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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Asyst Technologies, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(4) Date Filed:
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Notes:
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ASYST TECHNOLOGIES, INC.
48761 Kato Road
Fremont, CA 94538
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 28, 1998
----------------
TO THE SHAREHOLDERS OF ASYST TECHNOLOGIES, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Asyst
Technologies, Inc., a California corporation (the "Company"), will be held on
Friday, August 28, 1998 at 2:00 p.m. local time at the Westin Santa Clara,
5101 Great America Parkway, Santa Clara, California 95054 for the following
purpose:
1. To elect directors to serve for the ensuing year and until their
successors are elected.
2. To approve the Company's 1993 Stock Option Plan, as amended, including
amendments to (i) increase the aggregate number of shares of Common
Stock authorized for issuance under such plan by 1,800,000 shares, (ii)
add evergreen provisions, (iii) add provisions related to restricted
stock awards, (iv) rescind the Board's authority to reprice options
without shareholder approval, (v) set the aggregate number of shares
that may be issued pursuant to exercise of incentive stock options and
(vi) increase the per-individual, per-calendar year period limitation
from 200,000 shares to 900,000 shares of Common Stock.
3. To approve the Company's Long-Term Incentive Compensation Plan.
4. To approve the Company's 1993 Employee Stock Purchase Plan, as amended,
to increase the aggregate number of shares of Common Stock authorized
for issuance under such plan by 200,000 shares.
5. To ratify the selection of Arthur Andersen LLP as independent auditors
of the Company for it's fiscal year ending March 31, 1999.
6. To transact such other business as may properly come before the meeting
or any adjournment or postponement thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
The Board of Directors has fixed the close of business on July 10, 1998, as
the record date for the determination of shareholders entitled to notice of
and to vote at this Annual Meeting and at any adjournment or postponement
thereof.
By Order of the Board of Directors
/s/ JAMES C. KITCH
----------------------------
James C. Kitch
Secretary
Fremont, California
July 29, 1998
ALL SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN
AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN ORDER TO ENSURE
YOUR REPRESENTATION AT THE MEETING. A RETURN ENVELOPE (WHICH IS POSTAGE
PREPAID IF MAILED IN THE UNITED STATES) IS ENCLOSED FOR THAT PURPOSE. EVEN
IF YOU HAVE GIVEN YOUR PROXY, YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE
MEETING. PLEASE NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A
BROKER, BANK OR OTHER NOMINEE AND YOU WISH TO VOTE AT THE MEETING, YOU MUST
OBTAIN FROM THE RECORD HOLDER A PROXY ISSUED IN YOUR NAME.
<PAGE>
ASYST TECHNOLOGIES, INC.
48761 Kato Road
Fremont, CA 94538
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PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
August 28, 1998
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INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited on behalf of the Board of Directors of ASYST
TECHNOLOGIES, INC., a California corporation (the "Company"), for use at the
Annual Meeting of Shareholders to be held on Friday, August 28, 1998, at 2:00
p.m. local time (the "Annual Meeting"), or at any adjournment or postponement
thereof, for the purposes set forth herein and in the accompanying Notice of
Annual Meeting. The Annual Meeting will be held at the Westin Santa Clara,
5101 Great America Parkway, Santa Clara, California 95054. The Company intends
to mail this proxy statement and accompanying proxy card on or about July 29,
1998 to all shareholders entitled to vote at the Annual Meeting.
SOLICITATION
The Company will bear the entire cost of solicitation of proxies, including
preparation, assembly, printing and mailing of this proxy statement, the proxy
and any additional information furnished to shareholders. Copies of
solicitation materials will be furnished to banks, brokerage houses,
fiduciaries and custodians holding in their names shares of Common Stock
beneficially owned by others to forward to such beneficial owners. The Company
may reimburse persons representing beneficial owners of Common Stock for their
costs of forwarding solicitation materials to such beneficial owners. Original
solicitation of proxies by mail may be supplemented by telephone, telegram or
personal solicitation by directors, officers or other regular employees of the
Company or, at the Company's request, Corporate Investor Communications, Inc.
No additional compensation will be paid to directors, officers or other
regular employees for such services, but Corporate Investor Communications,
Inc. will be paid its customary fee, estimated to be about $10,000, if it
renders solicitation services.
VOTING RIGHTS AND OUTSTANDING SHARES
Only holders of record of Common Stock at the close of business on July 10,
1998 will be entitled to notice of and to vote at the Annual Meeting. At the
close of business on July 10, 1998 the Company had outstanding and entitled to
vote 12,148,572 shares of Common Stock.
Each holder of record of Common Stock on such date will be entitled to one
vote for each share held on all matters to be voted upon at the Annual
Meeting.
All votes will be tabulated by the inspector of election appointed for the
meeting, who will separately tabulate affirmative and negative votes,
abstentions and broker non-votes. Abstentions and broker non-votes are counted
towards a quorum but are not counted for any purpose in determining whether a
matter is approved.
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REVOCABILITY OF PROXIES
Any person giving a proxy pursuant to this solicitation has the power to
revoke it at any time before it is voted. It may be revoked by filing with the
Secretary of the Company at the Company's principal executive office, 48761
Kato Road, Fremont, CA 94538, a written notice of revocation or a duly
executed proxy bearing a later date, or it may be revoked by attending the
meeting and voting in person. Attendance at the meeting will not, by itself,
revoke a proxy.
SHAREHOLDER PROPOSALS
Proposals of shareholders that are intended to be presented at the Company's
1999 Annual Meeting of Shareholders must be received by the Company not later
than March 31, 1999 in order to be included in the proxy statement and proxy
relating to that Annual Meeting.
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PROPOSAL 1
ELECTION OF DIRECTORS
The Board of Directors is presently composed of six members with no
vacancies. James Springgate, whose term of office expires at the Annual
Meeting, is not seeking re-election. Following the Annual Meeting, the Board
will be composed of five members. A director elected by the Board to fill a
vacancy shall serve for the remainder of the full term of the director in
which the vacancy occurred and until such director's successor is elected and
qualified. Each director to be elected will hold office until the next annual
meeting of shareholders and until his successor is elected and has qualified,
or until such director's earlier death, resignation or removal. Each nominee
listed below is currently a director of the Company, all directors having been
elected by the shareholders.
Shares represented by executed proxies will be voted, if authority to do so
is not withheld, for the election of the five nominees named below. In the
event that any nominee should be unavailable for election as a result of an
unexpected occurrence, such shares will be voted for the election of such
substitute nominee as management may propose. Each person nominated for
election has agreed to serve if elected and management has no reason to
believe that any nominee will be unable to serve.
The five candidates receiving the highest number of affirmative votes cast
at the meeting will be elected directors of the Company.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF EACH NAMED NOMINEE.
NOMINEES
The names of the nominees and certain information about them are set forth
below:
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION/POSITION HELD WITH THE
NAME AGE COMPANY
---- --- -------------------------------------------
<C> <C> <S>
Mihir Parikh 51 Chairman of the Board of Directors and Chief
Executive Officer of the Company
Stanley Grubel 56 Chief Executive Officer of MiCRUS
Tsuyoshi Kawanishi 69 Senior Advisor of Toshiba Corporation
Ashok K. Sinha 54 President of the Metal Deposition Product Business
Group of Applied Materials, Inc.
Walter W. Wilson 54 President of Solectron California Corporation
</TABLE>
Dr. Parikh has served as Chairman of the Board and Chief Executive Officer
of the Company since July 1992. He has been a director of the Company since he
founded the Company in 1984 and served as the Company's President and Chief
Executive Officer from its inception to July 1992.
Mr. Grubel has served as a director of the Company since January 1997. Mr.
Grubel has served as Chief Executive Officer of MiCRUS, a manufacturer of CMOS
wafers since January 1, 1995. Between 1993 and 1995, he was a Director of
Procurement and Capital Planning for International Business Machines
Corporation.
Mr. Kawanishi has served as a director of the Company since February 1996.
He has served as Senior Adviser of Toshiba Corporation ("Toshiba"), a
manufacturer of electronic machinery and semiconductors, since June 1994. He
previously held the position of Senior Executive Vice President at Toshiba
from June 1990 to June 1994. Mr. Kawanishi also sits on the board of directors
of Applied Materials, Inc. and Chartered Semiconductor Manufacturing Ltd. He
is also president of Japan's Society for Hybrid Microelectronics and Chairman
of the Board of Singapore's Institute for Microelectronics.
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Dr. Sinha has served as a director of the Company since January 1997. Dr.
Sinha has served as Group Vice President of Applied Materials, Inc., a
semiconductor equipment manufacturer, since 1990 and is President of the Metal
Deposition Product Business Group of Applied Materials, Inc.
Mr. Wilson has served as a director of the Company since January 1995. Mr.
Wilson has served as President of Solectron North America, a wholly-owned
subsidiary of Solectron Corporation, a provider of manufacturing services to
the electronics industry ("Solectron"), since September 1995, as President of
Solectron California Corporation since September 1993 and as a Senior Vice
President, Operations of Solectron since June 1990. Mr. Wilson also sits on
the board of directors of Mylex Corporation.
There are no family relationships among any of the directors or executive
officers of the Company.
BOARD COMMITTEES AND MEETINGS
During the fiscal year ended March 31, 1998 the Board of Directors held five
meetings. The Board has an Audit Committee and a Compensation Committee.
The Audit Committee meets with the Company's independent auditors at least
annually to review the results of the annual audit and discuss the financial
statements; recommends to the Board the independent auditors to be retained;
and receives and considers the accountants' comments as to controls, adequacy
of staff and management performance and procedures in connection with audit
and financial controls. The Audit Committee is composed of 2 non-employee
directors: Messrs. Springgate and Wilson. It met 4 times during such fiscal
year.
The Compensation Committee makes recommendations concerning salaries and
incentive compensation, awards stock options to employees and consultants
under the Company's stock option plans and otherwise determines compensation
levels and performs such other functions regarding compensation as the Board
may delegate. The Compensation Committee is presently composed of two non-
employee directors: Messrs. Grubel and Sinha. During the fiscal year ended
March 31, 1998, the Compensation Committee was composed of Messrs. Springgate
and Sinha. It met once during such fiscal year.
During the fiscal year ended March 31, 1998, each Board member attended 75%
or more of the aggregate of the meetings of the Board and of the committees on
which he served, held during the period for which he was a director or
committee member, respectively.
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PROPOSAL 2
APPROVAL OF 1993 STOCK OPTION PLAN, AS AMENDED
The Company's 1993 Stock Option Plan (the "1993 Plan") was adopted by the
Board of Directors in June 1993 and approved by the shareholders in September
1993. As a result of a series of amendments, as of September 1997, there were
2,600,000 shares reserved for issuance under the 1993 Plan.
At June 30, 1998, options (net of cancelled or expired options) covering an
aggregate of 2,274,859 shares had been granted under the 1993 Plan and only
325,141 shares (plus any shares that might in the future be returned to the
1993 Plan as a result of cancellations or expiration of options) remained
available for future grant under the 1993 Plan. During the last fiscal year,
under the 1993 Plan, the Company granted to all current executive officers as
a group options to purchase 230,000 shares at an exercise price of $13 per
share and to all employees (excluding executive officers) as a group options
to purchase 803,443 shares at exercise prices of $9.63 to $45 per share. Each
Named Executive Officer received options as set forth in the table on page 24.
In July 1998, the Board approved an amendment to the 1993 Plan, subject to
shareholder approval, to enhance the flexibility of the Compensation Committee
in granting stock options to the Company's employees. The amendment increases
the number of shares authorized for issuance under the 1993 Plan from a total
of 2,600,000 shares to 4,400,000 shares. The Board adopted this amendment to
ensure that the Company can grant stock options and other stock awards to key
employees of acquired companies, if any, and continue to grant stock options
and other stock awards to employees, directors and consultants at levels
determined appropriate by the Board or the Compensation Committee.
Also in July 1998, the Board approved, subject to shareholder approval,
amendments to the 1993 Plan, that:
. Increase the number of shares authorized for issuance under the 1993 Plan
on the first day of each of the five fiscal years that commences after
March 31, 1999 by 4% of the total outstanding shares of Common Stock as
of the first day of each such fiscal year;
. Increase the per-individual, per-calendar year period limitation from
200,000 shares to 900,000 shares of Common Stock. In July 1997, the Board
amended the 1993 Plan to include a limitation providing that no employee
may be granted options under the 1993 Plan during a calendar year to
purchase in excess of 200,000 shares of Common Stock. The Board amended
the 1993 Plan to include such formal limitation to permit the Company,
under Section 162(m) of the Internal Revenue Code of 1986, as amended
(the "Code"), to continue to be able to deduct as a business expense
certain compensation attributable to the exercise of stock options
granted under the 1993 Plan;
. Set the aggregate number of shares that may be issued pursuant to
exercise of incentive stock options granted under the 1993 Plan at
7,400,000 shares;
. Rescind the Board's authority to reprice options without shareholder
approval; and
. Add provisions related to the issuance of restricted stock awards. See
"Terms of Stock Bonuses and Purchases of Restricted Stock" below for a
discussion of the application of such provisions.
Shareholders are requested in this Proposal 2 to approve the 1993 Plan, as
amended. If the shareholders fail to approve this Proposal 2, options granted
under the 1993 Plan after the Annual Meeting will not qualify as performance-
based compensation and, in some circumstances, the Company may be denied a
business expense deduction for compensation recognized in connection with the
exercise of such options. The affirmative vote of the holders of a majority of
the shares present in person or represented by proxy and voting at the meeting
will be required to approve the 1993 Plan, as amended. For purposes of this
vote, abstentions and broker non-votes will not be counted for any purpose in
determining whether this matter has been approved.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF PROPOSAL 2.
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The description of the essential features of the 1993 Plan outlined below is
qualified in its entirety by reference to the 1993 Plan.
GENERAL
The 1993 Plan provides for the grant of both incentive and nonstatutory
stock options and, if approved by the shareholders, restricted stock awards
and bonuses. Incentive stock options granted under the 1993 Plan are intended
to qualify as "incentive stock options" within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended (the "Code"). Nonstatutory stock
options granted under the 1993 Plan are intended not to qualify as incentive
stock options under the Code. See "Federal Income Tax Information" for a
discussion of the tax treatment of incentive and nonstatutory stock options.
PURPOSE
The 1993 Plan was adopted to provide a means by which officers, directors
and employees of and consultants to the Company and its affiliates could be
given an opportunity to purchase stock in the Company, to assist in retaining
the services of employees holding key positions, to secure and retain the
services of persons capable of filling such positions and to provide for such
persons to exert maximum efforts for the success of the Company. Approximately
195 of the Company's approximately 621 employees, directors and consultants
are eligible to participate in the 1993 Plan.
ADMINISTRATION
The 1993 Plan is administered by the Board of the Company. The Board has the
power to construe and interpret the 1993 Plan and, subject to the provisions
of the 1993 Plan, to select the persons to whom grants are to be made, to
designate the number of shares to be covered by each option, to determine
whether an option is an incentive stock option or a nonstatutory stock option,
to establish vesting schedules, to specify the exercise price and the type of
consideration to be paid to the Company upon exercise, and, subject to certain
restrictions, to specify any other terms. The Board of Directors is authorized
to delegate administration of the 1993 Plan to a committee composed of not
fewer than two members of the Board. The 1993 Plan provides that in the
Board's discretion, directors serving on the Compensation Committee will also
be "non-employee directors" within the meaning of Rule 16b-3 promulgated under
the Exchange Act ("Rule 16b-3") or "outside directors" within the meaning of
Section 162(m) of the Code. The Board has delegated administration of the 1993
Plan to the Compensation Committee of the Board. As used herein with respect
to the 1993 Plan, the "Board" refers to the Compensation Committee as well as
to the Board of Directors itself.
ELIGIBILITY
Incentive stock options may be granted under the 1993 Plan only to employees
(including officers and directors) of the Company and its affiliates.
Employees (including officers), directors and consultants are eligible to
receive nonstatutory stock options and awards of restricted stock under the
1993 Plan.
If approved by the shareholders, the per-individual, per-calendar year
period limitation under the 1993 Plan shall increase from 200,000 shares of
Common Stock to 900,000 shares of Common Stock. This limitation generally
permits the Company to continue to be able to deduct for tax purposes the
compensation attributable to the exercise of options granted under the 1993
Plan. To date, the Company has not granted to any individual in any calendar
year options to purchase a number of shares equal to or in excess of the
limitation.
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No incentive stock option may be granted under the 1993 Plan to any person
who, at the time of the grant, owns (or is deemed to own) stock possessing
more than 10% of the total combined voting power of all classes of stock of
the Company or any affiliate of the Company, unless the option exercise price
of such option is at least 110% of the fair market value of the stock subject
to the option on the date of grant, and the term of the option does not exceed
five years from the date of grant. For incentive stock options granted under
the 1993 Plan, the aggregate fair market value, determined at the time of
grant, of the shares of Common Stock with respect to which such options are
exercisable for the first time by an optionee during any calendar year (under
all such plans of the Company and its affiliates) may not exceed $100,000.
STOCK SUBJECT TO THE 1993 PLAN
If awards granted under the 1993 Plan expire or otherwise terminate without
being exercised, the Common Stock not purchased pursuant to such awards again
becomes available for issuance under the 1993 Plan.
Upon approval of the shareholders, the total number of shares of Common
Stock authorized for issuance under the 1993 Plan shall be 4,400,000 shares,
and this number shall thereafter increase on the first day of each of the five
fiscal years that commences after March 31, 1999 by 4% of the total
outstanding shares of Common Stock as of the first day of each such fiscal
year. Of the total number of shares reserved under the 1993 Plan, no more than
7,400,000 shares may be issued pursuant to the exercise of incentive stock
options granted under the 1993 Plan.
TERMS OF OPTIONS
The following is a description of the permissible terms of options under the
1993 Plan. Individual option grants may be more restrictive as to any or all
of the permissible terms described below.
Exercise Price; Payment. The exercise price of incentive stock options under
the 1993 Plan may not be less than the fair market value of the Common Stock
subject to the option on the date of the option grant, and in some cases (see
"Eligibility" above), may not be less than 110% of such fair market value. The
exercise price of nonstatutory stock options under the 1993 Plan may not be
less than 85% of the fair market value of the Common Stock subject to the
option on the date of the option grant. However, if options were granted with
exercise prices below fair market value, deductions for compensation
attributable to the exercise of such options could be limited by Section
162(m) of the Code. See "Federal Income Tax Information." If approved by the
shareholders, in the event of a decline in the value of the Company's Common
Stock, the Board shall not have the authority to offer employees the
opportunity to replace outstanding higher priced options, whether incentive or
nonstatutory, with new lower priced options. At July 21, 1998, the closing
price of the Company's Common Stock as reported on the Nasdaq National Market
was $13.44 per share.
The exercise price of options granted under the 1993 Plan must be paid
either: (i) in cash at the time the option is exercised; or (ii) at the
discretion of the Board, (a) by delivery of other Common Stock of the Company,
(b) pursuant to a deferred payment arrangement or (c) in any other form of
legal consideration acceptable to the Board.
Transferability. Under the 1993 Plan, an incentive stock option may not be
transferred by the optionee otherwise than by will or by the laws of descent
and distribution and may be exercised only by the optionee during the lifetime
of an optionee. A nonstatutory stock option may not be transferred except by
will or by the laws of descent and distribution unless otherwise specified in
the option agreement, in which case the nonstatutory stock option may be
transferred upon such terms and conditions as set forth in the option,
including pursuant to a domestic relations order. In any case, the optionee
may designate in writing a third party who may exercise the option in the
event of the optionee's death.
Option Exercise. Options granted under the 1993 Plan may become exercisable
in cumulative increments ("vest") as determined by the Board. The Board has
the power to accelerate the time during which an option may be exercised. In
addition, options granted under the 1993 Plan may permit early exercise prior
to vesting,
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<PAGE>
but in such event the optionee may be required to enter into an early exercise
stock purchase agreement that allows the Company to repurchase shares not yet
vested at their exercise price should the optionee leave the employment of the
Company before vesting. To the extent provided by the terms of an option, an
optionee may satisfy any federal, state or local tax withholding obligation
relating to the exercise of such option by a cash payment upon exercise, by
authorizing the Company to withhold a portion of the stock otherwise issuable
to the optionee, by delivering already-owned stock of the Company or by a
combination of these means.
Term. The maximum term of options under the 1993 Plan is ten years, except
that in certain cases (see "Eligibility") the maximum term is five years.
Options under the 1993 Plan terminate three months after termination of the
optionee's employment or relationship as a consultant or director of the
Company or any affiliate of the Company, unless (i) such termination of
employment is due to such person's permanent and total disability (as defined
in the Internal Revenue Code (the "Code")), in which case the option may, but
need not, provide that it may be exercised at any time within one year of such
termination; (ii) the optionee dies while employed by or serving as a
consultant or director of the Company or any affiliate of the Company, or
within three months after termination of such relationship, in which case the
option may, but need not, provide that it may be exercised (to the extent the
option was exercisable at the time of the optionee's death) within twelve
months of the optionee's death by the person or persons to whom the rights to
such option pass by will or by the laws of descent and distribution; or (iii)
the option by its terms specifically provides otherwise. Individual options by
their terms may provide for exercise within a longer period of time following
termination of employment or the consulting or director relationship. The
option term may also be extended in the event that exercise of the option
within these periods is prohibited for specified reasons.
TERMS OF STOCK BONUSES AND PURCHASES OF RESTRICTED STOCK
Payment. The purchase price under a restricted stock purchase agreement
shall be such amount as the Board shall determine and designate in such
agreement, however, stock bonuses may be awarded in consideration of services
without a purchase payment.
The purchase price of stock acquired pursuant to a restricted stock purchase
agreement under the 1993 Plan must be paid either (i) in cash at the time of
purchase; or (ii) at the discretion of the Board, according to a deferred
payment or other arrangement or in any other form of legal consideration
acceptable to the Board. The Board may award stock pursuant to a stock bonus
agreement in consideration for services actually rendered to the Company or
for its benefit.
Vesting. Shares of stock sold or awarded under the 1993 Plan may, but need
not be, subject to a repurchase option in favor of the Company in accordance
with a vesting schedule as determined by the Board. The Board has the power to
accelerate the vesting of stock acquired pursuant to a restricted stock
purchase agreement under the 1993 Plan.
Restrictions on Transfer. Rights under a stock bonus or restricted stock
bonus agreement may not be transferred except where such assignment is
required by law or expressly authorized by the terms of the applicable stock
bonus or restricted stock purchase agreement.
ADJUSTMENT PROVISIONS
If there is any change in the stock subject to the 1993 Plan or subject to
any option granted under the 1993 Plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange
of shares, change in corporate structure or otherwise), the 1993 Plan and the
options outstanding thereunder will be appropriately adjusted as to the class
and the maximum number of shares and price per share of stock subject to the
1993 Plan and such outstanding options.
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EFFECT OF CERTAIN CORPORATE EVENTS
The 1993 Plan provides that, in the event of a dissolution or liquidation of
the Company, specified type of merger or other corporate reorganization, to
the extent permitted by law, any surviving corporation will be required to
either assume any options outstanding under the 1993 Plan or substitute
similar options for those outstanding under such plan, or such outstanding
options will continue in full force and effect. In the event that any
surviving corporation declines to assume or continue the options outstanding
under the 1993 Plan, or to substitute similar options, then, with respect to
options held by persons then performing services as employees or as
consultants or directors for the Company, as the case may be, the time during
which such options may be exercised will be accelerated and the options
terminated if not exercised during such time. The acceleration of an option in
the event of an acquisition or similar corporate event may be viewed as an
antitakeover provision, which may have the effect of discouraging a proposal
to acquire or otherwise obtain control of the Company.
DURATION, AMENDMENT AND TERMINATION
The Board may suspend or terminate the 1993 Plan without shareholder
approval or ratification at any time or from time to time. Unless sooner
terminated, the 1993 Plan will terminate in June 2003.
The Board may also amend the 1993 Plan at any time or from time to time.
However, no amendment will be effective unless approved by the shareholders of
the Company within twelve months of its adoption by the Board if the amendment
would require shareholder approval in order for the 1993 Plan to comply with
Rule 16b-3 or satisfy the requirements of Section 422 of the Code or any
Nasdaq National Market requirement. Subject to the foregoing, the Board may
amend the 1993 Plan in any respect the Board deems necessary or advisable to
provide optionees with the maximum benefits available under the Code or to
bring the 1993 Plan or any option granted thereunder into compliance with the
Code.
FEDERAL INCOME TAX INFORMATION
Incentive Stock Options. Incentive stock options under the 1993 Plan are
intended to be eligible for the favorable federal income tax treatment
accorded "incentive stock options" under the Code.
There generally are no federal income tax consequences to the optionee or
the Company by reason of the grant or exercise of an incentive stock option.
However, the exercise of an incentive stock option may increase the optionee's
alternative minimum tax liability, if any.
If an optionee holds stock acquired through exercise of an incentive stock
option for at least two years from the date on which the option is granted and
at least one year from the date on which the shares are transferred to the
optionee upon exercise of the option, any gain or loss on a disposition of
such stock will be a capital gain or loss, which generally will be long-term
or short-term depending on how long the optionee holds the stock. Generally,
if the optionee disposes of the stock before the expiration of either of these
holding periods (a "disqualifying disposition"), at the time of disposition,
the optionee will realize taxable ordinary income equal to the lesser of (a)
the excess of the stock's fair market value on the date of exercise over the
exercise price, or (b) the optionee's actual gain, if any, on the purchase and
sale. The optionee's additional gain, or any loss, upon the disqualifying
disposition will be a capital gain or loss, which generally will be long-term
or short-term depending on how long the optionee holds the stock. Long-term
capital gains are generally subject to lower tax rates than ordinary income.
Slightly different rules may apply to optionees who are subject to Section 16
of the Exchange Act or who acquire stock subject to certain repurchase
options.
To the extent the optionee recognizes ordinary income by reason of a
disqualifying disposition, the Company will generally be entitled (subject to
the requirement of reasonableness, Section 162(m) of the Code and the
satisfaction of a tax reporting obligation) to a corresponding business
expense deduction in the tax year in which the disqualifying disposition
occurs.
9
<PAGE>
Nonstatutory Stock Options. Nonstatutory stock options granted under the
1993 Plan generally have the following federal income tax consequences:
There are no tax consequences to the optionee or the Company by reason of
the grant of a nonstatutory stock option. Upon exercise of a nonstatutory
stock option, the optionee normally will recognize taxable ordinary income
equal to the excess of the stock's fair market value on the date of exercise
over the option exercise price. Generally, with respect to employees, the
Company is required to withhold from regular wages or supplemental wage
payments an amount based on the ordinary income recognized. Subject to the
requirement of reasonableness, Section 162(m) of the Code and the satisfaction
of a reporting obligation, the Company will generally be entitled to a
business expense deduction equal to the taxable ordinary income realized by
the optionee. Upon disposition of the stock, the optionee will recognize a
capital gain or loss equal to the difference between the selling price and the
sum of the amount paid for such stock plus any amount recognized as ordinary
income upon exercise of the option. Such gain or loss generally will be long-
term or short-term depending on how long the optionee holds the stock.
Slightly different rules may apply to optionees who are subject to
Section 16(b) of the Exchange Act or who acquire stock subject to certain
repurchase rights.
Restricted Stock Purchase Awards and Stock Bonuses. Restricted stock
purchase awards and stock bonuses granted under the 1993 Plan generally have
the following federal income tax consequences:
Upon acquisition of the stock, the recipient normally will recognize taxable
ordinary income equal to the excess of the stock's fair market value over the
purchase price, if any. However, to the extent the stock is subject to certain
types of vesting restrictions, the taxable event will be delayed until the
vesting restrictions lapse unless the recipient elects to be taxed on receipt
of the stock. With respect to employees, the Company is generally required to
withhold from regular wages or supplemental wage payments an amount based on
the ordinary income recognized. Generally, the Company will be entitled to a
business expense deduction equal to the taxable ordinary income realized by
the optionee. Upon disposition of the stock, the optionee will recognize a
capital gain or loss equal to the difference between the selling price and the
sum of the amount paid for such stock plus any amount recognized as ordinary
income upon acquisition (or vesting) of the stock. Such gain or loss generally
will be long-term or short-term depending on how long the stock was held.
Slightly different rules may apply to optionees who acquire stock subject to
certain repurchase options or who are subject to Section 16(b) of the Exchange
Act.
Potential Limitation on Company Deductions. Code Section 162(m) denies a
deduction to any publicly held corporation for compensation paid to certain
employees in a taxable year to the extent that compensation exceeds $1 million
for a covered employee. It is possible that compensation attributable to
awards granted in the future under the 1993 Plan, when combined with all other
types of compensation received by a covered employee from the Company, may
cause this limitation to be exceeded in any particular year.
Certain kinds of compensation, including qualified "performance-based
compensation," are disregarded for purposes of the deduction limitation. In
accordance with Treasury regulations issued under Section 162(m), compensation
attributable to stock options will qualify as performance-based compensation,
provided that the option is granted by a compensation committee comprised
solely of "outside directors" and either: (i) the option plan contains a per-
employee limitation on the number of shares for which options may be granted
during a specified period, the per-employee limitation is approved by the
shareholders, and the exercise price of the option is no less than the fair
market value of the stock on the date of grant; or (ii) the option is granted
(or exercisable) only upon the achievement (s certified in writing by the
Compensation Committee) of an objective performance goal established in
writing by the Compensation Committee while the outcome is substantially
uncertain, and the option is approved by shareholders.
Compensation attributable to restricted stock and stock bonuses will qualify
as performance-based compensation, provided that: (i) the award is granted by
a compensation committee comprised solely of "outside directors"; and (ii) the
purchase price of the award is no less than the fair market value of the stock
on the date of grant. Stock bonuses qualify as performance-based compensation
under the Treasury regulations only if:
10
<PAGE>
(i) the award is granted by a compensation committee comprised solely of
"outside directors;" (ii) the award is granted (or exercisable) only upon the
achievement of an objective performance goal established in writing by the
compensation committee while the outcome is substantially uncertain; (iii) the
compensation committee certifies in writing prior to the granting (or
exercisability) of the award that the performance goal has been satisfied; and
(iv) prior to the granting (or exercisability) of the award, shareholders have
approved the material terms of the award (including the class of employees
eligible for such award, the business criteria on which the performance goal
is based, and the maximum amount (or formula used to calculate the amount)
payable upon attainment of the performance goal).
11
<PAGE>
PROPOSAL 3
APPROVAL OF LONG-TERM INCENTIVE COMPENSATION PLAN
In July 1998, the Board approved the Company's Long-Term Incentive
Compensation Plan (the "LTIP"). The Board of Directors believes that it is in
the best interest of the Company and the shareholders to adopt a plan that
provides incentive compensation for key executives responsible for the success
of the Company and that can help to attract talented new executives.
Compensation payable under the LTIP is based on long-term corporate
performance and is tied to an increase in shareholder value. The Company is
seeking shareholder approval of the LTIP in order to comply with the
requirements of Section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code") in order for compensation paid under the LTIP to be
deductible by the Company irrespective of the $1 million limit imposed by that
Section. The LTIP is designed so that all compensation payable thereunder will
be fully deductible by the Company.
Shareholders are requested in this Proposal 3 to approve the LTIP. If the
shareholders fail to approve this Proposal 3, awards under the LTIP made after
the Annual Meeting will not qualify as performance-based compensation and, in
some circumstances, the Company may be denied a business expense deduction for
compensation paid under the LTIP. The affirmative vote of the holders of a
majority of the shares present in person or represented by proxy and voting at
the meeting will be required to approve the LTIP. For purposes of this vote,
abstentions and broker non-votes will not be counted for any purpose in
determining whether this matter has been approved.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF PROPOSAL 3.
The essential features of the LTIP are outlined below:
ADMINISTRATION
The LTIP will be administered by the Compensation Committee, which has full
power and authority to determine which key employees of the Company will
receive awards under the LTIP, to interpret and construe the terms of the LTIP
and to make all determinations it deems necessary in the administration of the
LTIP.
ELIGIBILITY
Participation in the LTIP is limited to key employees of the Company
designated by the Compensation Committee.
AWARD OF UNITS
The LTIP provides for the award of participation units ("Units") to key
employees as determined by the Compensation Committee. Units may be awarded as
of the first day of any fiscal year of the Company through April 1, 2008.
Generally, Units vest and become exercisable after a term of five years from
the date of their award. A maximum of 500,000 Units may be awarded under the
LTIP, and no more than 150,000 Units may be awarded to any one participant.
VESTING OF UNITS
Each Unit will vest after five years from the date of award, except that, if
earlier, a Unit will become fully vested upon attainment of the Unit's Maximum
Cumulative Unit Value (as defined below) or upon termination of a
participant's employment with the Company (a) by the Company Without Cause
before or after a Change in Control (both as defined in the LTIP), (b) other
than for Cause after attainment of age 50 and completion of 10 years of
employment with the Company or (c) by reason of death or disability.
12
<PAGE>
VALUE OF UNITS
The value of an outstanding Unit (the "Incremental Unit Value") at any time
depends on the extent of increase in the Company's Earnings Per Share (defined
as the consolidated income of the Company prepared in accordance with
generally accepted accounting principles, as reported in the Company's audited
consolidated financial statements for that Fiscal year, adjusted on an after-
tax basis to (a) exclude (i) in its entirety any item of nonrecurring gain or
loss in excess of $2,000,000, except that gains resulting from the settlement
or adjudication of intellectual property litigation shall be totally
includible and (ii) any accruals for the Plan and (b) add back write-offs
required in connection with any acquisition in the year of acquisition) from
year to year. For purposes of the LTIP, Earnings Per Share for any fiscal year
is the Company's Earnings (as defined in the LTIP) divided by the number of
shares of common stock used to determine the Company's earnings per share for
that year, as reported in the Company's audited consolidated financial
statements for the year; provided, however, that for the fiscal year ending
March 31, 1999, Earnings Per Share will be based on Earnings for the period
July 1,1998 through March 3l, 1999 on an annualized basis.
The Incremental Unit Value for any fiscal year is equal to the product of
(i) the Unit's Measuring Price (as defined below) and (ii) 80 percent of the
percentage by which Earnings Per Share for the year exceeds Base Year EPS
(defined as the Earnings Per Share for the Fiscal Year immediately preceding
the date of an award of Units). The Measuring Price for each Unit awarded is
the closing price of the common stock as reported on the Nasdaq National
Market on the last day of the fiscal year preceding award of the Unit.
A Unit's Incremental Unit Value for each of the five years from the date of
award is cumulated to obtain the Unit cumulative value ("Cumulative Unit
Value"), which is capped at an amount determined by the Compensation Committee
when the Unit is awarded (the "Maximum Cumulative Unit Value").
PAYMENT OF UNITS
A Unit that becomes vested shall thereupon be exercised. Upon exercise, a
participant will receive the Unit's Cumulative Unit Value (but not more than
the Maximum Cumulative Unit Value). Except upon a Change in Control, when
payment must be made entirely in cash, not less than 50 percent of the amount
due will he paid in cash, and the balance will be paid in cash or in shares of
common stock or both, as determined by the Compensation Committee in its
discretion.
AMOUNT PAYABLE UPON CHANGE IN CONTROL
In respect of a Unit that becomes vested by reason of a Change in Control,
the amount payable is as follows: (a) if the Change in Control occurs before
the third anniversary of the Unit's award, the amount is the greater of the
Unit's (i) Cumulative Unit Value or (ii) 75 percent of its Maximum Cumulative
Unit Value; (b) if the Change in Control occurs on or after the third
anniversary of such award, the amount is the greater of the Unit's
(i) Cumulative Unit Value or (ii) Maximum Cumulative Unit Value.
TERMINATION OF UNITS
A Unit will expire upon the earlier of (a) its exercise or (b) termination
of the participant's employment with the Company; provided, however, that upon
termination (i) by the Company Without Cause, (ii) other than for Cause after
attainment of age 50 and completion of 10 years of employment with the
Company, (iii) by reason of death or disability or (iv) for any other reason
specifically approved in advance by the Compensation Committee, the term of
the Unit will be extended for a period of 14 months from the date of
termination.
DURATION, AMENDMENT AND TERMINATION OF LTIP
The Compensation Committee may amend or terminate the LTIP at any time,
provided that no amendment will be effective prior to approval by the
Company's shareholders to the extent such approval is required by Section
162(m) of the Code or is otherwise required by law. The LTIP shall terminate
no later than March 31, 2013.
13
<PAGE>
PROPOSAL 4
APPROVAL OF 1993 EMPLOYEE STOCK PURCHASE PLAN, AS AMENDED
In June 1993, the Board of Directors adopted, and the shareholders
subsequently approved, the 1993 Employee Stock Purchase Plan (the "Purchase
Plan") authorizing the issuance of 250,000 shares of the Company's Common
Stock. The Board of Directors subsequently amended the Purchase Plan to
increase the number of shares authorized for issuance thereunder to an
aggregate of 500,000 shares. The shareholders of the Company approved the
amendments to the Purchase Plan in September 1996. At June 30, 1998, an
aggregate of 397,575 shares had been issued under the Purchase Plan and only
102,425 shares remained for the grant of future rights under the Purchase
Plan. In July 1998, the Board of Directors of the Company adopted amendments
to the Purchase Plan to increase the number of shares authorized for issuance
under the Purchase Plan to 700,000 shares. This amendment is intended to
afford the Company greater flexibility in providing employees with stock
incentives and ensures that the Company can continue to provide such
incentives at levels determined appropriate by the Board. During the last
fiscal year, shares were purchased in the amounts and at the weighted average
prices per share under the Purchase Plan as follows: Anthony C. Bonora 131
shares ($2,422), Douglas J. McCutcheon 2,542 shares ($21,196), all current
executive officers as a group 2,673 shares ($23,618), and all employees
(excluding executive officers) as a group 81,007 shares ($902,655).
Shareholders are requested in this Proposal 4 to approve the Purchase Plan,
as amended. The affirmative vote of the holders of a majority of the shares
present in person or represented by proxy and voting at the meeting will be
required to approve the Purchase Plan, as amended. For purposes of this vote
abstentions and broker non-votes will not be counted for any purpose in
determining whether this matter has been approved.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF PROPOSAL 4.
The essential features of the Purchase Plan, as amended, are outlined below:
PURPOSE
The purpose of the Purchase Plan is to provide a means by which key
employees of the Company (and any parent or subsidiary of the Company
designated by the Board of Directors to participate in the Purchase Plan) may
be given an opportunity to purchase Common Stock of the Company through
payroll deductions, to assist the Company in retaining the services of its
employees, to secure and retain the services of new employees, and to provide
incentives for such persons to exert maximum efforts for the success of the
Company. Approximately 248 of the Company's approximately 621 employees are
eligible to participate in the Purchase Plan.
The rights to purchase Common Stock granted under the Purchase Plan are
intended to qualify as options issued under an "employee stock purchase plan"
as that term is defined in Section 423(b) of the Code.
ADMINISTRATION
The Purchase Plan is administered by the Board of Directors, which has the
final power to construe and interpret the Purchase Plan and the rights granted
under it. The Board has the power, subject to the provisions of the Purchase
Plan, to determine when and how rights to purchase Common Stock of the Company
will be granted, the provisions of each offering of such rights (which need
not be identical), and whether any parent or subsidiary of the Company shall
be eligible to participate in such plan. The Board has the power, which it has
not exercised, to delegate administration of such plan to a committee of not
less than two Board members. The Board may abolish any such committee at any
time and revest in the Board the administration of the Purchase Plan.
14
<PAGE>
OFFERINGS
The Purchase Plan is implemented by offerings of rights to all eligible
employees from time to time by the Board. Generally, each such offering is of
24 months duration.
ELIGIBILITY
Any person who is customarily employed at least 20 hours per week and five
months per calendar year by the Company (or by any parent or subsidiary of the
Company designated from time to time by the Board) on the first day of an
offering period is eligible to participate in that offering under the Purchase
Plan, provided such employee has been in the continuous employ of the Company
for a period as required by the Board, not to exceed two years preceding the
first day of the offering period.
Notwithstanding the foregoing, no employee is eligible for the grant of any
rights under the Purchase Plan if, immediately after such grant, the employee
would own, directly or indirectly, stock possessing 5% or more of the total
combined voting power or value of all classes of stock of the Company or of
any parent or subsidiary of the Company (including any stock which such
employee may purchase under all outstanding rights and options), nor will any
employee be granted rights that would permit him to buy more than $25,000
worth of stock (determined at the fair market value of the shares at the time
such rights are granted) under all employee stock purchase plans of the
Company in any calendar year.
PARTICIPATION IN THE PLAN
On each date an offering commences (the "Offering Date"), each eligible
employee shall be granted the right to purchase the number of shares of Common
Stock of the Company purchasable with a percentage designated by the Board not
exceeding 15% of such employee's earnings during the period which begins on
the Offering Date and ends on a designated date not in excess of 27 months
after the Offering Date. In connection with each offering, the Board shall
specify a maximum number of shares which may be purchased by an employee as
well as a maximum aggregate number of shares which may be purchased by all
eligible employees. If an offering contains more than one exercise date, the
Board may specify a maximum aggregate number of shares which may be purchased
by all eligible employees on any given exercise date under the offering. If
the aggregate purchase of shares upon exercise of rights granted under the
offering would exceed any such maximum aggregate number, the Board will make a
pro rata allocation of the shares available in as nearly a uniform manner as
practicable and as the Board deems equitable.
PURCHASE PRICE
The purchase price per share at which shares are sold in an offering under
the Purchase Plan is the lower of (a) 85% of the fair market value of a share
of Common Stock on the date of commencement of the offering, or (b) 85% of the
fair market value of a share of Common Stock on the last day of the purchase
period.
PAYMENT OF PURCHASE PRICE; PAYROLL DEDUCTIONS
The purchase price of the shares is accumulated by payroll deductions over
the offering period. At any time during the purchase period, a participant may
reduce, terminate, begin or increase his or her payroll deductions. All
payroll deductions made for a participant are credited to his or her account
under the Purchase Plan and deposited with the general funds of the Company. A
participant may not make any additional payments into such account.
PURCHASE OF STOCK
By executing an agreement to participate in the Purchase Plan, the employee
is entitled to purchase shares under such plan. In connection with offerings
made under the Purchase Plan, the Board specifies a maximum number of shares
any employee may be granted the right to purchase and the maximum aggregate
number of
15
<PAGE>
shares which may be purchased pursuant to such offering by all participants.
If the aggregate number of shares to be purchased upon exercise of rights
granted in the offering would exceed the maximum aggregate number, the Board
would make a pro rata allocation of shares available in a uniform and
equitable manner. Unless the employee's participation is discontinued, his
right to purchase shares is exercised automatically at the end of the purchase
period at the applicable price. Any money remaining in an employee's account
following the purchase of shares shall be rolled over into the next purchase
period. See "Withdrawal" below.
WITHDRAWAL
While each participant in the Purchase Plan is required to sign an agreement
authorizing payroll deductions, the participant may withdraw from a given
offering by terminating his or her payroll deductions and by delivering to the
Company a notice of withdrawal from the Purchase Plan. Such withdrawal may be
elected at any time prior to the end of the applicable offering period.
Upon any withdrawal from an offering by the employee, the Company will
distribute to the employee his or her accumulated payroll deductions without
interest, less any accumulated deductions previously applied to the purchase
of stock on the employee's behalf during such offering, and such employee's
interest in the offering will be automatically terminated. The employee is not
entitled to again participate in such offering. An employee's withdrawal from
an offering will not have any effect upon such employee's eligibility to
participate in subsequent offerings under the Purchase Plan.
TERMINATION OF EMPLOYMENT
Rights granted pursuant to any offering under the Purchase Plan terminate
immediately upon cessation of an employee's employment for any reason, and the
Company will distribute to such employee all of his or her accumulated payroll
deductions, without interest.
RESTRICTIONS ON TRANSFER
Rights granted under the Purchase Plan are not transferable and may be
exercised only by the person to whom such rights are granted.
DURATION, AMENDMENT AND TERMINATION
The Board may suspend or terminate the Purchase Plan at any time. Unless
terminated earlier, such plan will terminate in June 2003.
The Board may amend the Purchase Plan at any time. Any amendment of the
Purchase Plan must be approved by the shareholders within 12 months of its
adoption by the Board if the amendment would (a) increase the number of shares
of Common Stock reserved for issuance under the Purchase Plan, (b) modify the
requirements relating to eligibility for participation in the Purchase Plan,
or (c) modify any other provision of the Purchase Plan in a manner that would
materially increase the benefits accruing to participants under the Purchase
Plan, if such approval is required in order to comply with the requirements of
Rule 16b-3 under the Exchange Act.
Rights granted before amendment or termination of the Purchase Plan will not
be altered or impaired by any amendment or termination of such plan without
consent of the person to whom such rights were granted.
EFFECT OF CERTAIN CORPORATE EVENTS
In the event of a dissolution, liquidation or specified type of merger of
the Company, the surviving corporation either will assume the rights under the
Purchase Plan or substitute similar rights, or the exercise date of any
ongoing offering will be accelerated such that the outstanding rights may be
exercised immediately prior to, or concurrent with, any such event.
16
<PAGE>
STOCK SUBJECT TO PURCHASE PLAN
If rights granted under the Purchase Plan expire, lapse or otherwise
terminate without being exercised, the Common Stock not purchased under such
rights again becomes available for issuance under such plan.
FEDERAL INCOME TAX INFORMATION
Rights granted under the Purchase Plan are intended to qualify for favorable
federal income tax treatment associated with rights granted under an employee
stock purchase plan which qualifies under provisions of Section 423 of the
Code.
A participant will be taxed on amounts withheld for the purchase of shares
as if such amounts were actually received. Other than this, no income will be
taxable to a participant until disposition of the shares acquired, and the
method of taxation will depend upon the holding period of the purchase shares.
If the stock is disposed of at least two years after the beginning of the
offering period and at least one year after the stock is transferred to the
participant, then the lesser of (a) the excess of the fair market value of the
stock at the time of such disposition over the exercise price or (b) the
excess of the fair market value of the stock as of the beginning of the
offering period over the exercise price (determined as of the beginning of the
offering period) will be treated as ordinary income. Any further gain or any
loss will be taxed as capital gain or loss. Any capital gain or loss generally
will be short-term or long-term depending on how long the stock has been held.
Long-term capital gains currently are subject to lower tax rates than ordinary
income.
If the stock is sold or disposed of before the expiration of either of the
holding periods described above, then the excess of the fair market value of
the stock on the exercise date over the exercise price will be treated as
ordinary income at the time of such disposition. The balance of any gain will
be treated as capital gain. Even if the stock is later disposed of for less
than its fair market value on the exercise date, the same amount of ordinary
income is attributed to the participant, and a capital loss is recognized
equal to the difference between the sales price and the fair market value of
the stock on such exercise date. Any capital gain or loss generally will be
short-term or long-term depending on how long the stock has been held.
There are no federal income tax consequences to the Company by reason of the
grant or exercise of rights under the Purchase Plan. The Company is entitled
to a deduction to the extent amounts are taxed as ordinary income to a
participant (subject to the requirement of reasonableness, the provisions of
Section 162(m) of the Code and the satisfaction of a tax reporting
obligation).
17
<PAGE>
PROPOSAL 5
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
The Board of Directors has selected Arthur Andersen LLP as the Company's
independent auditors for the fiscal year ending March 31, 1999 and has further
directed that management submit the selection of independent auditors for
ratification by the shareholders at the Annual Meeting. Arthur Andersen LLP
has audited the Company's financial statements since its inception in 1984.
Representatives of Arthur Andersen LLP are expected to be present at the
Annual Meeting, will have an opportunity to make a statement if they so desire
and will be available to respond to appropriate questions.
Shareholder ratification of the selection of Arthur Andersen LLP as the
Company's independent auditors is not required by the Company's Bylaws or
otherwise. However, the Board is submitting the selection of Arthur Andersen
LLP to the shareholders for ratification as a matter of good corporate
practice. If the shareholders fail to ratify the selection, the Audit
Committee and the Board will reconsider whether or not to retain that firm.
Even if the selection is ratified, the Audit Committee and the Board in their
discretion may direct the appointment of different independent auditors at any
time during the year if they determine that such a change would be in the best
interests of the Company and its shareholders.
The affirmative vote of the holders of a majority of the shares present in
person or represented by proxy and voting at the Annual Meeting will be
required to ratify the selection of Arthur Andersen LLP. For purposes of this
vote abstentions and broker non-votes will not be counted for any purpose in
determining whether this matter has been approved.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE IN FAVOR OF PROPOSAL 5.
18
<PAGE>
ADDITIONAL INFORMATION
The current directors and executive officers of the Company, and their ages
as of June 30, 1998, are as follows:
MANAGEMENT
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<C> <C> <S>
Mihir Parikh 51 Chairman of the Board and Chief Executive
Officer
Terry L. Moshier 49 President and Chief Operating Officer
Anthony C. Bonora 55 Senior Vice President, Research and Development
and Chief Technical Officer
Douglas J. McCutcheon 49 Senior Vice President, Chief Financial Officer
William R. Leckonby 58 President and Chief Operating Officer, Asyst
Software, Inc.
</TABLE>
Mr. Moshier has served as President and Chief Operating Officer of the
Company since May 1997. From July 1996 to May 1997, Mr. Moshier served as
Executive Vice President and Chief Operating Officer of the Company. From June
1995 to June 1996, Mr. Moshier was on the Advisory Board of the Arizona
Technology Incubator Fund, a non-profit organization assisting start-up
technology companies. Prior to such time, Mr. Moshier was Senior Vice
President of Technology and Operations for Telxon Corporation, a designer and
manufacturer of hand-held wireless computers, from November 1993 to June 1995.
From June 1990 to October 1993, Mr. Moshier was Director of Operations of the
Motorola Computer Group, a wholly-owned subsidiary of Motorola.
Mr. Bonora joined Asyst in 1984 and has been Senior Vice President, Research
and Development of the Company since 1986 and Chief Technical Officer since
January 1996.
Mr. McCutcheon joined the Company in January 1996 as Senior Vice President,
Chief Financial Officer. From January 1991 to November 1995, Mr. McCutcheon
was Vice President, Corporate Finance at Cadence Design Systems, Inc., a
design automation software company. Prior to 1991, Mr. McCutcheon was
President of Toshiba America Medical Credit, a captive financing subsidiary of
Toshiba America.
Mr. Leckonby has served as President and Chief Operating Officer of Asyst
Software, Inc. since June 1996. From October 1993 to June 1996, Mr. Leckonby
was President and Chief Executive Officer of Integral Systems, Inc. an
enterprise application software and services company. From 1986 to September
1993, Mr. Leckonby was President and Chief Operating Officer of Tesseract
Corporation, an enterprise application software and services company.
19
<PAGE>
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the ownership
of the Company's Common Stock as of June 30, 1998 by: (i) each director and
nominee for director; (ii) each of the executive officers named in the Summary
Compensation Table employed by the Company; (iii) all executive officers and
directors of the Company as a group; and (iv) all those known by the Company
to be beneficial owners of more than five percent (5%) of its Common Stock.
<TABLE>
<CAPTION>
BENEFICIAL
OWNERSHIP(1)
--------------------
NUMBER OF PERCENT OF
BENEFICIAL OWNER SHARES TOTAL
- ---------------- --------- ----------
<S> <C> <C>
J.&W. Seligman & Co., Incorporated......................... 1,255,000 10.4%
100 Park Avenue
New York, NY 10017
Mihir Parikh(2)............................................ 421,206 3.5%
Anthony C. Bonora(3)....................................... 48,466 *
Douglas J. McCutcheon(4)................................... 51,536 *
Terry L. Moshier(5)........................................ 71,791 *
William R. Leckonby(6)..................................... 12,655 *
James E. Springgate(7)..................................... 32,125 *
Walter W. Wilson(8)........................................ 13,000 *
Stanley Grubel(9).......................................... 3,500 *
Ashok Sinha(10)............................................ 3,500 *
Tsuyoshi Kawanishi(11)..................................... 7,500 *
All directors and officers as a group (10 persons)(12)..... 665,279 5.3%
</TABLE>
- --------
* Less than one percent.
(1) This table is based upon information supplied by officers, directors and
principal shareholders and Schedules 13D and 13G, if any, filed with the
Securities and Exchange Commission (the "Commission"). Unless otherwise
indicated in the footnotes to this table and subject to community
property laws where applicable, each of the shareholders named in this
table has sole voting and investment power with respect to the shares
indicated as beneficially owned. Applicable percentages are based on
12,086,923 shares outstanding on June 30, 1998, adjusted as required by
rules promulgated by the Commission.
(2) Includes 235,400 shares held of record by Mihir & Nancy Parikh Living
Trust, dated April 3, 1986, of which Dr. Parikh is a trustee. Also
includes 49,600 shares held by a custodian for the benefit of
Dr. Parikh's minor children, of which Dr. Parikh disclaims beneficial
ownership. Includes 136,206 shares subject to stock options exercisable
within 60 days of June 30, 1998.
(3) Includes 34,274 shares subject to stock options exercisable within 60
days of June 30, 1998.
(4) Includes 51,405 shares subject to stock options exercisable within 60
days of June 30, 1998.
(5) Includes 71,791 shares subject to stock options exercisable within 60
days of June 30, 1998.
(6) Includes 11,655 shares subject to stock options exercisable within 60
days of June 30, 1998.
(7) Includes 20,125 shares subject to stock options exercisable within 60
days of June 30, 1998.
(8) Includes 13,000 shares subject to stock options exercisable within 60
days of June 30, 1998.
(9) Includes 3,500 shares subject to stock options exercisable within 60 days
of June 30, 1998.
(10) Includes 3,500 shares subject to stock options exercisable within 60 days
of June 30, 1998.
(11) Includes 7,500 shares subject to stock options exercisable within 60 days
of June 30, 1998.
(12) Includes an aggregate of 352,956 shares held by all directors and
executive officers that are subject to options exercisable within 60 days
of June 30, 1998. See Notes (2) through (11), above.
20
<PAGE>
COMPLIANCE WITH THE REPORTING REQUIREMENTS OF SECTION 16(a)
Section 16(a) of the Securities Exchange Act of 1934 (the "1934 Act")
requires the Company's directors and executive officers, and persons who own
more than ten percent of a registered class of the Company's equity
securities, to file with the Commission initial reports of ownership and
reports of changes in ownership of Common Stock and other equity securities of
the Company. Officers, directors and greater than ten percent shareholders are
required by Commission regulation to furnish the Company with copies of all
Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended March 31, 1998, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than ten percent beneficial owners were complied with.
EXECUTIVE COMPENSATION
COMPENSATION OF DIRECTORS
Stanley Grubel, Tsuyoshi Kawanishi, Ashok Sinha, James E. Springgate and
Walter W. Wilson each received $14,000 for service on the Board of Directors
or any committee thereof for the fiscal year ended March 31, 1998. The members
of the Board of Directors are also eligible for reimbursement for their
expenses incurred in connection with attendance at Board meetings in
accordance with Company policy.
Each non-employee director of the Company also receives stock option grants
under the 1993 Non-Employee Directors' Stock Option Plan (the "Directors'
Plan"). Only non-employee directors of the Company or an affiliate of such
directors (as defined in the Code) are eligible to receive options under the
Directors' Plan.
During fiscal 1998, the following directors received options under the
Directors' Plan: Mr. Grubel and Mr. Sinha were each granted an option to
purchase 6,000 shares of Common Stock at an exercise price of $24.875 per
share in January 1998; Mr. Springgate was granted an option to purchase 6,000
shares of Common Stock at an exercise price of $46.25 per share in September
1997; Mr. Kawanishi was granted an option to purchase 6,000 shares of Common
Stock at an exercise price of $24.31 per share in February 1998; and
Mr. Wilson was granted an option to purchase 6,000 shares of Common Stock at
an exercise price of $23.50 per share in January 1998.
21
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY OF COMPENSATION
The following table shows for the fiscal year ended March 31, 1998
compensation awarded or paid to, or earned by the Company's Chief Executive
Officer and the Company's next five most highly compensated executive officers
who earned over $100,000 during the fiscal year (the "Named Executive
Officers"), except as disclosed below, no compensation characterized as long-
term compensation, including restricted stock awards issued at a price below
fair market value or long-term incentive plan payouts, was paid by the Company
during the fiscal year ended March 31, 1998 to any of the Named Executive
Officers:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION
COMPENSATION AWARDS
----------------- ------------
FISCAL OPTIONS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) (# SHARES) COMPENSATION
--------------------------- ------ -------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Mihir Parikh................ 1998 $285,038 $395,300 100,000 $13,569(2)
Chairman of the Board and 1997 $249,519 $145,000 100,000 $11,644(3)
Chief Executive Officer 1996 $215,024 $177,188 100,000 $22,684(4)
Terry L. Moshier............ 1998 $212,865 $213,520 50,000 $33,597(5)
President and 1997 $141,538 $ 90,000 150,000 --
Chief Operating Officer 1996 -- -- -- --
Douglas J. McCutcheon....... 1998 $174,096 $128,810 30,000 $ 6,091(6)
Senior Vice President, 1997 $163,096 $ 80,300 10,000 $ 5,381(7)
Chief Financial Officer 1996 $ 30,462 -- 90,000 --
Anthony C. Bonora........... 1998 $171,207 $157,580 40,000 $ 5,218(7)
Senior Vice President, 1997 $158,827 $ 80,500 30,000 $ 2,381(7)
Research and Development 1996 $147,300 $ 77,500 30,000 $ 2,711(7)
and Chief Technical
Officer
William R. Leckonby......... 1998 $208,576 $ 41,000 10,000 $13,599(8)
President and Chief 1997 $150,000 $ 64,400 20,000 $ 5,040(9)
Operating Officer of 1996 -- -- -- --
Asyst Software, Inc.
</TABLE>
- --------
(1) The Company's officers are eligible for annual cash bonuses under the
terms of the Company's Executive Bonus Plans, adopted each fiscal year.
Payments of bonuses are based upon achievement of specified financial
objectives determined by the Board of Directors at the beginning of each
fiscal year. Financial objectives are based, in part, on the Company's
operating budget and results of operations.
(2) Consists of the following payments made by the Company: (i) $6,000 car
allowance, (ii) $2,819 for premium for term life and supplemental
disability and (iii) $4,750 in matching contribution to the Company's
401(k) plan.
(3) Consists of the following payments made by the Company: (i) $6,000 car
allowance, (ii) $600 for premiums for term life and supplemental
disability insurance, (iii) $5,044 in matching contributions to the
Company's 401(k) plan and (iv) reimbursements for certain incidental
expenses.
(4) Consists of the following payments made by the Company: (i) $6,000 car
allowance, (ii) $8,032 for premiums for term life insurance and
supplemental disability insurance, (iii) $8,652 in matching contributions
to the Company's 401(k) plan and (iv) reimbursements for certain
incidental expenses.
(5) Consists of the following payments made by the Company: (i) $6,000 car
allowance, (ii) $1,347 for premiums for term life insurance and
supplemental disability life insurance, (iii) reimbursements for certain
incidental expenses, and (iv) $26,250 loan forgiveness pursuant to a loan
agreement between the Company and Mr. Moshier.
22
<PAGE>
(6) Consists of the following payments made by the Company: (i) $1,249 for
premiums for term life and supplemental disability, and (ii) $4,842 in
matching contribution to the Company's 401(k) plan.
(7) Consists of matching contributions to the Company's 401(k) plan.
(8) Consists of the following payments made by the Company: (i) $6,000 for car
allowance, (ii) $3,394 for premiums for term life and supplemental
disability and (iii) $4,205 in matching contributions to the Company
401(k) plan.
(9) Consists of the following payments made by the Company: (i) $4,500 for car
allowance and (ii) $540 in matching contributions to the Company's 401(k)
plan.
23
<PAGE>
STOCK OPTION GRANTS AND EXERCISES
The Company grants options to its executive officers under its 1993 Plan. As
of June 30, 1998, options to purchase 1,668,273 shares were outstanding under
the 1993 Plan and options to purchase 325,141 shares remained available for
grant thereunder.
The following tables show for the fiscal year ended March 31, 1998 certain
information regarding options granted to, exercised by, and held at year end
by the Named Executive Officers:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
-------------------------------------------------- VALUE AT ASSUMED ANNUAL
NUMBER OF PERCENT OF RATES OF STOCK PRICE
SECURITIES TOTAL OPTIONS APPRECIATION FOR
UNDERLYING GRANTED OPTION TERM(3)
OPTIONS TO EMPLOYEES IN EXERCISE EXPIRATION -----------------------
NAME GRANTED(1) FISCAL YEAR(2) PRICE ($/SH) DATE 5% 10%
- ---- ---------- --------------- ------------ ---------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Mihir Parikh............ 100,000 8.90% $13.00 05/13/07 $817,562 $2,071,865
Terry L. Moshier........ 50,000 4.47 $13.00 05/13/07 $408,781 $1,035,932
Douglas J. McCutcheon... 30,000 2.68 $13.00 05/13/07 $245,269 $ 621,559
Anthony C. Bonora....... 40,000 3.57 $13.00 05/13/07 $327,025 $ 828,746
William R. Leckonby..... 10,000 .89 $13.00 05/13/07 $ 81,756 $ 207,186
</TABLE>
- --------
(1) Unless otherwise noted, options granted are subject to standard vesting
and become exercisable at a rate of 2.38% of the shares subject to the
option at the end of each month for 42 months following a six month
waiting period with no vesting. The term of the options is 10 years.
(2) Based on an aggregate of 1,119,745 options granted to directors and
employees of the Company in fiscal 1998 including the Named Executive
Officers.
(3) The potential realizable value is calculated based on the term of the
option at its time of grant (10 years). It is calculated by assuming that
the stock price on the date of grant appreciates at the indicated annual
rate compounded annually for the entire term of the option and that the
option is exercised and sold on the last day of its term for the
appreciated stock price. No gain to the optionee is possible unless the
stock price increases over the option term, which will benefit all
shareholders.
24
<PAGE>
The following table shows the number and value of the unexercised options
held by each of the Named Executive Officers at March 31, 1998:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR,
AND FY-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS AT
AT FY-END(#) FY-END
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) REALIZED(1) UNEXERCISABLE UNEXERCISABLE(2)
- ---- --------------- ----------- -------------- ------------------
<S> <C> <C> <C> <C>
Mihir Parikh............ 75,000 $1,536,374 94,739/200,261 $604,451/1,922,848
Terry L. Moshier........ 0 0 51,295/148,705 $656,962/1,823,539
Douglas J. McCutcheon... 0 0 36,204/88,796 $344,837/859,414
Anthony C. Bonora....... 61,300 $1,584,880 20,094/71,726 $185,351/714,882
William R. Leckonby..... 0 0 8,094/21,906 $103,462/261,439
</TABLE>
- --------
(1) Based on the fair market value of the Company's Common Stock on the date
of exercise minus the exercise price of the options.
(2) Based on the fair market value of the Company's Common Stock as of March
31, 1997 minus the exercise price of the options.
25
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE OF THE
BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATION
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATION/1/
The Compensation Committee is responsible for establishing the Company's
compensation programs including salaries, bonuses (if any) and stock ownership
programs for all employees, including the Chief Executive Officer and the
other executive officers. The Compensation Committee evaluates performance and
determines compensation policies and levels.
COMPENSATION PHILOSOPHY
The goals of the compensation program are to align compensation with
business objectives and performance and to enable the Company to attract,
retain and reward executive officers and other key employees who contribute to
the long-term success of the Company and to motivate them to enhance long-term
shareholder value. Key elements of this philosophy are:
. The Company pays competitively with leading companies with which it
competes for talent. The Company regularly compares its pay practices
with high-growth Silicon Valley companies in the semiconductor capital
equipment industry and selected companies appearing in compensation
surveys published by the American Electronics Association, and sets it
pay parameters based on this review. When using comparative data, the
Company attempts to set its compensation levels in a range which is
competitive with management compensation at the companies examined.
. The Company maintains annual incentive opportunities sufficient to
provide motivation to achieve specific operating goals and to generate
rewards that bring total compensation to competitive levels.
. The Company provides equity-based incentives for executives and other key
employees to ensure that they are motivated over the long-term to respond
to the Company's business challenges and opportunities as owners and not
just as employees.
Base Salary. The Compensation Committee annually reviews each executive
officer's base salary. When reviewing base salaries, the Compensation
Committee makes a subjective assessment of, in order of importance, individual
and corporate performance, levels of responsibility, prior experience, breadth
of knowledge and competitive pay practices. The weight of these factors in the
case of a particular individual's compensation may vary.
Annual Incentive. The Company's Executive Bonus Plan (the "Bonus Plan")
adopted each year, is a variable pay program pursuant to which officers and
other senior managers of the Company may earn additional annual compensation.
The actual incentive award earned depends on the extent to which the Company's
articulated objectives are achieved. At the start of each year, the
Compensation Committee reviews and approves the annual performance objectives
for the Company and establishes an individual bonus pool for each executive
officer. For fiscal 1998, the goal was based on a targeted level of operating
earnings per share and individual performance objectives. The total bonus pool
for all the executive officers was $936,210 for fiscal 1998.
Individual awards are determined by evaluating the Company's performance
against the goal and allocating a pro rata portion of the individual award
pool based on the Company's performance against objectives during the year.
- --------
/1/ The material in this report and in the performance graph is not soliciting
material, is not deemed filed with the SEC, and is not incorporated by
reference in any filing of the Company under the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended, whether made
before or after the date of this proxy statement and irrespective of any
general incorporation language in such filing.
26
<PAGE>
Long-Term Incentives. The Company's long-term incentive program currently
consists of the 1993 Stock Option Plan. The option program utilizes vesting
periods (generally four years) to encourage key employees to continue in the
employ of the Company and provide equity incentives to build long-term
shareholder value. The size of option grants is determined based on
competitive practices at leading companies in the industry and the Company's
philosophy of significantly linking executive compensation with shareholder
interests. The Compensation Committee attempts to set equity compensation
levels in the mid-range of comparable companies. In making awards, the
Compensation Committee considers the number, value and vesting of an officer's
outstanding options. In July 1998, the Board approved the Long-Term Incentive
Compensation Plan (the "LTIP"), subject to shareholder approval. See Proposal
3 above for a discussion of the LTIP.
CORPORATE PERFORMANCE AND CHIEF EXECUTIVE OFFICER COMPENSATION
The Compensation Committee set Dr. Parikh's base annual salary for fiscal
year 1998 at approximately $285,038.46. This amount was intended to provide an
annual cash compensation level in the range of salaries of comparable
companies. In setting this amount, the Compensation Committee took into
account (i) the scope of Dr. Parikh's responsibility and (ii) the Compensation
Committee's confidence in Dr. Parikh to lead the Company's continued
development.
Based on the Company's growth in revenue and profitability and other non-
financial objectives, the Compensation Committee awarded Dr. Parikh a bonus of
$395,300 for fiscal 1998. Dr. Parikh also received a stock option grant
covering 100,000 shares in fiscal year 1998 to maintain his equity incentive
position consistent with the objectives set forth above.
SECTION 162(m) OF THE INTERNAL REVENUE CODE
Section 162(m) of the Internal Revenue Code (the "Code") limits the Company
to a deduction for federal income tax purposes of no more than $1 million of
compensation paid to the Named Executive Officers in a taxable year.
Compensation above $1 million may be deducted if it is "performance-based
compensation" within the meaning of the Code.
The Compensation Committee believes that at the present time it is quite
unlikely that the compensation paid to any Named Executive Officer in a
taxable year which is subject to the deduction limit will exceed $1 million.
Nevertheless, the Compensation Committee has determined that options granted
under the Plan with an exercise price at least equal to the fair market value
of the Company's common stock on the date of grant shall be treated as
performance based compensation. The Compensation Committee intends to continue
to evaluate the effects of the statute and to comply with Code Section 162(m)
in the future to the extent consistent with the best interests of the Company.
CONCLUSION
Through the programs described above, a significant portion of the Company's
compensation program for its senior executive officers is contingent on
Company performance, and realization of benefits is closely linked to
increases in long-term shareholder value. The Company remains committed to
this philosophy of pay for performance, recognizing that the competitive
market for talented executives and the volatility of the Company's business
may result in highly variable compensation for a particular time period.
Ashok K. Sinha
James E. Springgate
27
<PAGE>
PERFORMANCE MEASUREMENT COMPARISON(1)
The following graph shows the total shareholder return of an investment of
$100 in cash on September 22, 1994, the date of commencement of trading of the
Company's Common Stock, for (i) the Company's Common Stock, (ii) the Nasdaq
Market Index, as calculated by Media General ("Nasdaq"), and (iii) the Media
General Industry Group 355 Index--Special Industry Machinery, except
Metalworks, a published index ("SIC Code Index"). All values assume
reinvestment of the full amount of all dividends and are calculated as of
December 31 of each year:
COMPARE 5-YEAR CUMULATIVE TOTAL RETURN
AMONG ASYST TECHNOLOGIES, INC.,
NASDAQ MARKET INDEX AND SIC CODE INDEX
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
COMPANY 1993 1994 1995 1996 1997 1998
------- ---- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Asyst Technologies Inc. ................ 100 109.09 334.09 206.82 177.27 422.73
SIC Code Index.......................... 100 108.03 145.23 152.43 183.15 241.57
Nasdaq Market Index..................... 100 101.85 108.05 145.33 162.59 245.71
</TABLE>
- --------
/1/ The material in this performance graph is not "soliciting material," is not
deemed "filed" with the SEC, and is not to be incorporated by reference in
any filing of the Company under the 1933 Act or the 1934 Act whether made
before or after the date of this proxy statement and irrespective of any
general incorporation language in any such filing.
28
<PAGE>
CERTAIN TRANSACTIONS
In August 1997, the Company loaned $200,000 (the "Loan") to Terry Moshier,
President and Chief Operating Officer of the Company, in order to assist Mr.
Moshier with the purchase of a new residence as part of his relocation to
California. The Loan has an interest rate of 4% per annum while Mr. Moshier is
an employee of the Company and 6.39% per annum if Mr. Moshier's employment
with the Company terminates for any reason. The Loan is secured by a second
deed of trust on Mr. Moshier's California residence. The Loan terminates and
shall be immediately due and payable upon the earlier of (i) September 1,
2002, (ii) 90 days after the termination of Mr. Moshier's employment for any
reason, (iii) a default on the repayment of any principal or interest on the
Loan, (iv) a default on the first mortgage on the property, (v) the sale or
transfer of the property or (vi) the insolvency of Mr. Moshier.
In addition, in August 1997 the Company loaned Mr. Moshier $180,000 (the
"Second Loan") in order to facilitate his relocation to California. The Second
Loan has an interest rate of 6.39% and is secured by a pledge of all of the
shares of Company Common Stock that Mr. Moshier owns or that he may
subsequently acquire. The Second Loan shall be forgiven equally over a 48
month period; provided, however, that if Mr. Moshier's employment is
terminated without cause or by his death, the Second Loan shall be forgiven in
full. The Second Loan shall terminate and be immediately due and payable upon
the earlier of (i) 90 days after Mr. Moshier's voluntary termination, (ii) Mr.
Moshier's insolvency or (iii) Mr. Moshier's termination for cause.
On September 30, 1997, the Company completed a private placement of one
million unregistered shares of its common stock at $42.92 per share to a group
of mutual funds managed by a single, large institutional management firm,
generating net proceeds to the Company of $42.9 million. The Company filed a
registration statement with the Securities Exchange Commission on Form S-3,
which became effective on December 1, 1997, for the resale of the securities.
On September 30, 1997, the Company entered into an asset purchase agreement
with Palo Alto Technologies, Inc. ("PAT") pursuant to which the Company sold
to PAT certain intellectual property rights and office equipment which were
owned or licensed by Asyst Automation, Inc. (a discontinued operation) in
consideration for quarterly "Earn-Out Payments" up to an aggregate of $2.0
million. The "Earn-Out Payments" are equal to 4.0 percent of PAT gross
revenue. The Company may convert the right to receive such "Earn-Out Payments"
into shares of PAT securities at the closing of certain issuances of
securities by PAT. In addition, PAT granted the Company the non-exclusive,
worldwide right to distribute and sell any of PAT's products on PAT's most
favorable distributor terms and conditions; except PAT may grant exclusive
distribution rights to particular markets so long as such rights are first
offered to the Company and the Company does not accept the offer. Such
distribution rights shall terminate on the earlier of (i) the fifth
anniversary of such agreement or (ii) if the Company begins selling its own
products which are directly competitive with PAT's products. The Chairman and
Chief Executive Officer of the Company is the Chairman and principal
shareholder of PAT. The parties have agreed that the Chairman and Chief
Executive Officer of the Company and one other officer of the Company may be
advisors or directors of PAT while employed full time by the Company.
29
<PAGE>
OTHER MATTERS
The Board of Directors knows of no other matters that will be presented for
consideration at the Annual Meeting. If any other matters are properly brought
before the meeting, it is the intention of the persons named in the
accompanying proxy to vote on such matters in accordance with their best
judgment.
By Order of the Board of Directors
/s/ JAMES C. KITCH
--------------------------
James C. Kitch
Secretary
July 29, 1998
A COPY OF THE COMPANY'S ANNUAL REPORT TO THE SECURITIES AND EXCHANGE
COMMISSION ON FORM 10-K FOR THE FISCAL YEAR ENDED MARCH 31, 1998 IS AVAILABLE
WITHOUT CHARGE UPON WRITTEN REQUEST TO: DOUGLAS J. MCCUTCHEON, ASYST
TECHNOLOGIES, INC., 48761 KATO ROAD, FREMONT, CA 94538.
30
<PAGE>
1226-PS-98
<PAGE>
ASYST TECHNOLOGIES, INC.
1993 STOCK OPTION PLAN
Adopted June 23, 1993
Approved by the Shareholders on September 3, 1993
Amended by the Board of Directors on July 21, 1994
Approved by the Shareholders on August 24, 1994
Amended by the Board of Directors on July 20, 1995
Approved by the Shareholders on September 26, 1995
Amended by the Board of Directors on July 25, 1996
Approved by the Shareholders on September 30, 1996
Amended by the Board of Directors on July 22, 1997
Approved by the Shareholders on September 29, 1997
Amended by the Board of Directors on July 21, 1998
1. Purposes.
(a) The purpose of the Plan is to provide a means by which selected
Employees and Directors of and Consultants to the Company, and its Affiliates,
may be given an opportunity to purchase stock of the Company.
(b) The Company, by means of the Plan, seeks to retain the services of
persons who are now Employees, Directors or Consultants to the Company and its
Affiliates, to secure and retain the services of new Employees and Consultants,
and to provide incentives for such persons to exert maximum efforts for the
success of the Company and its Affiliates.
(c) The Company intends that the Stock Awards issued under the Plan shall,
in the discretion of the Board or any Committee to which responsibility for
administration of the Plan has been delegated pursuant to subsection 3(c), be
either (i) Options granted pursuant to Section 6 hereof, including Incentive
Stock Options and Nonstatutory Stock Options, or (ii) rights to purchase
restricted stock granted pursuant to Section 7 hereof. All Options shall be
separately designated Incentive Stock Options or Nonstatutory Stock Options at
the time of grant, and in
1.
<PAGE>
such form as issued pursuant to Section 6, and a separate certificate or
certificates will be issued for shares purchased on exercise of each type of
Option.
2. Definitions.
(a) "Affiliate" means any parent corporation or subsidiary corporation,
whether now or hereafter existing, as those terms are defined in Sections 424(e)
and (f) respectively, of the Code.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means a Committee appointed by the Board in accordance
with subsection 3(c) of the Plan.
(e) "Company" means Asyst Technologies, Inc., a California corporation.
(f) "Consultant" means any person, including an advisor, engaged by the
Company or an Affiliate to render services and who is compensated for such
services, provided that the term "Consultant" shall not include Directors who
are paid only a director's fee by the Company or who are not compensated by the
Company for their services as Directors.
(g) "Continuous Status as an Employee, Director or Consultant" means the
employment or relationship as Director or Consultant is not interrupted or
terminated. The Board, in its sole discretion, may determine whether Continuous
Status as an Employee, Director or Consultant shall be considered interrupted in
the case of: (i) any leave of absence approved by the Board, including sick
leave, military leave, or any other personal leave; or (ii) transfers between
locations of the Company or between the Company, Affiliates or their successors.
(h) "Covered Employee" means the chief executive officer and the four (4)
other highest compensated officers of the Company for whom total compensation is
required to be
2.
<PAGE>
reported to shareholders under the Exchange Act, as determined for purposes of
Section 162(m) of the Code.
(i) "Director" means a member of the Board.
(j) "Disability" means total and permanent disability as defined in
Section 22(e)(3) of the Code.
(k) "Employee" means any person, including Officers and Directors,
employed by the Company or any Affiliate of the Company. Neither service as a
Director nor payment of a director's fee by the Company shall be sufficient to
constitute "employment" by the Company.
(l) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(m) "Fair Market Value" means, as of any date, the value of the common
stock of the Company determined as follows:
(i) If the common stock is listed on any established stock exchange
or a national market system, including without limitation the National Market of
The Nasdaq Stock Market, the Fair Market Value of a share of common stock shall
be the closing sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such system or exchange (or the exchange with the
greatest volume of trading in common stock) on the last market trading day prior
to the day of determination, as reported in the Wall Street Journal or such
other source as the Board deems reliable;
(ii) If the common stock is quoted on The Nasdaq Stock Market (but
not on the National Market thereof) or is regularly quoted by a recognized
securities dealer but selling prices are not reported, the Fair Market Value of
a share of common stock shall be the mean between the high bid and high asked
prices for the common stock on the last market trading day
3.
<PAGE>
prior to the day of determination, as reported in the Wall Street Journal or
such other source as the Board deems reliable;
(iii) In the absence of an established market for the common stock,
the Fair Market Value shall be determined in good faith by the Board.
(n) "Incentive Stock Option" means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.
(o) "Non-Employee Director" means a Director who either (i) is not a
current Employee or officer of the Company or an Affiliate, does not receive
compensation (directly or indirectly) from the Company or an Affiliate for
services rendered as a Consultant or in any capacity other than as a Director
(except for an amount as to which disclosure would not be required under Item
404(a) of Regulation S-K promulgated pursuant to the Securities Act of 1933, as
amended ("Regulation S-K")), does not possess an interest in any other
transaction as to which disclosure would be required under Item 404(a) of
Regulation S-K, and is not engaged in a business relationship as to which
disclosure would be required under Item 404(b) of Regulation S-K; or (ii) is
otherwise considered a "non-employee director" for purposes of Rule 16b-3.
(p) "Nonstatutory Stock Option" means an Option not intended to qualify as
an Incentive Stock Option.
(q) "Officer" means a person who is an officer of the Company within the
meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(r) "Option" means a stock option granted pursuant to the Plan.
4.
<PAGE>
(s) "Option Agreement" means a written agreement between the Company and
an Optionee evidencing the terms and conditions of an individual Option grant.
Each Option Agreement shall be subject to the terms and conditions of the Plan.
(t) "Optioned Stock" means the common stock of the Company subject to an
Option.
(u) "Optionee" means an Employee, Director or Consultant who holds an
outstanding Option.
(v) "Outside Director" means a Director who either (i) is not a current
employee of the Company or an "affiliated corporation" (within the meaning of
Treasury regulations promulgated under Section 162(m) of the Code), is not a
former employee of the Company or an "affiliated corporation" receiving
compensation for prior services (other than benefits under a tax qualified
pension plan), was not an officer of the Company or an "affiliated corporation"
at any time, and is not currently receiving direct or indirect remuneration from
the Company or an "affiliated corporation" for services in any capacity other
than as a Director, or (ii) is otherwise considered an "outside director" for
purposes of Section 162(m) of the Code.
(w) "Plan" means this 1993 Stock Option Plan.
(x) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any successor to
Rule 16b-3, as in effect when discretion is being exercised with respect to the
Plan.
(y) "Securities Act" means the Securities Act of 1933, as amended.
(z) "Stock Award" means any right granted under the Plan, including any
Option, or any right to purchase restricted stock.
(aa) "Stock Award Agreement" means a written agreement between the Company
and a holder of a Stock Award evidencing the terms and conditions of an
individual Stock Award grant. Each Stock Award Agreement shall be subject to the
terms and conditions of the Plan.
5.
<PAGE>
3. Administration.
(a) The Plan shall be administered by the Board unless and until the Board
delegates administration to a Committee, as provided in subsection 3(c).
(b) The Board shall have the power, subject to, and within the limitations
of, the express provisions of the Plan:
(i) To determine from time to time which of the persons eligible
under the Plan shall be granted Stock Awards; when and how each Stock Award
shall be granted; whether a Stock Award will be an Incentive Stock Option or a
Nonstatutory Stock Option, a right to purchase restricted stock, or a
combination of the foregoing; the provisions of each Stock Award granted (which
need not be identical), including the time or times such Stock Award may be
exercised in whole or in part; and the number of shares for which a Stock Award
shall be granted to each such person.
(ii) To construe and interpret the Plan and Stock Awards granted
under it, and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan or in any Stock Award Agreement,
in a manner and to the extent it shall deem necessary or expedient to make the
Plan fully effective.
(iii) To amend the Plan or a Stock Award as provided in Section 12.
(iv) Generally, to exercise such powers and to perform such acts as
the Board deems necessary or expedient to promote the best interests of the
Company.
(c) The Board may delegate administration of the Plan to a committee
composed of not fewer than two (2) members (the "Committee"), all of the members
of which Committee shall be Non-Employee Directors and may also be, in the
discretion of the Board, Outside
6.
<PAGE>
Directors. If administration is delegated to a Committee, the Committee shall
have, in connection with the administration of the Plan, the powers theretofore
possessed by the Board (and references in this Plan to the Board shall
thereafter be to the Committee), subject, however, to such resolutions, not
inconsistent with the provisions of the Plan, as may be adopted from time to
time by the Board. The Board may abolish the Committee at any time and revest in
the Board the administration of the Plan. Notwithstanding anything in this
Section 3 to the contrary, at any time the Board or the Committee may delegate
to a committee of one or more members of the Board the authority to grant Stock
Awards to eligible persons who (1) are not then subject to Section 16 of the
Exchange Act and/or (2) are either (i) not then Covered Employees and are not
expected to be Covered Employees at the time of recognition of income resulting
from such Stock Award, or (ii) not persons with respect to whom the Company
wishes to avoid the application of Section 162(m) of the Code.
4. Shares Subject To The Plan.
(a) Subject to the provisions of Section 11 relating to adjustments upon
changes in stock, the stock that may be sold pursuant to Options shall not
exceed in the aggregate Four Million Four Hundred Thousand (4,400,000) shares of
the Company's common stock; provided however, that on each April 1, commencing
with April 1, 1999, prior to April 2, 2003, the number of shares of the
Company's common stock which may be issued pursuant to Stock Awards shall
automatically be increased by the number that is equal to four percent (4%) of
the total number of shares of the Company's common stock outstanding on that
date. If any Stock Award shall for any reason expire or otherwise terminate, in
whole or in part, without having been exercised in full, the stock not acquired
under such Stock Award shall revert to and again become available for issuance
under the Plan.
7.
<PAGE>
(b) Except as adjusted pursuant to Section 11 of the Plan, however, no
more than Seven Million Four Hundred Thousand (7,400,000) of the shares eligible
for issuance under the Plan shall be issued upon the exercise of Incentive Stock
Options under the Plan.
(c) The stock subject to the Plan may be unissued shares or reacquired
shares, bought on the market or otherwise.
5. Eligibility.
(a) Incentive Stock Options may be granted only to Employees. Stock
Awards, other than Incentive Stock Options, may be granted only to Employees,
Directors or Consultants.
(b) No person shall be eligible for the grant of an Incentive Stock Option
if, at the time of grant, such person owns (or is deemed to own pursuant to
Section 424(d) of the Code) stock possessing more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company or of any of
its Affiliates unless the exercise price of such Option is at least one hundred
ten percent (110%) of the Fair Market Value of such stock at the date of grant
and the Option is not exercisable after the expiration of five (5) years from
the date of grant.
(c) Subject to the provisions of Section 11 relating to adjustments upon
changes in stock, no person shall be eligible to be granted Options covering
more than Nine Hundred Thousand (900,000) shares of the Company's common stock
in any calendar year.
8.
<PAGE>
6. Option Provisions.
Each Option shall be in such form and shall contain such terms and
conditions as the Board shall deem appropriate. The provisions of separate
Options need not be identical, but each Option shall include (through
incorporation of provisions hereof by reference in the Option or otherwise) the
substance of each of the following provisions:
(a) Term. No Option shall be exercisable after the expiration of ten (10)
years from the date it was granted.
(b) Price. The exercise price of each Incentive Stock Option shall be not
less than one hundred percent (100%) of the Fair Market Value of the stock
subject to the Option on the date the Option is granted. The exercise price of
each Nonstatutory Stock Option shall be not less than eighty-five percent (85%)
of the Fair Market Value of the stock subject to the Option on the date the
Option is granted.
(c) Consideration. The purchase price of stock acquired pursuant to an
Option shall be paid, to the extent permitted by applicable statutes and
regulations, either in cash at the time the Option is exercised, or (ii) at the
discretion of the Board or the Committee, either at the time of the grant or
exercise of the Option, (A) by delivery to the Company of other common stock of
the Company, (B) according to a deferred payment or other arrangement (which may
include, without limiting the generality of the foregoing, the use of other
common stock of the Company) with the person to whom the Option is granted or to
whom the Option is transferred pursuant to subsection 6(d), or (C) in any other
form of legal consideration that may be acceptable to the Board. In the case of
any deferred payment arrangement, interest shall be payable at least annually
and shall be charged at the minimum rate of interest necessary to avoid the
treatment as
9.
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interest, under any applicable provisions of the Code, of any amounts other than
amounts stated to be interest under the deferred payment arrangement.
(d) Transferability. An Incentive Stock Option shall not be transferable
except by will or by the laws of descent and distribution, and shall be
exercisable during the lifetime of the person to whom the Incentive Stock Option
is granted only by such person. A Nonstatutory Stock Option may be transferred
to the extent provided in the Option Agreement; provided that if the Option
Agreement of a Nonstatutory Stock Option does not expressly permit such
transfer, such Nonstatutory Stock Option shall not be transferable except by
will, by the laws of descent and distribution or pursuant to a domestic
relations order satisfying the requirements of Rule 16a-12 of the Exchange Act
and shall be exercisable during the lifetime of the person to whom such
Nonstatutory Stock Option is granted only by such person or any transferee
pursuant to a domestic relations order. Notwithstanding the foregoing, the
person to whom the Option is granted may, by delivering written notice to the
Company, in a form satisfactory to the Company, designate a third party who, in
the event of the death of the Optionee, shall thereafter be entitled to exercise
the Option.
(e) Vesting. The total number of shares of stock subject to an Option
may, but need not, be allotted in periodic installments (which may, but need
not, be equal). The Option Agreement may provide that from time to time during
each of such installment periods, the Option may become exercisable ("vest")
with respect to some or all of the shares allotted to that period, and may be
exercised with respect to some or all of the shares allotted to such period
and/or any prior period as to which the Option became vested but was not fully
exercised. During the remainder of the term of the Option (if its term extends
beyond the end of the installment periods), the option may be exercised from
time to time with respect to any shares
10.
<PAGE>
then remaining subject to the Option. The provisions of this subsection 6(e) are
subject to any Option provisions governing the minimum number of shares as to
which an Option may be exercised.
(f) Securities Law Compliance. The Company may require any Optionee, or
any person to whom an Option is transferred under subsection 6(d), as a
condition of exercising any such Option, (1) to give written assurances
satisfactory to the Company as to the Optionee's knowledge and experience in
financial and business matters and/or to employ a purchaser representative
reasonably satisfactory to the Company who is knowledgeable and experienced in
financial and business matters, and that he or she is capable of evaluating,
alone or together with the purchaser representative, the merits and risks of
exercising the Option; and (2) to give written assurances satisfactory to the
Company stating that such person is acquiring the stock subject to the Option
for such person's own account and not with any present intention of selling or
otherwise distributing the stock. These requirements, and any assurances given
pursuant to such requirements, shall be inoperative if (i) the issuance of the
shares upon the exercise of the Option has been registered under a then
currently effective registration statement under the Securities Act of 1933, as
amended (the "Securities Act"), or (ii) as to any particular requirement, a
determination is made by counsel for the Company that such requirement need not
be met in the circumstances under the then applicable securities laws. The
Company may, upon advice of counsel to the Company, place legends on stock
certificates issued under the Plan as such counsel deems necessary or
appropriate in order to comply with applicable securities laws, including, but
not limited to, legends restricting the transfer of the stock.
(g) Termination of Employment or Relationship as a Consultant. In the
event an Optionee's Continuous Status as an Employee, Director or Consultant
terminates (other than
11.
<PAGE>
upon the Optionee's death or Disability), the Optionee may exercise his or her
Option (to the extent that the Optionee was entitled to exercise it at the date
of termination) but only within such period of time ending on the earlier of (i)
the date three (3) months after the termination of the Optionee's Continuous
Status as an Employee, Director or Consultant (or such longer or shorter period
specified in the Option Agreement), or (ii) the expiration of the term of the
Option as set forth in the Option Agreement. If, after termination, the Optionee
does not exercise his or her Option within the time specified in the Option
Agreement, the Option shall terminate, and the shares covered by such Option
shall revert to and again become available for issuance under the Plan.
(h) Disability of Optionee. In the event an Optionee's Continuous Status
as an Employee, Director or Consultant terminates as a result of the Optionee's
Disability, the Optionee may exercise his or her Option (to the extent that the
Optionee was entitled to exercise it at the date of termination), but only
within such period of time ending on the earlier of (i) the date twelve (12)
months following such termination (or such longer or shorter period specified in
the Option Agreement), or (ii) the expiration of the term of the Option as set
forth in the Option Agreement. If, at the date of termination, the Optionee is
not entitled to exercise his or her entire Option, the shares covered by the
unexercisable portion of the Option shall revert to and again become available
for issuance under the Plan. If, after termination, the Optionee does not
exercise his or her Option within the time specified herein, the Option shall
terminate, and the shares covered by such Option shall revert to and again
become available for issuance under the Plan.
(i) Death of Optionee. In the event of the death of an Optionee during,
or within three (3) months of the termination of, the Optionee's Continuous
Status as an Employee,
12.
<PAGE>
Director or Consultant, the Option may be exercised (to the extent the Optionee
was entitled to exercise the Option at the date of death) by the Optionee's
estate or by a person who acquired the right to exercise the Option by bequest
or inheritance, but only within the period ending on the earlier of (i) the date
twelve (12) months following the date of death (or such longer or shorter period
specified in the Option Agreement), or (ii) the expiration of the term of such
Option as set forth in the Option Agreement. If, at the time of death, the
Optionee was not entitled to exercise his or her entire Option, the shares
covered by the unexercisable portion of the Option shall revert to and again
become available for issuance under the Plan. If, after death, the Optionee's
estate or a person who acquired the right to exercise the Option by bequest or
inheritance does not exercise the Option within the time specified herein, the
Option shall terminate, and the shares covered by such Option shall revert to
and again become available for issuance under the Plan.
(j) Early Exercise. The Option may, but need not, include a provision
whereby the Optionee may elect at any time while an Employee, Director or
Consultant to exercise the Option as to any part or all of the shares subject to
the Option prior to the full vesting of the Option. Any unvested shares so
purchased may be subject to a repurchase right in favor of the Company or to any
other restriction the Board determines to be appropriate.
(k) Withholding. To the extent provided by the terms of an Option
Agreement, the Optionee may satisfy any federal, state or local tax withholding
obligation relating to the exercise of such Option by any of the following means
or by a combination of such means: (1) tendering a cash payment; (2) authorizing
the Company to withhold shares from the shares of the common stock otherwise
issuable to the participant as a result of the exercise of the Option; or
13.
<PAGE>
(3) delivering to the Company owned and unencumbered shares of the common stock
of the Company.
7. Terms Of Purchases Of Restricted Stock.
Each restricted stock purchase agreement shall be in such form and shall
contain such terms and conditions as the Board or the Committee shall deem
appropriate. The terms and conditions of restricted stock purchase agreements
may change from time to time, and the terms and conditions of separate
agreements need not be identical, but each restricted stock purchase agreement
shall include (through incorporation of provisions hereof by reference in the
agreement or otherwise) the substance of each of the following provisions as
appropriate:
(a) Purchase Price. The purchase price under each restricted stock
purchase agreement shall be such amount as the Board or Committee shall
determine and designate in such agreement.
(b) Transferability. Rights under a restricted stock purchase agreement
shall be transferable by the grantee only upon such terms and conditions as are
set forth in the applicable Stock Award Agreement, as the Board or the Committee
shall determine in its discretion, so long as stock awarded under such Stock
Award Agreement remains subject to the terms of the agreement.
(c) Consideration. The purchase price of stock acquired pursuant to a
restricted stock purchase agreement shall be paid either: (i) in cash at the
time of purchase; (ii) at the discretion of the Board or the Committee,
according to a deferred payment arrangement, except that payment of the common
stock's "par value" (as defined in the Delaware General Corporation Law) shall
not be made by deferred payment, or other arrangement with the person
14.
<PAGE>
to whom the stock is sold; or (iii) in any other form of legal consideration
that may be acceptable to the Board or the Committee in its discretion.
(d) Vesting. Shares of stock sold or awarded under the Plan may, but need
not, be subject to a repurchase option in favor of the Company in accordance
with a vesting schedule to be determined by the Board or the Committee.
(e) Termination of Continuous Status as an Employee, Director or
Consultant. In the event a Participant's Continuous Status as an Employee,
Director or Consultant terminates, the Company may repurchase any or all of the
shares of stock held by that person which have not vested as of the date of
termination under the terms of the restricted stock purchase agreement between
the Company and such person.
8. Covenants Of The Company.
(a) During the terms of Stock Awards, the Company shall keep available at
all times the number of shares of stock required to satisfy such Stock Awards.
(b) The Company shall seek to obtain from each regulatory commission or
agency having jurisdiction over the Plan such authority as may be required to
issue and sell shares of stock upon exercise of Stock Awards; provided, however,
that this undertaking shall not require the Company to register under the
Securities Act of 1933, as amended, either the Plan, any Stock Award or any
stock issued or issuable pursuant to any such Stock Award. If, after reasonable
efforts, the Company is unable to obtain from any such regulatory commission or
agency the authority which counsel for the Company deems necessary for the
lawful issuance and sale of stock under the Plan, the Company shall be relieved
from any liability for failure to issue and sell stock upon exercise of such
Stock Awards unless and until such authority is obtained.
15.
<PAGE>
9. Use Of Proceeds From Stock.
Proceeds from the sale of stock pursuant to Stock Awards shall constitute
general funds of the Company.
10. Miscellaneous.
(a) The Board shall have the power to accelerate the time at which an
Option may first be exercised or the time during which an Option or any part
thereof will vest pursuant to subsection 6(e), notwithstanding the provisions in
the Option stating the time at which it may first be exercised or the time
during which it will vest.
(b) Neither the holder of a Stock Award, nor any person to whom a Stock
Award is transferred under subsection 6(d) or subsection 7(b) shall be deemed to
be the holder of, or to have any of the rights of a holder with respect to, any
shares subject to such Stock Award unless and until such person has satisfied
all requirements for exercise of the Stock Award pursuant to its terms.
(c) Nothing in the Plan or any instrument executed or Stock Award granted
pursuant thereto shall confer upon any Employee, Director, Consultant or other
holder of a Stock Award any right to continue in the employ of the Company or
any Affiliate (or to continue acting as a Director or Consultant) or shall
affect the right of the Company or any Affiliate to terminate the employment or
relationship as a Director or Consultant of any Employee, Director, Consultant
or other holder of a Stock Award with or without cause.
(d) To the extent that the aggregate Fair Market Value (determined at the
time of grant) of stock with respect to which Incentive Stock Options are
exercisable for the first time by any Optionee during any calendar year under
all plans of the Company and its Affiliates exceeds one hundred thousand dollars
($100,000), the Options or portions thereof which exceed such
16.
<PAGE>
limit (according to the order in which they were granted) shall be treated as
Nonstatutory Stock Options.
11. Adjustments Upon Changes In Stock.
(a) If any change is made in the stock subject to the Plan, or subject to
any Stock Award, without the receipt of consideration by the Company (through
merger, consolidation, reorganization, recapitalization, stock dividend,
dividend in property other than cash, stock split, liquidating dividend,
combination of shares, exchange of shares, change in corporate structure or
other transaction not involving the receipt of consideration by the Company),
the Plan and outstanding Stock Awards will be appropriately adjusted in the
class(es) and maximum number of shares subject to the Plan and the class(es) and
number of shares and price per share of stock subject to outstanding Stock
Awards. Such adjustments shall be made by the Board or the Committee, the
determination of which shall be final, binding and conclusive. (The conversion
of any convertible securities of the Company shall not be treated as a
"transaction not involving the receipt of consideration by the Company".)
(b) In the event of: (1) a dissolution or liquidation of the Company; (2)
a merger or consolidation in which the Company is not the surviving corporation;
or (3) a reverse merger in which the Company is the surviving corporation but
the shares of the Company's common stock outstanding immediately preceding the
merger are converted by virtue of the merger into other property, whether in the
form of securities, cash or otherwise, then to the extent permitted by
applicable law: (i) any surviving corporation shall assume any Stock Awards
outstanding under the Plan or shall substitute similar stock awards for those
outstanding under the Plan, or (ii) such Stock Awards shall continue in full
force and effect. In the event any surviving corporation refuses to assume or
continue such Stock Awards, or to substitute similar stock awards for those
17.
<PAGE>
outstanding under the Plan, then, with respect to Stock Awards held by persons
then performing services as Employees, Directors or Consultants, the time during
which such Stock Awards may be exercised, or the time during which restrictions
on shares received pursuant to Stock Awards lapse, shall be accelerated and the
Stock Awards shall terminate if not exercised prior to such event.
12. Amendment Of The Plan And Stock Awards.
(a) The Board at any time, and from time to time, may amend the Plan.
However, except as provided in Section 11 relating to adjustments upon changes
in stock, no amendment shall be effective unless approved by the shareholders of
the Company within twelve (12) months before or after the adoption of the
amendment to the extent shareholder approval is necessary for the Plan to
satisfy the requirements of Section 422 of the Code, Rule 16b-3 or any Nasdaq or
securities exchange listing requirements.
(b) It is expressly contemplated that the Board may amend the Plan in any
respect the Board deems necessary or advisable to provide Optionees with the
maximum benefits provided or to be provided under the provisions of the Code and
the regulations promulgated thereunder relating to Incentive Stock Options
and/or to bring the Plan and/or Incentive Stock Options granted under it into
compliance therewith.
(c) Rights and obligations under any Stock Award granted before amendment
of the Plan shall not be impaired by any amendment of the Plan unless (i) the
Company requests the consent of the person to whom the Stock Award was granted
and (ii) such person consents in writing.
(d) The Board at any time, and from time to time, may amend the terms of
any one or more Stock Awards; provided, however, that an amendment to reprice a
Stock Award or Stock
18.
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Awards (other than an amendment to correct an error in the price) shall not be
effective unless approved by the shareholders of the Company within twelve (12)
months before or after the adoption of the amendment, and rights and obligations
under a Stock Award shall not be impaired by any amendment to such Stock Award
unless (i) the Company requests the consent of the person to whom the Stock
Award was granted and (ii) such person consents in writing.
13. Termination Or Suspension Of The Plan.
(a) The Board may suspend or terminate the Plan at any time. Unless sooner
terminated, the Plan shall terminate on June 22, 2003. No Stock Awards may be
granted under the Plan while the Plan is suspended or after it is terminated.
(b) Rights and obligations under any Stock Award granted while the Plan is
in effect shall not be impaired by suspension or termination of the Plan, except
with the consent of the person to whom the Stock Award was granted.
14. Effective Date Of Plan.
The Plan, as amended on July 21, 1998 shall become effective on such date,
but no Stock Awards granted under the Plan, as amended, shall be exercised (or
issued in the case of a restricted stock bonus) unless and until the Plan, as
amended, has been approved by the shareholders of the Company.
19.
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July 24, 1998
ASYST TECHNOLOGIES, INC.
LONG-TERM INCENTIVE COMPENSATION PLAN
ARTICLE I
PURPOSE
The purpose of the Long-Term Incentive Compensation Plan (the "Plan") is to
promote the interests of Asyst Technologies, Inc. (the "Company") and its
stockholders by (i) helping the Company to attract and retain outstanding
management, (ii) stimulating management's efforts on behalf of the Company by
giving participants a direct interest in the performance of the Company and
(iii) suitably rewarding participants' contributions to the success of the
Company.
The Company intends that certain performance-based compensation payable under
the Plan will qualify for deduction under Section 162(m) of the Internal Revenue
Code of 1986, as amended.
ARTICLE II
DEFINITIONS
2.1 Award Certificate: A written instrument evidencing the award of Units
to a Participant.
<PAGE>
2.2 Base Year EPS: Earnings Per Share for the Fiscal Year immediately
preceding the date of an award of Units.
2.3 Beneficiary: The person or persons designated by a Participant, in
accordance with Section 9.1, to receive any amount payable under the Plan upon
the Participant's death.
2.4 Board: The Board of Directors of the Company.
2.5 Change in Control: (i) An acquisition by an individual, an entity or
a group (excluding the Company or an employee benefit plan of the Company or a
corporation controlled by the Company's stockholders) of 30 percent or more of
the Company's Common Stock or voting securities; (ii) a change in the
composition of the Board occurring within a rolling two-year period, as a result
of which fewer than a majority of the directors are Incumbent Directors
("Incumbent Directors" shall mean directors who either (x) are members of the
Board as of the Effective Date or (y) are elected, or nominated for election, to
the Board with the affirmative votes of at least a majority of the Incumbent
Directors at the time of such election or nomination, but shall not include an
individual not otherwise an Incumbent Director whose election or nomination is
in connection with an actual or threatened proxy contest relating to the
election of directors to the Board; (iii) consummation of a complete
liquidation or dissolution of the Company or a merger, consolidation or sale of
all or substantially all of the Company's assets (collectively, a "Business
Combination") other than a Business Combination (x) in which the stockholders of
the Company receive 50 percent or more of the stock resulting from the Business
Combination, (y) at least a majority of the
2
<PAGE>
board of directors of the resulting corporation were Incumbent Directors and (z)
after which no individual, entity or group (excluding any corporation resulting
from the Business Combination or any employee benefit plan of such corporation
or of the Company) owns 30 percent or more of the stock of the resulting
corporation, who did not own such stock immediately before the Business
Combination.
2.6 Code: The Internal Revenue Code of 1986, as amended from time to
time.
2.7 Committee: The Compensation Committee of the Board, which is
comprised solely of two or more "outside directors" within the meaning of
Section 162(m) of the Code.
2.8 Common Shares: Shares of common stock (no par value) of the Company.
2.9 Company: Asyst Technologies, Inc. and consolidated subsidiaries, a
California corporation, or any successor thereto.
2.10 Cumulative Unit Value: The amount determined in accordance with
Section 7.2.
2.11 Disability: Disability, as defined in a Participant's employment
agreement with the Company, or, absent an agreement, in the Company's group
disability insurance contract.
3
<PAGE>
2.12 Earnings: For any Fiscal Year, the consolidated income of the
Company prepared in accordance with generally accepted accounting principles, as
reported in the Company's audited consolidated financial statements for that
Fiscal Year, adjusted on an after-tax basis to (a) exclude (i) in its entirety
any item of nonrecurring gain or loss in excess of $2,000,000, except that gains
resulting from the settlement or adjudication of intellectual property
litigation shall be totally includible and (ii) any accruals for this Plan and
(b) add back write-offs required in connection with any acquisition in the year
of acquisition.
2.13 Earnings Per Share: For any Fiscal Year, Earnings divided by the
number of Common Shares used to determine the Company's fully diluted earnings
per share for that Fiscal Year, as reported in the Company's audited
consolidated financial statements for the Fiscal Year; provided, however, that
for the Fiscal Year ending March 31, 1999, Earnings per Share shall be based on
Earnings for the period July 1, 1998 through March 31, 1999 on an annualized
basis (i.e., multiplied by 133%).
2.14 Effective Date: The effective date of the Plan, which is April 1,
1998.
2.15 Fiscal Year: Any fiscal year commencing on April 1 and ending on
March 31 of the following year.
2.16 Incremental Unit Value: The amount determined in accordance with
Section 7.1.
4
<PAGE>
2.17 Maximum Cumulative Unit Value: For all Units awarded as of the
beginning of any Fiscal Year, the amount determined by the Committee for those
Units when they are awarded.
2.18 Measuring Price: For each Unit awarded as of the Effective Date,
$22.75; for each Unit awarded thereafter, the closing price of a Common Share as
reported on the NASDAQ National Market System on the last day of the Fiscal Year
preceding the date as of which the Unit is awarded.
2.19 Participant: A key employee of the Company designated by the
Committee to participate in the Plan.
2.20 Plan: The Asyst Technologies, Inc. Long-Term Incentive Compensation
Plan, as herein set forth and as it may be amended from time to time.
2.21 Term of the Plan: The period commencing on the Effective Date and
ending five years after the final award of Units (but in no event later than
March 31, 2013), in accordance with Section 5.1, or on such earlier date as the
Maximum Cumulative Unit Value of such Units may be achieved.
2.22 Termination Without Cause: Termination of a Participant's employment
by the Company without "Cause," as defined in the Participant's employment
agreement with the Company, or, absent an agreement defining Cause, termination
of the Participant's employment by the Company for any reason other than (i)
continuing and material failure to fulfill his or her
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employment obligations or willful misconduct or gross neglect in the performance
of such duties, (ii) commission of fraud, misappropriation or embezzlement in
the performance of such duties or (iii) conviction of a felony, which, as
determined in good faith by the Board, constitutes a crime involving moral
turpitude and may result in material harm to the Company.
2.23 Unit: A unit of participation in the Plan awarded to a Participant
in accordance with Article V.
2.24 Valuation Date: The last day of any Fiscal Year.
ARTICLE III
ADMINISTRATION
3.1 The Plan shall be administered by the Committee. A majority of the
Committee shall constitute a quorum. Committee decisions and determinations
shall be made by a majority of its members present at a meeting at which a
quorum is present, and they shall be final. The actions of the Committee with
respect to the Plan shall be binding on all affected Participants. Any decision
or determination reduced to writing and signed by all of the members of the
Committee shall be fully effective as if it had been made by a vote at a meeting
duly called and held. The Committee shall keep minutes of its meetings and
shall make such rules and regulations for the conduct of its business as it
shall deem advisable.
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3.2 The Committee shall have full authority, subject to the provisions
of the Plan (i) to select Participants and determine the extent and terms of
their participation; (ii) to adopt, amend and rescind such rules and regulations
as, in its opinion, may be advisable in the administration of the Plan, (iii) to
construe and interpret the Plan, the rules and regulations adopted thereunder
and any notice or Award Certificate given to a Participant; and (iv) to make all
other determinations that it deems necessary or advisable in the administration
of the Plan.
3.3 The Committee may employ attorneys, consultants, accountants or other
persons as it deems necessary for the proper administration of the Plan and may
rely on the advice, opinions or valuations of any such persons. No member of
the Committee shall be personally liable for any action, determination or
interpretation taken or made in good faith by the Committee with respect to the
Plan or any award hereunder, and all members of the Committee shall be fully
indemnified and protected by the Company in respect of any such action,
determination or interpretation.
3.4 In the event of any stock split, stock dividend, reclassification,
recapitalization or other change that affects the character or amount of
outstanding Common Shares and Earnings Per Share, the Committee shall make such
adjustments in the number of Units (whether authorized or outstanding and
unexercised), the Measuring Price or both as shall, in the sole judgment of the
Committee, be equitable and appropriate in order to make the value of such
Units, as nearly as may be practicable, equivalent to the value of Units
outstanding and unexercised immediately prior to
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such change. In no event, however, shall any such adjustment give any
Participant any additional benefits.
3.5 The Committee shall be precluded from increasing compensation payable
under the Plan to a Participant, including acceleration of payment and increase
of any amount payable, unless specifically provided for by the Plan.
ARTICLE IV
PARTICIPATION
4.1 Only key employees of the Company who, in the Committee's judgment,
will have a significant impact on the success of the business shall be eligible
to participate in the Plan. The Committee, in its sole discretion, shall select
the Participants.
4.2 In selecting Participants and in determining the number of Units to be
awarded to each Participant for any Fiscal Year, the Committee shall take into
account such factors as the individual's position, experience, knowledge,
responsibilities, advancement potential and past and anticipated contributions
to Company performance.
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ARTICLE V
AWARD OF UNITS
5.1 Subject to adjustment as provided in Section 3.4, a maximum of 500,000
Units may be awarded under the Plan. A Participant who has been awarded Units
may be awarded additional Units from time to time and new Participants may be
awarded Units, both in the discretion of the Committee; provided, however, that
no Units shall be awarded after 2008.
5.2 Units shall be awarded solely by the Committee and shall be evidenced
by an Award Certificate, as provided in Article X.
5.3 Subject to adjustment as provided in Section 3.4, the maximum number
of Units awarded to any one individual shall not exceed 150,000 during the Term
of the Plan.
ARTICLE VI
TERM AND VESTING OF UNITS
6.1 Each Unit shall have a term of five years from the date of award,
subject to earlier termination (i) as provided in Article XI or (ii) upon
attainment before five years of the Unit's Maximum Cumulative Unit Value.
Notwithstanding the foregoing, the term of Units awarded as
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of the Effective Date shall terminate on the last day of the Fiscal Year ending
in 2003, subject to earlier termination as aforesaid. Units shall be deemed to
be awarded as of the Effective Date or the first day of any subsequent Fiscal
Year through 2008, as the case may be.
6.2 Each Unit shall become vested on the Valuation Date immediately
preceding the fifth anniversary of the date of its award or, if earlier, upon
(i) attainment of its Maximum Cumulative Unit Value, (ii) a Participant's
Termination Without Cause (before or after a Change in Control) or (iii)
termination of a Participant's employment with the Company (y) other than for
Cause after attainment of age 50 and completion of 10 years of employment with
the Company or (z) by reason of death or Disability.
ARTICLE VII
DETERMINATION OF VALUE OF A UNIT
7.1 For any Fiscal Year, the Incremental Unit Value of a Unit shall be
equal to the product of the Measuring Price multiplied by .80 of the percentage
by which Earnings Per Share for the Fiscal Year exceeds Base Year EPS. In the
event Base Year EPS exceeds Earnings Per Share for any Fiscal Year, the
Incremental Unit Value for the Fiscal Year shall be zero. The Committee shall
notify each Participant of the Incremental Unit Value of his or her Units for
each Fiscal Year as soon as practicable after the Valuation Date for the Fiscal
Year.
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7.2 The Incremental Unit Value of each Unit for any Fiscal Year shall be
cumulated with the Incremental Unit Value of the Unit for all prior Fiscal Years
from the date of the Unit's award. The cumulative amount thus determined shall
be the then Cumulative Unit Value of such Unit.
ARTICLE VIII
EXERCISE AND PAYMENT OF UNITS
8.1 Except as provided in Article XI, a Unit that is vested, in accordance
with Article VI, shall thereupon be exercised. In order to exercise a vested
outstanding Unit, a Participant (i) shall give written notice of exercise to the
Secretary of the Company and (ii) shall deliver his or her Award Certificate to
the Secretary of the Company, who shall endorse thereon a notation of such
exercise and return the same to the Participant. The date of exercise of a Unit
shall be the date on which the Company receives the required documentation.
Upon exercise, the Participant shall be entitled to receive the Cumulative Unit
Value of the Units being exercised, determined as of the concurrent or
immediately preceding Valuation date, but not in excess of the Maximum
Cumulative Unit Value.
8.2 Payment of the amount due under the Plan shall be made not later than
five days following the date of exercise of any Unit or the date of such other
event as shall entitle the Participant to payment; provided, however, that,
before any payment may be made, the Committee must certify in writing that all
performance criteria under the Plan have been met. Not less than 50
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percent of any amount due shall be paid in cash, and the balance shall be paid
in cash or Common Shares or both, as determined by the Committee in its
discretion.
8.3 Upon a Change in Control, a Participant shall be entitled to receive a
lump-sum cash payment in respect of any award of Units thus vested, in an amount
determined as follows:
(a) If the Change in Control occurs before the third anniversary
of such award of Units, an amount equal to the greater of (i) the Cumulative
Unit Value of the Units or (ii) 75 percent of their Maximum Cumulative Unit
Value, or
(b) If the Change in Control occurs on or after the third
anniversary of such award of Units, an amount equal to the greater of (i) the
Cumulative Unit Value of the Units or (ii) their Maximum Cumulative Unit Value.
ARTICLE IX
LIMITS ON TRANSFERABILITY OF UNITS
9.1 Each Participant shall file with the Committee a written designation
of one or more persons as the Beneficiary who shall be entitled to receive any
amount or any Common Shares payable under the Plan upon his or her death. A
Participant may, from time to time, revoke or change his or her Beneficiary
designation without the consent of any previously designated
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Beneficiary by filing a new designation with the Committee. The last such
designation received by the Committee shall be controlling; provided, however,
that no designation, or change or revocation thereof, shall be effective unless
received by the Committee prior to the Participant's death, and in no event
shall it be effective as of a date prior to such receipt. If at the date of a
Participant's death, there is no designation of a Beneficiary in effect for the
Participant, or if no Beneficiary survives to receive any amount payable under
the Plan by reason of the Participant's death, the Participant's estate shall be
treated as the Beneficiary for purposes of the Plan.
9.2 A Unit may be exercised only by the Participant to whom it was
awarded, except in the event of the Participant's death, when a Unit may be
exercised by his or her Beneficiary. Except as provided in Section 9.1, a
Participant may not transfer, assign, alienate or hypothecate any benefits under
the Plan.
ARTICLE X
AWARD CERTIFICATE
10.1 Promptly following the making of an award, the Company shall deliver
to the recipient an Award Certificate, specifying the terms and conditions of
the Unit. This writing shall be in such form and contain such provisions not
inconsistent with the Plan as the Committee shall prescribe.
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ARTICLE XI
TERMINATION OF UNITS
11.1 An outstanding Unit awarded to a Participant shall be canceled and
all rights with respect thereto shall expire upon the earlier to occur of (i)
its exercise as provided in Section 8.1 or (ii) termination of the Participant's
employment with the Company; provided, however, that if such termination occurs
pursuant to clause (ii) or (iii) of Section 6.2 above, or for any other reason
specifically approved in advance by the Committee, the term of such Unit shall
continue for a period of 14 months from the date of termination (the "Extended
Term"). For purposes of this Section 11.1, the Cumulative Unit Value of such
Unit shall be determined as of the Valuation Date concurrent with or immediately
preceding the end of the Extended Term or any earlier exercise date, whichever
is applicable. A Unit whose term is continued for an Extended Term shall be
deemed to be automatically exercised as of the last Valuation Date within the
Extended Term, unless sooner exercised by the Participant or his or her legal
representative.
11.2 Nothing contained in Section 11.1 shall be deemed to extend the term
of any Unit beyond the end of the Term of the Plan.
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ARTICLE XII
TERMINATION AND AMENDMENT OF THE PLAN
12.1 The Company reserves the right to amend or terminate the Plan at any
time, by action of the Committee, but no such amendment or termination shall
adversely affect the rights of any Participant with respect to outstanding Units
held by the Participant without his or her written consent. No amendment will
be effective prior to approval by the Company's stockholders to the extent such
approval is required by Section 162(m) of the Code or otherwise required by law.
ARTICLE XIII
GENERAL PROVISIONS
13.1 Nothing in the Plan, nor the award of any Unit, shall confer on any
Participant a right to continue in the employment of the Company or affect any
right of the Company to terminate a Participant's employment.
13.2 The Plan shall be governed by and construed in accordance with the
laws of the State of California without reference to principles of conflict of
laws.
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13.3 The Company shall be authorized to withhold from any award or payment
it makes under the Plan to a Participant the amount of withholding taxes due
with respect to such award or payment and to take such other action as may be
necessary in the opinion of the Company to satisfy all obligations for the
payment of such taxes.
13.4 Nothing in the Plan shall prevent the Board from adopting other or
additional compensation arrangements, subject to stockholder approval as may be
necessary, and such arrangements may be either generally applicable or
applicable only in specific cases.
13.5 Participants shall not be required to make any payment or provide any
consideration for awards under the Plan other than the rendering of services.
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ASYST TECHNOLOGIES, INC.
EMPLOYEE STOCK PURCHASE PLAN
Adopted by the Board of Directors on June 23, 1993
Approved by the Shareholders on September 3, 1993
Amended by the Board of Directors on July 25, 1996
Approved by the Shareholders on September 30, 1996
Revised to reflect stock split on August 1, 1997
Amended by the Board of Directors on July 21, 1998
1. Purpose.
(a) The purpose of the Employee Stock Purchase Plan (the "Plan") is to
provide a means by which employees of Asyst Technologies, Inc., a California
corporation (the "Company"), and its Affiliates, as defined in subparagraph
1(b), which are designated as provided in subparagraph 2(b), may be given an
opportunity to purchase stock of the Company.
(b) The word "Affiliate" as used in the Plan means any parent
corporation or subsidiary corporation of the Company, as those terms are defined
in Sections 424(e) and (f), respectively, of the Internal Revenue Code of 1986,
as amended (the "Code").
(c) The Company, by means of the Plan, seeks to retain the services of
its employees, to secure and retain the services of new employees, and to
provide incentives for such persons to exert maximum efforts for the success of
the Company.
(d) The Company intends that the rights to purchase stock of the
Company granted under the Plan be considered options issued under an "employee
stock purchase plan" as that term is defined in Section 423(b) of the Code.
2. Administration.
(a) The Plan shall be administered by the Board of Directors (the
"Board") of the Company unless and until the Board delegates administration to a
Committee, as provided in subparagraph 2(c). Whether or not the Board has
delegated administration, the Board shall have the final power to determine all
questions of policy and expediency that may arise in the administration of the
Plan.
(b) The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
(i) To determine when and how rights to purchase stock of the
Company shall be granted and the provisions of each offering of such rights
(which need not be identical).
(ii) To designate from time to time which Affiliates of the
Company shall be eligible to participate in the Plan.
<PAGE>
(iii) To construe and interpret the Plan and rights granted under
it, and to establish, amend and revoke rules and regulations for its
administration. The Board, in the exercise of this power, may correct any
defect, omission or inconsistency in the Plan, in a manner and to the extent it
shall deem necessary or expedient to make the Plan fully effective.
(iv) To amend the Plan as provided in paragraph 13.
(v) Generally, to exercise such powers and to perform such acts
as the Board deems necessary or expedient to promote the best interests of the
Company.
(c) The Board may delegate administration of the Plan to a Committee
composed of not fewer than two (2) members of the Board (the "Committee"). If
administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore possessed
by the Board, subject, however, to such resolutions, not inconsistent with the
provisions of the Plan, as may be adopted from time to time by the Board. The
Board may abolish the Committee at any time and revest in the Board the
administration of the Plan.
3. Shares Subject To The Plan.
(a) Subject to the provisions of paragraph 12 relating to adjustments
upon changes in stock, the stock that may be sold pursuant to rights granted
under the Plan shall not exceed in the aggregate Seven Hundred Thousand
(700,000) shares of the Company's common stock (the "Common Stock"). If any
right granted under the Plan shall for any reason terminate without having been
exercised, the Common Stock not purchased under such right shall again become
available for the Plan.
(b) The stock subject to the Plan may be unissued shares or reacquired
shares, bought on the market or otherwise.
4. Grant Of Rights; Offering.
The Board or the Committee may from time to time grant or provide for
the grant of rights to purchase Common Stock of the Company under the Plan to
eligible employees (an "Offering") on a date or dates (the "Offering Date(s)")
selected by the Board or the Committee. Each Offering shall be in such form and
shall contain such terms and conditions as the Board or the Committee shall deem
appropriate. If an employee has more than one right outstanding under the Plan,
unless he or she otherwise indicates in agreements or notices delivered
hereunder: (1) each agreement or notice delivered by that employee will be
deemed to apply to all of his or her rights under the Plan, and (2) a right with
a lower exercise price (or an earlier-granted right, if two rights have
identical exercise prices), will be exercised to the fullest possible extent
before a right with a higher exercise price (or a later-granted right, if two
rights have identical exercise prices) will be exercised. The provisions of
separate Offerings need not be identical, but each Offering shall include
(through incorporation of the provisions of this Plan by reference in the
Offering or otherwise) the substance of the provisions contained in paragraphs 5
through 8, inclusive.
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5. Eligibility.
(a) Rights may be granted only to employees of the Company or, as the
Board or the Committee may designate as provided in subparagraph 2(b), to
employees of any Affiliate of the Company. Except as provided in subparagraph
5(b), an employee of the Company or any Affiliate shall not be eligible to be
granted rights under the Plan, unless, on the Offering Date, such employee has
been in the employ of the Company or any Affiliate for such continuous period
preceding such grant as the Board or the Committee may require, but in no event
shall the required period of continuous employment be equal to or greater than
two (2) years. In addition, unless otherwise determined by the Board or the
Committee and set forth in the terms of the applicable Offering, no employee of
the Company or any Affiliate shall be eligible to be granted rights under the
Plan, unless, on the Offering Date, such employee's customary employment with
the Company or such Affiliate is at least twenty (20) hours per week and at
least five (5) months per calendar year.
(b) The Board or the Committee may provide that, each person who,
during the course of an Offering, first becomes an eligible employee of the
Company or designated Affiliate will, on a date or dates specified in the
Offering which coincides with the day on which such person becomes an eligible
employee or occurs thereafter, receive a right under that Offering, which right
shall thereafter be deemed to be a part of that Offering. Such right shall have
the same characteristics as any rights originally granted under that Offering,
as described herein, except that:
(i) the date on which such right is granted shall be the "Offering
Date" of such right for all purposes, including determination of the exercise
price of such right;
(ii) the Purchase Period (as defined below) for such right shall
begin on its Offering Date and end coincident with the end of such Offering; and
(iii) the Board or the Committee may provide that if such person
first becomes an eligible employee within a specified period of time before the
end of the Purchase Period (as defined below) for such Offering, he or she will
not receive any right under that Offering.
(c) No employee shall be eligible for the grant of any rights under the
Plan if, immediately after any such rights are granted, such employee owns stock
possessing five percent (5%) or more of the total combined voting power or value
of all classes of stock of the Company or of any Affiliate. For purposes of this
subparagraph 5(c), the rules of Section 424(d) of the Code shall apply in
determining the stock ownership of any employee, and stock which such employee
may purchase under all outstanding rights and options shall be treated as stock
owned by such employee.
(d) An eligible employee may be granted rights under the Plan only if
such rights, together with any other rights granted under "employee stock
purchase plans" of the Company and any Affiliates, as specified by Section
423(b)(8) of the Code, do not permit such employee's rights to purchase stock of
the Company or any Affiliate to accrue at a rate which exceeds twenty-five
thousand dollars ($25,000) of fair market value of such stock (determined at
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the time such rights are granted) for each calendar year in which such rights
are outstanding at any time.
(e) Officers of the Company and any designated Affiliate shall be
eligible to participate in Offerings under the Plan, provided, however, that the
Board may provide in an Offering that certain employees who are highly
compensated employees within the meaning of Section 423(b)(4)(D) of the Code
shall not be eligible to participate.
6. Rights; Purchase Price.
(a) On each Offering Date, each eligible employee, pursuant to an
Offering made under the Plan, shall be granted the right to purchase up to the
number of shares of Common Stock of the Company purchasable with a percentage
designated by the Board or the Committee not exceeding ten percent (10%) of such
employee's Earnings (as defined in Section 7(a)) during the period which begins
on the Offering Date (or such later date as the Board or the Committee
determines for a particular Offering) and ends on the date stated in the
Offering, which date shall be no more than twenty-seven (27) months after the
Offering Date (the "Purchase Period"). In connection with each Offering made
under this Plan, the Board or the Committee shall specify a maximum number of
shares which may be purchased by any employee as well as a maximum aggregate
number of shares which may be purchased by all eligible employees pursuant to
such Offering. In addition, in connection with each Offering which contains more
than one Exercise Date (as defined in the Offering), the Board or the Committee
may specify a maximum aggregate number of shares which may be purchased by all
eligible employees on any given Exercise Date under the Offering. If the
aggregate purchase of shares upon exercise of rights granted under the Offering
would exceed any such maximum aggregate number, the Board or the Committee shall
make a pro rata allocation of the shares available in as nearly a uniform manner
as shall be practicable and as it shall deem to be equitable.
(b) The purchase price of stock acquired pursuant to rights granted
under the Plan shall be not less than the lesser of:
(i) an amount equal to eighty-five percent (85%) of the fair
market value of the stock on the Offering Date; or
(ii) an amount equal to eighty-five percent (85%) of the fair
market value of the stock on the Exercise Date.
7. Participation; Withdrawal; Termination.
(a) An eligible employee may become a participant in an Offering by
delivering a participation agreement to the Company within the time specified in
the Offering, in such form as the Company provides. Each such agreement shall
authorize payroll deductions of up to the maximum percentage specified by the
Board or the Committee of such employee's Earnings during the Purchase Period.
"Earnings" is defined as the total compensation paid to an employee, including
all salary, wages (including amounts elected to be deferred by the employee,
that would otherwise have been paid, under any cash or deferred arrangement
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established by the Company), overtime pay, commissions, bonuses, and other
remuneration paid directly to the employee, but excluding profit sharing, the
cost of employee benefits paid for by the Company, education or tuition
reimbursements, imputed income arising under any Company group insurance or
benefit program, traveling expenses, business and moving expense reimbursements,
income received in connection with stock options, contributions made by the
Company under any employee benefit plan, and similar items of compensation. The
payroll deductions made for each participant shall be credited to an account for
such participant under the Plan and shall be deposited with the general funds of
the Company. A participant may reduce (including to zero), increase or begin
such payroll deductions after the beginning of any Purchase Period only as
provided for in the Offering. A participant may make additional payments into
his or her account only if specifically provided for in the Offering and only if
the participant has not had the maximum amount withheld during the Purchase
Period.
(b) At any time during a Purchase Period a participant may terminate
his or her payroll deductions under the Plan and withdraw from the Offering by
delivering to the Company a notice of withdrawal in such form as the Company
provides. Such withdrawal may be elected at any time prior to the end of the
Purchase Period except as provided by the Board or the Committee in the
Offering. Upon such withdrawal from the Offering by a participant, the Company
shall distribute to such participant all of his or her accumulated payroll
deductions (reduced to the extent, if any, such deductions have been used to
acquire stock for the participant) under the Offering, without interest, and
such participant's interest in that Offering shall be automatically terminated.
A participant's withdrawal from an Offering will have no effect upon such
participant's eligibility to participate in any other Offerings under the Plan
but such participant will be required to deliver a new participation agreement
in order to participate in subsequent Offerings under the Plan.
(c) Rights granted pursuant to any Offering under the Plan shall
terminate immediately upon cessation of any participating employee's employment
with the Company and any designated Affiliate, for any reason, and the Company
shall distribute to such terminated employee all of his or her accumulated
payroll deductions (reduced to the extent, if any, such deductions have been
used to acquire stock for the terminated employee), under the Offering, without
interest.
(d) Rights granted under the Plan shall not be transferable, and shall
be exercisable only by the person to whom such rights are granted.
8. Exercise.
(a) On each exercise date, as defined in the relevant Offering (an
"Exercise Date"), each participant's accumulated payroll deductions and other
additional payments specifically provided for in the Offering (without any
increase for interest) will be applied to the purchase of whole shares of stock
of the Company, up to the maximum number of shares permitted pursuant to the
terms of the Plan and the applicable Offering, at the purchase price specified
in the Offering. No fractional shares shall be issued upon the exercise of
rights granted under the Plan. The amount, if any, of accumulated payroll
deductions remaining in each participant's account after the purchase of shares
which is less than the amount required to purchase one share of stock on the
final Exercise Date of an Offering shall be held in each such
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<PAGE>
participant's account for the purchase of shares under the next Offering under
the Plan, unless such participant withdraws from such next Offering, as provided
in subparagraph 7(b), or is no longer eligible to be granted rights under the
Plan, as provided in paragraph 5, in which case such amount shall be distributed
to the participant after said final Exercise Date, without interest. The amount,
if any, of accumulated payroll deductions remaining in any participant's account
after the purchase of shares which is equal to the amount required to purchase
whole shares of stock on the final Exercise Date of an Offering shall be
distributed in full to the participant after such Exercise Date, without
interest.
(b) No rights granted under the Plan may be exercised to any extent
unless the Plan (including rights granted thereunder) is covered by an effective
registration statement pursuant to the Securities Act of 1933, as amended (the
"Securities Act"). If on an Exercise Date of any Offering hereunder the Plan is
not so registered, no rights granted under the Plan or any Offering shall be
exercised on said Exercise Date and the Exercise Date shall be delayed until the
Plan is subject to such an effective registration statement, except that the
Exercise Date shall not be delayed more than two (2) months and the Exercise
Date shall in no event be more than twenty-seven (27) months from the Offering
Date. If on the Exercise Date of any Offering hereunder, as delayed to the
maximum extent permissible, the Plan is not registered, no rights granted under
the Plan or any Offering shall be exercised and all payroll deductions
accumulated during the purchase period (reduced to the extent, if any, such
deductions have been used to acquire stock) shall be distributed to the
participants, without interest.
9. Covenants Of The Company.
(a) During the terms of the rights granted under the Plan, the Company
shall keep available at all times the number of shares of stock required to
satisfy such rights.
(b) The Company shall seek to obtain from each regulatory commission or
agency having jurisdiction over the Plan such authority as may be required to
issue and sell shares of stock upon exercise of the rights granted under the
Plan. If, after reasonable efforts, the Company is unable to obtain from any
such regulatory commission or agency the authority which counsel for the Company
deems necessary for the lawful issuance and sale of stock under the Plan, the
Company shall be relieved from any liability for failure to issue and sell stock
upon exercise of such rights unless and until such authority is obtained.
10. Use Of Proceeds From Stock.
Proceeds from the sale of stock pursuant to rights granted under the
Plan shall constitute general funds of the Company.
11. Rights As A Stockholder.
A participant shall not be deemed to be the holder of, or to have any
of the rights of a holder with respect to, any shares subject to rights granted
under the Plan unless and until the participant's shareholdings acquired upon
exercise of rights hereunder are recorded in the books of the Company.
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<PAGE>
12. Adjustments Upon Changes In Stock.
(a) If any change is made in the stock subject to the Plan, or subject
to any rights granted under the Plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange of
shares, change in corporate structure or otherwise), the Plan and outstanding
rights will be appropriately adjusted in the class(es) and maximum number of
shares subject to the Plan and the class(es) and number of shares and price per
share of stock subject to outstanding rights.
(b) In the event of: (1) a dissolution or liquidation of the Company;
(2) a merger or consolidation in which the Company is not the surviving
corporation; (3) a reverse merger in which the Company is the surviving
corporation but the shares of the Company's Common Stock outstanding immediately
preceding the merger are converted by virtue of the merger into other property,
whether in the form of securities, cash or otherwise; or (4) any other capital
reorganization in which more than fifty percent (50%) of the shares of the
Company entitled to vote are exchanged, then, as determined by the Board in its
sole discretion (i) any surviving corporation may assume outstanding rights or
substitute similar rights for those under the Plan, (ii) such rights may
continue in full force and effect, or (iii) participants' accumulated payroll
deductions may be used to purchase Common Stock immediately prior to the
transaction described above and the participants' rights under the ongoing
Offering terminated.
13. Amendment Of The Plan.
(a) The Board at any time, and from time to time, may amend the Plan.
However, except as provided in paragraph 12 relating to adjustments upon changes
in stock, no amendment shall be effective unless approved by the stockholders of
the Company within twelve (12) months before or after the adoption of the
amendment, where the amendment will:
(i) Increase the number of shares reserved for rights under the
Plan;
(ii) Modify the provisions as to eligibility for participation in
the Plan (to the extent such modification requires stockholder approval in order
for the Plan to obtain employee stock purchase plan treatment under Section 423
of the Code or to comply with the requirements of Rule 16b-3 promulgated under
the Securities Exchange Act of 1934, as amended ("Rule 16b-3")); or
(iii) Modify the Plan in any other way if such modification
requires stockholder approval in order for the Plan to obtain employee stock
purchase plan treatment under Section 423 of the Code or to comply with the
requirements of Rule 16b-3.
It is expressly contemplated that the Board may amend the Plan in any respect
the Board deems necessary or advisable to provide eligible employees with the
maximum benefits provided or to be provided under the provisions of the Code and
the regulations promulgated thereunder relating to employee stock purchase plans
and/or to bring the Plan and/or rights granted under it into compliance
therewith.
7
<PAGE>
(b) Rights and obligations under any rights granted before amendment of
the Plan shall not be altered or impaired by any amendment of the Plan, except
with the consent of the person to whom such rights were granted or except as
necessary to comply with any laws or governmental regulation.
14. Termination Or Suspension Of The Plan.
(a) The Board may suspend or terminate the Plan at any time. Unless
sooner terminated, the Plan shall terminate on June 22, 2003. No rights may be
granted under the Plan while the Plan is suspended or after it is terminated.
(b) Rights and obligations under any rights granted while the Plan is
in effect shall not be altered or impaired by suspension or termination of the
Plan, except with the consent of the person to whom such rights were granted or
except as necessary to comply with any laws or governmental regulation.
15. Effective Date Of Plan.
The Plan shall become effective as determined by the Board, but no
rights granted under the Plan shall be exercised unless and until the Plan has
been approved by the stockholders of the Company.
8
<PAGE>
ASYST TECHNOLOGIES, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 28, 1998
The undersigned hereby appoints MIHIR PARIKH and DOUGLAS J. MCCUTCHEON, and
each of them, as attorneys and proxies of the undersigned, with full power of
substitution, to vote all of the shares of stock of Asyst Technologies, Inc.
which the undersigned may be entitled to vote at the Annual Meeting of
Shareholders of Asyst Technologies, Inc. to be held at the Westin Santa Clara,
5101 Great America Parkway, Santa Clara, California 95054 on Friday, August 28,
1998 at 2:00 p.m. (local time), and at any and all postponements, continuations
and adjournments thereof, with all powers that the undersigned would possess if
personally present, upon and in respect of the following matters and in
accordance with the following instructions, with discretionary authority as to
any and all other matters that may properly come before the meeting.
UNLESS A CONTRARY DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED FOR ALL
NOMINEES LISTED IN PROPOSAL 1 AND FOR PROPOSALS 2, 3, 4 AND 5, AS MORE
SPECIFICALLY DESCRIBED IN THE PROXY STATEMENT. IF SPECIFIC INSTRUCTIONS ARE
INDICATED, THIS PROXY WILL BE VOTED IN ACCORDANCE THEREWITH.
MANAGEMENT RECOMMENDS A VOTE FOR THE NOMINEES FOR DIRECTOR LISTED BELOW.
PROPOSAL 1: To elect directors to hold office until the next Annual Meeting
of Shareholders and until their successors are elected.
[_] For all nominees listed below [_] Withhold Authority
(except as marked to the contrary to vote for all nominees
below). listed below.
Nominees: Mihir Parikh, Stanley Grubel, Tsuyoshi Kawanishi, Ashok K. Sinha
and Walter W. Wilson
To withhold authority to vote for any nominee(s), write such nominee(s)' name(s)
below:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Continued on other side)
<PAGE>
(Continued from other side)
MANAGEMENT RECOMMENDS A VOTE FOR PROPOSALS 2, 3, 4 AND 5.
PROPOSAL 2: To approve the Company's 1993 Stock Option Plan, as amended,
including amendments to (i) increase the aggregate number of shares
of Common Stock authorized for issuance under such plan by
1,800,000 shares, (ii) add evergreen provisions (iii) add
provisions related to restricted stock awards, (iv) rescind the
Board's authority to reprice options without shareholder approval,
(v) set the aggregate number of shares that may be issued pursuant
to exercise of incentive stock options, and (vi) increase the per-
individual, per-calendar year period limitation from 200,000 shares
to 900,000 shares of Common Stock.
[_] For [_] Against [_] Abstain
Proposal 3: To approve the Company's Long Term Incentive Compensation Plan.
[_] For [_] Against [_] Abstain
Proposal 4: To approve the Company's 1993 Employee Stock Purchase Plan, as
amended, to increase the aggregate number of shares of Common Stock
authorized for issuance under such plan by 200,000 shares.
[_] For [_] Against [_] Abstain
(Continued and to be signed on other side)
(Continued from other side)
Proposal 5: To ratify selection of Arthur Andersen LLP as independent auditors
of the Company for its fiscal year ending March 31, 1999.
[_] For [_] Against [_] Abstain
DATED _________________ __________________________________________________
__________________________________________________
SIGNATURE(S)
Please sign exactly as your name appears hereon.
If the stock is registered in the names of two or
more persons, each should sign. Executors,
administrators, trustees, guardians and attorneys-
in-fact should add their titles. If signer is a
corporation, please give full corporate name and
have a duly authorized officer sign, stating
title. If signer is a partnership, please sign in
partnership name by authorized person.
Please vote, date and promptly return this proxy in the enclosed return envelope
which is postage prepaid if mailed in the United State.
