EXCEL TECHNOLOGY, INC.
41 Research Way
E. Setauket, NY 11733
......................
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD APRIL 19, 2005
.......................
Notice is hereby given that the Annual Meeting of Stockholders of
Excel Technology, Inc. (the "Company") will be held at the offices of
Excel Technology, Inc., 41 Research Way, East Setauket, New York 11733,
on April 19, 2005, at 10:00 A.M. EST, for the following purposes:
1. To elect a Board of Directors to serve until the next Annual
Meeting of Stockholders and until their successors are duly
elected and qualified;
2. To ratify the selection of KPMG LLP to serve as independent
auditors for the year ending December 31, 2005; and
3. To transact such other business as may properly be presented for
action at the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on March 8,
2005 as the record date for the determination of stockholders entitled to
notice of, and to vote at, the meeting or any adjournment thereof.
Holders of a majority of the outstanding shares must be present in
person or by proxy in order for the meeting to be held. Whether or not
you plan to attend the meeting, please complete, sign, date and return
the accompanying proxy in the enclosed postage-paid envelope. The giving
of such proxy will not affect your right to revoke such proxy before it
is exercised or to vote in person should you later decide to attend the
meeting.
All stockholders are cordially invited to attend the meeting.
By Order of the Board of Directors
/s/ J. Donald Hill
.....................
J. Donald Hill,
Chairman of the Board
March 18, 2005
IT IS IMPORTANT THAT THE ENCLOSED PROXY FORM BE COMPLETED
AND RETURNED PROMPTLY.
EXCEL TECHNOLOGY, INC.
41 Research Way
E. Setauket, NY 11733
......................
PROXY STATEMENT
......................
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD APRIL 19, 2005
........................................................
SOLICITATION AND REVOCATION OF PROXIES
This statement is furnished in connection with the solicitation by
the Board of Directors of Excel Technology, Inc., a Delaware corporation
(the "Company"), of proxies to be voted at the Annual Meeting of the
Stockholders of the Company to be held on April 19, 2005, at 10:00 A.M.
EST, at the offices of the Company, 41 Research Way, East Setauket, New
York 11733 and any adjournments thereof (the "Meeting").
A form of proxy is enclosed for use at the Meeting. The proxy may
be revoked by a stockholder at any time before it is voted by execution
of a proxy bearing a later date or by written notice to the Corporate
Secretary before the Meeting, and any stockholder present at the Meeting
may revoke his proxy thereat and vote in person if he so desires. When
such proxy is properly executed and returned, the shares it represents
will be voted at the Meeting in accordance with any instructions noted
thereon. If no direction is indicated, all shares represented by valid
proxies received pursuant to this solicitation (and not revoked prior to
exercise) will be voted by the person named in the form of proxy (i) FOR
the election of the nominees for directors named herein, (ii) FOR the
ratification of the appointment of KPMG LLP as the Company's independent
auditors for the year ending December 31, 2005, and (iii) in accordance
with the judgment of the persons named in the proxy as to such other
matters as may properly come before the Meeting.
The cost of soliciting proxies on behalf of the Board of Directors
will be borne by the Company. In addition to solicitation by mail,
proxies may be solicited by directors, officers or regular employees of
the Company (who will receive no extra compensation for these services)
in person or by telephone or telefax. The Company may also request
brokerage houses, custodians, nominees and fiduciaries to forward these
proxy materials to the beneficial owners of the Company's common stock
(the "Common Stock"), and will reimburse such holders for their
reasonable expenses in connection therewith. The approximate date of
mailing of this proxy statement is March 18, 2005.
Only stockholders of record at the close of business on March 8,
2005 (the "Record Date") will be entitled to notice of, and to vote at,
the Meeting. At the close of business on the Record Date, there were
12,053,429 shares of Common Stock issued and outstanding. Each share of
Common Stock entitles the holder thereof to one vote. The holders of a
majority of the shares of Common Stock outstanding on the Record Date and
entitled to vote at the Meeting, present in person or by proxy, will
constitute a quorum for the transaction of business at the Meeting.
Abstentions and broker non-votes each shall be included as shares present
and voting for purposes of determining whether a quorum is present at the
Meeting. Each vote shall be tabulated separately. Abstentions shall be
counted as votes present and entitled to be cast for purposes of
determining whether a proposal has been approved. As a result, they will
have the same effect as a vote against a proposal. Broker non-votes, if
any, will be treated as not present or represented for purposes of
determining whether stockholder approval of the matter has been obtained.
Accordingly, a broker non-vote will not affect the outcome of the voting
on any proposal. Other than the election of directors, which requires a
plurality of the votes entitled to be cast by holders of shares
represented in person or by proxy at the Meeting, each matter submitted
to the stockholders requires the affirmative vote of a majority of the
votes entitled to be cast by holders of shares represented in person or
by proxy at the Meeting.
PROPOSAL NO. 1
NOMINATION AND ELECTION OF DIRECTORS
Five persons, all of whom are members of the present Board of
Directors, are nominees for election to hold office until the next Annual
Meeting of Stockholders and until their respective successors are elected
and qualified. Unless otherwise instructed, the proxy holders will vote
the proxies received by them for the election of the five nominees named
below. If any nominee should refuse or be unable to serve, the shares
represented by the proxies will be voted for any nominee as shall be
designated by the Board of Directors to replace any such nominee. Each
of the nominees named herein has consented to serve as a director if
elected.
The Board of Directors recommends that the stockholders vote FOR the
election of all nominees to the Board of Directors listed below.
Nominee Age
.........................
J. Donald Hill 72
Steven Georgiev 71
Howard S. Breslow 65
Donald E. Weeden 74
Ira J. Lamel 57
The following information is submitted concerning the nominees named
for election as directors based upon information received by the Company
from such persons.
Mr. Hill has been Chairman of the Board of Directors since January
1996. He served as Chief Executive Officer of the Company from January
1996 to October 2000, President of the Company from August 1994 until
February 1998, and Chief Financial Officer of the Company from January
1994 until March 1995. In addition, he was President of Quantronix
Corporation ("Quantronix"), a subsidiary of the Company, from November
1992 until January 1996, and was a business consultant to Quantronix from
February 1992 to November 1992. From January 1991 to October 1991, Mr.
Hill was Chief Executive Officer of Medstone International, Inc., a
company engaged in the manufacture, marketing and sale of shock wave
therapy devices. From 1988 to 1990, he was Director of Corporate Finance
at Weeden & Co., an investment firm and member of the New York Stock
Exchange. Mr. Hill served as Vice Chairman of First Affiliated
Securities, Inc. from 1978 to 1988, and from 1966 to 1977 he was a
General Partner of Loeb, Rhoades & Company.
Mr. Georgiev has been a director of the Company since December 1991.
From 1993 to 1997, he served as Chairman and CEO of Palomar Medical
Technologies, Inc. ("Palomar"), a biotechnology company. Since 1988, he
has acted as a business and management consultant to several high
technology companies, including EG&G, Inc., Cybernetics Products, Inc.,
Camber, Inc., Dynatrend, Inc. and Palomar. From 1972 to 1975, and later
from 1978 to 1988, Mr. Georgiev was Chairman, President and Treasurer of
Dynatrend, Inc., which specializes in providing engineering and program
management services primarily to the United States Government. From 1961
to 1972, and later from 1975 to 1978, Mr. Georgiev held a variety of
positions with Avco Systems, a high technology aerospace business,
including Project Director - Missile Systems; Director of Engineering;
Director of Advanced Programs; and Vice President - Marketing and
Planning. Since 1980, Mr. Georgiev also has been involved in the start-
up and subsequent development of several companies. Mr. Georgiev has a
B.S. degree in engineering physics and an M.S. degree in management.
Mr. Breslow has been a director of the Company since January 1996.
Since 1972, he has been a partner of the law firm of Breslow & Walker,
LLP, New York, New York, which firm serves as general counsel to the
Company. Mr. Breslow currently serves as a director of BioLife
Solutions, Inc., a publicly-held company engaged in the development and
sale of solutions for the preservation of cells, tissues, and organs; and
Lucille Farms, Inc., a publicly-held company engaged in the manufacture
and marketing of dairy products.
Mr. Weeden has been a director of the Company since May 2003. Since
1987, Mr. Weeden has been Chairman of Weeden Securities Corporation, the
General Partner of Weeden & Co., L.P., a New York Stock Exchange member
firm, and a member of the National Association of Securities Dealers.
Over the years, Mr. Weeden has participated as an early venture investor
in a number of companies involved in the semiconductor industry. Mr.
Weeden graduated from Stanford University with a B.A. in economics.
Mr. Lamel has been a director of the Company since April 2004. He
has been Executive Vice President, Chief Financial Officer and Treasurer
of Hain Celestial Group since October 2001, and he has served as
Corporate Secretary since January 2003. From June 1973 to September
2001, Mr. Lamel, a certified public accountant, was a partner at Ernst &
Young LLP where he served in various capacities. Ernst & Young LLP
served as the Company's independent auditor for the year ended December
31, 2000, and Mr. Lamel directed the Company's audit that year. In
addition, Mr. Lamel currently serves as director of Harvey Electronics,
Inc., a publicly-held company engaged in the retail sale, service and
custom installation of audio, video and home theater equipment.
Director Compensation
On April 24, 2004, each member of the Board of Directors was granted
immediately exercisable, non-incentive options to purchase 20,000 shares
of Common Stock at an exercise price of $34.68 per share, the fair market
value on such date.
In addition, on October 11, 2004, Ira Lamel, the Chairman of the
Company's Audit Committee, was granted immediately exercisable, non-
incentive options to purchase 20,000 shares of Common Stock at an
exercise price equal to the fair market value on such date.
On February 7, 2005, each member of the Board of Directors was
granted immediately exercisable, non-incentive options to purchase 20,000
shares of Common Stock at an exercise price of $22.59, the fair market
value on such date.
Board Meetings
The Board of Directors currently consists of five persons: J.
Donald Hill, Howard S. Breslow, Steven Georgiev, Donald Weeden and Ira
Lamel. The Board held six meetings during the year ended December 31,
2004. Each director (during the period in which he was a director)
attended at least 80% of the total number of Board meetings and meetings
of all committees on which he served. Although the Company does not have
a formal policy regarding attendance by the Board of Directors at the
Company's Annual Meeting of Stockholders, it strongly encourages
directors to attend. All of the members of the Company's current Board
of Directors attended last year's Annual Meeting of Stockholders.
Board Committees
Audit Committee. The Board of Directors has an Audit Committee
which operates under a written charter adopted by the Board of Directors.
The Audit Committee held four meetings during the year ended December 31,
2004. The Audit Committee is comprised of Messrs. Georgiev, Lamel, and
Weeden. Mr. Georgiev, Mr. Weeden and Mr. Lamel are "independent
directors" as defined under NASDAQ rules. Mr. Georgiev and Mr. Lamel are
qualified as audit committee financial experts within the meaning of the
SEC regulations.
Compensation Committee. Management compensation for 2004 was
determined by a Compensation Committee which met once during 2004. The
Compensation Committee is comprised of Messrs. Georgiev, Lamel, and
Weeden. The role of the Compensation Committee is to evaluate the
performance of the Company's executive officers, and to determine and
approve their compensation.
Nominating Committee. The Board of Directors has no standing
nominating committee. The Company believes that obtaining input from all
of its directors in connection with Board nominations enhances the
nomination process. The Company currently does not have a charter with
regard to the nomination process. The nominations of the directors
standing for election or re-election at the Meeting were unanimously
recommended for selection by the independent directors, and were
unanimously approved by the Board of Directors.
The Company does not have a formal policy concerning stockholder
recommendations of nominees to the Board of Directors. The need for such
a policy has not arisen since, to date, the Company has not received any
recommendations from stockholders requesting that the Board of Directors
consider a candidate for inclusion among the Board's slate of nominees in
the Company's proxy statement. The absence of such a policy does not
mean, however, that a recommendation would not have been considered had
one been received. The Company will consider director candidates
recommended by stockholders. Any stockholder desiring to make such a
recommendation should send the recommendation, in writing, to the
Corporate Secretary at the address of the Company set forth on the first
page of this Proxy Statement, no later than the date by which stockholder
proposals for action must be submitted. The recommendation should
include the recommended candidate's biographical data, and should be
accompanied by the candidate's written consent to nomination and to
serving as a director, if elected.
The Company's goal is to assemble a Board of Directors that brings
to the Company a variety of perspectives and skills derived from business
and professional experience. The Company does not have any formal rules
or policies regarding minimum qualifications for nominees, but expects
that its candidates be of the highest ethical character, share the values
of the Company, have reputations, both personal and professional,
consistent with the image and reputation of the Company, be highly
accomplished in their respective field, and possess the relevant
expertise and experience necessary to assist the Board and the Company to
increase stockholder value.
The Board of Directors identifies nominees by first evaluating the
current members of the Board of Directors willing to continue in service.
Current members of the Board with skills and experience that are relevant
to the Company's business and who are willing to continue in service are
considered for re-nomination, balancing the value of continuity of
service by existing members of the Board with that of obtaining a new
perspective. If any member of the Board does not wish to continue in
service or if the Board of Directors decides not to re-nominate a member
for re-election, the Board of Directors will seek to identify nominees
that possess the characteristics outlined above. Current members of the
Board of Directors are polled for suggestions. Research also may be
performed to identify qualified individuals. To date, the Company has
not engaged third parties to identify, evaluate, or assist in identifying
potential nominees, although the Company reserves the right in the future
to retain a third party search firm, if necessary.
In evaluating director nominees, the Board of Directors may consider
the following factors:
- the appropriate size and the diversity of the Company's Board of
Directors;
- the needs of the Company with respect to the particular talents
and experience of its directors;
- the knowledge, skills and experience of nominees, including
experience in technology, business, or finance, in light of
prevailing business conditions and the knowledge, skills and
experience already possessed by other members of the Board;
- familiarity with national and international business matters;
- experience with accounting rules and practices; and
- the need to satisfy governance and other standards set by the SEC
and NASDAQ.
The Board of Directors may also consider such other factors as it
may deem to be in the best interests of the Company and its stockholders.
Audit Committee Report
The Company's management is responsible for preparing the Company's
financial statements, and the independent auditors are responsible for
auditing those financial statements. The Audit Committee is responsible
for monitoring and reviewing these processes on behalf of the Board of
Directors.
The Audit Committee has reviewed and discussed the audited financial
statements with management. Management represented to the Audit
Committee that the Company's consolidated financial statements were
prepared in accordance with generally accepted accounting principles.
The Audit Committee discussed with the independent auditors matters
required to be discussed by Statement on Auditing Standards No. 61
(Communication With Audit Committees). In addition, the Audit Committee
has received the written disclosures and the letter from the independent
auditors required by Independence Standards Board Standard No. 1
(Independence Discussions With Audit Committees), and has discussed with
the independent auditors the auditors' independence from the Company and
its management. In concluding that the auditors are independent, the
Audit Committee considered, among other factors, whether the nonaudit
services provided by KPMG LLP were compatible with their independence.
In reliance on the reviews and discussions referred to above, the
Audit Committee recommended to the Board of Directors (and the Board
subsequently approved the recommendation) that the audited financial
statements be included in the Company's Annual Report on Form 10-K for
the year ended December 31, 2004 for filing with the Securities and
Exchange Commission.
Steven Georgiev
Ira Lamel
Donald Weeden
EXECUTIVE OFFICERS AND SUBSIDIARY PRESIDENTS
The Company's executive officers, as well as the Presidents of the
Company's directly and indirectly owned subsidiaries, are listed in the
table below. Information concerning such employees (to the extent not
provided elsewhere in this Proxy Statement) follows the table.
Name Age Position
.... ... ........
Executive Officers
...................
J. Donald Hill 72 Chairman of the Board
Antoine Dominic 43 Chief Executive Officer, President, Chief
Operating Officer
Alice Varisano 51 Chief Financial Officer
Subsidiary Presidents
......................
Greg Anderson 53 President, Control Systemation, Inc.
Redmond P. Aylward 53 President, Cambridge Technology, Inc.
Reinhard Baumert 60 President, Excel Technology Europe GmbH
Dave Clarke 43 President, Synrad, Inc.
Laurence E. Cramer 54 President, Continuum Electro-Optics, Inc.
Francis Dominic 46 President, The Optical Corporation
President, Photo Research, Inc.
Qiang Fu 42 President, Quantronix Corporation
Stephen C. Graham 49 President, Control Laser Corporation
Kuni Kobayashi 62 President, Excel Technology Japan K.K.
Ooi Poay Chuan 51 President, Excel Technology Asia Sdn. Bhd.
Mr. Dominic has been Chief Executive Officer since October 2000 and
President and Chief Operating Officer of the Company since February 1998.
He served as Chief Financial Officer of the Company from March 1995
until December 26, 2004 and as a director of the Company from January
1996 through April 2004. In addition, Mr. Dominic served as President of
Quantronix from January 1996 until October 2000. From June 1992 to
January 1995, Mr. Dominic was Executive Vice President, Chief Financial
Officer and Director of CompuDyne Corporation, a manufacturer of data
acquisition equipment and access control systems, and Corcap Inc., a
holding company (both are related publicly-held companies). From March
1990 to June 1992, Mr. Dominic was the Chief Financial Officer for
CompuDyne Corporation and Corcap, Inc. From August 1987 to March 1990,
Mr. Dominic was Chief Financial Officer of Quanta Systems Corporation, a
division of CompuDyne Corporation. Mr. Dominic holds a B.S. in
accounting, an M.B.A., and is a non-practicing CPA.
Alice Varisano, a certified public accountant, has been the Chief
Financial Officer since December 27, 2004. From 1987 through 2004 she
was a principal at Ernst & Young LLP where she coordinated services for
many multinational public companies. Ms. Varisano holds a B.S. in
Accounting and M.S. in Taxation.
Mr. Anderson has been the President of Control Systemation, Inc., a
subsidiary of the Company, since October 2000. Previously, Mr. Anderson
had been with Control Laser Corporation for almost 20 years and had
served in many positions within the company including Project Engineer,
Mechanical Engineering Manager, Custom Systems Manager, Software Manager
and as Vice President. Mr. Anderson has worked previously as
Manufacturing Engineering Manager for Acme Cleveland Corporation and
Plant Engineer for General Motors Corporation. Mr. Anderson holds a B.S.
in Engineering and Computer Science.
Mr. Aylward has been President of Cambridge Technology, Inc.
("Cambridge"), a subsidiary of the Company, since February 1999. He
joined Cambridge as Director of Sales & Marketing in 1994, and was
promoted to Vice President of Sales & Marketing in 1997. Prior to
Cambridge, he worked for GenRad, Inc., where he held positions in Product
Line Management, Marketing Management, Engineering Management and Design
Engineering for over 18 years. Mr. Aylward holds B.S. and M.S. degrees
in Electrical Engineering from Northeastern University.
Dr. Baumert has been President of Excel Technology Europe GmbH, a
subsidiary of the Company, since November 1990. From 1982 to 1985, he
developed commercial laser and laser applications at Battelle
Institute/Frankfurt. In 1985, he joined Spectra Physics as Export Sales
Manager. Dr. Baumert holds a Ph.D. in physics.
Mr. Clarke has been President of Synrad, Inc. ("Synrad"), a
subsidiary of the Company, since September 1998. Mr. Clarke joined
Synrad in 1994 as International Sales Manager. In 1995, he became Vice
President of Marketing and President of Emerald Laser, Synrad's then
research and development division. Previously, Mr. Clarke worked for
Optilas Ltd., a European distributor of laser technology, for eight years
in various positions including General Manager. Mr. Clarke holds a B.S.
degree in Applied Physics.
Dr. Cramer has been President of Continuum Electro-Optics, Inc.
("Continuum"), a subsidiary of the Company, since October of 2002. He
joined Continuum as Vice President of R&D in April of 1999 and was
promoted to Executive Vice President/General Manager in June of 2001.
Prior to Continuum, Dr. Cramer was President of Laser Diode, Inc. for
five years and worked at Spectra Physics, Inc. where he held positions in
Product Line Management, Marketing and Sales Management, Engineering
Management and General Management for over 15 years. Dr. Cramer holds a
B.A. in Chemistry and Physics and M.S. and Ph.D. degrees in Chemical
Physics.
Mr. Francis Dominic has been President of Photo Research, Inc., a
subsidiary of the Company, since November 1996, and President of The
Optical Corporation, a subsidiary of the Company, since June 2000. From
1988 to 1996, he was Vice President and General Manager of Seth-Cole, a
manufacturer of reprographics and graphic arts media. He holds a B.S.
degree in Engineering and an M.B.A. Francis Dominic is the brother of
Antoine Dominic.
Dr. Qiang Fu has been President of Quantronix Corporation
("Quantronix"), a subsidiary of the Company, since October 2000. He
joined Quantronix in 1992 as a senior R&D scientist. He was promoted to
Director of Research and Development in 1996, Vice President of Research
and Development in 1998, and Executive Vice President in 1999. Dr. Fu
holds B.S., M.S. and Ph.D. degrees in Physics and an M.S. degree in
Electrical Engineering.
Mr. Graham has been President of Control Laser Corporation ("CLC"),
a subsidiary of the Company, since October 2000, and he was Executive
Vice President of CLC from September 1997 to September 2000. Having
worked with CLC for almost eighteen years, he has held several positions
including Design Engineer, Electrical Engineering Manager, Program
Manager, Production & Manufacturing Manager and Sales & Marketing
Director. Prior to joining CLC, he worked as an Electrical Design
Engineer at Insystec, Inc., a manufacturer of notebook computers, and at
TRW Financial Systems, Inc., a manufacturer of ATMs and Point of Sale
Terminals. Mr. Graham holds a B.S. degree in Electrical Engineering and
an M.B.A.
Mr. Kobayashi has been President of Excel Technology Japan K.K., a
subsidiary of the Company, since it was established in September 2002.
He had been involved with solid and ion laser development for 10 years
before he began selling and servicing the lasers. As the owner of
OptoFocus Corp., he represented Quantronix as an exclusive representative
in Japan for over 22 years. In September 2002, he sold OptoFocus Corp.
to the Company. Mr. Kobayashi holds a B.S. degree in Physics.
Mr. Ooi Poay Chuan has been President of Excel Technology Asia Sdn.
Bhd. ("Excel Asia"), a subsidiary of the Company, since November 1999.
From April 1998 to October 1999, he was Operations Manager for Excel
Asia. Prior to April 1998, he worked for Lumonics Corporation, Inc. as
Service Engineer, Service Manager and Regional Sales Manager covering
Asian Pacific territories. He has extensive laser training on marking
and industrial laser systems. Mr. Ooi holds a degree in Electrical
Engineering.
EXECUTIVE COMPENSATION
The following table sets forth certain information regarding
compensation earned by the Named Executive Officers for services rendered
to the Company for each of the last three years. The Named Executive
Officers include the Company's Chief Executive Officer and the executive
officers of the Company (other than the Chief Executive Officer) who
received salary and bonus payments in excess of $100,000 in 2004.
Annual Compensation Long Term Compensation
.............................. ...........................
Other
Annual Securities
Name and Compen- Underlying All Other
Principal Salary Bonus sation Options/SARs Compensation
Position Year ($) ($) <F1> ($) <F2> (#) ($)
........................... ..... ......... ......... ........ ............. ............
J. Donald Hill 2004 $175,000 $ 0 0 20,000 <F3> 0
............... 2003 $175,000 $ 0 0 10,000 <F3> 0
Chairman of the Board, 2002 $295,000 $ 50,000 0 110,000 <F3> 0
Excel Technology, Inc.
Antoine Dominic
................ 2004 $500,000 $1,102,500 0 20,000 <F3> 0
President, Chief Executive 2003 $425,000 $ 885,500 0 10,000 <F3> 0
Officer, Chief Operating, 2002 $351,000 $ 671,000 0 210,000 <F3> 0
Officer, Excel Technology, Inc.
...............................................................................................................
<F1> The amounts indicated reflect bonuses for the years in which they were earned.
<F2> In accordance with SEC rules, perquisites totaling the lesser of either $50,000, or 10% of the officer's
annual salary and bonus, have been omitted.
<F3> Represents options to acquire shares of Common Stock
</FN>
OPTION GRANTS DURING 2004
The following table provides information related to options granted
to the Named Executive Officers during the year ended December 31, 2004:
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation for
Individual Grants Option Term <F1>
.................................................................... .......................
Number of % of Total
Shares Options/SARs
Underlying Granted to Exercise or
Option/SARs Employees Base Price Expiration
Name Granted <F2> in Fiscal Year $/Share <F3> Date 5% 10%
................. ............ ............... ............... ................ ......... ..........
J. Donald Hill 20,000 22.0% $34.68 4/25/14 $436,201 $1,105,420
Antoine Dominic 20,000 22.0% $34.68 4/25/14 $436,201 $1,105,420
Alice Varisano 40,000 44.0% $26.51 12/28/14 $666,880 $1,690,005
.................................................................................................................
<F1> The potential realizable value portion of the foregoing table illustrates value that might be received upon
exercise of the options immediately prior to the expiration of their term, assuming the specified compounded
rates of appreciation on the Common Stock over the term of the options. These numbers are calculated based
on the requirements of the Securities and Exchange Commission and do not reflect the Company's estimate of
future stock price growth.
<F2> Fully vested options to acquire shares of Common Stock.
<F3> The exercise price equaled the fair market value of the Common Stock on the date of grant.
</FN>
OPTION EXERCISES DURING 2004
AND YEAR END OPTION VALUES
The following table provides information related to options
exercised by the Named Executive Officers during 2004 and the number and
value of options held at year-end. The Company does not have any
outstanding stock appreciation rights.
Value of Unexercised
Number of Unexercised In-the-Money
Option/SARs Options/SARs
at Fiscal Year End (#) at Fiscal Year End ($) <F1>
........................... ...........................
Shares Acquired Value Realized
Name on Exercise (#) ($) Exercisable Unexercisable Exercisable Unexercisable
................ ............... .............. ............ .............. ............ .............
J. Donald Hill 0 $ 0 303,334 33,333 $3,828,190 $361,667
Antoine Dominic 97,708 $1,908,247 223,125 66,667 $1,313,129 $723,333
Alice Varisano 0 $ 0 40,000 0 $ 0 $ 0
..................................................................................................................
<F1> The closing price for the Common Stock as reported on the NASDAQ National Market System on December 31, 2004
was $26.00. Value is calculated on the basis of the difference between the option exercise price and $26.00,
multiplied by the number of shares of Common Stock underlying the option.
</FN>
EMPLOYMENT AND RELATED AGREEMENTS
In October 2000, the Company entered into a five-year employment
agreement with J. Donald Hill, which agreement was amended on October 3,
2002 to, among other things, adjust Mr. Hill's base salary to $175,000
per annum, subject to annual review. Pursuant to the agreement, Mr. Hill
is eligible to receive bonus compensation in accordance with corporate
bonus plans adopted by the Board from time to time. In the event the
Company terminates Mr. Hill's employment without cause, he is entitled to
receive his base salary for a period of two years from termination. On
March 11, 2005, the agreement was amended further to (a) extend the term
thereof for a period of two years, and (b) provide for the payment to Mr.
Hill, in the event he voluntarily leaves the employ of the Company on
account of a change in control (as defined in such amendment), of
$1,000,000 plus a gross-up of any excise tax payable by him with respect
to any portion of such payment constituting an excess parachute payment
under Section 280G of the Internal Revenue Code. The agreement expires
in October, 2007.
In October 2000, the Company entered into a five-year employment
agreement with Antoine Dominic, which automatically renews for additional
one-year periods unless employment is terminated as provided in the
agreement. Pursuant to such agreement, Mr. Dominic received a base
salary of $500,000 for 2004. Mr. Dominic's base salary is subject to
annual review, and he is eligible to receive bonus compensation in
accordance with corporate bonus plans adopted by the Board from time to
time. The agreement provides that in the event the Company terminates
Mr. Dominic's employment without cause, he is entitled to receive his
base salary for a period of two years from termination. On March 11,
2005, the agreement was amended to (a) extend the term thereof for a
period of one year, and (b) provide for the payment to Mr. Dominic, in
the event he voluntarily leaves the employ of the Company on account of a
change in control (as defined in the agreement), of an amount equal to
300% of his base salary for the year in which the change of control takes
place, (but in no event less than $1,000,000), plus a gross-up of any
excise tax payable by him with respect to any portion of such payment
constituting an excess parachute payment under Section 280G of the
Internal Revenue Code.
In December 2004, the Company entered into a four-year employment
agreement with Alice Varisano. The agreement provides for a base salary
of $275,000, a non-accountable expense allowance of $25,000, and a yearly
bonus as determined by the Board which bonus shall not be less than
$50,000. The Agreement also provides that (a) in the event the Company
terminates Ms. Varisano's employment without cause or if she resigns for
Good Reason (as defined in the employment agreement), she is entitled to
receive a severance payment equal to one year of compensation (including
base salary, expense allowance and minimum bonus), and (b) if her
employment is terminated due to a Change in Control (as defined in the
employment agreement), she is entitled to receive a severance payment
equal to two years compensation (including base salary, expense allowance
and minimum bonus).
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Management compensation for 2004 was determined by the non-employee
directors of the Company. None of these outside directors was at any
time during 2004 or at any other time an officer or employee of the
Company, and none of them had any relationship with the Company requiring
disclosure under SEC rules.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD
OF DIRECTORS ON EXECUTIVE COMPENSATION
Compensation Guidelines
The Company is engaged in a highly competitive industry and must
attain high levels of quality and safety in the design, production, and
servicing of its products. To succeed, the Company believes that it must
offer executive compensation that reflects competitive pay practices of
other companies and job responsibility, and enables the Company to
attract, retain, and reward qualified, experienced executives. The
Company also believes that any competitive pay package should be
structured, in part, to align management's interests with the success of
the Company by making a portion of compensation dependent on operating
achievements and, to a lesser extent, on stock performance. The
Compensation Committee has determined that these objectives are best met
by offering the Company's three executive officers competitive base
salaries, stock options that vest over time, and where appropriate,
quarterly bonuses which are payable based on a percentage of pre-tax
profits, with the percentage increasing as pre-tax profits increase.
Chief Executive Officer Compensation
Based on the criteria described above, the Compensation Committee of
the Board of Directors approved an increase in Mr. Dominic's annual base
salary, effective January 2004, from $425,000 to $500,000. In
determining Mr. Dominic's base salary increase, the Compensation
Committee considered several factors including the Company's revenues,
earnings and cash-flow. Mr. Dominic's bonus under his performance-based
bonus plan (as amended) increased from $885,500 in 2003 to $1,102,500 in
2004 as a result of increases in the Company's pre-tax earnings from the
prior year.
Ira Lamel
Steven Georgiev
Donald Weeden
BENEFICIAL OWNERSHIP OF THE COMPANY'S SECURITIES
The following table sets forth certain information, based upon
publicly available filings or information provided to the Company,
regarding the beneficial ownership of Common Stock by each person owning
more than 5% of the Common Stock, each director and nominee, each Named
Executive Officer, and all directors and executive officers as a group.
Except as otherwise indicated, all information is as of March 8, 2005.
Name Number
(and Address of 5% Holders) Owned (1) Percentage of Class**
....................................... ............ .....................
Citigroup, Inc. 1,986,577 (2) 16.5%
399 Park Avenue
New York, NY 10043
Columbia Wanger Asset Management, L.P., 809,500 (3) 6.7%
WAM Acquisition GP, Inc. &
Columbia Acorn Trust
227 West Monroe Street, Suite 3000
Chicago, IL 60606
Royce & Associates, LLC 637,700 (4) 5.3%
1414 Avenue of the Americas
New York, NY 10019
J. Donald Hill 617,100 (5) 4.9%
Antoine Dominic 528,825 (6) 4.2%
Alice Varisano 40,000 (7) *
Steven Georgiev 40,000 (8) *
Howard S. Breslow 92,000 (9) *
Donald E. Weeden 50,000 (10) *
Ira Lamel 60,000 (11) *
Executive officers and directors
as a group (seven persons) 1,427,925 (12) 10.8%
*Less than 1%.
**Based on the number of shares outstanding on the Record Date.
(1) Unless otherwise indicated below, all shares are owned beneficially
and of record.
(2) Information with respect to Citigroup, Inc. ("Citigroup") and
related parties is based on the Schedule 13G, dated February 4,
2005, filed by those parties. Of the total shares reported,
Citigroup has shared voting and dispositive power with respect to
1,986,577 shares, Citigroup Global Markets Holdings, Inc. ("CGM
Holdings") has shared voting and dispositive power with respect to
1,963,613 shares, Smith Barney Fund Management, LLC ("SB Fund") has
shared voting and dispositive power with respect to 710,850 shares,
Citigroup Financial Products, Inc. ("CFP") has shared voting and
dispositive power with respect to 1,252,763 shares, and Citigroup
Global Markets, Inc. ("CGM") has shared voting and dispositive power
with respect to 1,252,683 shares. CFP is the sole stockholder of
CGM, CGM Holdings is the sole stockholder of CFP and the sole member
of SB Fund, and Citigroup is the sole stockholder of CGM Holdings.
(3) Information with respect to Columbia Wanger Asset Management, L.P.
("WAM"), WAM Acquisition GP, Inc., the general partner of WAM ("WAM
GP") and Columbia Acorn Trust ("Acorn") is based on the Schedule
13G, dated February 11, 2005, filed by those parties. Of the total
shares reported, WAM and WAM GP have shared voting and dispositive
power with respect to 809,500 shares and Acorn has shared voting and
dispositive power with respect to 625,000 shares.
(4) Information with respect to Royce & Associates, LLC ("Royce") is
based on the Schedule 13G, dated January 27, 2005, filed by that
party. Of the total shares reported, Royce has sole voting and
dispositive power with respect to 637,700 shares.
(5) Includes 436,667 shares of Common Stock underlying exercisable stock
options.
(6) Includes 489,793 shares of Common Stock underlying exercisable stock
options.
(7) Consists of 40,000 shares of Common Stock underlying exercisable
stock options.
(8) Consists of 40,000 shares of Common Stock underlying exercisable
stock options.
(9) Includes 80,000 shares of Common Stock underlying exercisable stock
options.
(10) Consists of 50,000 shares of Common Stock underlying exercisable
stock options.
(11) Consists of 60,000 shares of Common Stock underlying exercisable
stock options.
(12) Includes 1,196,460 shares of Common Stock underlying exercisable
stock options.
STOCK PERFORMANCE GRAPH
The following chart compares the yearly percentage change in the
cumulative total stockholder return on the Common Stock during the period
from December 31, 1999 through December 31, 2004, with the cumulative
total return on the S&P 500 and the Company Peer Group. The Company Peer
Group is made up of the following 7 companies all of which are in the
laser technology field: Coherent, Inc., Electro Scientific Industries,
Inc., Thermo Electron Corp., Laserscope, Rofin-Sinar Technologies, Inc.,
Spectranetics Corporation (The) and GSI Lumonics, Inc.
(Assumes Initial Investment of $100 & Reinvestment of Dividends)
1999 2000 2001 2002 2003 2004
.... ....... ....... ....... ....... .......
Excel Technology, Inc. $100 $111.14 $ 96.99 $ 99.73 $183.16 $144.93
S & P 500 $100 $ 90.90 $ 80.10 $ 62.39 $ 80.29 $ 89.02
Peer Group $100 $148.76 $130.22 $103.01 $140.66 $169.65
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF AUDITORS
The Audit Committee has selected the accounting firm of KPMG LLP
("KPMG") to serve as independent auditors of the Company for the year
ending December 31, 2005, and proposes the ratification of such decision.
Although the Audit Committee is not required to seek your approval of
this appointment, it is customary practice to do so. No determination has
been made as to what action the Audit Committee and the Board would take
if you fail to ratify the appointment. Even if the appointment is
ratified, the Audit Committee retains discretion to appoint a new
independent audit firm if it concludes such a change would be in the best
interests of the Company and its stockholders. A representative of KPMG
is expected to be present at the Meeting to make a statement if he wishes
to do so and to respond to appropriate stockholder questions.
Prior Auditors
During 2002, Ernst & Young LLP ("E&Y") acted as independent auditor
for the Company and its subsidiaries. On April 9, 2003, the Company
notified E&Y that it was not engaging E&Y as the Company's independent
auditor for the year ended December 31, 2003, and it appointed KPMG as
its new independent auditor. The Company retained E&Y for tax services
for 2003 and 2004.
The decision to discontinue the services of E&Y was approved by the
Company's Board of Directors upon the recommendation of the Audit
Committee. Prior to KPMG's appointment, the Company had not consulted
with KPMG on the application of accounting principles to a specified
transaction, or on the type of audit opinion that might be rendered on
the Company's financial statements.
The reports of E&Y on the Company's financial statements for 2002
contained no adverse opinion or disclaimer of opinion, and were not
qualified or modified as to uncertainty, audit scope, or accounting
principles. During 2002 and through April 9, 2003, there was no
disagreement with E&Y on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or
procedure, which disagreement, if not resolved to the satisfaction of
E&Y, would have caused E&Y to make reference to the subject matter of the
disagreement in their report.
The Company provided E&Y with a copy of this disclosure and
requested that E&Y furnish the Company with a letter addressed to the
Securities and Exchange Commission stating whether it agrees with the
above statements. A copy of the letter from E&Y, dated April 14, 2003,
was filed as Exhibit 16 to the Company's Current Report on Form 8-K,
dated April 14, 2003.
Audit and Other Fees
The following table sets forth the aggregate fees billed or expected
to be billed by the Company's independent auditors for audit services
rendered in connection with the financial statements and reports for 2003
and 2004, and for other services rendered by such independent auditors
during 2003 and 2004 on behalf of the Company and its subsidiaries. The
information in the table reflects services provided by KPMG, except for
the information set forth under "Tax Fees" which reflects the tax
services that E&Y continues to provide to the Company. The Audit
Committee approved all engagements of the independent auditor in 2004 in
advance of any such engagement.
Year ended December 31,
2004 2003
.......... ........
Audit Fees $ 291,000 $227,000
Fees related to Section 404
of Sarbanes-Oxley 560,000 0
Audit-Related Fees (a) 0 12,000
Tax Fees (b) 167,000 151,000
All Other Fees (c) 0 15,000
.......... ........
Total $1,018,000 $405,000
.......... ........
.......... ........
(a) Principally pertains to audits of employee benefit plan.
(b) Primarily for federal, state and international tax return
preparation, planning and consultation services; also includes
assistance with matters related to audits and acquisitions.
(c) Primarily includes services related to business acquisitions.
The Board of Directors recommends a vote FOR ratification of the
selection of KPMG as the independent auditors for the Company for the
year ending December 31, 2005.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's executive officers and directors, and persons who
own more than 10% of the Common Stock (collectively, the "Reporting
Persons"), to file reports of ownership and changes in ownership with the
SEC and NASDAQ, and to furnish a copy of such reports to the Company.
Based solely on review of the copies of such forms furnished to the
Company, the Company believes that during the year ended December 31,
2004, the Reporting Persons complied with all applicable Section 16(a)
filing requirements.
STOCKHOLDER COMMUNICATIONS AND PROPOSALS
Stockholders of the Company interested in communicating with the
Board of Directors may do so by sending their communication to Excel
Technology Board of Directors, c/o Corporate Secretary, at the address of
the Company set forth on the first page of this Proxy Statement. All
such correspondence received by the Corporate Secretary will be delivered
to one or more members of the Board of Directors.
Stockholder proposals for action at the 2006 Annual Meeting of
Stockholders must be submitted in writing to the Corporate Secretary at
the address of the Company set forth on the first page of this Proxy
Statement, and must be received by the Corporate Secretary no later than
November 7, 2005 in order that they may be considered for inclusion in
next year's proxy statement and proxy card. Stockholders who intend to
present a proposal at the Company's 2006 Annual Meeting of Stockholders
without inclusion of such proposal in the Company's proxy materials are
required to provide notice of such proposal to the Company no later than
January 31, 2006. The Company reserves the right to reject, rule out of
order, or take other appropriate action with respect to any proposal that
does not comply with these and other applicable requirements.
CODE OF ETHICS
The Company has a Code of Ethics that is applicable to all employees
of the Company, including the Company's executive officers. The Company
will provide an electronic or paper copy of the Code of Ethics free of
charge upon request. Requests may be made by calling Investor Relations
at (631) 784-6175, or by writing to Investor Relations at 41 Research
Way, East Setauket, New York 11733.
MAILINGS TO STOCKHOLDERS
The Annual Report to stockholders of the Company for the year ended
December 31, 2004, including audited consolidated financial statements,
is being mailed to the stockholders along this Proxy Statement. Such
report is not incorporated in this Proxy Statement and is not deemed to
be a part of the proxy solicitation material.
For those stockholders who share a single address, only one Annual
Report and Proxy Statement will be sent to that address unless the
Company has received a request from one or more of such stockholders to
the contrary. This practice, known as "householding," is designed to
reduce the Company's printing and postage costs. Upon request, the
Company will promptly send a separate Annual Report or Proxy Statement to
any stockholder residing at such an address. Requests may be made by
calling Investor Relations at (631) 784-6175 or by writing to Investor
Relations at 41 Research Way, East Setauket, New York 11733. If any
stockholder residing at such an address wishes to receive a separate
annual report or proxy statement in the future, or if any stockholder
receiving multiple copies of the Company's annual report and proxy
statement desires householding, they may contact Investor Relations in
the same manner.
OTHER MATTERS
The Board of Directors of the Company does not know of any other
matters that are to be presented for action at the Meeting. Should any
other matters come before the Meeting or any adjournments thereof, then
with respect to such matters, the proxy holders will have the
discretionary authority to vote all proxies received by them in
accordance with their judgments.
A copy of the Company's Annual Report on Form 10-K, as filed with
the Securities and Exchange Commission (exclusive of exhibits), will be
furnished without charge to any stockholder upon written request to
Investor Relations, 41 Research Way, East Setauket, New York, 11733.
By Order of the Board of Directors
/s/ J. Donald Hill
.....................
J. Donald Hill,
Chairman of the Board
E. Setauket, New York
March 18, 2005
STOCKHOLDERS ARE URGED TO SPECIFY THEIR CHOICES, DATE, SIGN AND RETURN
THE ENCLOSED PROXY IN THE ENCLOSED ENVELOPE. YOUR PROMPT RESPONSE IS
HELPFUL, AND YOUR COOPERATION IS APPRECIATED.
[FORM OF PROXY CARD]
EXCEL TECHNOLOGY, INC.
41 Research Way
E. Setauket, NY 11733
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, acknowledging receipt of the proxy statement dated
March 18, 2005 of Excel Technology, Inc., hereby constitutes and appoints
J. Donald Hill and Antoine Dominic and each or any of them, attorney,
agent and proxy of the undersigned, with full power of substitution to
each of them, for and in the name, place and stead of the undersigned, to
appear and vote all the shares of stock of Excel Technology, Inc.
standing in the name of the undersigned on the books of said corporation
on March 8, 2005 at the Annual Meeting of the Stockholders of Excel
Technology, Inc. to be held at the offices of Excel Technology, Inc., 41
Research Way, E. Setauket, NY 11733 on April 19, 2005 at 10:00 A.M. EST,
and any adjournments thereof.
When properly executed, this proxy will be voted as designated by
the undersigned. If no choice is specified, the proxy will be voted FOR
the following proposals, which are set forth in the Proxy Statement:
(Continued and to be signed on the reverse side)
ANNUAL MEETING OF STOCKHOLDERS OF
EXCEL TECHNOLOGY, INC.
April 19, 2005
Please date, sign and mail
your proxy card in the
envelope provided as soon
as possible
Please detach along perforated line and mail in the envelope provided.
.........................................................................
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION
OF DIRECTORS AND "FOR" PROPOSAL 2. PLEASE SIGN, DATE AND
RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK
YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE [X]
.........................................................................
1. ELECTION OF DIRECTORS
NOMINEES:
[ ] FOR ALL NOMINEES ( ) J. Donald Hill
( ) Steven Georgiev
[ ] WITHHOLD AUTHORITY ( ) Howard S. Breslow
FOR ALL NOMINEES ( ) Donald E. Weeden
( ) Ira J. Lamel
[ ] FOR ALL EXCEPT
(See instructions below)
INSTRUCTION: to withhold authority to vote for any individual
nominee(s), mark "FOR ALL EXCEPT" and fill in the circle
next to each nominee you wish to withhold,
as shown here: (X)
.........................................................................
2. PROPOSAL TO RATIFY THE SELECTION OF KPMG LLP AS INDEPENDENT AUDITORS
FOR THE YEAR ENDING DECEMBER 31, 2005
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. FOR SUCH OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE MEETING
AND ANY ADJOURNMENTS THEREOF
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD
PROMPTLY IN THE ENCLOSED ENVELOPE
.........................................................................
.........................................................................
To change the address on your account, please check the box at right [ ]
indicate your new address in the address space above. Please note
that changes to the registered name(s) on the account may not be
submitted via this method.
.........................................................................
Signature of Stockholder........................... Date...............
Signature of Stockholder........................... Date...............
Note: Please sign exactly as name appears below. When shares are held
jointly, each holder should sign. When signing as executor,
administrator, attorney, trustee or guardian, please give full title as
such. If a corporation, please sign full corporate name by duly
authorized officer, giving full title as such. If signer is a
partnership, please sign in partnership name by authorized person.