<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
<TABLE>
<S> <C>
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
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 Section240.14a-11(c) or
Section240.14a-12
ULTRATECH STEPPER, INC.
-----------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
-----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
</TABLE>
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
----------------------------------------------------------
(2) Aggregate number of securities to which transaction
applies:
----------------------------------------------------------
(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):
----------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------
/ / 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:
----------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
----------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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</TABLE>
<PAGE>
[LOGO]
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 1, 2000
------------------------
TO THE STOCKHOLDERS OF ULTRATECH STEPPER, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Ultratech
Stepper, Inc., a Delaware corporation (the "Company"), will be held on June 1,
2000, at 10:00 a.m. local time, at the Beverly Heritage Hotel, 1820 Barber Lane,
Milpitas, CA 95035, for the following purposes, as more fully described in the
Proxy Statement accompanying this Notice:
1. To elect two (2) directors to serve for the ensuing two years until the
expiration of their terms in 2002, or until their successors are duly
elected and qualified;
2. To ratify the appointment of Ernst & Young LLP as independent auditors
of the Company for the fiscal year ending December 31, 2000; and
3. To transact such other business as may properly come before the meeting
or any adjournment or postponement thereof, including the election of any
director if any of the above nominees is unable to serve or for good
cause will not serve.
Only stockholders of record at the close of business on April 14, 2000 are
entitled to notice of and to vote at the Annual Meeting. The stock transfer
books will not be closed between the record date and the date of the meeting. A
list of stockholders entitled to vote at the Annual Meeting will be available
for inspection at the executive offices of the Company.
All stockholders are cordially invited to attend the meeting in person.
Whether or not you plan to attend, please sign and return the enclosed proxy as
promptly as possible in the envelope enclosed for your convenience. Should you
receive more than one proxy because your shares are registered in different
names and addresses, each proxy should be signed and returned to assure that all
your shares will be voted. You may revoke your proxy at any time prior to the
Annual Meeting. If you attend the Annual Meeting and vote by ballot, your proxy
will be revoked automatically and only your vote at the Annual Meeting will be
counted.
Sincerely,
/s/ Arthur W. Zafiropoulo
Arthur W. Zafiropoulo
CHAIRMAN OF THE BOARD, CHIEF EXECUTIVE
OFFICER
May 2, 2000
YOUR VOTE IS VERY IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES YOU OWN. PLEASE
READ THE ATTACHED PROXY STATEMENT CAREFULLY, COMPLETE, SIGN AND DATE THE
ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE AND RETURN IT IN THE ENCLOSED
ENVELOPE.
<PAGE>
ULTRATECH STEPPER, INC.
3050 ZANKER ROAD
SAN JOSE, CALIFORNIA 95134
------------------------
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 1, 2000
---------------------
GENERAL
The enclosed proxy ("Proxy") is solicited on behalf of the Board of
Directors of Ultratech Stepper, Inc., a Delaware corporation (the "Company"),
for use at the Annual Meeting of Stockholders to be held on June 1, 2000 (the
"Annual Meeting"). The Annual Meeting will be held at 10:00 a.m. at the Beverly
Heritage Hotel, 1820 Barber Lane, Milpitas, CA 95035. These proxy solicitation
materials were mailed on or about May 2, 2000 to all stockholders entitled to
vote at the Annual Meeting.
VOTING
The specific proposals to be considered and acted upon at the Annual Meeting
are summarized in the accompanying Notice and are described in more detail in
this Proxy Statement. On April 14, 2000, the record date for determination of
stockholders entitled to notice of and to vote at the Annual Meeting, 21,470,509
shares of the Company's common stock, $.001 par value ("Common Stock"), were
issued and outstanding. No shares of the Company's preferred stock were
outstanding. Each stockholder is entitled to one vote for each share of Common
Stock held by such stockholder on April 14, 2000. Stockholders may not cumulate
votes in the election of directors.
All votes will be tabulated by the inspector of elections appointed for the
meeting who will separately tabulate affirmative and negative votes, abstentions
and broker non-votes. Directors are elected by a plurality vote. Proposal Two,
the ratification of Ernst & Young as the Company's independent auditors for the
fiscal year ending December 31, 2000, will be decided by the affirmative vote of
the holders of a majority of shares present in person or represented by proxy
and entitled to vote on such matter. With regard to the election of directors,
votes may be cast in favor of or withheld from each nominee; votes that are
withheld will be excluded entirely from the vote and will have no effect.
Abstentions and broker non-votes are counted as present for purposes of
determining the presence or absence of a quorum for the transaction of business.
Abstentions with respect to any matter other than the election of directors will
be treated as shares present or represented and entitled to vote on that matter
and will thus have the same effect as negative votes. If shares are not voted by
the broker who is the record holder of the shares, or if shares are not voted in
other circumstances in which proxy authority is defective or has been withheld
with respect to any matter, these non-voted shares are deemed not to be entitled
to vote on the matter and accordingly are not counted for purposes of
determining whether stockholder approval of that matter has been obtained.
REVOCABILITY OF PROXIES
If the enclosed form of proxy is properly signed and returned, the shares
represented thereby will be voted at the Annual Meeting in accordance with the
instructions specified thereon. If the proxy does not specify how the shares
represented thereby are to be voted, the proxy will be voted FOR the election of
each director proposed by the Board unless the authority to vote for the
election of any such director is withheld and, if no contrary instructions are
given, the proxy will be voted FOR the approval of Proposal 2 described in the
accompaying Notice and Proxy Statement and, with respect to and any other
proposals properly brought before the Annual Meeting, as the Board of Directors
recommends. You may revoke or change your Proxy at any time before the Annual
Meeting by filing with the Secretary of the Company at
<PAGE>
the Company's principal executive offices, a notice of revocation or another
signed proxy with a later date. You may also revoke your proxy by attending the
Annual Meeting and voting in person.
SOLICITATION
The Company will bear the entire cost of solicitation, including the
preparation, assembly, printing and mailing of this Proxy Statement, the proxy
and any additional solicitation materials furnished to stockholders. Copies of
solicitation materials will be furnished to brokerage houses, fiduciaries, and
custodians holding shares in their names that are beneficially owned by others
so that they may forward this solicitation material to such beneficial owners.
In addition, the Company may reimburse such persons for their costs in
forwarding the solicitation materials to such beneficial owners. The original
solicitation of proxies by mail may be supplemented by a solicitation by
telephone, telegram, or other means by directors, officers or employees. Such
individuals, however, will not be compensated by the Company for those services.
Except as described above, the Company does not presently intend to solicit
proxies other than by mail.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
Proposals of stockholders of the Company that are intended to be presented
by such stockholders at the Company's 2001 Annual Meeting must be received no
later than December 27, 2000 in order that they may be included in the proxy
statement and form of proxy relating to that meeting. In addition, the proxy
solicited by the Board of Directors for the 2001 Annual Meeting will confer
discretionary authority to vote on any stockholder proposal presented at that
meeting, unless the Company receives notice of such proposal not later than
March 12, 2001.
2
<PAGE>
MATTERS TO BE CONSIDERED AT ANNUAL MEETING
PROPOSAL ONE
ELECTION OF DIRECTORS
GENERAL
On July 23, 1993, the Board of Directors and stockholders of the Company
approved the Company's Amended and Restated Certificate of Incorporation to
provide for a classified Board of Directors consisting of two classes of
directors each serving staggered two-year terms. The Amended and Restated
Certificate of Incorporation became effective on October 6, 1993 and was amended
in 1995 and 1998 by the stockholders to give effect to increases in the number
of authorized shares of Common Stock. The class whose term of office expires at
the Annual Meeting currently consists of three directors. However, Mr. Larry
Carter has indicated that he will not serve on the Board of Directors after his
current term expires at the Annual Meeting. The Board of Directors has selected
two nominees for election for the term ending upon the 2002 Annual Stockholders
Meeting or until their successors have been duly elected and qualified, both of
whom are current directors of the Company. If the proposal is approved, the
board will consist of five persons, with two classes consisting of three
directors each with one vacancy. The names of the persons who are nominees for
director, the terms of their proposed directorship, and their positions and
offices with the Company as of April 14, 2000 are set forth below.
Each person nominated for election has agreed to serve if elected, and
management has no reason to believe that any of the nominees will be unavailable
to serve. In the event any of the nominees are unable or decline to serve as a
director at the time of the Annual Meeting, the proxies will be voted for any
nominee who may be designated by the present Board of Directors to fill the
vacancy. Unless otherwise instructed, the proxy holders will vote the proxies
received by them FOR the nominees named below. The two candidates receiving the
highest number of affirmative votes of the shares represented and voting on this
particular matter at the Annual Meeting will be elected directors of the
Company, to serve for their respective terms or until their successors have been
elected and qualified.
NOMINEES FOR TERM ENDING UPON THE 2002 ANNUAL STOCKHOLDERS MEETING
ARTHUR W. ZAFIROPOULO, 61, founded the Company in September 1992 to acquire
certain assets and liabilities of the Ultratech Stepper Division ("Predecessor")
of General Signal Corporation ("General Signal") and, since March 1993, has
served as Chief Executive Officer and Chairman of the Board. Additionally,
Mr. Zafiropoulo served as President of the Company from March 1993 to
March 1996, resumed the position of President of the Company in May 1997 and
served in this capacity until April 1999. Between September 1990 and
March 1993, he was President of Predecessor. From February 1989 to
September 1990, Mr. Zafiropoulo was President of General Signal's Semiconductor
Equipment Group International, a semiconductor equipment company. From
August 1980 to February 1989, Mr. Zafiropoulo was President and Chief Executive
Officer of Drytek, Inc., a plasma dry-etch company that he founded in
August 1980, and which was sold to General Signal in 1986. From July 1987 to
September 1989, Mr. Zafiropoulo was also President of Kayex, a semiconductor
equipment manufacturer, which is a unit of General Signal. Mr. Zafiropoulo is a
director of SEMI (Semiconductor Equipment and Materials International), an
international trade association representing the semiconductor, flat panel
display equipment and materials industry; Semi/Sematech, which represents
majority United States-owned and controlled suppliers of equipment, materials
and services to the semiconductor manufacturing industry; Advanced Energy
Industries, Inc., a leading manufacturer of power conversion and control
systems; and Intelligent Reasoning Systems, Inc., a provider of optical
inspection tools which utilize artificial intelligence software for Printed
Wiring Assemblies (PWA) and High-Density Interconnect (HDI) markets.
JOEL F. GEMUNDER, 60, has been a Director of the Company since
October 1997. Mr. Gemunder has been President and a member of the Board of
Directors of Omnicare, Inc., a pharmacy services provider,
3
<PAGE>
since 1991. He has also served as a Director of Chemed Corporation, a
construction services company, since 1977. Mr. Gemunder holds an A.B. from the
City College of New York in Business and an M.B.A. from the University of
Chicago.
CONTINUING DIRECTORS FOR TERM ENDING UPON THE 2001 ANNUAL STOCKHOLDERS MEETING
TOMMY GEORGE, 60, has served as a Director of the Company since
October 1997. From April 1993 through May 1997, Mr. George served as the
President of Motorola SPS ("Motorola"). From June 1986 through April 1993,
Mr. George served as the Assistant General Manager of Motorola. In addition,
Mr. George has also served as a Director of Amkor Technology, Inc., a packaging
and test services provider, since October 1997 and FSI International, Inc., a
processing equipment supplier, since January 1998.
GREGORY HARRISON, 67, has served as a Director of the Company since
May 1993. Since 1986, he has served as President of G. Harrison & Company, a
management consulting firm. From 1969 to 1986, Mr. Harrison served in various
operating management positions, most recently as Vice President and Corporate
Officer, at National Semiconductor Corporation.
KENNETH LEVY, 57, has served as a Director of the Company since May 1993.
Mr. Levy has served as Chairman of the Board of Directors of KLA-Tencor
Corporation ("KLA"), a company which he co-founded, since July 1999 and served
in the same capacity April 1997 to June 1998. Mr. Levy was Chief Executive
Officer and a director of KLA from July 1998 to June 1999. From July 1975 until
April 1997, he served as Chief Executive Officer of KLA Instruments Corporation
and Chairman of its Board of Directors. Mr. Levy has also served as a director
of SpeedFam--IPEC, Inc., formerly known as Integrated Process Equipment
Corporation, a manufacturer of semiconductor processing equipment for chemical,
mechanical, planarization and cleaning of advanced integrated circuits, since
May 1995. In addition, Mr. Levy serves as a director emeritus on the board of
Semiconductor Equipment and Materials Institute (SEMI), an industry trade
association.
BOARD COMMITTEES AND MEETINGS
During the fiscal year ended December 31, 1999, the Board of Directors held
five meetings and acted by unanimous written consent on two occasions. The Board
of Directors has an Audit Committee and a Compensation Committee. During the
respective term of his service on the Board, each of the directors, other than
Mr. Kenneth Levy, attended or participated in 75% or more of the aggregate of
(i) the total number of meetings of the Board of Directors and (ii) the total
number of meetings held by all committees of the Board on which he served during
the past fiscal year.
The Compensation Committee currently consists of two directors,
Messrs. Harrison and Gemunder. The Compensation Committee is primarily
responsible for approving the Company's general compensation policies and
setting compensation levels for the Company's executive officers. The
Compensation Committee also has sole and exclusive authority to administer the
Company's 1993 Stock Option/Stock Issuance Plan and Employee Stock Purchase Plan
and the Company's 1999 Supplemental Stock Option/ Stock Issuance Plan. The
Compensation Committee held four meetings during the past fiscal year and acted
by unanimous written consent on three occasions.
The Audit Committee currently consists of two directors, Messrs. Carter and
Levy, and is primarily responsible for approving the services performed by the
Company's independent auditors and reviewing their reports regarding the
Company's accounting practices and systems of internal accounting controls. The
Audit Committee held five meetings during the last fiscal year. After the Annual
Meeting, Mr. Carter will be replaced on the Audit Committee.
4
<PAGE>
DIRECTOR COMPENSATION
During the fiscal year ended December 31, 1999, each non-employee Board
member was paid an annual cash retainer fee of $10,000, received an additional
$1,000 for attendance at each Board meeting and $500 for attendance at each
meeting of any Board committee of which he was a member, so long as such
committee meeting did not follow a meeting of the Board. In addition, the
Company reimburses each non-employee Board member for expenses incurred in
connection with his attendance at such Board and committee meetings.
Pursuant to the Automatic Option Grant Program in effect under the Company's
1993 Stock Option/ Stock Issuance Plan (the "1993 Plan"), each individual who
becomes a non-employee Board member will automatically be granted, on the date
of his or her initial election or appointment to the Board, a non-statutory
stock option to purchase 12,000 shares of the Company's Common Stock. The option
will have an exercise price equal to the fair market value per share of Common
Stock on the applicable grant date. The option will have a maximum term of ten
(10) years measured from the grant date, subject to earlier termination upon the
optionee's cessation of Board service. The option will be immediately
exercisable for all of the option shares, but any shares purchased under the
option will be subject to repurchase by the Company, at the exercise price paid
per share, upon the optionee's cessation of Board service prior to vesting in
those shares. The shares will vest as follows: (i) fifty percent (50%) of the
shares will vest upon completion of one (1) year of Board service measured from
the grant date and (ii) the remaining shares will vest in three (3) successive
equal annual installments upon completion of each of the next three (3) years of
Board service thereafter.
On the date of the 1999 Annual Stockholders Meeting, each of the continuing
non-employee Board members (Messrs. Carter, Gemunder, George, Harrison and Levy)
received an option grant under the Automatic Option Grant Program for 4,000
shares with an exercise price of $12.9375 per share, the fair market value per
share of the Common Stock on the June 2, 1999 grant date. Each of the options
has a maximum term of ten (10) years measured from the grant date, subject to
the earlier termination upon the optionee's cessation of Board service. The
option is immediately exercisable for all the option shares. However, any shares
purchased under the option will be subject to repurchase by the Company, at the
option exercise price paid per share, upon the optionee's cessation of Board
service prior to vesting in those shares. The shares subject to each such
4,000-share grant vested upon the optionee's completion of one (1) year of Board
service measured from the grant date.
The shares subject to each outstanding option under the Automatic Option
Grant Program will vest immediately upon an acquisition of the Company by merger
or asset sale or upon certain other changes in control or ownership of the
Company. Upon the successful completion of a hostile tender offer for more than
50% of the Company's outstanding Common Stock, each automatic option grant may
be surrendered to the Company in return for a cash distribution from the Company
in an amount per surrendered option share equal to the excess of (i) the fair
market value per share of Common Stock on the date the option is surrendered to
the Company or the highest reported price per share of Common Stock paid in the
tender offer over (ii) the option exercise price payable per share.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board recommends that the stockholders vote FOR the election of each of
the above nominees.
5
<PAGE>
PROPOSAL TWO
RATIFICATION OF INDEPENDENT AUDITORS
The Board of Directors has appointed the firm of Ernst & Young LLP,
independent auditors for the Company during the fiscal year ended December 31,
1999, to serve in the same capacity for the fiscal year ending December 31,
2000, and is asking the stockholders to ratify this appointment. The affirmative
vote of a majority of the shares represented and voting at the Annual Meeting is
required to ratify the selection of Ernst & Young LLP as the Company's
independent auditors.
In the event the stockholders fail to ratify the appointment, the Board of
Directors will reconsider its selection. Even if the selection is ratified, the
Board of Directors in its discretion may direct the appointment of a different
independent auditing firm at any time during the year if the Board of Directors
believes that such a change would be in the best interests of the Company and
its stockholders.
Representatives of Ernst & Young LLP are expected to be present at the
Annual Meeting and will have the opportunity to make a statement if they desire
to do so, and will be available to respond to appropriate questions.
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors recommends that the stockholders vote FOR the
ratification of the selection of Ernst & Young LLP to serve as the Company's
independent auditors for the fiscal year ending December 31, 2000.
OTHER MATTERS
The Company knows of no other matters that will be presented for
consideration at the Annual Meeting. If any other matters properly come before
the Annual Meeting, it is the intention of the persons named in the enclosed
form of Proxy to vote the shares they represent as the Board of Directors
recommends. Discretionary authority with respect to such other matters is
granted by the execution of the enclosed Proxy.
6
<PAGE>
OWNERSHIP OF SECURITIES
The following table sets forth certain information known to the Company with
respect to the beneficial ownership of the Company's Common Stock as of
March 1, 2000 (unless otherwise stated in the footnotes) by (i) all persons who
are or who may be deemed beneficial owners of five percent (5%) or more of the
Company's Common Stock, (ii) each director of the Company, (iii) the Named
Executive Officers (as defined below) and (iv) all current directors and
executive officers as a group. Unless otherwise indicated, each of the security
holders has sole voting and investment power with respect to the shares
beneficially owned, subject to community property laws, where applicable.
<TABLE>
<CAPTION>
SHARES OF COMMON STOCK PERCENTAGE OF SHARES
NAME AND ADDRESS OF BENEFICIAL OWNER(1) BENEFICIALLY OWNED BENEFICIALLY OWNED(1)
- --------------------------------------- ---------------------- ---------------------
<S> <C> <C>
State of Wisconsin Investment Board.................... 1,165,300 5.4%
121 East Wilson Street
Madison, WI 53707
Arthur W. Zafiropoulo(2)............................... 1,766,108 8.2%
Ultratech Stepper, Inc.
3050 Zanker Road
San Jose, CA 95134
Daniel H. Berry(3)..................................... 293,635 1.4%
William G. Leunis, III(4).............................. 126,575 *
Bruce Wright........................................... 0 *
Kenneth Levy(5)........................................ 63,800 *
Gregory Harrison(6).................................... 16,000 *
Larry R. Carter(7)..................................... 20,000 *
Joel Gemunder(8)....................................... 21,000 *
Thomas D. George(9).................................... 25,000 *
All current directors and executive officers as a group 2,205,543 10.3%
(8 persons)(10)......................................
</TABLE>
- ------------------------
* Less than one percent of the outstanding Common Stock.
(1) Percentage of ownership is based on 21,458,657 shares of Common Stock issued
and outstanding on March 1, 2000. This percentage also takes into account
the Common Stock to which such individual or entity has the right to acquire
beneficial ownership within sixty (60) days after March 1, 2000, including,
but not limited to, through the exercise of options; however, such Common
Stock will not be deemed outstanding for the purpose of computing the
percentage owned by any other individual or entity. Such calculation is
required by Rule 13d-3(1)(i) under the Securities Exchange Act of 1934, as
amended.
(2) Includes 1,642,108 shares held in the name of Arthur W. Zafiropoulo, trustee
of the Separate Property Trust, dated July 20, 1998, for the benefit of
Arthur W. Zafiropoulo. Includes 24,000 shares of the Company's Common Stock
subject to options which are currently exercisable or which will become
exercisable within 60 days after March 1, 2000. Also includes 100,000 shares
held in the name of Zafiropoulo Family Foundation.
(3) Includes 213,800 shares of the Company's Common Stock subject to options
which are currently exercisable or which will become exercisable within
60 days after March 1, 2000.
(4) Includes 44,875 shares of the Company's Common Stock subject to options
which are currently exercisable or which will become exercisable within
60 days after March 1, 2000. These options were canceled on March 31, 2000
as a result of the termination of Mr. Leunis' employment with the Company
effective December 31, 1999.
7
<PAGE>
(5) Consists of 63,800 shares of the Company's Common Stock subject to options
which are currently exercisable or which will become exercisable within
60 days after March 1, 2000.
(6) Consists of 16,000 shares of the Company's Common Stock subject to options
which are currently exercisable or which will become exercisable within
60 days after March 1, 2000.
(7) Consists of 20,000 shares of the Company's Common Stock subject to options
which are currently exercisable or which will become exercisable within
60 days after March 1, 2000.
(8) Includes 20,000 shares of the Company's Common Stock subject to options
which are currently exercisable or which will become exercisable within
60 days after March 1, 2000.
(9) Consists of 20,000 shares of the Company's Common Stock subject to options
which are currently exercisable or which will become exercisable within
60 days after March 1, 2000.
(10) Includes 377,600 shares of the Company's Common Stock subject to options
which are currently exercisable or which will become exercisable within
60 days after March 1, 2000.
8
<PAGE>
EXECUTIVE COMPENSATION AND RELATED INFORMATION
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION
The following table provides certain summary information concerning the
compensation earned, by the Company's Chief Executive Officer and each of the
other executive officers of the Company whose salary and bonus for the 1999
fiscal year was in excess of $100,000 (collectively, the "Named Executive
Officers"), for services rendered in all capacities to the Company and its
subsidiaries for the last three fiscal years. No executive officer who would
otherwise have been included in such table on the basis of salary and bonus
earned for the 1999 fiscal year resigned or terminated employment during that
fiscal year, other than William G. Leunis, III who ceased serving as the
Company's Chief Financial Officer in June 1999 and whose employment with the
Company terminated on December 31, 1999.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION AWARDS
-----------------------
ANNUAL NUMBER OF
COMPENSATION(2) RESTRICTED SECURITIES
-------------------- STOCK UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) AWARDS($) OPTIONS(#) COMPENSATION($)(3)
- --------------------------- -------- --------- -------- ---------- ---------- ------------------
<S> <C> <C> <C> <C> <C> <C>
Arthur W. Zafiropoulo(1)........ 1999 310,000 0 0 100,000 0
Chairman of the Board, 1998 310,000 0 0 -- 0
Chief Executive Officer 1997 310,000 0 0 -- 0
Daniel H. Berry(1).............. 1999 225,000 0 0 50,000 0
President and 1998 214,327 0 0 100,000 0
Chief Operating Officer 1997 178,365 0 0 50,000 0
Bruce R. Wright(1).............. 1999 131,250 25,000 0 100,000 0
Senior Vice President,
Finance,
Chief Financial Officer,
and Secretary
William G. Leunis, III(1)....... 1999 175,000 0 0 -- 0
Senior Vice President,
Business 1998 175,000 0 0 -- 0
Development 1997 163,942 0 0 50,000 0
</TABLE>
- ------------------------
(1) Mr. Zafiropoulo served as President of the Company until March 1996 and from
May 1997 to April 1999. Mr. Berry has served as Chief Operating Officer and
President for the Company since April 1999. Between June 1998 and
April 1999, Mr. Berry was the Chief Operating Officer and Executive Vice
President of the Company. Between March 1993 and June 1998, Mr. Berry served
as Senior Vice President, Sales and Service of the Company. Mr. Wright
joined the Company in June 1999 as Senior Vice President, Finance, Chief
Financial Officer and Secretary. Mr. Leunis served as Senior Vice President,
Business Development from June 1999 to December 1999. Until May 1999,
Mr. Leunis served as Senior Vice President, Finance, Chief Financial
Officer, Secretary and Treasurer.
(2) Includes compensation deferred by the Named Executive Officer under the
Company's Section 401(k) Plan and Section 125 Cafeteria Benefit Plan.
(3) Normally represents for each Named Executive Officer the sum of the
following two amounts: (i) the individual's allocable share of the
profit-sharing contribution made by the Company to the Section 401(k) Plan
for the fiscal year and (ii) 50% of the bonus earned for the fiscal year
under the Company's Executive Incentive Plan but subject to deferred payout.
The deferred portion will be distributed in four equal annual installments,
together with interest at the prime rate during the
9
<PAGE>
deferral period, provided the Named Executive Officer continues in the
Company's service. No such amounts have been allocated to the Named
Executive Officers for fiscal years 1997 through 1999, as indicated below:
<TABLE>
<CAPTION>
PROFIT-SHARING DEFERRED PORTION OF
CONTRIBUTION TO EXECUTIVE INCENTIVE
NAMED EXECUTIVE OFFICER TO SECTION 401(K) PLAN($) PLAN BONUS($)
- ----------------------- ------------------------- -------------------
<S> <C> <C>
Mr. Zafiropoulo
1999..................................... 0 0
1998..................................... 0 0
1997..................................... 0 0
Mr. Berry
1999..................................... 0 0
1998..................................... 0 0
1997..................................... 0 0
Mr. Wright
1999..................................... 0 0
Mr. Leunis
1999..................................... 0 0
1998..................................... 0 0
1997..................................... 0 0
</TABLE>
STOCK OPTIONS
The following table provides information on the option grants made to the
Named Executive Officers during the fiscal year ended December 31, 1999. No
stock appreciation rights were granted to the Named Executive Officers during
that fiscal year.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
----------------- VALUE AT ASSUMED
NUMBER OF ANNUAL RATES OF
SECURITIES % OF TOTAL STOCK PRICE
UNDERLYING OPTIONS APPRECIATION FOR
OPTIONS GRANTED TO EXERCISE OPTION TERM(3)
GRANTED EMPLOYEES PRICE EXPIRATION -----------------------
NAME (#)(1) IN FISCAL YEAR ($/SH)(2) DATE 5%($) 10%($)
- ---- ---------- ----------------- --------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Arthur W. Zafiropoulo......... 100,000 12.3 13.375 4/19/09 841,000 2,131,500
Daniel H. Berry............... 50,000 6.1 13.375 4/19/09 420,500 1,066,000
Bruce R. Wright............... 100,000 12.3 13.125 5/31/09 825,500 2,092,000
William G. Leunis, III........ -- -- -- -- -- --
</TABLE>
- ------------------------
(1) The grants to Mr. Zafiropoulo and Mr. Berry were made on April 20, 1999. The
grant to Mr. Wright was made on June 1, 1999. Each option has a maximum term
of ten (10) years measured from such grant date, subject to earlier
termination upon the optionee's cessation of service with the Company. The
shares subject to each option will vest and become exercisable as follows:
(i) twenty-four percent (24%) of the option shares upon optionee's
completion of twelve (12) months service measured from the grant date, and
(ii) the remaining shares in a series of thirty-eight (38) successive equal
monthly installments upon his completion of each additional month of service
thereafter. The shares subject to each option will immediately vest in full
in the event the Company is acquired by a merger or asset sale, unless the
option is assumed by the acquiring entity.
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(2) The exercise price may be paid in cash, in shares of the Company's Common
Stock valued at fair market value on the exercise date or through a cashless
exercise procedure involving a same-day sale of the purchased shares. The
Company may also finance the option exercise by loaning the optionee
sufficient funds to pay the exercise price for the purchased shares,
together with any federal and state withholdings taxes to which the optionee
may become subject in connection with such exercise.
(3) There can be no assurance provided to the option holder or any other holder
of the Company's securities that the actual stock price appreciation over
the ten (10)-year option term will be at the assumed 5% and 10% annual rates
of compounded stock price appreciation or at any other defined level.
OPTION EXERCISES AND HOLDINGS
The following table sets forth certain information concerning option
exercises and holdings for the fiscal year ended December 31, 1999 with respect
to each of the Named Executive Officers. No stock appreciation rights were
exercised by the Named Executive Officers during such fiscal year, and no stock
appreciation rights were held by them at the end of such fiscal year.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS AT FISCAL YEAR IN-THE-MONEY OPTIONS AT
ACQUIRED END(#) FISCAL YEAR-END($)(2)
ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED($)(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Arthur W. Zafiropoulo.......... 0 -- 0 100,000 0 275,000
Daniel H. Berry................ 0 -- 188,200 141,000 1,755,390 137,500
Bruce R. Wright................ 0 -- 0 100,000 0 300,000
William G. Leunis, III......... 24,000 332,500 55,700 0 895,378 0
</TABLE>
- ------------------------
(1) Equal to the fair market value of the securities underlying the option on
the exercise date, minus the exercise price paid for those securities.
(2) Equal to the fair market value of the securities underlying the option at
fiscal year-end ($16.125 per share), less the exercise price payable for
those securities.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AGREEMENTS AND CHANGE OF CONTROL
Other than Mr. Bruce Wright, none of the Company's executive officers have
employment agreements with the Company, and their employment may be terminated
at any time at the discretion of the Board of Directors. Mr. Wright's agreement,
provides, among other things, that he was to receive an option to purchase
100,000 shares of Common Stock upon his commencement of employment with the
Company and that he will be eligible for an additional option grant to purchase
50,000 shares upon his completion of one year of employment. In addition, should
Mr. Wright's employment be terminated during his first year of employment with
the Company, then he will be entitled to a severance package including 6-months
of salary continuation payments and one year accelerated vesting of his
outstanding stock options.
The Compensation Committee of the Board of Directors has the authority as
plan administrator of the Company's 1993 Stock Option/Stock Issuance Plan to
provide for accelerated vesting of any shares of Common Stock subject to
outstanding options held by the Chief Executive Officer and the Company's other
executive officers and any unvested shares actually held by those individuals
under the 1993 Plan, in the event their employment were to be terminated
(whether involuntarily or through a forced resignation) following (i) an
acquisition of the Company by merger or asset sale or (ii) a change in control
of the Company effected through a successful tender offer for more than 50% of
the Company's outstanding Common Stock or through a change in the majority of
the Board as a result of one or more contested elections for Board membership.
11
<PAGE>
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors is responsible for
establishing the base salary and incentive cash bonus programs to be in effect
for the Company's executive officers and administering certain other
compensation programs for such individuals, subject to review by the full Board.
The Compensation Committee also has the exclusive responsibility for the
administration of the Company's 1993 Stock Option/Stock Issuance Plan (the "1993
Plan") under which grants may be made to executive officers and other key
employees.
COMPENSATION PHILOSOPHY
The fundamental policy of the Compensation Committee is to provide the
Company's executive officers and other key employees with competitive
compensation opportunities based upon their contribution to the financial
success of the Company and their personal performance. It is the Compensation
Committee's objective to have a substantial portion of each officer's
compensation contingent upon the Company's performance as well as upon the
officer's own level of performance. Accordingly, the compensation package for
each executive officer and key employee is comprised of three elements:
(i) base salary which reflects individual performance and is designed primarily
to be competitive with salary levels in effect at a select group of companies
with which the Company competes for executive talent, (ii) annual variable
performance awards payable in cash and tied to the Company's achievement of
financial performance milestones, and (iii) long-term stock-based incentive
awards which strengthen the mutuality of interests between the executive
officers and the Company's stockholders. As an executive officer's level of
responsibility increases, it is the intent of the Compensation Committee to have
a greater portion of the executive officer's total compensation be dependent
upon Company performance and stock price appreciation rather than base salary.
In carrying out these objectives, the Compensation Committee takes the
following factors into consideration:
- The estimated level of compensation paid to executive officers in similar
positions by other companies within and outside the Company's industry
which compete with the Company for executive personnel.
- The individual performance of each executive officer, together with his
job knowledge and skills, demonstrated teamwork and adherence to the
Company's core values.
- The individual's level of responsibility and authority relative to other
positions within the Company.
- Corporate performance relative to competitors and business conditions and
the progress of the Company in meeting financial goals and objectives.
SPECIFIC FACTORS
The primary factors which the Compensation Committee considered in
establishing the components of each executive officer's compensation package for
the 1999 fiscal year are summarized below. The Compensation Committee may,
however, in its discretion apply different factors, particularly different
measures of financial performance, in setting executive compensation for future
fiscal years.
* BASE SALARY. The base salary levels for the executive officers was
established for the 1999 fiscal year on the basis of the following factors:
personal performance, the estimated salary levels in effect for similar
positions at a select group of companies within and outside the Company's
industry with which the Company competes for executive talent, and internal
comparability considerations. The Compensation Committee also relied upon
specific compensation surveys for comparative compensation purposes. The
Compensation Committee made its decisions as to the appropriate market level of
base salary for each executive officer on the basis of its understanding of the
salary levels in effect for similar positions at those
12
<PAGE>
companies with which the Company competes for executive talent. Base salaries
will be reviewed on an annual basis, and adjustments will be made in accordance
with the factors indicated above.
* PROFIT SHARING PLAN. The Company annually distributes a profit sharing
bonus to all eligible employees, including the executive officers, based on the
level of the Company's operating earnings for the fiscal year in comparison to
the targeted levels established by the Compensation Committee at the start of
the year. One-half of the distribution is paid as a current cash bonus, and the
remainder is contributed on the individual's behalf to his or her profit-sharing
account under the Company's Section 401(k) Plan for subsequent distribution
following his or her termination of employment. Accordingly, the bonuses under
the profit sharing plan are tied solely to the Company's success in achieving
the targeted levels of operating earnings. Because the targeted levels for the
1999 fiscal year were not attained, none of the Company's executive officers or
other employees received a profit sharing distribution for such year.
* ANNUAL INCENTIVE COMPENSATION. Each executive officer may also earn an
incentive bonus each fiscal year on the basis of the Company's achievement of
certain performance milestones established by the Compensation Committee at the
start of that year. For fiscal year 1999, the performance milestones were tied
to increases in the Company's operating earnings. Accordingly, this element of
executive compensation is also earned solely on the basis of the achievement of
certain specific objectives. Because the milestones for the 1999 fiscal year
were not attained, none of the executive officers received an incentive bonus
for that year.
It is the Compensation Committee's estimate (on the basis of calendar year
2000 surveys of calendar year 1999 executive compensation) that the total cash
compensation earned by the Company's executive officers for the 1999 fiscal year
ranged from the 40th percentile to the 95th percentile of the total cash
compensation earned by the executive officers in comparable positions at the
principal companies with which the Company competes for executive talent.
* EQUITY INCENTIVES. Equity incentives are provided primarily through stock
option grants under the 1993 Plan. The grants are designed to align the
interests of each executive officer with those of the stockholders and provide
each individual with a significant incentive to manage the Company from the
perspective of an owner with an equity stake in the business. Each grant allows
the individual to acquire shares of the Company's common stock at a fixed price
per share (the market price on the grant date) over a specified period of time
(up to 10 years). The shares subject to each option generally vest in
installments over a fifty-month period, contingent upon the executive officer's
continued employment with the Company. Accordingly, the option will provide a
return to the executive officer only if the executive officer remains employed
by the Company during the applicable vesting period, and then only if the market
price of the underlying shares appreciates over the option term.
The number of shares subject to each option grant will be set at a level
intended to create a meaningful opportunity for stock ownership based on the
officer's current position with the Company, the base salary associated with
that position, the size of comparable awards made to individuals in similar
positions within the industry, the individual's potential for increased
responsibility and promotion over the option term, and the individual's personal
performance in recent periods. The Compensation Committee will also take into
account the executive officer's existing holdings of the Company's common stock
and the number of vested and unvested options held by that individual in order
to maintain an appropriate level of equity incentive. However, the Compensation
Committee does not intend to adhere to any specific guidelines as to the
relative option holdings of the Company's executive officers.
CEO COMPENSATION
In setting the compensation payable to the Company's Chief Executive
Officer, Mr. Arthur W. Zafiropoulo, for the 1999 fiscal year, the Compensation
Committee has sought to be competitive with the peer group companies, while at
the same time tying a significant percentage of his compensation to
13
<PAGE>
Company performance. It is the Committee's intent to provide Mr. Zafiropoulo
with a level of stability and certainty each year with respect to base salary
and not to have this particular component of compensation affected to any
significant degree by Company performance factors. For the 1999 fiscal year,
Mr. Zafiropoulo's base salary was maintained at the same level in effect for the
prior fiscal year. In addition, because the Company did not achieve the
operating earnings targets for the 1999 fiscal year, Mr. Zafiropoulo did not
receive any profit-sharing or other incentive awards for such year.
Mr. Zafiropoulo was granted an option for 100,000 shares during the 1999
fiscal year with an exercise price equal to the market price of the shares on
the grant date. The grant is designed to provide him with a significant
incentive to remain in the Company's employ and to contribute to the creation of
shareholder value in the form of stock price appreciation, since the grant will
not have any value unless he remains with the Company during the 50-month
vesting period and the market price of the Company's common stock appreciates
over the market price in effect at the time the option grant was made to him.
For the 1999 fiscal year, the Compensation Committee believes (on the basis
of 2000 surveys of 1999 executive compensation) that the total cash compensation
earned by Mr. Zafiropoulo was approximately at the 36th percentile of the total
cash compensation earned by chief executive officers at the principal companies
with which the Company competes for executive talent.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(M)
Section 162(m) of the Internal Revenue Code, enacted in 1993, generally
disallows a tax deduction to publicly held companies for compensation exceeding
$1 million paid to certain of the corporation's executive officers. The
limitation applies only to compensation which is not considered to be
performance-based. The non-performance based compensation to be paid to the
Company's executive officers for the 1999 fiscal year did not exceed the
$1 million limit per officer, nor is it expected that the non-performance based
compensation to be paid to the Company's executive officers for fiscal 2000 will
exceed that limit. The Company's 1993 Plan is structured so that any
compensation deemed paid to an executive officer in connection with the exercise
of option grants made under that plan will qualify as performance-based
compensation and will therefore not be subject to the $1 million limitation.
Because it is very unlikely that the cash compensation payable to any of the
Company's executive officers in the foreseeable future will approach the
$1 million limit, the Compensation Committee has decided at this time not to
take any other action to limit or restructure the elements of cash compensation
payable to the Company's executive officers. The Compensation Committee will
reconsider this decision should the individual compensation of any executive
officer ever approach the $1 million level.
The Compensation Committee believes that the executive compensation policies
and programs in effect for the Company's executive officers provide an
appropriate level of total remuneration which properly aligns the Company's
performance and the interests of the Company's stockholders with competitive and
equitable executive compensation in a balanced and reasonable manner, for both
the short and long-term.
<TABLE>
<S> <C>
Joel F. Gemunder Gregory Harrison
Member of Compensation Committee Member and Chairman, Compensation Committee
</TABLE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee is a former or current officer or
employee of the Company or any of its subsidiaries. No executive officer of the
Company serves as a member of the board of directors or compensation committee
of any entity which has one or more of its executive officers serving as a
member of the Company's Board of Directors or Compensation Committee.
14
<PAGE>
STOCK PERFORMANCE GRAPH
The graph depicted below reflects a comparison of the cumulative total
return (change in stock price plus reinvestment of dividends) of the Company's
Common Stock assuming $100 invested as of December 31, 1994 with the cumulative
total returns of the Nasdaq Stock Market Index and the Hambrecht & Quist
Semiconductor Index.
COMPARISON OF CUMULATIVE TOTAL RETURNS(1)(2)(3)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ULTRATECH STEPPER, INC. THE NASDAQ STOCK MARKET (US) HAMBRECHT & QUIST SEMICONDUCTOR INDEX
<S> <C> <C> <C>
Dec. 31, 1994 $100.00 100 100
Mar. 31, 1995 $127.96 108.951 120.758
Jun. 30, 1995 $185.53 124.623 169.479
Sept. 30, 1995 $222.37 139.634 191.535
Dec. 31, 1995 $135.53 141.335 139.168
Mar. 30, 1996 $92.76 147.952 131.434
Jun. 30, 1996 $98.68 160.006 125.97
Sept. 30, 1996 $96.71 165.705 142.999
Dec. 31, 1996 $125.00 173.892 180.237
Mar. 31, 1997 $116.45 164.463 202.567
Jun. 30, 1997 $120.40 194.59 228.444
Sept. 30, 1997 $178.95 227.521 285.564
Dec. 31, 1997 $104.61 213.073 190.083
Mar. 31, 1998 $107.24 249.365 217.941
Jun. 30, 1998 $103.95 256.215 187.246
Sept. 30, 1998 $79.93 231.371 163.248
Dec. 31, 1998 $84.21 300.248 266.818
Mar. 31, 1999 $74.34 335.857 302.655
Jun. 30, 1999 $79.28 367.468 396.913
Sept. 30, 1999 $67.11 375.848 445.375
Dec. 31, 1999 $84.87 542.43 665.872
</TABLE>
- ------------------------
(1) The graph covers the period from December 31, 1994 to December 31, 1999.
(2) No cash dividends have been declared on the Company's Common Stock.
(3) Stockholder returns over the indicated period should not be considered
indicative of future stockholder returns.
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE COMPANY'S
PREVIOUS FILINGS UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED, WHICH MIGHT INCORPORATE FUTURE FILINGS MADE BY
THE COMPANY UNDER THOSE STATUTES, NEITHER THE PRECEDING COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION NOR THE STOCK PRICE PERFORMANCE GRAPH WILL BE
INCORPORATED BY REFERENCE INTO ANY OF THOSE PRIOR FILINGS, NOR WILL SUCH REPORT
OR GRAPH BE INCORPORATED BY REFERENCE INTO ANY FUTURE FILINGS MADE BY THE
COMPANY UNDER THOSE STATUTES.
15
<PAGE>
CERTAIN TRANSACTIONS
The Company's Amended and Restated Certificate of Incorporation and Bylaws
provide for indemnification of all directors and officers. In addition, each
director and officer of the Company has entered into a separate indemnification
agreement with the Company.
The Company has entered into various service contracts with KLA-Tencor
Corporation, a company of which Mr. Levy serves as Chairman of the Board and as
a member of the Board of Directors. To date, the Company's obligations to
KLA-Tencor are approximately $200,000. The Company believes that the terms of
the contracts with KLA-Tencor are no less favorable to the Company than could be
obtained from an unaffiliated third party.
The Board of Directors has adopted a policy that all material transactions
with affiliates will be on terms no less favorable to the Company than those
available from unaffiliated third parties and will be approved by a majority of
the disinterested members of the Board of Directors.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, executive officers and any persons who are the beneficial owners of
more than ten percent of the Company's common stock to file reports of ownership
and changes in ownership with the SEC. Such directors, officers and greater than
ten percent beneficial stockholders are required by SEC regulations to furnish
the Company with copies of all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it and
written representations from reporting persons for the 1999 fiscal year, the
Company believes that all of the Company's executive officers, directors and
greater than ten percent beneficial stockholders complied with all applicable
Section 16(a) filing requirements for the 1999 fiscal year, other than the
Form 4 filed late by Mr. William G. Leunis, III on January 18, 2000 with respect
to his sale of 13,200 shares in December 1999.
ANNUAL REPORT
A copy of the Annual Report of the Company for the fiscal year ended
December 31, 1999 has been mailed concurrently with this Proxy Statement to all
stockholders entitled to notice of and to vote at the Annual Meeting. Except for
"Executive Officers of the Registrant" from Part I of the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1999, the Annual
Report is not incorporated into this Proxy Statement and is not considered proxy
solicitation material.
The Board of Directors of
Ultratech Stepper, Inc.
Dated: May 2, 2000
16
<PAGE>
1223-PS-00
<PAGE>
ULTRATECH STEPPER, INC.
PROXY
ANNUAL MEETING OF STOCKHOLDERS
JUNE 1, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, hereby appoints Arthur W. Zafiropoulo and Bruce Wright
and each of them as Proxies of the undersigned, with full power of
substitution, and hereby authorizes them to represent and to vote, as
designated below, all of the shares of Common Stock of Ultratech Stepper,
Inc. (the "Company"), held of record by the undersigned on April 14, 2000 at
the Annual Meeting of Stockholders of Ultratech Stepper, Inc. to be held on
June 1, 2000, or at any adjournment or postponement thereof with the same
force and effect as the undersigned might or could do if personally present
thereat. The shares represented by this Proxy shall be voted in the manner
set forth on the reverse side.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL NOS. 1, 2, AND 3.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS SPECIFIED ON THE REVERSE
SIDE. THIS PROXY WILL BE VOTED FOR PROPOSAL NOS. 1, 2, AND 3 IF NO
SPECIFICATION IS MADE.
1. To elect two directors to serve for the ensuing two years until the
expiration of their terms in 2002 until their successors are elected and
qualified.
FOR all nominees WITHHOLD AUTHORITY EXCEPTIONS
listed below to vote for all nominees
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE MARK
THE "EXCEPTIONS" BOX, AND STRIKE A LINE THROUGH THE NOMINEE'S NAME IN THE
LIST BELOW:
For the term ending upon the 2002 Annual Stockholders Meeting:
Joel Gemunder
Arthur W. Zafiropoulo
(continued, and to be signed, on the other side)
2. To ratify the appointment of Ernst & Young LLP as independent auditors
of the Company for the fiscal year ending December 31, 2000.
FOR AGAINST ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such other
matters as may properly come before the meeting, including the election
of any director if any of the above nominees is unable to serve or for
good cause will not serve.
Please sign exactly as your name(s) is (are) shown on the share
certificate to which the Proxy applies. When shares are held by joint
tenants, both should sign. When signing as an attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
DATED: ______________________________, 2000
___________________________________________
Signature
___________________________________________
(Additional signature if held jointly)
PLEASE SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED ENVELOPE.
