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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
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CATALYTICA, INC.
(Name of Registrant as Specified in its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-
11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
- -------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
- -------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- -------------------------------------------------------------------------------
(5) Total fee paid:
- -------------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
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(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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[LOGO OF CATALYTICA]
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held On June 24, 1999
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the 1999 Annual Meeting of Stockholders of
Catalytica, Inc., a Delaware corporation (the "Company" or "Catalytica"), will
be held on June 24, 1999, at 10:00 a.m., local time, in the Mandarin Oriental
Hotel, 222 Sansome Street, San Francisco, California 94101 for the following
purposes:
1. To elect directors to serve for the following year and until their
successors are duly elected.
2. To ratify the appointment of Ernst & Young LLP as the Company's
independent accountants for the 1999 fiscal year.
3. To transact such other business as may properly come before the
Annual Meeting or any adjournments thereof.
Nominees for directors are set forth in the Proxy Statement accompanying
this Notice.
Only stockholders of record at the close of business on April 30, 1999 are
entitled to notice of and to vote at the Annual Meeting.
All stockholders are cordially invited to attend the Annual Meeting in
person. However, to assure your representation at the Annual Meeting, you are
urged to mark, sign, date and return the enclosed Proxy as promptly as
possible in the envelope enclosed for that purpose. Any stockholder attending
the Annual Meeting may vote in person even if he or she has previously
returned a Proxy.
Sincerely,
/s/ LAWRENCE W. BRISCOE
LAWRENCE W. BRISCOE
Vice President, Finance and
Administration
Chief Financial Officer
Mountain View, California
April 30, 1999
[LOGO OF CATALYTICA]
----------------
PROXY STATEMENT
----------------
1999 ANNUAL MEETING OF STOCKHOLDERS
INFORMATION CONCERNING SOLICITATION AND VOTING
General
The enclosed Proxy is solicited on behalf of Catalytica, Inc. (the
"Company" or "Catalytica") for the 1999 Annual Meeting of Stockholders (the
"Annual Meeting") to be held on June 24, 1999, at 10:00 a.m., local time, in
the Mandarin Oriental Hotel, 222 Sansome Street, California 94101, or any
adjournment or adjournments thereof, for the purposes set forth herein and in
the accompanying Notice of Annual Meeting of Stockholders. The Company's
principal executive offices are located at 430 Ferguson Drive, Mountain View,
California 94043 and its telephone number is (650) 960-3000.
These proxy solicitation materials and the Annual Report for the year ended
December 31, 1998 are expected to be mailed on or about June 1, 1999 to all
stockholders entitled to vote at the Annual Meeting.
Record Date and Outstanding Shares
Only stockholders of record at the close of business on April 30, 1999 (the
"Record Date") are entitled to receive notice of and to vote at the Annual
Meeting. The outstanding voting securities of the Company as of April 30,
1999, consisted of 41,727,116 shares of Common Stock, which includes
13,270,000 shares of Class A Common Stock and excludes 11,730,000 shares of
non-voting Class B Common Stock. For information regarding holders of more
than 5% of the outstanding Common Stock of the Company, see "Proposal No. 1--
Election of Directors--Security Ownership of Principal Stockholders and
Management."
Revocability of Proxies
The enclosed Proxy is revocable at any time before its use by delivering to
the Company a written notice of revocation or a duly executed Proxy bearing a
later date. If a person who has executed and returned a Proxy is present at
the Annual Meeting and wishes to vote in person, he or she may elect to do so
and thereby suspend the power of the proxy holders to vote his or her Proxy.
Voting and Solicitation
Except as provided below with respect to cumulative voting, every
stockholder of record on the Record Date is entitled, for each share held, to
one vote on each proposal or item that comes before the Annual Meeting. In the
election of directors, each stockholder will be entitled to vote for seven
nominees, and the seven nominees receiving the greatest number of votes will
be elected.
Every stockholder voting for the election of directors may cumulate such
stockholder's votes and give one candidate a number of votes equal to the
number of directors to be elected, multiplied by the number of votes to which
the stockholder's shares are entitled, or distribute the stockholder's votes
on the same principle among as many candidates as the stockholder thinks fit,
provided that votes cannot be cast for more than seven candidates. However, no
stockholder shall be entitled to cumulate votes unless the candidate's name
has been placed in nomination prior to the voting and the stockholder, or any
other stockholder, has given notice at the meeting prior to the voting of the
intention to cumulate the stockholder's votes.
The cost of this solicitation will be borne by the Company. The Company may
reimburse expenses incurred by brokerage firms and other persons representing
beneficial owners of shares in forwarding solicitation material to beneficial
owners. Proxies may be solicited by certain of the Company's directors,
officers and regular employees, without additional compensation, personally or
by telephone, telegram, letter, electronic mail or facsimile.
Stockholders representing an aggregate of 20,863,558 shares of the
Company's Common Stock, including the Class A Common Stock, present or
represented by proxy at the Annual Meeting will constitute a quorum for
purposes of voting.
Deadline for Receipt of Stockholder Proposals
Proposals of stockholders of the Company that are intended to be presented
by such stockholders at the Company's 2000 Annual Meeting of Stockholders must
be received by the Company no later than February 1, 2000 in order that they
may be considered for inclusion in the proxy statement and form of proxy
relating to that meeting.
Pursuant to the Company's Bylaws, stockholders who wish to bring matters or
propose nominees for director at the Company's 2000 annual meeting of
stockholders must provide specified information in writing to the secretary of
the Company not less than 90 days nor more than 120 days prior to the first
anniversary of the 1999 annual meeting (i.e., June 24, 1999), unless such
matters are included in the Company's proxy statement pursuant to Rule 14a-8
under the Securities Exchange Act, as amended. If such stockholders fail to
comply with the foregoing notice provision, then the proxy holders will be
allowed to use their voting discretionary authority when the proposal is
raised at the 2000 Annual Meeting of Stockholders.
2
PROPOSAL NO. 1--ELECTION OF DIRECTORS
At the Annual Meeting of Stockholders, a Board of seven directors is to be
elected. Unless otherwise instructed, the proxyholders will vote all of the
proxies received by them for the Company's seven nominees named below, all of
whom are currently directors of the Company. If any nominee of the Company is
unable or declines to serve as a director at the time of the Annual Meeting,
the proxies will be voted for any nominee who is designated by the current
Board of Directors to fill the vacancy. In the event that additional persons
are nominated for election as directors and if cumulative voting has been
properly invoked, the proxyholders intend to cumulate their votes and to vote
all proxies received by them in accordance with cumulative voting procedures
in such a manner as they believe will ensure the election of as many of the
nominees listed below as possible. In such event, the specific nominees for
whom such votes will be cast will be determined by the proxyholders. It is not
expected that any nominee will be unable or will decline to serve as a
director. Directors Hoffen and Goldberg are nominated to the Company's Board
of Directors pursuant to certain agreements. See "Transactions with
Management." The term of office of each person elected as a director will
continue until the next Annual Meeting of Stockholders and until a successor
has been elected and qualified.
Vote Required
The seven nominees receiving the highest number of affirmative votes of the
shares entitled to be voted shall be elected to the Board of Directors. Votes
withheld from any director are counted for purposes of determining the
presence or absence of a quorum, but have no other legal effect under Delaware
law. The Company believes that both abstentions and broker non-votes should be
counted for purposes of determining whether a quorum is present at the Annual
Meeting. In the absence of controlling precedent to the contrary, the Company
intends to treat abstentions and broker non-votes with respect to the election
of directors in this manner.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" EACH OF THE
NOMINEES LISTED BELOW.
Nominees
The names of and certain information about the nominees of management are
set forth below:
Name of Nominee Age Position/Principal Occupation Director Since
--------------- --- ----------------------------- --------------
James A. Cusumano....... 56 Chairman of the Board and Chief Strategic 1974
Officer of the Company
Richard Fleming (2)..... 74 President and Chief Executive Officer of 1985
Richard Fleming Associates, Inc.
Alan Goldberg........... 44 Managing Director of Morgan Stanley Dean 1997
Witter
Howard I. Hoffen 35 Managing Director of Morgan Stanley Dean 1997
(1)(2)................. Witter
Ricardo B. Levy......... 54 President and Chief Executive Officer of 1974
the Company
Ernest Mario (1)........ 60 Co-Chairman and Chief Executive Officer of 1996
ALZA
John A. Urquhart........ 70 Senior Advisor to the Chairman of Enron 1997
Corp.
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(1) Member of the Compensation Committee
(2) Member of the Audit Committee.
Except as set forth below, each of the nominees has been engaged in the
principal occupation described above during the past five years. There is no
family relationship between any of the directors or executive officers of the
Company.
James A. Cusumano, a founder of Catalytica and a director since 1974,
served as President of the Company from its inception in 1974 until 1985, when
he assumed his current position of Chairman of the Board.
3
Dr. Cusumano served as the Company's Chief Technical Officer from 1985 through
October 29, 1998, when he assumed his current position as Chief Strategic
Officer of Catalytica, Inc. as well as its subsidiary, Catalytica
Pharmaceuticals, Inc. Dr. Cusumano has also served as President of Catalytica
Pharmaceuticals, Inc., a subsidiary of the Company from February 1995 until
October 29, 1998. Dr. Cusumano served as Director of Catalysis Research and
Development at Exxon Corporation's Corporate Research Laboratory from 1967 to
1974. Dr. Cusumano has a Ph.D. in physical chemistry from Rutgers University.
Richard Fleming has been a director of Catalytica since 1985 and also
serves as an advisor and consultant to Catalytica. Mr. Fleming was President
and Chief Executive Officer of the Company from 1985 through August 1991. He
has served as President and Chief Executive Officer of Richard Fleming
Associates, Inc., a consulting firm, since May 1981 and was Vice Chairman for
Membership and Fiscal Affairs of the Chemical Industry Institute of Toxicology
until 1997. From 1969 to 1980, Mr. Fleming served at Air Products and
Chemicals, most recently as Executive Vice President, and from 1980 to 1981,
he served as President and Chief Operating Officer of GAF Corporation, a
multi-industry company. Mr. Fleming is also a director of Catalytica
Pharmaceuticals, Inc. Mr. Fleming has an M.S. in chemical engineering from New
York University.
Alan E. Goldberg has been a director of Catalytica since August 1997. Mr.
Goldberg is Chairman and Chief Executive Officer of Morgan Stanley Dean Witter
Capital Partners, and Head of Morgan Stanley Dean Witter Private Equity. Mr.
Goldberg joined Morgan Stanley in 1979. He was elected Vice President in 1984
and in July 1984, he participated in the formation of the Private Equity
Business. He was promoted to Principal in 1986 and elected Managing Director
in 1988. Mr. Goldberg is Chairman and President of Morgan Stanley Leveraged
Equity Fund I, Inc., is a Managing Director and Director of Morgan Stanley
Leveraged Equity Fund II, Inc., and is a Managing Director and a Director of
Morgan Stanley Capital Partners III, Inc. He also serves as a Director of
Amerin Guaranty, Catalytica, Direct Response Corporation, Enterprise
Reinsurance, Equant N.V., Homeowners Direct, Smurfit-Stone Container
Corporation and LifeTrust America. Mr Goldberg received his B.A. in Philosophy
and Economics in 1975 from New York University. In 1979, he earned an M.B.A.
from New York University and a J.D. from Yeshiva University. Mr. Goldberg
became a member of the New York Bar in 1979.
Howard I. Hoffen has been a director of Catalytica since August 1997. Mr.
Hoffen is a Managing Director of MSDW Capital Partners IV, Inc. and Morgan
Stanley Dean Witter. He joined Morgan Stanley in 1985 and Private Equity in
1986. He is a Managing Director of Morgan Stanley Capital Partners, Inc. and
of MSLEF II, Inc. Mr. Hoffen is a Director of Amerin Corporation, Somerset
Energy and Union Drilling. Mr. Hoffen has a B.S. from Columbia University and
an M.B.A. from the Harvard Business School.
Ricardo B. Levy, a founder of Catalytica and a director since 1974, served
as Chief Operating Officer from the Company's inception in 1974 until August
1991, when he was promoted to his current position of President and Chief
Executive Officer. Mr. Levy is also a director of Catalytica Pharmaceuticals,
Inc. and Catalytica Combustion Systems, Inc. Prior to founding Catalytica, Dr.
Levy was a founding member of Exxon Corporation's Chemical Physics Research
Team. Dr. Levy is an alumnus of Princeton and Harvard University's Executive
Management Program and has a Ph.D. in chemical engineering from Stanford
University.
Ernest Mario has been a director of Catalytica since 1996. Dr. Mario is Co-
Chairman of ALZA and has been Chief Executive Officer of ALZA since August
1993. Prior to joining ALZA, Dr. Mario was Deputy Chairman and Chief Executive
Officer of Glaxo Holdings p.l.c., and has served in a variety of executive
positions with Glaxo Inc. beginning in 1986. From 1977 to 1984, he held
various executive level positions with Squibb Corporation, ending as President
and Chief Executive Officer of Squibb Medical Products. Dr. Mario has a Ph.D.
and M.S. in physical sciences from the University of Rhode Island, and a B.S.
in pharmacy from Rutgers University.
John A. Urquhart has been a director of Catalytica, Inc. since April 1997
and has served as a special board advisor to Catalytica Combustion Systems,
Inc., since July 1995. He currently serves as Senior Advisor to the Chairman
of Enron Corporation., a global integrated natural gas company, and has also
served as the Vice Chairman of Enron Corporation since 1990. Mr. Urquhart also
serves on a number of other corporate Boards of Directors, including Enron
Corp., Aquarion Company, Hubbell Incorporated, TECO Energy, Inc., Weir Group
4
PLC, and Tampa Electric Co. He previously served as the Senior Vice President
of Industrial and Power Systems at General Electric. In addition, he served
five years as a Committee Member on the Board of US Council for Energy
Awareness.
Security Ownership of Principal Stockholders and Management
The following table sets forth, as of April 15, 1999, certain information
with respect to the beneficial ownership of the Company's Common Stock by (i)
each person known by the Company to own beneficially more than five percent of
the outstanding shares of Common Stock, (ii) each director of the Company,
(iii) each of the executive officers named in the table under "Executive
Compensation--Summary Compensation Table" and (iv) all directors and executive
officers as a group. Percentage beneficial ownership is based on 41,725,847
shares of common stock, which includes 13,270,000 shares of Class A common
stock, that are outstanding as of April 15, 1999. Except as otherwise
indicated in the footnotes to this table, the persons and entities named in
the table have sole voting and investment power with respect to all shares
beneficially owned, subject to community property laws, where applicable.
Shares of Common
Stock
Beneficially Owned
---------------------
Name of Person or Percentage
Identity of Group Number Ownership
----------------- ---------- ----------
Franklin Resources,
Inc..................... 2,579,959 6.18%
777 Mariners Island
Blvd.
San Mateo, California
94404
Morgan Stanley Capital
Partners III, L.P. (1).. 13,270,000 31.80%
Alan Goldberg/Howard
Hoffen
1221 Avenue of the
Americas
New York, New York 10020
Ricardo B. Levy (2)...... 837,316 2.00%
c/o Catalytica, Inc.
430 Ferguson Drive
Mountain View,
California 94043
James A. Cusumano (3).... 753,090 1.80%
c/o Catalytica, Inc.
430 Ferguson Drive
Mountain View,
California 94043
Richard Fleming (4)...... 523,740 1.26%
Ralph Dalla Betta (5).... 435,872 1.04%
Lawrence W. Briscoe (6).. 86,496 *
Ernest Mario (7)......... 19,222 *
John A. Urquhart (8)..... 19,222 *
John M. Hart (9)......... 6,667 *
All officers and
directors as a group (10
persons) (10)........... 15,951,625 38.00%
- --------
(1) Represents 13,270,000 voting shares of Class A stock held by Morgan
Stanley Capital Partners III, L.P. and two affiliated funds. Excludes
11,730,000 non-voting shares of Class B stock also held by Morgan
Stanley. Mr. Goldberg and Mr. Hoffen are Managing Directors of Morgan
Stanley Dean Witter. Mr. Goldberg and Mr. Hoffen disclaim beneficial
ownership of the shares owned by Morgan Stanley.
(2) Includes shares held by the following trusts, of which Dr. Levy serves as
trustee: (i) 680,877 shares held by the Levy Family Trust; (ii) 37,348
shares held by the Polly Jean Cusumano Trust; and (iii) 35,799 shares
held by the Doreen Ann Nelson Trust. Dr. Levy disclaims beneficial
ownership for the shares owned by the Polly Jean Cusumano Trust and the
Doreen Ann Nelson Trust.
5
(3) Includes shares held by the following trusts, of which Dr. Cusumano
serves as trustee: (i) 488,232 shares held by the Cusumano Family Trust;
(ii) 114,028 shares held by the Brian K. Levy Trust; and (iii) 115,350
shares held by the Tamara Levy Trust. Dr. Cusumano disclaims beneficial
ownership of the shares owned by the Brian K. Levy Trust and the Tamara
Levy Trust.
(4) Includes 5,333 shares issuable upon exercise of options held by Mr.
Fleming, which options are exercisable within 60 days of April 15, 1999.
(5) Includes 13,650 shares issuable upon exercise of options held by Dr.
Dalla Betta, which options are exercisable within 60 days of April 15,
1999.
(6) Includes 66,496 shares issuable upon exercise of options held by Mr.
Briscoe, which options are exercisable within 60 days of April 15, 1999.
(7) Includes 19,222 shares issuable upon exercise of options held by Dr.
Mario, which options are exercisable within 60 days of April 15, 1999.
(8) Includes 19,222 shares issuable upon exercise of options held by Mr.
Urquhart, which options are exercisable within 60 days of April 15, 1999.
(9) Includes 6,667 shares issuable upon exercise of options held by Mr. Hart,
which options are exercisable within 60 days of April 15, 1999.
(10) Includes 249,362 shares issuable upon exercise of options held by three
directors and four executive officers, which options are exercisable
within 60 days of April 15, 1999.
Board Meetings and Committees
The Board of Directors of the Company held a total of four meetings during
the year ended December 31, 1998.
The current members of the Audit Committee are Richard Fleming and Howard
I. Hoffen. The Audit Committee met twice during the year ended December 31,
1998. This Committee recommends engagement of the Company's independent public
accountants and is primarily responsible for approving the services performed
by such accountants and for reviewing and evaluating the Company's accounting
principles and its system of internal accounting controls.
The Compensation Committee, which during the year ended December 31, 1998,
consisted of Directors Hoffen and Mario, met twice during the last fiscal
year. This Committee establishes the salary and incentive compensation of the
executive officers of the Company and the general compensation policies for
all employees. See "Report of the Compensation Committee of the Board of
Directors on Executive Compensation."
The Nominating Committee, which for the year ended December 31, 1998,
consisted of Directors Fleming and Levy, did not meet during the past fiscal
year. The Nominating Committee reviews candidates and makes recommendations
for nominees to serve on the Board of Directors. If there are vacancies on the
Board of Directors, the Nominating Committee will consider nominees
recommended by stockholders. Candidates for consideration by the Nominating
Committee should be submitted to the attention of Dr. Levy at the Company by
no later than February 24, 2000. Any stockholder wishing to make a
recommendation to the Nominating Committee must submit the candidate's resume,
together with a statement describing why the candidate should be considered by
the Nominating Committee.
During the fiscal year ended December 31, 1998, no Director attended fewer
than 75% of the aggregate of all meetings of the Board of Directors and any
committees on which such Director served except that Alan Goldberg attended
only 50% of the meetings held during the period for which he served as a
director during fiscal 1999.
Director Compensation
Directors who are not officers of the Company, with the exception of Mr.
Hoffen and Mr. Goldberg, each receive an annual retainer for their services in
the amount of $20,000 per year, plus reimbursement of expenses. Mr. Fleming,
Dr. Mario and Mr. Urquhart each serve as Director for one of the subsidiaries
of the Company, as
6
well, and receive similar compensation for that service. During the fiscal
year ended December 31, 1998, Mr. Fleming, Dr. Mario and Mr. Urquhart each
received $40,000 in connection with their services as directors of the Company
and its subsidiaries.
During the year ended December 31, 1998, the Company paid Richard Fleming
Associates, a consulting organization of which Richard Fleming, a Director of
the Company, is the President and Chief Executive Officer, approximately
$260,250. These payments were for services provided to the Company by Mr.
Fleming in his capacity as a consultant to the Company at a rate of $20,000
per month from January through December. Moreover, additional consulting fees
were paid for the period of July through September in the amount of $20,250 in
conjunction with further assistance provided to the Company on various
development programs and in identifying and investigating new business
opportunities.
During the fiscal year ended December 31, 1998, Mr. Fleming, Dr. Mario and
Mr. Urquhart each received options to purchase 4,000 shares of Common Stock at
an exercise price of $11.875. Mr. Fleming's, Dr. Mario's and Mr. Urquhart's
options become exercisable at the rate of one-twelfth of the shares subject to
the option at the end of each month that the director remains on the Board
following the date of grant such that the options become fully vested within
one year of the date of grant.
Certain directors who served on the board of directors of a subsidiary or
acted as a consultant to that subsidiary received stock options during the
fiscal year ended December 31, 1998. Mr. Fleming and Dr. Mario each received
options to purchase 5,000 shares of Catalytica Pharmaceuticals, Inc. at an
exercise price of $16.50. Mr. Urquhart received options to purchase 4,000
shares of Catalytica Combustion Systems, Inc. at an exercise prices of $12.00.
7
Report of the Compensation Committee of the Board of Directors
on Executive Compensation
The following is the Report of the Compensation Committee of the Company,
describing the compensation policies and rationale applicable to the Company's
executive officers with respect to the compensation earned by such executive
officers for the year ended December 31, 1998.
The Compensation Committee of the Board of Directors of Catalytica
establishes the general compensation policies of the Company as well as the
compensation plans and specific compensation levels for executive officers.
The Compensation Committee during the year ended December 31, 1998 consisted
of two independent, non-employee Directors, Howard Hoffen and Ernest Mario.
The Company's compensation philosophy is to provide a total compensation
package that will enable the Company to attract and retain top executive
talent, while emphasizing the linkage of compensation to corporate, business
and individual performance.
The compensation program for the executive officers is identical to that
for all employees and consists of base salary, stock options and bonus. Other
benefits, such as health and welfare insurance, a defined contribution 401k
pension plan, and an employee stock purchase plan, are also available to all
eligible employees.
The Compensation Committee establishes the compensation of the Chief
Executive Officer and the other executive officers based on several criteria
related to competitive compensation levels, the performance of the individual
and the company's performance relative to plan.
Competitive Compensation. In order to establish competitive compensation, a
market basket of companies from both pharmaceuticals and combustion-related
industries was created and the base salaries, bonus opportunities and stock
option awards for their top executives were analyzed. The intent of the
Compensation Committee is to set the total compensation for the Company's
executive officers at approximately the 50th percentile of the market basket
of companies. Any such cross-company comparisons require some adjustments to
reflect varying levels of specific responsibilities, complexity of the
business, its ultimate potential and the background and training of the
incumbent. Such considerations set the base level of compensation assuming an
acceptable level of performance. Performance variations on an individual and
business level are then applied.
Individual Performance. Personal performance is appraised against a budget
and business plan laid out at the beginning of each year. The plan includes a
set of personal objectives regarding such things as budgetary control,
achieving milestones in the Company's development programs, successful
execution and implementation of collaborative agreements or contracts,
achieving planned revenues and other criteria. Assessment of performance in
these regards determines the annual increase in base salary and also
determines, in part, the level of cash bonus and long term incentive
compensation. Bonus and options are also affected by corporate performance.
Corporate Performance. Achievement of corporate objectives, designed to
enhance stockholder value, is a key factor in establishing stock option awards
and bonus. Typical corporate objectives would include profitable commercial
operation, sound management of all balance sheet items, appropriate balancing
of new opportunities and risks and the creation of profitable opportunities
for future business activity. The bonus plan for executives is based on the
achievement of a combination of financial and non-financial goals. The
financial portion of the bonus does not pay out below achievement of 95% of
the planned goal; it does, however, provide for over-achievement of the
financial objectives. Overall personal performance for 1998 was also taken
into consideration in the final bonus amount.
In determining the Chief Executive Officer's compensation, the Committee
considered all of the above factors in relation to specific corporate plan and
CEO objectives and accomplishments in 1998, as well as progress toward longer
range Company goals under his leadership. The salary increase of 6.1% to
$350,000 was
8
effective March 1, 1999, the bonus of $315,000 for the 1998 calendar year, and
the option award of 34,500 shares on March 1, 1999 at an exercise price of
$14.25 per share, were all within the general guidelines we are following and
are consistent with the 1998 performance of the Company. In addition, the
Chief Executive Officer received Catalytica Combustion Systems, Inc. stock
options of 4,500 at an exercise price of $21.60 per share.
The Company intends to take the necessary steps to comply with the $1
million compensation deduction limitation pursuant to Section 162(m) of the
Omnibus Reconciliation Act of 1993. In addition, the non-equity-based
compensation paid to the Named Officers in fiscal 1996, 1997 and 1998 did not
exceed $1 million for any individual.
COMPENSATION COMMITTEE
Howard I. Hoffen
Ernest Mario
9
Performance Graph
The following is a graph comparing the cumulative total return to
stockholders, calculated on a dividend reinvested basis, from December 31, 1993
through December 31, 1998, to the cumulative total return over such period of
(i) Nasdaq U.S. Stock Market Index and (ii) Standard and Poor Chemical
Specialty Index. The graph assumes that $100 was invested in the Company's
Common Stock at the initial public offering price, the Nasdaq U.S. Stock
Market, and in the Standard and Poor Chemical Specialty Index on December 31,
1993. Data for the Standard and Poor Chemical Specialty Index was unavailable
for dates in the middle of the month. The information contained in the
performance graph shall not be deemed to be "soliciting material" or to be
"filed" with the SEC, nor shall such information be incorporated by reference
into any future filing under the Securities Act or the Exchange Act, except to
the extent that the Company specifically incorporates it by reference into such
filing.
[PERFORMANCE GRAPH APPEARS HERE]
1998 Baseline
12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
Data Points -------- -------- -------- -------- -------- --------
Catalytica, Inc......... $ 7.75 $ 2.88 $ 4.38 $ 4.00 $ 11.88 $ 18.00
NASDAQ US Stock Market.. 249.861 244.244 345.448 424.800 520.459 733.392
S&P Specialty Chemicals
Index.................. 259.644 222.576 287.943 291.167 354.117 295.727
Conversion to Index 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
Point -------- -------- -------- -------- -------- --------
Catalytica, Inc......... 100 37 57 52 153 232
NASDAQ US Stock Market.. 100 98 138 170 208 294
S&P Specialty Chemicals
Index.................. 100 86 111 112 136 114
- --------
(1) Stock closing price on last business day of quarter
(2) Index Point = Data Point/Baseline X 100
10
Executive Compensation
The following table sets forth the compensation paid by the Company with
respect to the years ended December 31, 1996, December 31, 1997, and December
31, 1998, to the Chief Executive Officer and each of the other four most
highly compensated executive officers (collectively, the "Named Officers") of
the Company:
Summary Compensation Table
Long-Term
Compensation
Awards
------------
Annual
Compensation
------------------ Securities
Name and Principal Fiscal Underlying All Other
Position Year Salary($) Bonus($) Options(#) Compensation($)
------------------ ------ --------- -------- ------------ ---------------
Ricardo B. Levy......... 1998 $330,000 $315,000 38,000 $33,450(1)
President and 1997 $229,000 $ 76,000 60,000 $17,064(2)
Chief Executive Officer 1996 $218,000 $ 7,000 40,000 $17,264(3)
James A. Cusumano....... 1998 $300,000 $245,000 3,000 $29,547(1)
Chairman of the Board
and 1997 $210,000 $ 64,000 60,000 $16,052(2)
Chief Strategic Officer 1996 $206,000 $ 4,140 10,000 $15,891(3)
Lawrence W. Briscoe..... 1998 $250,000 $178,000 19,000 $ 4,000(1)
Vice President, Finance
and 1997 $198,000 $ 54,000 100,000 $ 4,000(2)
Administration, and 1996 $188,000 $ 4,500 35,000 $ 4,000(3)
Chief Financial Officer
Ralph A. Dalla Betta.... 1998 $166,000 $ 16,000 1,500 $11,680(1)
Vice President and 1997 $162,000 $ 3,000 -- $10,808(2)
Chief Scientist 1996 $152,000 $ 1,000 10,000 $10,640(3)
John M. Hart(4)......... 1998 $ 85,432 $ 30,000 40,000 --
Vice President, 1997 -- -- -- --
Human Resources 1996 -- -- -- --
- --------
(1) Includes (i) $4,000 contributed by the Company to each Named Officer's
account under the defined contribution pension plan and (ii) the following
amounts contributed by the Company to the Named Officer's account under
the Supplemental Severance Benefits Plan: Dr. Levy $29,450; Dr. Cusumano
$25,547; and Dr. Dalla Betta $7,680.
(2) Includes (i) $4,000 contributed by the Company to each Named Officer's
account under the defined contribution pension plan and (ii) the following
amounts contributed by the Company to the Named Officer's account under
the Supplemental Severance Benefits Plan: Dr. Levy $13,064; Dr. Cusumano
$12,052; and Dr. Dalla Betta $6,808.
(3) Includes (i) $4,000 contributed by the Company to each Named Officer's
account under the defined contribution pension plan and (ii) the following
amounts contributed by the Company to the Named Officer's account under
the Supplemental Severance Benefits Plan: Dr. Levy $13,264; Dr. Cusumano
$11,891; and Dr. Dalla Betta $6,640.
(4) Mr. Hart joined the Company on September 3, 1998. On an annualized basis,
Mr. Hart's salary and bonus for 1998 would have been $220,000.
11
The Subsidiaries' Summary Stock Option Table
The following table sets forth the stock options granted in each of the
company subsidiaries with respect to the years ended December 31, 1996,
December 31, 1997 and December 31, 1998 to the Company's Chief Executive
Officer and the Named Officers of the Company.
Long-Term Compensation Awards
------------------------------------------------------
Securities Securities Securities
Name and Principal Fiscal Underlying Underlying Underlying
Position Year CPI Options(#)(1) CCSI Options(#)(2) CAT Options(#)(3)
------------------ ------ ----------------- ------------------ -----------------
Ricardo B. Levy......... 1998 2,000 2,400 --
President and 1997 86,000 20,500 --
Chief Executive Officer 1996 2,000 4,500 3,000
James A. Cusumano....... 1998 20,000 1,500 --
Chairman of the Board
and 1997 80,000 -- --
Chief Strategic Officer 1996 14,000 4,000 3,000
Lawrence W. Briscoe..... 1998 5,000 1,200 --
Vice President, Finance
and 1997 30,000 -- --
Administration, and 1996 1,600 4,000 3,000
Chief Financial Officer
Ralph A. Dalla Betta.... 1998 700 11,750 --
Vice President and 1997 -- -- --
Chief Scientist 1996 -- 25,000 --
John M. Hart............ 1998 15,000 15,000 --
Vice President, 1997 -- -- --
Human Resources 1996 -- -- --
- --------
(1) Represents long term compensation awards by Catalytica Pharmaceuticals,
Inc. (CPI)
(2) Represents long term compensation awards by Catalytica Combustion Systems,
Inc. (CCSI)
(3) Represents long term compensation awards by Catalytica Advanced
Technologies, Inc. (CAT)
12
Company Option Grants in Last Fiscal Year
The following table sets forth the stock options granted during the fiscal
year ended December 31, 1998 to each of the Named Officers:
Individual Grants(1)
-----------------------------------------
Potential
Realizable
Value at Assumed
Number of % of Total Annual Rates of
Securities Options Stock Price
Underlying Granted to Appreciation for
Options Employees Exercise Option Term(3)
Granted in Fiscal Price Expiration -----------------
Name (#)(1) Year(2) ($/sh.) Date 5%($) 10%($)
---- ---------- ---------- -------- ---------- -------- --------
Ricardo B. Levy......... 38,000 6.7% $12.81 4/1/08 $306,133 $775,802
James A. Cusumano....... 3,000 0.5% $12.81 4/1/08 $ 24,168 $ 61,248
Lawrence W. Briscoe..... 19,000 3.3% $12.81 4/1/08 $153,067 $387,901
Ralph A. Dalla Betta.... 1,500 0.3% $12.81 4/1/08 $ 12,084 $ 30,624
John M. Hart............ 40,000 7.0% $10.63 9/3/08 $267,406 $677,659
- --------
(1) These options were granted under the Company's Stock Option Plan (the
"Option Plan"). Options granted under the Option Plan generally have a
ten-year term. Generally, 12.5% of the grant becomes exercisable six
months after the date of grant. The balance of the grant then vests
monthly, with full exercisability occurring on the fourth anniversary
date. The per share exercise price is the Nasdaq closing price for the
Company's Common Stock on the date of grant. Unless otherwise determined
by the Board of Directors, the Option Plan provides for the automatic
acceleration of vesting of all outstanding options (such that they become
exercisable in full) in the event of a "change in control," as defined in
the Option Plan.
(2) Based on options to purchase an aggregate of 570,785 shares granted to
employees during 1998.
(3) Potential realizable value is based on an assumption that the stock price
appreciates at the annual rate shown (compounded annually) from the date
of grant until the end of the ten-year option term. These numbers are
calculated based on the requirements promulgated by the SEC and do not
reflect the Company's estimate of future stock price.
13
Subsidiary Option Grants in Last Fiscal Year
The following table sets forth the stock options granted by the Company's
subsidiaries during the fiscal year ended December 31, 1998 to each of the
Named Officers:
Individual Grants(1)
------------------------------------------------------
Potential
Realizable
Value at Assumed
Number of % of Total Annual Rates of
Securities Options Stock Price
Underlying Granted to Appreciation for
Options Employees Exercise Option Term(3)
Granted in Fiscal Price Expiration -----------------
Name Subsidiaries (#)(1) Year(2) ($/sh.) Date 5%($) 10%($)
---- ------------ ---------- ---------- -------- ---------- -------- --------
Ricardo B. Levy......... CPI 2,000 0.4% $16.50 4/1/08 $ 20,754 $ 52,594
CCSI 2,400 1.3% $12.00 4/1/08 $ 18,112 $ 45,900
James A. Cusumano....... CPI 20,000 4.1% $16.50 4/1/08 $207,535 $525,935
CCSI 1,500 0.8% $12.00 4/1/08 $ 11,320 $ 28,687
Lawrence W. Briscoe..... CPI 5,000 1.0% $16.50 4/1/08 $ 51,884 $131,484
CCSI 1,200 0.6% $12.00 4/1/08 $ 9,056 $ 22,950
Ralph A. Dalla Betta.... CPI 700 0.1% $16.50 4/1/08 $ 7,264 $ 18,408
CCSI 11,000 5.9% $12.00 4/1/08 $ 83,014 $210,374
CCSI 750 0.4% $ 5.60 1/30/08 $ 2,641 $ 6,694
John M. Hart............ CPI 15,000 3.1% $22.00 9/3/08 $207,535 $525,935
CCSI 15,000 8.0% $14.50 9/3/08 $136,785 $346,639
- --------
(1) These options were granted under each of Catalytica Pharmaceuticals (CPI)
and Catalytica Combustion Systems, Inc. (CCSI) Stock Option Plans (the
"Subsidiary Option Plans"). Options granted under the Subsidiaries Option
Plans generally have a ten-year term and vest ratably over a four-year
period. The per share exercise price is based on the fair market value of
the subsidiary's common stock on the date of grant, as determined by the
subsidiary's Board of Directors. Unless otherwise determined by the Board
of Directors, the Subsidiary Option Plans provide for the automatic
acceleration of vesting of all outstanding options (such that they become
exercisable in full) in the event of a "change in control," as defined in
the Subsidiary Option Plans.
(2) The percent of total options granted to employees during the fiscal year
is based on the total number of options issued to employees at each
particular subsidiary and is broken down accordingly. Particularly, the
percent of total options granted to employees of Catalytica
Pharmaceuticals during 1998 is based on options to purchase an aggregate
of 492,255 shares and the percent of total options granted to employees of
Catalytica Combustion Systems during 1998 is based on options to purchase
an aggregate of 187,950 shares.
(3) Potential realizable value is based on an assumption that the stock price
appreciates at the annual rate shown (compounded annually) from the date
of grant until the end of a ten-year option term. These numbers are
calculated based on the requirements promulgated by the SEC and do not
reflect the Company's estimate of future stock price.
14
Company Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-End
Values
The following table sets forth for each of the Named Officers, information
with respect to stock options exercised during the fiscal year ended December
31, 1998 and stock options held at fiscal year end:
Number of Securities
Underlying Unexercised Value of Unexercised
Options at In-the-Money Options
Shares Fiscal Year End(#) at Fiscal Year End ($)(2)
Acquired on Value ------------------------- -------------------------
Name Exercise(#) Realized($)(1) Exercisable Unexercisable Exercisable Unexercisable
---- ----------- -------------- ----------- ------------- ----------- -------------
Ricardo B. Levy......... -- -- 51,999 137,334 $581,578 $1,355,450
James A. Cusumano....... -- -- 24,333 64,667 $234,220 $ 572,300
Lawrence W. Briscoe..... 33,000 $372,375 52,851 112,249 $673,608 $1,390,787
Ralph A. Dalla Betta.... -- -- 7,871 15,205 $109,361 $ 206,504
John M. Hart............ -- -- -- 40,000 -- $ 295,000
- --------
(1) Market value of underlying securities on the exercise date minus the
exercise price.
(2) Market value of underlying securities at December 31, 1998 minus the
exercise price.
Subsidiary Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-End
Values
The following table sets forth for each of the Named Officers, information
with respect to subsidiary stock options exercised during the fiscal year
ended December 31, 1998 and stock options held at fiscal year end:
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
Options at Fiscal Year End(#) at Fiscal Year End ($)(2)
----------------------------- -----------------------------
Name Subsidiaries Exercisable (1) Unexercisable Exercisable (1) Unexercisable
---- ------------ --------------- ------------- --------------- -------------
Ricardo B. Levy......... CPI 40,167 61,833 $ 644,475 $ 883,325
CCSI 34,004 18,396 $ 461,367 $ 206,583
CAT -- 16,000 -- --
James A. Cusumano....... CPI 154,292 79,708 $2,840,413 $1,011,787
CCSI 20,292 3,208 $ 283,214 $ 30,736
CAT -- 12,000 -- --
Lawrence W. Briscoe..... CPI 41,592 5,008 $ 768,490 $ 30,890
CCSI 20,731 2,969 $ 289,990 $ 30,260
CAT -- 14,000 -- --
Ralph A. Dalla Betta.... CPI 117 583 $ 410 $ 2,040
CCSI 91,125 20,625 $1,259,696 $ 184,479
CAT -- -- -- --
John M. Hart............ CPI -- 15,000 -- --
CCSI -- 15,000 -- --
CAT -- -- -- --
- --------
(1) Subsidiaries Option Plans, except for Advanced Technologies, Inc. provide
for stock option to be exercisable effective in 1998.
(2) Market value of underlying securities at December 31, 1998 minus the
exercise price.
15
Compensation Committee Interlocks and Insider Participation
The Compensation Committee consisted of Directors Hoffen and Mario in 1998.
No executive officer of the Company serves as a member of the board of
directors or on the compensation committee of any entity that has an executive
officer serving as a member of the Company's Board of Directors or
Compensation Committee.
During the year ended December 31, 1998, the Company paid Richard Fleming
Associates, a consulting organization of which Richard Fleming, a Director of
the Company, is the President and Chief Executive Officer, approximately
$260,250. These payments were for services provided to the Company by Mr.
Fleming in his capacity as a consultant to the Company at a rate of $20,000
from January through December 1998 plus expenses and additional consulting for
the months of July through September in the amount of $20,250. Mr. Fleming
provided assistance to the Company on various development programs and in
identifying and investigating new business opportunities.
16
Transactions With Management
Morgan Stanley Capital Partners III, Inc. In June 1997, the Company entered
into a Stock Purchase Agreement (the "Investment Agreement") with Morgan
Stanley Capital Partners III, Inc. and two other affiliated equity funds (the
"Morgan Stanley Equity Funds"), pursuant to which the Company sold 30,000,000
shares of Class A Common Stock and Class B Common Stock to the Morgan Stanley
Equity Funds for an aggregate purchase price of $120 million. The proceeds
were used to fund the acquisition of the pharmaceutical manufacturing facility
in Greenville, North Carolina. The Morgan Stanley Equity Funds are entitled to
certain registration rights, which came into effect on July 1, 1998, and
certain rights of repurchase held by the Morgan Stanley Equity Funds, which
will come into effect on July 1, 2005.
The Investment Agreement also provides that the Morgan Stanley Equity Funds
are entitled to elect (i) 3 persons to the Company's Board of Directors for so
long as such funds own at least 30% of the outstanding Common Stock of the
Company, (ii) 2 persons to the Company's Board of Directors for so long as
such funds own between 10% and 30% of the outstanding Common Stock of the
Company or (iii) 1 person to the Company's Board of Directors for so long as
they own between 6% and 10% of the outstanding Common Stock of the Company.
(Common Stock assumes conversion of the Class A and Class B Common Stock into
Common Stock of the Company).
In August 1997, pursuant to the Investment Agreement, the Company amended
its bylaws to increase the size of the Board of Directors from 7 to 9 and
appointed Messrs. Howard Hoffen and Alan Goldberg to the Board of Directors.
Messrs. Hoffen and Goldberg were subsequently elected as directors to the
Company's Board of Directors in connection with the 1998 Annual Meeting of
Stockholders. In April 1999, the Board of Directors amended its bylaws to
decrease the size of the Board of Directors from 9 to 7.
With the proceeds received from exercise of warrants that the Company
distributed in August 1997 to its stockholders in connection with the
financing of the acquisition of the pharmaceutical manufacturing facility in
Greenville, North Carolina, the Company redeemed in October 1997 an aggregate
of 5,000,000 shares of Class B Common Stock held by the Morgan Stanley Equity
Funds at a redemption price of $4.75 per share.
On April 21, 1999 the Company entered into Change of Control Severance
Agreements with the following members of Management: Ricardo Levy, James
Cusumano, Lawrence Briscoe and John Hart. The Change of Control Severance
Agreements provide for the following benefits in the event an officer is
involuntarily terminated (as defined in the Change of Control Severance
Agreement): (1) 200 percent of the officer's annual compensation plus a pro
rata payment of their projected bonus, (2) continued employee benefits for up
to 2 years from the date of an Involuntary Termination and (3) accelerated
vesting of all of the officers options.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended ("Exchange
Act") requires the Company's executive officers, directors, and persons who
own more than 10% of a registered class of the Company's equity securities to
file reports of ownership and changes in ownership with the Securities and
Exchange Commission ("SEC") and the National Association of Securities
Dealers, Inc. Executive Officers, directors and greater than ten percent
stockholders are required by SEC regulation to furnish the Company with copies
of all Section 16(a) forms they file. Based solely in its review of the copies
of such forms received by it, or written representation from certain reporting
persons, the Company believes that, during fiscal year 1998, all reporting
persons complied with Section 16(a) filing requirements applicable to them
except that one Form 4 filed by Dr. Ricardo Levy was not timely with respect
to one transaction, which involved a sale of Common Stock.
17
PROPOSAL NO. 2--RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Company has selected Ernst & Young, LLP independent accountants, to
audit the financial statements of the Company for the current fiscal year
ending December 31, 1999. Ernst & Young, LLP has audited the Company's
financial statements since the fiscal year ended December 31, 1982. A
representative of Ernst & Young, LLP is expected to be available at the Annual
Meeting to make a statement if such representative desires to do so and to
respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS VOTING "FOR" APPROVAL AND RATIFICATION OF
THE SELECTION OF ERNST & YOUNG, LLP IN THE EVENT THAT A MAJORITY OF THE VOTES
CAST AT THE MEETING ARE CAST AGAINST SUCH RATIFICATION, THE BOARD OF DIRECTORS
WILL RECONSIDER ITS SELECTION.
OTHER MATTERS
The Company does not currently intend to bring before the Annual Meeting
any matters other than those set forth herein, and has no present knowledge
that any other matters will or may be brought before the meeting by others.
However, if any other matters properly come before the meeting, it is the
intention of the persons named in the enclosed form of proxy to vote the
proxies in accordance with their judgment.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ LAWRENCE W. BRISCOE
Lawrence W. Briscoe
Vice President, Finance and
Administration,
and Chief Financial Officer
Mountain View, California
April 30, 1999
18
- --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
P
R CATALYTICA, INC.
O
X 1999 ANNUAL MEETING OF STOCKHOLDERS
Y
June 24, 1999
The undersigned stockholder of Catalytica, Inc., a Delaware corporation,
hereby acknowledges receipt of the Notice of Annual Meeting of Stockholders and
Proxy Statement, each dated April 30, 1999, and hereby appoints Ricardo B. Levy
and Lawrence W. Briscoe, and each of them, proxies and attorneys-in-fact, with
full power to each of substitution, on behalf and in the name of the
undersigned, to represent the undersigned at the 1999 Annual Meeting of
Stockholders of Catalytica, Inc., to be held on Thursday, June 24, 1999, at
10:00 a.m., Pacific Daylight Savings Time, in the Mandarin Oriental Hotel
located at 222 Sansome Street, San Francisco, California 94101 and at any
continuation(s) or adjournment(s) thereof, and to vote all shares of Common
Stock that the undersigned would be entitled to vote if then and there
personally present, on the matters set forth on the reverse side and, in their
discretion, upon such other matter or matters that may properly come before the
meeting and any adjournment(s) thereof.
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS
INDICATED, WILL BE VOTED (1) FOR THE ELECTION OF DIRECTORS, (2) FOR THE
RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS AND
(3) AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER MATTERS AS MAY PROPERLY COME
BEFORE THE MEETING.
- --------------------------------------------------------------------------------
COMMENTS/ADDRESS CHANGE: PLEASE MARK COMMENT/ADDRESS BOX ON THE REVERSE SIDE
(Continued and to be signed on reverse side)
- --------------------------------------------------------------------------------
(FOLD AND DETACH HERE)
[LOGO OF CATALYTICA]
ANNUAL MEETING OF STOCKHOLDERS
Thursday, June 24, 1999
10:00 a.m.
Mandarin Oriental Hotel
333 Battery Street
San Francisco California 94101
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS VOTING "FOR" EACH OF THE FOLLOWING PROPOSALS.
Please Mark [X]
your votes as
indicated in
this example
FOR all nominees WITHHOLD
listed (except as for all
indicated) nominees
1. ELECTION OF DIRECTORS [_] [_]
IF YOU WISH TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THAT NOMINEE'S NAME IN THE LIST BELOW:
James A. Cusumano, Richard Fleming, Alan Goldberg, Howard Hoffen,
Ricardo B. Levy, Ernest Mario and John A. Urquhart
FOR AGAINST ABSTAIN
2. Proposal to approve and ratify the appointment of Ernst & Young, LLP [_] [_] [_]
as the independent auditors of the Company for the fiscal year
ending December 31, 1999.
3. The proxies are authorized to vote in their discretion upon such other [_] [_] [_]
business as may properly come before the meeting.
I PLAN TO ATTEND THE MEETING [_]
COMMENTS/ADDRESS CHANGE [_]
Please mark this if you have written
comments/address on the reverse side
Signature_____________________ Signature___________________ Date________________
(This Proxy should be marked, dated, signed by the stockholder(s) exactly as his
or her name appears hereon, and returned promptly in the enclosed envelope.
Persons signing in a fiduciary capacity should so indicate. If shares are held
by joint tenants or as community property, both should sign.)
- --------------------------------------------------------------------------------
(FOLD AND DETACH HERE)