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SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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
|X| Definitive proxy statement Commission Only (as permitted
|_| Definitive additional materials by Rule 14a-6(e)(2))
|_| Soliciting material
pursuant to Rule 14a-11(c) or Rule 14a-12
Semitool, Inc.
(Name of Registrant as Specified in Its Charter)
Semitool, Inc.
(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)(1) 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 transactions 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):
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(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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
SEMITOOL, INC.
Notice of Annual Meeting of Shareholders
To Be Held February 9, 1998
To the Shareholders of Semitool, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Semitool, Inc., a Montana corporation (the "Company"), will be held at the Best
Western - Outlaw Inn, 1701 Highway 93 South, Kalispell, Montana 59901, at 2:30
p.m., local time, on February 9, 1998, for the following purposes:
1. ELECTION OF DIRECTORS. To elect six directors of the Company to
serve until the 1999 Annual Meeting of Shareholders or until their successors
are elected and qualified.
2. APPROVAL AND RATIFICATION OF THE AMENDED AND RESTATED SEMITOOL, INC.
1994 STOCK OPTION PLAN, AS AMENDED. To ratify and approve the Amended and
Restated Semitool, Inc. 1994 Stock Option Plan, as amended, to increase the
number of shares of Common Stock available for issuance thereunder by 200,000
shares from 1,100,000 shares to 1,300,000 shares.
3. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS. To ratify the
appointment of Coopers & Lybrand L.L.P. as the independent auditors for the
Company for the fiscal year ending September 30, 1998.
4. OTHER BUSINESS. To transact such other business as may properly come
before the Annual Meeting of Shareholders and any adjournment or postponement
thereof.
The foregoing items of business are more fully described in the Proxy
Statement which is attached hereto and made a part hereof.
The Board of Directors has fixed the close of business on January 6,
1998 as the record date for determining the shareholders entitled to notice of
and to vote at the 1998 Annual Meeting of Shareholders and any adjournment or
postponement thereof.
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING OF SHAREHOLDERS
IN PERSON, YOU ARE URGED TO MARK, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD
AS PROMPTLY AS POSSIBLE IN THE POSTAGE-PREPAID ENVELOPE PROVIDED TO ENSURE YOUR
REPRESENTATION AND THE PRESENCE OF A QUORUM AT THE ANNUAL MEETING. IF YOU SEND
IN YOUR PROXY CARD AND THEN DECIDE TO ATTEND THE ANNUAL MEETING TO VOTE YOUR
SHARES IN PERSON, YOU MAY STILL DO SO. YOUR PROXY IS REVOCABLE IN ACCORDANCE
WITH THE PROCEDURES SET FORTH IN THE PROXY STATEMENT.
By Order of the Board of Directors,
/s/Raymon F. Thompson
Raymon F. Thompson
Chairman of the Board,
Chief Executive Officer and
President
Kalispell, Montana
January 22, 1998
<PAGE>
SEMITOOL, INC.
655 West Reserve Drive
Kalispell, Montana 59901
PROXY STATEMENT
General Information
This Proxy Statement is furnished to the shareholders of Semitool,
Inc., a Montana corporation (the "Company"), in connection with the solicitation
by the Board of Directors of the Company (the "Board" or "Board of Directors")
of proxies in the accompanying form for use in voting at the 1998 Annual Meeting
of Shareholders of the Company (the "Annual Meeting") to be held on February 9,
1998, at the Best Western - Outlaw Inn, 1701 Highway 93 South, Kalispell,
Montana 59901, at 2:30 p.m., local time, and any adjournment or postponement
thereof. The shares represented by the proxies received, properly marked, dated,
executed and not revoked will be voted at the Annual Meeting.
Revocability of Proxies
Any proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before it is exercised by delivering to the Company
(to the attention of Larry Viano) a written notice of revocation or a duly
executed proxy bearing a later date, or by attending the Annual Meeting and
voting in person.
Solicitation and Voting Procedures
The solicitation of proxies will be conducted by mail and the Company
will bear all attendant costs. These costs will include the expense of preparing
and mailing proxy materials for the Annual Meeting and reimbursements paid to
brokerage firms and others for their expenses incurred in forwarding
solicitation material regarding the Annual Meeting to beneficial owners of the
Company's Common Stock. The Company may conduct further solicitation personally,
by telephone or by facsimile through its officers, directors and regular
employees, none of whom will receive additional compensation for assisting with
such solicitation.
The close of business on January 6, 1998 has been fixed as the record
date (the "Record Date") for determining the holders of shares of Common Stock
of the Company entitled to notice of and to vote at the Annual Meeting. As of
the close of business on the Record Date, the Company had approximately
13,771,759 shares of Common Stock outstanding and entitled to vote at the Annual
Meeting. The presence at the Annual Meeting of a majority of these shares of
Common Stock of the Company, either in person or by proxy, will constitute a
quorum for the transaction of business at the Annual Meeting. Each outstanding
share of Common Stock on the Record Date is entitled to one (1) vote on all
matters. With respect to the election of directors, each shareholder is entitled
to cumulate his or her votes, meaning that such shareholder can multiply the
number of shares owned by the number of board positions to be filled, and
allocate such votes for all or as many director-nominees as he or she may
designate.
Abstentions and broker non-votes are each included in the determination
of the number of shares present and voting, but will not be counted for or
against any of the proposals to be voted upon at the meeting.
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
As set by the Board of Directors pursuant to the Bylaws of the Company,
the authorized number of directors is set at six. Six directors will be elected
at the Annual Meeting to serve until the 1999 Annual Meeting of Shareholders or
until their successors are elected or appointed and qualified or until the
director's earlier resignation or removal. In the event that any nominee of the
Company is unable or declines to serve as a director at the time of the Annual
Meeting, the proxies will be voted for any nominee who shall be designated by
the present Board of Directors to fill the vacancy. In the event that additional
persons are nominated for election as directors, the proxy holders intend to
vote all proxies received by them in such a manner, as will assure the election
of as many of the nominees listed below as possible, and, in such event, the
specific nominees to be voted for will be determined by the proxy holders. The
Board has no reason to believe that the persons named below will be unable or
unwilling to serve as a nominee or as a director, if elected. Each of the six
nominees for director who receives the greatest number of votes will be elected.
Set forth below is the age and certain biographical information
relating to the director nominees.
Raymon F. Thompson, age 56, founded the Company and has served as
Chairman, Chief Executive Officer and President since its inception in 1979. In
1979, Mr. Thompson designed, patented and introduced the first on-axis
rinser/dryer for the semiconductor industry.
Howard E. Bateman, age 63, has served on the Company's Board of
Directors since 1990. Mr. Bateman formerly owned and operated Entech, a
Pennsylvania company that was an independent sales representative for the
Company's products from 1979 to 1996.
Richard A. Dasen, age 55, has served on the Company's Board of
Directors since 1984. From 1974 to 1992, Mr. Dasen owned and managed Evergreen
Bancorporation, a multi-bank holding company. Since 1992, Mr. Dasen has been an
independent businessman.
Daniel J. Eigeman, age 63, has served on the Company's Board of
Directors since 1985. From 1971 to 1993, Mr. Eigeman was President of Eigeman,
Hanson & Co., P.C., CPAs, and since 1993 has been Vice President of Junkermier,
Clark, Campanella, Stevens, P.C., CPAs. Mr. Eigeman served as President of the
Montana Society of Certified Public Accountants in 1993 and currently serves as
a director of CPA Mutual Insurance of America, Inc.
John S. Osborne, age 53, has served on the Company's Board of Directors
since July of 1997 and has thirty years of experience in the semiconductor
industry, including 20 years in microchip manufacturing and ten years in the
capital equipment industry. During the past ten years, Mr. Osborne had held
senior management positions at Lam Research in Fremont, CA. These positions
included Vice President of Lam's Worldwide Customer Support. Mr. Osborne holds
seven patents, has numerous technical and business publications, and has served
on the Board of Directors of four companies.
Calvin S. Robinson, age 77, has served on the Company's Board of
Directors since 1982 and since February of 1996 has served as the Company's
Secretary. Mr. Robinson has been of counsel to Murphy, Robinson, Heckathorn &
Phillips, P.C. since 1989. This firm has provided legal services to the Company
since 1979. Mr. Robinson is also a director of Winter Sports, Inc.
THE BOARD RECOMMENDS A VOTE FOR
THE ELECTION OF THE NOMINEES NAMED ABOVE.
Relationships Among Directors or Executive Officers
There are no family relationships among any of the directors or
executive officers of the Company, except that Thomas Sulzbacher, a vice
president of the Company, is the son-in-law of Raymon F. Thompson.
Meetings and Committees of the Board of Directors
During the fiscal year ended September 30, 1997, the Board met four
times. The Board has three committees: the Audit Committee, the Compensation and
Stock Option Committee and the Nominating Committee. During the fiscal year
ended September 30, 1997, no director attended fewer than 75% of all the
meetings of the Board and its committees on which he served after becoming a
member of the Board.
The Audit Committee, which held three meetings in the fiscal year ended
September 30, 1997, consisted of Messrs. Dasen and Eigeman. The Audit Committee
reviews and supervises the Company's financial controls, including selecting the
Company's auditors, reviewing the books and accounts of the Company, meeting
with the officers of the Company regarding the Company's financial controls,
acting upon recommendations of auditors and taking such further action as the
Audit Committee deems necessary to complete an audit of the books and accounts
of the Company, as well as other matters which may come before it or as directed
by the Board.
The Compensation and Stock Option Committee, which held five meetings
in the fiscal year ended September 30, 1997, consists of Messrs. Bateman and
Robinson. The Compensation and Stock Option Committee reviews and approves the
compensation and benefits for the Company's executive officers, administers the
Company's stock option plan and performs such other duties as may from time to
time be determined by the Board.
The Nominating Committee, which held four (4) meetings in the fiscal
year ended September 30, 1997, consists of Messrs. Bateman and Thompson. The
Nominating Committee nominates directors to hold office for the ensuing year and
until their respective successors are duly elected and qualified. The Nominating
Committee may consider recommendations from shareholders if received in writing
addressed to the Secretary of the Company no later than 120 days prior to the
12-month anniversary of the previous annual meeting of shareholders.
Compensation of Directors
Upon becoming a member of the Board, non-employee directors receive
options (the "Initial Option Grants") to purchase 3,000 shares of Common Stock,
and thereafter receive an annual option grant (the "Annual Option Grants") to
purchase 2,000 shares of Common Stock. The Company's non-employee directors
receive a $1,000 monthly fee, $1,000 for each Board meeting attended and $500
for each committee meeting attended that is not held in conjunction with a Board
meeting. All non-employee directors are reimbursed for expenses incurred in
connection with attending meetings of the Board. Employee directors of the
Company do not receive compensation for their services as directors.
<PAGE>
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of the Company's Common Stock as of the Record Date for (i)
each person who is known by the Company to beneficially own more than 5% of the
Common Stock, (ii) each of the Company's directors, (iii) each of the officers
appearing in the Summary Compensation Table below and (iv) all directors and
executive officers as a group.
<TABLE>
<S> <C> <C>
Shares Beneficially Owned
-------------------------------------------------
Directors, Executive Officers and 5% Shareholders Number Percent(1)
- ------------------------------------------------------- --------------------- -------------------
Raymon F. and Ladeine A. Thompson(2).................... 6,384,234 46.4%
Howard E. Bateman(3).................................... 11,000 *
Richard A. Dasen(3)..................................... 10,000 *
Daniel J. Eigeman(3).................................... 7,900 *
John S. Osborne(4)...................................... 5,000 *
Calvin S. Robinson(3)................................... 7,750 *
Timothy C. Dodkin(5).................................... 23,250 *
Gregory L. Perkins(6) .................................. 27,300 *
Thomas Sulzbacher(7).................................... 46,275 *
All directors and officers as a group (10 persons)(8)... 6,526,009 47.1
</TABLE>
- ----------------------------
* Less than 1%.
(1)Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. In computing the number of shares
beneficially owned by a person and the percentage ownership of that
person, shares of Common Stock subject to options held by that person that
are currently exercisable or exercisable within 60 days of the Record Date
are deemed outstanding. Such shares, however, are not deemed outstanding
for the purpose of computing the percentage ownership of each other
person. Except as indicated in the footnotes to this table and pursuant to
applicable community property laws, the persons named in the table have
sole voting and investment power with respect to the shares set forth
opposite such person's name.
(2)Includes 318,750 shares held in the name of the Gina Thompson Trust of
which Mr. Thompson is the trustee, and includes 100,000 shares held in the
name of the Floyd Foundation Trust of which Mr. Thompson is the trustee.
(3)Includes 7,000 option shares exercisable within 60 days of the Record Date.
(4)Represents 3,000 option shares exercisable within 60 days of the Record Date.
(5)Includes 21,750 option shares exercisable within 60 days of the Record Date.
(6)Represents 27,300 option shares exercisable within 60 days of the Record
Date.
(7)Includes 6,900 option shares exercisable within 60 days of the Record Date.
(8)Includes 90,250 option shares exercisable within 60 days of the Record Date.
<PAGE>
PROPOSAL NO. 2
APPROVAL AND RATIFICATION OF THE AMENDED AND RESTATED SEMITOOL, INC.
1994 STOCK OPTION PLAN, AS AMENDED
The Company's shareholders are being asked to act upon a proposal to
approve and ratify the action of the Board amending the Company's Amended and
Restated 1994 Stock Option Plan (the "Option Plan"). Approval and ratification
of the proposal requires the affirmative vote of a majority of the outstanding
shares of the Company's Common Stock present in person or represented by proxy
and entitled to vote at the Annual Meeting.
The Board amended the Option Plan in December 1997, subject to
shareholder approval and ratification of the amended Option Plan, to increase
the number of shares reserved for issuance under the Option Plan by 200,000
shares from 1,100,000 shares to 1,300,000 shares.
The Board believes that the attraction and retention of high quality
personnel are essential to the Company's continued growth and success and that
an incentive plan such as the Option Plan is necessary for the Company to remain
competitive in its compensation practices.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
APPROVAL AND RATIFICATION OF THE
OPTION PLAN, AS AMENDED.
General Description
The following is a general description of the principal terms of the
Option Plan, the amendment approved by the Board and the purpose of the
amendment. Although the Company believes that the following description provides
a fair summary of the material terms of the Option Plan, the description is
qualified in its entirety by the text of the Option Plan, as proposed to be
amended.
The Option Plan was adopted by the Board and approved by the
shareholders of the Company in December 1994. The purpose of the Option Plan is
to assist the Company in attracting and retaining high quality personnel and to
provide a means whereby eligible employees (including officers and employee
directors) and non-employee directors can acquire Common Stock through the
exercise of options, thereby aligning the interests of employees, officers and
directors with the interests of shareholders. The Option Plan provides for the
granting to employees (including officers and employee directors) of incentive
stock options ("Incentive Stock Options") within the meaning of Section 422 of
the Internal Revenue Code of 1986, as amended, and for the granting to
employees, directors and consultants of nonqualified stock options. The Company
cannot grant an Incentive Stock Option if as a result of the grant the optionee
would have the right in any calendar year to exercise (under all plans of the
Company or its affiliates) for the first time one or more Incentive Stock
Options for shares having an aggregate fair market value (determined as of the
grant date) in excess of $100,000. As of the Record Date, approximately 156
persons were either participating in or eligible to participate in the Option
Plan and options to purchase 769,250 shares had been granted under the Option
Plan of which options to purchase 589,251 shares were outstanding.
The Option Plan is currently administered by the Compensation and Stock
Option Committee of the Board (the "Compensation Committee"), which, except for
Initial Option Grants and Annual Option Grants to non-employee directors,
determines the terms of the options granted under the Option Plan, including the
exercise price, the number of shares subject to the option and exercisability.
Generally, 5% of the shares subject to the option granted under the Option Plan
become exercisable at the end of each three-month period commencing three months
after the grant date such that the option is fully exercisable five years after
the grant date. No Incentive Stock Option may be transferred by the optionee
other than by will or the laws of descent or distribution. Each Incentive Stock
Option may be exercised, during the lifetime of the optionee, only by such
optionee.
Under the Option Plan, non-employee directors receive Initial Option
Grants to purchase 3,000 shares of Common Stock upon the date he or she becomes
a director. Thereafter, immediately following each annual meeting of
shareholders, each non-employee director who continues as such following the
annual meeting and has attended two or more meetings of the Board of Directors
as of the time of such annual meeting, receives an Annual Option Grant to
purchase 2,000 shares of Common Stock.
In general, the exercise price of stock subject to the Initial Option
Grants and the Annual Option Grants is the fair market value of the Common Stock
on the date of grant. The Initial Option Grants vest and become exercisable as
of the date of grant and the Annual Option Grants vest and become exercisable as
to 25% of the shares covered thereby on the last day of each three-month period
following the date of grant such that the option becomes fully exercisable
twelve months after the grant date.
The exercise price of Incentive Stock Options granted under the Option
Plan must equal at least the fair market value of the Common Stock on the date
of grant. The exercise price of any Incentive Stock Option granted to an
optionee who owns stock possessing more than 10% of the voting power of the
Company's outstanding capital stock must equal at least 110% of the fair market
value of the Common Stock on the date of grant. The Compensation Committee
determines the exercise price of nonqualified stock options other than Initial
Option Grants and Annual Option Grants. In general, payment of the exercise
price may be made in cash, by the optionee's personal check, certified check or
other specified consideration.
In general, except for options granted to non-employee directors, the
Option Plan provides that the Compensation Committee may include a provision in
the option agreement providing that, in the event of a Change in Control (as
defined in the Option Plan), any outstanding options covered by such agreement
shall be fully vested, nonforfeitable and become exercisable as of the date of
the Change in Control. If the Compensation Committee elects to include such a
provision, the option agreement will provide that, (a) in the event of a Change
in Control relating to (i) an acquisition of Common Stock resulting in the
beneficial ownership by any person or related group of persons of more than 50%
of the total combined voting power of the outstanding Common Stock, (ii) a
change in the composition of the Board over a 36 month period or (iii) approval
by the Company's shareholders of any reverse merger in which the Company
survives as an entity, but in which securities possessing more than 50% of the
total combined voting power of the Company's outstanding securities are
transferred to a person or persons different from those who held such securities
immediately prior to such merger, the option shall remain exercisable for the
remaining term of the option, and (b) in the event of a Change in Control
relating to (x) approval by the Company's shareholders of a merger or
consolidation in which the Company is not the surviving entity (except for a
transaction the principal purpose of which is to change the Company's state of
incorporation) or (y) the approval by the Company's shareholders of either the
sale, transfer or other disposition of all or substantially all of the assets of
the Company or the complete liquidation or dissolution of the Company, the
option shall terminate as of the effective date of such merger, disposition of
assets, liquidation or dissolution. As to options granted to non-employee
directors, (A) in the event of a Change in Control relating to (i), (ii) or
(iii) above, any such outstanding options become fully vested and remain
exercisable for the remaining term of such options and (B) in the event of a
Change in Control relating to (x) or (y) above, any such outstanding options
terminate as of the effective date of such merger, disposition of assets,
liquidation or dissolution.
The Board of Directors believes there are insufficient shares of Common
Stock currently available under the Option Plan to satisfy option grants
anticipated to be issued in 1998. The shareholders of the Company are therefore
being asked to approve the Option Plan, as amended, to increase the number of
shares of Common Stock available for issuance thereunder by 200,000 shares from
1,100,000 shares to 1,300,000 shares.
Federal Income Tax Information
If an option granted under the Option Plan is an Incentive Stock
Option, the optionee will recognize no income upon grant of the option and incur
no tax liability due to the exercise of the option unless the optionee is
subject to alternative minimum tax. The Company will not be allowed a deduction
for federal income tax purposes as a result of the exercise of an Incentive
Stock Option regardless of the applicability of the alternative minimum tax.
Upon the sale or exchange of the shares at least two years after grant of the
option and one and a half years after exercise of the option, a gain will be
treated as long-term capital gain. If these holding periods are not satisfied,
the optionee will recognize ordinary income equal to the difference between the
exercise price and the lower of the fair market value of the stock at the date
of the option exercise or the sale price of the stock. The Company will be
entitled to a deduction in the same amount as the ordinary income recognized by
the optionee. Any gain recognized on such a premature disposition of the shares
in excess of the amount treated as ordinary income will be characterized as
long-term capital gain if the sale occurs more than one and a half years after
exercise of the option or as short-term capital gain if the sale is made
earlier. Under current law, the maximum long-term capital gain tax rate for
individuals is 20% while the maximum ordinary income tax rate for individuals is
39.6%.
All options which do not qualify as Incentive Stock Options are
referred to as nonqualified stock options. An optionee will not recognize any
taxable income at the time he or she is granted a nonqualified stock option.
However, upon its exercise, the optionee will recognize ordinary income for tax
purposes measured by the excess, if any, of the then fair market value of the
shares over the exercise price. In certain circumstances, where the shares are
subject to a substantial risk of forfeiture when acquired, the date of taxation
may be deferred unless the optionee files an election with the Internal Revenue
Service under Section 83(b) of the Code within 30 days after the date of
exercise. The Company generally will be entitled to a deduction in the same
amount as the ordinary income recognized by the optionee. The income recognized
by an optionee who is also an employee of the Company will be subject to income
and employment tax withholding by the Company by payment of cash or out of the
current earnings paid to the optionee. Upon resale of such shares by the
optionee, any difference between the sale price and the exercise price, to the
extent not recognized as ordinary income as provided above, will be treated as
capital gain or loss, and will qualify for long-term capital gain or loss
treatment if the shares have been held for more than one and a half years.
The foregoing is only a summary of the effect of federal income
taxation upon the optionee and the Company with respect to the grant and
exercise of options under the Option Plan and does not purport to be complete.
The foregoing does not discuss the income tax laws of any municipality, state,
or foreign country in which an optionee may reside.
PROPOSAL NO. 3
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
Coopers & Lybrand L.L.P. has served as the Company's independent
auditors since 1984 and has been appointed by the Board to continue as the
Company's independent auditors for the Company's fiscal year ending September
30, 1998. In the event that ratification of this selection of auditors is not
approved by a majority of the shares of Common Stock voting at the Annual
Meeting in person or by proxy, management will review its future selection of
auditors. A representative of Coopers & Lybrand L.L.P. is expected to be present
at the Annual Meeting. The representative will have an opportunity to make a
statement and to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF
THE APPOINTMENT OF COOPERS & LYBRAND L.L.P. AS THE COMPANY'S
INDEPENDENT AUDITORS FOR THE FISCAL YEAR
ENDING SEPTEMBER 30, 1998.
<PAGE>
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Summary Compensation Table
The following table sets forth information relating to compensation
received by the Company's Chief Executive Officer and the four other most highly
compensated executive officers of the Company (the "Named Executive Officers")
during the periods indicated.
<TABLE>
<S> <C> <C> <C> <C> <C>
Long-Term
Compensation
-----------------
Securities
Underlying All Other
Name and Principal Position Year Salary Bonus Options(#) Compensation(1)
- ---------------------------------- ------- ------------ -------------- ----------------- ------------------
Raymon F. Thompson 1997 $243,345 -- -- $4,750
Chairman, Chief Executive 1996 230,015 $70,000(2) -- 4,750
Officer and President 1995 227,091 -- 4,620
Timothy C. Dodkin(3) 1997 303,536 $162,749(4) 10,000 2,620
Managing Director, Semitool 1996 228,565 50,000 -- 2,504
Europe Ltd. 1995 208,333 55,000(2) 45,000 2,534
Thomas Sulzbacher Vice President 1997 151,507 75,025 20,000 5,250
of Sales and Marketing
Gregory L. Perkins 1997 147,472 60,000 7,000 3,938
Vice President and General 1996 141,180 -- -- 2,573
Manager 1995 127,921 70,000(2) 45,000 920
Robert W. Berner(5) 1997 156,673 -- 5,000 4,921
Vice President and 1996 140,005 -- 15,000 3,979
General Manager, Metallization
Group
</TABLE>
(1)Represents Company contributions to the Company's 401(k) plan on behalf
of the Named Executive Officer, except that amounts for Mr. Dodkin
represent Company contributions to a United Kingdom employee benefit
plan that is similar to the Company's 401(k) plan on behalf of Mr.
Dodkin.
(2)Includes bonus amounts paid in fiscal 1996 for services rendered in fiscal
1995.
(3)Mr. Dodkin's compensation is paid in UK Pounds Sterling. The average UK
Pound Sterling exchange rates for fiscal 1995, 1996 and 1997 were
1.584, 1.565 and 1.638, respectively.
(4)Includes bonus amounts paid in fiscal 1998 for services rendered in fiscal
1997. (5) Mr. Berner ceased being an officer of the Company as of
December 5, 1997.
(5)Mr. Berner ceased being an officer of the Company as of December 5, 1997.
<PAGE>
Option Grants in Last Fiscal Year
The following table provides certain information with respect to stock
options granted to the Named Executive Officers during the fiscal year ended
September 30, 1997. In addition, as required by the Securities and Exchange
Commission rules, the table sets forth the hypothetical gains that would exist
for the respective options based on assumed rates of annual compound price
appreciation during the option term.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Individual Grants
----------------------------------------------------
Potential Realizable
Number of % of Total Value at Assumed
Securities Options Annual Rate of Stock
Underlying Granted to Exercise Price Appreciation for
Options Employees in Price Per Expiration Option Term (1)
Name Granted(2) Fiscal Year Share Date 5% 10%
- ---------------------- ----------- ------------ ------- ---------- ---------------------
Raymon F. Thompson........... -- -- -- -- -- --
Timothy C. Dodkin............ 10,000 6.62% $9.75 04/29/2007 $ 61,317 $155,390
Thomas Sulzbacher............ 20,000 13.25% 9.75 04/29/2007 122,634 310,780
Gregory L. Perkins........... 7,000 4.64% 9.75 04/29/2007 42,922 108,773
Robert W. Berner............. 5,000 3.31% 9.75 04/29/2007 30,659 77,695
- -------------------------------
</TABLE>
(1) Potential realizable value is determined by applying an amount equal to
the fair market value on the date of grant to the stated annual
appreciation rate compounded annually for the remaining term of the
option, subtracting the exercise price at the end of the period and
multiplying the remaining number by the number of shares subject to the
option. Actual gains, if any, on stock option exercise and Common Stock
holdings are dependent upon a number of factors, including the future
performance of the Common Stock, overall stock market conditions, and
the timing of option exercises, if any. There can be no assurance that
the amounts reflected in this table will be achieved.
(2) Reflects options that have a ten year term and vest and become
exercisable at the rate of 5% per quarter.
<PAGE>
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
The following table discloses for each of the Named Executive Officers
certain information relating to options to purchase the Company's Common Stock
exercised during the fiscal year ended September 30, 1997 and options to
purchase the Company's Common Stock held at the end of such period.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at September 30, at September 30, 1996($)(1)
1996(#)
------------------------------ -----------------------------
Shares
Acquired on Value
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
----------------------- ----------- ----------- ------------ -------------- ------------- -------------
Raymon F. Thompson.... -- -- -- -- -- --
Timothy C. Dodkin..... -- -- 16,250 29,750 $266,906 $479,344
Thomas Sulzbacher..... -- -- 4,300 21,700 69,687 336,562
Gregory L. Perkins.... -- -- 22,100 26,900 363,350 435,525
Robert W. Berner...... -- -- 13,000 22,000 194,187 311,437
</TABLE>
- -------------------------------
(1) Based on the fair market value of the Company's Common Stock as of
September 30, 1997 $25.125.
Compensation Committee Interlocks and Insider Participation
During the fiscal year ended September 30, 1997, Messrs. Bateman and
Robinson served on the Compensation Committee of the Board of Directors. No
interlocking relationship exists between any member of the Company's Board of
Directors or Compensation Committee and any member of the Board of Directors or
compensation committee of any other company, nor has such interlocking
relationship existed in the past.
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS
This section is not "soliciting material," is not deemed "filed" with
the Commission and is not incorporated by reference in any filing of the Company
under the Securities Act of 1933, as amended, or the Securities and Exchange Act
of 1934, as amended, whether made before or after the date hereof and
irrespective of any general language to the contrary.
The Compensation Committee of the Board was formed in 1995 and consists
of Messrs. Bateman and Robinson. Decisions concerning the compensation of the
Company's executive officers are made by the Compensation Committee and reviewed
by the full Board (excluding any interested director).
Executive Officer Compensation Programs
The objectives of the executive officer compensation program are to
attract, retain, motivate and reward key personnel who possess the necessary
leadership and management skills, through competitive base salary, annual cash
bonus incentives, long-term incentive compensation in the form of stock options,
and various benefits, including medical and life insurance plans.
The executive compensation policies of the Compensation Committee are
intended to combine competitive levels of compensation and rewards for above
average performance and to align relative compensation with the achievements of
key business objectives, optimal satisfaction of customers, and maximization of
shareholder value. The Compensation Committee believes that stock ownership by
management is beneficial in aligning management and shareholder interests,
thereby enhancing shareholder value.
Base Salaries. Salaries for the Company's executive officers are
determined primarily on the basis of the executive officer's responsibility,
general salary practices of peer companies and the officer's individual
qualifications and experience. The base salaries are reviewed annually and may
be adjusted by the Compensation Committee in accordance with certain criteria
which include individual performance, the functions performed by the executive
officer, the scope of the executive officer's on-going duties, general changes
in the compensation peer group in which the Company competes for executive
talent, and the Company's financial performance generally. The weight given each
such factor by the Compensation Committee may vary from individual to
individual.
Incentive Bonuses. The Compensation Committee believes that a cash
incentive bonus plan can serve to motivate the Company's executive officers and
management to address annual performance goals, using more immediate measures
for performance than those reflected in the appreciation in value of stock
options. The bonus amounts are based upon recommendations by management and a
subjective consideration of factors including such officer's level of
responsibility, individual performance, contributions to the Company's success
and the Company's financial performance generally.
Stock Option Grants. Stock options are granted to executive officers
and other employees under the Option Plan. Because of the direct relationship
between the value of an option and the stock price, the Compensation Committee
believes that options motivate executive officers to manage the Company in a
manner that is consistent with shareholder interests. Stock option grants are
intended to focus the attention of the recipient on the Company's long-term
performance which the Company believes results in improved shareholder value,
and to retain the services of the executive officers in a competitive job market
by providing significant long-term earning potential. To this end, stock options
generally vest and become fully exercisable over a five-year period. The
principal factors considered in granting stock options to executive officers of
the Company are prior performance, level of responsibility, other compensation
and the executive officer's ability to influence the Company's long-term growth
and profitability. However, the Option Plan does not provide any quantitative
method for weighting these factors, and a decision to grant an award is
primarily based upon a subjective evaluation of the past as well as future
anticipated performance.
Other Compensation Plans. The Company has adopted certain general
employee benefit plans in which executive officers are permitted to participate
on parity with other employees. The Company also provides a 401(k) deferred
compensation pension plan. Benefits under these general plans are indirectly
tied to the Company's performance.
Deductibility of Compensation. Section 162(m) of the Internal Revenue
Code ("IRC") disallows a deduction by the Company for certain compensation
exceeding $1.0 million paid to any Named Executive Officer, excluding, among
other things, certain performance based compensation. Because the compensation
figures for the Named Executive Officers have not approached the limitation, the
Compensation Committee has not had to use any of the available exemptions from
the deduction limit. However, the Option Plan is designed to qualify any
compensation realized by Named Executive Officers from the exercise of an option
as performance based compensation. The Compensation Committee remains aware of
the existence of the IRC Section 162(m) limitations, and the available
exemptions, and will address the issue of deductibility when and if
circumstances warrant the use of such exemptions in addition to the exemption
contemplated under the Option Plan.
Chief Executive Officer Compensation
The compensation of the Chief Executive Officer is reviewed annually on
the same basis as discussed above for all executive officers. Mr. Thompson's
base salary for the fiscal year ended September 30, 1997 was $243,345. Mr.
Thompson's base salary was established in part by comparing the base salaries of
chief executive officers at other companies of similar size. Mr. Thompson's base
salary was at the approximate median of the base salary range for
Presidents/Chief Executive Officers of comparative companies. Mr. Thompson
received no stock options or bonuses during the fiscal year ended September 30,
1997.
MEMBERS OF THE COMPENSATION COMMITTEE
Howard E. Bateman
Calvin S. Robinson
<PAGE>
CERTAIN TRANSACTIONS
The following is a description of certain transactions and
relationships entered into or existing during the fiscal year ended September
30, 1997 between the Company and certain affiliated parties. The Company
believes that the terms of such transactions were no less favorable to the
Company than could have been obtained from an unaffiliated party.
During the fiscal year ended September 30, 1997, the Company leased,
and continues to lease, airplanes from Raymon F. Thompson. Under these lease
agreements, the Company made rental payments to Raymon F. Thompson of $1,276,600
during the fiscal year ended September 30, 1997. The Company currently leases
three airplanes from Mr. Thompson with an aggregate monthly rental charge of
$106,100. One of these lease agreements expires in 1999, one expires in 2000 and
the other expires in 2001. The terms of the lease agreements were based on
quotes from independent aircraft leasing dealers for the same type of aircraft.
The Company believes that these lease agreements are on terms no less favorable
to the Company than could have been obtained from an unaffiliated party.
Fastener's West, Inc. ("FWI"), 76% of which is owned by Raymon F.
Thompson, supplies some of the fasteners used by the Company. During the fiscal
year ended September 30, 1997, total purchases by the Company from FWI amounted
to approximately $720,000. Prices paid by the Company are comparable to the list
price paid by other FWI customers.
<PAGE>
STOCK PERFORMANCE GRAPH
The following graph compares the percentage change in the cumulative
total shareholder return on the Company's Common Stock from February 2, 1995,
the date of the Company's initial public offering, through the end of the
Company's fiscal year ended September 30, 1997, with the percentage change in
the cumulative total return for the Nasdaq Composite Index (U.S. Companies) and
the Hambrecht & Quist Semiconductor Index. The comparison assumes an investment
of $100 on February 2, 1995 in the Company's Common Stock and in each of the
foregoing indices and assumes reinvestment of dividends. The stock performance
shown on the graph below is not necessarily indicative of future price
performance.
STOCK PERFORMANCE GRAPH APPEARS HERE
COMPARISON OF 31 MONTH CUMULATIVE TOTAL RETURN*
AMONG SEMITOOL, INC., THE NASDAQ STOCK MARKET (U.S) INDEX
AND THE HAMBRECHT & QUIST SEMICONDUCTOR INDEX
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Following is a listing of each of the plot points illustrated in the graph:
DOLLARS 2/02/95 3/95 6/95 9/95 12/95 3/96 6/96 9/96 12/96 3/97 6/97 9/97
SEMITOOL, INC. 100 162 246 288 150 173 150 137 110 127 134 290
NASDAQ STOCK MARKET-US 100 107 123 137 139 146 157 163 171 162 192 224
HAMBRECHT & QUIST SEMICONDUCTORS 100 115 161 182 132 125 120 136 171 193 217 272
* $100 INVESTED ON 2/02/95 IN STOCK OR INDEX-INCLUDING REINVESTMENT OF DIVIDENDS. FISCAL YEAR ENDING SEPTEMBER 30.
</TABLE>
<PAGE>
SHAREHOLDER PROPOSALS
To be considered for presentation to the annual meeting of the
Company's shareholders to be held in 1998, a shareholder proposal must be
received by Larry Viano, Principal Financial Officer, 655 West Reserve Drive,
Kalispell, Montana 59901, no later than September 11, 1998.
OTHER MATTERS
Section 16(a) Beneficial Ownership Reporting Compliance. Section 16(a)
of the Exchange Act requires the Company's directors, executive officers and
persons who own more than 10% of the Company's Common Stock (collectively,
"Reporting Persons") to file reports of ownership and changes in ownership of
the Company's Common Stock. Reporting Persons are required by Securities and
Exchange Commission regulations to furnish the Company with copies of all
Section 16(a) reports they file. Based solely on its review of the copies of
such reports received or written representations from certain Reporting Persons,
the Company believes that during the fiscal year ended September 30, 1997, all
Reporting Persons complied with all applicable filing requirements.
Other Matters. The Board of Directors knows of no other business which
will be presented at the Annual Meeting. If any other business is properly
brought before the Annual Meeting, it is intended that proxies in the enclosed
form will be voted in respect thereof in accordance with the judgments of the
persons voting the proxies.
It is important that the proxies be returned promptly and that your
shares be represented. Shareholders are urged to mark, date, execute and
promptly return the accompanying proxy card in the enclosed envelope.
By Order of the Board of Directors,
/s/Raymon F. Thompson
Raymon F. Thompson
Chairman of the Board,
Chief Executive Officer and
President
January 22, 1998
Kalispell, Montana
<PAGE>
EXHIBIT A
AMENDED AND RESTATED SEMITOOL, INC.
1994 STOCK OPTION PLAN
1. Establishment, Purpose, and Definitions.
(a) There is hereby adopted the 1994 Stock Option Plan
(the "Plan") of Semitool, Inc. (the "Company").
(b) The purpose of the Plan is to provide a means whereby
eligible individuals (as defined in Section 4, below) can acquire Common Stock
of the Company (the "Stock"). The Plan provides employees (including officers
and directors who are employees) of the Company and of its Affiliates an
opportunity to purchase shares of Stock pursuant to options which may qualify as
incentive stock options (referred to as "incentive stock options") under Section
422 of the Internal Revenue Code of 1986, as amended (the "Code"), and
employees, officers, directors, independent contractors, and consultants of the
Company and of its Affiliates an opportunity to purchase shares of Stock
pursuant to options which are not described in Sections 422 or 423 of the Code
(referred to as "nonqualified stock options").
(c) The term "Affiliates" as used in the Plan means parent or
subsidiary corporations, as defined in Sections 424(e) and (f) of the Code (but
substituting "the Company" for "employer corporation"), including parents or
subsidiaries which become such after adoption of the Plan.
2. Administration of the Plan.
(a) The Plan shall be administered by the Board of Directors
of the Company (the "Board"). Subject to Section 2(e) below, the Board may
delegate the responsibility for administering the Plan to a committee, under
such terms and conditions as the Board shall determine (the "Committee"). The
Committee shall consist of two or more members of the Board or such lesser
number of members of the Board as permitted by Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended ("Rule 16b-3"). None of the members
of the Committee shall receive, while serving on the Committee, or during the
one-year period preceding appointment to the Committee, a grant or award of
equity securities under (i) the Plan or (ii) any other plan of the Company or
its affiliates under which the participants are entitled to acquire Stock
(including restricted Stock), stock options, stock bonuses, related rights or
stock appreciation rights of the Company or any of its affiliates, other than
pursuant to the grant of automatic options provided in Section 7 below and
pursuant to transactions in any such other plan which do not disqualify a
director from being a disinterested person under Rule 16b-3. The limitations set
forth in this Section 2(a) shall automatically incorporate any additional
requirements that may in the future be necessary for the Plan to comply with
Rule 16b-3. Members of the Committee shall serve at the pleasure of the Board.
The Committee shall select one of its members as chairman, and shall hold
meetings at such times and places as it may determine. A majority of the
Committee shall constitute a quorum and acts of the Committee at which a quorum
is present, or acts reduced to or approved in writing by all the members of the
Committee, shall be the valid acts of the Committee. If the Board does not
delegate administration of the Plan to the Committee, then each reference in
this Plan to "the Committee" shall be construed to refer to the Board.
(b) Except for options granted to Non-Employee Directors
pursuant to Section 7, the Committee shall determine which eligible individuals
(as defined in Section 4, below) shall be granted options under the Plan, the
timing of such grants, the terms thereof (including any restrictions on the
Stock), and the number of shares subject to such options.
(c) Except for options granted to Non-Employee Directors
pursuant to Section 7, the Committee may amend the terms of any outstanding
option granted under this Plan, but any amendment which would adversely affect
the optionee's rights under an outstanding option shall not be made without the
optionee's written consent. The Committee may, with the optionee's written
consent, cancel any outstanding stock option or accept any outstanding stock
option in exchange for a new option.
(d) The Committee shall have the sole authority, in its
absolute discretion to adopt, amend, and rescind such rules and regulations as,
in its opinion, may be advisable in the administration of the Plan, to construe
and interpret the Plan, the rules and the regulations, and the instruments
evidencing options or Stock granted under the Plan and to make all other
determinations deemed necessary or advisable for the administration of the Plan.
All decisions, determinations, and interpretations of the Committee shall be
binding on all participants. Notwithstanding the foregoing, the Committee shall
not exercise any discretionary functions with respect to options granted to
Non-Employee Directors pursuant to Section 7.
(e) Notwithstanding the foregoing provisions of this Section
2, grants of options to any "Covered Employee," as such term is defined by
Section 162(m) of the Code shall be made only by a subcommittee of the Committee
which, in addition to meeting other applicable requirements of this Section 2,
is composed solely of two or more "outside directors," within the meaning of
Section 162(m) of the Code and the regulations thereunder (the "Subcommittee")
to the extent necessary to qualify such grants as "performance-based
compensation" under Section 162(m). In the case of such grants to Covered
Employees, references to the "Committee" shall be deemed to be references to the
Subcommittee as specified above.
3. Stock Subject to the Plan.
(a) An aggregate of not more than 1,300,000 shares of Stock
shall be available for the grant of stock options under the Plan, of which not
more than 90,000 shares shall be available for the grant of options under
Section 7 of the Plan. If an option is surrendered (except surrender for shares
of Stock) or for any other reason ceases to be exercisable in whole or in part,
the shares which were subject to such option but as to which the option had not
been exercised shall continue to be available under the Plan.
(b) If there is any change in the Stock subject to any option
granted under the Plan, through merger, consolidation, reorganization,
recapitalization, reincorporation, stock split, stock dividend (in excess of two
percent), or other change in the capital structure of the Company, appropriate
adjustments shall be made by the Committee in order to preserve but not to
increase the benefits to the individual, including adjustments to the number and
kind of shares and the price per share subject to outstanding options.
4. Eligible Individuals. The persons eligible to participate in the
Plan (other than pursuant to Section 7) are such employees, officers,
independent contractors, and consultants of the Company or an Affiliate as the
Committee , in its discretion, shall designate from time to time.
Notwithstanding the foregoing, only employees of the Company or an Affiliate
(including officers and directors who are bona fide employees) shall be eligible
to receive incentive stock options. Except for grants pursuant to Section 7,
Eligible Individuals shall not include Non-Employee Directors.
5. The Option Price. The exercise price of each incentive stock option
shall be not less than the per share fair market value of the Stock subject to
such option on the date the option is granted. Except as provided in Section 7,
the exercise price of each nonqualified stock option shall be as determined by
the Committee. Notwithstanding the foregoing, (i) in the case of an incentive
stock option granted to a person possessing more than ten percent of the
combined voting power of the Company or an Affiliate, the exercise price shall
be not less than 110 percent of the fair market value of the Stock on the date
the option is granted. The exercise price of an option shall be subject to
adjustment to the extent provided in Section 3(b), above.
6. Terms and Conditions of Options.
(a) Each option granted pursuant to the Plan will be
evidenced by a written Stock Option Agreement executed by the Company and
the person to whom such option is granted.
(b) The Committee shall determine the term of each option
granted under the Plan; provided, however, that (i) the term of an incentive
stock option shall not be more than 10 years, (ii) in the case of an incentive
stock option granted to a person possessing more than ten percent of the
combined voting power of the Company or an Affiliate, the term of each incentive
stock option shall be no more than five years, and (iii) the term of an option
granted pursuant to Section 7 shall be as provided in Section 7.
(c) In the case of incentive stock options, the aggregate fair
market value (determined as of the time such option is granted) of the Stock
with respect to which incentive stock options are exercisable for the first time
by an eligible employee in any calendar year (under this Plan and any other
plans of the Company or its Affiliates) shall not exceed $100,000.
Notwithstanding the designation in an option agreement, to the extent that the
$100,000 limit is exceeded for any calendar year, the excess options shall be
nonqualified stock options.
(d) Except for grants to Non-Employee Directors pursuant to
Section 7, which shall be granted on the form of Stock Option Agreement attached
hereto as Exhibit A, the Stock Option Agreement may contain such other terms,
provisions, and conditions as may be determined by the Committee not
inconsistent with this Plan. If an option, or any part thereof is intended to
qualify as an incentive stock option, the Stock Option Agreement shall contain
those terms and conditions which are necessary to so qualify it.
(e) The maximum amount of Stock for which options may be
granted pursuant to any individual per calendar year under the Plan shall be
375,000 shares, subject to adjustment pursuant to Section 3(b). To the extent
required by Section 162(m) of the Code and the regulations thereunder, in
applying the foregoing limitation with respect to an employee, if any option is
canceled, the canceled option shall continue to count against the maximum number
of shares for which options may be granted to the employee under this Section
6(e). For this purpose, the repricing of an option shall be treated as a
cancellation of the existing option and the grant of a new option.
7. Stock Options for Non-Employee Directors
(a) Automatic Grant of Options. An option to purchase 3,000
shares of Stock shall be granted ("Initial Grant") to each director who is not
an employee of the Company ("Non-Employee Director"), such Initial Grant to be
made (i) to the then existing Non-Employee Directors upon the closing of the
Company's initial public offering of its Stock in an underwriting pursuant to a
registration statement filed under the Securities Act of 1933 ("IPO") and (ii)
to other Non-Employee Directors elected or appointed to the Board after the IPO
upon the date each first becomes a Non-Employee Director of the Company.
Thereafter, immediately following each annual meeting of the Company's
stockholders, each Non-Employee Director who continues as a Non-Employee
Director following such annual meeting shall be granted an option to purchase
2,000 shares of Stock ("Subsequent Grant"); provided that no Subsequent Grant
shall be made to any Non-Employee Director who has not served as a director of
the Company and attended at least two (2) meetings of the Board of Directors, as
of the time of such annual meeting. Each such Subsequent Grant shall be made on
the date of the annual stockholders' meeting in question; provided, however,
that as to Subsequent Grants made to Non-Employee Directors in connection with
the Company's 1996 annual stockholders' meeting (the "1996 Annual Meeting"), (x)
Non-Employee Directors who have served as a director of the Company, as of the
time of the 1996 Annual Meeting, for at least one year, shall be granted an
option to purchase 1,500 shares of Stock on the date of the 1996 Annual Meeting
and shall be granted an option to purchase 500 shares of Stock on May 20, 1996,
and (y) Non-Employee Directors who have not served as a director of the Company
for at least one year, as of the time of such annual meeting, but have attended
at least two (2) meetings of the Board of Directors, as of the time of the 1996
Annual Meeting, shall be granted an option to purchase 2,000 shares of Stock on
May 20, 1996. If any option ceases to be exercisable in whole or in part, the
shares which were subject to such option but as to which the option had not been
exercised shall continue to be available under the Plan. All options granted to
Non-Employee Directors shall be nonqualified stock options.
(b) Option Exercise Price. The exercise price per share of
Stock covered by each option shall be the per-share fair market value of the
Stock on the date the option is granted; provided that the exercise price per
share of Stock covered by options constituting Initial Grants under Section
7(a)(i) above shall be the per-share price to the public in the IPO; provided
further, however, that the exercise price per share of Stock covered by options
granted on May 20, 1996 under Section 7(a)(x) and (y) above shall be the lesser
of the per-share fair market value of the Stock on February 16, 1996 or the
per-share fair market value of the Stock on the date the option is granted. The
exercise price of an option granted under the Plan shall be subject to
adjustment to the extent provided in Section 3(b) hereof.
(c) Exercisability. Each Initial Grant shall vest and become
exercisable as of the date of grant. Each Subsequent Grant shall vest and become
exercisable as to 1/4 of the shares covered thereby on a quarterly basis on the
last day of each three-month period following the date of grant such that the
option will be fully exercisable twelve (12) months after its date of grant.
8. Use of Proceeds. Cash proceeds realized from the sale of Stock under
the Plan or pursuant to options granted under the Plan shall constitute general
funds of the Company.
9. Amendment, Suspension, or Termination of the Plan.
(a) The Board may at any time amend, suspend or terminate the
Plan as it deems advisable; provided that such amendment, suspension or
termination complies with all applicable requirements of state and federal law,
including any applicable requirement that the Plan or an amendment to the Plan
be approved by the shareholders, and provided further that, except as provided
in Section 3(b), above, the Board shall in no event amend the Plan in the
following respects without the consent of stockholders then sufficient to
approve the Plan in the first instance:
(i) To increase the maximum number of shares subject to
incentive stock options issued under the Plan; or
(ii) To change the designation or class of persons eligible
to receive incentive stock options under the Plan.
(b) No option may be granted nor any Stock issued under the
Plan during any suspension or after the termination of the Plan, and no
amendment, suspension, or termination of the Plan shall, without the affected
individual's consent, alter or impair any rights or obligations under any option
previously granted under the Plan. The Plan shall terminate with respect to the
grant of incentive stock options on the tenth anniversary of the date of
adoption of the Plan, unless previously terminated by the Board pursuant to this
Section 9.
(c) Notwithstanding the provisions of Sections 9(a) and 9(b),
above, the provisions set forth in Section 7 of the Plan (and any other sections
of the Plan that affect the formula award terms of option grants to Non-Employee
Directors required to be specified in the Plan by Rule 16b-3) shall not be
amended periodically and in no event more than once every six months, other than
to comport with changes to the Code, the Employee Retirement Income Security Act
of 1974, as amended, or any applicable rules and regulations thereunder.
10. Assignability. To the extent required by Rule 16b-3, no option
granted pursuant to this Plan shall be transferable by the holder except by
operation of law or by will or the laws of descent and distribution; provided,
that, if Rule 16b-3 is amended after the date of the Board's adoption of the
Plan to permit broader transferability of options under that Rule, (i) options
granted under Section 7 to Non-Employee Directors shall be transferable to the
fullest extent permitted by Rule 16b-3 as so amended, (ii) any other option
shall be transferable to the extent provided in the option agreement covering
the option, and the Committee shall have discretion to amend any such
outstanding option to provide for broader transferability of the option as the
Committee may authorize within the limitations of Rule 16b-3. Notwithstanding
the foregoing, if required by the Code, each incentive stock option under the
Plan shall be transferable by the optionee only by will or the laws of descent
and distribution, and, during the optionee's lifetime, shall be exercisable only
by the optionee. In the event of any Rule 16b-3 permitted transfer of an option
hereunder, the transferee shall be entitled to exercise the option in the same
manner and only to the same extent as the optionee (or his personal
representative or the person who would have acquired the right to exercise the
option by bequest or intestate succession) would have been entitled to exercise
the option under Sections 6, 7 and 11 had the option not been transferred.
11. Payment Upon Exercise of Options.
(a) Payment of the purchase price upon exercise of any option
granted under this Plan shall be made in cash, by optionee's personal check, a
certified check, bank draft, or postal or express money order payable to the
order of the Company in lawful money of the United States (collectively, "Cash
Consideration'); provided, however, that, except for options granted under
Section 7, the Committee, in its sole discretion, may permit an optionee to pay
the option price in whole or in part (i) with shares of Stock owned by the
optionee or with shares of Stock withheld from the shares otherwise deliverable
to the optionee upon exercise of the option; (ii) by delivery on a form
prescribed by the Committee of an irrevocable direction to a securities broker
approved by the Committee to sell shares of Stock and deliver all or a portion
of the proceeds to the Company in payment for the Stock; (iii) by delivery of
the optionee's promissory note with such recourse, interest, security, and
redemption provisions as the Committee in its discretion determines appropriate;
or (iv) in any combination of the foregoing. The exercise price of any options
granted under Section 7 shall be paid in Cash Consideration, the consideration
specified in clauses (i) or (ii) of the preceding sentence, or in any
combination thereof. Any Stock used to exercise options shall be valued at its
fair market value on the date of the exercise of the option. In addition, the
Committee, in its sole discretion, may authorize the surrender by an optionee of
all or part of an unexercised option (excluding options granted under Section 7,
above) and authorize a payment in consideration thereof of an amount equal to
the difference between the aggregate fair market value of the Stock subject to
such option and the aggregate option price of such Stock. In the Committee's
discretion, such payment may be made in cash, shares of Stock with a fair market
value on the date of surrender equal to the payment amount, or some combination
thereof.
(b) In the event that the exercise price is satisfied by
shares withheld from the shares of Stock otherwise deliverable to the optionee,
the Committee may issue the optionee an additional option, with terms identical
to the option agreement under which the option was exercised, entitling the
optionee to purchase additional shares of Stock equal to the number of shares so
withheld but at an exercise price equal to the fair market value of the Stock on
the grant date of the new option; provided, however, that no such additional
options may be granted with respect to options granted pursuant to Section 7,
above. Any additional option shall be subject to the provisions of Section 6(e),
above.
12. Withholding Taxes.
(a) No Stock shall be delivered under the Plan to any
participant until the participant has made arrangements acceptable to the
Committee (or in the case of exercise of options granted to Named Executives,
the Subcommittee) for the satisfaction of federal, state, and local income and
social security tax withholding obligations, including, without limitation,
obligations incident to the receipt of Stock under the Plan or to the failure to
satisfy the conditions for treatment as incentive stock options under applicable
tax law. Upon exercise of a stock option the Company shall withhold from the
optionee an amount sufficient to satisfy federal, state and local income and
social security tax withholding obligations.
(b) In the event that such tax withholding is satisfied by the
Company or the optionee's employer withholding shares of Stock otherwise
deliverable to the optionee, the Committee may issue the optionee an additional
option, with terms identical to the option agreement under which the option was
exercised, entitling the optionee to purchase additional shares of Stock equal
to the number of shares so withheld but at an exercise price equal to the fair
market value of the Stock on the grant date of the new option; provided,
however, that no such additional options may be granted with respect to options
granted pursuant to Section 7, above. Any additional option shall be subject to
the provisions of Section 6(e), above.
13. Change in Control.
(a) For purposes of this Section 13, a "Change in Control"
shall be deemed to occur upon:
(i) The direct or indirect acquisition by any person or
related group of persons (other than an acquisition from or by
the Company or by a Company-sponsored employee benefit plan or
by a person that directly or indirectly controls, is
controlled by, or is under common control with, the Company)
of beneficial ownership (within the meaning of Rule 13d-3 of
the Securities Exchange Act of 1934, as amended) of
securities possessing more than fifty percent (50%) of the
total combined voting power of the Company's outstanding
Stock;
(ii) A change in the composition of the Board over a
period of thirty-six (36) months or less such that a
majority of the Board members cease, by reason of one or
more contested elections for Board membership or by one or
more actions by written consent of stockholders, to be
comprised of individuals who either (A) have been Board
members continuously since the beginning of such period or (B)
have been elected or nominated for election as Board members
during such period by at least a majority of the Board members
described in clause (A) who were still in office at the time
such election or nomination was approved by the Board;
(iii) Approval by the Company's stockholders of a merger
or consolidation in which the Company is not the surviving
entity, except for a transaction the principal purpose of
which is to change the state in which the Company is
incorporated;
(iv) Approval by the Company's stockholders of (A) the
sale, transfer or other disposition of all or substantially all
of the assets of the Company (including the capital stock of
the Company's subsidiary corporations) or (B) the complete
liquidation or dissolution of the Company; or
(v) Approval by the Company's stockholders of any
reverse merger in which the Company survives as an entity but
in which securities possessing more than fifty percent (50%)
of the total combined voting power of the Company's outstanding
securities are transferred to a person or persons different
from those who held such securities immediately prior to such
merger.
(vi) For the purpose of this Section 13, "Approval by
the Company's Stockholders" shall mean approval by a majority
of those shares of Stock voting at a stockholder's meeting at
which a quorum is present, excluding shares beneficially owned
(within the meaning of Rule 13d-3 under the Exchange Act) by
the Non-Employee Directors.
(b) Except for options granted to Non-Employee Directors under
Section 7, the Committee may provide in any stock option agreement (or in an
amendment thereto) that, in the event of any Change in Control, any outstanding
options covered by such an agreement shall be fully vested, nonforfeitable and
become exercisable, as of the date of the Change in Control.
(c) If the Committee determines to incorporate a Change in
Control provision in any option agreement hereunder, the agreement shall provide
that, (i) in the event of a Change in Control described in clauses (i), (ii) and
(v) of paragraph (a) above, the option shall remain exercisable for the
remaining term of the option and (ii) in the event of a Change in Control
described in clauses (iii) or (iv) of paragraph (a) above, the option shall
terminate as of the effective date of the merger, disposition of assets,
liquidation or dissolution described therein.
(d) As to any options granted under Section 7 to Non-Employee
Directors, (i) in the event of a Change in Control described in clauses (i),
(ii) or (v) of paragraph (a) above, any such outstanding options under the Plan
shall become fully vested and remain exercisable for the remaining term of such
options and (ii) in the event of a Change in Control described in clauses (iii)
or (iv) of paragraph (a) above, outstanding options under the Plan shall
terminate as of the effective date of the merger, disposition of assets,
liquidation or dissolution described therein.
(e) Notwithstanding the foregoing provisions of this Section
13, an outstanding option may not be accelerated under this Section 13 if and to
the extent (i) such option is, in connection with the transaction giving rise to
a Change of Control, either to be assumed by the successor or parent thereof or
to be replaced with a comparable option to purchase shares of the capital stock
of the successor corporation or parent thereof, or (ii) such option is to be
replaced with a cash incentive program of the successor corporation that
preserves the option spread existing at the time of the corporate transaction
giving rise to the Change of Control and provides for subsequent payment in
accordance with the same vesting schedule applicable to such option.
14. Stockholder Approval. The Plan and any options granted pursuant to
Section 7 and options granted to Covered Employees hereunder shall become
effective only upon approval by the holders of a majority of the Company's
shares voting (in person or by proxy) at a stockholders' meeting held within 12
months of the Board's adoption of the Plan. The Committee may grant stock
options under the Plan prior to the stockholders' meeting, but until stockholder
approval of the Plan is obtained, no such option shall be exercisable. In the
event that stockholder approval is not obtained within the period provided
above, all options described in this Section 14 previously granted above, shall
terminate.
15. Rule 16b-3 Compliance. Transactions under the Plan are intended to
comply with all applicable conditions of Rule 16b-3 or its successors under the
Exchange Act. To the extent any provision of the Plan or action by the Board or
the Committee fails to so comply, it shall be deemed null and void, to the
extent permitted by law and deemed advisable by the Board or the Committee.
Moreover, in the event the Plan does not include a provision required by Rule
16b-3 to be stated therein in order to qualify the grants under Section 5 hereof
as grants under a non-discretionary formula under Rule 16b-3 such provision
(other than one relating to eligibility requirements, or the price and amount of
awards) shall be deemed automatically to be incorporated by reference into the
Plan with respect to grants of options to Non-Employee Directors.
<PAGE>
[FORM OF FRONT OF PROXY CARD]
PROXY
SEMITOOL, INC.
655 West Reserve Drive
Kalispell, Montana 59901
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING TO BE HELD ON February 9, 1998
RAYMON F. THOMPSON and LARRY A. VIANO, or either of them, each with the
power of substitution, are hereby authorized to represent and vote the shares of
the undersigned, with all the powers which the undersigned would possess if
personally present, at the Annual Meeting of Semitool, Inc. (the "Company"), to
be held on February 9, 1998, and any adjournment or postponement thereof.
Election of all directors (or if any nominee is not available for
election, such substitute as the Board of Directors or the proxy holders may
designate). Nominees: RAYMON F. THOMPSON, HOWARD E. BATEMAN, RICHARD A. DASEN,
DANIEL J. EIGEMAN, JOHN S. OSBORNE AND CALVIN S. ROBINSON.
BOARD OF DIRECTORS' RECOMMENDATIONS: The Board of Directors recommends a vote
FOR the election of Directors, FOR ratification and approval of the Amended and
Restated Semitool, Inc. 1994 Stock Option Plan, as amended and FOR ratification
and appointment of Coopers & Lybrand L.L.P. as the Company's independent
auditors for the fiscal year ending September 30, 1998.
If you wish to vote in accordance with the Board of Directors' recommendations
you need not mark any boxes, just sign and date on the reverse side.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
[FORM OF BACK OF PROXY CARD]
[X] Please mark votes as in this example.
Shares represented by this proxy will be voted as directed by the
shareholder. If no such directions are indicated, the Proxies will have
authority to vote FOR the election of all Director Nominees. In their
discretion, the Proxies are authorized to vote upon such other business as may
properly come before the Annual Meeting.
1. Election of Directors (see reverse):
[ ] FOR [ ] WITHHELD
[ ]---------------------------------------------------
FOR all Director Nominees except as noted above
2. To ratify and approve the Amended and Restated Semitool, Inc. 1994 Stock
Option Plan, as amended, increasing the number of shares of Common Stock
available for issuance thereunder by 200,000 shares from 1,100,000 shares to
1,300,000 shares:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To ratify the appointment of Coopers & Lybrand L.L.P. as the Company's
independent auditors for the fiscal year ending September 30, 1998:
[ ] FOR [ ] AGAINST [ ] ABSTAIN
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
REPLY ENVELOPE.
Please sign exactly as your name appears herein and date where indicated.
Joint owners should each sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such.
Signature_______________________________ Date______________
Signature_______________________________ Date______________
