SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [_]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the Commission
[X] Definitive Proxy Statement Only (as Permitted by Rule 14a-6(e)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to $240.14a-11(c) or $240.14a-12
ASECO CORPORATION
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(Name of Registrant as Specified In Its Charter)
ASECO CORPORATION
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(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:
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(4) Date Filed:
Notes:
ASECO CORPORATION
500 DONALD LYNCH BOULEVARD
MARLBORO, MASSACHUSETTS 01752
July 8, 19962, 1997
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
Aseco Corporation (the "Company"), which will be held on Thursday,Wednesday, August 8,
19966,
1997 at 10:00 A.M., at the offices of Choate, Hall & Stewart, 36th Floor,
Exchange Place, 53 State Street, Boston, Massachusetts.
The following Notice of Annual Meeting of Stockholders and Proxy Statement
describe the items to be considered by the stockholders and contain certain
information about the Company and its officers and directors.
Please sign and return the enclosed proxy card as soon as possible in the
envelope provided so that your shares can be voted at the meeting in
accordance with your instructions. Even if you plan to attend the meeting, we
urge you
are urged to sign and promptly return the proxy card. You can revoke it at any
time before it is exercised at the meeting, or vote your shares personally if
you attend the meeting.
We look forward to seeing you.
Sincerely,
/s/ Carl S. Archer, Jr.
Carl S. Archer, Jr.
President, Chief Executive Officer
and Chairman of the Board
ASECO CORPORATION
500 DONALD LYNCH BOULEVARD MARLBORO, MASSACHUSETTS 01752
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 8, 19966, 1997
The Annual Meeting of Stockholders of Aseco Corporation (the "Company") will
be held at the offices of Choate, Hall & Stewart, 36th Floor, Exchange Place,
53 State Street, Boston, Massachusetts on Thursday,Wednesday, August 8, 19966, 1997 at 10:00
A.M., for the following purposes:
1. To elect two directors for a three-year term.
2. To approve an amendment to the Company's 1993 Omnibus Stock Plan
increasing the number of shares issuable under such plan from 930,000 to
1,230,000.
3. To approve amendments to the Company's 1993 Non-Employee Director
Stock Option Plan increasing the number of shares issuable under such plan
from 65,000 to 165,000, increasing the number of shares underlying initial
option grants under the plan and providing that each Non-Employee Director
who was serving on the Board of Directors on May 15, 1996 and is to serve
on the Board of Directors during fiscal 1997 be granted an option to
purchase an additional 10,000 shares.
4. To ratify the Board of Directors' selection of Ernst & Young LLP as
the Company's independent auditors for the fiscal year ending March 30,
1997.
5.29,
1998.
3. To transact such other business as may properly come before the
meeting, and any or all adjournments thereof.
Stockholders of record at the close of business on June 28, 199625, 1997 will be
entitled to notice of and to vote at the Annual Meeting and any adjournments
thereof.
By Order of the Board of Directors
/s/ Robert V. Jahrling
Robert V. Jahrling
Secretary
Dated: July 8, 19962, 1997
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND
SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED RETURN ENVELOPE
IN ORDER THAT YOUR SHARES MAY BE REPRESENTED.
ASECO CORPORATION
500 DONALD LYNCH BOULEVARD
MARLBORO, MASSACHUSETTS 01752
PROXY STATEMENT FOR
ANNUAL MEETING OF STOCKHOLDERS
This Proxy Statement is furnished to the holders of common stock of Aseco
Corporation (hereinafter referred to as the(the "Company") in connection with the solicitation of proxies to
be voted at the Annual Meeting of Stockholders to be held on August 8, 19966, 1997
and at any adjournment of that meeting. The enclosed proxy is solicited on
behalf of the Board of Directors of the Company. Each properly signed proxy
will be voted in accordance with the instructions contained therein, and, if
no choice is specified, the proxy will be voted in favor of the proposals set
forth in the Notice of Annual Meeting.
A person giving the enclosed proxy has the power to revoke it, at any time
before it is exercised at the meeting, by written notice to the Secretary of
the Company, by sending a later dated proxy, or by revoking it in person at
the meeting.
The approximate date on which this Proxy Statement and the enclosed proxy
will first be sent to stockholders is July 8, 1996.2, 1997. The Company's Annual
Report to Stockholders for the year ended March 31, 199630, 1997 is being mailed
together with this Proxy Statement.
Only holders of common stock of record on the stock transfer books of the
Company at the close of business on June 28, 199625, 1997 (the "record date") will be
entitled to vote at the meeting. There were 3,635,2153,672,017 shares of common stock
outstanding and entitled to vote on the record date.
Each share of common stock is entitled to one vote. The affirmative vote of
the holders of a plurality of the shares represented at the meeting, at which
a quorum is present, is required for the election of directors. Approval of
the other matters which are before the meeting will require the affirmative
vote at the meeting, at which a quorum is present, of the holders of a
majority of votes cast with respect to such matters.
For purposes of the matters before the Annual Meeting, under the Company's
By-Laws, a quorum consists of a majority of the issued and outstanding shares
entitled to vote on such matters as of the record date. Shares voted to
abstain or to withhold as to a particular matter and shares as to which a
nominee (such as a broker holding shares in street name for a beneficial
owner) has no voting authority in respect of such matter will be deemed
represented for quorum purposes. Under the Company's By-Laws, such shares will
not be deemed to be voting on such matters, and therefore will not be the
equivalent of negative votes as to such matters. It is the position of the
Securities and Exchange Commission, however, that, with respect to stockholder
approval pursuant to Rule 16(b)-3 under the Securities Exchange Act of 1934
(the "1934 Act") of the second and third proposals listed on the Notice of
Annual Meeting, abstentions will be deemed the equivalent of negative votes.
Votes will be tabulated by
the Company's transfer agent subject to the supervision of persons designated
by the Board of Directors as inspectors.
STOCK OWNERSHIP OF DIRECTORS, NOMINEES, EXECUTIVE OFFICERS
AND PRINCIPAL STOCKHOLDERS
The following table sets forth certain information regarding beneficial
ownership of the Company's common stock as of June 3, 1996May 31, 1997 by (a) each
director of the Company and nominee for director, (b) each of the executive
officers named in the Summary Compensation Table below, (c) all current
directors and executive officers as a group and (d) each person known to the
Company to own beneficially 5% or more of itsthe Company's common stock. Except
as otherwise indicated, each person has sole investment and voting power with
respect to the shares shown as being beneficially owned by such person, based
on information provided by such owners.
COMMON STOCK
BENEFICIALLY PERCENT OF
NAME OWNED(1) OUTSTANDING SHARESSHARES(2)
- ---- ------------ ---------------------------------------
Carl S. Archer, Jr. ........................... 227,079 6.0%Jr.......................... 247,815 6.45%
Sebastian J. Sicari............................ 175,891 4.7Sicari......................... 186,455 4.90
C. Kenneth Gray................................ 55,414 1.5
Peter S. Rood.................................. 25,952 *
Charles D. Yie................................. 8,147 *
Kenneth W. Tunnell............................. 5,000Gray............................. 61,092 1.64
Sheldon Buckler............................. 8,250 *
Sheldon Buckler................................ 2,000 *
Sheldon Weinig................................. 6,000Weinig.............................. 8,250 *
Gerald L. Wilson...............................Wilson............................ -- --
Adams, Harkness & Hill, Inc.(3)................ 122,820 3.4
60 State Street
Boston, MA 02109
Kopp Investment Advisers, Inc.(2)(3)........... 947,650 26.1(4)........ 666,950 18.16
6600 France Avenue South
Edina, MinnesotaMN 55435
All current directors and executive officers
as a group (8(9 persons)........................... 5,055,483 13.9..................... 525,564 12.97
- --------
* Less than 1%
(1) Includes 346,956381,043 shares which may be acquired by exercise of stock options
as of or within sixty days after June 3, 1996May 31, 1997 by the current directors and
executive officers as a group and individually as follows: Mr. Archer,
138,333;167,146; Mr. Sicari, 111,250;130,533; Mr. Gray, 53,373; Mr. Rood, 24,000; Mr. Yie,
8,000; Mr. Tunnell, 5,000;59,051; Dr. Buckler, 2,000; and4,250; Dr.
Weinig, 5,000.7,250; and other current executive officers, 12,813.
(2) The number of shares deemed outstanding includes 3,672,017 shares
outstanding as of May 31, 1997, plus any shares subject to options held by
the person or group in question that are exercisable as of or within sixty
days after May 31, 1997.
(3) Kopp Investment Advisors, Inc. serves as an investment adviser and
exercises investment power with respect to all such shares. Kopp
Investment Advisors, Inc. disclaims beneficial ownership of all such
shares.
(3)(4) Based solely on information contained in filings made with the Securities
and Exchange Commission pursuant to Section 13(d) or 13(g) of the
Securities Exchange Act of 1934 Act.(the "1934 Act").
2
ELECTION OF DIRECTORS
(ITEM 1 OF NOTICE)
There are currently sixfive members of the Board of Directors, divided into
three classes with terms expiring respectively at the 1996, 1997, 1998 and 19981999
annual meetings of stockholders. The Board has nominated Gerald L. Wilson to
succeed Mr. Tunnell,Sebastian J. Sicari
and Dr. Sheldon Weinig, whose term is expiring. The Board has also nominated
Sheldon Buckler, whose term isterms are expiring, for re-election. Mr. WilsonSicari
and Dr. BucklerWeinig have consented to serve, if elected at the meeting, for three-yearthree-
year terms expiring at the time of the 19992000 annual meeting of stockholders and
when their successors are elected and qualified. The shares represented by the
enclosed proxy will be voted to elect Mr. WilsonSicari and Dr. BucklerWeinig unless such
authority is withheld by marking the proxy to that effect. Mr. WilsonSicari and Dr.
BucklerWeinig have agreed to serve, but in the event either becomes unavailable for
any reason, the proxy, unless authority has been withheld as to such nominee,
may be voted for the election of a substitute. Charles D. Yie, whose term
expires at the 1998 annual meeting of stockholders, has indicated his
intention to resign, effective as of the 1996 annual meeting of stockholders.
The following information is furnished with respect to the nominees for
election as directors and each director whose term of office will continue
after the meeting.
PRINCIPAL OCCUPATION AND
NAME AND AGE DIRECTOR BUSINESS EXPERIENCE
AS OF JUNE 3, 1996MAY 31, 1997 SINCE DURING LAST FIVE YEARS
------------------ -------- ------------------------
NOMINEES FOR ELECTION FOR TERMS OF THREE YEARS EXPIRING IN 1999
Dr. Sheldon Buckler, 65. 1994 Dr. Buckler served as Vice Chairman of Polaroid
Corporation from 1990 until 1994. Since May
1995, he has served as Chairman of Commonwealth
Energy System, an energy utility.
Gerald L. Wilson, 57.... -- Professor Wilson is currently a faculty member
in the departments of Electrical Engineering
and Mechanical Engineering at the Massachusetts
Institute of Technology. He was Dean of the
School of Engineering at Massachusetts
Institute of Technology from 1981 until 1991.
Professor Wilson serves on the Boards of
Directors of Analogic Corporation and
Commonwealth Energy Systems, as well as on the
technical advisory boards of General Motors,
Cumming Engine and United Technologies
Corporation.
DIRECTORS WHOSE TERMS EXPIRE IN 19972000
Sebastian J. Sicari, 44.45. 1993 Mr. Sicari has been Vice President, Finance and
Administration, and Chief Financial Officer of
the Company since December 1985 and has served
as Treasurer of the Company since July 1988.
Dr. Sheldon Weinig, 68..69.. 1994 Dr. Weinig founded Materials Research Corporation, a wholly-owned subsidiary ofCompany
and served as its Chairman until 1989 when it
was acquired by the Sony Corporation of
America, in 1957 and has been
Chairman thereof since 1957. Since 1994, he has
also been a consultant to, and was from 1989
through 1994,America. He then served as Vice Chairman of
Sony Engineering &and Manufacturing of America.America
until April 1, 1996 when he retired from that
company. He is presently a Professor at
Columbia University and the State University of
New York at Stonybrook, New York. Dr. Weinig is
a directorDirector of Insituform Technologies, Inc., a
provider of pipeline reconstruction techniques,
Unique Mobile, Inc.,
a manufacturer of magnet motors and electronic
controls, and Intermagnetics General Corporation, a
manufacturer of superconducting systems.
3
PRINCIPAL OCCUPATION AND
NAME AND AGE DIRECTOR BUSINESS EXPERIENCE
AS OF JUNE 3, 1996 SINCE DURING LAST FIVE YEARS
------------------ -------- ------------------------
materials and
magnets, and U.S. Cast Polymer, a materials
company.
DIRECTORS WHOSE TERMS EXPIRE IN 1998
Carl S. Archer, Jr., 59.60. 1987 Mr. Archer has been President and Chief
Executive Officer of the Company since November
1987 and Chairman of the Board of Directors
since August 1993.
3
PRINCIPAL OCCUPATION AND
NAME AND AGE DIRECTOR BUSINESS EXPERIENCE
AS OF MAY 31, 1997 SINCE DURING LAST FIVE YEARS
------------------ -------- ------------------------
DIRECTORS WHOSE TERMS EXPIRE IN 1999
Dr. Sheldon Buckler, 66. 1994 Dr. Buckler served as Vice Chairman of Polaroid
Corporation from 1990 until 1994. Since May
1995, he has served as Chairman of Commonwealth
Energy Systems, an energy utility.
Dr. Gerald L. Wilson, 1996 Dr. Wilson is currently a faculty member and the
58..................... Vannevar Bush Professor of Engineering in the
departments of Electrical Engineering and
Mechanical Engineering at the Massachusetts
Institute of Technology. He was Dean of the
School of Engineering at Massachusetts
Institute of Technology from 1981 until 1991.
Dr. Wilson serves as a Director of Analogic
Corporation, an electronics manufacturing
company, and Commonwealth Energy Systems, and
as a member of the technical advisory boards of
General Motors, Cummins Engine and United
Technologies Corporation.
BOARD OF DIRECTORS AND COMMITTEE MEETINGS
The Board of Directors has an Audit, Compensation and Nominating Committee.
The Audit Committee reviews the internal accounting procedures of the
Company and consults with and reviews the services provided by the Company's
independent auditors. The directors currently serving on the Audit Committee
are SheldonDrs. Buckler, Weinig Kenneth W. Tunnell and Sheldon Buckler.Wilson. The Audit Committee met three times
during fiscal 1996.1997.
The Compensation Committee reviews and recommends to the Board the
compensation and benefits of all officers of the Company and reviews general
policy relating to compensation and benefits of employees of the Company. The
Compensation Committee also administers the issuance of stock options. The
directors currently serving on the Compensation Committee are Dr.Drs. Buckler,
Weinig and Messrs. Tunnell and Yie.Wilson. The Compensation Committee met three times during fiscal
1996.1997.
The Nominating Committee reviews and recommends to the Board candidates for
director. The directors currently serving on the Nominating Committee are Mr.
Archer and Drs. Weinig and Buckler. The Nominating Committee met four timesdid not meet
during fiscal 1996.1997. The Nominating Committee will consider director nominees
recommended by stockholders. Stockholder recommendations of director nominees
should be in writing, addressed to the chairman of the committee, Dr. Sheldon
Weinig, at the Company's address shown on the first page of this Proxy
Statement.
During fiscal 1996,1997, the Board of Directors of the Company held foursix meetings.
Each incumbent director attended at least 75% of the aggregate number of the
meetings of the Board (held during the period for which he was a
director) and the meetings of the committees of the Board on which
he served.
4
EXECUTIVE OFFICER COMPENSATION
The following summary compensation table sets forth the compensation paid or
accrued for services rendered in fiscal 1997, 1996 1995 and 19941995 to the chief
executive officer and the other threetwo most highly compensated executive officers
of the Company (the "Named Executive Officers"). None of the Company's other
executive officers' combined annual salary and bonus exceeded $100,000 during
fiscal 1996.1997.
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
------------COMPENSA-
TION AWARDS
------------
NAME AND-----------
ANNUAL COMPENSATION SHARES PRINCIPAL FISCAL ---------------------- UNDERLYING ALL OTHER
FISCAL ------------------- UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY ($SALARY($) BONUS ($) OPTIONS (#) COMPENSATION ($)(1)
- --------------------------- ------ --------- ------ ---------- --------- ----------- ------------ -------------------
Carl S. Archer, Jr. .... 1996 $262,633 $ 95,000 145,000 $2,930Jr........ 1997 $267,000 -- 145,000(2) $4,083
President and Chief 1996 262,633 $95,000 145,000(3) 2,930
Executive Officer 1995 210,538 -- -- 2,742
Executive Officer 1994 188,801 31,490 90,000 922
C. Kenneth Gray.........Gray........... 1997 155,000 -- 55,000(2) 2,304
Vice President, Sales and 1996 141,756 100,337 65,00065,000(3) 2,476
Vice President, SalesMarketing 1995 129,458 -- -- 1,276
and Marketing 1994 159,959(2) 31,490 47,500 518
Sebastian J. Sicari.....Sicari....... 1997 178,400 -- 90,000(2) 2,227
Vice President, Finance 1996 161,202 100,337 100,000100,000(3) 1,422
Vice President, Financeand Administration 1995 147,506 -- -- 1,305
and Administration 1994 129,150 31,490 75,000 586
Peter S. Rood........... 1996 129,086 81,450 45,000 1,805
Vice President, Manu- 1995 121,745 -- -- 1,157
facturing Operations(3) 1994 32,308 7,880 35,000 86
- --------
(1) For fiscal 1996,1997, consists of (i) contributions to 401(k) accounts in the
amount of $1,220$1,500 for each Named Executive Officer and (ii) insurance
premiums paid by the Company during the covered fiscal years with respect
to term life insurance for the benefit of the Named Executive Officers.
(2) Includes sales commissionsThese options include the grant of options to Messrs. Archer, Gray and
Sicari exercisable for 108,750, 41,250 and 67,500 shares, respectively, in
replacement of certain options granted in fiscal 1996, as described in the
amount"Ten-Year Option Repricing" table below.
(3) Certain of $42,747.
(3) Mr. Rood began his employmentthe options granted in fiscal 1996 to Messrs. Archer, Gray and
Sicari were cancelled in connection with the Companyrepricings set forth in January 1994.the
"Ten-Year Option Repricing" table below.
5
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information regarding options to
purchase shares of Common Stockthe Company's common stock granted during fiscal 19961997 by
the Company to the Named Executive Officers.
POTENTIAL REALIZABLE
% OF TOTAL VALUE AT ASSUMED RATES
NUMBER OF OPTIONS% OF TOTAL OF STOCK PRICE
SECURITIES OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO APPRECIATION FOREXERCISE OPTION UNDERLYINGTERM (1)
OPTIONS EMPLOYEES TERM(1)
OPTIONS IN FISCAL EXERCISEPRICE EXPIRATION -----------------------
NAME GRANTED (#) FISCAL YEAR PRICE ($/SH)SHARE) DATE 5% ($) 10% ($)
---- ----------- ------------ --------- ---------- ------------ ---------- ---------------------------------- -----------
Carl S. Archer, Jr...... 145,000 30.3% $18.69108,750(2) 23.7% $10.375 8/7/01(2) $922,200 $2,090,90001 $ 306,008 $ 675,060
36,250(3) 7.9 9.875 10/18/06 225,125 570,510
C. Kenneth Gray......... 10,000 2.1 13.00 5/15/05(3) 81,800 207,200
55,000 11.5 18.6941,250(2) 9.0 10.375 8/7/01(2) 349,800 793,10001 116,072 256,057
13,750(3) 3.0 9.875 10/18/06 85,392 216,400
Sebastian J. Sicari..... 10,000 2.1 13.00 5/15/05(3) 81,800 207,200
90,000 18.9 18.6967,500(2) 14.7 10.375 8/7/01(2) 572,400 1,297,800
Peter S. Rood........... 45,000 9.4 18.69 8/7/01(2) 286,200 648,90001 189,936 419,003
22,500(3) 4.9 9.875 10/18/06 139,733 354,110
- --------
(1) Amounts represent hypothetical gains that could be achieved for the
respective options if such options are not exercised until the end of the
option term. These gains are based on assumed rates of stock price
appreciation of 5% and 10% set by the SEC,Securities and Exchange Commission,
compounded annually from the dates the respective options were granted
until their respective expiration dates and, therefore, are not intended
to forecast possible future appreciation, if any, in the Common Stock.common stock.
This table does not take into account any actual appreciation in the price
of the Common Stockcommon stock after the date of grant.
(2) These options vest on August 7, 2000, subjectwere granted in exchange for the cancellation of previously
granted options to earlier vesting in full
uponpurchase a changegreater number of control of the Company or if the market price of the
Company's Common Stock for twenty consecutive days exceeds $31.00shares at $18.69 per
share. In addition, these options are subject to earlier vesting in part
upon the achievement by the Company of specified quarterly earnings
targets.
(3)See "Compensation Committee Report" below. These options vest half onwere
vested at the date of grant with respect to one-third of the shares
covered thereby (equal to the number of shares with respect to which the
canceled options were vested), and the remainderbalance of the shares covered
thereby vest in twenty equal quarterly installments over the three-year period
following the date of grant. In the event of a change in control of the
Company, these options vest in full immediately.
(3) These options vest in equal quarterly installments over a four-year period
beginning on the date of grant.
OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION VALUES
The following table sets forth information regarding (a) the number of
shares acquired upon the exercise of options during fiscal 19951997 and the value
realized therefrom and (b) the number of vested and unvested options and the
unrealized value or spread (the difference between the exercise price and the
market value) of the unexercised options issued by the Company and held by the
Named Executive Officers on March 31, 1996.30, 1997.
NUMBER OF SHARES VALUE OF UNEXERCISED
UNDERLYING IN-THE-MONEY
SHARES UNEXERCISED OPTIONS (#) OPTIONS ($)
ACQUIRED ON VALUE ------------------------------------------------- ----------------------
NAME EXERCISE (#) REALIZED ($) VESTED UNVESTED VESTED UNVESTED
---- ------------ ------------ ----------------------- ------------ ---------- -----------
Carl S. Archer, Jr. .... 40,140 $723,323 126,350 108,750 $551,250Jr...... -- -- 157,968 77,032 $491,758 $ 35,118
Sebastian J. Sicari..... -- -- 124,188 50,812 405,704 21,797
C. Kenneth Gray......... 20,000 273,750 53,206 46,792 233,987 $ 6,8455,000 $35,625 62,154 32,844 190,561 14,023
6
TEN-YEAR OPTION REPRICINGS
The following table sets forth information regarding all repricings of
options held by executive officers of the Company since the Company became
subject to the reporting requirements of the 1934 Act in March 1993.
NUMBER OF
SHARES
UNDERLYING MARKET PRICE EXERCISE
OPTIONS OF STOCK AT PRICE AT LENGTH OF ORIGINAL
REPRICED OR TIME OF TIME OF NEW OPTION TERM
AMENDED REPRICING REPRICING EXERCISE REMAINING AT DATE
NAME DATE (#)(1) ($) ($) PRICE ($) OF REPRICING
---- ---- ----------- ------------ --------- --------- ------------------
Carl S. Archer, Jr...... 9/2/96 145,000 $10.375 $18.69 $10.375 4 years, 11 months
Sebastian J. Sicari..... 43,750 788,375 103,500 71,500 459,375 --
Peter S. Rood........... 15,000 210,625 34,850 38,150 144,550 26,9509/2/96 90,000 10.375 18.69 10.375 4 years, 11 months
C. Kenneth Gray......... 9/2/96 55,000 10.375 18.69 10.375 4 years, 11 months
- --------
(1) 417The number of these unvestedshares of common stock underlying the repriced options are exercisable, but if such options are
exercisedwas
reduced for Messrs. Archer, Sicari and Gray to purchase unvested108,750, 67,500 and 41,250
shares, such shares, until vested, are
subject to repurchase by the Company.
6
respectively.
SEVERANCE AGREEMENTSAND CHANGE OF CONTROL ARRANGEMENTS
Pursuant to letter agreementsSeverance Agreements dated October 23, 1990,December 30, 1996, the Company has
agreed to pay each of Messrs. Archer and Sicari severance equal to six times his
monthlytwelve
months of base paysalary, the average of the annual bonus amounts paid to him for
each of the two previous fiscal years, and to continue histwelve months of continued health
insurance benefits for a six-month period if the Company terminates his employment for any reason
other than for cause. In the event either of such individual's employment is
terminated at any time after a Change of Control Event for any reason except
death, he is entitled to severance equal to twelvetwenty-four months of base salary,
two times the average of the annual bonus amounts paid to him for each of the
two previous fiscal years, and twelvetwenty-four months of continued health
insurance coverage.benefits. A "Change of Control Event" is defined to mean any of the
following events: (a) the sale, lease, transfer or other disposition by the
Company of all or substantially all of its assets; (b) the merger or
consolidation of the Company with another entity in which the stockholders of
the Company immediately prior to such merger or consolidation hold less than
50% of the outstanding voting stock of the surviving or resulting corporation
immediately following such transaction; or (c) the sale or exchange by the
Company's stockholders of greater than 50% of the Company's outstanding voting
stock. In addition, upon any Change of Control Event, the Company's repurchase
rights with respect to any shares of Common Stock held by such individuals
shall lapse and such individuals shall have the right to exercise any options
held by them to purchase shares of common stock. These agreements may have the
possible effect of discouraging unsolicited takeover attempts.
The Company has also agreed to pay to Mr. Gray, pursuant to a Severance
Agreement dated March 18, 1997, severance equal to six months of base salary
and six months of continued health insurance benefits if the Company
terminates his employment for any reason other than for cause.
As of March 31, 1996,30, 1997, Messrs. Archer, Sicari Gray and RoodGray held options to
purchase 235,000, 175,000, 80,000198,750, 142,500 and 65,00061,250 shares, respectively, which stock options
by their terms become immediately exercisable in full upon (i) the acquisition
by any person, entity or group of more than 35% of the aggregate voting power
of the outstanding securities of the Company, (ii) a majority of the Board of
Directors ceasing to consist of individuals (A) who are currently members of
the Board or (B) for whose nomination for such membership a majority of such
current members voted in favor, or (iii) the disposition by the Company of
substantially all its business, other than in connection with a mere change of
place of incorporation or similar change in form.
INDEBTEDNESS OF MANAGEMENT
On April 15, 1996, the Company loaned $140,000 to Sebastian J. Sicari, a
director and executive officer of the Company. The loan bears interest at a
rate of 5.33% per annum, compounded annually, and is due and payable in full
on the earlier of the termination of Mr. Sicari's employment with the Company
or April 15, 1999. At March 30, 1997, principal and accrued interest on the
loan totalled $147,384. The loan is secured by shares of the Company's common
stock owned by Mr. Sicari.
7
DIRECTOR COMPENSATION
Non-employee directors are paid (i) an annual retainer of $5,000, (ii)
$1,000 for each regular or special Board of DirectorDirectors meeting attended and
(iii) $500 for each Board Committee meeting attended on a day on which no
meeting of the Board of Directors is held. Non-employee directors also are
reimbursed for their reasonable out-of-pocket expenses incurred in connection
with meeting attendance. In addition, under the Company's 1993 Non-Employee
Director Stock Option Plan, each non-employee director serving as such on
April 30 of each year is automatically granted an option exercisable (subject
to a two-year vesting period) for the purchase of 2,500 shares of the
Company's common stock at a price per share equal to fair market value at the
date of grant. Any non-employee director, upon his or her first election to
the Board of Directors, is entitled to receive an option to purchase 15,000
shares of common stock.
78
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
This report, prepared by the Compensation Committee of the Company's Board of
Directors (the "Committee"), addresses the Company's executive compensation
policies and the basis on which fiscal 19961997 executive officer compensation
determinations were made. The Committee designs and approves all components of
executive pay.
To ensure that executive compensation is designed and administered in an
objective manner, the Committee's members are all non-employee directors.
During the portion of fiscal 1997 ending on August 8, 1996, Committee members
were Sheldon Buckler, Kenneth W. Tunnell and Charles D. Yie. During the balance
of fiscal 1997, the Committee was composed of Sheldon Buckler, Sheldon Weinig
and Gerald Wilson.
Compensation Philosophy
The objectives of the Company's executive compensation program are to (i)
enable the Company to attract, retain and reward executives who contribute to
both the short-term and long-term success of the Company, (ii) align
compensation with business objectives and individual performance, and (iii) tie
the interests of the Company's executives to the interests of the Company's
stockholders. The primary components of the Company's executive compensation
program are salary, cash bonuses and stock options. In addition, executives are
eligible to participate, on a non-discriminatory basis, in various benefit
programs provided to all full-time employees, including the Company's stock
purchase plan and group medical, disability and life insurance programs. The
Committee believes that executive compensation packages should be viewed as a
whole in order to properly assess their appropriateness.
In establishing total compensation packages for its executive officers, the
Committee takes into account the compensation packages offered to executives of
other semiconductor capital equipment companies of similar stature. These
companies are not included in the published industry index represented in the
Comparison of Cumulative Total Stockholder Return Graph on page 10.11. The
Committee uses this comparative data primarily as benchmarks to ensure that the
Company's executive compensation packages are competitive. The Committee seeks
to maintain total compensation within the broad middle range of comparative
pay. Individual amounts are based not only on comparative data, but also on
such factors as length of service with the Company, prior experience and the
Committee's judgment as to individual contributions. These factors are not
assigned specific mathematical weights.
Salary
Amounts shown under the Salary column of the Summary Compensation Table
represent the fixed portion of compensation for executive officers in fiscal
1996.1997. Changes in salary from year to year depend on such factors as individual
performance, cost of living changes, and the economic and business conditions
affecting the Company. Executive salaries are set at the beginning of each
fiscal year.
Mr. Archer received salary compensation of $267,000 in fiscal 1997. Mr.
Archer's salary was increased from $210,538 in fiscal 1995 to $262,633
in fiscal 1996,based on an increaseassessment of 25%. This increase was largely attributable to
Mr. Archer's significant contribution to the Company's financial performance
in fiscal 1996.comparative industry salaries.
Bonus
Amounts shown in the Bonus column of the Summary Compensation Table, together
with stock option grants, represent the variable compensation for executive
officers. Cash bonuses are based on the achievement of specific financial
performance goals by the Company as well as specific goals and objectives by
the executive officer. The Company seeks to structure each executive's bonus so
that, if the executive earns his maximum bonus, his combined salary and bonus
will be roughly equal to the average prior year's reported combined salary and
bonus of executives holding the same position with other semiconductor capital
equipment companies of similar stature. In fiscal 1996, executive1997, no bonuses were based ongranted
to executive officers due to the Company's achievement of a
certain annual
8
earnings per share and inventory level goals and on the achievement of
individual goals and objectives by each executive. The total amount available
for bonuses in fiscal 1996 was increased in recognition of the fact that in
fiscal 1995 the executive officersfailure of the Company waived certain bonuses due
them.to meet the financial
performance goals set for fiscal 1997.
Stock Options
The Committee believes that stock ownership by executive officers is
important in aligning management and stockholder interests in the long-term
enhancement of stockholder value. Stock options are awarded based
9
upon the market price of the Company's common stock on the date of grant and
are linked to future performance of the Company's stock because they do not
become valuable to the holder unless the price of the Company's stock
increases above the price on the date of grant. Beginning in fiscal 1994, the
Company has
generally granted options to its executive officers, the exercisability of which
iswas tied to the Company's achievement of specified financial performance
goals. In fiscal 1994,1997, however, the Committee changed its policy in favor of
annual grants of options to executive officers, the exercisability of which is
tied solely to the continued employment of the executive. Also in fiscal 1997,
the Company granted stockfor the first time repriced certain employee options, to itsincluding
certain options held by executive officers which were not exercisable prior to January 1999 unless the Company
attained specified earnings per share goals over the three years following the
grant date or the Company's stock price exceeded a certain amount for
specified numberofficers. See "Repricing of consecutive days. As a result of the increase in the
Company's stock price in fiscal 1996, the options became exercisable in full.
To provide further incentive to its executive officers, in August 1995 the
Company granted additional options to its executive officers as shown in the
preceding table entitled "Option Grants in Last Fiscal Year". The options
granted in fiscal 1996 are not exercisable prior to August 2000 unless the
Company attains specified earnings per share goals over the next five years or
its stock price exceeds $31.00 per share for twenty consecutive days.
In addition to the performance-based options described above, in fiscal 1996
the Company granted stock options to Messrs. Sicari and Gray (which vest over
five years subject only to continued employment) in further recognition of
their waiver of certain cash bonuses due them in fiscal 1995.Stock Options"
below.
The number of shares for which options were granted to executive officers in
fiscal 19961997 was determined by the Committee based upon several factors,
including the executive's position, his past and future expected performance,
the comparative data described above, and the number of shares under
previously granted options. These factors were evaluated in a qualitative
manner and were not assigned predetermined weights.
Repricing of Stock Options
On August 23, 1996, the Committee approved the offer by the Company to
employees of the Company holding options to purchase common stock at $18.69
per share (the "Existing Options") to exchange (the "Exchange") their Existing
Options for new options (the "New Options") (i) exercisable for 75% of the
number of shares subject to the Existing Options, (ii) having an exercise
price of $10.375 per share, the fair market value of the Company's common
stock on August 23, 1996 and (iii) vested to the same extent, based on the
number of shares vested, as the Existing Options, but with the balance of the
shares subject thereto vesting in equal quarterly installments over the three-
year period following the date of grant assuming the optionee's continued
employment by the Company (rather than vesting based on the achievement of
Company stock price and earnings per share milestones as was the case with the
Existing Options). In view of the decline in the market value of the common
stock, the Committee determined that the Existing Options provided inadequate
incentive to motivate and retain employees and that the foregoing repricing
offer was important to regain the incentive intended to be provided by options
to purchase the Company's stock. The Committee also determined that under a
Black-Scholes valuation analysis the value of the New Options approximated the
value of the Existing Options thereby minimizing the dilution to existing
stockholders of the Company. The Exchange was effected on September 2, 1996 by
canceling the Existing Options surrendered for cancellation by persons
accepting the Exchange offer and granting such persons New Options. All of the
Named Executive Officers participated in the Exchange and the New Options
granted to them are shown in the Ten-Year Option Repricing table above.
Deductibility of Executive Compensation
Section 162(m) of the Internal Revenue Code, enacted in 1993, generally
disallows a tax deduction to public companies for compensation over $1 million
paid to its chief executive officer and its four other most highly compensated
executives. Performance-based compensation is excluded from the compensation
taken into account for purposes of the limit if certain requirements are met.
The Company currently intends to structure its stock options granted to
executives in a manner that complies with the performance-based requirements
of the statute. The Committee believes that, given the general range of
salaries and bonuses for executive officers of the Company, the $1 million
threshold of Section 162(m) will not be reached by any executive officer of
the Company in the foreseeable future. Accordingly, the Committee has not
considered what its policy regarding compensation not qualifying for federal
tax deductibility might be at such time, if ever, as that threshold is within
range of any executive officer.
Compensation Committee
Charles D. Yie
Sheldon Buckler
Kenneth W. Tunnell
9Sheldon Weinig
Gerald Wilson
10
COMPARISON OF CUMULATIVE TOTAL STOCKHOLDER RETURN
The following performance graph assumes an investment of $100 on March 16,
1993 (the date the Company's common stock was first registered under Section
12 of the 1934 Act) and compares the changes thereafter in the market price of
the Company's common stock with a broad market index (S&P 500) and an industry
index (S&P Electronics--Instrumentation)Electronics-Instrumentation). The Company paid no dividends during
the periods shown; the performance of the indexes is shown on a total return
(dividend reinvestment) basis. The graph lines merely connect fiscal year-end
dates and do not reflect fluctuations between those dates.
LOGOCOMPARISON OF CUMULATIVE TOTAL RETURN
OF COMPANY, INDUSTRY INDEX AND BROAD MARKET
FISCAL YEAR ENDING
COMPANY 1993 1993 1994 1995 1996 1997
ASECO CORPORATION 100 92.68 74.39 103.66 106.10 103.66
S&P INDUSTRY
GROUP 230-ELECTRONICS
(INSTRUMENTATION) 100 100.00 108.36 156.24 209.95 264.51
S&P 500 100 100.00 101.48 117.27 154.92 185.64
THE COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION AND THE
COMPARISON OF CUMULATIVE TOTAL STOCKHOLDER RETURN INFORMATION ABOVE SHALL NOT
BE DEEMED "SOLICITING MATERIAL" OR INCORPORATED BY REFERENCE INTO ANY OF THE
COMPANY'S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION BY IMPLICATION
OR BY ANY REFERENCE IN ANY SUCH FILING TO THIS PROXY STATEMENT.
1011
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No person serving on the Compensation Committee at any time during fiscal
19961997 was a present or former officer or employee of the Company or any of its
subsidiaries. During fiscal 1996,1997, no executive officer of the Company served
as a member of the board of directors or compensation committee (or other
board committee performing equivalent functions) of another entity one of
whose executive officers served on the Company's Board of Directors or
Compensation Committee.
SECTION 1616(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the 1934 Act requires the Company's officers and directors
and persons who own more than ten percent of its common stock to file reports
with the Securities and Exchange Commission disclosing their ownership of
stock in the Company and changes in such ownership. Copies of such reports are
also required to be furnished to the Company. Based solely on a review of the
copies of such reports received by it, the Company believedbelieves that, during
fiscal 1996,1997, all such filing requirements were complied with, except that four
officers eachMr.
Archer filed one late Form 4 report.
APPROVAL OF AMENDMENT TO THE COMPANY'S 1993 OMNIBUS STOCK PLAN
(ITEM 2 OF NOTICE)
The Board of Directors has adopted, subject to stockholder approval, an
amendment to the Company's 1993 Omnibus Stock Plan (the "Omnibus Plan")
increasing the total number of shares issuable thereunder by 300,000 to
1,230,000. The purpose of the increase in the number of shares was to permit
the continuing grant of stock options, which the Board of Directors believes
is necessary to continue to attractreport, Dr. Buckler filed two late Form 4
reports, Mr. Legal filed one late Form 3 report and retain key employees, consultantsone late Form 4 report,
Mr. Sicari filed one late Form 4 report, Mr. Tunnell filed one late Form 4
report, Dr. Weinig filed two late Form 4 reports, Dr. Wilson filed one late
Form 4 report and directors.
Approval of the stockholders is sought under the terms of the Omnibus Plan
and in order to meet the stockholder approval requirements of (i) Section 422
of the Internal Revenue Code of 1986 (the "Code"), which requires stockholder
approval of any increase in the number of shares which may be issued under an
incentive stock option plan, and (ii) Rule 16(b)-3 of the 1934 Act, which, in
the case of certain option plans which have been approved by stockholders,
prevents the grant of options to directors, officers and certain other
affiliates from being deemed "purchases" for purposes of the profit recapture
provisions of Section 16(b) of that act. The executive officers and certain
directors of the Company who may receive such options will benefit from such
approval. The Board of Directors recommends approval of the amendment
increasing the number of shares because it believes that the continuing
availability of grants under the Omnibus Plan is an important factor in the
Company's ability to attract and retain experienced employees, consultants and
directors.
DESCRIPTION OF THE OMNIBUS PLAN AS AMENDED
The Omnibus Plan provides for the grant of incentive stock options ("ISOs")
within the meaning of the Code, non-statutory stock options ("NSOs"), awards
of stock ("Awards") and stock purchase opportunities ("Purchase Rights") to
directors, employees and consultants of the Company and its present and future
subsidiaries. The Omnibus Plan will remain in effect until January 18, 2003,
subject to the Board's right to terminate it earlier. The purpose of the plan
is to advance the interests of the Company by providing incentives to
directors, employees and consultants of the Company by providing them with
opportunities to purchase or receive awards of Company stock.
Under the plan, ISOs may only be granted to employees (currently 134) of the
Company; NSOs, Awards and Purchase Rights may be granted to any director
(currently six), employee or consultant of the Company. Recipients of options,
Awards and Purchase Rights are selected by the Compensation Committee.
11
The stock subject to options, Awards and Purchase Rights is authorized but
unissued shares of the Company's common stock or shares of treasury common
stock. Any shares subject to an option or Purchase Right which for any reason
expires or is terminated unexercised as to such shares may again be the
subject of an option, Award or Purchase Right under the plan.
The Omnibus Plan is administered by the Compensation Committee which
consists of two or more members of the Board who are "disinterested persons"
and "outside directors" within the meaning of the securities laws and the
Code, respectively. Members of the Compensation Committee serve at the
pleasure of the Board of Directors. Subject to the provisions of the plan, the
Compensation Committee has full power to construe and interpret the plan and
to establish, amend and rescind rules and regulations for its administration.
The Compensation Committee also determines, subject to the provisions of the
plan, the terms and conditions of options, Awards and Purchase Rights granted
under the plan and the recipients thereof.
The Omnibus Plan requires that each option grant be evidenced by an option
agreement containing certain specified terms and conditions, including the
number of shares subject to the option, the exercise price, the period of time
during which the option may be exercised and any vesting restrictions.
The maximum term of any option granted under the Omnibus Plan is ten years.
The Compensation Committee has discretion to determine the installments or
intervals at which an option will become exercisable at the time it grants an
option. If an employee to whom an ISO is granted is, on the date of grant, the
owner of stock possessing more than 10% of the total combined voting power of
all classes of stock of the Company, then the ISO may not have a term longer
than five years.
The exercise price of each option and Purchase Right granted under the Plan
is determined by the Compensation Committee at the time the option or Purchase
Right is granted; provided, however, that with respect to ISOs the exercise
price may not be less than 100% of the fair market value of the common stock
on the date of grant. If any employee to whom an ISO is granted is on the date
of grant the owner of stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company, the exercise price of
such option may not be less than 110% of the fair market value of the common
stock on the date of grant.
The exercise price of any option granted under the Plan must be paid in full
at the time the option is exercised. Payment must be (i) in cash, (ii) by
check, (iii) if permitted by the Compensation Committee, by delivery and
assignment to the Company of shares of Company stock having a fair market
value equal to the exercise price, (iv) if permitted by the Compensation
Committee, by promissory note, or (v) by a combination of (i), (ii), (iii) and
(iv).
No option granted under the plan may be transferred by the optionee
otherwise than by will or the laws of descent and distribution, and each
option may be exercised during the optionee's lifetime only by him or her.
The Company may, upon exercise of an NSO, the grant of an Award, the
purchase of stock pursuant to a Purchase Right for less than its fair market
value, or the making of a disqualifying disposition of any stock received upon
exercise of an ISO, require the participant to pay the taxes required to be
withheld by the Company.
As of June 3, 1996, options to purchase an aggregate of 672,072 shares of
common stock were outstanding under the Omnibus Plan, and 161,000 shares
remained available for future grants of options and awards or direct purchases
thereunder.
FEDERAL INCOME TAX CONSIDERATIONS
ISOs--A participant who receives an ISO will recognize no taxable income for
regular federal income tax purposes upon either the grant or the exercise of
such ISO. However, when a participant exercises an ISO, the
12
difference between the fair market value of the shares purchased and the
option price of those shares will be includible in determining the
participant's alternative minimum taxable income.
If the shares are retained by the participant for at leastMr. Yie filed one year from
date of exercise and two years from date of grant of the option, gain will be
taxable to the participant, upon sale of the shares acquired upon exercise of
the ISO, as a long-term capital gain. In general, the adjusted basis for the
shares acquired upon exercise will be the option price paid with respect to
such exercise. The Company will not be entitled to a tax deduction upon the
exercise of an ISO.
If the shares are sold within a period of one year from the date of exercise
or two years from the date of grant of the ISO, the participant will be
required to recognize ordinary income equal to the difference between the
option price and the lesser of the fair market value of the shares on the date
of exercise or the amount realized on the sale or exchange of the shares. In
this situation, the Company will be entitled to a tax deduction of an equal
amount.
NSOs--A participant will not recognize taxable income for federal income tax
purposes at the time an NSO is granted. However, the participant will
recognize compensation taxable as ordinary income at the time of exercise for
all shares which are not subject to a substantial risk of forfeiture. The
amount of such compensation will be the difference between the option price
and the fair market value of the shares on the date of exercise of the option.
The Company will be entitled to a deduction for federal income tax purposes at
the same time and in the same amount as the participant is deemed to have
recognized compensation income with respect to shares received upon exercise
of the NSO. The participant's basis in the shares will be adjusted by adding
the amount so recognized as compensation to the purchase price paid by the
participant for the shares.
The participant will recognize gain or loss when he disposes of shares
obtained upon exercise of a NSO in an amount equal to the difference between
the selling price and the participant's tax basis in such shares. Such gain or
loss will be treated as long-term or short-term capital gain or loss,
depending upon the holding period.
Purchase Rights--Stock Purchase Rights will generally be taxed in the same
manner as NSOs, as described above. However, if the shares acquired pursuant
to a Purchase Right are subject to a substantial risk of forfeiture, the
participant will recognize compensation taxable as ordinary income at the time
the restriction lapses, unless the participant has made an election under
Section 83(b) of the Code. At such time as the shares are free from any such
restrictions, the participant's compensation will be measured by the excess of
the then fair market value of the shares over the purchase price paid for the
shares. If a participant who acquires shares that are subject to a substantial
risk of forfeiture makes an appropriate election under Section 83(b) of the
Code within 30 days after purchasing shares, such participant will recognize
compensation taxable as ordinary income equal to the excess of the fair market
value of the shares at the purchase date over the purchase price paid for the
shares. The participant's basis in the shares will be adjusted by adding the
amount so recognized as compensation to the purchase price paid for the
shares, and the holding period for the determination of long-term capital gain
will commence at the exercise date.
Awards--If the Award is not subject to a "substantial risk of forfeiture"
(described above) when made, the participant will realize ordinary
compensation income to the extent of the fair market value of the shares
determined at the time of the transfer to the participant of the shares, over
the amount, if any, paid by the participant for the shares; the holding period
for the determination of long-term capital gain will commence on the date the
Award was received. If the shares are subject to a substantial risk of
forfeiture, the participant will recognize compensation taxable as ordinary
income at the time the restrictions lapse, unless the participant has made an
election under Section 83(b) of the Code, as discussed above, within 30 days
after receiving non-vested shares pursuant to the Award. If the participant
makes an appropriate election under Section 83(b) of the Code, the participant
will recognize compensation taxable as ordinary income equal to the fair
market value of the shares, over the amount, if any, paid by the participant
for the shares. The participant's basis in the shares will be adjusted by
adding the amount so recognized as compensation to the purchase price, if any,
paid for the shares, and the holding period for the determination of long-term
capital gain will commence as of the time the
13
restrictions lapse, or as of the date of transfer if an election under Section
83(b) of the Code was made. The Company will be entitled to a deduction for
federal income tax purposes at the same time and in the same amount as the
participant is deemed to have recognized compensation income with respect to
shares received as an Award.
The foregoing is a general summary of federal income tax considerations only
and does not purport to be complete. Reference is made to the applicable
sections of the Code.
APPROVAL OF AMENDMENTS TO THE COMPANY'S NON-EMPLOYEE DIRECTOR STOCK OPTION
PLAN
(ITEM 3 OF NOTICE)
The Board of Directors has adopted, subject to stockholder approval,
amendments to the Company's 1993 Non-Employee Director Stock Option Plan (the
"Director Plan") (i) increasing the total number of shares issuable thereunder
by 100,000 to 165,000, (ii) increasing the number of shares underlying Initial
Options (as defined below) from 5,000 to 15,000 shares and (iii) providing
that each Non-Employee Director (as defined below) who was serving on the
Board of Directors on May 15, 1996 and is to serve on the Board of Directors
during fiscal 1997 be granted an option to purchase an additional 10,000
shares (an "Initial Option Adjuster"). The purpose of the increase in the
total number of shares available under the Director Plan, the increase in the
number of shares underlying Initial Options and the grant of the Initial
Option Adjusters was to permit the continuing grant of stock options for a
reasonable number of shares and to properly award current Non-Employee
Directors, which the Board believes is necessary to continue to attract and
retain qualified non-employee directors.
Approval of the stockholders is sought under the terms of the Director Plan
and in order to meet the stockholder approval requirements of Rule 16(b)-3 of
the 1934 Act which, in the case of certain option plans which have been
approved by stockholders, prevents the grant to directors from being deemed
"purchases" for purposes of the profit recapture provision of Section 16(b) of
that act. The Board of Directors recommends approval of the amendments
increasing the total number of shares available under the Director Plan, the
increase in the number of shares underlying Initial Options and the grant of
the Initial Option Adjusters because it believes that the continuing
availability of grants of stock options for a reasonable number of shares
under the Director Plan is an important factor in the Company's ability to
attract and retain experienced non-employee directors.
DESCRIPTION OF THE DIRECTOR PLAN AS AMENDED
The Director Plan is administered by the Compensation Committee. Subject to
the provisions of the Director Plan, each person who is a director of the
Company and not a current or former employee of the Company (a "Non-Employee
Director") upon his or her first election to the Board of Directors following
adoption of the Director Plan is entitled to receive on the date of his or her
election an option (an "Initial Option") to purchase 15,000 shares of common
stock. Each Non-Employee Director is also entitled to receive on April 30 of
each year an option (an "Annual Option") to purchase 2,500 shares of common
stock. In addition, each Non-Employee Director who was serving on the Board of
Directors on May 15, 1996 and is to serve on the Board of Directors during
fiscal 1997 was granted an Initial Option Adjuster. The exercise price of
Options granted under the Director Plan is equal to the fair market value of
the common stock on the date of grant. options granted under the Director Plan
may only be exercised with respect to vested shares. One-half of the shares
subject to such options vest on the first anniversary of the date of grant and
the balance vest on the second anniversary of the date of grant. No options
granted under the Director Plan may be exercised more than 180 days after the
Non-Employee Director ceases to serve as a director of the Company (and then
only to the extent exercisable on the date the optionee ceased to be a
director), except that if a Non-Employee Director dies or becomes permanently
disabled while serving as a director of the Company, the options of such
director may be fully exercised at any time prior to the scheduled expiration
date of the option. No option granted under the Director Plan may be exercised
more than ten years after the date of grant. Options granted under the
Director Plan are non-transferable other than by will or the laws of descent
and distribution.
14
As of June 3, 1996 options to purchase an aggregate of 54,000 shares of
common stock were outstanding under the Director Plan, and 5,000 shares
remained available for future grant thereunder.
FEDERAL INCOME TAX CONSEQUENCES
A Non-Employee Director will not recognize taxable income for federal income
tax purposes at the time an option is granted under the Director Plan.
However, the Non-Employee Director will recognize compensation taxable as
ordinary income at the time of exercise or, where a so-called Section 83(b)
election has not been made, on the date any shares acquired by exercise vest
in accordance with the Director Plan (the "Measurement Date"). The amount of
such compensation will be the difference between the option price and the fair
market value of the shares on the Measurement Date. The Company will be
entitled to a deduction for federal income tax purposes at the same time and
in the same amount as the participant is deemed to have recognized
compensation income with respect to shares received under the Director Plan.
The Non-Employee Director's basis in the shares will be adjusted by adding the
amount so recognized as compensation to the purchase price paid by the
participant for the shares.
The Non-Employee Director will recognize gain or loss when he disposes of
shares obtained upon exercise of an option in an amount equal to the
difference between the selling price and the Non-Employee Director's tax basis
in such shares. Such gain or loss will be treated as long-term or short-term
capital gain or loss, depending upon the holding period. Non-Employee
Directors should consult their own tax advisor regarding the advisability of
early exercise and the making of Section 83(b) elections with respect thereto.late Form 4 report.
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
(ITEM 42 OF NOTICE)
On the recommendation of the Audit Committee, the Board of Directors has
selected Ernst & Young LLP, independent auditors, as auditors of the Company
for the fiscal year ending March 30, 1997.29, 1998. This firm has audited the accounts
and records of the Company since 1989. A representative of Ernst & Young LLP
will be present at the Annual Meeting to answer appropriate questions from
stockholders and will have an opportunity to make a statement if desired.
The selection of independent auditors is not required to be submitted to a
vote of the stockholders. The Board believes, however, it is appropriate as a
matter of policy to request that the stockholders ratify the appointment. If
the stockholders do not ratify the appointment, the Board will reconsider its
selection.
STOCKHOLDER PROPOSALS FOR 19971998 MEETING
Proposals of stockholders intended to be presented at the 19971998 Annual
Meeting of Stockholders must be presented on or before March 10, 19974, 1998 for
inclusion in the proxy materials relating to that meeting. Any such proposals
should be sent to the Company at its principal offices addressed to the Vice
President, Finance and Administration. Other requirements for inclusion are
set forth in Rule 14a-8 under the 1934 Act.
1512
OTHER MATTERS
The Company has no knowledge of any matters to be presented for action by
the stockholders at the Annual Meeting other than as set forth above. However,
the enclosed proxy gives discretionary authority to the persons named therein
to act in accordance with their best judgment in the event that any additional
matters should be presented.
The Company will bear the cost of the solicitation of proxies by management,
including the charges and expenses of brokerage firms and others for
forwarding solicitation material to beneficial owners of common stock.
By order of the Board of Directors
/s/ Robert V. Jahrling, Secretary
Robert V. Jahrling, Secretary
July 8, 19962, 1997
The Board hopes that stockholders will attend the Annual Meeting. WHETHER OR
NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, DATE, SIGN AND RETURN THE
ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE. A prompt response will greatly
facilitate arrangements for the Annual Meeting, and your cooperation will be
appreciated. Stockholders who attend the Annual Meeting may vote their stock
personally even though they have sent in their proxies.
1613
Please mark your
A [X] votes as in this
example.
1.) To elect two FOR WITHHOLD
directors for a
three-year term. [ ] [ ]
NOMINEES: SEBASTIAN J. SICARI
DR. SHELDON WEINIG
If you do not wish your shares voted for
a particular nominee, complete the "For
All Except" line below or strike a line
through the nominee's name.
For all Except
__________________________________________
2.) To ratify the Board of Directors' selection of FOR AGAINST ABSTAIN
Ernst & Young LLP as the Company's independent
auditors for the fiscal year ending March 29, [ ] [ ] [ ]
1998.
3.) To transact such business as may properly come FOR AGAINST ABSTAIN
before the meeting and any or all adjournments
thereof. [ ] [ ] [ ]
MARK BOX AT RIGHT IS COMMENTS OR ADDRESS CHANGE HAVE BEEN [ ]
NOTED ON THE REVERSE SIDE OF THIS CARD.
Stockholder sign here_________________________________________
Co-owner sign here____________________________________________
Date: _________________________
NOTE: Please be sure to sign and date this Proxy
PROXY PROXY
ASECO CORPORATION PROXY
PROXY SOLICITED BY THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS - AUGUST 8, 1996STOCKHOLDERS--AUGUST 6, 1997
The undersigned hereby acknowledge(s) receipt of the Notice and accompanying
Proxy Statement, revoke(s) any prior proxies, and appoint(s) Carl S. Archer,
Jr., Sebastian J. Sicari and Robert J.V. Jahrling, III, and each of them, with
power of substitution in each, attorneys for the undersigned to act for and
vote, as specified below,on the reverse, all shares of stock which the undersigned may
be entitled to vote at the Annual Meeting of the Stockholders of the ASECOAseco
Corporation, to be held on Thursday,Wednesday, August 8, 19966, 1997 at Choate, Hall and& Stewart,
36th Floor, Exchange Place, Boston, Massachusetts at 10:00 a.m. and at any
adjourned sessions thereof.
WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. ALL PROPOSALS SET FORTH ON THE REVERSE OF THIS
PROXY CARD HAVE BEEN PROPOSED BY THE BOARD OF DIRECTORS. IF NO DIRECTION IS
GIVEN, THIS PROXY CARD WILL BE VOTED "FOR" THE NOMINEES FOR DIRECTOR AND "FOR"
ALL OTHER PROPOSALS. THE PROXY WILL BE VOTED IN ACCORDANCE WITH THE HOLDER'S
BEST JUDGEMENT AS TO ANY OTHER MATTER.
- --------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON OTHER SIDE AND
RETURN PROMPTLY IN ENCLOSED ENVELOPE.
-------------------------------------------------------------------------- --------------------------------------------------------------------------------
Please sign this proxy exactly as your name appears on the books of the Company.
Joint owners should each sign personally. Trustees and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED?CHANGED DO YOU HAVE ANY COMMENTS?
- ------------------------- ------------------------------------------------------------ -----------------------------------
- ------------------------- ------------------------------------------------------------ -----------------------------------
- ------------------------- -------------------------
DETACH CARD
[X]PLEASE MARK VOTES
AS IN THIS EXAMPLE With- For All
For hold Except For Against Abstain
1.)To elect two directors [_] [_] [_] 2.) To approve an [_] [_] [_]
for a three-year term. amendment to the Company's
1999 Omnibus Stock Plan increasing
SHELDON BUCKLER AND GERALD L. WILSON the number of shares issuable under
such plan from 930,000 to 1,230,000.
If you do not wish your shares voted for a particular
nominee, mark the "For All Except" box and strike a
line through the nominee's name.
For Against Abstain
[_] [_] [_]
3.) To approve amendments to the
Company's 1993 Non-Employee
Director Stock Option Plan
increasing the number of shares
issuable under such plan from
85,000 to 165,000, increasing the
number of shares underlying initial
option grants under the plan and
providing that each Non-Employee
Director who was serving on the
Board of Directors on May 15, 1996
and is to serve on the Board of
Directors during fiscal 1997 be
granted an option to purchase an
additional 10,000 shares.
RECORD DATE SHARES:
For Against Abstain
4.) To ratify the Board of Directors' [_] [_] [_]
selection of Ernst & Young LLP
REGISTRATION as the Company's independent
auditors for the fiscal year
ending March 30, 1997.
For Against Abstain
5.) To transact each other business [_] [_] [_]
as may property come before this
meeting, and any or all
adjournments thereof.
Date
Please be sure to sign and date this proxy Mark box at right if comments or address change [_]
have been noted on the reverse side of this card.
Shareholder sign here Co-owner sign here
- ---------------------------------------------------------------------------------------------------------------------
DETACH CARD DETACH CARD
ASECO CORPORATION
DEAR STOCKHOLDER:
Please take note of the important information enclosed with this Proxy Ballot. There are a number of issues
related to the management and operation of your Company that require your immediate attention and approval.
These are discussed in detail in the enclosed proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right to vote your shares.
Please mark the boxes on the proxy card to indicate how your shares shall be voted. Then sign the card,
detach it and return your proxy vote in the enclosed postage paid envelope.
Your vote must be received prior to the Annual Meeting of Stockholders, August 8, 1996.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Aseco Corporation
----------------------------------- -----------------------------------
(CONTINUED ON REVERSE SIDE)