SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
FILED BY THE REGISTRANT [ ] FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
--------------------------------------------------------------------------------
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
MKS Instruments, Inc.
(Name of Registrant as Specified In Its Charter)
(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 paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
--------------------------------------------------------------------------------
LOGO
MKS INSTRUMENTS, INC.
SIX SHATTUCK ROAD
ANDOVER, MASSACHUSETTS 01810
---------------------
April 17, 2002
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of
MKS Instruments, Inc. (the "Company") to be held on Thursday, May 16, 2002, at
10:00 a.m. at the Andover Country Club, 60 Canterbury Street, Andover,
Massachusetts 01810.
At the Annual Meeting you will be asked to (i) elect two (2) Class III
Directors for a three (3) year term; (ii) to approve an amendment to the
Company's Restated Articles of Organization increasing the number of authorized
shares of Common Stock from 75,000,000 to 200,000,000; (iii) to approve an
amendment increasing the number of shares of Common Stock authorized for
issuance under MKS' Amended and Restated 1995 Stock Incentive Plan from
9,750,000 to 15,000,000; (iv) to approve an amendment increasing the number of
shares of Common Stock authorized for issuance under MKS' Amended and Restated
1999 Employee Stock Purchase Plan from 450,000 to 700,000; (v) to approve an
amendment increasing the number of shares of Common Stock authorized for
issuance under MKS' International Employee Stock Purchase Plan from 50,000 to
75,000; (vi) to ratify the selection of PricewaterhouseCoopers LLP as the
Company's independent auditors for the fiscal year ending December 31, 2002; and
(vii) to transact such other business as may properly come before the meeting or
any adjournment thereof. Details of the matters to be considered at the Annual
Meeting are contained in the Proxy Statement, which we urge you to review
carefully.
Whether or not you plan to attend the Annual Meeting, please complete,
date, sign and return your Proxy Card promptly in the enclosed envelope, which
requires no postage if mailed in the United States. If you attend the Annual
Meeting, you may vote in person if you wish, even if you have previously
returned your Proxy Card.
On behalf of the Board of Directors, I would like to express our
appreciation for your continued interest in the affairs of the Company.
Sincerely,
/s/ John R. Bertucci
JOHN R. BERTUCCI
Chairman, Chief Executive Officer and
President
LOGO
MKS INSTRUMENTS, INC.
SIX SHATTUCK ROAD
ANDOVER, MASSACHUSETTS 01810
---------------------
NOTICE OF 2002 ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 16, 2002
---------------------
To the Stockholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of MKS
INSTRUMENTS, INC. (the "Company"), a Massachusetts corporation, will be held on
Thursday, May 16, 2002 at 10:00 a.m. at the Andover Country Club, 60 Canterbury
Street, Andover, Massachusetts 01810, for the following purposes:
1. To elect two (2) Class III Directors for a three (3) year term;
2. To approve an amendment to the Company's Restated Articles of
Organization increasing the number of authorized shares of Common Stock
from 75,000,000 to 200,000,000;
3. To approve an amendment increasing the number of shares of Common
Stock authorized for issuance under MKS' Amended and Restated 1995 Stock
Incentive Plan from 9,750,000 to 15,000,000;
4. To approve an amendment increasing the number of shares of Common
Stock authorized for issuance under MKS' Amended and Restated 1999 Employee
Stock Purchase Plan from 450,000 to 700,000;
5. To approve an amendment increasing the number of shares of Common
Stock authorized for issuance under MKS' International Employee Stock
Purchase Plan from 50,000 to 75,000;
6. To ratify the selection of PricewaterhouseCoopers LLP as the
Company's independent auditors for the year ending December 31, 2002; and
7. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has no knowledge of any other business to be
transacted at the Annual Meeting.
The Board of Directors has fixed the close of business on April 1, 2002 as
the record date for the determination of stockholders entitled to notice of and
to vote at the Annual Meeting and any adjournment or adjournments thereof. The
stock transfer books of the Company will remain open for the purchase and sale
of the Company's Common Stock.
A copy of the Company's Annual Report to Stockholders for the year ended
December 31, 2001, which contains consolidated financial statements and other
information of interest to stockholders, accompanies this Notice and the
enclosed Proxy Statement.
If you would like to attend the Annual Meeting and your shares are held by
a broker, bank or other nominee, you must bring to the Annual Meeting a letter
from the nominee confirming your beneficial ownership of such shares. You must
also bring a form of personal identification. In order to vote your shares at
the Annual Meeting, you must obtain from the nominee a proxy issued in your
name.
By Order of the Board of Directors
/s/ Richard S. Chute
RICHARD S. CHUTE
Clerk
Andover, Massachusetts
April 17, 2002
IMPORTANT
WHETHER OR NOT YOU EXPECT TO ATTEND IN PERSON, PLEASE PROMPTLY SIGN, DATE, AND
RETURN THE ENCLOSED PROXY. PROMPTLY SIGNING, DATING, AND RETURNING THE PROXY
WILL SAVE THE COMPANY THE EXPENSE AND EXTRA WORK OF ADDITIONAL SOLICITATION. AN
ADDRESSED ENVELOPE FOR WHICH NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES IS ENCLOSED FOR THAT PURPOSE. SENDING IN YOUR PROXY WILL NOT PREVENT YOU
FROM VOTING YOUR STOCK AT THE ANNUAL MEETING IF YOU DESIRE TO DO SO, AS YOUR
PROXY IS REVOCABLE AT YOUR OPTION.
MKS INSTRUMENTS, INC.
SIX SHATTUCK ROAD
ANDOVER, MASSACHUSETTS 01810
---------------------
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of MKS Instruments, Inc. (the "Company" or
"MKS"), a Massachusetts corporation, for use at the Annual Meeting of
Stockholders to be held on May 16, 2002, at 10:00 a.m. at the Andover Country
Club, 60 Canterbury Street, Andover, Massachusetts 01810, and at any adjournment
or postponement thereof (the "Annual Meeting").
All proxies will be voted in accordance with the stockholders'
instructions. If no choice is specified, the shares will be voted in favor of
the matters set forth in the accompanying Notice of 2002 Annual Meeting of
Stockholders. Any proxy may be revoked by a stockholder at any time before its
exercise by delivery of written revocation to the Clerk of the Company.
Attendance at the Annual Meeting will not in itself be deemed to revoke a Proxy
unless the stockholder gives affirmative notice at the Annual Meeting that the
stockholder intends to revoke the proxy and vote in person.
VOTING SECURITIES AND VOTES REQUIRED
At the close of business on April 1, 2002, the record date for the
determination of stockholders entitled to notice of and to vote at the Annual
Meeting, there were issued and outstanding and entitled to vote 50,975,323
shares of Common Stock, no par value per share, of the Company (the "Common
Stock"). Each share entitles the record holder to one vote on each matter.
Under the Company's Amended and Restated By-Laws (the "By-Laws"), the
holders of a majority of the shares of Common Stock issued and outstanding and
entitled to vote at the Annual Meeting shall constitute a quorum for the
transaction of business at the Annual Meeting. Shares of Common Stock present in
person or represented by proxy (including shares which abstain or do not vote
with respect to one or more of the matters presented for stockholder approval)
will be counted for purposes of determining whether a quorum exists at the
Annual Meeting.
The affirmative vote of the holders of a plurality of the shares of Common
Stock voting on the matter is required for the election of Directors. The
affirmative vote of the holders of a majority of the outstanding shares of
Common Stock is required to approve the proposed amendment to the Company's
Restated Articles of Organization, as amended (the "Restated Articles of
Organization"). All other matters require the approval of the holders of a
majority of the shares of Common Stock present at the Annual Meeting or
represented by proxy.
Shares held by stockholders who abstain from voting as to a particular
matter, and shares held in "street name" by brokers or nominees, who indicate on
their proxies that they do not have discretionary authority to vote such shares
as to a particular matter, will not be counted as votes in favor of such matter,
and also will not be counted as shares voting on such matter. Accordingly,
abstentions and "broker non-votes" will have no effect on the voting on a matter
that requires the affirmative vote of a certain percentage of the shares voting
on the matter. However, because shares which abstain and shares represented by
broker non-votes are nonetheless considered outstanding shares, abstentions and
broker non-votes with respect to the proposed
amendment to the Company's Restated Articles of Organization will have the same
effect as a vote against such proposed amendment.
THE NOTICE OF ANNUAL MEETING, THIS PROXY STATEMENT AND THE COMPANY'S ANNUAL
REPORT TO STOCKHOLDERS FOR THE YEAR ENDED DECEMBER 31, 2001, ARE BEING MAILED TO
STOCKHOLDERS ON OR ABOUT APRIL 17, 2002. A COPY OF THE COMPANY'S ANNUAL REPORT
ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2001, AS FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION (THE "COMMISSION"), EXCLUDING EXHIBITS, WILL BE
FURNISHED WITHOUT CHARGE TO ANY STOCKHOLDER UPON WRITTEN REQUEST TO GLOBALWARE
SOLUTIONS, C/O CCBN.COM INVESTOR CONNECT, 148 WARD HILL, HAVERHILL, MA 01835.
EXHIBITS WILL BE PROVIDED UPON WRITTEN REQUEST AND PAYMENT OF AN APPROPRIATE
PROCESSING FEE.
2
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of Common Stock by (i) each stockholder known to the
Company to be the beneficial owner of more than 5% of the outstanding shares of
Common Stock; (ii) each current director of the Company; (iii) the executive
officers named in the Summary Compensation Table below; and (iv) all directors
and executive officers of the Company as a group. Unless otherwise indicated in
the footnotes to the table, (i) all information set forth in the table is as of
January 31, 2002; and (ii) the address for each director and executive officer
of the Company is: c/o MKS Instruments, Inc., Six Shattuck Road, Andover,
Massachusetts 01810.
NUMBER OF SHARES PERCENTAGE OF
NAME OF BENEFICIAL OWNERS BENEFICIALLY OWNED(1) CLASS OUTSTANDING
------------------------- --------------------- -----------------
John R. Bertucci........................................... 14,921,284(2) 29.8%
Ronald C. Weigner.......................................... 310,001(3) *
Leo Berlinghieri........................................... 270,000(4) *
William D. Stewart......................................... 284,247(5) *
Peter R. Younger........................................... 113,973(6) *
Robert L. Klimm............................................ 42,739(7) *
Richard S. Chute........................................... 1,509,148(8) 3.0%
Robert R. Anderson......................................... 77,265(9) *
Hans-Jochen Kahl........................................... 50,663(10) *
Owen W. Robbins............................................ 31,092(4) *
Louis P. Valente........................................... 31,092(4) *
James G. Berges............................................ 12,000,000(11) 24.0%
All directors and executive officers as a group (12
persons)................................................. 28,163,448(12) 55.0%
Other 5% shareholder Emerson Electric Co................... 12,000,000 24.0%
800 West Florissant Avenue
St. Louis, MO 63136
---------------
* Represents less than 1% of the outstanding Common Stock.
(1) The Company believes that each stockholder has sole voting and investment
power with respect to the shares listed, except as otherwise noted. The
number of shares beneficially owned by each stockholder is determined under
rules of the Commission, and the information is not necessarily indicative
of ownership for any other purpose. Under such rules, beneficial ownership
includes any shares as to which the person has sole or shared voting power
or investment power and also any shares which the individual has the right
to acquire within 60 days after January 31, 2002 through the exercise of any
stock option or other right. The inclusion herein of any shares of Common
Stock deemed beneficially owned does not constitute an admission by such
stockholder of beneficial ownership of those shares of Common Stock. Shares
of Common Stock which an individual or entity has a right to acquire within
the 60-day period following January 31, 2002 pursuant to the exercise of
options or warrants are deemed to be outstanding for the purpose of
computing the percentage ownership of such individual or entity, but are not
deemed to be outstanding for the purpose of computing the percentage
ownership of any other person or entity shown in the table.
(2) Includes 5,878,484 shares held directly by Mr. Bertucci, 5,552,946 shares
held directly by Mr. Bertucci's family members, and 3,456,112 shares held by
Bertucci family trusts for which either Mr. Bertucci or his wife serves as a
co-trustee. In addition, includes 33,742 shares subject to options
exercisable within 60 days of January 31, 2002.
3
(3) Consists of 2,901 shares held directly by Mr. Weigner and 307,100 shares
subject to options exercisable within 60 days of January 31, 2002.
(4) Consists solely of options exercisable within 60 days of January 31, 2002.
(5) Consists of 2,647 shares held directly by Mr. Stewart and 281,600 shares
subject to options exercisable within 60 days of January 31, 2002.
(6) Consists of 656 shares held directly by Mr. Younger, 2,484 shares held
directly by Mr. Younger and his family members, 833 shares held by certain
members of the Younger family trusts for which Mr. Younger serves as
trustee, and 110,000 shares subject to options exercisable within 60 days of
January 31, 2002.
(7) Consists of 1,489 shares held directly by Mr. Klimm and 41,250 shares
subject to options exercisable within 60 days of January 31, 2002.
(8) Consists of 1,478,056 shares held by certain of the Bertucci family trusts
for which Mr. Chute serves as a co-trustee and 31,092 shares subject to
options held by Mr. Chute exercisable within 60 days of January 31, 2002.
(9) Consists of 53,193 shares held directly by Mr. Anderson, 11,503 shares held
in trust for the benefit of a child of Mr. Anderson, of which Mr. Anderson
is the trustee, and 12,569 shares subject to options exercisable within 60
days of January 31, 2002.
(10) Consists of 20,209 shares held directly by Mr. Kahl, 4,081 shares held by
Mr. Kahl's wife, and 26,373 shares subject to options exercisable within 60
days of January 31, 2002.
(11) Includes 12,000,000 shares held by Emerson Electric Co. of which Mr. Berges
serves as President and Director.
(12) Includes 1,175,910 shares subject to options exercisable within 60 days of
January 31, 2002.
To the knowledge of the Company, there are no agreements among any of the
foregoing persons or entities with respect to the voting of shares of Common
Stock of the Company.
PROPOSAL ONE
ELECTION OF DIRECTORS
The By-Laws of the Company provide for a Board of Directors which is
divided into three classes. The term of the Class I Directors expires at the
2003 Annual Meeting. The term of the Class II Directors expires at the 2004
Annual Meeting, and the term of the Class III Directors expires at the 2002
Annual Meeting. Mr. John R. Bertucci and Mr. Robert R. Anderson are currently
proposed for election to serve as Class III Directors.
Shares represented by all proxies received by the Board of Directors and
not so marked as to withhold authority to vote for an individual director will
be voted (unless one or both nominees are unable or unwilling to serve) for the
election of the nominees named below. The Board of Directors expects that each
of the nominees named below will be available for election, but if either of
them is not a candidate at the time the election occurs, it is intended that
such proxies will be voted for the election of a substitute nominee to be
designated by the Board of Directors.
BOARD RECOMMENDATION
THE BOARD OF DIRECTORS BELIEVES THAT APPROVAL OF THE ELECTION OF MR. JOHN
R. BERTUCCI AND MR. ROBERT R. ANDERSON TO SERVE AS CLASS III DIRECTORS IS IN THE
BEST INTERESTS OF MKS AND ITS STOCKHOLDERS AND THEREFORE RECOMMENDS A VOTE "FOR"
THIS PROPOSAL.
4
DIRECTORS
Set forth below are the names and ages of each member of the Board of
Directors (including those who are nominees for election as Class III Directors)
and the positions and offices held by him, his principal occupation and business
experience during the past five years, the names of other publicly held
companies of which he serves as a director and the year of the commencement of
his term as director of MKS. Information with respect to the number of shares of
Common Stock beneficially owned by each director, directly or indirectly, as of
January 31, 2002, appears under the heading "Security Ownership of Certain
Beneficial Owners and Management."
CLASS TO WHICH
NAME AGE POSITION DIRECTOR BELONGS
---- --- -------- ----------------
*John R. Bertucci.................. 61 Director; Chairman, Chief Executive III
Officer and President
Richard S. Chute................... 63 Director; Clerk II
Owen W. Robbins(2)................. 72 Director II
Louis P. Valente(1)(2)............. 71 Director I
*Robert R. Anderson(2)............. 64 Director I
Hans-Jochen Kahl(1)................ 62 Director III
James G. Berges(3)................. 54 Director II
---------------
(1) Member of Compensation Committee.
(2) Member of Audit Committee.
(3) Joined the Board effective February 1, 2002
* Nominee for election at this meeting.
Mr. Bertucci has served as a director of MKS since 1974 and has been
Chairman of the Board of Directors and Chief Executive Officer since November
1995. Mr. Bertucci served as President of MKS from 1974 to May 1999 and again
from November 2001 to the present. From 1970 to 1974, he was Vice President and
General Manager. Mr. Bertucci has an M.S. in Industrial Administration and a
B.A. in Metallurgical Engineering from Carnegie-Mellon University. Mr. Bertucci
is also a director of Intellisense Corporation.
Mr. Chute has served as a director of MKS since 1974. Mr. Chute has been a
member of the law firm of Hill & Barlow, a Professional Corporation, since 1971.
Mr. Robbins has served as a director of MKS since February 1996. Mr.
Robbins was Executive Vice President of Teradyne, Inc., a manufacturer of
electronic test systems and backplane connection systems used in the electronics
and telecommunications industries, from March 1992 to May 1997, and its Chief
Financial Officer from February 1980 to May 1997.
Mr. Valente has served as a director of MKS since February 1996. Mr.
Valente has been Chairman and Chief Executive Officer of Palomar Medical
Technologies, Inc., a company which designs, manufactures and markets cosmetic
lasers, since September 1997. He has been a director of Palomar Medical
Technologies, Inc. Mr. Valente was also served as director of SurgiLight, Inc.
since July, 2001. since February 1997 and was its President and Chief Executive
Officer from May 1997 to September 1997. Mr. Valente is a director of two
privately held medical software companies. Mr. Valente also serves as director
of SurgiLight, Inc. since July, 2001.
Mr. Anderson has served as a director of MKS since January 2001. Mr.
Anderson is a private investor. From October 1998 to October 2000, Mr. Anderson
served as Chief Executive Officer of Yield Dynamics, Inc., a private
semiconductor control software company and presently serves as a director. He
also served as
5
CEO of Silicon Valley Research, Inc., a semiconductor design automation software
company from December 1996 to August 1998. Mr. Anderson currently serves as a
director of Metron Technology N.V., a distributor of parts and equipment for the
semiconductor industry, Trikon Technologies, Inc., a manufacturer of
semiconductor process equipment, and Aehr Test Systems, Inc., a manufacturer of
semiconductor test and burn in equipment. He also serves as a director of three
other private development stage companies, and as a trustee of Bentley College.
Mr. Kahl has served as a director of MKS since January 2001. From June 1994
through September 1996, Mr. Kahl served as a consultant to Ebara, a Japanese
manufacturer of industrial water pumps and vacuum process equipment for the
semiconductor industry. Mr. Kahl was employed by Leybold AG, formerly
Leybold-Heraeus GmbH, a leading international manufacturer of vacuum pumps and
other vacuum process equipment for the semiconductor industry, from July 1983 to
March 1992, where he served as a managing director and was primarily responsible
for sales, marketing and strategic planning. Since November 1996, he has served
as a director of Solid State Management, a privately held manufacturer of high
precision measurement tools.
Mr. Berges joined Emerson Electric Co. in 1976 as director of
manufacturing planning, and has held successively more responsible positions at
the company since then. He is currently President and Director of Emerson, and
is also a Director of PPG Industries, Inc.
DIRECTOR COMPENSATION
Directors of MKS are reimbursed for expenses incurred in connection with
their attendance at Board of Directors and committee meetings. Directors who are
not employees of MKS are paid an annual fee of $10,000 and $1,000 for each Board
of Directors meeting they attend and $500 for each committee meeting they attend
which is not held on the same day as a Board of Directors meeting. Messrs.
Chute, Robbins and Valente and Robert J. Therrien, a former non-employee
director of the Company, have each been granted options, under MKS's 1996
Director Stock Option Plan (under which no further grants will be made), to
purchase 8,592 shares of Common Stock at a weighted average exercise price of
$4.81 per share. Each has also been granted options to purchase 28,500 shares of
Common Stock at a weighted average exercise price of $23.74 per share under the
1997 Director Stock Option Plan (the "1997 Director Plan"). Mr. Anderson and Mr.
Kahl have each been granted options to purchase 11,250 shares of Common Stock at
an exercise price of $20.125 per share under the 1997 Director Plan.
1997 DIRECTOR STOCK OPTION PLAN
MKS' 1997 Director Plan authorizes the issuance of up to an aggregate of
300,000 shares of Common Stock. The 1997 Director Plan is administered by MKS'
Board of Directors. Options are granted under the 1997 Director Plan only to
directors of MKS who are not employees of MKS. Under the 1997 Director Plan,
non-employee directors receive an option to purchase 11,250 shares of Common
Stock upon their initial election to the Board of Directors. Each initial option
vests over a three-year period in twelve (12) equal quarterly installments
following the date of grant. On the date of each annual meeting of the
stockholders, options are automatically granted to each eligible director who
has been in office for at least six (6) months prior to the date of the annual
meeting of the stockholders. Each annual option entitles the holder to purchase
6,000 shares of Common Stock. Each annual option will generally become
exercisable on the day prior to the first annual meeting of stockholders
following the date of grant, or if no such meeting is held within thirteen (13)
months after the date of grant, on the thirteen (13) month anniversary of the
date of grant. The exercise price of all options granted under the 1997 Director
Plan is equal to the fair market value of the Common Stock on the date of grant.
Options granted under the 1997 Director Plan terminate upon the earlier of three
(3) months after the optionee ceases to be a director of MKS or ten (10) years
after the grant date. In the
6
event of a change in control of MKS, the vesting of all options then outstanding
would be accelerated in full and any restrictions on exercising outstanding
options would terminate.
The Company's 1996 Director Stock Option Plan, under which options have
been granted to, and may still be exercised by, four non-employee directors of
MKS, has been terminated. See "Director Compensation."
COMMITTEES OF THE BOARD OF DIRECTORS
The Compensation Committee for the year 2001 consisted of Messrs. Valente
and Kahl and Mr. Therrien, who resigned as a director and from the Compensation
Committee in February 2002. The Compensation Committee reviews and evaluates the
salaries, supplemental compensation and benefits of all officers of MKS, reviews
general policy matters relating to compensation and benefits of employees of MKS
and makes recommendations concerning these matters to the Board of Directors.
The Compensation Committee also administers MKS' stock option and stock purchase
plans, and sets grants to executive officers, under the Company's Stock Plans.
The Compensation Committee held two (2) meetings in 2001.
The Audit Committee beginning in year 2001 initially consisted of Messrs.
Robbins, Therrien and Valente. Mr. Therrien resigned from the Audit Committee in
February 2001 and Mr. Anderson joined the Audit Committee in February 2001. The
Audit Committee reviews with MKS' independent auditor the scope and timing of
its audit services, the auditor's report on MKS' financial statements following
completion of its audit and MKS' policies and procedures with respect to
internal accounting and financial controls. In addition, the Audit Committee
will make annual recommendations to the Board of Directors for the appointment
of independent auditors for the ensuing year.
The Board of Directors held ten (10) meetings during 2001. Each director
attended at least 80% of the total number of meetings of the Board of Directors
and all committees of the Board on which he served.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's executive compensation program is administered by the
Compensation Committee of the Board of Directors. In 2001, the Compensation
Committee (the "Committee") was initially comprised of two non-employee
directors, Messrs. Therrien and Valente. Mr. Kahl joined the Committee in
February 2001. Mr. Therrien resigned as a director and from the Committee in
February 2002. The Committee is responsible for determining the salaries of,
establishing bonus programs for, and granting stock options to, the Company's
executive officers.
The Committee believes that the primary objectives of the Company's
compensation policies are to attract, retain, motivate, and reward a management
team that can effectively implement and execute the Company's strategic business
plan and lead the Company in achieving its long-term growth and earnings goals.
These compensation policies include an overall management compensation program
that: (i) is competitive with management compensation programs at companies of
similar size; (ii) recognizes individual initiative, leadership and achievement;
(iii) provides short-term bonus incentives for management to meet the Company's
net income performance goals; and (iv) provides long-term incentive compensation
in the form of stock options to encourage management to continue to focus on
shareholder return.
The Committee's goal is to use compensation policies to closely align the
interests of the Company's management with the interests of shareholders so that
the Company's management have incentives to achieve short-term performance goals
while building long-term value for the Company's shareholders. In establishing
base salaries for executive officers, the Committee considers numerous factors
such as the executive's responsibilities, the executive's importance to the
Company, the executive's performance, historical salary
7
levels of the executive, and the salaries of executives at certain other
companies whose business is similar to that of the Company. The Committee will
review its compensation policies from time to time in order to determine the
reasonableness of the Company's compensation programs and to take into account
factors which are unique to the Company.
The Company has entered into employment agreements with certain senior
officers of the Company. The Committee believes that the salaries and benefits
provided to these senior officers reflect appropriate base salaries and benefits
as compared to senior officers of other companies of similar size. These
agreements provide for termination for cause as well as termination without
cause and for certain severance benefits and restrict the officers' ability to
compete with the Company.
BONUS PLAN
To further provide incentives for management to continue to improve
operating results, the Board of Directors implemented the Management Incentive
Plan ("Bonus Plan"). The amounts to be distributed pursuant to the Bonus Plan
are determined by the financial results of the Company. The Committee believes
that the Bonus Plan provides significant incentive to the executive officers of
the Company to exceed the Company's financial goals.
LONG-TERM INCENTIVE COMPENSATION
Long-term incentive compensation, in the form of stock options, allows the
executive officers to share in any appreciation in the value of the Company's
Common Stock. The Committee believes that stock option participation aligns
executive officers' interests with those of the stockholders. In addition, the
Committee believes that awarding options to executive officers helps to balance
the short-term focus of annual incentive compensation with a longer term view
and may help to retain key executive officers. Moreover, because options granted
to executive officers generally become exercisable over a four or five year
period and terminate upon or shortly after the termination of the executive's
employment with the Company, stock options serve as a means of retaining these
executives.
When establishing stock option grant levels, the Committee considers
general corporate performance, the Chief Executive Officer's recommendations,
level of seniority and experience, the dilutive impact of the options, previous
grants of stock options, vesting schedules of outstanding options and the
current stock price.
It is the policy of the Company to make an initial stock option grant to
all executive officers at the time they commence employment consistent with the
number of options granted to executive officers in the industry at similar
levels of seniority. In addition, the Committee may also make grants throughout
the year. In making such grants, the Committee considers individual
contributions to the Company's financial, operational and strategic objectives.
Senior management also participates in Company-wide employee benefit plans,
including the Company's 401(k) Plan. Benefits under these plans are not
dependent upon individual performance.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
Mr. Bertucci's compensation was based upon a careful analysis of other
comparable companies' Chief Executive Officers' compensation and Mr. Bertucci's
efforts and success in improving the Company's operating results, establishing
strategic goals and objectives for long-term growth of the Company, and
advancing the Company in obtaining its strategic goals.
8
SECTION 162(M)
Section 162(m) of the Internal Revenue Code generally disallows a tax
deduction to public companies for certain compensation in excess of $1.0 million
paid to the company's chief executive officer and the four other most highly
compensated executive officers. Certain compensation, including qualified
performance-based compensation, will not be subject to the deduction limit if
certain requirements are met.
The Committee reviews the potential effect of Section 162(m) periodically
and generally seeks to structure the long-term incentive compensation granted to
its executive officers through option issuances under the Amended and Restated
1995 Stock Incentive Plan, as amended, in a manner that is intended to avoid
disallowance of deductions under Section 162(m). However, because the Company's
Bonus Plan is not operated in a manner designed to qualify as performance-based
compensation under Section 162(m), it is possible that a portion of any bonus
payable to Mr. Bertucci and certain other executives under the Bonus Plan will
not be deductible for federal income tax purposes. Nevertheless, there can be no
assurances that compensation attributable to awards granted under the Amended
and Restated 1995 Stock Incentive Plan, as amended, will be treated as qualified
performance-based compensation under Section 162(m). The Committee reserves the
right to use its judgment to authorize compensation payments which may be in
excess of the Section 162(m) limit when the Committee believes such payments are
appropriate, after taking into consideration changing business conditions or the
officer's performance, and are in the best interests of the stockholders.
Louis P. Valente, Chairman
Robert J. Therrien
Hans-Jochen Kahl
9
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
In 2001, the Compensation Committee comprised Messrs. Therrien, Valente and
Kahl. Messrs. Therrien, Valente and Kahl were not, at any time, officers or
employees of MKS or any subsidiary of MKS, and none of them had any relationship
with MKS requiring disclosure under Item 404 of Regulation S-K under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). No executive
officer of MKS serves or has served as a member of the Board of Directors or
Compensation Committee (or other committee serving an equivalent function) of
any other entity which has one or more executive officers serving as a member of
MKS' Board of Directors or Compensation Committee.
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The Audit Committee of the Company's Board of Directors is currently
composed of three members and acts under a written charter first adopted and
approved in 2000. A copy of this charter is attached to this proxy statement as
Appendix A. The members of the Audit Committee are independent directors, as
defined by its charter and the rules of the Nasdaq Stock Market, and possess the
financial sophistication required by such charter and rules. The Audit Committee
held six meetings during the fiscal year ended December 31, 2001.
Management is responsible for the Company's internal controls and the
financial reporting process. The Company's independent accountants,
PricewaterhouseCoopers LLP ("PwC"), are responsible for performing an
independent audit of the Company's financial statements in accordance with
generally accepted accounting principles and issue a report on those financial
statements. The Audit Committee is responsible for monitoring and overseeing
these processes. As appropriate, the Audit Committee reviews and evaluates, and
discusses with the Company's management, internal accounting, financial and
auditing personnel and the independent auditors, the following:
- the plan for, and the independent auditors' report on, each audit of the
Company's financial statements;
- the Company's financial disclosure documents, including all financial
statements and reports filed with the Securities and Exchange Commission
or sent to shareholders;
- management's selection, application and disclosure of critical accounting
policies;
- major changes in the Company's significant: accounting practices,
principles, controls or methodologies;
- significant developments or changes in accounting rules applicable to the
Company; and
- the adequacy of the Company's internal controls and accounting, financial
and auditing personnel.
The Audit Committee reviewed the Company's audited financial statements for
the fiscal year ended December 31, 2001, and discussed these financial
statements with the Company's management. Management represented to the Audit
Committee that the Company's financial statements had been prepared in
accordance with generally accepted accounting principles. The Audit Committee
also reviewed and discussed the audited financial statements and the matters
required by Statement on Auditing Standards 61 Communication with Audit
Committees with PwC, the Company's independent auditors. SAS 61 requires the
Company's independent auditors to discuss with the Company's Audit Committee,
among other things, the following:
- methods to account for significant unusual transactions;
- the effect of significant accounting policies in controversial or
emerging areas for which there is a lack of authoritative guidance
or consensus;
- the process used by management in formulating particularly sensitive
accounting estimates and the basis for the auditors' conclusions
regarding the reasonableness of those estimates; and
10
- disagreements with management over the application of accounting
principles, the basis for management's accounting estimates and the
disclosures in the financial statements.
The Company's independent auditors also provided the Audit Committee with
the written disclosures and the letter required by Independence Standards Board
Standard No. 1 (Independence Discussions with Audit Committees). Independence
Standards Board Standard No. 1 requires auditors annually to disclose in writing
all relationships that in the auditor's professional opinion may reasonably be
thought to bear on independence, confirm their perceived independence and engage
in a discussion of independence. In addition, the Audit Committee discussed with
the independent auditors their independence from the Company. The Audit
Committee also considered whether the independent auditors' provision of the
other, non-audit related services to the Company which are referred to below is
compatible with maintaining such auditors' independence.
Based on its discussions with management and the independent auditors, and
its review of the representations and information provided by management and the
independent auditors, the Audit Committee recommended to the Company's Board of
Directors that the audited financial statements be included in the Company's
Annual Report on Form 10-K for the year ended December 31, 2001.
Management has advised us that for the year ended December 31, 2001, the
Company was billed by its independent auditors, PwC, for services in the
following categories:
Audit Fees:
PwC billed the Company an aggregate of $339,000 in fees for professional
services rendered in connection with the audit of the Company's financial
statements for the most recent fiscal year and the reviews of the financial
statements included in each of the Company's Quarterly Reports on Form 10-Q
during the last fiscal year ended December 31, 2001.
Financial Information Systems Design and Implementation Fees:
PwC did not bill the Company for any professional services rendered for the
fiscal year in connection with financial information systems design or
implementation, the operation of the Company's information system or the
management of its local area network.
All Other Fees(1):
PwC billed the Company an aggregate of $1,238,000 for all other services
rendered for the most recent fiscal year.
---------------
(1) All Other Fees includes fees for the following routine audit and tax
services:
Tax accounting and compliance services...................... $655,000
Due diligence, accounting and tax advice in support of
acquisitions and dispositions............................. $583,000
We have considered and determined that the provision of the non-audit
services noted in the foregoing table is compatible with maintaining PwC's
independence.
By the Audit Committee of the Board of Directors of MKS Instruments, Inc.
Robert R. Anderson, Chairman
Owen W. Robbins
Louis P. Valente
11
EXECUTIVE OFFICERS
The following is a brief summary of the background of each executive
officer of MKS, other than Mr. Bertucci, MKS' Chairman, Chief Executive Officer
and President, whose background is described above:
Ronald C. Weigner, Vice President and Chief Financial Officer, Age 56.
Mr. Weigner has served as Vice President and Chief Financial Officer of MKS
since November 1995. From September 1993 until November 1995, he was Vice
President and Corporate Controller and from 1980 to 1993 he was Corporate
Controller. Mr. Weigner is a certified public accountant and has a B.S. in
Business Administration from Boston University.
Leo Berlinghieri, Vice President, Global Sales and Service, Age 48.
Mr. Berlinghieri has served as Vice President, Global Sales and Service of
MKS since November 1995. From 1980 to November 1995, he served in various
management positions of MKS, including Manufacturing Manager, Production and
Inventory Control Manager, and Director of Customer Support Operations. Mr.
Berlinghieri is also Treasurer of the TQM-BASE Council, Inc., a non-profit
quality management consortium comprised of Boston area semiconductor capital
equipment manufacturers.
William D. Stewart, Vice President and General Manager, HPS Products, Age 57.
Mr. Stewart has served as Vice President and General Manager, HPS Products
group since November 1997. From October 1986 to November 1997, he was President
of HPS Products group, which MKS acquired in 1986. Mr. Stewart co-founded HPS in
1976. Mr Stewart has an M.B.A. from Northwestern University and a B.S. in
Business Administration from the University of Colorado. Mr. Stewart also serves
on the Board of Directors of the Janus Fund.
Robert L. Klimm, Vice President and General Manager, ASTeX Products, Age 51.
Mr. Klimm has served as Vice President and General Manager of MKS since
December 1999. Mr. Klimm was Vice President and General Manager of the Factory
Automation Division of PRI Automation from 1997 to 1999. From 1990 to 1997 he
held various positions at Eaton's Semiconductor Equipment Operations,
culminating as General Manager of the Implant Systems Division. Mr. Klimm has an
M.B.A. from the Sloan School at MIT, an M.A. in Electrical Engineering from
Northeastern University and a B.S. in Electrical Engineering from Lehigh
University.
Executive officers of MKS are elected by the Board of Directors on an
annual basis and serve until their successors are duly elected and qualified.
There are no family relationships among any of the executive officers or
directors of MKS.
12
EXECUTIVE COMPENSATION
The following table sets forth information with respect to the compensation
of MKS's Chief Executive Officer, each of the four other most highly compensated
executive officers (the "Named Executive Officers") and Peter R. Younger, MKS'
former President and Chief Operating Officer for the years ended December 31,
2001, 2000, and 1999.
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
AWARDS
OTHER ANNUAL COMPENSATION ------------
---------------------------------------- SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION OPTIONS(#) COMPENSATION(1)
--------------------------- ---- -------- ------- ------------ ------------ ---------------
John R. Bertucci.............. 2001 $400,437 -- -- -- --
Chairman, Chief Executive 2000 391,281 593,372 -- -- 8,500
Officer and President 1999 348,720 476,957 -- -- 12,800
Ronald C. Weigner............. 2001 210,701 -- -- 155,950 5,100
Vice President and Chief 2000 196,743 160,871 -- 12,000 13,600
Financial Officer 1999 187,838 132,517 -- -- 12,800
Leo Berlinghieri.............. 2001 196,410 -- -- 155,880 --
Vice President Global Sales 2000 179,783 145,528 -- 11,000 8,500
and Service 1999 168,002 124,170 -- -- 8,000
William D. Stewart............ 2001 201,087 -- -- 155,926 5,100
Vice President and General 2000 206,135 170,449 -- 11,000 13,600
Manager HPS Products 1999 191,693 140,225 -- -- 12,800
Robert L. Klimm............... 2001 191,721 -- -- 30,863 5,100
Vice President and General 2000 193,419 161,741 -- -- 4,168
Manager Materials Delivery 1999 11,531 8,009 -- 75,000 --
and Analysis Products
Peter R. Younger(2)........... 2001 289,296 -- -- 60,000 --
President and Chief
Operating 2000 241,114 293,448 -- 15,000 13,600
Officer 1999 138,117 138,114 -- 15,000 --
---------------
(1) Represents amounts paid into a 401(k) plan. Other compensation in the form
of perquisites and other personal benefits has been omitted in those
instances where such perquisites and other personal benefits constituted
less than the lesser of $50,000 or 10 percent of the total salary and bonus
for each Named Executive Officer for such year.
(2) Effective November, 2001, Mr. Younger resigned as the Company's President
and Chief Operating Officer.
13
STOCK OPTION GRANTS
OPTION GRANTS IN FISCAL YEAR 2001
INDIVIDUAL GRANTS STOCK
--------------------------- POTENTIAL REALIZABLE VALUE AT
NUMBER OF % OF TOTAL ASSUMED ANNUAL RATES OF
SECURITIES OPTIONS PRICE APPRECIATION FOR OPTION
UNDERLYING GRANTED TO EXERCISE OF TERM(6)
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION -----------------------------
NAME GRANTED(1) FISCAL YEAR(4) ($/SH) DATE(5) 5% 10%
---- ---------- -------------- ----------- ---------- ------------- -------------
John R. Bertucci..... -- -- -- -- -- --
Ronald C. Weigner.... 30,000(1) $17.25 3/20/2011 $ 325,453 $ 824,761
950(2) 20.02 10/14/2011 11,961 30,311
125,000(3) 5.8% 24.50 11/13/2011 1,925,991 4,880,835
Leo Berlinghieri..... 30,000(1) 17.25 3/20/2011 325,453 824,761
880(2) 20.02 10/14/2011 11,080 28,078
125,000(3) 5.8% 24.50 11/13/2011 1,925,991 4,880,835
William D. Stewart... 30,000(1) 17.25 3/20/2011 325,453 824,761
926(2) 20.02 10/14/2011 11,659 29,546
125,000(3) 5.8% 24.50 11/13/2011 1,925,991 4,880,835
Robert L. Klimm...... 30,000(1) 17.25 3/20/2011 325,453 824,761
863(2) 1.1% 20.02 10/14/2011 10,866 27,535
Peter R. Younger..... 50,000(3) 24.50 11/13/2011 770,396 1,952,334
10,000(3) 2.2% 24.80 11/15/2011 155,966 395,248
---------------
(1) The Options granted in the fiscal year ended December 31, 2001 are
exercisable as follows: 25% of the shares become exercisable on the first
anniversary of the date of issue. An additional 6.25% of the initial grant
of options vests on each successive quarter.
(2) This option will become exercisable as follows: 33 1/3% after the first year
and each successive 12 month period thereafter.
(3) This option is exercisable on the grant date.
(4) In the fiscal year ended December 31, 2001, options to purchase a total of
2,701,952 shares of Common Stock were granted to employees of MKS, including
officers.
(5) The options are subject to earlier termination upon certain events related
to termination of employment.
(6) The dollar gains under these columns result from calculations discussing
hypothetical growth rates as set by the Commission and are not intended to
forecast future price appreciation of the Common Stock.
14
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED IN-THE-
UNDERLYING UNEXERCISED MONEY OPTIONS AT FISCAL YEAR
SHARES OPTIONS AT FISCAL YEAR END END(1)
ACQUIRED ON VALUE --------------------------- -----------------------------
NAME EXERCISE(#) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ------------ --------------
John R. Bertucci....... -- -- 33,742 -- $ 370,496 --
Ronald C. Weigner...... -- -- 295,850 58,700 3,971,450 $727,619
Leo Berlinghieri....... -- -- 258,812 58,068 3,144,290 727,128
William D. Stewart..... 25,000 $678,000 270,412 58,114 3,406,450 727,451
Robert L. Klimm........ -- -- 30,000 75,863 27,150 340,174
Peter R. Younger....... 40,000 420,090 110,000 -- 587,350 --
---------------
(1) Total value of "in-the-money" unexercised options is based on the difference
between the last sales price of the Company's Common Stock on the Nasdaq
National Market on December 31, 2001 ($27.03 per share) and the exercise
price of "in-the-money" options, multiplied by the number of shares subject
to such options.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Mr. Chute, a director of MKS, MKS' clerk and co-trustee of certain Bertucci
family trusts, and Mr. Thomas H. Belknap, a co-trustee of certain Bertucci
family trusts, are attorneys at the law firm of Hill & Barlow, a Professional
Corporation. Hill & Barlow has provided legal services to MKS during the
calendar year ended December 31, 2001 for which it was compensated by MKS in the
aggregate amount of $380,080.
Mr. Stewart, Vice President and General Manager of the HPS Products group,
is the general partner of Aspen Industrial Park Partnership ("Aspen"). MKS
leases from Aspen certain facilities occupied by MKS' HPS Products group in
Boulder, Colorado. MKS paid Aspen $480,319 in 2001 to lease such facilities.
Mr. Berges, a director of MKS, is the president and director of Emerson
Electric Co. ("Emerson"). On January 31, 2002, MKS completed its acquisition of
the business of Emerson and its subsidiaries operating as the "ENI Division"
pursuant to an Agreement and Plan of Merger with respect to the Acquisition of
the ENI Business dated October 30, 2001 between MKS and Emerson. At the
effective time of the acquisition, MKS issued an aggregate of 12 million shares
of its Common Stock to Emerson, in exchange for the businesses and assets of
ENI. The purchase price was approximately $265,000,000.
EMPLOYMENT AGREEMENTS
MKS entered into employment agreements with each of Messrs. Weigner,
Berlinghieri, Stewart, Klimm and Younger. The terms of such employment agreement
are included in the summary below.
Each agreement sets the base salary for each employee which is reviewed
annually. In addition to a base salary, each employee is entitled, under MKS'
Management Incentive Program, to a bonus equal to a percentage of his base
salary if MKS attains specified financial goals during the year. Each employee
is also entitled to standard benefits including:
- participation in a profit sharing and retirement savings plan
- vacation days
- life insurance
- medical/dental insurance
The remaining provisions of each agreement are also substantially the same.
15
The term of employment for each is month to month with termination:
- upon the death of the employee
- at the election of MKS if the employee fails or refuses to perform
- at the election of MKS if the employee commits any acts not in MKS's best
interest
Payment by MKS upon termination depends on how employment is terminated:
- if employment is terminated by death, MKS must pay the employee's estate
the compensation owed to him at the end of the month of his death
- if employment is terminated at the election of MKS because the employee
fails or refuses to perform, MKS must pay the employee through the last
day of actual employment
Each of the agreements contains non-competition provisions during the term
of employment and for the period of one year after termination of employment.
Under these provisions, Messrs. Weigner, Berlinghieri, Stewart, Klimm and
Younger may not:
- engage in any competitive business or activity
- for the 12 months subsequent to termination, work for, employ, become a
partner with, or cause to be employed, any employee, officer or agent of
MKS
- for the 12 months subsequent to termination, give, sell or lease any
competitive services or goods to any customer of MKS
- have any financial interest in or be a director, officer, stockholder,
partner, employee or consultant to any competitor of MKS
SECTION 16(A) BENEFICIAL
OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act ("Section 16(a)") requires executive
officers, directors, and persons who beneficially own more than ten percent
(10%) of the Company's stock to file initial reports of ownership on Form 3 and
reports of changes in ownership on Form 4 with the Commission and any national
securities exchange on which the Company's securities are registered. Executive
officers, directors and greater than ten percent (10%) beneficial owners are
required by the Commission's regulations to furnish the Company with copies of
all Section 16(a) forms they file.
Based solely on a review of the copies of such forms furnished to the
Company and written representations from the executive officers and directors
pursuant to Item 405 of Regulation S-K, the Company believes that Peter Solomon
is the only "reporting person" (as defined in Item 405) who failed to file on a
timely basis a report required by Section 16(a). Dr. Solomon timely filed the
Form 3 required upon his appointment as an executive officer; however, he failed
to report at that time the 200 shares of Common Stock held directly by him and
the 42,053 shares held in escrow on his own behalf and that of his spouse. These
holdings were reported on Dr. Solomon's Form 5. The Company believes that all
other of its executive officers, directors and greater than ten percent (10%)
beneficial owners complied with all applicable Section 16(a) filing
requirements.
16
COMPARATIVE STOCK PERFORMANCE
The following graph compares the cumulative total stockholder return
(assuming reinvestment of dividends) from investing $100 on March 30, 1999 (the
Company's first trading day), and plotted at the last trading days of each
fiscal quarter in the years ended December 31, 1999, 2000 and 2001, in each of
(i) the Company's Common Stock; (ii) a Peer Group Index of semiconductor
equipment/material manufacturers (the "MG Group Index"), compiled by Media
General Financial Services, Inc. ("Media General"); and (iii) the Nasdaq Market
Index of companies (the "Nasdaq Market Index"). The graph was compiled by Media
General. The stock price performance on the graph below is not necessarily
indicative of future price performance. The Company's Common Stock is listed on
the Nasdaq National Market under the ticker symbol "MKSI".
PERFORMANCE GRAPH
COMPARISON OF CUMULATIVE TOTAL RETURN
OF ONE OR MORE COMPANIES, PEER GROUPS,
INDUSTRY INDEXES AND/OR BROAD MARKETS
[PERFORMANCE GRAPH]
ASSUMES $100 INVESTED ON MAR. 30, 1999
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING DEC. 31, 2001
FISCAL QUARTER ENDED
---------------------------------------------------------------------------------------------------
COMPANY/INDEX/MARKET 3/30/99 3/31/99 6/30/99 9/30/99 12/31/99 3/31/00 6/30/00 9/30/00 12/31/00 3/31/01
-------------------- ------- ------- ------- ------- -------- ------- ------- ------- -------- -------
MKS Instruments,Inc....... 100.00 95.11 132.44 158.22 256.89 359.11 278.22 194.67 110.22 133.06
MG Group Index............ 100.00 100.00 127.86 133.86 219.29 315.68 287.14 186.46 133.76 144.77
NASDAQ Market Index....... 100.00 100.00 108.81 110.58 163.32 185.83 159.83 147.49 99.12 74.73
FISCAL QUARTER ENDED
----------------------------
COMPANY/INDEX/MARKET 6/30/01 9/30/01 12/31/01
-------------------- ------- ------- --------
MKS Instruments,Inc....... 204.81 126.22 192.21
MG Group Index............ 171.67 98.42 145.93
NASDAQ Market Index....... 87.58 60.82 79.27
Note: Base price date is 3/30/1999
17
PROPOSAL TWO
APPROVAL OF AN AMENDMENT INCREASING AUTHORIZED COMMON STOCK
On March 29, 2002, the Board of Directors of MKS approved, subject to
stockholder approval, an amendment to MKS' Restated Articles of Organization
previously defined increasing the number of authorized shares of Common Stock
from 75,000,000 to 200,000,000.
The authorized Common Stock of MKS currently consists of 75,000,000 shares,
no par value per share, of which as of February 28, 2002 (i) 50,140,250 shares
were outstanding; (ii) options to purchase 7,543,360 shares of Common Stock of
the Company were outstanding; and (iii) options to purchase 2,608,403 shares of
Common Stock of the Company were available for future grants pursuant to the
Company's existing stock plans.
The Board of Directors believes that the authorization of additional shares
of Common Stock is desirable to provide shares for issuance in connection with
the exercise of stock options expected to be granted under MKS' option and stock
purchase plans, and in connection with possible future stock splits, stock
dividends, financings, joint ventures, acquisitions and other general corporate
purposes. Other than as described above, however, there are no existing plans,
understandings or agreements for the issuance of any shares of Common Stock. If
the amendment is adopted by MKS' stockholders, the Board of Directors will have
the authority to issue shares of Common Stock without the necessity of further
stockholder action. The issuance of additional shares of Common Stock, while
providing desirable flexibility in connection with possible acquisitions and
other corporate purposes, would have the effect of diluting MKS' current
stockholders and could have the effect of making it more difficult for a third
party to acquire, or of discouraging a third party from attempting to acquire,
control of MKS. Holders of the Common Stock have no preemptive rights with
respect to any shares which may be issued in the future.
BOARD RECOMMENDATION
THE BOARD OF DIRECTORS BELIEVES THAT THE PROPOSED AMENDMENT TO THE RESTATED
ARTICLES OF ORGANIZATION IS IN THE BEST INTERESTS OF MKS AND ITS STOCKHOLDERS
AND THEREFORE RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
PROPOSAL THREE
APPROVAL OF AMENDMENT OF THE
AMENDED AND RESTATED 1995 STOCK INCENTIVE PLAN
OVERVIEW.
MKS' Board of Directors believes that the future success of MKS depends on
its ability to attract, retain and motivate key employees. Under MKS' Amended
and Restated 1995 Stock Incentive Plan, as amended (the "Stock Incentive Plan"),
MKS is currently authorized to issue options to purchase up to an aggregate of
9,750,000 shares of Common Stock. As of February 28, 2002, there were 2,196,957
shares available for future grant under the Stock Incentive Plan. Accordingly,
on March 29, 2002 MKS' Board of Directors adopted, subject to stockholder
approval, an amendment to the Stock Incentive Plan, to increase from 9,750,000
shares to 15,000,000 the maximum number of shares of Common Stock available for
sale upon exercise of options granted under the Stock Incentive Plan.
18
SUMMARY OF THE STOCK INCENTIVE PLAN.
The following summary of the Stock Incentive Plan is qualified in its
entirety by reference to the full text of the Amended and Restated 1995 Stock
Incentive Plan, as amended (the "Stock Incentive Plan"), a copy of which is
attached as Appendix B to the electronic copy of this Proxy Statement filed with
the Commission and may be accessed from the Commission's home page
(www.sec.gov). In addition, a copy of the Stock Incentive Plan may be obtained
by making a written request to MKS.
Description of Awards.
The Stock Incentive Plan provides for the grant of incentive stock options,
nonstatutory stock options, stock appreciation rights, performance shares and
awards of restricted stock and unrestricted stock. An aggregate of 9,750,000
shares of Common Stock may be issued pursuant to the Stock Incentive Plan
(subject to adjustment for certain changes in MKS' capitalization). No award may
be made under the Stock Incentive Plan after November 29, 2005.
Administration.
The Stock Incentive Plan is administered by the Board of Directors and the
Compensation Committee. The Board of Directors has the authority to grant awards
under the Stock Incentive Plan and to accelerate, waive or amend certain
provisions of outstanding awards. The Board of Directors has authorized the
Compensation Committee to administer certain aspects of the Stock Incentive Plan
and has authorized the Chief Executive Officer of MKS to grant awards to
non-executive officer employees. Subject to adjustment for certain changes in
MKS' capitalization, the maximum number of shares represented by awards granted
by our Chief Executive Officer under the Stock Incentive Plan may not exceed
35,000 shares to any one employee. The maximum number of shares with respect to
which awards may be granted to any employee in any calendar year is 1,350,000
shares.
Incentive Stock Options and Nonstatutory Options.
Optionees receive the right to purchase a specified number of shares of
Common Stock at some time in the future at an option price and subject to such
terms and conditions as are specified at the time of the grant. Incentive stock
options and options that the Board of Directors or Compensation Committee
intends to qualify as performance-based compensation under Section 162(m) of the
Internal Revenue Code, may not be granted at an exercise price less than the
fair market value of the Common Stock on the date of grant (or less than 110% of
the fair market value in the case of incentive stock options granted to
optionees holding 10% or more of the voting stock of MKS or any of its
subsidiaries). All non-qualified options may be granted at an exercise price
that may be less than, equal to or greater than the fair market value of the
Common Stock on the date of grant.
Restricted and Unrestricted Stock.
Restricted stock awards entitle recipients to acquire shares of Common
Stock, subject to the right of MKS to repurchase all or part of such shares at
their issue price from the recipient in the event that the conditions specified
in the applicable stock award are not satisfied prior to the end of the
applicable restriction period established for such award, or portion of such
award, in the case of restrictions which lapse ratably.
All of the employees, officers, directors, consultants and advisors of MKS
and its subsidiaries who are expected to contribute to MKS' future growth and
success are eligible to participate in the Stock Incentive Plan.
19
Stock Appreciation Rights and Performance Shares.
A stock appreciation right is based on the value of Common Stock and
entitles the holder to receive consideration to the extent that the fair market
value on the date of exercise of the shares of Common Stock underlying the right
exceeds the fair market value of the underlying shares on the date the right was
granted. A performance share award entitles the recipient to acquire shares of
Common Stock upon the attainment of specified performance goals.
FEDERAL INCOME TAX CONSEQUENCES.
The following generally summarizes the United States federal income tax
consequences that will arise with respect to awards granted under the Stock
Incentive Plan and with respect to the sale of Common Stock acquired under the
Stock Incentive Plan. This summary is based on the tax laws in effect as of the
date of this proxy statement. Changes to these laws could alter the tax
consequences described below.
Incentive Stock Options. A participant will not have income upon the grant
of an incentive stock option. Also, except as described below, a participant
will not have income upon exercise of an incentive stock option if the
participant has been employed by MKS or a majority-owned corporate subsidiary at
all times beginning with the option grant date and ending three months before
the date the participant exercises the option. If the participant has not been
so employed during that time, then the participant will be taxed as described
below under "Nonstatutory Stock Options." The exercise of an incentive stock
option may subject the participant to the alternative minimum tax.
A participant will have income upon the sale of the stock acquired under an
incentive stock option at a profit (if sales proceeds exceed the exercise
price). The type of income will depend on when the participant sells the stock.
If a participant sells the stock more than two years after the option was
granted and more than one year after the option was exercised, then all of the
profit will be long-term capital gain. If a participant sells the stock prior to
satisfying these waiting periods, then the participant will have engaged in a
disqualifying disposition and a portion of the profit will be ordinary income
and a portion may be capital gain. This capital gain will be long-term if the
participant has held the stock for more than one year and otherwise will be
short-term. If a participant sells the stock at a loss (sales proceeds are less
than the exercise price), then the loss will be a capital loss. This capital
loss will be long-term if the participant held the stock for more than one year
and otherwise will be short-term.
Nonstatutory Stock Options. A participant will not have income upon the
grant of a nonstatutory stock option. A participant will have compensation
income upon the exercise of a nonstatutory stock option equal to the value of
the stock on the day the participant exercised the option less the exercise
price. Upon sale of the stock, the participant will have capital gain or loss
equal to the difference between the sales proceeds and the value of the stock on
the day the option was exercised. This capital gain or loss will be long-term if
the participant has held the stock for more than one year and otherwise will be
short-term.
Restricted Stock. A participant will not have income upon the grant of
restricted stock unless an election under Section 83(b) of the Internal Revenue
Code is made within 30 days of the date of grant. If a timely 83(b) election is
made, then a participant will have compensation income equal to the value of the
stock less the purchase price. When the stock is sold, the participant will have
capital gain or loss equal to the difference between the sales proceeds and the
value of the stock on the date of grant. If the participant does not make an
83(b) election, then when the stock vests the participant will have compensation
income equal to the value of the stock on the vesting date less the purchase
price. When the stock is sold, the participant will have capital gain or loss
equal to the sales proceeds less the value of the stock on the vesting date. Any
capital gain or loss will be long-term if the participant held the stock for
more than one year and otherwise will be short-term.
20
Tax Consequences to MKS. The grant of an award under the Stock Incentive
Plan will have no tax consequences to MKS, except that it will be entitled to a
business-expense deduction when a participant has compensation income. Any such
deduction will be subject to the limitations of Section 162(m) of the Internal
Revenue Code.
BOARD RECOMMENDATION
THE BOARD OF DIRECTORS BELIEVES THAT THE PROPOSED AMENDMENT TO THE AMENDED
AND RESTATED 1995 STOCK INCENTIVE PLAN IS IN THE BEST INTERESTS OF MKS AND ITS
STOCKHOLDERS AND THEREFORE RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
PROPOSAL FOUR
APPROVAL OF AMENDMENT OF THE
AMENDED AND RESTATED 1999 EMPLOYEE STOCK PURCHASE PLAN
OVERVIEW.
MKS' Board of Directors adopted the Amended and Restated 1999 Employee
Stock Purchase Plan, as amended (the "Employee Stock Purchase Plan"), to provide
eligible employees of MKS and certain of its subsidiaries with opportunities to
purchase shares of Common Stock. Under MKS' Employee Stock Purchase Plan, MKS is
currently authorized to sell to its eligible employees, through payroll
deductions, up to an aggregate of 450,000 shares of Common Stock. As of February
28, 2002, there were 218,527 shares available for future grant under the
Employee Stock Purchase Plan. Accordingly, on March 29, 2002, MKS' Board of
Directors adopted an amendment, subject to stockholder approval, to the Employee
Stock Purchase Plan that increased the number of shares of Common Stock
available for sale under the Employee Stock Purchase Plan from 450,000 to
700,000, subject to adjustment to certain changes in MKS' capitalization.
SUMMARY OF THE EMPLOYEE STOCK PURCHASE PLAN.
The following summary of the Employee Stock Purchase Plan is qualified in
its entirety by reference to the full text of the Employee Stock Purchase Plan,
a copy of which is attached as Appendix C to the electronic copy of this Proxy
Statement filed with the Commission and may be accessed from the Commission's
home page (www.sec.gov). In addition, a copy of the Employee Stock Purchase Plan
may be obtained by making a written request to MKS.
Description of the Plan.
The Employee Stock Purchase Plan permits employees of MKS and its
designated subsidiaries to purchase shares of Common Stock through a series of
offerings. Each offering may last up to one year. Offerings under the Employee
Stock Purchase Plan commence every six months, so at any given point in time,
MKS may be conducting more than one offering. However, employees are only
eligible to participate in one offering at a time. Each eligible employee may
elect to have amounts withheld from his or her compensation, which amounts will
accrue in an account for such employee during the period of an offering. On the
last day of the offering period, funds that have accrued in this account will be
used to purchase Common Stock, subject to certain limitations, at a purchase
price that is generally 85% of the closing price of the Common Stock on either
the initial date of each offering, or on the last day of the offering period,
whichever is less.
21
Administration.
The Employee Stock Purchase Plan is administered by the Board of Directors
or by a committee appointed by the Board of Directors. The Board of Directors or
its committee has the authority to grant awards and to adopt, amend and repeal
such administrative rules, guidelines and practices relating to the Employee
Stock Purchase Plan as it shall deem advisable. The Board of Directors may also
correct any defect, supply any omission or reconcile any inconsistency in the
Employee Stock Purchase Plan in the manner and to the extent it deems expedient
to carry the Employee Stock Purchase Plan into effect. The Board of Directors or
its committee is the sole and final judge of such expediency and its decisions
are final and binding. No member of the Board of Directors or person acting
pursuant to authority delegated by the Board of Directors is liable for any
action or determination relating to or under the Employee Stock Purchase Plan
made in good faith.
Eligibility.
Persons eligible to participate in an offering under the Employee Stock
Purchase Plan are generally those employees who (i) are customarily employed by
MKS for more than twenty (20) hours a week and for more than five (5) months in
a calendar year; (ii) have been employed by MKS for at least three (3) months
prior to enrollment; (iii) are MKS' employees on the date that the option is
offered; and (iv) do not own 5% or more of the total combined voting power or
value of all classes of MKS' stock or that of its subsidiaries.
Limitation.
No employee may be granted an option under the Employee Stock Purchase Plan
which permits the employee's rights to purchase Common Stock under the Employee
Stock Purchase Plan and any other MKS stock purchase plan, to accrue at a rate
which exceeds $25,000 of the fair market value of Common Stock for each calendar
year in which the option to purchase such stock is outstanding at any time.
Payroll Deductions.
Eligible employees may authorize a payroll deduction up to a maximum of 10%
of their compensation. Payroll deductions are then credited to the employee's
accounts and are withheld in whole percentages only. Interest will not be paid
on any account. The employee may decrease or discontinue payroll deductions once
during a plan period by filing a new payroll deduction authorization form.
However, the employee may not increase payroll deduction during a plan period.
If the employee elects to discontinue payroll deductions, but does not elect to
withdraw funds, the funds in the account will be used to purchase Common Stock
on the last day of the plan period.
Grant of Option.
On the beginning date of each plan period, MKS will grant each employee who
is participating in the Employee Stock Purchase Plan, an option to purchase a
certain maximum number of shares on the last day of the plan period. That amount
is determined by multiplying $2,083 by the number of full months in the offering
period and dividing the result by the closing price of Common Stock on the
beginning date of the plan period. The employee does not become a stockholder of
the Common Stock granted by the option until the shares are purchased and
issued.
Purchase Price.
The purchase price of the shares of Common Stock to be sold pursuant to any
given offering is equal to the lesser of (i) 85% of the closing price of Common
Stock on the first business day of the plan period; or
22
(ii) 85% of the closing price of Common Stock on the last trading day of the
purchase period. For so long as Common Stock is traded on the Nasdaq National
Market, the closing price of Common Stock shall be the last reported sales
price.
Exercise of Option.
An employee's option to purchase shares is exercised automatically on the
last trading date of the plan period. Upon exercise, the employee will purchase
the maximum number of full or fractional shares of Common Stock allowable on
this date based on the applicable purchase price and the accumulated payroll
deductions in the employee's account, subject in all cases to the limits
described above.
Changes in Capitalization.
In the event of a stock split, a subdivision of outstanding shares of
Common Stock, or payment of a dividend in Common Stock, the number of shares and
the share limitation, approved for the Employee Stock Purchase Plan, shall be
modified proportionately.
Merger or Consolidation.
In the event of a merger or consolidation of MKS with another corporation
in which the holders of MKS' capital stock before the merger or consolidation
continue to hold at least 80% of the voting power of the capital stock in the
newly merged corporation, those who hold options under the Employee Stock
Purchase Plan will, per exercisable option, upon an exercise of such options
under the terms described in the Employee Stock Purchase Plan, be entitled to
purchase what the holders of MKS' capital stock received per share during the
merger or consolidation.
In the event of a merger or consolidation of MKS with another corporation
in which the holders of MKS' capital stock before the merger or consolidation do
not hold at least 80% of the voting power of the capital stock in the newly
merged corporation, and the merger or consolidation does not constitute a sale
of substantially all of the Company's assets, the options outstanding under the
Employee Stock Purchase Plan will be cancelled on the date of such merger or
consolidation. However, notice of this cancellation will be provided, and each
option holder will have the right to exercise his or her options based on
payroll deductions credited in the account at a date determined by the Board of
Directors or its committee, but not less than ten days prior to such
transaction.
FEDERAL INCOME TAX CONSEQUENCES.
The following generally summarizes the United States federal income tax
consequences that will arise with respect to participation in the Employee Stock
Purchase Plan and with respect to the sale of Common Stock acquired under the
Employee Stock Purchase Plan. This summary is based on the tax laws in effect as
of the date of this Proxy Statement. Changes to these laws could alter the tax
consequences described below.
Tax Consequences to Participants. A participant will not have income upon
enrolling in the Employee Stock Purchase Plan or upon purchasing stock at the
end of an offering.
A participant may have both compensation income and capital gain income if
the participant sells stock that was acquired under the Employee Stock Purchase
Plan at a profit (if sales proceeds exceed the purchase price). The amount of
each type of income will depend on when the participant sells the stock. If the
participant sells the stock more than two years after the commencement of the
offering during which the stock
23
was purchased and more than one year after the date that the participant
purchased the stock, then the participant will have compensation income equal to
the lesser of:
- 15% of the value of the stock on the day the offering commenced; and
- the participant's profit.
Any excess profit will be long-term capital gain.
If the participant sells the stock prior to satisfying these waiting
periods, then he or she will have engaged in a disqualifying disposition. Upon a
disqualifying disposition, the participant will have compensation income equal
to the value of the stock on the day he or she purchased the stock less the
purchase price. If the participant's profit exceeds the compensation income,
then the excess profit will be capital gain. This capital gain will be long-term
if the participant has held the stock for more than one year and otherwise will
be short-term.
If the participant sells the stock at a loss (if sales proceeds are less
than the purchase price), then the loss will be a capital loss. This capital
loss will be long-term if the participant has held the stock for more than one
year and otherwise will be short-term.
Tax Consequences to MKS. There will be no tax consequences to MKS except
that it will be entitled to a business-expense deduction when a participant has
compensation income upon a disqualifying disposition. Any such deduction will
subject to the limitations of Section 162(m) of the Internal Revenue Code.
BOARD RECOMMENDATION
THE BOARD OF DIRECTORS BELIEVES THAT THE PROPOSED AMENDMENT TO THE AMENDED
AND RESTATED 1999 EMPLOYEE STOCK PURCHASE PLAN IS IN THE BEST INTERESTS OF MKS
AND ITS STOCKHOLDERS AND THEREFORE RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
PROPOSAL FIVE
APPROVAL OF AMENDMENT OF THE INTERNATIONAL
EMPLOYEE STOCK PURCHASE PLAN
OVERVIEW.
MKS' Board of Directors adopted the International Employee Stock Purchase
Plan, as amended (the "International Employee Stock Purchase Plan"), to provide
eligible employees of certain non-United States subsidiaries of MKS with
opportunities to purchase shares of Common Stock. Under MKS' International
Employee Stock Purchase Plan, MKS is currently authorized to sell to its
eligible employees of designated subsidiaries, through payroll deductions, up to
an aggregate of 50,000 shares of Common Stock. As of February 28, 2002, there
were 29,419 shares available for future grant under the International Employee
Stock Purchase Plan. Accordingly, on March 29, 2002, MKS' Board of Directors
adopted, subject to stockholder approval, an amendment to the International
Employee Stock Purchase Plan that increased the number of shares of Common Stock
available for issuance under the International Employee Stock Purchase Plan from
50,000 to 75,000, subject to adjustment for certain changes in MKS'
capitalization.
24
SUMMARY OF THE INTERNATIONAL EMPLOYEE STOCK PURCHASE PLAN.
The following summary of the International Employee Stock Purchase Plan is
qualified in its entirety by reference to the full text of the International
Employee Stock Purchase Plan, a copy of which is attached as Appendix D to the
electronic copy of this Proxy Statement filed with the Commission and may be
accessed from the Commission's home page (www.sec.gov). In addition, a copy of
the International Employee Stock Purchase Plan may be obtained by making a
written request to MKS.
Description of the Plan.
The International Employee Stock Purchase Plan permits employees of MKS and
its designated subsidiaries to purchase shares of Common Stock through a series
of offerings. Each offering may last up to one year. Offerings under the
International Employee Stock Purchase Plan commence every six months, so at any
given point in time, MKS may be conducting more than one offering. However,
employees are only eligible to participate in one offering at a time. Each
eligible employee may elect to have amounts withheld from his or her which
amounts will accrue in an account for such employee during the period of an
offering. On the last day of the offering period, funds that have accrued in
this account will be used to purchase Common Stock, subject to certain
limitations, at a purchase price that is generally 85% of the closing price of
the Common Stock on either the initial date of each offering, or on the last day
of the offering period, whichever is less.
Administration.
The International Employee Stock Purchase Plan is administered by the Board
of Directors or by a committee appointed by the Board of Directors. The Board of
Directors is elected by the shareholders in accordance with the provisions of
the Company's Amended and Restated Articles of Organization and its Amended and
Restated Bylaws.
The Board of Directors or its committee has the authority to grant awards
and to adopt, amend and repeal such administrative rules, guidelines and
practices relating to the International Employee Stock Purchase Plan as it shall
deem advisable. The Board of Directors may also correct any defect, supply any
omission or reconcile any inconsistency in the International Employee Stock
Purchase Plan in the manner and to the extent it deems expedient to carry the
International Employee Stock Purchase Plan into effect. The Board of Directors
or its committee is the sole and final judge of such expediency and its
decisions are final and binding. The Board of Directors or its committee may
also establish additional conditions or provisions for the participation of our
eligible employees in the International Employee Stock Purchase Plan in order to
comply with the tax, securities and other laws and regulation of the countries
in which the Company's eligible employees reside, even if such conditions or
provisions increase the benefits accruing to the Company's eligible employees
under the International Employee Stock Purchase Plan. No member of the Board of
Directors or person acting pursuant to authority delegated by the Board of
Directors is liable for any action or determination relating to or under the
International Employee Stock Purchase Plan made in good faith.
Eligibility.
Persons eligible to participate in an offering under the International
Employee Stock Purchase Plan, to the extent permitted by local law, are
generally those employees who (i) are customarily employed by a designated
non-U.S. subsidiary for more than 20 hours a week and for more than five months
in a calendar year; (ii) have been employed by a designated non-U.S. subsidiary
for at least three months prior to enrollment; (iii) are MKS' employees of a
designated non-U.S. subsidiary on the day the option is offered; and (iv) do not
own 5% or more of the total combined voting power or value of all classes of
MKS' stock.
25
Limitation.
No employee may be granted an option under the International Employee Stock
Purchase Plan which permits the employee's rights to purchase Common Stock under
the International Employee Stock Purchase Plan and any other stock purchase plan
of MKS' and its subsidiaries, to accrue at a rate which exceeds U.S. $25,000 of
the fair market value of Common Stock for each calendar year in which the option
is outstanding at any time.
Tax Withholding.
The employee's enrollment in the International Employee Stock Purchase Plan
will authorize MKS to deduct from the employee's compensation the amount
necessary for payment or reimbursement of any tax liability payable by the
employee because of a grant of options to the employee under the Employee Stock
Purchase Plan, the exercise of options under the Employee Stock Purchase Plan,
or the sale of any stock acquired through the exercise of options.
Payroll Deductions.
Eligible employees may authorize a payroll deduction up to a maximum of 10%
of their compensation. Payroll deductions are then credited to the employee's
accounts and are withhheld in whole percentages only. Interest will not be paid
on any account. The employee may decrease or discontinue payroll deductions once
during a plan period by filing a new payroll deduction authorization form.
However, the employee may not increase payroll deduction during a plan period.
All payroll deductions will be converted into U.S. currency at such time or
times as is approved by the Board of Directors or its committee.
Grant of Option.
On the beginning date of each plan period, MKS will grant the employee who
is participating in the International Employee Purchase Plan, an option to
purchase a certain number of shares on the last day of the plan period. That
amount is determined by multiplying U.S. $2,083 by the number of full months in
the offering period and dividing the results by the closing price of MKS' stock
on the beginning date of the plan period. An employee does not become a
stockholder of the stock subject to an option until the shares are purchased and
issued.
Purchase Price.
The purchase price of the shares of Common Stock to be sold pursuant to any
given plan period is equal to the lesser of (i) 85% of the fair market value of
Common Stock on the first business day of the plan period or (ii) 85% of the
fair market value of Common Stock on the last day of the offering period. For so
long as the Common Stock is traded on the Nasdaq National Market, the closing
price of Common Stock shall be the last reported sales price.
Exercise of Option.
An employee's option to purchase shares is exercised automatically on the
last trading date of the plan period. Upon exercise, the employee will purchase
the maximum number of full or fractional shares of Common Stock allowable on
this date based on the applicable purchase price and the accumulated payroll
deductions in the employee's account, subject in all cases to the limits
described above.
26
Changes in Capitalization.
In the event of a subdivision of outstanding shares of Common Stock, or
payment of a dividend in Common Stock, the number of shares and the share
limitation, approved for the International Employee Stock Purchase Plan, shall
be modified proportionately.
Merger or Consolidation.
In the event of a merger or consolidation of MKS with another corporation
in which the stockholders of MKS' capital stock before the merger or
consolidation continue to hold at least 80% of the voting power of the capital
stock in the newly merged corporation, those who hold options under the
International Employee Stock Purchase Plan, will per exercisable option, upon an
exercise of such options under the terms described in the International Employee
Stock Purchase Plan, be entitled to purchase what the holders of MKS' capital
stock received per share during the merger or consolidation.
In the event of a merger or consolidation of MKS with another corporation
in which the holders of MKS' capital stock before the merger or consolidation do
not hold at least 80% of the voting power of the capital stock in the newly
merged corporation, and the merger or consolidation does not constitute a sale
of substantially all of the Company's assets, the options outstanding under the
International Employee Stock Purchase Plan shall be cancelled on the date of
such merger or consolidation, provided that notice of such cancellation will be
given, and each option holder will have the right to exercise his or her options
based on payroll deductions credited in the account at a date determined by the
Board of Directors or its committee, but not less than ten days before the date
of the transaction.
CERTAIN TAX CONSEQUENCES FOR NON-U.S. PARTICIPANTS IN MKS'S INTERNATIONAL
EMPLOYEE STOCK PURCHASE PLAN.
The following is a general discussion of certain material U.S. federal tax
consequences to a non-U.S. person who receives and exercises options to purchase
shares of Common Stock under MKS's International Employee Stock Purchase Plan,
and who disposes of Common Stock following such exercise. Each non-U.S.
participant in the International Employee Stock Purchase Plan should consult a
tax advisor regarding the U.S. federal, state, local, estate, gift and all
non-U.S. tax consequences of participating in MKS's International Employee Stock
Purchase Plan. This discussion does not consider, among other things, U.S. state
and local or non-U.S. tax consequences. This summary is based on the tax laws in
effect as of the date of this Proxy Statement. Changes to these laws could alter
the tax consequences described below, possibly with retroactive effect.
As used in this discussion, the term non-U.S. participant means an
individual participant in MKS's International Employee Stock Purchase Plan who
is not, for U.S. federal income tax purposes, a citizen or resident of the
United States. As used in this discussion, the term non-U.S. holder means an
individual beneficial owner of Common Stock who is not, for U.S. federal income
tax purposes, a citizen or resident of the United States.
An individual may be treated as a resident of the United States in any
calendar year for U.S. federal income tax purposes, instead of as a nonresident,
if, among other things, such individual is physically present in the United
States on at least 31 days in that calendar year and for an aggregate of at
least 183 days during the three-year period ending on December 31 of that
calendar year, counting all of the days physically present in the United States
in the current year, one-third of the days present in the immediately preceding
year and one-sixth of the days present in the second preceding year. Residents
are taxed for U.S. federal income tax purposes as if they were U.S. citizens.
27
Receipt and Exercise of Option to Purchase Common Stock.
A non-U.S. participant generally will not be subject to any U.S. federal
income tax or withholding tax upon the receipt of an option to purchase Common
Stock under the International Employee Purchase Plan. A non-U.S. participant
generally will not be subject to any U.S. federal income tax or withholding tax
upon the exercise of an option to purchase Common Stock under the International
Employee Stock Purchase Plan.
Gain on Disposition of Common Stock.
A non-U.S. holder generally will not be subject to any U.S. federal income
tax or withholding tax on any gain recognized on a sale or other disposition of
Common Stock, whether or not such disposition is deemed to be a "disqualifying
disposition", unless, among other things: (i) the gain is effectively connected
with the non-U.S. holder's conduct of a trade or business in the United States
and, in the event that an income tax treaty applies, is also attributable to a
permanent establishment maintained by the non-U.S. holder in the United States;
(ii) the non-U.S. holder is an individual who is present in the United States
for 183 or more days in the taxable year of the disposition and certain other
requirements are met; or (iii) the holder is subject to tax pursuant to U.S.
federal income tax provisions applicable to certain U.S. expatriates.
U.S. Estate Tax Consequences.
Common Stock that is owned or is treated as owned by a non-U.S. holder at
the time of death will be included in that individual's gross estate for U.S.
federal estate tax purposes, unless an applicable estate tax treaty provides
otherwise.
Tax Consequences to MKS.
There will be no U.S. federal income tax consequences to MKS in connection
with transactions relating to MKS's International Employee Stock Purchase Plan,
except that MKS may be entitled to a deduction when a participant has
compensation income upon a disqualifying disposition. Any such deduction will be
subject to the limitations of Section 162(m) of the Code.
BOARD RECOMMENDATION
THE BOARD OF DIRECTORS BELIEVES THAT THE PROPOSED AMENDMENT TO THE
INTERNATIONAL EMPLOYEE STOCK PURCHASE PLAN IS IN THE BEST INTERESTS OF MKS AND
ITS STOCKHOLDERS AND THEREFORE RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
PROPOSAL SIX
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
On March 18, 2002, the Board of Directors, on the recommendation of its
Audit Committee, appointed the firm of PwC as the Company's independent
accountants for the fiscal year of the Company ending December 31, 2002. PwC was
the Company's independent accountants for the fiscal year ended December 31,
2001.
Representatives of PwC are expected to be present at the Annual Meeting and
will have the opportunity to make a statement if they so desire and will be
available to respond to appropriate questions from stockholders. In the event
that the ratification of the appointment of PwC as the independent accountants
for the Company is not obtained at the Annual Meeting, the Board of Directors
will reconsider its appointment.
28
THE BOARD OF DIRECTORS BELIEVES THAT THE PROPOSAL TO RATIFY THE APPOINTMENT
OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT ACCOUNTANTS OF THE COMPANY FOR THE
FISCAL YEAR ENDING DECEMBER 31, 2002 IS IN THE BEST INTERESTS OF MKS AND ITS
STOCKHOLDERS AND THEREFORE RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
OTHER MATTERS
The Board of Directors does not know of any other matters which may come
before the meeting. However, if any other matters are properly presented to the
meeting, it is the intention of the persons named in the accompanying proxy to
vote, or otherwise act, in accordance with their judgment on such matters.
All costs of solicitation of proxies will be borne by the Company. In
addition to solicitations by mail, the Company's directors, officers and regular
employees, without additional remuneration, may solicit proxies by telephone,
telegraph and personal interviews and the Company reserves the right to retain
outside agencies for the purpose of soliciting proxies. Brokers, custodians and
fiduciaries will be requested to forward proxy soliciting material to the owners
of stock held in their names, and the Company will reimburse them for their
reasonable out-of-pocket expenses incurred in connection with the distribution
of proxy materials.
DEADLINE FOR SUBMISSION OF STOCKHOLDER PROPOSALS
FOR THE 2003 ANNUAL MEETING
Proposals of stockholders intended to be presented at the 2003 Annual
Meeting of Stockholders must be received by the Company at its principal office
in Andover, Massachusetts not later than December 17, 2002, for inclusion in the
proxy statement for that meeting.
In addition, MKS' By-laws require that MKS be given advance notice of
matters that stockholders wish to present for action at an Annual Meeting of
stockholders (other than matters included in MKS' proxy statement in accordance
with Rule 14a-8 of the Exchange Act). The required written notice must be
delivered to the Clerk of MKS at the principal offices of MKS at least sixty
(60) days prior to the Annual Meeting, but no more than ninety (90) days prior
to such meeting. However, if less than forty (40) days notice of the Annual
Meeting is provided to the stockholders, the written notice of the stockholder
must be sent to the Clerk of MKS no later than ten (10) days after the notice of
the Annual Meeting was received. The advance notice provisions of MKS's By-Laws
contain the requirements of the written notice of stockholders and supersede the
notice requirement contained in recent amendments to Rule 14a-4 under the
Exchange Act.
IMPORTANT NOTICE REGARDING DELIVERY OF SECURITY HOLDER DOCUMENTS
Some banks, brokers and other nominee record holders may be participating
in the practice of "householding" proxy statements and annual reports. This
means that only one copy of our proxy statement or annual report may have been
sent to multiple shareholders in your household. We will promptly deliver a
separate copy of either document to you if you call or write us at the following
address or phone number: MKS Instruments, Inc., Six Shattuck Road, Andover,
Massachusetts 01810 (978) 975-2350, Attn: Investor Relations. If you want to
receive separate copies of the annual report and proxy statement in the future,
or if you are receiving multiple copies and would like to receive only one copy
for your household, you should contact your bank, broker, or other nominee
record holder, or you may contact us at the above address and phone number.
29
By Order of the Board of Directors
/s/ Richard S. Chute
Richard S. Chute
Clerk
April 17, 2002
THE BOARD OF DIRECTORS ENCOURAGES STOCKHOLDERS TO ATTEND THE MEETING.
WHETHER OR NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE. A PROMPT RESPONSE WILL
GREATLY FACILITATE ARRANGEMENTS FOR THE MEETING AND YOUR COOPERATION WILL BE
APPRECIATED. STOCKHOLDERS WHO ATTEND THIS MEETING MAY VOTE THEIR STOCK
PERSONALLY EVEN THOUGH THEY HAVE SENT IN THEIR PROXIES.
30
APPENDIX A
MKS INSTRUMENTS, INC.
AUDIT COMMITTEE CHARTER
PURPOSE
The primary purpose of the Audit Committee (the "Committee") is to assist
the Board of Directors (the "Board") in fulfilling its responsibility to oversee
management's conduct of the Company's financial reporting process, including by
overviewing the financial reports and other financial information provided by
the Company to any governmental or regulatory body, the public or other users
thereof, the Company's systems of internal accounting and financial controls,
and the annual independent audit of the Company's financial statements.
In discharging its oversight role, the Committee is empowered to
investigate any matter brought to its attention with full access to all books,
records, facilities and personnel of the Company and the power to retain outside
counsel, auditors or other experts for this purpose. The Board and the Committee
are in place to represent the Company's shareholders; accordingly, the outside
auditor is ultimately accountable to the Board and the Committee.
The Committee shall review the adequacy of this Charter on an annual basis.
MEMBERSHIP
The Committee shall be comprised of not less than three members of the
Board, and the Committee's composition will meet the requirements of the Audit
Committee Policy of the NASD.
Accordingly, all of the members will be directors:
1. Who have no relationship to the Company that may interfere with the
exercise of their independence from management and the Company;
2. Who are able to read and understand fundamental financial statements,
including the Company's balance sheet, income statement, and cash flow
statement, or must become able to do so within a reasonable time after
his or her appointment to the Committee. At least one member of the
Committee must have past employment experience in finance or accounting,
professional certification in accounting, or other comparable experience
or background which result in the member having financial sophistication
(such as being or having been a chief executive officer, chief financial
officer or other senior officer with financial oversight
responsibilities);
3. Who have not been an employee of the Company or any affiliate of the
Company in the current year or in any of the past three years;
4. Who have no immediate family member who has been employed by the Company
or an affiliate of the Company as an executive officer in any of the
past three years (an immediate family member includes a person's spouse,
parents, children, siblings, mother-in-law, father-in-law,
brother-in-law, sister-in-law, son-in-law, daughter-in-law, and anyone
who resides in a person's home);
5. Who is not employed as an executive of an entity other than the Company
having a compensation committee which includes any of the Company's
executives;
A-1
6. Who did not within the last fiscal year receive from the Company or any
affiliate of the Company compensation -- other than benefits under a tax
qualified retirement plan, compensation for director service or
nondiscretionary compensation -- greater than $60,000; and
7. Who has not in any of the past three years been a partner in, or
controlling shareholder or executive of, a for profit business
organization to which the Company made or from which the Company
received payment (other than payment arising solely from investments in
the Company's securities) that exceeds the greater of: (i) $200,000; or
(ii) more than 5% of the Company's or business organization's
consolidated gross revenues.
KEY RESPONSIBILITIES
The Committee's job is one of oversight and it recognizes that the
Company's management is responsible for preparing the Company's financial
statements and that the outside auditors are responsible for auditing those
financial statements. Additionally, the Committee recognizes that financial
management, as well as the outside auditors, have more time, knowledge and more
detailed information on the Company than do Committee members; consequently, in
carrying out its oversight responsibilities, the Committee is not providing any
expert or special assurance as to the Company's financial statements or any
professional certification as to the outside auditor's work.
The following functions shall be the common recurring activities of the
Committee in carrying out its oversight function. These functions are set forth
as a guide with the understanding that the Committee may diverge from this guide
as appropriate given the circumstances.
- The Committee shall review with management and the outside auditors the
audited financial statements to be included in the Company's Annual
Report on Form 10-K (or the Annual Report to Shareholders if distributed
prior to the filing of Form 10-K) and review and consider with the
outside auditors the matters required to be discussed by Statement of
Auditing Standards ('SAS') No. 61.
- As a whole, or through the Committee chair, the Committee shall review
with the outside auditors the matters (if any) required to be discussed
by SAS No. 61 in connection with the interim financial reviews conducted
by the outside auditors; this review will occur prior to the Company's
filing of the Form 10-Q.
- The Committee shall discuss with management and the outside auditors the
quality and adequacy of the Company's internal controls, accounting
policies and estimates.
- The Committee shall review and reassess the adequacy of this Charter at
least annually.
- The Committee shall:
- request from the outside auditors annually, a formal written statement
delineating all relationships between the auditor and the Company
consistent with Independence Standards Board Standard Number 1;
- discuss with the outside auditors any such disclosed relationships or
services and their impact on the outside auditor's independence; and
- recommend that the Board take appropriate action to oversee the
independence of the outside auditor.
- The Committee, subject to any action that may be taken by the Board,
shall have the ultimate authority and responsibility to select (or
nominate for shareholder approval), evaluate and, where appropriate,
replace the outside auditor.
A-2
- The Committee will prepare the report required by the rules of the
Securities and Exchange Commission to be included in the Company's annual
proxy statement, commencing with the proxy statement for the 2001 Annual
Meeting.
- Based on the criteria set forth in Item 306(a) of Regulation S-K and, if
so determined by the Committee, recommend to the Board that the audited
financial statements for each fiscal year be included in the Company's
Annual Report on Form 10-K in respect of such year.
- The Committee will perform such other functions as may be required by
law, the Company's Articles of Organization or its By-Laws.
- The Committee shall annually inform the outside auditor, the Chief
Financial Officer, the Controller, and the most senior other person, if
any, responsible for the internal audit activities, that they should
promptly contact the Committee or its Chairman about any significant
issue or disagreement concerning the Company's accounting practices or
financial statements that is not resolved to their satisfaction. Where
such communications are made to the Chairman, he or she shall confer with
the outside auditor concerning any such communications, and shall notify
the other members of the Committee of any communications which the
outside auditor or the Chairman in the exercise of his or her business
judgment believes should be considered by the Committee prior to its next
scheduled meeting.
- The Committee shall direct the outside auditor to use its best efforts to
perform all reviews of interim financial information prior to disclosure
by the Company of such information, and to discuss promptly with the
Chairman of the Committee and the Chief Financial Officer any matters
identified in connection with the auditor's review of interim financial
information which are required to be discussed by Statement on Auditing
Standards No. 61. The Chairman of the Committee shall discuss any such
matters with the outside auditor, and shall notify the other members of
the Committee of any discussions which the outside auditor or the
Chairman in the exercise of his or her business judgment believes should
be considered by the Committee prior to disclosure or filing of the
interim financial information, or the Committee's next scheduled meeting.
- The Committee shall direct management to advise the Committee in the
event that the Company proposes to disclose or file interim financial
information prior to completion of review by the outside auditor.
- The Committee shall meet privately at least once per year with: (i) the
outside auditor; (ii) the Chief Financial Officer; (iii) the Controller;
and (iv) the most senior person (if any) responsible for the internal
audit activities of the Company.
A-3
Appendix B
FIRST AMENDMENT TO
AMENDED AND RESTATED 1995 STOCK INCENTIVE PLAN
OF
MKS INSTRUMENTS, INC.
The Amended and Restated 1995 Stock Incentive Plan (the "Plan") be and
hereby is amended by deleting the last sentence of Section 3(b) thereof in its
entirety and inserting in lieu thereof the following:
"The Chief Executive Officer of the Company may grant Awards to
non-executive officer employees of the Company in amounts not to exceed 500,000
shares in the aggregate or 35,000 shares to any one employee."
Adopted by the Compensation Committee of the Board of Directors on October 18,
1999.
SECOND AMENDMENT TO
AMENDED AND RESTATED 1995 STOCK INCENTIVE PLAN
OF
MKS INSTRUMENTS, INC.
The Amended and Restated 1995 Stock Incentive Plan (the "Plan") be and
hereby is amended by deleting the first sentence of Section 4(a) thereof in its
entirety and inserting in lieu thereof the following:
"Beginning July 1, 2000 and subject to adjustment under Section 4(c),
the number of shares of Common Stock (as defined below in Section 4(d))
available for Awards under the Plan shall annually increase by 4% of the total
shares of the Company's outstanding Common Stock on July 1 of each year. Such
annual increase shall occur until such time as an aggregate number of shares of
Common Stock which may be issued under the Plan is 9,750,000 shares."
Adopted by the Board of Directors on January 31, 2000.
Approved by the Stockholders on May 17, 2000.
THIRD AMENDMENT TO
AMENDED AND RESTATED 1995 STOCK INCENTIVE PLAN
OF
MKS INSTRUMENTS, INC.
The Amended and Restated 1995 Stock Incentive Plan (the "Plan") be and
hereby is amended as follows:
(1) by deleting the first sentence of Section 4(a) thereof in its
entirety and inserting in lieu thereof the following:
"Beginning July 1, 2001 and subject to adjustment under Section 4(c),
the number of shares of Common Stock (as defined below in Section 4(d))
available for Awards under the Plan shall annually increase by 5% of the total
shares of the Company's outstanding Common Stock on July 1 of each year. Such
annual increase shall occur until such time as an aggregate number of shares of
Common Stock which may be issued under the Plan is 9,750,000 shares."
(2) by deleting the last sentence of Section 3(b) thereof in its
entirety and inserting in lieu thereof the following:
"The Chief Executive Officer of the Company may grant Awards to
non-executive officer employees of the Company in amounts not to exceed 35,000
shares to any one employee."
Adopted by the Board of Directors on April 19, 2001.
FOURTH AMENDMENT TO
AMENDED AND RESTATED 1995 STOCK INCENTIVE PLAN
OF
MKS INSTRUMENTS, INC.
The Amended and Restated 1995 Stock Incentive Plan, as amended be and hereby
is amended as follows:
by deleting the first sentence of Section 4(a) thereof in its
entirety and inserting in lieu thereof the following:
"Effective January 1, 2002 and subject to adjustment under Section
4(c), the number of shares of Common Stock (as defined below in Section 4(d))
available for Awards under the Plan: (i) shall annually increase by 5% of the
total shares of the Company's outstanding Common Stock on January 1 of each
year; and (ii) in the event of an increase in the total shares of the Company's
Common Stock after January 1 of any such year in connection with the acquisition
of any corporation, partnership or other business entity by the Company (whether
by merger, stock purchase or otherwise), shall increase by 5% of such increased
amount. Such increases shall occur until such time as the aggregate number of
shares of Common Stock which may be issued under the Plan is 9,750,000 shares,
subject to adjustment under Section 4(c)."
Adopted by the Board of Directors on January 23, 2002.
FIFTH AMENDMENT TO
AMENDED AND RESTATED 1995 STOCK INCENTIVE PLAN
OF
MKS INSTRUMENTS, INC.
The Amended and Restated 1995 Stock Incentive Plan, as amended be and hereby
is amended as follows:
by deleting the second sentence of Section 4(a) thereof in its entirety
and inserting in lieu thereof the following:
"Such increases shall occur until such time as the aggregate number of
shares of Common Stock which may be issued under the Plan is 15,000,000 shares,
subject to adjustment under Section 4(c)."
Adopted by the Board of Directors on March 29, 2002.
Approved by the Stockholders on May __, 2002.
MKS INSTRUMENTS, INC.
AMENDED AND RESTATED 1995 STOCK INCENTIVE PLAN
1. PURPOSE
The purpose of this Amended and Restated 1995 Stock Incentive Plan (the "Plan")
of MKS Instruments, Inc., a Massachusetts corporation (the "Company"), is to
advance the interests of the Company's stockholders by enhancing the Company's
ability to attract, retain and motivate persons who make (or are expected to
make) important contributions to the Company by providing such persons with
equity ownership opportunities and performance-based incentives and thereby
better aligning the interests of such persons with those of the Company's
stockholders. Except where the context otherwise requires, the term "Company"
shall include any present or future subsidiary corporations of MKS Instruments,
Inc. as defined in Section 424(f) of the Internal Revenue Code of 1986, as
amended, and any regulations promulgated thereunder (the "Code").
2. ELIGIBILITY
All of the Company's employees, officers, directors, consultants and advisors
are eligible to be granted options, restricted stock, or other stock-based
awards (each, an "Award") under the Plan. Any person who has been granted an
Award under the Plan shall be deemed a "Participant."
3. ADMINISTRATION, DELEGATION
a. ADMINISTRATION BY BOARD OF DIRECTORS. The Plan will be administered
by the Board of Directors of the Company (the "Board"). The Board shall have
authority to grant Awards and to adopt, amend and repeal such administrative
rules, guidelines and practices relating to the Plan as it shall deem advisable.
The Board may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any Award in the manner and to the extent it shall
deem expedient to carry the Plan into effect and it shall be the sole and final
judge of such expediency. All decisions by the Board shall be made in the
Board's sole discretion and shall be final and binding on all persons having or
claiming any interest in the Plan or in any Award. No director or person acting
pursuant to the authority delegated by the Board shall be liable for any action
or determination relating to or under the Plan made in good faith.
b. DELEGATION TO EXECUTIVE OFFICERS. To the extent permitted by
applicable law, the Board may delegate to one or more executive officers of the
Company the power to make Awards and exercise such other powers under the Plan
as the Board may determine, provided that the Board shall fix the maximum number
of shares subject to Awards and the maximum number of shares for any one
Participant to be made by such executive officers. The Chief Executive Officer
of the Company may grant Awards to non-executive officer employees of the
Company in amounts not to exceed 300,000 shares in the aggregate or 20,000
shares to any one employee.
c. APPOINTMENT OF COMMITTEES. To the extent permitted by applicable
law, the Board may delegate any or all of its powers under the Plan to one or
more committees or subcommittees of the Board (a "Committee"). If and when the
Common Stock (as defined below in Section 4(d)) is registered under the
Securities Exchange Act of 1934 (the "Exchange Act"), the Board shall appoint
one such Committee of not less than two members, each member of which shall be
an "outside director" within the meaning of Section 162(m) of the Code and a
"non-employee director" as defined in Rule 16b-3 promulgated under the Exchange
Act." All references in the Plan to the "Board" shall mean the Board or a
Committee of the Board or the executive officer referred to in Section 3(b) to
the extent that the Board's powers or authority under the Plan have been
delegated to such Committee or executive officer.
4. STOCK AVAILABLE FOR AWARDS
a. NUMBER OF SHARES. Subject to adjustment under Section 4(c), Awards
may be made under the Plan for up to 2,500,000 shares of Common Stock (as
defined below in Section 4 (d)). If any Award expires or is terminated,
surrendered or canceled without having been fully exercised or is forfeited in
whole or in part or results in any Common Stock not being issued, the unused
Common Stock (as defined below in Section 4(d)) covered by such Award shall
again be available for the grant of Awards under the Plan, subject, however, in
the case of Incentive Stock Options (as hereinafter defined), to any limitation
required under the Code. Shares issued under the Plan may consist in whole or in
part of authorized but unissued shares or treasury shares. All share amounts set
forth in this plan reflect the 2,110-for-1 stock split approved by the Board of
Directors of the Company on December 31, 1997 (the "1997 Stock Split").
b. PER-PARTICIPANT LIMIT. Subject to adjustment under Section 4(c), for
Awards granted after the Common Stock (as defined below in Section 4(d)) is
registered under the Exchange Act, the maximum number of shares with respect to
which an Award may be granted to any Participant under the Plan shall be 900,000
per calendar year. The per-participant limit described in this Section 4(b)
shall be construed and applied consistently with Section 162(m) of the Code.
c. ADJUSTMENT TO COMMON STOCK. In the event, at any time after the 1997
Stock Split, of any stock split, stock dividend, recapitalization,
reorganization, merger, consolidation, combination, exchange of shares,
liquidation, spin-off or other similar change in capitalization or event, or any
distribution to holders of Common Stock (as defined below in Section 4(d)) other
than a normal cash dividend, (i) the number and class of securities available
under this Plan, (ii) the number and class of security and exercise price per
share subject to each outstanding Option, (iii) the repurchase price per
security subject to each outstanding Restricted Stock Award and (iv) the terms
of each other outstanding stock-based Award shall be appropriately adjusted by
the Company (or substituted Awards may be made, if applicable) to the extent the
Board shall determine, in good faith, that such an adjustment (or substitution)
is necessary and appropriate. If this Section 4(c) applies and Section 8(e) (1)
also applies to any event, Section 8(e)(1) shall be applicable to such event and
this Section 4(c) shall not be applicable.
d. DEFINITION OF COMMON STOCK. "Common Stock" means (i) prior to the
closing of the Company's initial public offering of common stock pursuant to an
effective registration statement under the Securities Act of 1933 ("IPO"), the
Class B Common Stock, no par value per share, of the Company, and (ii) from and
after the closing of the IPO, the Common Stock, no par value per share, of the
Company.
5. STOCK OPTIONS
a. GENERAL. The Board may grant options to purchase Common Stock (each,
an "Option") and determine the number of shares of Common Stock to be covered by
each Option, the exercise price of each Option and the conditions and
limitations applicable to the exercise of each Option, including conditions
relating to applicable federal or state securities laws, as it considers
necessary or advisable. An Option which is not intended to be an Incentive Stock
Option (as hereinafter defined) shall be designated a "Nonstatutory Stock
Option."
b. INCENTIVE STOCK OPTIONS. An Option that the Board intends to be an
"incentive stock option" as defined in Section 422 of the Code (an "Incentive
Stock Option") shall only be granted to employees of the Company and shall be
subject to and shall be construed consistently with the requirements of Section
422 of the Code. The Company shall have no liability to a Participant, or any
other party, if an Option (or any part thereof) which is intended to be an
Incentive Stock Option is not an Incentive Stock Option.
c. EXERCISE PRICE. The Board shall establish the exercise price at
the time each Option is granted and specify it in the applicable option
agreement.
d. DURATION OF OPTIONS. Each Option shall be exercisable at such
times and subject to such terms and conditions as the Board may specify in the
applicable option agreement. No Option will be granted for a term in excess
of 10 years.
e. EXERCISE OF OPTION. Options may be exercised only by delivery to the
Company of a written notice of exercise signed by the proper person together
with payment in full as specified in Section 5(f) for the number of shares for
which the Option is exercised.
f. PAYMENT UPON EXERCISE. Common Stock purchased upon the exercise of an
Option granted under the Plan shall be paid for as follows:
i. in cash or by check, payable to the order of the Company;
ii. except as the Board may otherwise provide in an Option
Agreement, delivery of an irrevocable and unconditional undertaking by a
creditworthy broker to deliver promptly to the Company sufficient funds to pay
the exercise price, delivery by the Participant to the Company of a copy of
irrevocable and unconditional instructions to a creditworthy broker to deliver
promptly to the Company cash or a check sufficient to pay the exercise price, or
by delivery of shares of Common Stock owned by the Participant valued at the
fair market value as determined by the Board in good faith ("Fair Market
Value"), which Common Stock was owned by the Participant at least six months
prior to such delivery;
iii. to the extent permitted by the Board and explicitly
provided in an Option Agreement (i) by delivery of a promissory note of the
Participant to the Company on terms determined by the Board, or (ii) by payment
of such other lawful consideration as the Board may determine; or
iv. any combination of the above permitted forms of payment.
6. RESTRICTED STOCK
a. GRANTS. The Board may grant Awards entitling recipients to acquire
shares of Common Stock, subject to the right of the Company to repurchase all or
part of such shares at their issue price or other stated or formula price (or to
require forfeiture of such shares if issued at no cost) from the recipient in
the event that conditions specified by the Board in the applicable Award are not
satisfied prior to the end of the applicable restriction period or periods
established by the Board for such Award (each, "Restricted Stock Award").
b. TERMS AND CONDITIONS. The Board shall determine the terms and
conditions of any such Restricted Stock Award, including the conditions for
repurchase (or forfeiture) and the issue price, if any. Any stock certificates
issued in respect of a Restricted Stock Award shall be registered in the name of
the Participant and, unless otherwise determined by the Board, deposited by the
Participant, together with a stock power endorsed in blank, with the Company (or
its designee). At the expiration of the applicable restriction periods, the
Company (or such designee) shall deliver the certificates no longer subject to
such restrictions to the Participant or if the Participant has died, to the
beneficiary designated, in a manner determined by the Board, by a Participant to
receive amounts due or exercise rights of the Participant in the event of the
Participant's death (the "Designated Beneficiary"). In the absence of an
effective designation by a Participant, Designated Beneficiary shall mean the
Participant's estate.
7. OTHER STOCK-BASED AWARDS
The Board shall have the right to grant other Awards based upon the Common
Stock, having such terms and conditions as the Board may determine including the
grant of shares based upon certain conditions, the grant of securities
convertible into Common Stock and the grant of stock appreciation rights.
8. GENERAL PROVISIONS APPLICABLE TO AWARDS
a. TRANSFERABILITY OF AWARDS. Except as the Board may otherwise
determine or provide in an Award, Awards shall not be sold, assigned,
transferred, pledged or otherwise encumbered by the person to whom they are
granted, either voluntarily or by operation of law, except by will or the laws
of descent and distribution, and, during the life of the Participant, shall be
exercisable only by the Participant. References to a Participant, to the extent
relevant in the context, shall include references to authorized transferees.
b. DOCUMENTATION. Each Award under the Plan shall be evidenced by a
written instrument in such form as the Board shall determine. Each Award may
contain terms and conditions in addition to those set forth in the Plan.
c. BOARD DISCRETION. Except as otherwise provided by the Plan, each
type of Award may be made alone or in addition or in relation to any other type
of Award. The terms of each type of Award need not be identical, and the Board
need not treat Participants uniformly.
d. TERMINATION OF STATUS. The Board shall determine the effect on an
Award of the disability, death, retirement, authorized leave of absence or other
change in the employment or other status of a Participant and the extent to
which, and the period during which, the Participant, the Participant's legal
representative, conservator, guardian or Designated Beneficiary may exercise
rights under the Award.
e. ACQUISITION EVENTS
(1) CONSEQUENCES OF ACQUISITION EVENTS. Upon the occurrence of
an Acquisition Event (as defined below), or the execution by the Company of any
agreement with respect to an Acquisition Event, the Board shall take any one or
more of the following actions with respect to then outstanding Awards: (i)
provide that outstanding Options shall be assumed, or equivalent Options shall
be substituted, by the acquiring or succeeding corporation (or an affiliate
thereof), provided that any such Options substituted for Incentive Stock Options
shall satisfy, in the determination of the Board, the requirements of Section
424(a) of the Code; (ii) if the acquisition or succeeding corporation refuses or
is unable to assume outstanding Options or grant Options in substitution
therefor pursuant to clause (i), upon written notice to the Participants,
provide that all then unexercised Options will become exercisable in full as of
a specified time (the "Acceleration Time") prior to the Acquisition Event and
will terminate immediately prior to the consummation of such Acquisition Event,
except to the extent exercised by the Participants between the Acceleration Time
and the consummation of such Acquisition Event; (iii) in the event of an
Acquisition Event under the terms of which holders of Common Stock will receive
upon consummation thereof a cash payment for each share of Common Stock
surrendered pursuant to such Acquisition Event (the "Acquisition Price"),
provide that all outstanding Options shall terminate upon consummation of such
Acquisition Event and each Participant shall receive, in exchange therefor, a
cash payment equal to the amount (if any) by which (A) the Acquisition Price
multiplied by the number of shares of Common Stock subject to such outstanding
Options (whether or not then exercisable), exceeds (B) the aggregate exercise
price of such Options; (iv) provide that all Restricted Stock Awards then
outstanding shall become free of all restrictions prior to the consummation of
the Acquisition Event; and (v) provide that any other stock-based Awards
outstanding (A) shall become exercisable, realizable or vested in full, or shall
be free of all conditions or restrictions, as applicable to each such Award,
prior to the consummation of the Acquisition Event, or (B), if applicable, shall
be assumed, or equivalent Awards shall be substituted, by the acquiring or
succeeding corporation (or an affiliate thereof).
An "Acquisition Event" shall mean: (a) any merger or
consolidation which results in the voting securities of the Company outstanding
immediately prior thereto representing immediately thereafter (either by
remaining outstanding or by being converted into voting securities of the
surviving or acquiring entity) less than 50% of the combined voting power of the
voting securities of the Company or such surviving or acquiring entity
outstanding immediately after such merger or consolidation; (b) any sale of all
or substantially all of the assets of the Company; or (c) the complete
liquidation of the Company.
(2) ASSUMPTION OF OPTIONS UPON CERTAIN EVENTS. The Board may
grant Awards under the Plan in substitution for stock and stock-based awards
held by employees of another corporation who become employees of the Company as
a result of a merger or consolidation of the employing corporation with the
Company or the acquisition by the Company of property or stock of the employing
corporation. The substitute Awards shall be granted on such terms and conditions
as the Board considers appropriate in the circumstances.
f. WITHHOLDING. Each Participant shall pay to the Company, or make
provision satisfactory to the Board for payment of, any taxes required by law to
be withheld in connection with Awards to such Participant no later than the date
of the event creating the tax liability. The Board may allow Participants to
satisfy such tax obligations in whole or in part in shares of Common Stock,
including shares retained from the Award creating the tax obligation, valued at
their Fair Market Value. The Company may, to the extent permitted by law, deduct
any such tax obligations from any payment of any kind otherwise due to a
Participant.
g. AMENDMENT OF AWARD. The Board may amend, modify or terminate any
outstanding Award, including but not limited to, substituting therefor another
Award of the same or a different type, changing the date of exercise or
realization, and converting an Incentive Stock Option to a Nonstatutory Stock
Option, provided that the Participant's consent to such action shall be required
unless the Board determines that the action, taking into account any related
action, would not materially and adversely affect the Participant.
h. CONDITIONS ON DELIVERY OF STOCK. The Company will not be obligated
to deliver any shares of Common Stock pursuant to the Plan or to remove
restrictions from shares previously delivered under the Plan until (i) all
conditions of the Award have been met or removed to the satisfaction of the
Company, (ii) in the opinion of the Company's counsel, all other legal matters
in connection with the issuance and delivery of such shares have been satisfied,
including any applicable securities laws and any applicable stock exchange or
stock market rules and regulations, and (iii) the Participant has executed and
delivered to the Company such representations or agreements as the Company may
consider appropriate to satisfy the requirements of any applicable laws, rules
or regulations.
i. ACCELERATION. The Board may at any time provide that any Options
shall become immediately exercisable in full or in part, that any Restricted
Stock Awards shall be free of all restrictions or that any other stock-based
Awards may become exercisable in full or in part or free of some or all
restrictions or conditions, or otherwise realizable in full or in part, as the
case may be.
9. MISCELLANEOUS
a. NO RIGHT TO EMPLOYMENT OR OTHER STATUS. No person shall have any
claim or right to be granted an Award, and the grant of an Award shall not be
construed as giving a Participant the right to continued employment or any other
relationship with the Company. The Company expressly reserves the right at any
time to dismiss or otherwise terminate its relationship with a Participant free
from any liability or claim under the Plan, except as expressly provided in the
applicable Award.
b. NO RIGHTS AS STOCKHOLDER. Subject to the provisions of the
applicable Award, no Participant or Designated Beneficiary shall have any
rights as a stockholder with respect to any shares of Common Stock to be
distributed with respect to an Award until becoming the record holder of
such shares.
c. EFFECTIVE DATE AND TERM OF PLAN. The Plan shall become effective on
the date on which it is adopted by the Board, but no Award granted to a
Participant designated as subject to Section 162(m) by the Board shall become
exercisable, vested or realizable, as applicable to such Award, unless and until
the Plan has been approved by the Company's stockholders. No Awards shall be
granted under the Plan after the completion of ten years from the earlier of (i)
the date on which the Plan was adopted by the Board or (ii) the date the Plan
was approved by the Company's stockholders, but Awards previously granted may
extend beyond that date.
d. AMENDMENT OF PLAN. The Board may amend, suspend or terminate the
Plan or any portion thereof at any time, provided that no Award granted to a
Participant designated as subject to Section 162(m) by the Board after the date
of such amendment shall become exercisable, realizable or vested, as applicable
to such Award (to the extent that such amendment to the Plan was required to
grant such Award to a particular Participant), unless and until such amendment
shall have been approved by the Company's stockholders.
e. STOCKHOLDER APPROVAL. For purposes of this Plan, stockholder
approval shall mean approval by a vote of the stockholders in accordance with
the requirements of Section 162(m) of the Code.
f. GOVERNING LAW. The provisions of the Plan and all Awards made
hereunder shall be governed by and interpreted in accordance with the laws of
The Commonwealth of Massachusetts, without regard to any applicable conflicts
of law rules or provisions.
Adopted by the Board of Directors on
November 30, 1995
Adopted by the Stockholders on May 17, 1996
Approved as Amended and Restated by the
Board of Directors on December 31, 1997
Approved as Amended and Restated by the
Stockholders on January 9, 1998
Appendix C
FIRST AMENDMENT TO
AMENDED AND RESTATED 1999 EMPLOYEE STOCK PURCHASE PLAN
OF
MKS INSTRUMENTS, INC.
Whereas, the above titled plan (the "Plan") was adopted by the Board of
Directors (the "Board") of MKS Instruments, Inc. (the "Company") and
Whereas, Section 17 of the Plan provides that the Board may at any
time, and from time to time, amend this Plan in any respect,
Now therefore, the Plan is hereby amended, effective for the Plan
Period beginning June 1, 2001, as follows:
Section 2(b) is amended by deleting the requirement that a
person be employed by the Company or a Designated Subsidiary for "at
least six (6) months prior to enrolling in the Plan" and substituting a
requirement that a person be employed for "at least three (3) months
prior to enrolling in the Plan".
Now therefore, the Plan is hereby further amended, effective for the
Plan Period beginning June 1, 2001, as follows:
The first paragraph of Section 9 is hereby deleted in its entirety and
the following paragraph is inserted in lieu thereof:
"9. PURCHASE OF SHARES. On the Offering Commencement Date of each Plan
Period, the Company will grant to each eligible employee who is then a
participant in the Plan an option ("Option") to purchase on the last
business day of such Plan Period (the "Exercise Date"), at the Option
Price hereinafter provided for, the largest number of shares
(fractional or whole) of Common Stock of the Company as does not exceed
the number of shares determined by multiplying $2,083 by the number of
full months in the Offering Period and dividing the results by the
closing price (as defined below) on the Offering Commencement Date of
such Plan Period."
Adopted by the Board of Directors on April 19, 2001.
SECOND AMENDMENT TO
AMENDED AND RESTATED 1999 EMPLOYEE STOCK PURCHASE PLAN
OF
MKS INSTRUMENTS, INC.
Whereas, the above titled plan (the "Plan") was adopted by the Board of
Directors (the "Board") of MKS Instruments, Inc. (the "Company") and
Whereas, Section 17 of the Plan provides that the Board may at any
time, and from time to time, amend this Plan in any respect,
Now therefore, the Plan is hereby further amended, as follows:
The second sentence of the first paragraph is hereby deleted in its
entirety and the following sentence is inserted in lieu thereof:
"Seven hundred thousand (700,000) shares of Common Stock in the
aggregate have been approved for this purpose."
Adopted by the Board of Directors on March 29, 2002.
Approved by the Stockholders on May __, 2002.
MKS INSTRUMENTS, INC.
AMENDED AND RESTATED 1999 EMPLOYEE STOCK PURCHASE PLAN
The purpose of this Plan is to provide eligible employees of MKS
Instruments, Inc. (the "Company") and certain of its subsidiaries with
opportunities to purchase shares of the Company's Common Stock, no par value per
share (the "Common Stock"), commencing on June 1, 1999; provided, that at such
time the Company's Common Stock shall be listed for trading on the Nasdaq
National Market or a national securities exchange. Four hundred fifty thousand
(450,000) shares of Common Stock in the aggregate have been approved for this
purpose. This Plan is intended to qualify as an "employee stock purchase plan"
as defined in Section 423 of the Internal Revenue Code of 1986, as amended (the
"Code") and the regulations promulgated thereunder, and shall be interpreted
consistent therewith. All share amounts set forth in this Plan reflect the
3-for-2 stock split approved by the Board of Directors of the Company on
February 10, 1999 (the "1999 Stock Split").
1. ADMINISTRATION. The Plan will be administered by the Company's Board
of Directors (the "Board") or by a Committee appointed by the Board (the
"Committee"). The Board or the Committee has authority to make rules and
regulations for the administration of the Plan and its interpretation and
decisions with regard thereto shall be final and conclusive.
2. ELIGIBILITY. All employees of the Company, including Directors who
are employees, and all employees of any subsidiary of the Company (as defined in
Section 424(f) of the Code) designated by the Board or the Committee from time
to time (a "Designated Subsidiary"), including employees of the Company or any
designated Subsidiary who are "highly compensated" within the meaning of Section
414(q) of the Code, are eligible to participate in any one or more of the
Offerings (as defined in Section 9) to purchase Common Stock under the Plan
provided that:
(a) they are customarily employed by the Company or a
Designated Subsidiary for more than 20 hours a week and for more than
five months in a calendar year; and
(b) they have been employed by the Company or a Designated
Subsidiary for at least six months prior to enrolling in the Plan; and
(c) they are employees of the Company or a Designated
Subsidiary on the first day of the applicable Plan Period (as defined
below).
No employee may be granted an option hereunder if such employee,
immediately after the option is granted, owns 5% or more of the total combined
voting power or value of the stock of the Company or any subsidiary. For
purposes of the preceding sentence, the attribution rules of Section 424(d) of
the Code shall apply in determining the stock ownership of an employee, and all
stock which the employee has a contractual right to purchase shall be treated as
stock owned by the employee.
3. OFFERINGS. The Company will make one or more offerings ("Offerings")
to employees to purchase stock under this Plan. Offerings will begin each June 1
and December 1, or the first business day thereafter (the "Offering Commencement
Dates"). Each Offering Commencement Date will begin a six (6) month period (a
"Plan Period") during which Payroll deductions will be made and held for the
purchase of Common Stock at the end of the Plan Period. The Board or the
Committee may, at its discretion, choose a different Plan Period of twelve (12)
months or less for subsequent Offerings.
4. PARTICIPATION. An employee eligible on the Offering Commencement
Date of any Offering may participate in such Offering by completing and
forwarding a payroll deduction authorization form to the employee's appropriate
payroll office at least 30 days prior to the applicable Offering Commencement
Date. The form will authorize a regular payroll deduction from the Compensation,
as defined below, received by the employee during the Plan Period. Unless an
employee files a new form or withdraws from the Plan, his deductions and
purchases will continue at the same rate for future Offerings under the Plan as
long as the Plan remains in effect. The term "Compensation" means the amount of
money reportable on the employee's Federal Income Tax Withholding Statement,
including overtime, shift premium, incentive or bonus awards and sales expenses
and excluding allowances and reimbursements for expenses such as relocation
allowances for travel expenses, income or gains on the exercise of Company stock
options or stock appreciation rights, and similar items, whether or not shown on
the employee's Federal Income Tax Withholding Statement, but including, in the
case of salespersons, sales commissions to the extent determined by the Board or
the Committee.
5. DEDUCTIONS. The Company will maintain payroll deduction accounts for
all participating employees. With respect to any Offering made under this Plan,
an employee may authorize a payroll deduction in any whole percent amount up to
a maximum of 10% (or such lower percentage as may be established by the Board or
the Committee) of the Compensation he or she receives during the Plan Period or
such shorter period during which deductions from payroll are made. The minimum
payroll deduction is such percentage of compensation as may be established from
time to time by the Board or the Committee.
No employee may be granted an Option (as defined in Section 9) which
permits his rights to purchase Common Stock under this Plan and any other
employee stock purchase plan (as defined in Section 423(b) of the Code) of the
Company and its subsidiaries, to accrue at a rate which exceeds $25,000 of the
fair market value of such Common Stock (determined at the Offering Commencement
Date of the Plan Period) for each calendar year in which the Option is
outstanding at any time.
6. DEDUCTION CHANGES. An employee may decrease, subject to section 5
hereof or discontinue his payroll deduction once during any Plan Period, by
filing a new payroll deduction authorization form. However, an employee may not
elect to increase his payroll deduction during a Plan Period. If an employee
elects to discontinue his payroll deductions during a Plan Period, but does not
elect to withdraw his funds pursuant to Section 8 hereof, funds deducted prior
to his election to discontinue will be applied to the purchase of Common Stock
on the Exercise Date (as defined below).
7 INTEREST. Interest will not be paid on employee accounts.
8. WITHDRAWAL OF FUNDS. An employee may at any time prior to the close
of business on the last business day in a Plan Period and for any reason
permanently draw out the balance accumulated in the employee's account and
thereby withdraw from participation in an Offering. Partial withdrawals are not
permitted. The employee may not begin participation again during the remainder
of the Plan Period. The employee may participate in any subsequent Offering in
accordance with terms and conditions established by the Board or the Committee.
9. PURCHASE OF SHARES. On the Offering Commencement Date of each Plan
Period, the Company will grant to each eligible employee who is then a
participant in the Plan an option ("Option") to purchase on the last business
day of such Plan Period (the "Exercise Date"), at the Option Price hereinafter
provided for, the largest number of whole shares of Common Stock of the Company
as does not exceed the number of shares determined by multiplying $2,083 by the
number of full months in the Offering Period and dividing the results by the
closing price (as defined below) on the Offering Commencement Date of such Plan
Period.
The purchase price for each share purchased will be 85% of the closing
price of the Common Stock on (i) the first business day of such Plan Period or
(ii) the Exercise Date, whichever closing price shall be less. Such closing
price shall be (a) the closing price on any national securities exchange on
which the Common Stock is listed, (b) the closing price of the Common Stock on
the Nasdaq National Market or (c) the average of the closing bid and asked
prices in the over-the-counter-market, whichever is applicable, as published in
The Wall Street Journal. If no sales of Common Stock were made on such a day,
the price of the Common Stock for purposes of clauses (a) and (b) above shall be
the reported price for the next preceding day on which sales were made.
Each employee who continues to be a participant in the Plan on the
Exercise Date shall be deemed to have exercised his Option at the Option Price
on such date and shall be deemed to have purchased from the Company the number
of full shares of Common Stock reserved for the purpose of the Plan that his
accumulated payroll deductions on such date will pay for, but not in excess of
the maximum number determined in the manner set forth above.
Any balance remaining in an employee's payroll deduction account at the
end of a Plan Period will be automatically refunded to the employee, except that
any balance which is less than the purchase price of one share of Common Stock
will be carried forward into the employee's payroll deduction account for the
following Offering, unless the employee elects not to participate in the
following Offering under the Plan, in which case the balance in the employee's
account shall be refunded.
10. ISSUANCE OF CERTIFICATES. Certificates representing shares of
Common Stock purchased under the Plan may be issued only in the name of the
employee, in the name of the employee and another person of legal age as joint
tenants with rights of survivorship, or (in the Company's sole discretion) in
the name of a brokerage firm, bank or other nominee holder designated by the
employee. The Company may, in its sole discretion and in compliance with
applicable laws, authorize the use of book entry registration of shares in lieu
of issuing stock certificates.
11. RIGHTS ON RETIREMENT, DEATH OR TERMINATION OF EMPLOYMENT. In the
event of a participating employee's termination of employment prior to the last
business day of a Plan Period, no payroll deduction shall be taken from any pay
due and owing to an employee and the balance in the employee's account shall be
paid to the employee or, in the event of the employee's death, (a) to a
beneficiary previously designated in a revocable notice signed by the employee
(with any spousal consent required under state law) or (b) in the absence such a
designated beneficiary, to the executor or administrator of the employee's
estate or (c) if no such executor or administrator has been appointed to the
knowledge of the Company, to such other person(s) as the Company may, in its
discretion, designate. If, prior to the last business day of the Plan Period,
the Designated Subsidiary by which an employee is employed shall cease to be a
subsidiary of the Company, or if the employee is transferred to a subsidiary of
the Company that is not a Designated Subsidiary, the employee shall be deemed to
have terminated employment for the purposes of this Plan.
12. OPTIONEES NOT STOCKHOLDERS. No employee shall have any rights as a
stockholder with respect to any shares of Common Stock to be distributed with
respect to an Option until becoming the record holder or such shares.
Notwithstanding the foregoing, in the event the Company effects a split of the
Common Stock by means of a stock
dividend (and the exercise price of and the number of shares subject to such
Option are adjusted as of the date of the distribution of the dividend rather
than as of the record date for such dividend), then an optionee who is deemed to
have exercised an Option between the record date and the distribution date for
such stock dividend shall be entitled to receive, on the distribution date, the
stock dividend with respect to the shares of Common Stock.
13. RIGHTS NOT TRANSFERABLE. Rights under this Plan are not
transferable by a participating employee other than by will or the laws of
descent and distribution, and are exercisable during the employee's lifetime
only by the employee.
14. APPLICATION OF FUNDS. All funds received or held by the Company
under this Plan may be combined with other corporate funds and may be used for
any corporate purpose.
15. ADJUSTMENT IN CASE OF CHANGES AFFECTING COMMON STOCK. In the event,
at any time after the 1999 Stock Split, of a subdivision of outstanding shares
of Common Stock, or the payment of a dividend in Common Stock, the number of
shares approved for this Plan, and the share limitation set forth in Section 9,
shall be increased proportionately, and such other adjustment shall be made as
may be deemed equitable by the Board or the Committee. In the event of any other
change affecting the Common Stock, such adjustment shall be made as may be
deemed equitable by the Board or the Committee to give proper effect to such
event.
16. MERGER. If the Company shall at any time merge or consolidate with
another corporation and the holders of the capital stock of the Company
immediately prior to such merger or consolidation continue to hold at least 80%
by voting power of the capital stock of the surviving corporation ("Continuity
of Control"), the holder of each Option then outstanding will thereafter be
entitled to receive at the next Exercise Date upon the exercise of such Option
for each share as to which such Option shall be exercised the securities or
property which a holder of one share of the Common Stock was entitled to upon
and at the time of such merger or consolidation, and the Board or the Committee
shall take such steps in connection with such merger or consolidation as the
Board or the Committee shall deem necessary to assure that the provisions of
Section 15 shall thereafter be applicable, as nearly as reasonably may be, in
relation to the said securities or property as to which such holder of such
Option might thereafter be entitled to receive thereunder.
In the event of a merger or consolidation of the Company with or into
another corporation which does not involve Continuity of Control, or of a sale
of all or substantially all of the assets of the Company while unexercised
Options remain outstanding under the Plan, all outstanding Options shall be
cancelled by the Board or the Committee as of the effective date of any such
transaction, provided that notice of such cancellation shall be given to each
holder of an Option, and each holder of an Option shall have the right to
exercise such Option in full based on payroll deductions then credited to his
account as of a date determined by the Board or the Committee, which date shall
not be less than ten (10) days preceding the effective date of such transaction.
17. AMENDMENT OF THE PLAN. The Board may at any time, and from time to
time, amend this Plan in any respect, except that (a) if the approval of any
such amendment by the shareholders of the Company is required by Section 423 of
the Code, such amendment shall not be effected without such approval, and (b) in
no event may any amendment be made which would cause the Plan to fail to comply
with Section 423 of the Code.
18. SUFFICIENT SHARES. In the event that the total number of shares of
Common Stock specified in elections to be purchased under any Offering plus the
number of shares purchased under previous Offerings under this Plan exceeds the
maximum number of shares issuable under this Plan, the Board or the Committee
will allot the shares then available on a pro rata basis.
19. TERMINATION OF THE PLAN. This Plan may be terminated at any time by
the Board. Upon termination of this Plan all amounts in the accounts of
participating employees shall be promptly refunded.
20. GOVERNMENTAL REGULATIONS. The Company's obligation to sell and
deliver Common Stock under this Plan is subject to listing on a national stock
exchange or quotation on the Nasdaq National Market and the approval of all
governmental authorities required in connection with the authorization, issuance
or sale of such stock.
21. GOVERNING LAW. The Plan shall be governed by Massachusetts law
except to the extent that such law is preempted by federal law.
22. ISSUANCE OF SHARES. Shares may be issued upon exercise of an Option
from authorized but unissued Common Stock, from shares held in the treasury of
the Company, or from any other proper source.
23. NOTIFICATION UPON SALE OF SHARES. Each employee agrees, by entering
the Plan, to promptly give the Company notice of any disposition of shares
purchased under the Plan where such disposition occurs within two years after
the date of grant of the Option pursuant to which such shares were purchased or
one year after the date of exercise of the Option.
24. EFFECTIVE DATE AND APPROVAL OF STOCKHOLDERS. The Plan shall take
effect on June 1, 1999 if at such time the Common Stock is listed for trading on
the Nasdaq National Market or a national securities exchange, subject to
approval by the stockholders of the Company as required by Section 423 of the
Code, which approval must occur within twelve months of the adoption of the Plan
by the Board.
Adopted by the Board of Directors on
February 10, 1999
Approval by the Stockholders
on February 17, 1999
Amended and Restated by the Board of
Directors on April 22, 1999
Appendix D
MKS INSTRUMENTS, INC.
INTERNATIONAL EMPLOYEE STOCK PURCHASE PLAN
FIRST 2001 AMENDMENT
Whereas, the above titled plan (the "Plan") was adopted by the Board of
Directors (the "Board") of MKS Instruments, Inc. (the "Company") and
Whereas, Section 17 of the Plan provides that the Board may at any time,
and from time to time, amend this Plan in any respect,
Now therefore, the Plan is hereby amended, effective for the Plan Period
beginning June 1, 2001, as follows:
Section 2(a) is amended by deleting the requirement that a person be
employed by the Subsidiary for "at least six (6) months prior to enrolling in
the Plan" and substituting a requirement that a person be employed for "at least
three (3) months prior to enrolling in the Plan."
Now therefore, the Plan is hereby further amended, effective for the Plan
Period beginning June 1, 2001, as follows:
The first paragraph of Section 9 is hereby deleted in its entirety and the
following paragraph is inserted in lieu thereof:
"9. PURCHASE OF SHARES. On the Offering Commencement Date of each Plan
Period, the Company will grant to each eligible employee who is then a
participant in the Plan an option ("Option") to purchase on the last business
day of such Plan Period (the "Exercise Date"), at the Option Price hereinafter
provided for, the largest number of shares (fractional or whole) of Common Stock
of the Company as does not exceed the number of shares determined by multiplying
$2,083 by the number of full months in the Offering Period and dividing the
results by the closing price (as defined below) on the Offering Commencement
Date of such Plan Period."
Adopted by the Board of Directors on April 19, 2001.
MKS INSTRUMENTS, INC.
INTERNATIONAL EMPLOYEE STOCK PURCHASE PLAN
SECOND 2001 AMENDMENT
Whereas, the above titled plan (the "Plan") was adopted by the Board of
Directors (the "Board") of MKS Instruments, Inc. (the "Company") and
Whereas, Section 17 of the Plan provides that the Board may at any time,
and from time to time, amend this Plan in any respect,
Now therefore, the Plan is hereby amended to add the following new Section:
"25. ADDITIONAL CONDITIONS. The Committee or the Board may establish
additional conditions or provisions for the participation of eligible employees
in the Plan in order to comply with the tax, securities and other laws and
regulation of the countries in which such employees reside, even if such
conditions or provisions increase the benefits accruing to such employees under
the Plan."
Adopted by the Board of Directors on July 31, 2001.
MKS INSTRUMENTS, INC.
INTERNATIONAL EMPLOYEE STOCK PURCHASE PLAN
FIRST 2002 AMENDMENT
Whereas, the above titled plan (the "Plan") was adopted by the Board of
Directors (the "Board") of MKS Instruments, Inc. (the "Company") and
Whereas, Section 17 of the Plan provides that the Board may at any time,
and from time to time, amend this Plan in any respect,
Now therefore, the Plan is hereby further amended, as follows:
The last sentence of the first paragraph is hereby deleted in its entirety
and the following sentence is inserted in lieu thereof:
"Seventy-five thousand (75,000) shares of Common Stock in the aggregate
have been approved for this purpose."
Adopted by the Board of Directors on March 29, 2002.
Approved by the Stockholders on May __, 2002.
MKS INSTRUMENTS, INC.
INTERNATIONAL EMPLOYEE STOCK PURCHASE PLAN
The purpose of this Plan is to provide eligible employees of certain
non-U.S. subsidiaries of MKS Instruments, Inc. (the "Company") with
opportunities to purchase shares of the Company's common stock (the "Common
Stock"), commencing on March 1, 2000. Fifty thousand (50,000) shares of Common
Stock in the aggregate have been approved for this purpose.
1. ADMINISTRATION. The Plan will be administered by the Company's Board of
Directors (the "Board") or by a Committee appointed by the Board (the
"Committee"). The Board or the Committee has authority to make rules and
regulations for the administration of the Plan and its interpretation and
decisions with regard thereto shall be final and conclusive.
2. ELIGIBILITY. All employees of any non-U.S. subsidiary of the Company
designated by the Board or the Committee from time to time (a "Subsidiary"),
excluding Officers and Directors of the Company who are employees of a
Subsidiary, are eligible to participate in any one or more of the offerings of
Options (as defined in Section 9) to purchase Common Stock under the Plan
provided that:
a. they have been employed by the Subsidiary for at least six (6)
months prior to enrolling in the Plan;
b. they are employees of the Subsidiary on the first day of the
applicable Plan Period (as defined below);
c. to the extent local law permits such a requirement, they are
customarily employed by a Subsidiary for more than twenty (20) hours a week
and for more than five (5) months in a calendar year; and
d. they meet any other requirements imposed from time to time by the
Board or the Committee on employees of one or more subsidiaries.
No employee may be granted an option hereunder if such employee,
immediately after the option is granted, owns 5% or more of the total combined
voting power or value of the stock of the Company or any subsidiary. For
purposes of the preceding sentence, the attribution rules of Section 424(d) of
the U.S. Internal Revenue Code of 1986, as amended (the "Code") shall apply in
determining the stock ownership of an employee, and all stock which the employee
has a contractual right to purchase shall be treated as stock owned by the
employee.
3. OFFERINGS. The Company will make one or more offerings ("Offerings") to
employees to purchase stock under this Plan. The first Offering will begin on
March 1, 2000 or the first business day thereafter (the "Offering Commencement
Dates") and end on May 31, 2000. Thereafter, each June 1 and December 1 or the
first business day thereafter will be an Offering Commencement Date. Each
Offering Commencement Date after March 1, 2000 will begin a six (6) month period
(a "Plan Period") during which payroll deductions will be made and held for the
purchase of Common Stock at the end of the Plan Period. The Board or the
Committee may, at its discretion, choose a different Plan Period of twelve (12)
months or less for subsequent Offerings.
4. PARTICIPATION.
a. ENROLLMENT. An employee eligible on the Offering Commencement Date
of any Offering may participate in such Offering by enrolling, in such manner
and at such time approved, from time to time, by the Board or the Committee,
prior to the applicable Offering Commencement Date in said Offering. The
enrollment will authorize a regular payroll deduction from the Compensation
received by the employee during the Plan Period. Unless an employee changes his
enrollment in a manner prescribed by the Committee from time to time or
withdraws from the Plan, his deductions and purchases will continue at the same
rate for future Offerings under the Plan as long as the Plan remains in effect.
The term "Compensation" shall be defined by the Board or the Committee from time
to time, but until modified shall mean regular base salary, including overtime,
shift premium, incentive or bonus awards and sales commissions and excluding
allowances and reimbursements for expenses such as relocation allowances for
travel expenses, income or gains on the exercise of Company stock options or
stock appreciation rights, and similar items whether or not taxable.
b. TAX WITHHOLDING AUTHORIZED. The enrollment of each employee shall
constitute such participating employee's authorization of his or her employer to
deduct from such employee's compensation in the relevant month or months (or
subsequent months, if appropriate) any amount necessary for the payment or
reimbursement of any tax liability payable by such employee with respect to the
grant or exercise of the options hereunder, or the sale of any stock acquired
through the exercise of such option.
5. DEDUCTIONS. The Company will maintain payroll deduction accounts for all
participating employees. With respect to any Offering made under this Plan, an
employee may authorize a payroll deduction in any whole percent amount between
one and ten percent (1-10%) of the Compensation he or she receives during the
Plan Period or such shorter period during which deductions from payroll are made
(or such other percentages as may be established by the Board or the Committee).
Any change in Compensation during the Plan Period will result in an automatic
corresponding change in the amount withheld. The payroll deductions shall be
made in the applicable local currency and will be converted into United Stated
currency at the prevailing rate of exchange in effect on such date as the Board
or Committee shall determine. All amounts deducted may be transferred to an
account of the Company or the Subsidiary outside the country in which such
employee is employed.
No employee may be granted an Option (as defined in Section 9) which
permits his rights to purchase Common Stock under this Plan and any other
employee stock purchase plan (as defined by the Committee or Board) of the
Company and its subsidiaries, to accrue at a rate which exceeds $25,000 of the
fair market value of such Common Stock (determined at the Offering Commencement
Date of the Plan Period) for each calendar year in which the Option is
outstanding at any time.
6. DEDUCTION CHANGES. An employee may decrease, subject to Section 5
hereof, or discontinue his payroll deduction once during any Plan Period, up to
such date prior to the close of business on the last business day, and in such
manner as is permitted by the Board or Committee. However, an employee may not
elect to increase his payroll deduction during a Plan Period. If an employee
elects to discontinue his payroll deductions during a Plan Period but does not
elect to withdraw his funds pursuant to Section 8 hereof, amounts previously
withheld will be applied to the purchase of Common Stock on the Exercise Date
(as defined below).
7. INTEREST. Interest will not be paid on any employee accounts.
8. WITHDRAWAL OF FUNDS. An employee may at any time up to a deadline
established by the Committee or the Board, prior to the close of business on the
last business day in a Plan Period, and for any reason, permanently draw out the
balance accumulated in the employee's account, which will be paid in the local
currency or, in Euros, at the discretion of the Board or the Committee if such
employee is employed in a country which maintains a fixed exchange rate between
its local currency and the Euro ("Repayment in Euros"), and thereby withdraw
from participation in an Offering. Partial withdrawals are not permitted. The
employee may not begin participation again during the remainder of the Plan
Period. The employee may participate in any subsequent Offering in accordance
with terms and conditions established by the Board or the Committee.
9. PURCHASE OF SHARES. On the Offering Commencement Date of each Plan
Period, the Company will grant to each eligible employee who is then a
participant in the Plan an option ("Option") to purchase on the last business
day of such Plan Period (the "Exercise Date"), at the Option Price hereinafter
provided for, the largest number of shares (including fractional shares) of
Common Stock of the Company as does not exceed the number of shares determined
by multiplying $2,083 by the number of full months in the Offering Period and
dividing the results by the closing price (as defined below) on the Offering
Commencement Date of such Plan Period.
The purchase price for each share purchased will be 85% of the Fair Market
Value of the Common Stock on (i) the first business day of such Plan Period or
(ii) the Exercise Date, whichever Fair Market Value shall be less. Such Fair
Market Value shall be (a) the closing price on any national securities exchange
on which the Common Stock is listed, (b) the closing price of the Common Stock
on the Nasdaq National Market or (c) the average of the closing bid price and
asked price in the over-the-counter-market, whichever is applicable, as
published in THE WALL STREET
JOURNAL. If no sales of Common Stock were made on such a day, the price of the
Common Stock for purposes of clauses (a) and (b) above shall be based on the
reported price for the next preceding day on which sales were made.
Each employee who continues to be a participant in the Plan on the Exercise
Date shall be deemed to have exercised his Option at the Option Price on such
date and shall be deemed to have purchased from the Company the number of shares
of Common Stock (including fractional shares) reserved for the purpose of the
Plan that his accumulated payroll deductions on such date will pay for, in
United State currency as of that date, but not in excess of the maximum number
determined in the manner set forth above. The Board or the Committee may, in its
discretion, limit the purchase to only whole shares and not fractional shares.
Any balance remaining in an employee's payroll deduction account at the end
of a Plan Period will be automatically refunded to the employee in the local
currency or at the discretion of the Committee or the Board there may be
Repayment in Euros, except that any balance which is less than the purchase
price of one share of Common Stock will be carried forward into the employee's
payroll deduction account for the following Offering, unless the employee elects
not to participate in the following Offering under the Plan, in which case the
balance shall be refunded.
10. ISSUANCE OF CERTIFICATES. Certificates representing shares of Common
Stock purchased under the Plan may be issued only in the name of the employee,
in the name of the employee and another person of legal age as joint tenants
with rights of survivorship, or (in the Company's sole discretion) in the name
of a brokerage firm, bank or other nominee holder designated by the employee.
The Company may, in its sole discretion and in compliance with applicable laws,
authorize the use of book entry registration of shares in lieu of issuing stock
certificates.
11. RIGHTS ON RETIREMENT DEATH OR TERMINATION OF EMPLOYMENT. In the event
of a participating employee's termination of employment prior to the last
business day of a Plan Period, no payroll deduction shall be taken from any pay
due and owing to an employee and the balance in the employee's account shall be
paid to the employee or, in the event of the employee's death, and subject to
the terms of applicable law, (a) to a beneficiary previously designated in a
revocable notice signed by the employee (with any spousal consent required under
local law) or (b) in the absence of such a designated beneficiary, to the
personal representative of the employee's estate or (c) if no such personal
representative has been appointed to the knowledge of the Company, to such other
person(s) as the Company may, in its discretion, designate. If, prior to the
last business day of the Plan Period, the designated Subsidiary by which an
employee is employed shall cease to be a subsidiary of the Company, or if the
employee is transferred to a subsidiary of the Company that is not a Subsidiary
under the Plan, the employee shall be deemed to have terminated employment for
the purposes of this Plan.
12. OPTIONEES NOT STOCKHOLDERS. Neither the granting of an Option to an
employee nor the deductions from his pay shall constitute such employee a
stockholder of the shares of Common Stock covered by an Option under this Plan
until such shares have been purchased by and issued to him or to an account for
his benefit. Notwithstanding the foregoing, in the event the Company effects a
split of the Common Stock by means of a stock dividend (and the exercise price
of and the number of shares subject to such Option are adjusted as of the date
of the distribution of the dividend rather than as of the record date for such
dividend), then an optionee who is deemed to have exercised an Option between
the record date and the distribution date for such stock dividend shall be
entitled to receive, on the distribution date, the stock dividend with respect
to the shares of Common Stock.
13. RIGHTS NOT TRANSFERABLE. Rights under this Plan are not transferable by
a participating employee other than by will or the laws of descent and
distribution, and are exercisable during the employee's lifetime only by the
employee.
14. APPLICATION OF FUNDS. To the extent consistent with applicable law, all
funds received or held by the Company or any Subsidiary under this Plan may be
combined with other corporate funds and may be used for any corporate purpose
and transferred outside the country in which they are deducted from payroll.
15. ADJUSTMENT IN CASE OF CHANGES AFFECTING COMMON STOCK. In the event of a
subdivision of outstanding shares of Common Stock, or the payment of a dividend
in Common Stock, the number of shares approved for this Plan, and the share
limitation set forth in Section 9, shall be increased proportionately, and such
other adjustment shall be made as may be deemed equitable by the Board or the
Committee. In the event of any other change affecting the
Common Stock, such adjustment shall be made as may be deemed equitable by the
Board or the Committee to give proper effect to such event.
16. MERGER. If the Company shall at any time merge or consolidate with
another corporation and the holders of the capital stock of the Company
immediately prior to such merger or consolidation continue to hold at least 80%
by voting power of the capital stock of the surviving corporation ("Continuity
of Control"), the holder of each Option then outstanding will thereafter be
entitled to receive at the next Exercise Date upon the exercise of such Option
for each share as to which such Option shall be exercised the securities or
property which a holder of one share of the Common Stock was entitled to upon
and at the time of such merger or consolidation, and the Board or the Committee
shall take such steps in connection with such merger or consolidation as the
Board or the Committee shall deem necessary to assure that the provisions of
Section 15 shall thereafter be applicable, as nearly as reasonably may be, in
relation to the said securities or property as to which such holder of such
Option might thereafter be entitled to receive thereunder.
In the event of a merger or consolidation of the Company with or into
another corporation which does not involve Continuity of Control, or of a sale
of all or substantially all of the assets of the Company while unexercised
Options remain outstanding under the Plan, all outstanding Options shall be
cancelled by the Board or the Committee as of the effective date of any such
transaction, provided that notice of such cancellation shall be given to each
holder of an Option, and each holder of an Option shall have the right to
exercise such Option in full based on payroll deductions then credited to his
account as of a date determined by the Board or the Committee, which date shall
not be less than ten (10) days preceding the effective date of such transaction.
17. AMENDMENT OF THE PLAN. The Board may at any time, and from time to
time, amend this Plan in any respect.
18. INSUFFICIENT SHARES. In the event that the total number of shares of
Common Stock specified in elections to be purchased under any Offering plus the
number of shares purchased under previous Offerings under this Plan exceeds the
maximum number of shares issuable under this Plan, the Board or the Committee
will allot the shares then available on a pro rata basis.
19. TERMINATION OF THE PLAN. This Plan may be terminated at any time by the
Board. Upon termination of this Plan all amounts in the accounts of
participating employees shall be promptly refunded in local currency or at the
discretion of the Committee or the Board there may be Repayment in Euros.
20. GOVERNMENTAL REGULATIONS. The Company's obligation to sell and deliver
Common Stock under this Plan is subject to listing on a U.S. national stock
exchange or quotation on the Nasdaq National Market and the approval of all
applicable governmental authorities required in connection with the
authorization, issuance or sale of such stock.
21. GOVERNING LAW. The Plan shall be governed by Massachusetts law except
to the extent that such law is preempted by U.S. federal law or other applicable
law.
22. ISSUANCE OF SHARES. Shares may be issued upon exercise of an Option
from authorized but unissued Common Stock, from shares held in the treasury of
the Company, or from any other proper source.
23. NOTIFICATION UPON SALE OF SHARES. Each employee agrees, by entering the
Plan, to promptly give the Company notice of any disposition of shares purchased
under the Plan.
24. EFFECTIVE DATE. The Plan shall take effect on March 1, 2000.
Approved by the Board of Directors on February 18, 2000
Appendix E
DETACH HERE
THE PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
MKS INSTRUMENTS, INC.
2002 ANNUAL MEETING OF STOCKHOLDERS
MAY 16, 2002
The undersigned stockholder of MKS Instruments, Inc., a Massachusetts
corporation (the "Company"), hereby acknowledges receipt of the Notice of 2002
Annual Meeting of Stockholders and Proxy Statement, each dated April [_], 2002,
and hereby appoints Richard S. Chute and Ronald C. Weigner, and each of them
acting singly, proxies and attorneys-in-fact, with full power to each of
substitution, on behalf and in the name of the undersigned, to represent the
undersigned at the 2002 Annual Meeting of Stockholders of the Company to be held
on May 16, 2002, at 10:00 a.m. at the Andover Country Club, 60 Canterbury
Street, Andover, Massachusetts 01810, and at any adjournment(s) thereof, and to
vote all shares of Common Stock which the undersigned would be entitled to vote
if then and there personally present, on the matters set forth on the reverse
side, and, in their discretion, upon any other matters which may properly come
before the meeting.
SEE REVERSE CONTINUED AND TO BE SIGNED SEE REVERSE
SIDE ON REVERSE SIDE SIDE
DETACH HERE
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE.
This proxy, when properly executed, will be voted as directed below, or, if no
contrary direction is indicated, will be voted FOR the election of the two (2)
nominees listed below as Directors of the Company, FOR proposals 2 and 3 and as
said proxies deem advisable on such other matters as may properly come before
the meeting.
1. To elect two (2) members of the Board of Directors for a term of three
(3) years. Nominees: (01) John R. Bertucci, (02) Robert R. Anderson
FOR WITHHELD
[ ] [ ]
[ ] _______________________________
For both nominees except as
noted above
2. To approve an amendment to the Company's Restated Articles of
Organization, as amended, increasing the number of authorized shares of
Common Stock from 75,000,000 to 200,000,000.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. To approve an amendment to the Company's Amended and Restated 1995 Stock
Incentive Plan, as amended, increasing the number of authorized shares of
Common Stock from 9,750,000 to 15,000,000.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. To approve an amendment to the Company's Amended and Restated 1999
Employee Stock Purchase Plan, as amended, increasing the number of
authorized shares of Common Stock from 450,000 to 700,000.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
5. To approve an amendment to the Company's International Employee Stock
Purchase Plan, as amended, increasing the number of authorized shares of
Common Stock from 50,000 to 75,000.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
6. To ratify the appointment of PricewaterhouseCoopers LLP as independent
accountants for the Company for the fiscal year ending December 31, 2002.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
MARK HERE IF YOU PLAN TO [ ]
ATTEND
MARK HERE FOR ADDRESS [ ]
CHANGE AND NOTE AT LEFT
TO ENSURE YOUR REPRESENTATION AT THE
ANNUAL MEETING, PLEASE MARK, SIGN AND
DATE THIS PROXY AND RETURN IT AS
PROMPTLY AS POSSIBLE.
(This proxy should be marked, dated and
signed by the stockholder(s) exactly
as his or her name appears hereon, and
returned promptly in the enclosed
envelope. When shares are held by joint
tenants, both should sign. When signing
as attorney, executor, administrator,
trustee or guardian, please give full
title as such. If a corporation, please
sign in full corporate name by president
or other authorized officer. If a
partnership, please sign in partnership
name by authorized person, who should
state his or her title.)
SIGNATURE: __________________________________________ DATE: ____________________
SIGNATURE: __________________________________________ DATE: ____________________