SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO.)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for use of the
[X] Definitive Proxy Statement Commission only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2)).
[ ] Soliciting Material Pursuant toss.240.14a-11(c) orss.240.14a-12
PLASMA-THERM, INC.
------------------------------------------------
(Name of Registrant as Specified in its Charter)
PLASMA-THERM, INC.
--------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
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:
- --------------------------------------------------------------------------------
(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 previously paid 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:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
[PLASMA-THERM LOGO]
PLASMA-TERHM, INC.
10050 16TH STREET NORTH
ST PETERSBURG, FLORIDA 33176/bullet/USA
-----------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 9, 1998
----------------------
Notice is hereby given that the Annual Meeting of Stockholders of
PLASMA-THERM, INC. (the "Company") will be held at the offices of the Company,
10050 16th Street North, St. Petersburg, Florida, on Tuesday, June 9, 1998 at
10:00 A.M., local time, for the following purposes:
1. To consider and approve an amendment to the Company's Articles of
Incorporation ("Articles of Incorporation") and Bylaws of the Company ("Bylaws")
to provide for the classification of the Board of Directors into three classes.
2. To consider and approve an amendment to the Articles of Incorporation
and Bylaws to eliminate the shareholders' ability to fill vacancies on the
Board.
3. To consider and approve an amendment to the Articles of Incorporation
and Bylaws to increase to 66-2/3% the threshold of shareholder votes required
for shareholders to remove a director for cause.
4. To consider and approve an amendment to the Articles of Incorporation
and Bylaws to increase to 50% the threshold of shareholder votes required for
shareholders to call a special shareholders' meeting.
5. To consider and approve an amendment to the Articles of Incorporation
and Bylaws to increase to 66-2/3% the threshold of shareholder votes required
for shareholders to amend the Bylaws.
6. To elect four persons to serve as Directors of the Company.
7. To consider and act upon any matters incidental to the foregoing
purposes and to transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has selected the close of business on Wednesday,
April 15, 1998, as the record date for the determination of Shareholders
entitled to notice of and to vote at this Annual Meeting and any adjournment or
postponement thereof.
Enclosed is your copy of (i) the Company's Annual Report on Form 10-K as
filed with the Securities and Exchange Commission for the fiscal year ended
November 30, 1997 ("fiscal 1997"); and (ii) the Company's Quarterly Report on
Form 10-Q for the quarter ended February 28, 1998.
You are cordially invited to attend the meeting in person. Whether or not
you expect to attend in person, you are urged to complete, date, sign and return
the enclosed proxy card, which is solicited by the board of directors, in the
self-addressed envelope enclosed for your convenience which requires no postage
if mailed in the United States. You may revoke your proxy at any time before it
is voted at the meeting by giving written notice to the secretary of the
Company, by delivering to the secretary of the company a duly executed proxy
bearing a later date or by appearing at the meeting and voting by written ballot
in person.
By Order of the Board of Directors
April 21, 1998 W. NICHOLAS GOETZ
SECRETARY
STOCKHOLDERS WHO DO NOT EXPECT TO ATTEND THE MEETING IN PERSON ARE URGED TO
COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
2
PLASMA-THERM, INC.
----------------------
PROXY STATEMENT
----------------------
This Proxy Statement and the accompanying form of proxy are furnished in
connection with the solicitation of proxies by the Board of Directors of
Plasma-Therm, Inc., a Florida corporation (the "Company"), for the Annual
Meeting of Shareholders to be held at the Company's headquarters, 10050 16th
Street North, St. Petersburg, Florida 33716, on Tuesday, June 9, 1998 at 10:00
a.m., local time, and at any postponements or adjournments thereof (the
"Meeting" or the "Annual Meeting"). The approximate date on which this Proxy
Statement and the accompanying form of proxy will be first sent or given to
Shareholders is April 21, 1998.
The record date for determining Shareholders entitled to vote at the
Meeting has been fixed as the close of business on Wednesday, April 15, 1998
(the "Record Date"). As of the Record Date, there were 11,160,561 shares of the
Common Stock owned at the Record Date entitling the holder to one vote. There is
no other class of voting securities outstanding. Votes may not be cumulated in
the election of directors. The presence, in person or by proxy, at the Meeting
of the holders of a majority of the shares of Common Stock entitled to vote will
constitute a quorum for purposes of the Meeting.
If the proxy card accompanying this Proxy Statement is properly executed
and returned, the shares of common stock, par value $.01 per share of the
Company (the "Common Stock"), represented thereby will be voted as instructed on
the proxy card, but if no instructions are given, such shares of Common Stock
will be voted in favor of (i) the addition to the Company's Articles of
Incorporation ("Articles of Incorporation"), and corresponding amendment of the
Bylaws of the Company ("Bylaws"), of a provision classifying the Board of
Directors into three classes, (ii) the amendment to the Articles of
Incorporation and Bylaws eliminating the shareholders' ability to fill vacancies
on the Board, (iii) the amendment to the Articles of Incorporation and Bylaws to
require the affirmative vote of 66-2/3% of the outstanding Common Stock to
remove a director for cause; (iv) the amendment to the Articles of Incorporation
and Bylaws to require the affirmative vote of 50% of the outstanding Common
Stock for shareholders to call a special meeting; (v) the amendment to the
Articles of Incorporation and Bylaws to require the affirmative vote of the
holders of 66-2/3% of the outstanding Common Stock to amend, alter or repeal the
Bylaws; (vi) the election to the Board of each of the nominees for directors of
the Company, and (vi) any other matters incidental to the foregoing purposes and
to transact such other business as may properly come before the Meeting. Any
proxy given may, however, be revoked by the stockholder executing it at any time
before it is voted by giving written notice to the Secretary of the Company, by
delivering to the Secretary of the Company a duly executed proxy bearing a later
date or by appearing at the Meeting and voting by written ballot in person.
The cost of solicitation of proxies by the Board of Directors will be borne
by the Company. Proxies may be solicited by mail, personal interview, telephone
or telegraph and, in addition, directors, officers and employees of the Company
may solicit proxies by such methods without additional remuneration. In
accordance with the regulations of the Securities and Exchange Commission, the
Company will reimburse, upon request, banks, brokers and other institutions,
nominees and fiduciaries for their expenses incurred in sending proxies and
proxy materials to the beneficial owners of the Company's Common Stock.
TABLE OF CONTENTS
PAGE
NUMBER
------
Possible Consequences of the Anti-Takeover Effects of the Amendments.......................3
Proposal 1 -- Classification of Board of Directors.........................................4
Proposal 2 -- Elimination of Shareholders Ability to Fill
Vacancies on the Board of Directors.....................................................6
Proposal 3 -- Supermajority Voting Required for
Shareholders to Remove a Director for Cause.............................................7
Proposal 4 -- Increased Voting Required for Shareholders
to Call Special Meeting.................................................................8
Proposal 5 -- Supermajority Voting Required for Shareholders to Amend Bylaws...............9
Proposal 6 -- Election of Directors.......................................................10
Beneficial Owners and Management..........................................................12
Section 16(a) Beneficial Ownership Reporting Compliance...................................14
Executive Compensation....................................................................14
Summary Compensation Table...........................................................15
Option/SAR Grants in Last Fiscal Year................................................18
Aggregate Option/SAR Exercises in Last Fiscal Year
and FY-End Option/SAR Values......................................................19
Report by the Board of Directors on Executive Compensation...........................20
Compensation Committee Interlocks and Insider Participation..........................22
Committees, Meetings, and Compensation of the Board of Directors.....................23
Performance Graph....................................................................23
Certain Relationships and Related Party Transactions......................................25
Selection of Independent Auditors.........................................................25
Stockholder Proposals.....................................................................25
Other Matters.............................................................................25
Exhibits: Amendments to Corporate Governance Documents
Exhibit 1 -- Classified Board of Directors..........................................E1-1
Exhibit 2 -- Elimination of Shareholders Ability to Fill Vacancies
on the Board of Directors........................................................E2-1
Exhibit 3 -- Supermajority Voting Required for
Shareholders to Remove a Director for Cause......................................E3-1
Exhibit 4 -- Increased Voting Required for Shareholders to Call Special Meeting.....E4-1
Exhibit 5 -- Supermajority Voting Required for Shareholders to Amend Bylaws.........E5-1
2
POSSIBLE CONSEQUENCES OF THE
ANTI-TAKEOVER EFFECTS OF THE AMENDMENTS
The Board of Directors has evaluated the potential vulnerability of the
Company's stockholders to the threat of unfair or coercive takeover tactics and
has considered the range of possible responses to any such threat. The Board of
Directors has unanimously approved, and recommends to the Company's stockholders
for their approval, the amendments to the Articles of Incorporation and Bylaws
described in Proposals 1 through 5 set forth below. Proposals 1 through 5 are
referred to collectively as the "Amendments."
Proposals 1 through 5 involve related amendments to the Articles of
Incorporation and Bylaws designed to assist the Company's stockholders in
obtaining fair and equitable treatment in the event of a takeover of the
Company. These Proposals include (i) the addition to the Company's Articles of
Incorporation and Bylaws of a provision classifying the Board of Directors into
three classes, (ii) the amendment to the Articles of Incorporation and Bylaws
eliminating the shareholders' ability to fill vacancies on the Board, (iii) the
amendment to the Articles of Incorporation and Bylaws to require the affirmative
vote of 66-2/3% of the outstanding Common Stock to remove a director for cause;
(iv) the amendment to Articles of Incorporation and Bylaws to require the
affirmative vote of 50% of the outstanding Common Stock for shareholders to call
a special meeting; and (v) the amendment to the Articles of Incorporation and
Bylaws to require the affirmative vote of the holders of 66-2/3% of the
outstanding Common Stock to amend, alter or repeal the Bylaws (including, if
adopted, the amendments set forth in Proposals 1 through 5).
The Amendments are not in response to any effort, of which the Company is
aware, to accumulate the Common Stock or to obtain control of the Company. The
Board of Directors has observed the relatively common use of certain coercive
takeover tactics in recent years, including the accumulation of substantial
common stock positions as a prelude to a threatened takeover or corporate
restructuring, proxy fights, and partial tender offers. The Board of Directors
believes that the use of these tactics can place undue pressure on a
corporation's board of directors and stockholders to act hastily and on
incomplete information and, therefore, can be highly disruptive to a corporation
as well as result in unfair differences in treatment of stockholders who act
immediately in response to announcement of takeover activity and those who
choose to act later, if at all.
While the Amendments, individually and collectively, give added protection
to the Company's stockholders, they may also have the effect of making more
difficult and discouraging a merger, tender offer or proxy fight, even if such
transaction or occurrence may be favorable to the interests of some or all of
the Company's stockholders. The Amendments also may delay the assumption of
control by a holder of a large block of the Common Stock and the removal of
incumbent management, even if such removal might be beneficial to some or all of
the stockholders. Furthermore, the Amendments may have the effects of deterring
or frustrating certain types of future takeover attempts that may not be
approved by the incumbent Board of Directors, but that the holders of a majority
of the shares of Common Stock may deem to be in their best interests or in which
some or all of the stockholders may receive a substantial premium over
prevailing market prices for their stock. By having the effect of discouraging
takeover attempts, the Amendments also could have the incidental effect of
inhibiting certain changes in management (some or all of the members of which
might be replaced in the course of a change of control) and also the temporary
fluctuations in the market price of the Common Stock that often result from
actual or rumored takeover attempts.
3
The Board of Directors recognizes that a takeover might in some
circumstances be beneficial to some or all of the Company's stockholders but,
nevertheless, believes that the stockholders as a whole will benefit from the
adoption of Proposals 1 through 5. The Board of Directors further believes that
it is preferable to act on the proposed Amendments when they can be considered
carefully rather than during an unsolicited bid for control.
Under Florida law, the adoption of a bylaw that adds, changes, or deletes a
greater voting requirement for shareholders must meet the same voting
requirement then in effect or proposed to be in adopted, whichever is greater.
Accordingly, the Amendment to the Bylaws set forth in Proposal 4 requires the
affirmative vote of the holders of 66-2/3% of the outstanding Common Stock.
Under the Company's Articles of Incorporation, the proposed Amendments to the
Articles of Incorporation described in Proposals 1 through 5 also require the
affirmative vote of the holders of 66-2/3% of the Company's outstanding Common
Stock. All of the proposals are permitted by law. If stockholders approve any or
all of the Amendments, the Company will file an amendment to the Articles of
Incorporation of the Company that reflects the amendments which have been
approved with the Secretary of State of the State of Florida. Each of the
Amendments adopted by the Company's stockholders will become effective
regardless of whether any of the other Amendments to be acted upon at the
Meeting is adopted.
The full text of each Amendment for which approval is sought in Proposals 1
through 5 is set forth in the exhibits to this Proxy Statement, and the
following summaries of such Amendments are qualified in their entirety by
reference to such exhibits. Stockholders are urged to read carefully the
following description and discussion of the proposed Amendments and exhibits to
this Proxy Statement before voting on the Amendments.
PROPOSAL 1
CLASSIFICATION OF BOARD OF DIRECTORS
The Board of Directors has approved a resolution amending the Articles of
Incorporation to provide for a classified Board of Directors and to establish
procedures for filling vacancies on the Board. At the Meeting, stockholders will
consider and vote on this proposed amendment. The text of the proposed amendment
is attached to this Proxy Statement as EXHIBIT 1. The statements made in this
Proxy Statement with respect to this amendment to the Articles of Incorporation
should be read in conjunction with and are qualified in their entirety by
reference to EXHIBIT 1.
This Proposal 1 may have the effect of making it more difficult for
stockholders to remove the existing management of the Company and may,
therefore, discourage potentially unfriendly bids for shares of the Company. See
"Possible Consequences of the Anti-Takeover Effects of the Amendments."
The Articles of Incorporation would be amended to provide for a classified
Board of Directors by adding revising the first paragraph of Article VII as
provided in EXHIBIT 1. This Proposal 1 would operate to divide the Board into
three separate classes of directors, as nearly equal in number as possible, to
serve a three-year term and until their successors are duly elected and
qualified with each class being elected at different annual stockholder
meetings. Following the effectiveness of this Proposal, Class I will consist of
one director who will serve for an initial term of one year, Class II will
consist of two directors who will serve for an initial term of two years, and
Class III will consist of one director who will serve for initial terms of three
years. See
4
"Proposal 6--Election of Directors." At each annual meeting after 1998,
directors will be elected to succeed those whose terms then expire and each
newly elected director will serve for a three-year term. The proposed Amendment
would replace the prior system of electing all of the directors annually for one
year terms.
The effect of a classified Board of Directors may be circumvented by
increasing or decreasing the size of the Board. At present, vacancies in the
Board of Directors, including vacancies resulting from an increase in the number
of directors, are required to be filled by a majority of the remaining members
of the Board, although less than a quorum (and, if not so filled, by a majority
of the shareholders unless Proposal 2 also is adopted), and each person so
elected serves as a director until a successor is elected by the stockholders at
the next annual meeting at which directors are elected. This Proposal 1 provides
that the size of the Board may be fixed solely by action of the Board itself,
and that any vacancies in the Board of Directors be filled by a majority vote of
the remaining directors then in office, even though less than a quorum. If the
number of directors constituting the Board is increased or decreased, the
resulting number of directors will be apportioned among the three classes so as
to make all classes as nearly equal in number as possible, except that the term
of any incumbent director may not be shortened. Under the Florida Business
Corporation Act ("FBCA"), the term of a director elected to fill a vacancy
expires at the next shareholders' meeting at which directors are elected.
Accordingly, in the event that stockholders approve this Proposal 1, and the
number of directors constituting the Board is increased, persons appointed by
the Board to fill resulting vacancy will stand for reelection at the next annual
meeting of shareholders; however, each person so elected would serve for the
remainder of the full term of the class in which the new directorship was
created or the vacancy occurred.
Since directors will be serving for longer terms which expire at different
times and, in the event Proposal 3 is approved, may be removed only for cause by
a supermajority vote of stockholders, the Board of Directors believes that a
classified Board will promote continuity of management and, thereby enhance the
ability of the Company to carry out long-range plans and goals for its benefit
and the benefit of its stockholders. Although the Company has not experienced
difficulties in the past in maintaining continuity of the Board and management,
the Board of Directors believes that a classified Board will assist the Company
in maintaining this continuity of management into the future. Additionally, this
Proposal 1 has certain anti-takeover effects that the Board believes will deter
unsolicited takeover attempts and protect the value of each stockholder's
investment in the Company.
A classified Board would also extend the time it would take for a majority
stockholder to obtain control of the Board of Directors, thereby limiting such
abusive takeover tactics as two tiered tender offers. Assuming each class of
directors is equal in size, a majority stockholder could not obtain control of
the Board until the second annual stockholder' meeting after it acquired a
majority of the voting stock. During this time, the Board of Directors would
have a better opportunity to negotiate with any such majority stockholder to
obtain more favorable price and terms in any merger or tender offer. For these
reasons, the Board of Directors believes that Proposal 1 may have anti-takeover
effects as described above. In considering Proposal 1, stockholders should
consider and review the section entitled "Possible Consequences of the
Anti-Takeover Effects of the Amendments" appearing elsewhere in this Proxy
Statement.
5
VOTE REQUIRED FOR APPROVAL
The affirmative vote of holders of at least 66-2/3% of the outstanding
Common Stock is required in order to approve this Proposal 1. Therefore, failure
to vote, broker nonvotes, and abstentions have the same effect as a negative
vote. Accordingly, if stockholders are in favor of this Proposal 1 and do not
vote their shares for this Proposal 1 either in person or by proxy, such
stockholders will have effectively voted against the Proposal. If approved, this
Proposal 1 will become effective upon the filing of Articles of Amendment to the
Articles of Incorporation with the Secretary of State of Florida, which is
expected to follow shortly after the approval, if at all, of this Proposal 1.
Thereafter, the Board of Directors will adopt conforming amendments to the
Bylaws.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE CLASSIFICATION OF
THE BOARD OF DIRECTORS.
PROPOSAL 2
ELIMINATION OF SHAREHOLDERS ABILITY
TO FILL VACANCIES ON THE BOARD OF DIRECTORS
The Board of Directors has approved a resolution amending the Articles of
Incorporation to eliminate the shareholders ability to fill vacancies created on
the Board. At the Meeting, stockholders will consider and vote on this proposed
amendment. The text of the proposed amendment to the Articles of Incorporation
is attached to this Proxy Statement as EXHIBIT 2. The statements made in this
Proxy Statement with respect to this amendment to the Articles of Incorporation
should be read in conjunction with and are qualified in their entirety by
reference to EXHIBIT 2.
The Articles of Incorporation currently provide that newly created
directorships resulting from any increase in the number of directors or any
vacancy on the Board of Directors resulting from death, resignation,
disqualification, removal, or other cause may be filled by shareholders if not
filled by the affirmative vote a majority of the directors then in office, even
though less than a quorum, or by a sole remaining director. The amendment will
eliminate the ability of shareholders to fill vacancies, and is a counterpart
amendment to Proposal 1 regarding the classification of the Board. The Board
believes that the adoption of this amendment prevents a third party seeking
majority representation on the Board of Directors from obtaining such
representation simply by enlarging the Board and filling the new directorships
created thereby with his own nominees. The Board of Directors believes that
adoption of this Proposal will promote continuity of management and, thereby
enhance the ability of the Company to carry out long-range plans and goals for
its benefit and the benefit of its stockholders. For these reasons, the Board of
Directors believes that this Proposal may have an anti-takeover effect. In
considering Proposal 2, stockholders should consider and review the section
entitled "Possible Consequences of the Anti-Takeover Effects of the Amendments"
appearing elsewhere in this Proxy Statement.
6
VOTE REQUIRED FOR APPROVAL
The affirmative vote of holders of at least 66-2/3% of the outstanding
Common Stock is required in order to approve this Proposal 2. Therefore, failure
to vote, broker nonvotes, and abstentions have the same effect as a negative
vote. Accordingly, if stockholders are in favor of this Proposal 2 and do not
vote their shares for this Proposal 2 either in person or by proxy, such
stockholders will have effectively voted against the Proposal. If approved, this
Proposal 2 will become effective upon the filing of Articles of Amendment to the
Articles of Incorporation with the Secretary of State of Florida, which is
expected to follow shortly after the approval, if at all, of this Proposal 2.
Thereafter, the Board will adopt conforming amendments to the Bylaws.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELIMINATION OF THE
ABILITY OF THE SHAREHOLDERS TO FILL VACANCIES ON THE BOARD.
PROPOSAL 3
SUPERMAJORITY VOTING REQUIRED
FOR SHAREHOLDERS TO REMOVE A DIRECTOR FOR CAUSE
The Board of Directors has approved a resolution amending the Articles of
Incorporation to require the affirmative vote of 66-2/3% of the outstanding
Common Stock to remove a director for cause. At the Meeting, stockholders will
consider and vote on this proposed amendment. The text of the proposed amendment
to the Articles of Incorporation is attached to this Proxy Statement as EXHIBIT
3. The statements made in this Proxy Statement with respect to this amendment to
the Articles of Incorporation should be read in conjunction with and are
qualified in their entirety by reference to EXHIBIT 3.
The Articles of Incorporation and Bylaws currently provide that directors
can only be removed for cause and upon the affirmative vote of the holders of a
majority of the outstanding Common Stock. The Board of Directors believes that
by increasing the percentage of outstanding Common Stock to remove a director to
a supermajority would make it more difficult for a hostile acquiror to obtain
Board control of the Company. The Board of Directors believes that adoption of
this Proposal will prevent a hostile acquiror from removing directors and
filling vacancies on the Board. The Board also believes that adoption of this
Proposal will promote continuity of management and, thereby enhance the ability
of the Company to carry out long-range plans and goals for its benefit and the
benefit of its stockholders. For these reasons, the Board of Directors believes
that this Proposal may have an anti-takeover effect. In considering Proposal 3,
stockholders should consider and review the section entitled "Possible
Consequences of the Anti-Takeover Effects of the Amendments" appearing elsewhere
in this Proxy Statement.
VOTE REQUIRED FOR APPROVAL
The affirmative vote of holders of at least 66-2/3% of the outstanding
Common Stock is required in order to approve this Proposal 3. Therefore, failure
to vote, broker nonvotes, and abstentions have the same effect as a negative
vote. Accordingly, if stockholders are in favor of this Proposal 3 and do not
vote their shares for this Proposal 3 either in person or by proxy, such
stockholders will have effectively voted against the Proposal. If approved, this
Proposal 3 will become effective upon the filing of Articles of Amendment to the
Articles of Incorporation with the Secretary of State of Florida, which is
expected to follow shortly after the
7
approval, if at all, of this Proposal 3. Thereafter, the Board of Directors will
adopt conforming amendments to the Bylaws.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ADOPTION OF A
SUPERMAJORITY VOTING REQUIREMENT FOR SHAREHOLDERS TO REMOVE A DIRECTOR FOR
CAUSE.
PROPOSAL 4
INCREASED VOTING REQUIRED FOR
SHAREHOLDERS TO CALL SPECIAL MEETING
The Board of Directors has approved a resolution amending the Articles of
Incorporation to require that special meetings of stockholders may only be
called by the President, the Chairman of the Board of Directors, by the
affirmative action of a majority of the Board of Directors, or by written demand
by the holders of not less than 50% of the outstanding Common Stock entitled to
vote on matters to be brought at such meeting. At the Meeting, stockholders will
consider and vote on this proposed amendment. The text of the proposed amendment
to the Articles of Incorporation is attached to this Proxy Statement as EXHIBIT
4. The statements made in this Proxy Statement with respect to this amendment to
the Articles of Incorporation should be read in conjunction with and are
qualified in their entirety by reference to EXHIBIT 4.
The Articles of Incorporation currently provide that special meetings can
be called by stockholders who hold at least 20% of the voting power to be cast
on any issue proposed to be considered at the special meeting, by the Board of
Directors, by the Chairman of the Board, or by the President of the Company. The
amendments will increase the percentage of shareholder votes necessary for
shareholders to call a special meeting of shareholders to 50%. This provision
will provide for the orderly conduct of all Company affairs at a special meeting
called by the President, the Chairman, or the Board of Directors. Accordingly, a
relatively small minority of stockholders could not force stockholder
consideration of a proposal over the opposition of the Board by calling a
special meeting of stockholders prior to such time that the Board believed such
consideration to be appropriate, unless at least 50% of the stockholders
entitled to vote were in agreement. As a result, the Board will have the
opportunity to inform all other stockholders adequately of the matters to be
considered. For these reasons, the Board of Directors believes that this
Proposal may have an anti-takeover effect. In considering Proposal 4,
stockholders should consider and review the section entitled "Possible
Consequences of the Anti-Takeover Effects of the Amendments" appearing elsewhere
in this Proxy Statement.
VOTE REQUIRED FOR APPROVAL
The affirmative vote of holders of at least 66-2/3% of the outstanding
Common Stock is required in order to approve this Proposal 4. Therefore, failure
to vote, broker nonvotes, and abstentions have the same effect as a negative
vote. Accordingly, if stockholders are in favor of this Proposal 4 and do not
vote their shares for this Proposal 4 either in person or by proxy, such
stockholders will have effectively voted against the Proposal. If approved, this
Proposal 4 will become effective upon the filing of Articles of Amendment to the
Articles of Incorporation with the Secretary of State of Florida, which is
expected to follow shortly after the approval, if at all, of this Proposal 4.
Thereafter, the Board of Directors will adopt conforming amendments to the
Bylaws.
8
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ADOPTION OF INCREASED
VOTING REQUIREMENT FOR STOCKHOLDERS TO CALL A SPECIAL MEETING.
PROPOSAL 5
SUPERMAJORITY VOTING REQUIRED
FOR SHAREHOLDERS TO AMEND BYLAWS
The Board of Directors has approved a resolution amending the Articles of
Incorporation and Bylaws to require the affirmative vote of 66-2/3% of the
outstanding Common Stock for stockholders to amend, alter or repeal the Bylaws.
The Board of Directors currently has the right to amend, alter or repeal the
Bylaws without the consent of stockholders. Under the FBCA, however, a bylaw
that fixes a greater voting requirement for shareholders may not be adopted,
amended or repealed by the Board of Directors. At the Meeting, stockholders will
consider and vote on these proposed amendments. The text of the proposed
amendment to the Articles of Incorporation and Bylaws is attached to this Proxy
Statement as EXHIBIT 5. The statements made in this Proxy Statement with respect
to this amendment to the Articles of Incorporation and Bylaws should be read in
conjunction with and are qualified in their entirety by reference to EXHIBIT 5.
The bylaws of a corporation set forth the rules and regulations governing
certain processes and procedures relative to the governance of a corporation.
Bylaw provisions are subordinate to provisions contained in a corporation's
articles of incorporation. The bylaws typically contain the procedures regarding
the calling and conduct of stockholder meetings, stockholder rights to inspect
corporate records and qualification of directors as well as procedures regarding
directors meetings, quorums and required votes. Bylaws also set forth the
general duties of officers and procedures regarding their removal in addition to
detailed provisions regarding indemnification of officers, directors and
employees. The FBCA confers authority to adopt, amend, or repeal bylaws in the
board of directors unless the (i) the articles of incorporation or the FBCA
reserves the power to amend the bylaws generally or a particular bylaw provision
exclusively, to the shareholders; or (ii) the shareholders, in amending or
repealing the bylaws generally or a particular bylaw provision, provide
expressly that the board of directors may not amend or repeal the bylaws or that
bylaw provision. The FBCA also confers the power to amend or repeal bylaws upon
the shareholders, even though the bylaws may be amended or repealed by the board
of directors.
The Articles of Incorporation and Bylaws currently provide that the power
to adopt, alter, amend or repeal bylaws is vested in the Board of Directors and
stockholders, unless any bylaw adopted by the shareholders specifically provide
that the bylaw is not subject to amendment or repeal by the Board. Currently,
the affirmative vote of a majority of the Board or the affirmative vote of the
holders of a majority of the outstanding Common Stock is required to adopt,
alter, amend or repeal the Bylaws. This Proposal 5 would allow the Board of
Directors to continue to amend the Bylaws without the approval of the
stockholders (except for the bylaw amended pursuant to Proposal 5). In addition,
by requiring the supermajority vote of stockholders to amend the Bylaws,
Proposal 5 will have the effect of making it more difficult for stockholders (i)
to change the internal operating procedures of the Company, (ii) to undermine or
limit the effectiveness of the classified Board provisions set forth in Proposal
1, and (iii) to limit the Board's ability to manage the affairs of the Company
on behalf of all stockholders. If this Proposal 5 is adopted, amendment of the
Bylaws will require the affirmative vote of holders representing 66-2/3% of the
outstanding Common Stock entitled to vote thereon, but will not change the
ability of the majority of the Board of Directors to amend the Bylaws. This
9
provision may further discourage potentially unfriendly bids for shares of the
Company. For these reasons, the Board of Directors believes that Proposal 5 may
have an anti-takeover effect. In considering this Proposal 5, stockholders
should consider and review the section entitled "Possible Consequences of the
Anti-Takeover Effects of the Amendments" appearing elsewhere in this Proxy
Statement.
VOTE REQUIRED FOR APPROVAL
The affirmative vote of holders of at least 66-2/3% of the outstanding
Common Stock is required in order to approve this Proposal 5. Therefore, failure
to vote, broker nonvotes, and abstentions have the same effect as a negative
vote. Accordingly, if stockholders are in favor of this Proposal 5 and do not
vote their shares for this Proposal 5 either in person or by proxy, such
stockholders will have effectively voted against the Proposal. If approved, this
Proposal 5 will become effective upon the filing of Articles of Amendment to the
Articles of Incorporation with the Secretary of State of Florida, which is
expected to follow shortly after the approval, if at all, of this Proposal 5.
Thereafter, the Board of Directors will cause the amendment adopted by the
shareholders to be reflected in the Bylaws.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ADOPTION OF A
SUPERMAJORITY VOTING REQUIREMENT FOR SHAREHOLDERS TO AMEND THE BYLAWS.
PROPOSAL 6
ELECTION OF DIRECTORS
The four persons listed below have been nominated by the Board of Directors
to serve as directors of the Company. Nominees for directors who receive a
plurality of the votes cast by the holders of the outstanding shares of Common
Stock will be elected. Abstentions, broker nonvotes and withheld votes are not
counted in determining the number of votes cast for any nominee for director.
If the amendment to the Articles of Incorporation to provide for a
classified Board of Directors (see "Proposal 1") is adopted, the Board of
Directors will be divided into three classes. This Meeting will be the first
election of directors after the amendment which created the classified Board of
Directors. Accordingly, at the Meeting, one director will be elected for a term
expiring at the Company's 1999 Annual Meeting, two directors for terms expiring
at the Company's 2000 Annual Meeting, and one director for a term expiring at
the Company's 2001 Annual Meeting; in each case, until their successors are duly
elected and qualified. At each Annual Meeting after 1998, directors will be
elected to succeed those directors whose terms then expire, and each person so
elected will serve for a three-year term.
If the Amendment to the Articles of Incorporation is not approved,
directors elected at the Meeting will serve one-year terms until the 1999 Annual
Meeting and until their successors are duly elected and qualified.
It is the intention of the persons named in the accompanying form of proxy
to vote such proxy for the election as directors of the following nominees. In
the event that any nominee is unable to serve or will not serve as a director,
it is intended that the proxies solicited hereby will be voted for such other
person or persons as may be nominated by management. Vacancies on the Board of
Directors may be filled by the Board of Directors and, assuming stockholder
approval of Proposal 1, any director chosen to fill a vacancy would hold
10
office until the next election of the class for which such director had been
chosen. Assuming stockholders do not approve Proposal 1, any director chosen to
fill a vacancy would hold office until the next election of directors.
The following information is set forth with respect to the persons
nominated for election as a director and each director of the Company whose term
of office will continue after the meeting.
NOMINEES FOR ELECTION AT THE ANNUAL MEETING
DIRECTOR TERM WILL
NAME AGE SINCE EXPIRE
---- --- --------- ---------
Ronald H. Deferrari..........................57 1975 2001
Anastasios S. Gianoplus......................67 1989 2000
Richard T. Heglin............................61 1997 1999
Lubek Jastrzebski............................49 1996 2000
Ronald H. Deferrari............. Founder and Chairman of the Board of Directors
since 1975; Chief Executive Officer, Chief
Financial Officer and Treasurer of the Company
for more than five years; President of the
Company from 1975 to 1995.
Anastasios S. Gianoplus......... President of Open Retail Systems, Inc., a
supplier of software systems and services to
the retail industry, since July of 1995. From
August 1988 to June 1995, Mr. Gianoplus served
as Executive Vice President of Compex
Corporation, a provider of computer systems and
services to government and industry.
Richard T. Heglin............... President of Leybold Vacum Products, Inc., a
Division of Leybold GMBH of Cologne, Germany,
for more than five years.
Lubek Jastrzebski............... Vice President and founder of Semiconductor
Diagnostics Inc. (SDI) of Tampa, a provider of
sophisticated contamination monitoring
equipment to the integrated circuit (IC)
industry, for more than five years.
VOTE REQUIRED FOR APPROVAL
Nominees for directors who receive a plurality of the votes cast by the
holders of the shares of Common Stock in person or by proxy at the Meeting shall
be elected. Abstentions, broker nonvotes and withheld votes are not counted in
determining the number of votes cast for any nominee for director.
11
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE ABOVE NOMINEES
FOR ELECTION AS DIRECTORS OF THE COMPANY.
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of April 15, 1998 by each person
known to the Company to own beneficially more than five percent of the Company's
Common Stock, each director, each nominee for election as a director, each
executive officer, and all executive officers and directors as a group.
AMOUNT PERCENT
BENEFICIALLY OF
NAME OF BENEFICIAL OWNER OWNED (1) CLASS
------------------------ ------------ -------
Ronald H. Deferrari (2)................................................ 2,038,200 18.26%
Ronald S. Deferrari (3)................................................ 440,592 3.81%
Diana M. DeFerrari..................................................... 56,792 *
Anastasios S. Gianoplus (4)............................................ 35,000 *
W. Nicholas Goetz (5).................................................. 20,000 *
Richard T. Heglin (6).................................................. 1,000 *
Lubek Jastrzebski (7).................................................. 35,000 *
Edmond A. Richards (8)................................................. 96,000 *
Stacy L. Wagner (9).................................................... 118,000 1.06%
All directors and executive officers as a group
(9 persons).......................................................... 2,890,684 24.39%
<FN>
- ----------
*Less than one percent. SEE FOOTNOTES CONTINUED ON FOLLOWING PAGE.
FOOTNOTES:
(1) The named stockholders have sole voting and dispositive power with respect
to all shares shown as being beneficially owned by them, except as
otherwise indicated.
(2) The number of shares reflected includes (i) 500,000 shares owned by the
Ronald H. Deferrari Revocable Trust U/T/A 8/9/97 for which Ronald H.
Deferrari is the sole trustee; (ii) 390,000 shares held by the R & C
Deferrari Family Limited Partnership (the "R&C Deferrari FLP"), the
general partner of which is R & C Management, Inc.; (iii) 390,000 shares
held by the R & S Deferrari Family Limited Partnership (the "R&S Deferrari
FLP"), the general partner of which is R & S Management, Inc.; and (iii)
320,000 shares held by the R & D Deferrari Family Limited partnership (the
"R&D Deferrari FLP"), the general partner of which is R & D Management,
Inc. Ronald H. Deferrari is the sole limited partner and is the sole
officer, director and shareholder of the general partners of the R&C
Deferrari FLP, the R&S Deferrari FLP and the R&D Deferrari FLP, and has
sole voting and dispositive power over the shares owned thereby. Ronald H.
Deferrari is the founder of the Company. His address is 10050 16th Street
North, St. Petersburg, Florida 33716. Ronald H. Deferrari is the father of
Ronald S. Deferrari and Diana M. DeFerrari.
12
(3) The number of shares reflected includes 30,000, 110,000, 150,000 and
125,000 shares which Mr. Deferrari has the right to acquire pursuant to
currently exercisable stock options at exercise prices of $4.06, $3.87,
$4.12 and $6.97 per share, respectively. The number of shares reflected
does not include 125,000 shares which Mr. Deferrari has the right to
acquire pursuant to a stock option exercisable after July 13, 1998 at an
exercise price of $6.19 per share. Ronald S. Deferrari is the son of
Ronald H. Deferrari.
(4) The number of shares reflected includes 20,000, 5,000, and 5,000 shares
which Mr. Gianoplus has the right to acquire pursuant to currently
exercisable stock options at exercise prices of $4.12, $6.98, and $3.60
per share, respectively. The number of shares reflected does not include
5,000 shares which Mr. Gianoplus has the right to acquire pursuant to a
stock option exercisable after July 13, 1998 at an exercise price of $6.19
per share.
(5) The number of shares reflected includes 20,000 shares Mr. Goetz has the
right to acquire pursuant to a currently exercisable stock option at an
exercise price of $6.97 per share. The number of shares reflected does not
include 20,000 shares which Mr. Goetz has the right to acquire pursuant to
a stock option exercisable after July 13, 1998 at an exercise price of
$6.19 per share.
(6) The number of shares reflected represents 200 shares held in Mr. Heglin's
individual retirement account, and 800 shares held by Mr. Heglin's spouse.
The number of shares reflected does not include 5,000 shares which Mr.
Heglin has the right to acquire pursuant to a stock option exercisable
after July 13, 1998 at an exercise price of $6.19 per share.
(7) The number of shares reflected includes 5,000, 20,000, 5,000, and 5,000
shares Mr. Jastrzebski has the right to acquire pursuant to currently
exercisable stock options at exercise prices of $3.87, $4.12, $6.97 and
$3.60 per share, respectively. The number of shares reflected does not
include 5,000 shares which Mr. Jastrzebski has the right to acquire
pursuant to a stock option exercisable after July 13, 1998 at an exercise
price of $6.19 per share.
(8) The number of shares reflected includes 15,000, 50,000, and 30,000 shares
which Mr. Richards has the right to acquire pursuant to currently
exercisable stock options at exercise prices of $4.12, and $6.97 per
share, respectively. The number of shares reflected does not include
50,000 shares which Mr. Richards has the right to acquire pursuant to a
stock option exercisable after July 13, 1998 at an exercise price of $6.19
per share.
(9) The number of shares reflected includes 10,000, 50,000, 10,000, 15,000 and
10,000 shares Ms. Wagner has the right to acquire pursuant to currently
exercisable stock options at exercise prices of $2.62, $3.87, $5.25,
$4.12, and $6.97 per share, respectively. The number of shares reflected
does not include 10,000 shares which Ms. Wagner has the right to acquire
pursuant to a stock option exercisable after July 13, 1998 at an exercise
price of $6.19 per share.
</FN>
13
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
During fiscal 1997, the following persons were required to file Forms 3,
4, and 5 with the Securities and Exchange Commission pursuant to Section 16(a)
of the Securities Exchange Act of 1934 (the "Act") because such person was a
director, officer, or beneficial owner of more than 10% of the Company's Common
Stock: Ronald H. Deferrari, Ronald S. Deferrari, Diana M. DeFerrari, Anastasios
S. Gianoplus, W. Nicholas Goetz, Richard T. Heglin, Lubek Jastrzebski, Edmond A.
Richards, and Stacy L. Wagner. Based solely upon a review of Forms 3, 4, and 5
furnished to the Company pursuant to Rule 16-3(e) of the Act, no person filed a
late report, no transactions were reported on an untimely basis, and no person
failed to file a Form 3, Form 4 or Form 5 as required by Section 16(a) of the
Act, except that Stacy L. Wagner failed to timely file one Form 4 for a single
transaction involving one open market sale.
EXECUTIVE COMPENSATION
The following table sets forth information with respect to the cash and
noncash compensation for the last three fiscal years earned by or awarded to the
Company's Chief Executive Officer, the four most highly compensated executive
officers whose total annual salary and bonus exceeded $100,000 and one
additional individual who would have been one of the Company's four most highly
compensated officers except that she was not serving as an officer at the end of
fiscal 1997 (collectively, the "named executive officers").
14
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM COMPENSATION
------------------------------------ -----------------------------
AWARDS PAYOUTS
--------------------- -------
OTHER
ANNUAL RESTRICTED ALL OTHER
COMPEN- STOCK OPTIONS/ LTIP COMPEN-
SALARY BONUS SATION AWARD(S) SARs PAYOUTS SATION
NAME AND PRINCIPAL POSITION YEAR ($) ($)(1) ($)(2) ($) (#) ($) ($)
- --------------------------- ---- -------- --------- -------- ---------- -------- ------- ---------
RONALD H. DEFERRARI (3) 1997 $150,000 $ 100,000 $ 33,454
Chairman of the Board, Chief 1996 $150,000 $ 99,357 $ 36,306
Executive Officer, Chief Financial 1995 $150,000 $ 44,146 $ 33,284
Officer and Treasurer
RONALD S. DEFERRARI (4) 1997 $160,000 $ 250,000 $ 18,968 275,000
President and Chief Operating 1996 $160,000 $ 150,000 $ 8,334 150,000
Officer 1995 $146,340 $ 53,006 $ 5,613 70,000
DIANA M. DEFERRARI (5)(6)(7) 1997 $ 88,619 $ 87,288 $ 20,000 $61,408
former Sr. Vice President 1996 $101,000 $ 82,797 $ 0 150,000
and Secretary 1995 $ 93,119 $ 20,378 $ 1,500 20,000
W. NICHOLAS GOETZ (8)(9) 1997 $ 21,154 $ 7,693 $ 0 20,000 $45,682
Vice President and Secretary 1996 $ 0 $ 0 $ 0
1995 $ 0 $ 0 $ 0
EDMOND A. RICHARDS (10) 1997 $146,772 $ 25,201 $ 0 80,000
Vice President of Engineering 1996 $144,779 $ 3,671 $ 3,240 18,000
1995 $ 0 $ 0 $ 0
STACY L. WAGNER (11) 1997 $ 76,370 $ 50,400 $ 1,800 25,000
Vice President of Finance and 1996 $ 63,545 $ 24,791 $ 0 70,000
Administration 1995 $ 56,233 $ 5,126 $ 0 16,000
<FN>
- ----------
(1) Reflects bonuses based on fiscal year net income. Bonuses are paid
quarterly based on quarterly net income before bonuses, for the first
three fiscal quarters, and are reconciled for the full fiscal year after
the fiscal year end. The bonuses are subject to certain limitations, which
vary among the individuals.
(2) Automobile allowance.
(3) In May 1994, the Company entered into an employment agreement with Ronald
H. Deferrari for a term of three years. The agreement was amended in June
1995, and in January 1997 the Board of Directors resolved to permit Mr.
Deferrari's employment agreement to renew automatically, in accordance
with its terms, for an additional three-year term. Under Mr. Deferrari's
current agreement, he receives $150,000 in base salary per year and a
bonus equal to 3% of the Company's fiscal year net earnings, such bonus
not to exceed $100,000 annually, and reimbursement for payments related to
the lease or purchase of two automobiles. Upon termination of the
agreement, including termination on death or disability, Mr. Deferrari is
entitled to receive the full compensation provided thereunder for the
remainder of the term of the agreement, unless the termination is made by
the Company based upon reasonable cause as
15
defined in the agreement, in which event the compensation shall continue
one year from the notice of termination. Mr. Deferrari is entitled to
terminate the agreement in the event of a change of control of the
Company, in which case Mr. Deferrari also will be entitled to receive the
full compensation provided thereunder for the remainder of the agreement
term. Ronald H. Deferrari is the father of Ronald S. Deferrari and Diana
M. DeFerrari.
(4) In May 1994, the Company entered into an employment agreement with Ronald
S. Deferrari for a term of three years. The agreement was amended in June
1995 to reflect his promotion from Executive Vice President to President.
Under Mr. Deferrari's employment agreement, as in effect during fiscal
1997, he was entitled to receive $160,000 per year in base salary, an
annual bonus equal to 5% of the Company's fiscal year net earnings, such
bonus not to exceed $150,000, and reimbursement for payments related to
the lease or purchase of two automobiles. In January 1997, the Board of
Directors resolved to provide Mr. Deferrari with a new employment
agreement for a three-year term, commencing January 22, 1997. Under the
new agreement, Mr. Deferrari is entitled to receive $160,000 per year in
base salary, an annual bonus equal to 5% of the Company's fiscal year net
earnings, such bonus not to exceed $250,000 annually, and reimbursement
for payments related to the lease or purchase of two automobiles. If the
agreement is terminated due to death or disability, Mr. Deferrari is
entitled to receive full compensation for the then remaining term of the
agreement. If the agreement is terminated by the Company with cause or by
Mr. Deferrari without cause, Mr. Deferrari is entitled to receive a
severance package of six months salary and benefits (the "severance
package") as set forth in the agreement. If the agreement is terminated by
the Company without cause, Mr. Deferrari is entitled to receive full
compensation for the then remaining term of the agreement as well as the
severance package. In the event of a change in control or change in the
Board of Directors of the Company (as those terms are defined in the
agreement), (a) the term of the agreement will be extended, to the extent
necessary, so that there are 18 months remaining in the term from the time
of the change in control or change in the Board of Directors; and (b) Mr.
Deferrari commits to continue to perform his duties under the agreement
for 18 months after the time of the change in control or change in the
Board of Directors after which he may terminate the agreement without a
loss or benefits, as if the Company had terminated the agreement without
cause, except that if Mr. Deferrari terminates the agreement in the event
of a change in control or if the Company terminates the agreement
subsequent to a change in control, Mr. Deferrari is entitled to received
at least 12 months of salary and benefits. Ronald S. Deferrari is the son
of Ronald H. Deferrari and the brother of Diana M. DeFerrari.
(5) In February 1995, the Company entered into an employment agreement with
Ms. DeFerrari for a three-year term. The agreement was amended, effective
September 18, 1996, to reflect Ms. DeFerrari's promotion from Vice
President of Administration to Senior Vice President. Under the employment
agreement, Ms. DeFerrari was entitled to receive $101,000 per year in base
salary and an annual bonus equal to 2.5% of the Company's fiscal year net
earnings, such bonus not to exceed $100,000 annually. Under the terms of
the employment agreement, upon termination of the agreement, including
termination on death or disability, Ms. DeFerrari was entitled to receive
the full compensation provided thereunder for the remainder of the term,
unless a termination is made by the Company based upon reasonable cause,
in which event the compensation would continue one year from the notice of
termination. On March 5, 1997, the Company and Diana M. DeFerrari entered
into an Employment Termination and Consulting Agreement ("Termination and
Consulting Agreement") superseding the terms of the employment agreement.
Under the terms of the Termination and Consulting Agreement, Ms.
DeFerrari's employment with the Company terminated effective September 30,
1997. Upon termination, Ms. DeFerrari received six months base salary as
severance compensation, and retained her bonus for fiscal 1997 through the
period ended August 31, 1997. Pursuant to the terms of the Termination and
Consulting Agreement,
16
Ms. DeFerrari will provide consulting services to the Company from October
1, 1997 through May 31, 1998 and will be compensated at an hourly rate of
$100 per hour, plus reimbursement of business expenses. Additionally, the
Company agreed to pay for the continuation of Ms. DeFerrari's health
insurance through May 31, 1998.
(6) The amount reflected in the columns entitled "Salary," "Bonus," and "Other
Annual Compensation" represents amounts paid to Ms. DeFerrari in
connection with her services as Sr. Vice President and Secretary of the
Company, which employment arrangement terminated effective September 30,
1997. See Footnotes (5) and (6).
(7) The amount reflected in the column entitled "All Other Compensation"
represents payments to Ms. DeFerrari pursuant to the Termination and
Consulting Agreement of $50,500 severance, $835 COBRA insurance premiums,
$10,000 consulting fees, and reimbursement of $73 in expenses for the
period October 1, 1997 through November 30, 1997. See Footnote (5).
(8) On July 31, 1997, the Company extended an offer of employment to W.
Nicholas Goetz to replace Diana M. DeFerrari as the Company's Secretary
effective September 8, 1997. Under the agreement, Mr. Goetz is entitled to
receive $100,000 per year in base salary and an annual bonus equal to 0.5%
of the Company's fiscal year net profits in the first year, and 1% of net
profits commencing in year two. Additionally, the Company agreed to pay
relocation expenses for Mr. Goetz. If the agreement is terminated for any
reason other than gross misconduct during the first year following the
satisfactory completion of the Company's normal probationary period of 90
days, Mr. Goetz will be entitled to receive six months severance pay.
(9) The amount reflected in the column entitled "Other Annual Compensation"
represents relocation expenses paid to Mr. Goetz in connection with his
employment with the Company.
(10) The Company entered into an employment agreement with Mr. Richards for a
three-year term, commencing as of January 22, 1997. Under the agreement,
Mr. Richards is entitled to receive $146,772 per year in base salary and
an annual bonus equal to 0.5% of the Company's fiscal year net earnings,
such bonus not to exceed $50,000 annually. If the agreement is terminated
due to death or disability or by the Company without cause, Mr. Richards
is entitled to receive full compensation for the then remaining term of
the agreement. In the event of a change in control (as that term is
defined in the agreement), (a) the term of the agreement will be extended,
to the extent necessary, so that there are 18 months remaining in the term
from the time of the change in control; and (b) Mr. Richards commits to
continue to perform his duties under the agreement for 18 months after the
time of the change in control after which he may terminate the agreement
without a loss of benefits, as if the Company had terminated the agreement
without cause.
(11) The Company entered into an employment agreement with Stacy L. Wagner for
a three-year term, commencing as of January 22, 1997. If the agreement is
terminated due to death or disability or by the Company without cause, Ms.
Wagner is entitled to receive full compensation for the then remaining
term of the agreement. In the event of a change in control (as that term
is defined in the agreement), (a) the term of the agreement will be
extended, to the extent necessary, so that there are 12 months remaining
in the term from the time of the change in control; and (b) Ms. Wagner
commits to continue to perform her duties under the agreement for 12
months after the time of the change in control after which she may
terminate the agreement without a loss of benefits, as if the Company had
terminated the agreement without cause. The agreement was amended,
effective August 19, 1997, to reflect Ms. Wagner's
17
promotion to Vice President of Finance. Under the amended employment
agreement, Ms. Wagner is entitled to receive $85,000 per year in base
salary and an annual bonus equal to 1% of the Company's fiscal year net
earnings, such bonus not to exceed $100,000 annually, plus a monthly car
allowance of $600.
</FN>
The following table provides certain information regarding the stock
options granted during fiscal 1997 to the named executive officers in the
Summary Compensation Table.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE
PERCENT OF VALUE AT ASSUMED
NUMBER OF TOTAL ANNUAL RATES OF STOCK
SHARES OPTIONS/SARs EXERCISE PRICE APPRECIATION FOR
UNDERLYING GRANTED TO OR OPTION TERM
OPTIONS/SARs EMPLOYEES IN BASE PRICE EXPIRATION ----------------------
NAME GRANTED FISCAL YEAR ($/SH) DATE 5% 10%
---- ------------- ------------- ----------- ------------ ---------- ----------
Ronald H. Deferrari 0 - - - -
Ronald S. Deferrari 150,000 21.1% $4.12 05/06/00 $ 97,412 $ 204,558
125,000 17.6% $6.97 08/19/00 $ 137,331 $ 288,384
Diana M. DeFerrari 0 - - - - -
W. Nicholas Goetz 20,000 2.8% $6.97 08/19/00 $ 21,973 $ 46,141
Edmond A. Richards 50,000 7.0% $4.12 05/06/00 $ 32,471 $ 68,186
30,000 4.2% $6.97 08/18/00 $ 32,959 $ 69,212
Stacy L. Wagner 15,000 2.1% $4.12 05/06/00 $ 9,741 $ 20,456
10,000 1.4% $6.97 08/19/00 $ 10,986 $ 23,071
18
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
VALUE OF
UNEXERCISED
NUMBER OF IN-THE-MONEY
UNEXERCISED OPTIONS/SARs AT
OPTIONS/SARs FY-END ($)*
SHARES ACQUIRED VALUE AT FY-END (#) ----------------------------
NAME ON EXERCISE REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- --------------- ------------ ----------- ------------- ----------- --------------
Ronald H. Deferrari 0
Ronald S. Deferrari(1) 40,000 $ 115,200 290,000 125,000 $ 1,299,500 $ 191,250
Diana M. DeFerrari(2) 170,000 $ 431,950 0 0 $ 0 $ 0
W. Nicholas Goetz(3) 0 - 0 20,000 $ 0 $ 30,600
Edmond A. Richards(4) 6,000 $ 19,170 65,000 30,000 $ 288,450 $ 45,900
Stacy L. Wagner(5) 6,000 $ 28,380 95,000 10,000 $ 432,900 $ 15,300
<FN>
- ----------
*Based on the closing price of the Company's Common Stock on November 28, 1997
as quoted on The Nasdaq Stock Market.
(1) Of the 415,000 stock options held by Mr. Deferrari on November 30, 1997 (a)
30,000 were granted on June 26, 1995, expire on June 26, 1998, and became
exercisable on December 26, 1995 at an exercise price of $4.06 per share;
(b) 110,000 were granted on April 30, 1996, expire on April 30, 1999, and
became exercisable on October 30, 1996 at an exercise price of $3.87 per
share; (c) 150,000 were granted on May 6, 1997, expire on May 6, 2000, and
became exercisable on November 6, 1997 at an exercise price of $4.12 per
share; and (d) 125,000 were granted on August 19, 1997, expire on August
19, 2000, and became exercisable after the end of fiscal 1997, at an
exercise price of $6.97 per share.
(2) Prior to leaving the employ of the Company in September 1997, Ms. DeFerrari
exercised all of her outstanding stock options.
(3) The 20,000 stock options held by Mr. Goetz on November 30, 1997, were
granted on August 19, 1997, expire on August 19, 2000, and became
exercisable after the end of fiscal 1997, at an exercise price of $6.97 per
share.
(4) Of the 96,000 stock options held by Mr. Richards on November 30, 1997 (a)
15,000 were granted on April 30, 1996, expire on April 30, 1999, and became
exercisable on October 30, 1996 at an exercise price of $3.87 per share;
(b) 50,000 were granted on May 6, 1997, expire on May 6, 2000, and became
exercisable on November 6, 1997 at an exercise price of $4.12 per share;
and (c) 30,000 were granted on August 19, 1997, expire on August 19, 2000,
and became exercisable after the end of fiscal 1997, at an exercise price
of $6.97 per share.
(5) Of the 105,000 stock options held by Ms. Wagner on November 30, 1997 (a)
10,000 were granted on June 26, 1995, expire on June 26, 1998, and became
exercisable on December 26, 1995 at an exercise price of $4.06 per share;
(b) 10,000 were granted on December 26, 1995, expire on December 26, 1998,
and became exercisable on June 26, 1996 at an exercise price of $2.62 per
share; (c) 50,000 were granted on April 30, 1996, expire on April 30, 1999,
and became exercisable on October 30, 1996 at an exercise price of $3.87
per share; (d) 10,000 were granted on June 26, 1996, expire on June 26,
1999, and became exercisable on December 26, 1996 at an exercise price of
$5.25 per share; (e) 15,000 were granted on May 6, 1997, expire on May 6,
2000, and became exercisable on November 6, 1997 at an exercise price of
$4.12 per share; and (f) 125,000 were granted on August 19, 1997, expire on
August 19, 2000, and became exercisable after the end of fiscal 1997, at an
exercise price of $6.97 per share.
</FN>
19
REPORT BY THE BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATION
The Board of Directors reviews annually the compensation to be paid to the
Company's executive officers. In making such review, the Board of Directors
evaluates information supplied by management. The compensation provided by the
Company to executive officers includes salary, stock option and bonuses. The
Company's compensation policies are structured to enable the Company to attract,
retain and motivate highly qualified executive officers and to reward
contributions to the Company's success. The objective is to provide a management
team that will consistently produce superior results for the Company and it
shareholders. The Board of Directors negotiates employment agreements, including
provisions for salary and bonuses, with each of the Company's executive
officers. Currently, pursuant to the Company's employment agreements with its
executive officers, each executive officer receives a fixed annual base salary
and a bonus equal to a fixed percentage of the Company's net earnings for each
fiscal year during the term of the agreement.
SALARY. The Board of Directors' policy is to negotiate salaries including
the salary of Ronald H. Deferrari, the Company's Chief Executive Officer, in
relation to the contribution of each incumbent and to grant merit increases
based on individual performance. The Board of Directors considers the financial
condition of the Company, earnings in an absolute manner and in relation to the
previously established business plan, other measures of business success and the
degree of difficulty in achieving these levels. Executive officer compensation
for the last three years is set forth in the Summary Compensation Table on Page
14.
STOCK OPTIONS/BONUSES. The Board of Directors believes that providing a
portion of an executive's annual incentive compensation in the form of stock
options in addition to cash bonuses encourages the executive to share with
outside shareholders the goals of increasing the value of the Company's stock
and contributing to the success of the Company. The Board of Directors
encourages stock ownership by management. Option grants are based upon the
contributions of each individual executive toward achievement of corporate and
individual goals during the previous fiscal year. Ronald H. Deferrari, the
Cmpany's founder and Chief Executive Officer, has not been granted options to
acquire the Company's Common Stock since its inception. Executive officer stock
option grants for the last three years are listed in the Summary Compensation
Table on Page . Similarly, bonus formulae are based on the Company's net
earnings, instead of other measures of performance, because net earnings have a
significant effect on the market price of the Common Stock.
In May 1994, the Company entered into a three-year employment agreement
with Ronald H. Deferrari, the Company's founder and Chief Executive Officer.
Pursuant to the agreement, Mr. Deferrari receives $150,000 in base salary per
year and a bonus equal to 3% of the Company's net earnings, for each fiscal year
during the term of the agreement, such bonus not to exceed $100,000.
Additionally, Mr. Deferrari receives reimbursement for lease payments and other
expenses related to two automobiles. In June 1995, Mr. Deferrari's bonus
percentage was decreased from 5% to 3% of the Company's fiscal year net
earnings. Mr. Deferrari suggested such decrease so that certain other key
employees could receive bonuses without increasing the overall size of the bonus
pool. In January 1997, the Board of Directors resolved to permit Mr. Deferrari's
employment agreement to renew automatically, in accordance with its terms, for
an additional three-year term. See Footnote (3) to the Summary Compensation
Table on Page 15.
In May 1994, the Company entered into a three-year employment agreement
with Ronald S. Deferrari. The agreement was amended in June 1995 to reflect Mr.
Deferrari's promotion from Executive Vice President
20
to President. Pursuant to this agreement, Mr. Deferrari is entitled to receive
$160,000 per year in base salary and an annual bonus equal to 5% of the
company's fiscal year net earnings, such bonus not to exceed $150,000. In
addition, Mr. Deferrari is entitled to receive reimbursement for lease payments
and expenses related to two automobiles. In January 1997, the Board of Directors
resolved to provide Mr. Deferrari with a new employment agreement for a
three-year term, with an increase in the bonus compensation cap to $250,000.
See Footnote (4) to the Summary Compensation Table on Page 16.
On March 5, 1997, the Company and Diana M. DeFerrari entered into an
Employment Termination and Consulting Agreement ("Termination and Consulting
Agreement") superseding the terms of her employment agreement. Under the terms
of the Termination and Consulting Agreement, Ms. DeFerrari's employment with the
Company terminated effective September 30, 1997. Upon termination, Ms. DeFerrari
received six months base salary as severance, and retained her bonus
compensation for fiscal 1997 through the period ended August 31, 1997. Pursuant
to the terms of the Termination and Consulting Agreement, Ms. DeFerrari will
provide consulting services to the Company from October 1, 1997 through May 31,
1998 and will be compensated at an hourly rate of $100 per hour, plus
reimbursement of business expenses. Additionally, the Company agreed to pay for
the continuation of Ms. DeFerrari's health insurance through May 31, 1998. See
Footnotes (5), (6) and (7) to the Summary Compensation Table on Pages 16, 17,
and 17, respectively.
On July 31, 1997, the Company extended an offer of employment to W.
Nicholas Goetz to replace Diana M. DeFerrari as the Company's Secretary
effective September 8, 1997. Under the letter agreement, Mr. Goetz is entitled
to receive $100,000 per year in base salary and an annual bonus equal to 0.5% of
the Company's fiscal year net profits in the first year, and 1% of net profits
commencing in year two. If the agreement is terminated for any reason other than
gross misconduct during the first year following the satisfactory completion of
the Company's normal probationary period of 90 days, Mr. Goetz will be entitled
to receive six months severance pay. See Footnotes (8) and (9) to the Summary
Compensation Table on Pages 17 and 17, respectively.
Effective January 22, 1997, the Company entered into an employment
agreement with Edmond A. Richards for a three-year term. Under the agreement,
Mr. Richards is entitled to receive $146,772 per year in base salary and an
annual bonus equal to 0.5% of the Company's fiscal year net earnings, such bonus
not to exceed $50,000 annually. See Footnote (10) to the Summary Compensation
Table on Page 17.
The Company entered into an employment agreement with Stacy L. Wagner for a
three-year term, commencing as of January 22, 1997. The agreement was amended,
effective August 19, 1997, to reflect Ms. Wagner's promotion to Vice President
of Finance. Under the amended employment agreement, Ms. Wagner is entitled to
receive $85,000 per year in base salary and an annual bonus equal to 1% of the
Company's fiscal year net earnings, such bonus not to exceed $100,000 annually,
plus a monthly car allowance of $600. See Footnote (11) to the Summary
Compensation Table on Page 17 .
SECTION 162(m). Section 162(m) to the Internal Revenue Code of 1986, as
amended (the "Code"), prohibits a deduction to any publicly held corporation for
compensation paid to a "covered employee" in excess of $1 million per year (the
"Dollar Limitation"). A covered employee is any employee who appears in the
Summary Compensation Table who also is employed by the Company on the last day
of the Company's calendar year. The Compensation Committee does not expect the
deductibility of compensation paid in 1997 to any executive officer to be
affected by Section 162(m). The Compensation Committee may consider
21
alternatives to its existing compensation programs in the future with respect to
qualifying executive compensation for deductibility.
The Company generally is entitled to a tax deduction upon an employee's
exercise of nonqualified options in an amount equal to the excess of the value
of the shares over the exercise price. Such deduction is considered compensation
for purposes of the Dollar Limitation with respect to options having an exercise
price less than fair market value at the date of grant. Deductibility of
compensation in future years to the named executive officers may be affected by
the Dollar Limitation if they remain covered employees and exercise options in
amounts which would result in compensation to them exceeding the Dollar
Limitation in any year. As of December 31, 1997, three named executive officers,
Ronald S. Deferrari, Edmond A. Richards, and Stacy L. Wagner, held then
currently exercisable options to acquire 290,000, 65,000 and 89,000 shares,
respectively, of the Company's Common Stock, with values based on the closing
price of the Company's Common Stock as reported on The Nasdaq Stock Market of
approximately $1,975,625, $444,813, and $606,313, respectively. Ronald S.
Deferrari, Edmond A. Richards and Stacy L. Wagner each have agreed to cooperate
with the Company in exercising their options so as to minimize any loss of
deductibility due to the Dollar Limitations; however, no assurances can be given
in that regard. Ronald H. Deferrari, the Company's Chief Executive Officer, has
not been granted any options to acquire the Company's Common Stock since its
inception.
MEMBERS OF THE BOARD OF DIRECTORS:
Ronald H. Deferrari, Chairman
Anastasios S. Gianoplus
Richard T. Heglin
Lubek Jastrzebski, Ph.D.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee currently consists of all of the members of the
Board of Directors of the Company which are identified above. Stock option
grants are considered part of the overall compensation for executive officers
and directors of the Company, and members of the Stock Option Committee are
granted options pursuant to a specified formula under the Company's 1995 Stock
Incentive Plan. Anastasios S. Gianoplus and Lubek Jastrzebski were both granted
stock options during fiscal 1997. See "Committees, Meetings, and Compensation of
the Board of Directors," below.
The Company's subsidiary, Magnetran, Inc. ("Magnetran"), located in New
Jersey, leases approximately 17,750 square feet, from the Company's Chief
Executive Officer, Ronald H. Deferrari. The premises are leased by Magnetran at
an annual base rental for fiscal 1997 of approximately $93,038. For a more
detailed description of the lease between the Company and Magnetran, see
"Certain Relationships and Related Party Transactions," below.
22
COMMITTEES, MEETINGS, AND COMPENSATION
OF THE BOARD OF DIRECTORS
The Board of Directors held four meetings during fiscal 1997. In addition
to formal meetings of the Board of Directors and its committees, the directors
have frequent informal communications among themselves and with other executives
regarding Board and Committee issues. There is no standing nominating committee
of the Board of Directors. The entire Board of Directors serves as the
Compensation Committee.
The Board of Directors of the Company has an Audit Committee consisting of
two members. Mr. Gianoplus is Chairman of the Audit Committee and Dr.
Jastrzebski is the other member. The Audit Committee, which had two meeting
during fiscal 1997, has responsibility for reviewing matters involving the
retention of auditors, for overseeing internal audit matters, for responding to
and resolving issues with the Company's auditors and for reporting on these
issues to the Board of Directors for appropriate action.
The Board of Directors of the Company also has a Stock Option Committee
consisting of two members. Mr. Gianoplus is Chairman of the Stock Option
Committee and Ronald H. Deferrari is the other member. The Stock Option
Committee has responsibility for administering the Company's stock option plans.
The Stock Option Committee met four times during fiscal 1997. Under the terms of
the Company's 1995 Stock Incentive Plan, each member of the Committee shall be
granted on each June 30 annually, an option to purchase 5,000 shares of the
Company's Common Stock an exercise price equal to 60% of the fair market value
of the shares on the date the option is granted. All options proposed to be
granted by the Stock Option Committee are approved by the entire Board of
Directors prior to grant.
Mr. Gianoplus, Mr. Heglin, and Dr. Jastrzebski are compensated at the rate
of $20,000, $15,000, and $15,000 per year, respectively, for services as a
director. They are also entitled to reimbursement of expenses. During fiscal
1997, certain directors were granted stock options. Mr. Gianoplus and Dr.
Jastrzebski were each granted options to acquire 20,000 shares, 5,000 shares,
and 5,000 shares, on May 6, 1997, June 30, 1997, and August 19, 1997,
respectively. The options are exercisable at exercise prices of $4.12, $3.60,
and $6.97, respectively. Upon election to the Board by shareholders, Mr. Heglin
will be granted 5,000 shares of the Company's Common Stock for an exercise price
equal to 100% of the Fair Market Value of the Common Stock on the date of grant.
Ronald H. Deferrari receives no separate compensation for services as a
director.
PERFORMANCE GRAPH
The following graph compares cumulative total stockholder return on Company
Common Stock for the five years in the period ended November 30, 1997 with that
of The Nasdaq Stock Market (U.S. Companies) Composite Index (the "Composite
Index") and a peer group stock performance index defined as follows: SIC Index
No. 3500-3599 (industrial and commercial machinery and computer equipment
companies) (the "Peer Group"). The graph shows the comparative values for $100
invested on November 30, 1991.
23
COMPARISON OF FIVE YEAR-CUMULATIVE TOTAL RETURNS
PERFORMANCE GRAPH FOR
PLASAMA-THERM, INC.
PREPARED BY THE CENTER FOR RESEARCH IN SECURITY PRICES
Produced on 03,/31/98 including data to 11/28/97
[PERFORMANCE GRAPH OMITTED]
LEGEND
SYMBOL CRSP TOTAL RETURNS INDEX FOR: 11/30/92 11/30/93 11/30/94 11/30/95 11/29/96 11/28/97
- ------ ----------------------------- -------- -------- -------- -------- -------- --------
_______ /bullet/ Plasa-Therm, Inc. 100.0 682.4 870.6 600.0 694.1 1600.0
.. __ . /star/ NASDAQ Stock Market (US Companies) 100.0 115.18 116.0 165.4 202.5 252.4
- ------- /triangle/ NASDAQ Stocks (SIC 3500-3599 US Companies) 100.0 102.4 115.1 198.6 249.4 309.0
Industrial and commercial machinery and computer
equipment
<FN>
Notes:
A. The lines represent monthly index levels derived from compounded daily
returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization of the
previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a trading
day, the preceding trading day is used.
D. The index level for all series was set to $100.0 on 11/30/92.
</FN>
There can be no assurance that the Company's stock performance will
continue into the future with the same or similar trends depicted in the graph
above. The Company does not make or endorse any predictions as to the future
stock performance.
24
THE STOCK PRICE PERFORMANCE GRAPH SHALL NOT BE DEEMED INCORPORATED BY
REFERENCE BY ANY GENERAL STATEMENT INCORPORATING BY REFERENCE THIS PROXY
STATEMENT INTO ANY FILING UNDER THE ACTS, EXCEPT TO THE EXTENT THAT THE COMPANY
SPECIFICALLY INCORPORATES THIS INFORMATION BY REFERENCE, AND SHALL NOT OTHERWISE
BE DEEMED FILED UNDER THE ACTS.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On November 1, 1994, Magnetran, Inc. ("Magnetran"), the Company's
subsidiary located in New Jersey, entered into a five-year gross lease for
approximately 17,750 square feet, with Ronald H. Deferrari, the Company's
founder, Chairman of the Board, and Chief Executive Officer. The premises were
leased by Magnetran at an initial annual base rental of $86,841, which escalates
3% annually. At the expiration of the initial term of the lease, Magnetran has
an option to renew the lease for five years with a 3% increase each year. The
rent paid to the Ronald H. Deferrari for fiscal 1997 was approximately $93,038.
The Company believes that the terms of the lease are generally as favorable to
the Company as could be obtained from unaffiliated third parties.
SELECTION OF INDEPENDENT AUDITORS
The firm of Grant Thornton LLP served as independent public accountants for
the Company for its most recently completed fiscal year and has been selected by
the Board of Directors to serve in such capacity for the current fiscal year. A
representative of Grant Thornton is expected to be present at the Meeting and
will have the opportunity to make a statement if he or she desires to do so. The
representative is also expected to be available to respond to appropriate
questions.
STOCKHOLDER PROPOSALS
Any stockholder who intends to present a proposal at the 1999 Annual
Meeting of Stockholders for inclusion in the proxy statement and form of proxy
relating to that meeting is advised that the proposal must be received by the
Company at its principal executive offices not later than November 25, 1998. The
Company will not be required to include in its proxy statement or form of proxy
a stockholder proposal which is received after that date or which otherwise
fails to meet requirements for stockholder proposals established by regulations
of the Securities and Exchange Commission.
OTHER MATTERS
The solicitation of proxies is made by and on behalf of the Board. The cost
of the solicitation will be borne by the Company, including the reasonable
expenses of brokerage firms or other nominees for forwarding proxy materials to
beneficial owners. In addition to solicitation by mail, proxies may be solicited
by telephone, telegraph or personally. Proxies may be solicited by directors,
officers and employees of the Company without additional compensation.
25
If the enclosed proxy is executed and returned, the shares represented
thereby will be voted in accordance with any specifications made by the
stockholder. In the absence of any such specification, they will be voted "FOR"
the adoption of the Amendments described in Proposals 1 through 5, and "FOR" the
election of each of the directors as set forth in Proposal 6 above. Pursuant to
the Company's Certificate and applicable law, broker nonvotes and abstaining
votes will not be counted in favor of or against the election of any nominee for
director or any of the proposals to be presented at the meeting.
The presence of a stockholder at the meeting will not operate to revoke his
proxy. A proxy may be revoked at any time insofar as it has not been exercised
by giving written notice to the Company.
If any other matters shall come before the meeting, the persons named in
the proxy, or their substitutes, will vote thereon in accordance with their
judgment. The Board does not know of any other matters which will be presented
for action at the meeting.
By Order of the Board of Directors
April 21, 1998 W. NICHOLAS GOETZ
SECRETARY
26
EXHIBIT 1
CLASSIFIED BOARD OF DIRECTORS
AMENDMENT TO ARTICLES OF INCORPORATION
PARAGRAPH 1 OF ARTICLE VII OF THE ARTICLES OF INCORPORATION OF THE COMPANY
SHALL BE AMENDED TO READ AS FOLLOWS:
Except as otherwise fixed by or pursuant to provisions hereof relating to
the rights of the holders of any class or series of stock having a preference
over common stock as to dividends or upon liquidation to elect additional
directors under specified circumstances, the corporation shall have two
directors initially. The number of directors may be either increased or
diminished from time to time, as provided in the bylaws, but shall never be less
than two or more than twelve, the exact number fixed from time to time by
affirmative vote of a majority of the directors then in office. The directors,
other than those who may be elected by the holders of any classes or series of
stock having a preference over the common stock as to dividends or upon
liquidation, shall be classified, with respect to the time for which they
severally hold office, into three classes, as nearly equal in number as
possible, as shall be provided in the manner specified in the bylaws of the
corporation, one class to be originally elected for a term expiring at the
annual meeting of stockholders to be held in 1999, another class to be
originally elected for a term expiring at the annual meeting of stockholders to
be held in 2000, and another class to be originally elected for a term expiring
at the annual meeting of stockholders to be held in 2001, with each class to
hold office until its successor is elected and qualified. At each annual meeting
of the stockholders of the Corporation after fiscal year 1998, the successors of
the class of directors whose term expires at that meeting shall be elected to
hold office for a term expiring at the annual meeting of stockholders held in
the third year following the year of their election.
AMENDMENT TO BYLAWS
IN THE EVENT PROPOSAL 1 IS APPROVED BY THE STOCKHOLDERS, CONFORMING CHANGES
SHALL BE MADE TO SECTION 4 OF ARTICLE II OF THE BYLAWS OF THE COMPANY.
E1-1
EXHIBIT 2
ELIMINATION OF SHAREHOLDERS' ABILITY
TO FILL VACANCIES ON THE BOARD OF DIRECTORS
AMENDMENT TO ARTICLES OF INCORPORATION
PARAGRAPH 3 OF ARTICLE VII OF THE ARTICLES OF INCORPORATION OF THE COMPANY
SHALL BE AMENDED TO READ AS FOLLOWS:
Except as otherwise fixed by or pursuant to provisions hereof relating to
the rights of the holders of any class or series of stock having a preference
over common stock as to dividends or upon liquidation to elect additional
directors under specified circumstances, newly created directorships resulting
from any increase in the number of directors and any vacancies on the Board of
Directors resulting from death, resignation, disqualification, removal or other
cause shall be filled by the affirmative vote of a majority of the remaining
directors then in office, even though less than a quorum of the Board of
Directors. Any director elected in accordance with the preceding sentence shall
hold office until the next shareholders' meeting at which directors are elected,
and thereafter shall hold office for the remainder of the full term of the class
of directors in which the new directorship was created or the vacancy occurred
and until such director's successor shall have been elected and qualified. No
decrease in the number of directors constituting the Board of Directors shall
shorten the term of any incumbent director.
AMENDMENTS TO BYLAWS
IN THE EVENT PROPOSAL 2 IS APPROVED BY THE STOCKHOLDERS, CONFORMING CHANGES
SHALL BE MADE TO SECTION 8 OF ARTICLE II OF THE BYLAWS OF THE COMPANY.
E2-1
EXHIBIT 3
SUPERMAJORITY VOTING REQUIRED
FOR SHAREHOLDERS TO REMOVE DIRECTORS FOR CAUSE
AMENDMENT TO ARTICLES OF INCORPORATION
PARAGRAPH 2 OF ARTICLE VII OF THE ARTICLES OF INCORPORATION OF THE COMPANY
SHALL BE AMENDED TO READ AS FOLLOWS:
Except as otherwise fixed by or pursuant to provisions hereof relating to
the rights of the holders of any class or series of stock having a preference
over common stock as to dividends or upon liquidation to elect additional
directors under specified circumstances, any and all of he directors of this
corporation may be removed from office for cause by the shareholders of this
corporation at any annual or special meeting of shareholders by the affirmative
vote of 66-2/3% of the outstanding shares of common stock of this corporation.
Notice of any such annual or special meeting of shareholders shall state that
the removal of a director or directors for cause is among the purposes of the
meeting. Directors may not be removed by the shareholders without cause.
AMENDMENT TO BYLAWS
IN THE EVENT PROPOSAL 3 IS APPROVED BY THE STOCKHOLDERS, CONFORMING CHANGES
SHALL BE MADE TO SECTION 9 OF ARTICLE II OF THE BYLAWS OF THE COMPANY.
E3-1
EXHIBIT 4
INCREASED VOTING REQUIRED FOR
SHAREHOLDERS TO CALL SPECIAL MEETING
AMENDMENT TO ARTICLES OF INCORPORATION
THE SIXTH PARAGRAPH OF ARTICLE IX OF THE ARTICLES OF INCORPORATION OF THE
COMPANY SHALL BE AMENDED TO READ AS FOLLOWS:
Special meetings of the shareholders of this corporation for any purpose or
purposes may be called at any time by (a) the Board of Directors; (b) the
Chairman of the board of directors (if one is so appointed); (c) the President
of this corporation; or (d) by the holders of not less than 50% of all the votes
entitled to be case on any issue proposed to be considered at the proposed
special meeting, if such shareholders sign, date and deliver to this
corporation's secretary one or more written demands for the meeting describing
the purpose or purposes for which it is to be held. Special meetings of
shareholders of this corporation may not be called by any other person or
persons.
AMENDMENT TO BYLAWS
IN THE EVENT PROPOSAL 4 IS APPROVED BY THE STOCKHOLDERS, CONFORMING CHANGES
SHALL BE MADE TO SECTION 2 OF ARTICLE I OF THE BYLAWS OF THE COMPANY.
E4-1
EXHIBIT 5
SUPERMAJORITY VOTING REQUIRED
FOR SHAREHOLDERS TO AMEND BYLAWS
AMENDMENT TO ARTICLES OF INCORPORATION
ARTICLE X OF THE ARTICLES OF INCORPORATION OF THE COMPANY SHALL BE AMENDED
TO READ AS FOLLOWS:
The power to adopt, alter, amend, or repeal bylaws shall be vested in the
Board of Directors and the affirmative vote of 66-2/3% of the shareholders,
except that the Board of Directors may not amend or repeal any bylaws adopted by
the shareholders if otherwise provided by law or if the shareholders
specifically provide that the bylaw is not subject to amendment or repeal by the
directors.
AMENDMENT TO BYLAWS
IN THE EVENT PROPOSAL 5 IS APPROVED BY THE STOCKHOLDERS, THE BOARD OF
DIRECTORS WILL CAUSE THE AMENDMENT TO BE REFLECTED IN ARTICLE VII OF THE BYLAWS
OF THE COMPANY.
E5-1
PROXY
PLASMA-THERM, INC.
ANNUAL MEETING OF STOCKHOLDERS
JUNE 9, 1998
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby nominates and appoints Ronald S. Deferrari and W.
Nicholas Goetz or any one of them, as proxies of the undersigned, with power of
substitution to each, to vote all shares of stock of PLASMA-THERM, INC. (the
"Company") which the undersigned may be entitled to vote at the Annual Meeting
of Stockholders of the Company to be held at the offices of the Company located
at 10050 16th Street North, St. Petersburg, Florida, on Tuesday, June 9, 1998 at
10:00 A.M., local time, and at any adjournment or adjournments thereof with
authority to vote said stock on the following matters:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2, 3, 4 AND 5, AND FOR
ALL OF THE NOMINEES IN PROPOSAL 6:
1. Approve an amendment to the Articles of Incorporation of the Company
("Articles of Incorporation") and to corresponding amendment to the Bylaws of
the Company ("Bylaws") to provide for the classification of the Board of
Directors into three classes.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
2. Approval of an amendment to the Articles of Incorporation and
corresponding amendments to the Bylaws to eliminate the ability of shareholders
to fill vacancies on the Board of Directors.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Approval of an amendment to the Articles of Incorporation and
corresponding amendments to the Bylaws requiring the affirmative vote of the
holders of 66-2/3% of the outstanding common stock to remove a director for
cause.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
1
4. Approval of an amendment to the Articles of Incorporation and
corresponding amendment to the Bylaws to provide that special meetings of
stockholders may only be called by the President, the Chairman of the board of
Directors, by the affirmative action of a majority of the Board of Directors, or
by the written demand by the holders of not less than 50% of the outstanding
Common Stock entitled to vote on matters to be brought at such meeting.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. Approval of an amendment to the Articles of Incorporation and
corresponding amendment to the Bylaws to require the affirmative vote of 66-2/3%
of the outstanding common stock for stockholders to amend, alter or repeal the
Bylaws.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
6. The election of four directors of the Company: Ronald H. Deferrari,
Anastasios S. Gianoplus, Richard T. Heglin, Lubek Jastrzebski.
[ ] VOTE FOR all nominees listed above, with the following exceptions:
Exceptions:_______________________________________________________________
[ ] WITHHOLD AUTHORITY to vote for all nominees listed above.
NOTE: Please sign and return promptly in the envelope provided. No postage is
required if mailed in the United States.
Date: _____________ , 1998
______________________________________
Signature
______________________________________
Signature
Please sign exactly as your name
appears. When signing as attorney,
executor, administrator, trustee or
guardian, please set forth your full
title. If signer is a corporation,
please sign the full corporation name
by a duly authorized officer. Joint
shareholders should each sign.
2