SCHEDULE 14A (RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a party other than the Registrant [_]
Check the appropriate box
[_] Preliminary proxy statement
[X] Definitive proxy statement
[_] Definitive additional materials
[_] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
VITRONICS CORPORATION
(Name of Registrant as Specified in Its Charter)
VITRONICS CORPORATION
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[_] $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:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or underlying value of transaction computed pursuant to
Exchange Act Rule 0-11
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(4) Proposed maximum aggregate value of transaction:
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Set forth the amount on which the filing fee is calculated and state how it
was determined.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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VITRONICS CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 4, 1995
TO THE STOCKHOLDERS
OF VITRONICS CORPORATION:
The Annual Meeting of Stockholders of Vitronics Corporation (the "Company")
will be held on Thursday, May 4, 1995 at 10:00 a.m., local time, at the
Company's headquarters, 1 Forbes Road, Newmarket, New Hampshire, to consider
and act upon the following matters:
1. To elect one Class B director to the Board of Directors to serve until
the 1998 annual meeting of stockholders and thereafter until his successor
is duly elected and qualified.
2. To approve the adoption by the Board of Directors of the Company's
1995 Key Employees' Stock Option Plan.
3. To ratify the appointment by the Board of Directors of Coopers &
Lybrand L.L.P. as the Company's independent auditors for the 1995 fiscal
year.
4. To transact such other business as may properly be presented to the
meeting or any adjournment thereof.
A copy of the Annual Report to Stockholders for the fiscal year ended
December 31, 1994 has been mailed to the Stockholders prior to or
simultaneously with the mailing of this proxy material.
The Board of Directors has fixed March 24, 1995 as the record date for
determining the Stockholders entitled to notice of and to vote at the Annual
Meeting.
YOUR VOTE IS IMPORTANT TO THE COMPANY. WHETHER OR NOT YOU PLAN TO ATTEND THE
MEETING, PLEASE COMPLETE AND DATE YOUR ENCLOSED PROXY AND PROMPTLY RETURN IT
IN THE ENCLOSED ENVELOPE IN ORDER TO ASSURE REPRESENTATION OF YOUR SHARES.
IF YOU ATTEND THE MEETING AND WISH TO VOTE IN PERSON, YOUR PROXY WILL NOT BE
USED.
By Order of the Board of Directors,
Lorraine D. Giordano
Clerk
Newmarket, New Hampshire
April 3, 1995
VITRONICS CORPORATION
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS--MAY 4, 1995
This Proxy Statement and the accompanying form of proxy are furnished in
connection with the solicitation of proxies by the Board of Directors of
Vitronics Corporation (the "Company") for use at the 1995 annual meeting of the
stockholders of the Company to be held May 4, 1995, at the time and place and
for the purposes set for in the accompanying notice. This Proxy Statement and
form of proxy are being mailed to stockholders on or about April 3, 1995.
Unless otherwise directed by individual stockholders, all proxies properly
executed and duly returned by a stockholder of the Company will be voted for
the nominee named herein for election to the Board of Directors, for the
approval of the Board of Directors' adoption of the Company's 1995 Key
Employees' Stock Option Plan and to ratify the Board of Directors' appointment
of independent auditors. In addition, all proxies will be voted in accordance
with the judgment of the proxy holders with respect to any other matter that
may properly come before the meeting.
The enclosed proxy, even though executed and returned, may be revoked at any
time prior to the voting of the proxy by delivering notice of such revocation
or a duly executed proxy bearing a later date to the Clerk of the Company or by
attending the meeting and voting in person. Shares represented by proxy will be
voted at the meeting.
Holders of record of the shares of the Company's common stock, par value $.01
per share (the "Common Stock"), outstanding as of the close of business on
March 24, 1995 are entitled to notice of and to vote at the meeting or any
adjournment thereof. Holders of Common Stock are entitled to one vote for each
share held on matters properly presented at the meeting.
The holders of a majority of the shares of the Common Stock entitled to vote,
present in person or by proxy, will constitute a quorum for the transaction of
business at the meeting, but if a quorum should not be present, the meeting may
be adjourned from time to time until a quorum is obtained. A simple majority of
the shares present and voting, in person or by proxy, may elect the Class B
director nominee, approve the Board's adoption of the 1995 Key Employees' Stock
Option Plan and ratify the Board's appointment of independent auditors.
Abstentions are treated as present and entitled to vote and therefore have the
effect of a vote against a matter. A broker non-vote on a matter is considered
not entitled to vote on the matter and thus is not counted in determining
whether a matter requiring approval of a majority of the shares present and
entitled to vote has been approved. As of March 24, 1995, there were 7,552,488
shares of Common Stock outstanding. Each director and officer of the Company
has informed the Company that he intends to vote for the approval of the
proposals set forth in the notice of meeting.
ELECTION OF DIRECTORS
(PROPOSAL 1)
In accordance with Massachusetts Business Corporation Law, the Company has a
classified Board of Directors currently consisting of two Class A Directors
whose terms expire in 1997, two Class B Directors (including one vacancy) whose
terms expire in 1995, and three Class C Directors whose terms expire in 1996.
One Class B director will be elected at the 1995 Annual Meeting. David R.A.
Steadman, the current Class B director, has been nominated for re-election,
with a term to expire in 1998. No nomination has been made nor will any be
accepted at the Annual Meeting for the vacant Class B directorship. The
Directors are seeking an individual to fill the vacant seat, but have not yet
agreed upon a qualified candidate.
Proxies solicited by the Board of Directors hereby may not be voted for more
than one nominee for each directorship. Should David R.A. Steadman become
unable or unwilling to accept nomination or election,
it is intended that the persons acting under the proxies will vote for the
election of such person as the Board of Directors of the Company may recommend.
The Company presently has no reason to believe that Mr. Steadman will refuse or
be unable to serve if elected.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE NOMINEE
FOR ELECTION AS A CLASS B DIRECTOR.
The names of the nominee for election and each other person who will continue
as a director after the 1995 Annual Meeting are shown below. The information
given herein as to personal background and Common Stock ownership data has been
furnished by each director.
POSITION WITH DIRECTOR
NAME AGE THE COMPANY SINCE
---- --- ------------- --------
CLASS A DIRECTORS
James J. Manfield, Jr... 54 Chairman of the Board, Chief Executive Officer, 1981
Chief Financial Officer, Treasurer and Director
Ronald W. Lawler........ 47 President, Chief Operating Officer and Director 1992
CLASS B DIRECTOR/NOMINEE
David R.A. Steadman..... 57 Director 1987
CLASS C DIRECTORS
Allen H. Keough......... 65 Director 1989
John F. Rousseau, Jr.... 52 Director 1993
Robert J. Hanks......... 52 Director 1993
James J. Manfield, Jr. has served as Chairman of the Board and Chief
Executive Officer of the Company since September 1983, as Treasurer since
October 1990, as Chief Financial Officer since May 1991, and as a Director
since the time of its organization. He also served as President of the Company
from July 1986 to November 1992 and as Chief Financial Officer from July 1986
to May 1987 and from March 1988 to July 1988.
Ronald W. Lawler has served as President and Chief Operating Officer and as a
Director of the Company since November 1992. From 1989 to 1992, he served as
Vice President and General Manager of the Vacuum Products Business Division of
Varian Associates (a manufacturer of high vacuum components and systems)
located in Lexington, Massachusetts. From April 1987 to April 1989 he was
General Manager of the Tempe Electronics Business division of Varian Associates
located in Tempe, Arizona.
David R.A. Steadman has been a Director of the Company since May 1987. Mr.
Steadman has served as President of Atlantic Management Associates Inc. of
Wolfeboro, New Hampshire, a management services firm, since September 1988. Mr.
Steadman served as President and Chief Executive Officer of Integra-A Hotel &
Restaurant Co. of Dallas, Texas, a hotel and restaurant chain, from July 1990
until February 1994. From July 1987 to June 1988, Mr. Steadman served as Chief
Executive Officer and Chairman of the Board of GCA Corporation of Andover,
Massachusetts, a manufacturer of automated capital equipment used in the
production of integrated circuits by semi-conductor device manufacturers. From
1980 to 1987, Mr. Steadman served as a Vice President of Raytheon Company of
Lexington, Massachusetts, a defense electronics manufacturer. From January 1985
to July 1987, Mr. Steadman served as President of Raytheon Ventures, a venture
capital division of Raytheon Company.
Allen H. Keough has been a Director of the Company since July 1989. Since
April 1, 1994, Dr. Keough has served as Vice President--Research and
Development of Metallized Products, Inc. Prior to April 1, 1994, Dr. Keough
served as Technical Director of Metallized Products, Inc. of Winchester,
Massachusetts, a manufacturer of electronic device packaging material, since
October 1981.
2
John F. Rousseau, Jr. has been a director of the Company since October 1993.
Mr. Rousseau was initially appointed to fill a vacant Class C directorship by
the Board of Directors pursuant to the terms of a Convertible Subordinated
Debenture Purchase Agreement dated as of October 1, 1993 between the Company
and New England Growth Fund I, L.P., an investment fund limited partnership the
general partner of which is New England Partners I, L.P., a limited partnership
in which Mr. Rousseau has served as a general partner since 1992 (see Certain
Relationships and Related Transactions below). Since June 1992, Mr. Rousseau
has served as Executive Vice President of BCP Ventures, Inc., an investment
advisory firm, and since 1991 Mr. Rousseau has served as President of BCP
Investment Company, Inc., an investment advisory firm. From 1988 to 1991, Mr.
Rousseau served as Senior Vice President of Homart Development Company, a
subsidiary of Sears, Roebuck & Co., and from 1986 to 1988, Mr. Rousseau served
as Chairman and Chief Executive Officer of Associated Project Control, Inc., a
national project management company.
Robert J. Hanks has been a director of the Company since October 1993. Mr.
Hanks was also initially appointed to fill a vacant Class C directorship by the
Board of Directors pursuant to the aforementioned agreement between the Company
and New England Growth Fund I, L.P. Mr. Hanks has served as a general partner
of New England Partners I, L.P., the general partner of New England Growth Fund
I, L.P. since June 1992. Since January 1991, Mr. Hanks has served as President
of BCP Ventures, Inc., an investment advisory firm and as Executive Vice
President of BCP Investment Company, Inc., an investment advisory firm. Mr.
Hanks served as President of Vista Investment Co., an investment company, from
January 1989 to December 1991. From 1984 to 1990, Mr. Hanks served as President
of RJH Associates, Inc. a management consulting firm.
There are no family relationships between any of the foregoing persons.
COMMITTEES OF THE BOARD
The Board has an Audit Committee and a Compensation Committee. It does not
have a standing nominating committee or a committee performing a similar
function. The principal duties of the Audit Committee are to nominate the firm
of independent auditors for appointment by the Board; to meet with the
independent auditors to review and approve the scope of their audit engagement
and the fees related to such work; to meet with the Company's financial
management and independent auditors to review matters relating to internal
accounting controls, the Company's accounting practices and procedures, and
financial condition; and to report to the Board periodically any conclusions or
recommendations the Audit Committee may have with respect to such matters. The
members of the Audit Committee are Robert J. Hanks and Allen H. Keough, with
Mr. Hanks serving as Chairman.
The principal duties of the Compensation Committee are to review all
compensation of the employee-directors and officers of the Company and to
prepare recommendations and periodic reports to the Board concerning such
matters, and to function as the stock option committee of the Company's 1983,
1983-II, the 1987 Stock Option Plans and 1995 Key Employees Stock Option Plan
proposed for approval at the Annual Meeting. The members of the Compensation
Committee are James J. Manfield, Jr., John F. Rousseau, Jr. and David R.A.
Steadman, with Mr. Steadman serving as Chairman.
The Board of Directors held five meetings in 1994, the Audit Committee met
twice in 1994 and the Compensation Committee held one meeting in 1994. Each
Director attended at least 75% of the aggregate number of meetings of the Board
and of the Board committees on which he served.
COMPENSATION OF DIRECTORS
Each non-employee Director of the Company receives an annual stipend of
$3,000 for serving on the Board plus $500 for each Board meeting attended.
3
EXECUTIVE OFFICERS OF THE COMPANY
Listed below are the names, ages, and positions with the Company as of March
24, 1995, of the executive officers of the Company. The Company's executive
officers were elected by the Board of Directors to serve in their respective
capacities until the first meeting of the Board following the next annual
meeting of stockholders and thereafter until their successors are duly elected
and qualified.
NAME AGE POSITION WITH THE COMPANY
---- --- -------------------------
James J. Manfield, Jr...... 54 Chairman of the Board, Chief Executive Officer,
Chief Financial Officer, and Treasurer
Ronald W. Lawler........... 47 President and Chief Operating Officer
Albert J. Chanasyk......... 54 Vice President--Engineering
Daniel J. Sullivan......... 37 Corporate Controller
Patrick W. Byrnes.......... 48 Vice President--Sales and Marketing
For a description of the business experience of Messrs. Manfield and Lawler,
see Election of Directors above.
Albert J. Chanasyk has served as Vice President--Engineering of the Company
since May 1990. From October 1986 to May 1990, Mr. Chanasyk served as an
Engineering Manager for the Ion Beam Implanter division of Eaton Corp. of
Beverly, Massachusetts. From May 1984 to October 1986, Mr. Chanasyk served as
Director of Engineering and Engineering Manager of Factron, a factory
automation division of Schlumberger, located in Latham, New York.
Daniel J. Sullivan has served as Corporate Controller of the Company since
April 1994. From January 1989 through October 1993 he served as Controller of
Visual Technology, Inc., of Westboro, Massachusetts, a manufacturer of computer
terminals. From May 1987 through January 1989 he served as Assistant
Controller, and from November 1985 through May 1987 he served as Accounting
Manager at Visual Technology.
Patrick W. Byrnes has been Vice President of Sales and Marketing at Vitronics
since October 1994. From April 1993, until joining the Company, he served as
Vice President sales and marketing for Leeman Labs Inc. of Lowell,
Massachusetts, a manufacturer of laboratory instrumentation. From 1986 to 1992,
Mr. Byrnes held the positions of Director of Sales and Marketing and Assistant
General Manager for Balzers Inc. and Varian Associates in the vacuum industry
serving semiconductor and other high tech manufacturers.
4
EXECUTIVE COMPENSATION
The following table summarizes compensation paid or accrued by the Company to
its Chief Executive Officer and its two* other most highly compensated
executive officers for services rendered in all capacities to the Company
during 1994.
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
---------------------- ------------
ALL OTHER
NAME AND SALARY STOCK COMPENSATION
PRINCIPAL POSITION YEAR ($)(A) BONUS OPTIONS (#) ($)(B)
------------------ ---- ----------- ---------- ------------ ------------
James J. Manfield, Jr. . 1994 $132,355.52 $26,500.00 50,000 $2,512.00
Chairman and Chief 1993 $115,599.86 $ 0 25,000 $2,279.41
Executive Officer 1992 $ 92,610.00 $ 0 50,000 $1,472.00
Ronald W. Lawler........ 1994 $132,355.52 $41,500.00(c) 50,000 $2,335.00
President and Chief 1993 $115,599.86 $ 0 75,000 $ 0
Operating Officer 1992 $ 17,700.00 $ 0 186,000 $ 0
Albert J. Chanasyk...... 1994 $111,384.53 $ 5,500.00 10,000 $1,832.00
Vice President-- 1993 N/A N/A N/A N/A
Engineering 1992 N/A N/A N/A N/A
--------
(a) Includes compensation deferred at the election of the named executive
officer pursuant to a plan established under Section 401(k) of the Internal
Revenue Code (the "401(k) Plan").
(b) Includes $1,985.00, $1,985.00 and $1,588.00 for Messrs. Manfield, Lawler
and Chanasyk, respectively, representing the Company's 1994 matching
contribution to the 401(k) Plan based upon the amount of compensation
deferred under such plan by each executive officer, and $527.00, $350.00,
and $244.00 for the premiums paid in 1994 by the Company on a group term
life insurance policies on behalf of Messrs. Manfield, Lawler and Chanasyk,
respectively.
(c) Includes $15,000 sales commission.
* No other executive officers earned in excess of $100,000 of salary and bonus
in 1994.
5
Option/SAR Grants Table. The following table sets forth certain information
regarding options granted during the fiscal year ended December 31, 1994 to the
named executive officers of the Company appearing in the Summary Compensation
Table. No stock appreciation rights were granted during such year.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
NUMBER OF PERCENTAGE OF
SECURITIES TOTAL OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED (#)(A) FISCAL YEAR ($/ SHARE) DATE
---- -------------- ------------------ ----------- ----------
James J. Manfield, Jr... 50,000 24.5% $1.3125 12/19/99
Ronald W. Lawler........ 50,000 24.5% $1.3125 12/19/99
Albert J. Chanasyk...... 10,000 4.9% $1.3125 12/19/99
--------
(a) All options were granted in December 1994, 20% of such options immediately
vested and the remaining options will vest over the next four years in 20%
increments.
Year-End Option Table. The following table sets forth certain information
regarding stock options held as of December 31, 1994 for the named executive
officers of the Company appearing in the Summary Compensation Table. No stock
options were exercised by any named executive officer during the fiscal year
ended December 31, 1994.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR END
AND FISCAL YEAR END OPTION/SAR VALUES
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED,
UNEXERCISED OPTIONS/SARS HELD IN-THE-MONEY
AT FISCAL YEAR END OPTIONS/SARS (A)
------------------------------- -------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
James J. Manfield, Jr.. 58,800 66,200 $ 88,200.00 $ 99,300.00
Ronald W. Lawler........ 151,600 159,400 $227,400.00 $239,100.00
Albert J. Chanasyk...... 55,000 18,000 $ 82,500.00 $ 27,000.00
--------
(a) Value is based upon the last sales price ($1.50) per share on December 31,
1994 as reported on the American Stock Exchange.
EMPLOYMENT AGREEMENTS
In March 1995, the Company renewed its Employments Agreements with Messrs.
Manfield and Lawler for a one-year period which agreements shall automatically
renew for additional one year periods unless terminated pursuant to the terms
thereof. Such agreements each provide for a 12 month severance payment to
Messrs. Manfield and Lawler, respectively, at his then current salary, if
terminated by the Company prior to a change in control and a 24 month severance
at his then current salary if (i) terminated by the Company subsequent to
certain changes in control or (ii) if terminated by either Messrs. Manfield or
Lawler, respectively, for certain reasons subsequent to a change in control.
Messrs. Manfield's and Lawler's salary are each set at an annualized rate of
$140,000.
6
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of March 24, 1995 with
respect to the beneficial ownership of the Company's Common Stock by each
director, the Chief Executive Officer and two other named executive officers*,
all executive officers and directors as a group, and, as of December 31, 1994,
each person believed to be a beneficial owner of 5% or more of the Common
Stock:
NAME AND ADDRESS** AMOUNT AND NATURE OF PERCENT
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(A) OF CLASS(B)
------------------- ----------------------- -----------
James J. Manfield, Jr...................... 498,544(c) 4.44%
27 North Shore Road
Hampton, NH 03842
David R.A. Steadman........................ 79,000(d) ***
Allen H. Keough............................ 15,000(e) ***
Ronald W. Lawler........................... 190,600(f) 1.70%
Albert J. Chanasyk......................... 55,000(g) ***
John F. Rousseau, Jr....................... 2,412,000(h) 21.50%
313 Congress Street,
Boston, MA 02210
Robert J. Hanks............................ 2,412,000(h) 21.50%
313 Congress Street
Boston, MA 02210
New England Growth Fund I, L.P............. 2,400,000(i) 21.39%
313 Congress Street
Boston, MA 02210
All executive Officers and Directors as a
Group (8 persons)......................... 3,271,644(j) 29.16%
--------
* No other executive officers earned in excess of $100,000 of salary and
bonus in 1994.
** Furnished for 5% or more beneficial owners.
*** Denotes less than 1% of class.
(a) Unless otherwise indicated in the following notes, ownership is both
beneficial and of record. All information with respect to beneficial
ownership has been furnished by the respective directors, officers and 5%
owners.
(b) Pursuant to the rules of the Securities and Exchange Commission, shares of
Common Stock which an individual or group has a right to acquire within 60
days pursuant to the exercise of options, warrants or conversion
privileges are deemed to be outstanding for the purpose of computing the
percentage of ownership of such individual or group, but are not deemed
outstanding for the purpose of computing the percentage of ownership of
any other person shown in the table.
(c) Includes 10,000 shares owned by family members as to which beneficial
ownership is disclaimed and 58,800 shares which may be acquired upon the
exercise of stock options within 60 days of April 1, 1995.
(d) Includes 28,000 shares which may be acquired upon the exercise of stock
options within 60 days of April 1, 1995.
(e) All 15,000 shares may be acquired upon the exercise of stock options
within 60 days of April 1, 1995.
(f) Includes 151,600 shares which may be acquired upon the exercise of stock
options within 60 days of April 1, 1995.
(g) All 55,000 shares may be acquired upon the exercise of stock options
within 60 days of April 1, 1995.
(h) Includes 12,000 shares which may be acquired upon the exercise of stock
options within 60 days of April 1, 1995 and 2,400,000 shares which may be
acquired at any time upon conversion of the Company's $1,200,000
Subordinated Convertible Debenture dated October 1, 1993 held by New
England Growth Fund I, L.P. ("NEGFILP") Messrs. Rousseau and Hanks are
general partners of New England Partners I, L.P., the general partner of
NEGFILP.
(i) All of such shares may be acquired at any time upon conversion of the
Company's $1,200,000 Subordinated Convertible Debenture dated October 1,
1993 held by NEGFILP.
(j) Includes 2,741,900 shares which may be acquired upon (i) the exercise of
stock options and (ii) conversion of the Company's $1,200,000 Subordinated
Convertible Debenture dated October 1, 1993.
7
APPROVAL OF 1995 KEY EMPLOYEES STOCK OPTION PLAN
(PROPOSAL 2)
On March 17, 1995, the Board of Directors voted, subject to approval by the
stockholders, to adopt the 1995 Key Employees Stock Option Plan (the "Plan"). A
copy of the Plan is attached as Appendix A.
The Plan will be administered by the Compensation Committee of the Board. The
Committee has the authority to make awards of stock, grant purchase rights to
purchase stock at prices determined by the committee, and grant options to
purchase stock (both incentive stock options and non-qualified stock options).
All employees, officers, directors and consultants of the company are
eligible grantees of stock awards, non-qualified stock options and direct stock
purchase authorizations, but only employees of the Company are eligible to be
granted incentive stock options. As of March 24, 1995, approximately 116
persons were eligible to participate in the Plan. All awards, options and
purchase authorizations are granted at the discretion of the Committee based on
the Committee's evaluation of appropriate incentives. No person may receive
awards, options, and/or purchase authorizations with respect to more than
100,000 shares of Common Stock in any calendar year.
The Committee has the authority to determine the option price for options
granted (subject to rules limiting the grant of the incentive stock options to
a price of not less than the fair market value of the stock at the time of the
grant of the option or, in certain circumstances, at an option price at least
equal to 110% of the fair market value of the stock at the time the option is
granted), the purchase price for direct purchase authorizations, the expiration
date of options granted (subject to a limit of 10 years for non-qualified
options, 10 years for incentive stock options, and five years for certain
incentive stock options granted to holders of more than 10% of the Common
Stock), the vesting schedules to which options will be subject and whether
stock issued through awards or purchase authorizations or upon exercise of
options will be subject to transfer restrictions or repurchase rights of the
Company. The Committee has the authority to accelerate the vesting schedule of
any option, for any reason, including a change of control.
Stock purchase authorizations and options may be exercised in cash, or
subject to the discretion of the Committee, with shares of Common Stock having
a fair market value at least equal to the exercise price.
The following is a brief summary of the principal federal income tax
consequences of incentive stock options and non-qualified stock options:
Incentive Stock Options. No taxable income is recognized by the optionholder
upon the grant or exercise of an incentive stock option ("ISO"). If no
disposition of shares issued to an optionholder pursuant to the exercise of an
ISO is made by the optionholder within two years from the date of grant of the
option or within one year after the transfer of such shares to the
optionholder, then (a) upon sale of such shares, any amount realized in excess
of the option price (the amount paid for the shares) will be taxed to the
optionholder as long term capital gain and any loss sustained will be a long-
term capital loss and (b) no deduction will be allowed to the Company for
Federal income tax purposes. The exercise of ISOs will give rise to an item of
tax preference that may result in alternative minimum tax liability for the
optionholder.
If shares of Common Stock acquired upon the exercise of an ISO are disposed
of prior to the expiration of the two-year and one-year holding periods
described above (a "disqualifying disposition"), then (a) the optionholder will
generally recognize ordinary income in the year of disposition in an amount
equal to the excess (if any) of the fair market value of the shares at exercise
(or, if less, the amount realized on a sale of such shares) over the option
price thereof, and (b) the Company will be entitled to deduct such amount. Any
further gain realized will be taxed as short-term or long-term capital gain and
will not result in any deduction by the Company. Special rules apply where all
or a portion of the exercise price of the ISO is paid by tendering shares of
Common Stock. A disqualifying disposition will eliminate the item of tax
preference associated with the exercise of the ISO.
8
Non-Qualified Stock Options. No taxable income is recognized by the
optionholder at the time the option is granted. Generally, (a) at exercise,
ordinary income is recognized by the optionholder in an amount equal to the
difference between the option price and the fair market value of the shares on
the date of the exercise, and the Company receives a tax deduction for the same
amount, and (b) at disposition, appreciation or depreciation after the date of
exercise is treated as either short-term or long-term capital gain or loss
depending on how long the shares have been held.
The Plan may be terminated or amended at any time by the Board of Directors
of the Company except that the Board may not increase the number of shares
reserved under the Plan, modify the eligibility or exercise price for persons
receiving incentive stock options, or extend the expiration date of the Plan
without stockholder approval not later than 12 months after such Board action.
Awards to be made under the Plan are not determinable at this time.
On March 21, 1995, the Company's Common Stock (trading on the American Stock
Exchange) sold at a high and low of $1.75 and $1.625, respectively.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE ADOPTION OF THE
1995 KEY EMPLOYEES STOCK OPTION PLAN.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
(PROPOSAL 3)
Upon recommendation of the Audit Committee, the Board of Directors voted to
appoint Coopers & Lybrand L.L.P. to act as independent auditors for the Company
for the year ending December 31, 1995.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
APPOINTMENT OF COOPERS & LYBRAND L.L.P. AS INDEPENDENT AUDITORS FOR THE COMPANY
FOR THE YEAR ENDING DECEMBER 31, 1995.
Representatives of Coopers & Lybrand L.L.P. are expected to be present at the
annual meeting with the opportunity to make a statement if they desire to do
so, and will be available to respond to appropriate questions.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent (10%) of a
registered class of the Company's equity securities (collectively, "Insiders"),
to file reports of ownership and changes in ownership with the Securities and
Exchange Commission ("SEC") and the American Stock Exchange. Insiders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.
Based solely on review of the copies of such forms furnished to the Company,
or written representations that no Forms 5 were required, the Company believes
that during the fiscal year ended December 31, 1994, all Section 16(a) filing
requirements applicable to the Company's Insiders were satisfied.
9
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On October 1, 1993, the Company and New England Growth Fund I, L.P., a
Delaware limited partnership (the "Purchaser"), entered into a Convertible
Subordinated Debenture Purchase Agreement (the "Debenture Agreement"). Under
the terms of the Debenture Agreement, the Company issued a 10% Convertible
Subordinated Debenture (the "Debenture") to the Purchaser in the principal
amount of $1,200,000. The Purchaser may convert the Debenture, in whole or in
part, into the Company's Common Stock at any time at the conversion price of
$.50 per share, subject to certain anti-dilution adjustments. If the Debenture
were converted in full, the Purchaser would own, as of the date of this Proxy
Statement, approximately 25% of the Company's outstanding Common Stock. Messrs.
Rousseau and Hanks, Class C Directors of the Company, are general partners of
the general partner of the Purchaser and serve as directors of the Company
pursuant to the terms of the Debenture Agreement. In January 1994, the
Purchaser lent $350,000 to the Company on a short term, secured basis. Such
loan was repaid in full prior to March 31, 1994.
OTHER BUSINESS
Management does not intend to bring any matters before the meeting other than
those set forth in the accompanying notice. Management knows of no other
matters to be brought before the meeting by others. However, if any other
matters are properly brought before the meeting, the persons named in the
enclosed form of proxy will vote in accordance with their judgment on such
matters.
SOLICITATION OF PROXIES
The cost of preparing and mailing the enclosed material will be borne by the
Company. In addition to the solicitation of proxies by mail, it is possible
that certain of the officers, directors and employees of the Company may
solicit proxies on behalf of the Board of Directors by telephone, telegraph and
in person, with the cost of any such solicitation to be borne by the Company.
No additional compensation will be received by any officer, director or
employee of the Company in connection with any such proxy solicitation. Upon
request, the Company will reimburse brokers, dealers, banks and trustees, or
their nominees, for reasonable expenses incurred by them in forwarding proxy
material to beneficial owners of shares of Common Stock.
STOCKHOLDER PROPOSALS
A proposal submitted by a stockholder for action at the Company's 1996 annual
meeting of stockholders must be received at the Company's headquarters, 1
Forbes Road, Newmarket, New Hampshire, 03857-2099, no later than December 16,
1995, in order to be included in the Company's Proxy Statement for that
meeting. Any such proposal must comply with the rules and regulations of the
Securities and Exchange Commission.
By Order of the Board of Directors,
Lorraine D. Giordano
Clerk
Newmarket, New Hampshire
April 3, 1995
10
APPENDIX A
VITRONICS CORPORATION
1995 KEY EMPLOYEES STOCK OPTION PLAN
1. Purposes. This 1995 Key Employees Stock Option Plan (the "Plan") is
designed to enable VITRONICS CORPORATION, a Massachusetts corporation with its
principal place of business located in Newmarket, New Hampshire (the "Company")
and its Affiliates to continue to be able to attract and retain persons of
ability as key employees, officers, directors and consultants and to motivate
such persons to exert their best efforts on behalf of the Company and its
Affiliates by providing them with awards of stock in the Company and/or
opportunities to purchase stock in the Company, all in the manner provided
herein.
2. Definitions.
"Affiliate" means any corporation which owns fifty percent (50%) of the
voting power of the Company or any other corporation (other than the Company)
in an unbroken chain of corporation beginning with the Corporation if each of
the corporations other than the last in such chain owns stock possessing at
least fifty percent (50%) of the voting power in one of the other corporations
in such chain.
"Award" means Common Stock awarded hereunder to Eligible Recipients.
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended.
"Committee" means the committee established to administer the Plan as
provided in Section 3(a).
"Common Stock" means shares of common stock of the Company ($.01 par value)
and such other stock as shall be substituted therefor as provided in Section
15.
"Company" shall have the meaning set forth in Section 1 hereof.
"Date of Grant" means the date on which the Committee authorizes the granting
of a Stock Right or such later date as may be specified by the Committee at the
time of such authorization; provided, however, that with respect to Stock
Rights granted pursuant to Section 3(d) such term shall mean the date on which
the granting of such Stock Right is authorized by the Board or by the committee
established pursuant to Section 3(d) to whom the Board has delegated such
authority.
"Disability" shall mean "Permanent and Total Disability" as defined in
Section 22(e) (3) of the Code.
"Disqualifying Disposition" shall have the meaning set forth in Section 22.
"Eligible Recipient" means a person who satisfies the eligibility
requirements of Section 4 applicable to the Stock Right proposed to be granted
to him.
"Grantee" means an Eligible Recipient to whom a Stock Right has been granted
under this Plan.
"ISO" means an Option which qualifies as an incentive stock option under
Section 422(b) of the Code.
"Non-Qualified Option" means an Option which does not qualify as an ISO.
"Option" means a right to purchase Common Stock granted to an Eligible
Recipient pursuant to this Plan.
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"Optionee" means an Eligible Recipient to whom an Option has been granted
under this Plan.
"Plan" means the VITRONICS CORPORATION 1995 Key Employees Stock Option Plan.
"Purchase" means an opportunity to make a direct purchase of Common Stock
granted to an Eligible Recipient pursuant to this Plan.
"Stock Option Agreement" means the agreement executed between the Corporation
and a Grantee pursuant to Section 13.
"Stock Rights" collectively refers to Options, Awards and Purchases.
3. Administration of the Plan.
A. The Plan shall be administered by a Committee consisting of not less than
two members of the Board who shall be appointed by and serve at the pleasure of
the Board. No member of the Committee, while a member, shall be eligible to
participate in the Plan.
B. Subject to ratification of the grant or authorization of each Stock Right
by the Board (if so required by applicable state law), and subject to the terms
of the Plan, the Committee, if so appointed, shall have the authority to (i)
determine the employees of the Company and its Affiliates (from among the class
of employees eligible under Section 4 to receive ISOs) to whom ISOs may be
granted and to determine (from among the class of individuals and entities
eligible under Section 4 to receive Non-Qualified Options and Awards and to
make Purchases) to whom Non-Qualified Options, Awards and authorizations to
make Purchases may be granted; (ii) determine the time or times at which
Options or Awards may be granted or Purchases made; (iii) determine the option
price of shares subject to each Option and the purchase price of shares subject
to each Purchase; (iv) determine whether each Option granted shall be an ISO or
a Non-Qualified Option; (v) determine (subject to Section 8) the time or times
when each Option shall become exercisable and the duration of the exercise
period; (vi) determine whether restrictions such as repurchase options are to
be imposed on shares subject to Options, Awards and Purchases and the nature of
such restrictions, if any; and (vii) interpret the Plan and prescribe and
rescind rules and regulations relating to it. If the Committee decides to grant
a Non-Qualified Option, it shall take whatever actions it deems necessary,
under Section 422 of the Code and the regulations promulgated thereunder, to
ensure that such Option is not treated as an ISO. The interpretation and
construction by the Committee of any provisions of the Plan or of any Stock
Right granted under it shall be final. The Committee may from time to time
adopt such rules and regulations for carrying out the Plan as it may deem best.
No member of the Committee shall be liable for any action or determination made
in good faith with respect to the Plan or any Stock Right granted under it.
4. Eligibility Requirements. ISOs may be granted to any employee of the
Company or any Affiliate. Those officers and directors of the Company or any
Affiliate who are not employees may not be granted ISOs under the Plan. Non-
Qualified Options, Awards and authorizations to make Purchases may be granted
to any director (whether or not an employee), officer, employee or consultant
of the Company or any Affiliate. The Committee may take into consideration a
candidate's individual circumstances in determining whether to grant an ISO, a
Non-Qualified Option, an Award or an authorization to make a Purchase. The
granting of any Stock Right to any individual or entity shall neither entitle
that individual or entity to, nor disqualify him from, participation in any
other grant of Stock Rights.
5. Stock. The aggregate number of shares of Common Stock which may be issued
pursuant to the Plan is 300,000, subject to adjustment as provided in Section
15. The Committee may grant ISOs and Non-Qualified Options and may authorize
Purchases and Awards with respect to such shares in such combinations and for
such amount of shares as it shall desire, provided that the number of shares
issuable upon exercise of such Options and Purchases and upon grant of such
Awards does not exceed such number, as adjusted. Stock subject to Options,
Awards and Purchases may be authorized but unissued shares of Common Stock or
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Common Stock held in the treasury of the Company. If any Option granted under
the Plan shall expire or terminate for any reason without having been exercised
in full or shall cease for any reason to be exercisable in whole or in part, or
if the Company shall reacquire any unvested shares issued pursuant to Awards or
Purchases, the unpurchased shares subject to such Option and any unvested
shares so reacquired by the Company shall again be available for grants of
Stock Rights under the Plan.
6. Granting of Stock Rights. The Committee is authorized to grant Stock
Rights under the Plan at such time or times as it may determine, provided that
the Committee shall not grant Stock Rights under the Plan after March 17, 2005.
The Committee shall have the right, with the consent of the Optionee, to
convert an ISO granted under the Plan to a Non-Qualified Option pursuant to
Article 18. Notwithstanding any provision herein to the contrary, the maximum
number of shares of Common Stock with respect to which Options or Awards may be
granted pursuant to the Plan during any calendar year to any Eligible Recipient
shall not exceed 100,000.
7. Minimum Option Price; ISO Limitations.
A. The exercise price specified in the Stock Option Agreement relating to
each ISO granted under the Plan shall not be less than the fair market value
per share of Common Stock on the Date of Grant. In the case of an ISO to be
granted to an Eligible Recipient owning stock possessing more than ten percent
of the total combined voting power of all classes of stock of the Company or
any Affiliate, the exercise price specified in the Stock Option Agreement
relating to such ISO shall not be less than 110 percent of the fair market
value per share of Common Stock on the Date of Grant.
B. In no event shall the aggregate fair market value (determined at the time
an ISO is granted) of Common Stock for which ISOs granted to any Eligible
Recipient are exercisable for the first time by such Eligible Recipient during
any calendar year (under all stock option plans of the Company and any
Affiliate) exceed $100,000.
C. If on the Date of Grant the Company's Common Stock is publicly traded,
"fair market value" shall be determined as of the last business day for which
the prices or quotes discussed in this sentence are available prior to the Date
of Grant and shall mean (i) the average (on that date) of the high and low
prices of the Common Stock on the principal national securities exchange on
which the Common stock is traded, if the Common Stock is then traded on a
national securities exchange; or (ii) the last reported sale price (on that
date) of the Common Stock on the NASDAQ National Market System, if the Common
Stock is not then traded on a national securities exchange; or (iii) the
closing bid price (or average of bid prices) last quoted (on that date) by an
established quotation service for over-the-counter securities, if the Common
Stock is not reported on the NASDAQ National Market System. However, if the
Common Stock is not publicly traded on the Date of Grant, "fair market value"
shall be deemed to be the fair value of the Common Stock on the Date of Grant
as determined by the Committee after taking into consideration all factors
which it deems appropriate, including, without limitation, recent sale and
offer prices of the Common Stock in private transactions negotiated at arm's
length.
8. Option Duration. Subject to earlier termination as provided in Sections 11
and 12, each Option shall expire on the date specified by the Committee, but
not more than (i) ten years and one day from the Date of Grant in the case of
Non-Qualified Options, (ii) ten years from the Date of Grant in the case of
ISOs generally, and (iii) five years from the Date of Grant in the case of ISOs
granted to an employee owning stock possessing more than ten percent of the
total combined voting power of all classes of stock of the Company or any
Affiliate. Subject to earlier termination as provided in Sections 11 and 12,
the term of each ISO shall be the term set forth in the Stock Option Agreement
granting such ISO, unless any part of such ISO is converted into a Non-
Qualified Option pursuant to Section 18 and pursuant to such conversion the
Committee elects to extend the exercise period applicable to such part.
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9. Exercise of Option. Subject to the provisions of Sections 11 through 14,
each Option granted under the Plan shall be exercisable as follows:
A. The Option shall either be fully exercisable on the Date of Grant or shall
become exercisable thereafter in such installments as the Committee may
specify.
B. Once an installment becomes exercisable it shall remain exercisable until
expiration or termination of the Option, unless otherwise specified by the
Committee.
C. Each Option or installment may be exercised at any time or from time to
time, in whole or in part, for up to the total number of shares with respect to
which it is then exercisable, provided that no partial exercise of such Option
or installment within any year shall be for less than 20 whole shares of Common
Stock as constituted on the Date of Grant (or the remaining shares of Common
Stock purchasable under the Option if less than 20 shares).
D. The Committee shall have the right to accelerate the date of exercise of
any installment of any Option; provided that the Committee shall not accelerate
the exercise date of any installment of any Option granted to any employee as
an ISO (and not previously converted into a Non-Qualified Option pursuant to
paragraph Section 18) if such acceleration would violate the annual vesting
limitation contained in Section 422(b)(7) of the Code, as described in Section
7(B).
10. Restrictions of Resale.
A. No Holder of Stock Rights who is an "affiliate" of the Company as defined
in the Securities Act of 1933 (the "1933 Act") may sell, transfer or dispose of
any shares, except pursuant to an effective Registration Statement under the
1933 Act, without first delivering to the Company an opinion of counsel
reasonably acceptable in form and substance to the Company that registration
under the 1933 Act is not required in connection with such transfer.
B. The certificates representing the Common Stock acquired under the Plan
shall bear the following legend:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE SOLD
OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
ACT OR AN EXEMPTION FROM REGISTRATION THEREUNDER. SECURITIES REPRESENTED BY
THIS CERTIFICATE ARE ALSO SUBJECT TO CERTAIN ADDITIONAL RESTRICTIONS SET FORTH
IN THE STOCK OPTION AGREEMENT DATED AS OF BETWEEN THE ISSUER AND THE
HOLDER."
11. Termination of Employment. If the Grantee of an ISO ceases to be employed
by the Company and all affiliates other than by reason of death or disability,
no further installments of such Grantee's ISOs shall become exercisable, and
the Grantee's ISOs shall terminate after the passage of 90 days from the date
of termination of his or her employment, but in no event later than on their
specified expiration dates, except to the extent that such ISOs (or unexercised
installments thereof) have been converted into Non-Qualified Options pursuant
to Section 18. Leave of absence with the written approval of the Committee
shall not be considered an interruption of employment under the Plan, provided
that such written approval contractually obligates the Company or any Affiliate
to continue the employment of the employee after the approved period of
absence. Employment shall also be considered as continuing uninterrupted during
any other bona fide leave of absence (such as those attributable to illness,
military obligations or governmental service) provided that the period of such
leave does not exceed 90 days or, if longer, any period during which such
Grantee's right to reemployment is guaranteed by statute. ISOs granted under
the Plan shall not be affected by any change of employment within or among the
Company and its Affiliates, so long as the Optionee continues to be an
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Employee of the Company or any Affiliate. Nothing in the Plan shall be deemed
to give any Grantee of any Stock Right the right to be retained in employment
or other service by the Company or any Affiliate for any period of time.
12. Death; Disability. If the Grantee of an ISO ceases to be employed by the
Company and all Affiliates by reason of his death, any ISO previously granted
hereunder to such Grantee may be exercised, to the extent of the number of
shares with respect to which the Grantee could have exercised it on the date of
his or her death, by the Grantee's estate, personal representative or any
beneficiary who has acquired the ISO by will or by the laws of descent and
distribution, at any time prior to the earlier of the ISO's specified
expiration date or 365 days from the date of the Grantee's death.
If the Grantee of an ISO ceases to be employed by the Company and all
Affiliates by reason of his Disability, the Grantee shall have the right to
exercise any ISO held by him on the date of termination of employment, to the
extent of the number of shares with respect to which the Grantee could have
exercised it on that date, at any time prior to the earlier of the ISO's
specified expiration date or 365 days from the date of the termination of the
Grantee's employment.
13. Assignability. No Stock Right shall be assignable or transferable by the
Grantee thereof except by will or by the laws of descent and distribution, and
during the lifetime of the Grantee each Stock Right shall be exercisable only
by him.
14. Terms and Conditions of Options. Each Option granted under the Plan shall
be evidenced by a Stock Option Agreement in such form as the Committee may from
time to time approve. Each Stock Option Agreement shall conform to the terms
and conditions set forth in Sections 7 through 13 hereof and may contain such
other provisions (which may vary as between Grantees) as the Committee deems
advisable, including restrictions applicable to shares of Common Stock issuable
upon exercise of Options, provided such provisions are not inconsistent with
the terms of this Plan. The Committee may, in its discretion, make some or all
of the Non-Qualified Options granted under this Plan subject to the
restrictions set forth herein with respect to ISOs, or to such other
termination and cancellation provisions as the Committee may determine. The
Committee may from time to time confer authority and responsibility on one or
more of its own members and/or one or more officers of the Company to execute
and deliver Stock Option Agreements. The proper officers of the Company are
authorized and directed to take any and all action necessary or advisable from
time to time to carry out the terms of each Stock Option Agreement entered into
pursuant to this Plan.
15. Adjustments. Upon the happening of any of the following described events,
a Grantee's rights with respect to Stock Rights granted hereunder and with
respect to Common Stock acquired pursuant to exercise of a Stock Right granted
hereunder shall be adjusted as hereinafter provided, unless otherwise
specifically provided in any written agreement between the Grantee and the
Company relating to such Stock Right.
A. In the event shares of Common Stock shall be subdivided or combined into a
greater or smaller number of shares or if, upon a merger, consolidation,
reorganization, split-up, liquidation, combination, recapitalization or the
like of the Company, the shares of Common Stock shall be exchanged for other
securities of the Company or of another corporation, each Grantee of a Stock
Right shall be entitled, subject to the conditions herein stated, to purchase
such number of shares of Common Stock or amount of other securities of the
Company or such other corporation as were exchangeable for the number of shares
of Common Stock which such Grantee would have been entitled to purchase except
for such action, and appropriate adjustments shall be made in the purchase
price per share to reflect such subdivision, combination or exchange; and
B. In the event the Company shall issue any of its shares as a stock dividend
upon or with respect to the shares of stock of the class which at the time
shall be subject to a Stock Right hereunder, each Grantee upon exercising a
Stock Right shall be entitled to receive (for the purchase price paid upon such
exercise) the shares as to which he is exercising his Stock Right and, in
addition thereto (at no additional cost), such
A-5
number of shares of the class or classes in which such stock dividend or
dividends were declared or paid, and such amount of cash in lieu of fractional
shares, as he would have received if he had been the holder of the shares as to
which he is exercising his Stock Right at all times between the date of grant
of such Stock Right and the date of its exercise.
C. If any person or entity owning restricted Common Stock obtained by
exercise of a Stock Right made hereunder receives new or additional or
different shares or securities in connection with a corporate transaction
described in paragraph A above or a stock dividend described in paragraph B
above as a result of owning such restricted Common Stock, such new or
additional or different shares or securities shall be subject to all of the
conditions and restrictions applicable to the restricted Common Stock with
respect to which such shares or securities were issued.
D. Notwithstanding the foregoing, any adjustments made pursuant to paragraphs
A or B with respect to ISOs shall be made only after the Committee, after
consulting with counsel for the Company, determines whether such adjustments
would constitute a "modification" of such ISOs (as that term is defined in
Section 425 of the Code) or would cause any adverse tax consequences for the
Grantees of such ISOs. If the Committee determines that such adjustments made
with respect to ISOs would constitute a modification of such ISOs, it may
refrain from making such adjustments.
E. No adjustments shall be made for dividends paid in cash or in property
other than securities of the Company.
F. No fractional shares shall be issued under the Plan. Any fractional shares
which, but for this paragraph F, would have been issued to a Grantee pursuant
to a Stock Right shall be deemed to have been issued and immediately sold to
the Company for their fair market value, and the Grantee shall receive from the
Company cash in lieu of such fractional shares.
G. Upon the happening of any of the events described in paragraphs A or B
above, the class and the aggregate number of shares set forth in Section 5
hereof shall be appropriately adjusted to reflect the events described in such
paragraphs. The Committee shall determine the specific adjustments to be made
under this Section 15 and, subject to Section 3, its determination shall be
conclusive.
16. Means of Exercising Stock Rights. A Stock Right (or any part or
installment thereof) shall be exercised by giving written notice to the Company
at its principal office address. Such notice shall identify the Stock Right
being exercised and specify the number of shares as to which such Stock Right
is being exercised, accompanied by full payment of the purchase price therefor
either (a) in United States dollars in cash or by check, or (b) at the
discretion of the Committee, through delivery of shares of Common Stock having
fair market value equal as of the date of the exercise to the cash exercise
price of the Stock Right, or (c) at the discretion of the Committee, by
delivery of the Grantee's personal recourse note bearing interest payable not
less than annually at no less than 100% of the applicable Federal rate, as
defined in (S)l274(d) of the Code, or (d) at the discretion of the Committee,
by any combination of (a), (b) and (c) above. If the Committee exercises its
discretion to permit payment of the exercise price of an ISO by means of the
methods set forth in clauses (b), (c), or (d) of the preceding sentence, such
discretion shall be exercised in writing at the time of the grant of the ISO in
question. The holder of a Stock Right shall not have the rights of a
shareholder with respect to the shares covered by his Stock Right until the
date of issuance of a stock certificate to him for such shares. Except as
expressly provided above in Section 15 with respect to changes in
capitalization and stock dividends, no adjustment shall be made for dividends
or similar rights for which the record date is before the date such stock
certificate is issued.
17. Term and Amendment of Plan.
A. The effective date of the Plan is March 17, 1995. The Plan shall expire on
March 17, 2005 (except as to Options outstanding on that date).
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B. The Board may terminate or amend the Plan in any respect at any time,
except that the Board may not (a) increase the total number of shares that may
be issued under the Plan (except by adjustment pursuant to Section 15); (b)
modify the provisions of Section 4 regarding eligibility for grants of ISOs;
(c) modify the provisions of Section 7(A) regarding the exercise price (except
by adjustment pursuant to Section 15); or (d) extend the expiration date of the
Plan without obtaining the approval of the Company's Stockholders within 12
months before or after any such amendment. Except as provided in the last
sentence of paragraph A of this section, in no event may action of the Board or
Stockholders alter or impair the rights of a Grantee, without his consent,
under any Stock Right previously granted to him.
18. Conversion of ISOs into Non-Qualified Options; Termination of ISOs. The
Committee, at the written request of any Optionee, may in its discretion take
such actions as may be necessary to convert such Optionee's ISOs (or any
installments or portions of installments thereof) that have not been exercised
on the date of conversion into Non-Qualified Options at any time prior to the
expiration of such ISOs, regardless of whether the Optionee is an employee of
the Company or any Affiliate at the time of such conversion. Such actions may
include, but not be limited to, extending the exercise period or reducing the
exercise price of the appropriate installments of such Options. At the time of
such conversion, the Committee (with the consent of the Optionee) may impose
such conditions on the exercise of the resulting Non-Qualified Options as the
Committee in its discretion may determine, provided that such conditions shall
not be inconsistent with this Plan. Nothing in this Plan shall be deemed to
give any Optionee the right to have such Optionee's ISOs converted into Non-
Qualified Options, and no such conversion shall occur until and unless the
Committee takes appropriate action. The Committee, with the consent of the
Optionee, may also terminate any portion of any ISO that has not been exercised
at the time of such termination.
19. Application Of Funds. The proceeds received by the Company from the sale
of shares pursuant to Options granted and Purchases authorized under the Plan
shall be used for general corporate purposes.
20. Governmental Regulation. The Company's obligation to sell and deliver
shares of the Common Stock under this Plan is subject to the approval of any
governmental authority required in connection with the authorization, issuance
or sale of such shares.
21. Withholding of Additional Income Taxes. Upon the exercise of a Non-
Qualified Option, the grant of an Award, the making of a Purchase of Common
Stock for less than its fair market value, the making of a Disqualifying
Disposition or the vesting of restricted Common Stock acquired on the exercise
of a Stock Right hereunder, the Company, in accordance with Section 3402(a) of
the Code, may require such Grantee to pay additional withholding taxes in
respect of the amount that is considered compensation includable in the
Grantee's gross income. The Committee in its discretion may condition (i) the
exercise of a Non-Qualified Option, (ii) the grant of an Award, (iii) the
making of a Purchase of Common Stock for less than its fair market value, or
(iv) the vesting of restricted Common Stock acquired by exercising a Stock
Right on the Grantee's payment of such additional withholding taxes.
22. Notice to Company of Disqualifying Disposition. Each Stock Option
Agreement entered into between the Company and the Grantee of an ISO granted
under this Plan shall provide that the Grantee agrees to notify the Company in
writing immediately after the Grantee makes a Disqualifying Disposition of any
Common Stock acquired pursuant to the exercise of such ISO. A Disqualifying
Disposition is any disposition (including any sale) by the Grantee of an ISO of
Common Stock acquired pursuant to the exercise of such ISO before the later of
(a) two years after the Date of Grant of such ISO or (b) one year after the
date the Grantee acquired such Common Stock by exercising the ISO, provided,
however, that the foregoing rules shall not apply to dispositions of such
Common Stock after the death of such Grantee by his or her legal
representative, devisees or heirs.
23. Governing Law; Construction. The validity and construction of the Plan
and Stock Option Agreements entered into hereunder shall be governed by the
laws of the Commonwealth of Massachusetts.
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In construing this Plan, the singular shall include the plural and the
masculine gender shall include the feminine and neuter, unless the context
otherwise requires.
The Company has caused its duly authorized officer to execute this Plan as of
March 17, 1995.
Vitronics Corporation
By: _________________________________
Title: __________________________
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[X] PLEASE MARK VOTES REVOCABLE PROXY
AS IN THIS EXAMPLE VITRONICS CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
MAY 4, 1995
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Lorraine D. Giordano and David R.A.
Steadman, and either of them, as attorney and proxy with full power of
substitution. In the name, place and stead of the undersigned to vote as proxy
all the common stock of the undersigned in Vitronics Corporation (the "Company")
at the Company's annual meeting of stockholders to be held at 10:00 a.m. local
time on May 4, 1995 at the offices of the Company, 1 Forbes Road, Newmarket, New
Hampshire, for the purposes of considering and voting upon:
With-
For hold
1. Election of one Class B Director: [_] [_]
David R.A. Steadman
2. To approve the adoption of the For Against Abstain
Company's 1995 Key Employees' [_] [_] [_]
Stock Option Plan.
3. Ratification of appointment of For Against Abstain
Coopers & Lybrand L.L.P. as inde- [_] [_] [_]
pendent auditors of the Company for
the 1995 fiscal year.
4. To consider and act upon such other business as may properly come before the
meeting.
The Shares represented by this proxy will be voted for the director Nominee
and for proposals 2 and 3, if no instruction to the contrary is indicated or if
no instruction is given and, in addition, on other business which may properly
come before the meeting or any adjournment thereof.
Note: Please sign exactly as name appears hereon. When shares are held by
joint tenants, both should sign. When signing as Attorney, Executor,
Administrator, Trustee or Guardian, please give full title as such. If a
corporation, please sign in full corporate name by president or other authorized
officer. If a partnership, please sign in partnership name by authorized person.
Please be sure to sign and date Date
this Proxy in the box below. -----------------------------
---Stockholder sign above------Co-holder (if any) sign above-------
Detach above card, sign, date and mail in postage paid envelope provided.
VITRONICS CORPORATION
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PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
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