-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
WTlWXP620QD4NtgrBDXcmtwzvbFMwYAVwZ2V7gx6LDum1SioIMv4Cvky/El+d/Mp
Gu0kgfIoE85K9tins0702A==
0001104659-07-023923.txt : 20070330
0001104659-07-023923.hdr.sgml : 20070330
20070330101136
ACCESSION NUMBER: 0001104659-07-023923
CONFORMED SUBMISSION TYPE: DEF 14A
PUBLIC DOCUMENT COUNT: 11
CONFORMED PERIOD OF REPORT: 20070509
FILED AS OF DATE: 20070330
DATE AS OF CHANGE: 20070330
EFFECTIVENESS DATE: 20070330
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: AXCELIS TECHNOLOGIES INC
CENTRAL INDEX KEY: 0001113232
STANDARD INDUSTRIAL CLASSIFICATION: SPECIAL INDUSTRY MACHINERY, NEC [3559]
IRS NUMBER: 341818596
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: DEF 14A
SEC ACT: 1934 Act
SEC FILE NUMBER: 000-30941
FILM NUMBER: 07729854
BUSINESS ADDRESS:
STREET 1: 108 CHERRY HILL DRIVE
CITY: BEVERLY
STATE: MA
ZIP: 01915
BUSINESS PHONE: 978 232 4001
MAIL ADDRESS:
STREET 1: 108 CHERRY HILL DRIVE
CITY: BEVERLY
STATE: MA
ZIP: 01915
FORMER COMPANY:
FORMER CONFORMED NAME: EATON SEMICONDUCTOR EQUIPMENT INC
DATE OF NAME CHANGE: 20000501
DEF 14A
1
a07-8372_1def14a.htm
DEF 14A
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment
No. )
Filed by
the Registrant x
|
Filed
by a Party other than the Registrant o
|
Check
the appropriate box:
|
o
|
Preliminary Proxy
Statement
|
o
|
Confidential, for Use of the
Commission Only (as permitted by Rule 14a-6(e)(2))
|
x
|
Definitive Proxy
Statement
|
o
|
Definitive Additional
Materials
|
o
|
Soliciting Material
Pursuant to §240.14a-12
|
AXCELIS TECHNOLOGIES, INC.
|
(Name
of Registrant as Specified In Its Charter)
|
|
(Name
of Person(s) Filing Proxy Statement, if other than the Registrant)
|
|
Payment of Filing Fee
(Check the appropriate box):
|
x
|
No fee required.
|
o
|
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:
|
|
|
|
o
|
Fee paid previously
with preliminary materials.
|
o
|
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:
|
|
|
|
|
|
|
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 9, 2007
The 2007 annual
meeting of the stockholders of Axcelis Technologies, Inc., a Delaware
corporation, will be held at the offices of the Company at 108 Cherry Hill
Drive, Beverly, Massachusetts, at 1:30 p.m. on Wednesday, May 9, 2007
for the following purposes:
1. To elect three (3) directors
to serve until the 2010 annual meeting of stockholders.
2. To ratify the
appointment of our independent registered public accounting firm to audit our
financial statements for the year ending December 31, 2007.
3. To consider a
stockholder proposal if properly presented at the 2007 annual meeting.
4. To transact such
other business as may properly come before the meeting or any adjournment
thereof.
Only stockholders of
record at the close of business on March 15, 2007 will be entitled to vote
at the annual meeting or at any adjournment.
It is important that your shares be represented at the
meeting. Therefore, whether or not you plan to attend the meeting, please
complete your proxy card and return it in the enclosed envelope, which requires
no postage if mailed in the United States. If you attend the meeting and wish
to vote in person, your proxy will not be used.
|
|
By order of the Board of Directors,
|
|
|
|
|
|
Lynnette C. Fallon
|
Dated: April 4, 2007
|
|
Secretary
|
PROXY STATEMENT
TABLE
OF CONTENTS
GENERAL INFORMATION
ABOUT VOTING
The Board of Directors of Axcelis Technologies, Inc.
(Axcelis or the Company) is soliciting your proxy for use at the 2007
annual meeting of stockholders to be held on Wednesday May 9, 2007 and at
any adjournment of the meeting. This proxy statement and the accompanying proxy
card are first being sent or given to stockholders of Axcelis on or about April 4,
2007.
Who
can vote. You may vote your shares of Axcelis
common stock at the annual meeting if you were a stockholder of record at the
close of business on March 15, 2007. On that date, there were 101,544,879
shares of common stock outstanding. You are entitled to one vote for each share
of common stock that you held on the record date.
How
to vote your shares. You may vote your shares
either by proxy or by attending the meeting and voting in person. If you choose
to vote by proxy, please complete, date, sign and return the proxy card in the
enclosed postage prepaid envelope. The proxies named in the proxy card will
vote your shares as you have instructed. If you sign and return the proxy card
without indicating how your votes should be cast, the proxies will vote your
shares in favor of proposals one and two and against proposal three contained
in this proxy statement, as recommended by our Board of Directors. Even if you
plan to attend the meeting, please complete and mail your proxy card to ensure
that your shares are represented at the meeting. If you attend the meeting, you
can still revoke your proxy by voting in person. If your shares are held in a
brokerage or bank account, you must make arrangements with your broker or bank
to vote your shares in person.
Proposals
to be considered at the annual meeting. The
principal business expected to be transacted at the meeting, as more fully
described below, will be the reelection of three directors whose current terms
end in 2007, the ratification of the selection of independent auditors of the
Company and a stockholder proposal regarding the repeal of our classified Board
of Directors, if properly presented.
Quorum. A
quorum of stockholders is required to transact business at the meeting. A
majority of the outstanding shares of common stock entitled to vote, represented
at the meeting in person or by proxy, constitutes a quorum for the transaction
of business.
Number of votes required. The
number of votes required to approve the proposals that are scheduled to be
presented at the meeting is as follows:
Proposal
|
|
Required Vote
|
·Election of three nominees as
directors
|
|
Each nominee must receive a plurality of the votes
cast.
|
·Ratification of the appointment of
our independent registered public accounting firm (our independent
auditors) to audit our financial statements for the year ending
December 31, 2007
|
|
This requires the
affirmative vote of a majority of the votes cast.
|
·Approval of the stockholder proposal
regarding repeal of the classified Board of Directors
|
|
This requires the
affirmative vote of a majority of votes cast.
|
Abstentions. Abstaining
from voting for a nominee in the election of directors or on the proposal to
ratify the appointment of our auditors or the stockholder proposal will reduce
the number of votes cast as well as the number of votes in favor, so will have
no impact on the results of voting.
2
Broker
non-votes. A broker non-vote occurs when a
broker cannot vote a customers shares registered in the brokers name because
the customer did not send the broker instructions on how to vote on the matter
and the broker is barred by law or stock exchange regulations from exercising
its discretionary voting authority in the particular matter. Brokers will have voting discretion for shares
registered in their own name on both the election of directors and ratification
of auditors, but not the stockholder proposal. However, because broker non-votes will not be included in the
votes cast, they will have no impact on the results of voting.
Discretionary
voting by proxies on other matters. Aside from
the proposals for the election of directors, the ratification of our selection
of auditors and the stockholder proposal described herein, we do not know of
any other proposals that may be presented at the 2007 annual meeting. If
another matter is properly presented for consideration at the meeting, the
persons named in the accompanying proxy card will exercise their discretion in
voting on the matter.
How
you may revoke your proxy. You may revoke the
authority granted by your executed proxy card at any time before we exercise it
by filing with our Corporate Secretary, Lynnette C. Fallon, a written
revocation or a duly executed proxy card bearing a later date, or by voting in
person at the meeting. If your shares are held in a brokerage account, you must
make arrangements with your broker or bank to revoke your proxy.
Expenses
of solicitation. We will bear all costs of
soliciting proxies. We will upon request reimburse brokers, custodians and
fiduciaries for out-of-pocket expenses incurred in forwarding proxy
solicitation materials to the beneficial owners of stock held in their names. In
addition to solicitations by mail, our directors, officers and employees may
solicit proxies from stockholders in person or by other means of communication,
including telephone, facsimile and e-mail, without additional remuneration. We
may retain a proxy solicitation firm to assist in the solicitation of proxies. We
will bear all reasonable fees and expenses if such a firm is retained.
Householding
of Annual Meeting Materials. Some banks, brokers
and other nominee record holders may be householding our proxy statements and
annual reports. This means that only one copy of our proxy statement and annual
report to stockholders may have been sent to multiple stockholders 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 telephone number: Axcelis
Technologies, Inc., 108 Cherry Hill Drive, Beverly, Massachusetts 01915,
Attn: Corporate Secretary, telephone: (978) 787-4000. If you want to
receive separate copies of the proxy statement or annual report to stockholders
in the future, or if you are receiving multiple copies and would like to receive
only one copy per household, you should contact your bank, broker, or other
nominee record holder, or you may contact us at the above address and telephone
number. Our annual report is also available on our website at www.axcelis.com.
3
SHARE OWNERSHIP OF
5% STOCKHOLDERS
The
following table shows the amount of our common stock beneficially owned as of December 31,
2006 by persons known by us to own more than 5% of our common stock.
Beneficial Owner(1)
|
|
|
|
Shares
Owned
|
|
Percent
of Class
|
|
FMR
Corp. and Edward C. Johnson 3rd(2)
82 Devonshire Street, Boston, MA 02109
|
|
15,194,609
|
|
|
15.0
|
%
|
|
Donald Smith &
Co., Inc.(3)
152 West 57th Street, New York, NY 10019
|
|
10,120,900
|
|
|
9.9
|
%
|
|
Dimensional Fund Advisors LP(4)
1299 Ocean Avenue Santa Monica CA 90401
|
|
8,203,296
|
|
|
8.1
|
%
|
|
Barclays Global Investors, NA
and Barclays Global Fund Advisors
45 Fremont Street, San Francisco, CA 94105
|
|
5,376,465
|
|
|
5.3
|
%
|
|
Barclays Global Investors, Ltd.
Murray House, 1 Royal Mint Court, London EC3N 4HH, England
|
|
|
|
|
|
|
|
Barclays Global Investors Japan Trust and
Banking Company Limited and Barclays Global Investors Japan Limited(5)
Ebisu Prime Square Tower, 8th Floor, 1-1-39 Hiroo Shibuya-Ku,
Tokyo 150-0012, Japan
|
|
|
|
|
|
|
|
(1) Unless
otherwise noted, the number of shares beneficially owned by each person listed
includes any shares over which a person has sole or shared voting or investment
power. The percentage ownership of each person listed in the table was
calculated using the total number of shares outstanding on December 31,
2006.
(2) Based
on a Schedule 13G/A filed with the Securities and Exchange Commission in February 2007
reporting on ownership as of December 31, 2006, which states that Fidelity
Management & Research Company (Fidelity), a wholly-owned subsidiary
of FMR Corp., is the beneficial owner of 14,178,109 of the reported shares
(14.0% of the class). Such beneficial ownership is the result of Fidelity
acting as investment advisor to various investment companies, including
Fidelity Low Priced Stock Fund (the Fund), which holds 9,000,004 of such
shares (8.9% of the class). According to the Schedule 13G/A, Edward C. Johnson
3d and FMR Corp., through its control of Fidelity and the investment companies,
have sole dispositive power over the shares held by Fidelity, but no voting
power. Fidelity votes these shares pursuant to guidelines of the investment
companies trustees. Fidelity and the Fund are located at the same address as
FMR Corp. According to the Schedule 13G/A, of the remaining shares, which are held
in institutional accounts managed by other subsidiaries of FMR Corp., Edward C.
Johnson 3d and FMR Corp. each have sole dispositve power over 1,016,500 shares
and sole voting power over 912,100 shares.
(3) Based
on a Schedule 13G filed with the Securities and Exchange Commission in February 2007
reporting on ownership as of December 31, 2006, which states that such
shares are owned by advisory clients of Donald Smith & Co., Inc. According
to the Schedule 13G, Donald Smith & Co., Inc. has sole voting power
over 7,839,800 of such shares and the sole power to dispose of all of such
shares.
(4) Based
on a Schedule 13G filed with the Securities and Exchange Commission in February 2007
reporting on ownership as of December 31, 2006, which states that such
shares are owned by advisory clients of Dimensional Fund Advisors LP.
(5) Based
on a Schedule 13G filed with the Securities and Exchange Commission in February 2007
reporting on ownership as of December 31, 2006, which states that such
shares are held by the Barclays banks and investment adviser named above in
trust accounts for the economic benefit of the beneficiaries of those accounts.
According to the Schedule 13G, such companies collectively have sole voting
power over 4,999,840 such shares and the sole power to dispose of all of such
shares.
4
SHARE OWNERSHIP OF
DIRECTORS AND EXECUTIVE OFFICERS
The
following table shows the amount of our common stock beneficially owned as of March 1,
2007 by our directors, the executive officers named in the Summary Compensation
Table below, and all of our current executive officers and directors as a
group.
Beneficial Owner(1)
|
|
|
|
Shares
Owned
|
|
Shares Subject to
Options or Warrants
Exercisable as of
April 29, 2007(2)
|
|
Total Shares
Beneficially
Owned
|
|
Percent
of Class
|
|
Non-Executive
Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R. John Fletcher
|
|
22,590
|
|
|
55,000
|
|
|
|
77,590
|
|
|
|
*
|
|
|
Stephen R. Hardis
|
|
86,325
|
|
|
100,000
|
|
|
|
186,325
|
|
|
|
*
|
|
|
William C.
Jennings
|
|
20,590
|
|
|
55,000
|
|
|
|
75,590
|
|
|
|
*
|
|
|
Michio Naruto
|
|
8,333
|
|
|
40,000
|
|
|
|
48,333
|
|
|
|
*
|
|
|
Patrick H.
Nettles
|
|
27,090
|
|
|
85,000
|
|
|
|
112,090
|
|
|
|
*
|
|
|
H. Brian Thompson
|
|
20,590
|
|
|
85,000
|
|
|
|
105,590
|
|
|
|
*
|
|
|
Geoffrey Wild
|
|
0
|
|
|
0
|
|
|
|
0
|
|
|
|
*
|
|
|
Named
Executive Officers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mary G. Puma(3)
|
|
75,763
|
|
|
1,450,124
|
|
|
|
1,525,887
|
|
|
|
1.5
|
%
|
|
Stephen G.
Bassett
|
|
10,000
|
|
|
57,500
|
|
|
|
67,500
|
|
|
|
*
|
|
|
Lynnette C.
Fallon
|
|
11,033
|
|
|
211,500
|
|
|
|
222,533
|
|
|
|
*
|
|
|
Matthew P. Flynn
|
|
2,054
|
|
|
94,369
|
|
|
|
96,423
|
|
|
|
*
|
|
|
Kevin J. Brewer
|
|
1,500
|
|
|
110,618
|
|
|
|
112,118
|
|
|
|
*
|
|
|
All
current Executive Officers and Directors as a Group (16 persons)(4)
|
|
300,217
|
|
|
2,637,856
|
|
|
|
2,938,073
|
|
|
|
2.9
|
%
|
|
* Indicates less
than 1%.
(1) Unless otherwise noted,
the number of shares beneficially owned by each person listed includes any
shares over which the person has sole or shared voting or investment power. The
shares shown in the table also include shares that the persons named in this
table have the right to acquire on or before April 29, 2007 (60 days after
March 1, 2007) by exercising a stock option or other right. Unless
otherwise noted, each person has sole investment and voting power (or shares
that power with his or her spouse) over the shares listed in the table. The
percentage ownership of each person listed in the table was calculated using
the total number of shares outstanding on March 1, 2007 (101,542,411 shares), plus any shares that person could
acquire upon the exercise of any options on or before April 29, 2007.
(2) Concurrently with the
acceleration of vesting of certain stock options effective December 15,
2005, the executive officers agreed not to sell affected options until they
would otherwise vest in accordance with their original terms. Of the shares
listed as subject to options exercisable as of April 29, 2007, the
following shares will on such date remain subject to these lock up agreements: Ms. Puma81,250
shares; Mr. Bassett1,250 shares; Ms. Fallon22,500 shares; Mr. Flynn11,250
shares; Mr. Brewer10,000 shares; and all current executive officers148,500
shares.
(3) Ms. Pumas
ownership includes 10,000 shares owned by her husband.
(4) Includes shares and exercisable
options held by the directors and named executive officers, as well as four
other executive officers who beneficially own an aggregate of 14,349 shares and
293,745 exercisable options.
5
PROPOSAL 1:
ELECTION OF DIRECTORS
Our Board of Directors has fixed the number of
directors at eight. The number of directors is subject to increase or decrease
by action of the Board. Under our charter, our Board is divided into three
classes as nearly equal in number of directors as possible. The term of one
class expires, and their successors are elected for a term of three years, at
each annual stockholders meeting. At the upcoming annual meeting, three
directors will be elected to hold office for a term of three years until our
annual meeting in 2010 and until their successors are elected and qualified. Each
of the Boards nominees, Michio Naruto, Patrick H. Nettles and Geoffrey Wild,
has consented to serve if elected. However, if any nominee is unable to serve,
proxies will be voted for any other candidate nominated by the Board. The Board
recommends a vote FOR each of the three nominees.
The following table
contains biographical information about the nominees for director and current
directors whose term of office will continue after the meeting.
Name and Age
|
|
|
|
Business Experience and Other Directorships
|
|
Director
Since
|
|
Present
Term
Expires
|
|
*Geoffrey Wild
Age: 50
|
|
Mr. Wild is Chief
Executive Officer and President of Nikon Precision, Inc., a position he
has held since 2002. Nikon Precision, Inc. is a wholly owned subsidiary
of Nikon Corporation, the leading global supplier of step-and-repeat and
step-and-scan lithography systems. Prior to joining Nikon, Mr. Wild was
Chief Executive Officer of TheSupply, Inc., an e-commerce provider
of supply chain services. Mr. Wild is also a director of Nikon
Precision, Inc., and E Ink Corporation.
|
|
|
2006
|
|
|
|
2007
|
|
|
*Michio Naruto
Age: 71
|
|
Mr. Naruto is an
advisor to Fujitsu Corporation, a global provider of information technology
and communications solutions. Until March 2001, he held the position of
vice chairman of Fujitsu. Prior to becoming vice chairman, Mr. Naruto
was executive vice president in charge of Fujitsus Legal and Industry
Relations, External Affairs, and Export Control Groups. He has been a member
of Fujitsus board in charge of international operations since 1985.
Mr. Naruto is chairman of the board, Toyota InfoTechnology Center Co.,
Ltd.
|
|
|
2005
|
|
|
|
2007
|
|
|
*Patrick H.
Nettles
Age: 63
|
|
Mr. Nettles has
served as Executive Chairman of the Board of Directors of CIENA Corporation,
a manufacturer of optical networking equipment, since May 2001. Prior to
that, Mr. Nettles served as Chairman of the Board of Directors and Chief
Executive Officer of CIENA from October 2000, as its President, Chief
Executive Officer and Director from April 1994, and as its Director and
Chief Executive Officer from February 1994. Mr. Nettles is a
director of Progressive Corporation.
|
|
|
2001
|
|
|
|
2007
|
|
|
R. John Fletcher
Age: 61
|
|
Mr. Fletcher is
Chief Executive Officer of Fletcher Spaght, Inc., a strategy consulting
organization, which he founded in 1983, and Managing Director of Fletcher
Spaght Ventures, a venture fund. Prior to founding Fletcher
Spaght, Inc., Mr. Fletcher was a manager at the Boston Consulting
Group. Mr. Fletcher is also a director of AutoImmune, Inc.,
Spectranetics Corporation and Panacos, Inc.
|
|
|
2003
|
|
|
|
2008
|
|
|
6
Stephen R. Hardis
Age: 71
|
|
Mr. Hardis was the
Companys Chairman of the Board until May 2006 and currently serves as
Lead Director. He was Chairman and Chief Executive Officer of Eaton
Corporation until July 2000. Mr. Hardis became Eatons Chairman in
January 1996 and its Chief Executive Officer in September 1995.
Prior to that, he served as Eatons Vice Chairman from 1986 and its Executive
Vice PresidentFinance and Administration from 1979. Mr. Hardis is a
director of American Greetings Corporation, Lexmark International
Group, Inc., Marsh & McLennan Companies, Inc., Nordson
Corporation, Progressive Corporation, and Steris Corporation.
|
|
|
2000
|
|
|
|
2008
|
|
|
H. Brian Thompson
Age: 67
|
|
Mr. Thompson is
Executive Chairman of Global Telecom & Technology (GTT), a
world-wide multi-network telecommunications operator, a position held since
2006. He is also the Chairman of Comsat International, a privately held
independent telecommunications company operating throughout Latin America, a
position he assumed in January 2003. He has also been the Chief
Executive Officer of Universal Telecommunications, Inc., a private
investment and advisory firm, since 1991. Mr. Thompson previously served
as Chairman and Chief Executive Officer of Global Telesystems, Inc., a
telecommunications company, from March 1999 through September 2000
and served as Chairman and Chief Executive Officer of LCI International, a
telecommunications company, from July 1991 until its sale to Qwest
Communications International, Inc., a broadband internet communications
company, in June 1998. At that time, Mr. Thompson became Vice
Chairman of the Board of Qwest until his resignation in December 1998.
Earlier, he was Executive Vice President of MCI Communications through its
growth years in the 1980s. Mr. Thompson serves on the Boards of
Directors of Bell Canada International, Inc., Comsat International,
United Auto Group, and Sonus Networks, Inc.
|
|
|
2002
|
|
|
|
2008
|
|
|
William C.
Jennings
Age: 67
|
|
Mr. Jennings is a
retired partner of PricewaterhouseCoopers LLP, a global accounting and
advisory firm, where he led the risk management and internal control
consulting practice from 1992 until his retirement in 1999. Before that,
Mr. Jennings served as a senior audit partner at Coopers &
Lybrand, as a senior executive vice president at Shearson Lehman Brothers,
responsible for quality assurance, internal audit and compliance, and as an
executive vice president and chief financial officer of Bankers Trust. Since
retiring from PricewaterhouseCoopers, Mr. Jennings has provided
independent consulting services to a number of companies. He is also a
director of Silgan Holdings Inc. and Nyfix, Inc.
|
|
|
2003
|
|
|
|
2009
|
|
|
7
Mary G. Puma
Age: 49
|
|
Ms. Puma
is Axcelis Chairman (since May 2006), Chief Executive Officer (since
January 2002) and President (since May 2000). Prior to becoming
Chief Executive Officer, Ms. Puma served as Chief Operating Officer from
May 2000, and, before that, served as a Vice President of the Company
from February 1999. In 1998,
she became General Manager and Vice President of the Implant Systems Division
of Eaton Corporation, a global diversified industrial manufacturer. In
May 1996, she joined Eaton as General Manager of the Commercial Controls
Division. Prior to joining Eaton, Ms. Puma spent 15 years in various
marketing and general management positions for General Electric Company.
Ms. Puma is a director of Nordson Corporation.
|
|
|
2000
|
|
|
|
2009
|
|
* Indicates
a nominee for election as director.
PROPOSAL 2: RATIFICATION
OF THE APPOINTMENT OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Upon the recommendation of its Audit Committee, the
Board of Directors has appointed the independent registered public accounting
firm of Ernst & Young LLP (referred to herein as our independent
auditor) as independent auditors to conduct the annual audit of our financial
statements for 2007 and is seeking stockholder ratification of the appointment.
Ernst & Young LLP is an internationally recognized independent
registered public accounting firm that audited the Companys financial
statements in 2006 and which the Audit Committee believes is well qualified to
continue.
Representatives of Ernst & Young are expected
to attend the annual meeting and be available to respond to appropriate
questions. They will also have the opportunity to make a statement if they
desire.
The
aggregate fees billed for each of the last two fiscal years for professional
services rendered by Ernst & Young LLP were as follows:
|
|
2005
|
|
2006
|
|
Audit
Fees
|
|
$
|
1,848,700
|
|
$
|
1,848,500
|
|
Audit Related Fees
|
|
$
|
12,500
|
|
$
|
11,000
|
|
Tax
Fees
|
|
|
|
|
|
Tax compliance
and preparation
|
|
$
|
212,751
|
|
$
|
62,890
|
|
International tax
planning
|
|
$
|
135,000
|
|
$
|
220,000
|
|
General tax
planning and other tax
|
|
$
|
36,435
|
|
0
|
|
Total
Tax Fees
|
|
$
|
384,186
|
|
$
|
282,890
|
|
Total
Fees
|
|
$
|
2,245,386
|
|
$
|
2,142,390
|
|
Audit fees include a U.S. GAAP audit of SEN
Corporation, an SHI and Axcelis Company and statutory audits for subsidiaries
and branches operating in countries outside of the United States. Audit related
fees include audits for the Companys 401(k) plan required under ERISA.
International tax planning relates to the setting of fair compensation for
services provided to us by our foreign subsidiaries to ensure appropriate
revenue levels are reported for taxation in those foreign countries.
8
Our Audit Committee has adopted
a policy and procedures requiring its pre-approval of all non-audit (including
tax) services performed by the independent auditor in order to assure that
these services do not impair the auditors independence. The policy approves
the performance of specific services subject to cost limits for each service.
Such general approvals are to be reviewed and, if necessary, modified at least
annually. The policy also prohibits the independent auditors performance of
certain types of services as inconsistent with independence. Management must
obtain the specific prior approval of the Audit Committee for each engagement
of the independent auditor to perform other audit-related or other non-audit
services.
Any approval required under the
policy must be given by the Audit Committee or by any member or members to whom
the Committee has delegated that authority. The Audit Committee does not
delegate its responsibility to approve services performed by the independent
auditor to any member of management.
The standard applied by the
Audit Committee in determining whether to grant approval of any type of
non-audit service, or of any specific engagement to perform a non-audit
service, is whether the services to be performed, the compensation to be paid
therefor and other related factors are consistent with the independent auditors
independence under guidelines of the Securities and Exchange Commission, the
Public Company Accounting Oversight Board and applicable professional standards.
Relevant considerations include whether the work product is likely to be
subject to, or implicated in, audit procedures during the audit of our
financial statements, whether the independent auditor would be functioning in
the role of management or in an advocacy role, whether the independent auditors
performance of the service would enhance our ability to manage or control risk
or improve audit quality, whether such performance would increase efficiency
because of the independent auditors familiarity with our business, personnel,
culture, systems, risk profile and other factors, and whether the amount of
fees involved, or the proportion of the total fees payable to the independent
auditor in the period that is for non-audit services, would tend to reduce the
independent auditors ability to exercise independent judgment in performing
the audit.
All of the non-audit services
rendered by Ernst & Young LLP in respect of the 2005 and 2006 fiscal
years were pre-approved by the Audit Committee in accordance with this policy.
Ernst & Young LLP informed the Company that
they are not aware of any relationship with the Company that, in their
professional judgment, may reasonably be thought to bear on the independence of
Ernst & Young LLP.
Ratification of the appointment of Ernst &
Young LLP by the stockholders is not required by law or by our bylaws. The
Board of Directors is nevertheless submitting it to the stockholders to
ascertain their views. If this proposal is not approved at the annual meeting
by the affirmative vote of holders of a majority of the votes cast at the
meeting, the Audit Committee intends to reconsider its recommendation of Ernst &
Young LLP as independent auditors. The Company may retain the firm for 2007
notwithstanding a negative stockholder vote.
The Board of Directors
recommends a vote FOR ratification of the appointment of Ernst & Young LLP.
9
PROPOSAL 3: STOCKHOLDER
PROPOSAL REGARDING REPEAL OF THE CLASSIFIED BOARD OF DIRECTORS
Proposal No. 3 is a
non-binding proposal by individual stockholders. For the reasons set forth
below, the Board of Directors recommends a vote AGAINST Proposal No. 3.
Stockholder
Proposal
The Company has been advised that William C. Thompson, Jr.,
Comptroller, City of New York, on behalf of the Boards of Trustees of New York
City Employees Retirement System, the New York City Teachers Retirement
System, the New York City Police Pension Fund, the New York City Fire
Department Pension Fund and the New York City Board of Education Retirement
System (collectively, the New York City Pension Funds), which are reportedly
the beneficial owners in the aggregate of 1,469,628 shares of the Companys
Common Stock, with an address of 1 Centre Street, Room 736, New York,
NY 10007-2341, intends to submit the following proposal for consideration at
the Annual Meeting:
BE IT RESOLVED, that the stockholders of Axcelis
Technologies, Inc. request that the Board of Directors take the necessary
steps to declassify the Board of Directors and establish annual elections of
directors, whereby directors would be elected annually and not by classes. This
policy would take effect immediately, and be applicable to the re-election of
any incumbent director whose term, under the current classified systems,
subsequently expires.
The New York City Pension Funds provided the following
supporting statement:
We believe that the ability to elect directors is the
single most important use of the shareholder franchise. Accordingly, directors
should be accountable to shareholders on an annual basis. The election of directors
by classes, for three-year terms, in our opinion, minimizes accountability and
precludes the full exercise of the rights of shareholders to approve or
disapprove annually the performance of a director or directors.
In addition, since only one-third of the Board of
Directors is elected annually, we believe that classified boards could
frustrate, to the detriment of long-term shareholder interest, the efforts of a
bidder to acquire control or a challenger to engage successfully in a proxy
contest.
We urge your support for
the proposal to repeal the classified board and establish that all directors be
elected annually.
Recommendation of
the Board on this Stockholder Proposal
The Board takes the views of its stockholders
seriously and has given this proposal thorough consideration. The Board
believes that this proposal should not be implemented because it would diminish
the Boards ability to act in the best interests of the stockholders.
Therefore, the Board unanimously recommends a vote AGAINST the proposal.
As provided in the Companys Certificate of
Incorporation, the Company has three classes of directors, with members of each
class elected to three-year terms. The classes are staggered, such that
stockholders vote on one class of directors each year. The Company has had this
structure continuously since it went public in 2000. Similar procedures for
staggered elections have been adopted by a majority of S&P 1500 companies,
including a majority of the S&P MidCap and SmallCap companies.
10
A classified board maintains accountability to
stockholders while promoting continuity and stability in the Boards business
strategies and policies. To maintain accountability, stockholders have the
opportunity each year to vote on one-third of the members of the Board. The
Board believes that three-year terms do not reduce directors accountability. Directors
have fiduciary duties to the Company and its stockholders that do not depend on
the length of their term of office.
The staggered three-year terms served by Axcelis
directors promote the Companys performance. They ensure that, in any year, at
least two-thirds of the directors will have had prior experience and
familiarity with the Companys business, which is beneficial for long-term
strategic planning. They support independent thought and action by non-employee
directors, who need not worry about being renominated each year The classified
structure also helps the Company attract highly qualified directors willing to
commit the time necessary to understand the Company, its operations and its
competitive environment.
Contrary to the stockholder proposal, the classified
Board will enhance, not frustrate, the stockholders long-term interest in the
event of an unsolicited proposal to acquire control of the Company. The
classified board structure reduces the threat of an abrupt change in the
composition of the Board because a majority of the directors cannot be replaced
at a single meeting. This helps ensure that the Board has an adequate
opportunity to fulfill its duties to the Companys stockholders by reviewing
any such proposal, studying appropriate alternatives and achieving the best
result for all stockholders. A classified board does not preclude takeover
offers. Rather, a classified board enhances the Boards ability to negotiate
favorable terms with the proponent of an unsolicited proposal, a function the
stockholders cannot perform.
Stockholders should be
aware that, even if approved, this proposal is not binding on the Board. The
Board will consider the stockholders wishes as expressed at the Annual Meeting
and will take such action as the Board, in its business judgment and the
exercise of its fiduciary duties, deems to be in the best interests of the
Company and its stockholders.
FOR THE FOREGOING REASONS, THE BOARD OF DIRECTORS
RECOMMENDS A VOTE AGAINST
PROPOSAL NO. 3
11
EXECUTIVE
COMPENSATION
2006 Compensation
Discussion and Analysis
This Compensation
Discussion and Analysis is intended to provide a context for the disclosures
contained in this Proxy Statement with respect to the compensation paid to the
Companys principal executive officer (Mary G. Puma), principal financial
officer (Stephen G. Bassett), and the three most highly compensated other
executive officers serving as executive officers at December 31, 2006
included in the Summary Compensation Table below. These executive officers are
referred to herein as named executive officers or NEOs. Specifically, this
Compensation Discussion and Analysis will explain the objectives and material
elements of the compensation of the NEOs during 2006.
Compensation
Principles and Tools
The Companys
executive compensation program is designed to:
(1) retain
executive talent by offering compensation that is commensurate with pay at
other companies of a similar size in the same or similar industries, as
adjusted for individual factors; and
(2) drive
executive performance by having pay at risk so actual pay is tied to goal
achievement and individual performance.
All executive compensation is determined by the
Compensation Committee of the Board of Directors. For a discussion of the
Committees processes in general, see Corporate GovernanceCompensation
Committee elsewhere in this Proxy Statement. Executive compensation for
incumbent executives is reviewed annually.
Executive compensation decision-making begins by
determining the level and mix of types (base, incentive and equity) of
compensation for a particular position that are paid by similar companies for
comparable positions. In
2006, the Committee reviewed a report from an external compensation consultant
that compared the compensation of each of the Axcelis executives against the
compensation paid for similar positions in a peer group of 11 publicly traded
firms in the semiconductor equipment industry, which are referred to in this
discussion as the Peer Group. These 11 companies (Advanced Energy Industries,
Asyst Technologies, Brooks Automation, KLA Tencor, Lam Research, Mattson
Technology, MKS Instruments, Novellus Systems, Semitool, Teradyne and Varian
Semiconductor Equipment Associates) are among the principal firms in the
semiconductor capital equipment industry. The median revenues for the Peer
Group over the 12 month period prior to the report were $560.9 million in
comparison to $370.4 million for the Company in the same period.
The Compensation Committee sets compensation by using
this information together with an evaluation of the unique education, training
and experience of the executive officer and his or her overall value to the
Company. Factors considered by the Compensation Committee in valuing the NEOs
services include the executives contributions to the Companys competitive
position in the marketplace, individual performance, and the past and expected
contribution by the executive officer toward the achievement of the Companys
performance objectives. While the benchmarking information is a very important
starting point, this subjective review is necessary to ensure that the level
and mix of types of executive compensation is appropriate for the particular
individual and will drive the performance of the executive.
All elements of an
executives 2006 compensation were reviewed in the context of the executives
total compensation. This was done by reviewing comprehensive reports on each
executives current and historical base and annual incentive cash compensation,
equity portfolio and contractual arrangements with the Company. The Committee
had no pre-established policy or target for the allocation between cash and
non-cash compensation or between short-term and long-term incentive
compensation. It determined such allocations based on the factors discussed
below.
12
Material Elements
of Named Executive Officer Compensation
The key elements of NEO compensation are: base
salaries; an annual cash incentive program; equity compensation; and a double-trigger
Change of Control Agreement. Executives also may participate, on the same terms
as all other employees, in an Employee Stock Purchase Plan, a 401(k) retirement
savings plan and health and welfare benefits.
The following discussion seeks to explain why Axcelis
has chosen to pay each compensation element, how Axcelis determines the amount
of each element, and how the element and the Companys decisions regarding that
element in 2006 fit into the Companys overall compensation objectives and
affect decisions regarding other elements.
Base
Salary. The Company pays a base salary to each
of its NEOs. The objective is to provide base compensation to the executive
which is competitive with base compensation the executive could earn in a
similar position at other companies. Base pay for NEOs is set on commencement
of employment with the Company and annually reviewed thereafter. The process of
fixing and adjusting base pay involves the Committees review of peer group
benchmark compensation and subjective considerations, as discussed above. Typically,
the Chief Executive Officer makes recommendations to the Compensation Committee
with regard to base pay for the other executive officers that she believes are
justified in light of these considerations. In fixing or adjusting base pay,
the Committee considers the impact increases in base pay will have on annual
incentive cash compensation and equity grants, which are both currently based
on a percentage of base pay.
Increases in executive officer base pay are only made
if the Committee determines that the executives current compensation is
insufficient. This determination may be reached because the market pay for the
position has increased, the executive has taken on additional responsibilities,
or the value of the executive to the Company has increased due to exceptional
performance. At its meeting in August 2006, the Compensation Committee
reviewed the cash compensation of each incumbent executive, including the named
executive officers. In doing so, the Committee reviewed the Peer Group report
for each position and subjective factors relating to each executive. The Peer
Group report showed that on average, the base compensation of the Companys
nine executive officers was at the 55th percentile of the compensation paid in the Peer
Group for comparable positions.
As a result of this process, in 2006 only one of the
named executive officers, Matthew Flynn, had an adjustment in base salary,
which became effective on August 19, 2006. Mr. Flynns base pay had
last been adjusted in May 2005. No adjustments were made in 2006 to the
base pay of Ms. Puma (which was last adjusted in July 2004), Mr. Bassett
(which has not changed since he joined the Company in 2003), Ms. Fallon
(which was last adjusted in January 2004) or Mr. Brewer (which was
last adjusted in May 2005). In 2006, the base pay of these four NEOs was
determined to be adequate by the Committee in light of the Peer Group report
and subjective factors.
Annual Cash Incentive. Axcelis offers an annual cash incentive target as
part of executive compensation to incent and reward the executive to achieve
specific company goals. Although executives understand that the payout under a
cash incentive program will depend on the Companys performance overall and the
executives individual performance, the stated cash incentive target for a
particular position is an important part of a competitive compensation package
to attract and retain executives. NEOs at Axcelis participate along with all
other employees in an annual cash incentive plan called the Axcelis Team
Incentive plan. Annual cash incentive compensation under the Axcelis Team
Incentive plan is the result of a four step process, in which the Compensation
Committee:
(1) sets the officers cash
incentive target, as a percentage of the officers actual base earnings for the
year (this is done at hire and reviewed annually);
13
(2) approves, at its first
meeting in each calendar year, the specific annual financial and operational
goals that will drive the payout under the plan and the weighting of each goal;
(3) determines, after the
conclusion of each year, the payout under the plan by fixing the Company
Performance Score based on goal achievement; and
(4) determines each executive
officers individual performance score to reflect the officers performance
during the course of the year.
Each of these steps is discussed in more detail below.
Cash Incentive
Targets. Cash
incentive targets are fixed and adjusted based on the annual review of cash
compensation at comparable companies, such as the Peer Group used in 2006, and
subjective factors discussed above. Typically, the Chief Executive Officer
makes recommendations to the Compensation Committee with regard to the initial
and subsequent executive officer incentive targets that she believes are
justified. At its meeting in August 2006, the Compensation Committee
reviewed the cash incentive compensation of each incumbent executive, including
the named executive officers. The Peer Group report showed that, on average,
the target total cash compensation (base plus cash incentive) of the Companys
nine executive officers was at the 55th percentile of the compensation paid in the
Peer Group for comparable positions, and the average actual total cash
compensation of the group was at the 50th percentile of the Peer Group comparables.
As a result of this process, in 2006 only one of the
named executive officers, Matthew Flynn, had an adjustment in his cash
incentive target, which became effective on August 19, 2006. Mr. Flynns
cash incentive target had last been adjusted in June 2005. No adjustments
were made in 2006 to the cash incentive targets of Ms. Puma (which was
last adjusted in July 2003), Mr. Bassett (which was last adjusted in June 2005),
Ms. Fallon (which was last adjusted in June 2005) or Mr. Brewer
(which was last adjusted in June 2005). In 2006, the cash incentive
targets of these four NEOs were determined to be adequate by the Committee in
light of the Peer Group report and subjective factors.
The current target opportunities for the NEOs under
the 2006 Axcelis Team Incentive plan are fixed at percentages of base
compensation ranging from 50%, in the case of Mr. Brewer, to 60%, in the
cases of Mr. Flynn, Mr. Bassett and Ms. Fallon, to 100%, in the
case of Ms. Puma.
Structure of the
Axcelis Team Incentive Plan. The
2006 Axcelis Team Incentive plan Company Performance Score was based 70% on
financial goals and 30% on non-financial operational goals. The Company Performance Score may range from
0% to 200%, based on goal achievement. A 100% Company Performance Score results
in each executive having the opportunity to receive his or her target cash
incentive, subject to adjustment for an individual performance score, which can
range from 0% to 150%. The financial goals in the 2006 Axcelis Team
Incentive plan were derived from the Companys profit plan for 2006, and
included specific targets for 2006 revenues, gross margin, pre-tax profit and
cash generation. Since these financial targets are set at the beginning of the
year, they will vary from publicly-announced quarterly financial guidance as
the Companys anticipated performance changes during the year. The plan also requires
the Committee to consider factors relating to the quality of the financial
results (such as sources of revenue, whether operational improvements impacted
gross margin, and whether certain types of investment impacted earnings) as
well as the actual quantitative results. The operational goals are derived from
the Companys 2006 strategic plan and include multiple detailed targets in the
areas of product development and customer relationships, such as goals to ship
initial new products and penetrate specific numbers of new customers.
The Compensation Committee believes
that achievement of each of the specific 2006 goals was challenging, but
attainable. These goals were formulated in the same way as past Axcelis Team
Incentive plan goals. Over the five years ending with 2006, the Company
Performance Scores have ranged from a low
14
of 0%
to a high of 123%, illustrating the variability of achievement of these types
of goals and therefore the inherent challenge to management.
Determination of
the 2006 Company Performance Score. In its meetings throughout 2006, the Compensation
Committee monitored the Companys performance against the Axcelis Team
Incentive goals. In February 2007, the Committee determined that the
Companys performance against the 2006 financial goals scored at 86.71% against
a target of 70%. Based on managements report on its performance against
operational goals, the Committee determined that the Companys performance
against the operational goals drove a 19.35% score out of a target of 30%. These
scores resulted in an aggregate Company Performance Score of 106%.
Determination of
the 2006 Individual Performance Scores for Each Named Executive Officer. Also in February 2007,
the Compensation Committee established the 2006 individual performance score
for each NEO. The Committee made this
assessment based on the executives achievement of his or her personal and team
goals set at the beginning of the year, taking into account the Chief Executive
Officers recommendation and the business results in the executives area of
responsibility. The individual performance scores were 105% for the Chief Executive Officer and an
average of 106% for the other NEOs. The resulting amounts paid to the NEOs
under the 2006 Axcelis Team Incentive Plan are set forth in the Non-equity
incentive plan compensation column in the Summary Compensation Table in this Proxy Statement.
Long
Term Incentive Compensation through Equity. The
Compensation Committee also grants the NEOs equity compensation under the 2000
Stock Plan. Equity compensation for NEOs, which has taken the form of stock
options and restricted stock units, is designed to align the interests of
executives with our investors and to retain executives during multi-year
vesting periods. Equity grants are a key retention device as a result of
vesting provisions which typically extend over four years. Long term ownership
of equity awards is further encouraged through the Companys executive stock
ownership guidelines, which establish
a minimum number of shares that the executive must own. In the case of the
NEOs, the required ownership ranges from 20,000 shares in the case of Ms. Puma
to 12,000 shares in the case of the other NEOs. These levels were set to create
meaningful investments by executives in shares of the Company, so that their
interest in the value of the Companys stock was not limited to stock price
appreciation via options without a downside.
Equity grants are also intended to drive performance,
in that the value ultimately realized is linked to stock price appreciation. Option
grants have no value without stock price appreciation, and restricted stock
units have value at grant that can increase with stock price appreciation. Thus,
equity grants should constructively influence managements motivation to
enhance the value of the Companys stock.
Equity grants to executives are made upon hire and,
typically, thereafter on an annual basis. Annual equity grants to executive
officers have been made in most years in order to ensure a meaningful retentive
effect by maintaining the percentage of the executives equity position that is
unvested.
Form, Size and
Timing of Equity Grants. The
Compensation Committee determines the form of equity grants made to the NEOs. The
2000 Stock Plan permits the Compensation Committee to award several different
forms of equity rights, including restricted stock, restricted stock units,
incentive stock options and non-qualified stock options. Past equity grants to
NEOs have taken the form of non-qualified stock options and restricted stock
units. From the Companys initial public offering through 2004, the executive
officers received annual stock option grants in the Companys annual equity
program.
In 2005, the Compensation Committee determined that
restricted stock units were an attractive form of equity grants in light of
required equity compensation expensing under Financial Accounting Standard
123(R), which took effect January 1, 2006. Under FAS 123(R), the expense
the Company records with respect to option grants can be much greater than the
perceived value of those grants or the value
15
ultimately delivered to
the recipient. Providing whole share equity compensation allows the Committee
to better align the expense to the Company of executive equity grants with the
perceived value of such grants by the executive at the current time.
In the Compensation Committees meeting in June 2005,
the Committee reviewed the then current option portfolios of the executive
officers and concluded that these options did not offer any substantial
retention benefit or alignment with stockholders, in light of their high
exercise prices. At that time, the Committee had significant concerns regarding
the retention of the executive team due to recent executive departures, a
recent reorganization of the Companys functions and the Companys financial
condition and product alignment situation. The Committee determined, with the
advice of compensation consultants, that for an equity portfolio to have a
meaningful retentive effect on an executive, it should have a value of
approximately three times the annual base compensation of the executive.
Based on this information, in 2005, the Committee
commenced a program to reach the recommended level of equity portfolio value
over the course of a three-year period using restricted stock unit grants. The
Compensation Committee made an initial restricted stock unit grant to executive
officers in 2005 and expressed an intention to make additional restricted stock
unit grants to each of the executive officers employed in good standing with
the Company in 2006 and 2007 in amounts equal to 100% of such executives base
salary in effect at the time of grant. Accordingly, in 2006, after reviewing
the values of each executives equity portfolio, the Committee made an
additional grant of restricted stock units to each executive officer, including
the NEOs, having a value at grant equal to one times salary. These grants are
set forth in the Grants of Plan-Based Awards in Fiscal 2006 table below.
The 2006 restricted stock unit grants to NEOs were
approved by the Compensation Committee at a regularly scheduled meeting on May 3,
2006. The Committees approval specified that the grant would become effective
on July 3, 2006. It is the Committees general practice to approve equity
awards at a single annual regularly scheduled meeting, with a future effective
date, typically four to eight weeks after the meeting date. The Company
believes that this time period between the approval and effectiveness of an
equity grant means that the Committee is unable to know or estimate the trading
price of the Companys common stock on the effective date of grant. As a result,
the Committee has not, to date, felt it necessary to adopt a policy of timing
the approval or effectiveness of equity awards to specific dates following the
release of financial results or other material information.
Vesting Provisions. Restricted stock units
granted to executives will forfeit in the event of a termination of employment
prior to vesting. In setting the vesting provisions for the restricted stock
unit grants to named executive officers in 2006, the Committee sought to optimize
the retentive effect of such equity grants by setting the vest date for 50% of
the grant on each of the third and fourth anniversaries of the grant date. The
Committee sought to provide additional incentive and reward through these
equity grants by allowing for the acceleration of the vesting of 50% of the
grants in the event that the market capitalization of the Company exceeds $1
billion and of the other 50% of the grants in the event that the market
capitalization of the Company exceeds $1.3 billion, but not earlier than the
second anniversary of the grant date.
Change of Control
Agreements
Part of
the Companys executive compensation package is a double-trigger Change of
Control Agreement. These agreements were entered into with each NEO on
assumption of the position of an executive officer. These Change of Control
Agreements are referred to as double trigger because they only provide for
payment in the event of (1) a change of control of the Company that is (2) followed
by or preceded by the termination of employment of the executive for reasons
other than voluntary resignation, cause, death or disability. The Committee
believes that these Change of Control Agreements are a part of a competitive
compensation package and will assist in the retention of critical talent if a
possible or actual
16
change of control should
arise. It is important in a change of control to retain executive talent both
to assist in the completion of the transaction and to be able to deliver all or
a specified member of the management to an acquirer if that is a condition of
closing. Under the Change of Control Agreements, an officers resignation
because of a demotion or reduction in compensation, benefits or position is a
termination by us and is not a voluntary resignation. This type of good reason
termination is needed to ensure that the executives position after a change of
control is in fact substantively the same as the executives position prior to
the change of control.
The Axcelis Change of Control Agreements have two
material elements: (A) a lump sum cash payment equal to three years base
salary and estimated cash incentive and (B) acceleration of the unvested
portion of the executives options or restricted stock units. As shown in the
table under the heading Payments on Termination or Change in ControlChange of
Control Agreements, the Company will make an additional payment to the NEOs to
insulate them from the impact of excise taxes due under Sections 280G and 4999
of the Internal Revenue Code (IRC). The effects of Sections 280G and 4999
generally are unpredictable and can have widely divergent and unexpected
effects based on an executives personal compensation history. Therefore, to
provide a predictable and equal level of benefit across individuals without
regard to the effect of the excise tax, the Company determined that it was
appropriate to pay the cost of this excise tax plus an amount needed to pay
income taxes due on such additional payment. This practice is consistent with
competitive pay packages and ensures the executive will receive the three years
base salary and estimated cash incentive less only ordinary income taxes on
that amount.
The Company believes that these particular elements
will assist in retaining executive talent through a change of control event
because the cash payment and the ability to access the value in otherwise
unvested equity grants will insulate the executive from the hardship of the
loss of the executives job.
The Company has the right
each year to terminate its obligation to make change of control payments
effective on the date three years after the next anniversary date of the
agreement. To do so, the Company must provide notice of non-renewal to the
executive prior to such anniversary date. At its August 2006 meeting, the
Compensation Committee reviewed payments that would have been due under these
agreements if the change of control had occurred midyear. This review did not
lead to a conclusion that the Change of Control Agreements were no longer
appropriate, and therefore the Company did not provide a termination notice to
any executive officer in 2006. Additional information on these Change of
Control Agreements is provided under Payments on Termination or Change of
Control below.
Other Compensation
Components
In order to encourage our executives to obtain
adequate financial and tax planning assistance, Axcelis reimburses up to $5,500
of an executives annual tax and financial planning expenses. This program is
the only executive perquisite at Axcelis and amounts paid to NEOs in 2006 under
this program are included in the All other compensation column in the Summary
Compensation Table.
Executives may elect to make contributions to a
retirement account in the Companys IRC Section 401(k) plan,
which is available to all employees and under which the Company made a matching
contribution to each participant in 2006. The matching contribution under the
401(k) Plan is the greater of (1) 100% of the employees pre-tax
contributions to the plan, capped at a $1,000, or (2) 50% of the employees
pre-tax contributions to the plan, up to the first 6% of eligible pre-tax
compensation contributed to the plan. The Companys matching contributions to
the accounts of the NEOs under the 401(k) plan are shown in the All other
compensation column in the Summary Compensation Table.
NEOs may also participate
in the Companys medical and dental insurance offerings by electing to make
payroll deductions designed to cover approximately 25% of the cost of those
programs (the Company covers the other 75% of the cost). The Company provides
life, accidental death and
17
dismemberment
and disability insurance for all employees, and the opportunity to increase
coverage levels via payroll deductions. Finally, the Company maintains the
Employee Stock Purchase Plan, an IRC Section 423 plan, a voluntary
plan in which employees may purchase Axcelis shares through salary deductions.
Tax Implications
In setting NEO compensation, the Committee takes into
account the impact of IRC Section 162(m), which bars the Company from
taking a tax deduction for compensation for any NEO that exceeds $1 million,
subject to exceptions for certain performance-based compensation. To the extent
that compensation under the Axcelis Team Incentive plan and/or in the form of restricted stock units causes the
total compensation paid to an NEO to exceed $1 million in any year, such excess
compensation would not be tax deductible to the Company. In the case of cash
incentive payments, this is because certain components of the Axcelis Team
Incentive plan, such as the Committees determination that some operational and
individual performance goals have been achieved, require subjectivity that does
not meet the requirements of Section 162(m). In the case of restricted stock
unit awards, it is because vesting is based on the length of the NEOs service,
which is not performance-based for purposes of Section 162(m).
The Compensation Committee believes that the structure
of the Axcelis Team Incentive plan provides benefits to the Company that
outweigh the potential tax deductions that might be available (at the levels
potentially realizable under the current plan) if the plan included only
objective performance measures. It also believes that the benefits of the use of service-based restricted stock
units to provide long-term incentives outweigh the potential loss of tax
deductions from such equity compensation. To date, the Companys tax
deductions for compensation have not been limited by Section 162(m) except
in connection with the Axcelis Team Incentive bonuses paid to the Chief
Executive Officer with respect to 2004 and 2006. The Committee expects to
continue to take Section 162(m) into account as it makes decisions in
future years and may modify the forms of compensation used accordingly.
In addition, the Committee
considers the impact of IRC Section 409A, which imposes certain
requirements on nonqualified deferred compensation plans. These may be
particularly relevant in the case of compensation paid after termination of an
NEOs employment under the Change of Control Agreements discussed above. The
Company believes that this compensation is in compliance with the applicable
requirements of Section 409A.
2006 Compensation Committee
Report
The Compensation Committee
has reviewed and discussed the foregoing Compensation Discussion and Analysis
with management and, based on this review and discussion, the Compensation
Committee recommended to the Board of Directors that the Compensation
Discussion and Analysis be included in this Proxy Statement.
|
By the Compensation
Committee,
|
|
H. Brian
Thompson, Chairman
|
|
R. John Fletcher
|
|
Stephen R. Hardis
|
18
2006 Summary
Compensation Table
The
Summary Compensation Table below sets forth the 2006 salary, value of stock and
option awards expensed by the Company in 2006, the 2006 Axcelis Team Incentive
plan compensation and all other compensation paid in respect of 2006 to each of
the Companys principal executive officer (Mary G. Puma), principal financial
officer (Stephen G. Bassett), and the three most highly compensated other
executive officers serving as executive officers at December 31, 2006. The
terms of the 2006 Axcelis Team Incentive plan are set forth in detail in the
Compensation Discussion and Analysis above.
Name and
Principal Position
|
|
|
|
Year
|
|
Salary
($)(1)
|
|
Stock
awards
($)(2)
|
|
Option
awards
($)(2)
|
|
Non-equity
incentive plan
compensation
($)(3)
|
|
All other
compensation
($)(4)
|
|
Total
($)(5)
|
|
Mary G. Puma,
|
|
2006
|
|
$
|
500,001
|
|
$
|
197,690
|
|
$
|
249,407
|
|
|
$
|
556,501
|
|
|
|
$
|
6,600
|
|
|
$
|
1,510,199
|
|
Chairman, Chief Executive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Officer and President
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stephen G. Bassett,
|
|
2006
|
|
$
|
275,999
|
|
$
|
109,125
|
|
$
|
27,111
|
|
|
$
|
175,536
|
|
|
|
$
|
0
|
|
|
$
|
587,771
|
|
Executive Vice
President and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chief
Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Matthew P. Flynn,
|
|
2006
|
|
$
|
288,847
|
|
$
|
143,080
|
|
$
|
47,736
|
|
|
$
|
197,194
|
|
|
|
$
|
6,600
|
|
|
$
|
683,457
|
|
Senior Vice President,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lynnette C. Fallon,
|
|
2006
|
|
$
|
305,001
|
|
$
|
120,590
|
|
$
|
68,822
|
|
|
$
|
193,981
|
|
|
|
$
|
6,600
|
|
|
$
|
694,994
|
|
Executive Vice
President
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HR/Legal
and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General
Counsel
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin J. Brewer,
|
|
2006
|
|
$
|
249,999
|
|
$
|
130,074
|
|
$
|
40,259
|
|
|
$
|
139,125
|
|
|
|
$
|
7,160
|
|
|
$
|
566,617
|
|
Senior Vice President,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Manufacturing Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Other than
Ms. Puma, the named executive officers (NEOs) do not have employment
agreements. Ms. Pumas employment agreement is described under the heading
Payments on Termination or Change in Control in this Proxy Statement.
(2) Represents the
compensation expense incurred by the Company relating to stock awards and
option awards held by the NEO determined in accordance with FAS 123(R), using
the assumptions described in Note 15 to the Companys Financial Statements
included in the Form 10-K filed with the Securities and Exchange
Commission for the year ended December 31, 2006 (the 2006 10-K),
provided that no forfeitures of awards have been assumed for the NEOs.
(3) Non-equity incentive
plan compensation represents amounts that were paid under the 2006 Axcelis Team
Incentive plan, as described in the Compensation Discussion and Analysis above.
(4) The amounts in this
column represent the amount paid in cash as a matching contribution to Axcelis 401(k) plan
in respect of contributions made by the NEO during the year and amounts
reimbursed under the Companys Executive Tax and Financial Planning
Reimbursement Program.
(5) The proportion that an
NEOs salary and non-equity incentive compensation bears to the NEOs total
compensation is largely a result of the various factors involved in the
calculation of the payout under the Axcelis Team Incentive plan as described in
the Compensation Discussion and Analysis above.
19
Grants
of Plan Based Awards in Fiscal 2006
|
|
|
|
Grant
|
|
Date of
Compensation
Committee
|
|
Estimated Possible
Payouts Under
Non-Equity Incentive
Plan Awards (1)
|
|
All Other
Stock
Awards:
Number of
Shares of
Stock or
|
|
Grant Date Fair
Value of Stock
and Option
|
|
Name
|
|
|
|
Year
|
|
Date
|
|
Approval
|
|
Target ($)
|
|
Maximum ($)
|
|
Units (#)(2)
|
|
Awards
|
|
Mary G.
Puma
|
|
2006
|
|
7/3/2006
|
|
|
5/3/2006
|
|
|
|
|
|
|
|
|
|
83,333
|
|
|
|
$
|
499,998
|
|
|
|
|
|
|
|
|
|
2/1/2006
|
|
|
$
|
500,000
|
|
|
$
|
1,500,000
|
|
|
|
|
|
|
|
|
|
|
Stephen
G. Bassett
|
|
2006
|
|
7/3/2006
|
|
|
5/3/2006
|
|
|
|
|
|
|
|
|
|
46,000
|
|
|
|
$
|
276,000
|
|
|
|
|
|
|
|
|
|
2/1/2006
|
|
|
$
|
155,028
|
|
|
$
|
465,083
|
|
|
|
|
|
|
|
|
|
|
Matthew
P. Flynn
|
|
2006
|
|
7/3/2006
|
|
|
5/3/2006
|
|
|
|
|
|
|
|
|
|
45,833
|
|
|
|
$
|
274,998
|
|
|
|
|
|
|
|
|
|
2/1/2006
|
|
|
$
|
189,000
|
|
|
$
|
567,000
|
|
|
|
|
|
|
|
|
|
|
Lynnette
C. Fallon
|
|
2006
|
|
7/3/2006
|
|
|
5/3/2006
|
|
|
|
|
|
|
|
|
|
50,833
|
|
|
|
$
|
304,998
|
|
|
|
|
|
|
|
|
|
2/1/2006
|
|
|
$
|
183,000
|
|
|
$
|
549,000
|
|
|
|
|
|
|
|
|
|
|
Kevin
J. Brewer
|
|
2006
|
|
7/3/2006
|
|
|
5/3/2006
|
|
|
|
|
|
|
|
|
|
41,667
|
|
|
|
$
|
250,002
|
|
|
|
|
|
|
|
|
|
2/1/2006
|
|
|
$
|
125,000
|
|
|
$
|
375,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Estimated Possible
Payouts under Non-Equity Incentive Plan represent amounts that were targeted
and possible under the 2006 Axcelis Team Incentive plan, approved by the
Compensation Committee on February 1, 2006, as discussed in the
Compensation Discussion and Analysis above. The minimum payment under this plan
is $0.00. All payouts under this plan are subject to the discretion of the
Board of Directors and the executives have no contractual right to receive any payment
thereunder. Actual payments under the 2006 Axcelis Team Incentive plan were
determined by the Compensation Committee in February 2007 and are shown in
the Summary Compensation Table above.
(2) The only equity awards
issued to NEOs during 2006 were restricted stock units granted under the
Companys 2000 Stock Plan granted effective July 3, 2006. Half of these units will vest on July 3,
2009 and the remaining half of the units will vest on July 3, 2010 (in
each case subject to acceleration on achievement of a market capitalization
goal as discussed in the Compensation Discussion and Analysis), provided
however, that such vesting shall in no event be earlier than July 3, 2008.
Other than future services to the Company, no consideration was paid or will be
due in respect of these restricted stock units or the shares issued thereon.
These restricted stock units will be forfeited if the NEOs employment
terminates prior to vesting. No dividends on the shares underlying these units
are paid until the shares are issued.
20
Outstanding
Equity Awards at Fiscal 2006 Year End
|
|
Option Awards
|
|
Stock Awards
|
|
Name
|
|
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
|
|
Option
Exercise
Price ($)
|
|
Option
Expiration
Date
|
|
Number of
Shares or
Units of
Stock that
Have Not
Vested(#)
|
|
Market Value of
Shares or Units
of Stock that
Have Not
Vested ($)(14)
|
|
Mary G. Puma
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
72,569
|
|
|
|
$
|
423,077.27
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
83,333
|
|
|
|
$
|
485,831.39
|
|
|
|
|
|
606,100
|
|
|
|
0
|
|
|
|
$
|
22.00
|
|
|
|
7/10/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,705
|
|
|
|
0
|
|
|
|
$
|
10.44
|
|
|
|
1/27/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
84,699
|
|
|
|
0
|
|
|
|
$
|
8.44
|
|
|
|
1/25/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
177,870
|
|
|
|
0
|
|
|
|
$
|
8.43
|
|
|
|
1/26/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
|
|
|
0
|
|
|
|
$
|
10.28
|
|
|
|
6/21/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
|
|
|
0
|
|
|
|
$
|
5.85
|
|
|
|
6/21/2012
|
|
|
|
|
|
|
|
|
|
|
3
|
|
|
93,750
|
|
|
|
31,250
|
|
|
|
$
|
5.70
|
|
|
|
5/1/2013
|
|
|
|
|
|
|
|
|
|
|
4
|
|
|
125,000
|
|
|
|
0
|
|
|
|
$
|
11.48
|
|
|
|
5/1/2013
|
|
|
|
|
|
|
|
|
|
|
5
|
|
|
100,000
|
|
|
|
0
|
|
|
|
$
|
11.87
|
|
|
|
6/25/2014
|
|
|
|
|
|
|
|
|
|
|
6
|
|
|
50,000
|
|
|
|
50,000
|
|
|
|
$
|
7.97
|
|
|
|
6/25/2014
|
|
|
|
|
|
|
|
|
|
|
Stephen G. Bassett
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,058
|
|
|
|
$
|
233,538.14
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
46,000
|
|
|
|
$
|
268,180.00
|
|
|
|
|
|
20,000
|
|
|
|
$
|
0
|
|
|
|
$
|
9.90
|
|
|
|
12/18/2013
|
|
|
|
|
|
|
|
|
|
|
7
|
|
|
25,000
|
|
|
|
$
|
0
|
|
|
|
$
|
11.87
|
|
|
|
6/25/2014
|
|
|
|
|
|
|
|
|
|
|
6
|
|
|
12,500
|
|
|
|
12,500
|
|
|
|
$
|
7.97
|
|
|
|
6/25/2014
|
|
|
|
|
|
|
|
|
|
|
Matthew P. Flynn
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
59,869
|
|
|
|
$
|
349,036.27
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
45,833
|
|
|
|
$
|
267,206.39
|
|
|
|
|
|
5,082
|
|
|
|
0
|
|
|
|
$
|
10.44
|
|
|
|
1/27/2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,329
|
|
|
|
0
|
|
|
|
$
|
8.43
|
|
|
|
1/26/2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,388
|
|
|
|
0
|
|
|
|
$
|
8.44
|
|
|
|
1/25/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,500
|
|
|
|
0
|
|
|
|
$
|
22.00
|
|
|
|
7/10/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,911
|
|
|
|
0
|
|
|
|
$
|
14.10
|
|
|
|
1/7/1900
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,910
|
|
|
|
0
|
|
|
|
$
|
13.20
|
|
|
|
7/31/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,000
|
|
|
|
0
|
|
|
|
$
|
10.28
|
|
|
|
6/21/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,500
|
|
|
|
0
|
|
|
|
$
|
6.88
|
|
|
|
11/5/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,750
|
|
|
|
0
|
|
|
|
$
|
5.85
|
|
|
|
6/21/2012
|
|
|
|
|
|
|
|
|
|
|
3
|
|
|
11,250
|
|
|
|
3,750
|
|
|
|
$
|
5.70
|
|
|
|
5/1/2013
|
|
|
|
|
|
|
|
|
|
|
8
|
|
|
15,000
|
|
|
|
0
|
|
|
|
$
|
11.48
|
|
|
|
5/1/2013
|
|
|
|
|
|
|
|
|
|
|
9
|
|
|
15,000
|
|
|
|
0
|
|
|
|
$
|
11.87
|
|
|
|
6/25/2014
|
|
|
|
|
|
|
|
|
|
|
6
|
|
|
7,500
|
|
|
|
7,500
|
|
|
|
$
|
7.97
|
|
|
|
6/25/2014
|
|
|
|
|
|
|
|
|
|
|
Lynnette C. Fallon
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
44,267
|
|
|
|
$
|
258,076.61
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,833
|
|
|
|
$
|
296,356.39
|
|
|
|
|
|
27,000
|
|
|
|
|
|
|
|
$
|
11.75
|
|
|
|
4/9/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,500
|
|
|
|
|
|
|
|
$
|
14.10
|
|
|
|
7/30/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,500
|
|
|
|
|
|
|
|
$
|
13.20
|
|
|
|
7/30/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
|
|
|
|
|
|
|
$
|
10.28
|
|
|
|
6/21/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,000
|
|
|
|
|
|
|
|
$
|
5.85
|
|
|
|
6/21/2012
|
|
|
|
|
|
|
|
|
|
|
3
|
|
|
22,500
|
|
|
|
7,500
|
|
|
|
$
|
5.70
|
|
|
|
5/1/2013
|
|
|
|
|
|
|
|
|
|
|
10
|
|
|
30,000
|
|
|
|
|
|
|
|
$
|
11.48
|
|
|
|
5/1/2013
|
|
|
|
|
|
|
|
|
|
|
11
|
|
|
30,000
|
|
|
|
|
|
|
|
$
|
11.87
|
|
|
|
6/25/2014
|
|
|
|
|
|
|
|
|
|
|
6
|
|
|
15,000
|
|
|
|
15,000
|
|
|
|
$
|
7.97
|
|
|
|
6/25/2014
|
|
|
|
|
|
|
|
|
|
|
Kevin J. Brewer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
54,427
|
|
|
|
$
|
317,309.41
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
41,667
|
|
|
|
$
|
242,918.61
|
|
|
|
|
|
12,705
|
|
|
|
0
|
|
|
|
$
|
8.44
|
|
|
|
1/25/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,200
|
|
|
|
0
|
|
|
|
$
|
22.00
|
|
|
|
7/10/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,715
|
|
|
|
0
|
|
|
|
$
|
14.10
|
|
|
|
7/30/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,714
|
|
|
|
0
|
|
|
|
$
|
13.20
|
|
|
|
7/30/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,143
|
|
|
|
0
|
|
|
|
$
|
10.28
|
|
|
|
6/21/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,000
|
|
|
|
0
|
|
|
|
$
|
6.88
|
|
|
|
11/5/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,143
|
|
|
|
0
|
|
|
|
$
|
5.85
|
|
|
|
6/21/2012
|
|
|
|
|
|
|
|
|
|
|
3
|
|
|
7,500
|
|
|
|
2500
|
|
|
|
$
|
5.70
|
|
|
|
5/1/2013
|
|
|
|
|
|
|
|
|
|
|
12
|
|
|
10,000
|
|
|
|
0
|
|
|
|
$
|
11.48
|
|
|
|
5/1/2013
|
|
|
|
|
|
|
|
|
|
|
13
|
|
|
15,000
|
|
|
|
0
|
|
|
|
$
|
11.87
|
|
|
|
6/25/2014
|
|
|
|
|
|
|
|
|
|
|
6
|
|
|
7,500
|
|
|
|
7,500
|
|
|
|
$
|
7.97
|
|
|
|
6/25/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) These restricted stock units vest as to 1/3 of the
shares on each of July 1, 2007, 2008 and 2009.
(2) These restricted stock units vest as to 50% of the
shares on July 3, 2009 and 2010, provided that such vesting may
accelerate, but not earlier than July 3, 2008, on achievement of market capitalization targets.
21
(3) The unexercisable options will become exercisable on
May 1, 2007.
(4) Of the shares that may be acquired on exercise of these
options, 31,250 may not be sold by the executive until after May 1, 2007.
(5) Of the shares that may be acquired on exercise of these
options, 25,000 may not be sold by the executive until after June 25, 2007
and 25,000 may not be sold by the executive until after
June 25, 2008.
(6) Half of the unexercisable options will become
exercisable on each of June 25, 2007 and June 25, 2008.
(7) Of the shares that may be acquired on exercise of these
options, 6,250 may not be sold by the executive until after June 25, 2007
and 6,250 may not be sold by the executive until after June 25, 2008.
(8) Of the shares that may be acquired on exercise of these
options, 3,750 may not be sold by the executive until after May 1, 2007.
(9) Of the shares that may be acquired on exercise of these
options, 3,750 may not be sold by the executive until after June 25, 2007
and 3,750 may not be sold by the executive until after June 25, 2008.
(10) Of the shares that may be acquired on exercise of these
options, 7,500 may not be sold by the executive until after May 1, 2007.
(11) Of the shares that may be acquired on exercise of these
options, 7,500 may not be sold by the executive until after June 25, 2007
and 7,500 may not be sold by the executive until after June 25, 2008.
(12) Of the shares that may be acquired on exercise of these
options, 2,500 may not be sold by the executive until after May 1, 2007.
(13) Of the shares that may be acquired on exercise of these
options, 3,750 may not be sold by the executive until after June 25, 2007
and 3,750 may not be sold by the executive until after June 25, 2008.
(14) Using
closing market price on December 29, 2006 of $5.83
Option Exercises
and Stock Vested During Fiscal 2006
None of the named
executive officers exercised options or had any unvested stock vest during
fiscal year 2006.
Payments on
Termination or Change in Control
Employment
Agreement with Ms. Puma. We
entered into an Employment Agreement with Ms. Puma effective in
July 2000. This agreement provided for an initial three-year term of
employment at a minimum annual base salary of $380,000 and an annual target
incentive compensation opportunity of 45% of base salary. Actual incentive
compensation for any year may be greater or less if actual performance is
greater or less than the target. Ms. Pumas base salary and incentive
opportunities were increased by our Board of Directors in the past, and may be
subject to future adjustment by the Board, but not to less than the minimum
levels in her Employment Agreement. See Compensation Discussion and Analysis
above. The term of Ms. Pumas agreement automatically renews on a
year-to-year basis unless one party notifies the other that the agreement will
not be extended. Such termination notice must be sent between January 14th and March 14th of
each year. Since no termination notice was sent prior to March 14, 2007,
the agreement will continue until July 14, 2008, subject to further
renewal. The agreement also provides that Ms. Puma will participate in the
2000 Stock Plan, the 401(k) savings plan and the welfare benefit plans
that we sponsor. In the agreement, Ms. Puma has agreed not to compete with
us for a period of 12 months after termination of her active employment and not
to reveal confidential information during the term of her employment and
thereafter, unless the information has otherwise become public knowledge.
22
In the
event Ms. Pumas employment is terminated prior to the end of the term for
reasons other than cause, death, disability or voluntary resignation without
good reason, she is entitled to receive all compensation accrued to date,
acceleration of vesting of options and other equity rights and a cash
separation payment. The
cash separation payment will equal 24 months of her base compensation and 2 times
an annual bonus amount determined in accordance with the agreement. For this
purpose, Ms. Pumas annual bonus compensation will be her current base
multiplied by the greater of (a) the percentage of her base that she
actually received as a bonus for the prior fiscal year or (b) 25%. The
following table sets forth the separation pay that would be due to
Ms. Puma if a qualifying termination occurred on December 31, 2006:
Lump sum cash payment(1)
|
|
|
|
Value of accelerated
vesting on equity
awards(2)
|
|
Value of life, disability
and health coverage(3)
|
|
Total
|
|
$1,440,000
|
|
|
$
|
912,972
|
|
|
|
$
|
57,454
|
|
|
$
|
2,410,426
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) This represents 24
months of Ms. Pumas base salary at December 31, 2006 plus two times
an annual bonus amount. The annual bonus amount is a percentage of her current
base salary equaling the percentage of her base salary paid to her as a bonus
in respect of the 2005 fiscal year. This amount is due within 30 days of
termination.
(2) This amount reflects a
valuation of the acceleration of Ms. Pumas outstanding equity awards
calculated in accordance with IRC 280G. The actual amount received by
Ms. Puma on exercise of options and sales of shares issued on restricted
stock units will depend on the market values at the time of such transactions.
(3) Ms. Pumas
employment agreement provides that the Company shall either maintain
Ms. Pumas life, disability and health coverage for 24 months, or pay Ms. Puma
two times the projected cost of these benefits in a lump sum. The amount in the
table represents an estimation of the cost to the Company of maintaining such
benefits, based on the terms of the plans, the premiums in effect at the time
of this Proxy Statement, premiums available for similar coverage for
non-employees in the market place and Ms. Pumas coverage elections.
In the event of an actual termination of
Ms. Pumas employment, it is possible that her separation pay would be
renegotiated by Ms. Puma and the Board of Directors, in which case the
amounts payable might differ from the foregoing.
Change of Control
Agreements. The Company has
entered into a Change of Control Agreement with each of our executive officers,
including Ms. Puma, to provide that severance compensation will be paid in
a lump sum within 30 days of a covered termination following a change in
control, as defined in the agreement. These Change of Control Agreements
provide that executive officers are entitled to severance compensation in the
event there is both (1) a change in control and (2) a termination of
employment within three years of that change in control for reasons other than
voluntary resignation, cause, death or disability. Under the Change of Control
Agreements, a resignation by an officer for reasons of a demotion or reduction
in compensation, benefits or position is a termination by us and is not a
voluntary resignation. A change of control is defined in the agreement and
covers a number of events, including a merger or acquisition involving the
Company in which the persons holding the Companys shares immediately prior to
the transaction hold less than 75% of the shares outstanding after the
transaction.
In these agreements, the executives have agreed not to
be engaged by, or own, any business competing with any of the businesses
conducted by the Company for a period of 12 months following any termination of
employment (whether or not following a change of control). The executives also
agreed not to solicit employees of the Company to leave employment with the
Company or solicit or induce customers of the Company to cease doing business
with the Company, during such period.
23
If severance compensation is payable, it would consist
of a cash payment equal to the sum of (a) the Companys accrued
obligations for base pay and incentive compensation and (b) the amount
determined by multiplying the executives then salary and average bonus by
three. For this purpose, an executives average bonus is his or her current
bonus opportunity multiplied by the average of the individual performance
scores given to the executive in the last three years, but without taking into
account company performance scores. In the event such severance is payable, all
unvested restricted stock units and options held by the executive will become
vested until termination or expiration in accordance with their terms. We will
also reimburse the executive for the effects, including federal, state and
local income tax consequences, of any excise tax due on severance compensation,
as shown the chart below.
The
amounts due to each named executive officer in the event that a change of
control and termination occurred on December 31, 2006 are set forth in the
table below:
Estimated
Payments under the Change of Control Agreements if due at December 31,
2006
Name
|
|
|
|
Lump sum cash
payment(1)
|
|
Value of accelerated
vesting on equity
awards(2)
|
|
Excise Tax Due
under IRC 280G,
plus gross-up
amount(3)
|
|
Total
|
|
Mary G.
Puma
|
|
|
$
|
3,615,000
|
|
|
|
$
|
912,972
|
|
|
|
$
|
1,701,300
|
|
|
$
|
6,229,272
|
|
Stephen G. Bassett
|
|
|
$
|
1,490,400
|
|
|
|
$
|
501,718
|
|
|
|
$
|
726,739
|
|
|
$
|
2,718,857
|
|
Matthew P. Flynn
|
|
|
$
|
1,818,180
|
|
|
|
$
|
616,731
|
|
|
|
$
|
969,054
|
|
|
$
|
3,403,965
|
|
Lynnette C. Fallon
|
|
|
$
|
1,665,300
|
|
|
|
$
|
555,408
|
|
|
|
$
|
853,579
|
|
|
$
|
3,074,287
|
|
Kevin
J. Brewer
|
|
|
$
|
1,238,375
|
|
|
|
$
|
560,553
|
|
|
|
$
|
654,998
|
|
|
$
|
2,453,926
|
|
(1) This amount, which
represents three times the NEOs current base salary plus an estimated bonus
amount, is due within 30 days of termination.
(2) This amount reflects a
valuation of the acceleration of the NEOs outstanding equity awards calculated
in accordance with IRC 280G. The actual amount received by the NEO on exercise
of options and sales of shares issued on restricted stock units will depend on
the market values at the time of the change of control.
(3) As discussed in the
Compensation Discussion and Analysis, the Change of Control Agreement with each
NEO provides for the Companys reimbursement of the excise tax liability due on
the separation pay under IRC Section 280G, which amount is grossed up to
cover income taxes due on such reimbursement. Therefore, the amounts shown in
this column represent amounts due to taxing authorities and will not be retained
by the executive.
In the event Ms. Puma
receives payment under her Change of Control Agreement, she will not receive
amounts and benefits due under her Employment Agreement unless such amounts are
in excess of the amounts paid under the Change of Control Agreement. Also, in
the event of an actual termination of an NEOs employment in connection with a
change of control, it is possible that the NEOs separation pay would be
renegotiated by the NEO and the Board of Directors, in which case the amounts
payable might differ from the foregoing.
COMPENSATION
OF DIRECTORS
The Nominating and Governance Committee has
responsibility under its charter to review and determine recommended
non-employee director compensation for adoption by the full Board. All equity
grants to non-employee directors are either made under automatic granting
language in the 2000 Stock Plan or by the Compensation Committee on the
recommendation of the Board of Directors.
24
2006
Director Fees. Mr. Hardis, the Lead
Director, received an annual retainer, payable quarterly. Mr. Hardis
annual retainer was set at $100,000 for the period from July 1, 2005
through June 30, 2006, at which time it was reduced to $50,000 annually. Each
non-employee director (other than Mr. Hardis) received an annual retainer
of $30,000 payable quarterly. In addition, each non-employee director (other
than Mr. Hardis) assuming responsibility as Chairman of a committee of the
Board of Directors received an annual retainer of $7,500. Non-employee
directors also receive cash fees for attendance at Board and committee meetings.
Mr. Hardis did not receive meeting fees for meetings held prior to July 1,
2006. The meeting fees are: (1) $2,000 for attendance in person at a
meeting of the Board of Directors; (2) $1,000 for attendance at a meeting
of any committee of the Board of Directors; and (3) $1,000 for
participation in a telephonic meeting of the Board of Directors or committee of
the Board of Directors. Fees are paid only to committee members with respect to
attendance at a committee meeting. Non-employee directors also receive
reimbursement of out-of-pocket expenses incurred in attending Board and
committee meetings. Non-employee directors do not receive any Company-paid perquisites.
2006
Equity Awards. All non-employee directors of
Axcelis receive an automatic initial stock option grants under our 2000 Stock
Plan for 40,000 shares upon initial election to the Board. These non-employee
director options have an exercise price equal to the closing price of our
common stock on the grant date and are fully exercisable on the 181st day after the date the option is granted,
provided the optionee is still a director on that date. The options have a term
of ten years from the date of grant. Kirk Pond received an initial stock option
grant upon his election to the Board in February 2006, but it was
forfeited prior to vesting on his resignation from the Board later that month. Mr. Wild
received such an initial stock option grant upon his election to the Board in November 2006.
Also, effective July 3, 2006, the Compensation
Committee approved the issuance under the 2000 Stock Plan of 8,333 shares of
restricted stock to each of the non-employee directors elected in years prior
to 2006. The number of restricted shares granted to each director had a value
equal to $50,000, based on the closing price on the date of grant. These
restricted stock grants became fully vested on the 181st day after the date of grant if the director
remained in service on that date. Long
term ownership of equity awards by directors is encouraged through the Companys
director stock ownership guidelines, which provide that
non-employee directors should own
a minimum
of 20,000 shares of Axcelis common stock. This level was set to create
meaningful investments by directors in shares of the Company, so that their
interest in the value of the Companys stock was not limited to stock price
appreciation via options without a downside.
The chart below shows
compensation paid to all directors who served the Company during 2006 (both Mr. Cutler
and Mr. Pond resigned during 2006):
2006
Non-Employee Director Compensation
Name
|
|
|
|
Fees earned or
paid in cash ($)
|
|
Stock awards
($)(1)(2)
|
|
Option awards
($)(1)(3)
|
|
Total ($)
|
|
Alexander M. Cutler
|
|
|
$
|
11,500
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
$
|
11,500
|
|
R. John Fletcher
|
|
|
$
|
53,000
|
|
|
|
$
|
48,911
|
|
|
|
$
|
|
|
|
$
|
101,911
|
|
Stephen R. Hardis
|
|
|
$
|
86,000
|
|
|
|
$
|
48,911
|
|
|
|
$
|
|
|
|
$
|
134,911
|
|
William C. Jennings
|
|
|
$
|
57,500
|
|
|
|
$
|
48,911
|
|
|
|
$
|
|
|
|
$
|
106,411
|
|
Michio Naruto
|
|
|
$
|
40,000
|
|
|
|
$
|
48,911
|
|
|
|
$
|
|
|
|
$
|
88,911
|
|
Patrick H. Nettles
|
|
|
$
|
52,500
|
|
|
|
$
|
48,911
|
|
|
|
$
|
|
|
|
$
|
101,411
|
|
Kirk P. Pond
|
|
|
$
|
|
|
|
|
$
|
|
|
|
|
$
|
|
|
|
$
|
|
|
H. Brian Thompson
|
|
|
$
|
60,500
|
|
|
|
$
|
48,911
|
|
|
|
$
|
|
|
|
$
|
109,411
|
|
Geoffrey Wild
|
|
|
$
|
3,000
|
|
|
|
$
|
|
|
|
|
$
|
38,904
|
|
|
$
|
41,904
|
|
(1) Represents the
compensation expense incurred by the Company relating to stock and option
awards held by the Director during 2006 determined in accordance with FAS
123(R), using the assumptions
25
described in Note 15 to
the Companys Financial Statements included in the 2006 10-K, provided
that no forfeitures of awards have been assumed.
(2) On July 3, 2006,
each of R. John Fletcher, Stephen Hardis, William C. Jennings, Michio Naruto,
Patrick Nettles and H. Brian Thompson received a restricted stock grant for
8,333 shares of Axcelis common stock, vesting on January 3, 2007. The
grant date fair value of this equity award was $49,998.00. As of
December 31, 2006, each of Messrs. Hardis, Fletcher, Thompson,
Jennings and Nettles held an aggregate of 15,590 shares of common stock
received as restricted stock grants from the Company. Mr. Wild does not
hold any shares of common stock received as restricted stock grants from the
Company.
(3) On
November 8, 2006, Geoffrey Wild received a non-qualified stock option
grant for 40,000 shares of Axcelis common stock, exercisable at $6.61 and
vesting on May 8, 2007. The grant date fair value of this option was
$131,200. These are the only options held by Mr. Wild. As of
December 31, 2006, the other non-employee directors in office held the
following total stock options, all of which were fully vested and had exercise
prices ranging from $6.03 to $16.63:
|
|
Aggregate # of shares
subject to outstanding
options
|
|
Lowest exercise price
|
|
Highest exercise price
|
|
Fletcher
|
|
|
55,000
|
|
|
|
$
|
8.75
|
|
|
|
$
|
11.91
|
|
|
Hardis
|
|
|
100,000
|
|
|
|
$
|
6.08
|
|
|
|
$
|
16.63
|
|
|
Jennings
|
|
|
55,000
|
|
|
|
$
|
6.03
|
|
|
|
$
|
11.91
|
|
|
Naruto
|
|
|
40,000
|
|
|
|
$
|
6.09
|
|
|
|
$
|
6.09
|
|
|
Nettles
|
|
|
85,000
|
|
|
|
$
|
6.08
|
|
|
|
$
|
14.17
|
|
|
Thompson
|
|
|
85,000
|
|
|
|
$
|
6.08
|
|
|
|
$
|
13.22
|
|
|
CORPORATE GOVERNANCE
Board of Directors
Independence and Meetings
The Board of Directors has determined that all
directors who served on the Board
during 2006, other than Ms. Puma, are or were independent under the
criteria established by NASDAQ,
and that the members of the Audit Committee also meet the additional
independence requirements of the Securities and Exchange Commission. None of
the directors, to the Companys knowledge, had any business, financial, family
or other type of relationship with the Company or its management (other than as
a director and stockholder of the Company), except for any relationships that
the Board considered to be immaterial under the NASDAQ independence standards.
In determining that each such director is independent, the Board was aware that
the Company purchases and sells products and services in the ordinary course of
business on arms-length
business terms from and to companies (or their affiliates) at which
certain directors are or have been employed as officers or serve as directors.
During 2006, Messrs. Hardis, Cutler and Pond served as officers and/or
directors of entities that purchased or sold products or services to or from
the Company. In each case, the amount paid to or received from the other entity
by the Company was below the total revenue threshold in the NASDAQ independence standards (that
is, the greater of $200,000 or 5% of the recipients consolidated gross annual
revenues). None of these relationships were determined by the Board determined
to impair the independence of the respective directors.
26
Our Board of Directors
held nine meetings during 2006. Each of our incumbent directors attended at
least 75% of the meetings of the Board and of the committees on which such
director served. The average rate of attendance at Board and committee meetings
for all current directors was 94%. All Board members whose terms continue after
the annual meeting of stockholders are expected to attend the annual meeting of
stockholders, subject to special circumstances. All current Board members then
in office attended the annual meeting in 2006. Our Board has standing Audit,
Compensation and Nominating and Governance Committees. Independent directors
have regularly scheduled meetings at which only independent directors are
present.
Compensation Committee
Until May 3, 2006, the Compensation Committee was
composed of Mr. Thompson (Chairman), Mr. Hardis and Alexander M.
Cutler, who resigned from the Board on that date. During the remainder of 2006,
the Compensation Committee was composed of Mr. Thompson (Chairman), Mr. Hardis
and Mr. Fletcher. The Compensation Committee holds four regularly
scheduled meetings per year and occasionally calls special meetings or acts by
written consent to address particular matters. In 2006, the Compensation
Committee met four times and acted once by written consent. The Compensation
Committee operates under a written charter, a copy of which is available on our
website at www.axcelis.com.
The Compensation Committee establishes the
compensation philosophy for Axcelis and has all the authority of the Board of
Directors to act or exercise corporate powers with respect to the compensation
of the executive officers and the administration of Axcelis equity
compensation plans. The Compensation Committee is responsible to ensure that an
annual review of executive officer performance and succession planning is
presented to the Board.
The Compensation Committee meets in the first quarter
of each year to establish the goals and targets applicable to the executives
annual incentive compensation for the coming year, as well as to determine the
results for the year just ended. The Compensation Committee usually makes
annual equity grants in its second meeting in each year (which typically occurs
in May or June), selecting a future date for the effectiveness of the
annual equity grants, which is usually four to six weeks after the meeting date.
Other compensation decisions are made throughout the year, as circumstances
warrant and as described in detail in Compensation Discussion and Analysis
above.
To support its decision-making processes, the
Compensation Committee accesses the advice of an independent compensation
consultant with respect to the structure and competitiveness of the Companys
executive compensation programs, as well as the programs consistency with the
Companys executive compensation philosophy. The Committee has the sole
authority to hire and fire all outside compensation consultants providing
information and advice to the Committee. During 2006, the Compensation
Committees compensation consultant was Pearl Meyer & Partners. At the
request of the Committee, management will make specific proposals to the
Committee regarding compensation for executive officers. Management will often
work with the Committees outside consultant to ensure that the consultant has
access to the appropriate information to enable the consultant to complete its
analyses for the Committee. Management ensures that the consultants invoices
are paid from Company funds. The Chief Executive Officer, the Chief Financial Officer
and the Executive VP HR/Legal usually participate in Compensation Committee
meetings to present and discuss the material. After such a discussion, Mr. Bassett
and Ms. Fallon will leave the meeting, allowing the Compensation Committee
time to meet alone with Ms. Puma, after which she leaves the Committee in
executive session. All decisions on executive compensation are made by the
Compensation Committee in executive session without Ms. Puma.
For a discussion on the
Compensation Committees actions during 2006, see the Compensation Discussion
and Analysis above.
27
Nominating and
Governance Committee
During 2006, the Nominating and Governance Committee
was composed of Mr. Nettles (Chairman), Mr. Hardis and Alexander M.
Cutler, until Mr. Cutlers resignation from the Board in May. The
Nominating and Governance Committee is responsible for identifying and
nominating candidates for membership on the Board of Directors, making
recommendations to the Board on non-employee director compensation and
establishing governance policies for the Board and management. The Committee
operates under a written charter and governance policies, copies of which are
available on our website at www.axcelis.com. The Committee held four meetings
in 2006.
Under a process established by the Nominating and
Governance Committee, the Board of Directors undertakes an annual
self-evaluation of Board size, function and management interaction. In
addition, each Board member completes an annual self and peer performance
review.
The Nominating and Governance Committee seeks new
nominees for election to the Board, when necessary, through a variety of
channels, including the engagement of director search firms and less formal
recommendations through business and personal contacts. Mr. Naruto, who is
standing for election by the stockholders for the first time, was identified as
a board candidate to the Nominating and Governance Committee by one of the
other non-employee directors. Mr. Wild, who is also standing for election
by the stockholders for the first time, was identified as a board candidate to
the Nominating and Governance Committee by a third-party search firm. Director
search firms engaged by the Company are paid a retainer fee to identify and
screen candidates meeting specifications established by the Committee for a
particular Board nominee search. Such specifications will change from one
search to another based on the Committees determination of the needs of Board
composition at the time a particular search is initiated.
The Nominating and
Governance Committee will evaluate any candidate recommended for nomination as
a director, whether proposed by a stockholder or identified through the
Committees own search processes, about whom it is provided appropriate
information. In evaluating a candidate, the Committee must, at a minimum,
determine that the candidate is capable of discharging his or her fiduciary
duties to the stockholders of the Company. The Committee will determine whether
the particular nomination would be consistent with Axcelis governance policies.
These policies provide in part that all new candidates for election to the
Board and all Board members eligible for nomination for re-election to the
Board shall be evaluated on the following criteria:
(a) such
candidate or Board members current level of, and on-going commitment to,
education regarding the responsibilities of a member of a Board of Directors
under standards established by the Nominating and Governance Committee;
(b) the
adequacy of such candidate or Board members time available to commit to
responsibilities as a member of the Board;
(c) the
existence of any financial relationship with the Company other than that
arising as an employee of the Company, as a Board member and/or as a
stockholder; and
(d) in the case of re-election, such members compliance with our
Director Stock Ownership Policy.
If a candidate is presented to the Nominating and
Governance Committee at a time when it has established specifications for a
particular Board search, the Committee will consider whether the candidate
satisfies the established specifications. More generally, the Committee will
consider a candidates skills, character, leadership experience, business
experience and judgment, and familiarity with relevant industry, national and
international issues in light of the backgrounds, skills and characteristics of
the current Board and the needs of the Companys business. Finally, the
Committee must consider whether a nominee (in conjunction with the existing
Board members) will assist the Company in meeting the requirements of
28
applicable law, the rules of
the Securities and Exchange Commission, the Nasdaq listing standards, and the
Internal Revenue Code regarding the independence, sophistication and skills of
the members of the Board of Directors and the Audit, Compensation and
Nominating and Governance committees.
In order to recommend a
candidate for consideration by the Nominating and Governance Committee, a
stockholder must provide the Committee with the candidates name, background
and relationship with the proposing stockholder, a brief statement outlining
the reasons the candidate would be an effective director of Axcelis and
information relevant to the considerations described above. Such information
should be sent to the Nominating and Governance Committee of Axcelis
Technologies, Inc., 108 Cherry Hill Drive, Beverly, Massachusetts 01915,
Attn: Corporate Secretary. The Committee may require further information.
Audit Committee
The Audit Committee operates under a written charter and
is responsible for assisting the Board of Directors in monitoring and oversight
of (1) the integrity of the Companys financial statements and its systems
of internal accounting and financial controls and (2) the independence and
performance of the Companys internal and independent auditors. The Audit
Committee has adopted procedures for the handling of complaints regarding
accounting, internal controls and auditing matters which are described in our
Code of Ethics. The Audit Committees charter and the Companys Code of Ethics
are both available on our website at www.axcelis.com. The Audit Committee met
ten times during 2006. Until November 10, 2006, the Audit Committee
consisted of Mr. Jennings (Chairman) and Messrs. Thompson and
Fletcher. Beginning November 10, 2006, the Audit Committee consisted of Mr. Jennings
(Chairman), and Messrs. Fletcher and Wild.
The Board of Directors has determined that each of Mr. Jennings,
Mr. Fletcher and Mr. Wild are audit committee financial experts as
defined in Item 401 of Regulation S-K promulgated by the Securities and
Exchange Commission. The Boards conclusions regarding the qualifications of a
director as an audit committee financial expert are based on his certification
that he has (1) an understanding of generally accepted accounting
principles and financial statements; (2) the ability to assess the general
application of such principles in connection with the accounting for estimates,
accruals and reserves; (3) experience preparing, auditing, analyzing or
evaluating financial statements that present a breadth and level of complexity
of accounting issues that are generally comparable to the breadth and
complexity of issues that can reasonably be expected to be raised by the
Companys financial statements, or experience actively supervising one or more
persons engaged in such activities; (4) an understanding of internal
controls and procedures for financial reporting; and (5) an understanding
of audit committee functions.
For a report on the Audit
Committees actions during 2006, see the 2006 Audit Committee Report below.
2006 Audit
Committee Report
The Audit Committee schedules meetings to occur after
the preparation of quarterly and annual financial statements but prior to the
public release of financial results for the period. The Committee met in May, July and
October of 2006, prior to the release of the financial results for the
first, second and third quarters of 2006, respectively and in January 2007
prior to the release of our 2006 year-end results. If appropriate, additional
meetings may also be held during the year to address a variety of recurring and
non-recurring topics, such as the Companys internal control systems, the scope
and results of the Companys internal audit plans, changes to the Audit Committee
charter and other matters. In addition, throughout 2006, the Audit Committee
provided oversight of the Companys preparations for managements assessment of
its internal controls over financial reporting as required by Section 404
of the
29
Sarbanes Oxley Act of 2002.
The Committee receives regular reports from management on this topic and
confirmation of the processes and timing of preparation from the independent
auditors.
At all of these meetings, Axcelis Chief Executive
Officer and Chief Financial Officer were present, as was our General Counsel
and our independent auditors. The Committees agenda is established by the
Committees chairman, with input from the Companys Chief Financial Officer. Depending
on the content of the meeting, the Committee holds private sessions with the
Companys independent auditors, the Companys internal auditors, and,
separately, with management, at which candid discussions of financial
management, accounting and internal control issues can take place. In its
executive sessions with representatives of the independent auditors, the
Committee seeks to engage in a meaningful dialogue to address any questions or
concerns identified by the Committee and to obtain an understanding of any
questions or concerns of the auditors.
At the recommendation of the Audit Committee, the
Board of Directors appointed Ernst & Young LLP as our Independent
Registered Public Accounting Firm to audit our financial statements for 2006. At
the 2006 annual meeting of stockholders, our stockholders ratified this
appointment. The Audit Committee discussed with our independent auditors and
the Companys Chief Financial Officer overall audit scopes and plans, the
results of external audit examinations, evaluations by the auditors of the
Companys internal controls and the quality of the Companys financial
reporting.
Management has reviewed with the Audit Committee the
audited consolidated financial statements for the year ended December 31,
2006 prepared by management and audited by Ernst & Young LLP, managements
assessment of the effectiveness of our internal control over financial
reporting and Ernst & Young LLPs evaluation of our internal control
over financial reporting. In addition, the Committee received from the
independent auditors (1) their annual written reports covering matters
required to be discussed by the auditors with the Committee under Statement on
Auditing Standards No. 61, Communication with Audit
Committees and (2) their disclosures and the letter regarding
independence from the Company and its management, which disclosures and letter
are made under Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees. Both items
were discussed with the auditors and management at an Audit Committee meeting,
including a discussion of any relationship that may impact the objectivity and
independence of our auditors and whether the provision of any non-audit
services by the auditors is compatible with maintaining their independence. The review included a discussion of the quality, not just
the acceptability, of the accounting principles, the reasonableness of
significant judgments, and the clarity of disclosures in the financial
statements.
In reliance on these reviews and discussions, and the
report of our Independent Registered Public Accounting Firm, the Audit
Committee recommended to the Board of Directors that such audited
financial statements be included in the Companys 2006 Annual Report on Form 10-K
for filing with the Securities and Exchange Commission and in the Annual Report
to Stockholders which accompanies this proxy statement.
The Committee and the Board have also recommended,
subject to reconsideration in the absence of stockholder ratification, the
selection of the Companys independent auditors for the current year, as
discussed above under Proposal 2: Ratification of the Appointment of Our
Independent Registered Public Accounting Firm.
30
In
performing all of these functions, the Audit Committee acts only in an
oversight capacity. Necessarily, in its oversight role, the Committee relies on
the work and assurances of the Companys management, which has the primary
responsibility for financial statements and reports, and of the independent
auditors, who in their report on the audited annual financial statements,
express an opinion on the conformity of the Companys annual financial
statements to accounting principles generally accepted in the United States.
|
By the Audit Committee,
|
|
William C. Jennings,
Chairman
|
|
R. John Fletcher
|
|
Geoffrey Wild
|
31
Code of Ethics
Axcelis has set forth its
policy on ethical behavior in a document called Ethical Business Conduct at
Axcelis. This policy applies to the members of our Board of Directors and all
employees, including (but not limited to) our principal executive officer,
principal financial officer, principal accounting officer or controller and
persons performing similar functions. This policy comprises written standards
that are reasonably designed to deter wrongdoing and to promote the behavior
described in Item 406 of Regulation S-K promulgated by the Securities and
Exchange Commission. The text of this code of ethics is posted on the Investors
page of our website at www.axcelis.com, where we may also disclose any
amendments to and waivers of the code.
Certain
Relationships and Related Transactions
The governance rules of the NASDAQ Global Market
require the Company to conduct an appropriate review of all related party
transactions which are disclosable under Item 404 of Regulation S-K.
In its charter, the Nominating and Governance Committee is given responsibility
to review and approve any such related party transactions, including (a) business
arrangements between the Company and directors or their affiliates or between
the Company and employees, other than compensation for service as a director or
as an employee of the Company, and (b) any other relationships between a
director or employee and the Company or a third party (including membership on
the boards of directors of a third party) which create the appearance or
reality of a current or potential conflict of interest.
Axcelis reviews all
relationships and transactions reported to it in which the Company and our
directors and executive officers or their immediate family members are
participants to determine whether such persons have a direct or indirect
material interest. The Companys General Counsel is primarily responsible for
the development and implementation of processes and controls to obtain
information from the directors and executive officers with respect to related
person transactions and for then determining, based on the facts and
circumstances, whether the Company or a related person has a direct or indirect
material interest in the transaction. As required under SEC rules, transactions
that are determined to be directly or indirectly material to the Company or a
related person are disclosed in the Companys proxy statement. In addition, the
Nominating and Governance Committee reviews and approves or ratifies any
related person transaction that is required to be disclosed. In the course of
its review and approval or ratification of a disclosable related party
transaction, the Nominating and Governance Committee considers:
· the
nature of the related persons interest in the transaction;
· the
material terms of the transaction, including, without limitation, the amount
and type of transaction;
· the
importance of the transaction to the related person;
· the
importance of the transaction to the Company;
· whether
the transaction would impair the judgment of a director or executive officer to
act in the best interest of the Company; and
· any
other matters the Committee deems appropriate.
Any member of the Nominating and Governance Committee
who is a related person with respect to a transaction under review may not
participate in the deliberations or vote respecting approval or ratification of
the transaction, provided, however, that such director may be counted in
determining the presence of a quorum at a meeting of the Committee that
considers the transaction.
32
During 2006, no related
person transactions requiring disclosure in the proxy statement were identified
or submitted to the Nominating and Governance Committee for approval. As
discussed above under Board of Directors Independence and Meetings, the
Company has arms-length commercial dealings with companies of which certain
directors are officers and/or directors, none of which are material
individually or in the aggregate.
OTHER MATTERS
Stockholder
Communications to the Directors
Security holders may
communicate with the Axcelis Board of Directors by mailing a communication to
the entire Board or to one or more individual directors in care of the
Corporate Secretary, Axcelis Technologies, Inc., 108 Cherry Hill Drive,
Beverly, Massachusetts 01915. All communications from security holders to Board
members (other than communications soliciting the purchase of products and
services) will be promptly relayed to the Board members to whom the
communication is addressed.
Compensation
Committee Interlocks and Insider Participation
During 2006, the
Compensation Committee of the Board of Directors consisted of Mr. Hardis, Mr. Cutler
(until his resignation in May 2006), Mr. Fletcher (commencing May 2006)
and Mr. Thompson, as Chairman, none of who has been an officer or employee
of Axcelis or had a relationship during 2006 requiring disclosure under Item
404 of Regulation S-K.
Section 16(a) Beneficial
Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires
our directors, executive officers and persons owning more than 10% of our
registered equity securities to file with the SEC reports of their initial
ownership and of changes in their ownership of our common stock and to provide
us with copies of all Section 16(a) reports they file.
To our knowledge, based
solely on our review of copies of reports furnished to us and written
representations that no other reports were required, during 2006, our
directors, officers, and 10% stockholders complied with all Section 16(a) filing
requirements.
Deadlines for
Stockholder Proposals
Assuming the 2008 annual meeting is not more than 30
days before or 30 days after May 9, 2008, if you wish to bring business
before or propose director nominations at the 2008 annual meeting, you must
give written notice to Axcelis by February 9, 2008 (the date 90 days
before the anniversary of the 2007 annual meeting).
If you intend to bring proposed business to the 2008
annual meeting and you would like us to consider the inclusion of your proposal
in our proxy statement for the meeting, you must provide written notice to
Axcelis of such proposal prior to December 4, 2007 (120 days before the
anniversary date of the mailing of this proxy statement), assuming the 2008
annual meeting is not more than 30 days before or 30 days after May 9,
2008.
Notices of stockholder proposals and nominations shall
be given in writing to Axcelis Technologies, Inc., 108 Cherry Hill Drive,
Beverly, Massachusetts 01915, Attn: Corporate Secretary.
33
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Axcelis Technologies, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
000004
|
000000000.000000
ext
|
|
000000000.000000 ext
|
|
MR A SAMPLE
|
|
000000000.000000
ext
|
|
000000000.000000 ext
|
DESIGNATION (IF ANY)
|
|
000000000.000000
ext
|
|
000000000.000000 ext
|
ADD 1
|
XXXXXXXXXXXXXX
|
|
|
ADD 2
|
|
|
|
ADD 3
|
|
|
|
ADD 4
|
|
|
|
ADD 5
|
|
|
|
ADD
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Using
a black ink pen, mark
your votes with an X as shown in
|
|
X
|
|
|
|
this
example. Please do not write outside the designated areas.
|
|
|
|
|
|
|
Annual Meeting Proxy
Card
|
|
PLEASE
FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE
ENCLOSED ENVELOPE.
|
|
|
|
|
A
|
|
Proposals
The Board of Directors recommends a vote FOR all the listed nominees, FOR
Proposal 2 and AGAINST Proposal 3.
|
|
1. Election of
Directors:
|
For
|
Withhold
|
|
|
For
|
Withhold
|
|
For
|
Withhold
|
|
|
|
|
|
01 - Geoffrey Wild
|
o
|
o
|
|
02 - Michio Naruto
|
o
|
o
|
03 - Patrick H. Nettles
|
o
|
o
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
|
Against
|
Abstain
|
|
For
|
Against
|
Abstain
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2. Ratification of
appointment of independent auditors.
|
|
o
|
o
|
o
|
3. Stockholder proposal
regarding repeal
of the classified Board of
Directors
|
o
|
o
|
o
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
B
|
|
Non-Voting Items
|
|
|
|
|
|
|
|
|
|
|
|
Change of Address Please print new address
below.
|
|
|
|
|
Comments Please print your comments
below.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
C
|
|
Authorized
Signatures This section must be completed for your vote to be counted. Date
and Sign Below
|
|
|
Please sign
exactly as name(s) appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, corporate officer, trustee,
guardian, or custodian, please give full title.
|
|
|
Date
(mm/dd/yyyy) Please print date below.
|
|
Signature
1 Please keep signature within the box.
|
|
Signature
2 Please keep signature within the box.
|
|
|
/ /
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
C 1234567890
|
J N T
|
1
|
|
MR A SAMPLE (THIS AREA IS SET UP TO ACCOMMODATE
140 CHARACTERS) MR A SAMPLE AND MR A SAMPLE AND
MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND
MR A SAMPLE AND MR A SAMPLE AND MR A SAMPLE AND
|
|
|
|
|
|
3 2 B V
|
|
C O Y # # #
|
|
|
|
|
|
|
|
|
|
|
|
<STOCK>
|
00NYRC
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THIS
IS YOUR PROXY. YOUR VOTE IS IMPORTANT.
DO YOU
NEED ASSISTANCE IN ANY OF THE FOLLOWING AREAS?
|
ADDRESS CHANGES - LEGAL
TRANSFERS
|
|
|
|
CONSOLIDATION OF ACCOUNTS -
|
ELIMINATE MULTIPLE ACCOUNTS
FOR ONE HOLDER AND CERTAIN DUPLICATE SHAREHOLDER
|
|
|
MAILINGS GOING TO ONE ADDRESS.
|
|
|
JUST
CALL OUR TRANSFER AGENTS TELEPHONE RESPONSE CENTER:
|
(781)
575-2725
|
OR WRITE
TO:
|
COMPUTERSHARE
TRUST CO., N.A.
|
P.O. BOX
43069
|
PROVIDENCE,
RI 02940-3069
|
|
|
|
|
PLEASE FOLD ALONG THE PERFORATION, DETACH AND RETURN
THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
|
|
|
|
|
|
|
Proxy
Axcelis Technologies, Inc.
|
Proxy
Solicited on Behalf of the Board of Directors
for Annual Meeting on May 9, 2007.
The undersigned hereby appoints Mary G. Puma, Stephen
G. Bassett or Lynnette C. Fallon, or any of them, and any substitutes, to be
the attorneys and proxies of the undersigned at the Annual Meeting of
Stockholders of Axcelis Technologies, Inc. (Axcelis) to be held at 1:30 p.m.
EST on Wednesday May 9, 2007 at the offices of Axcelis at 108 Cherry Hill
Drive, Beverly, Massachusetts, or at any adjournment thereof, and to vote at
such meeting the shares of common stock of Axcelis the undersigned held of
record on the books of Axcelis on the record date for the meeting for the
election of the nominees listed on the reverse side and on the ratification of
Axcelis independent auditors as described in the Proxy Statement, and on any
other business before the meeting, with all powers the undersigned would
possess if personally present.
You are encouraged to specify your choices by marking the appropriate
boxes, SEE REVERSE SIDE, but you need not mark any boxes if you wish to vote in
accordance with the Board of Directors recommendations. The proxies cannot
vote your shares unless you sign and return this card.
PLEASE VOTE, DATE AND SIGN THIS
PROXY ON THE OTHER SIDE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
GRAPHIC
2
g83721bci001.gif
GRAPHIC
begin 644 g83721bci001.gif
M1TE&.#EAVP`Q`/8`````,P`&.@`*/0`.0``410`72``920H>31(>30<@3@H@
M3PTE4A,A3Q(F4Q(I5A4L6!@F5!DJ5AHN6ATS71\V8"`O6R$S7BPV7R,V8"4Z
M8RL]9BU!:3)%;#5(;CA';C=+<#M-498>TA7>DI
M@$]@@5-DA%=HAU=IB%AGAEIHAUQLBV1NC&)QCV5TD6AWDVMZE7![EW%^F72"
MG'F%GGJ'H'V*HH&-I8.0IX:2J(J6K(Z9KI":KY.=LI:@M)FCMIRFN)^HNJ2L
MO:>OP*>PP*NSP["WQK&XQ[2\RKB_S+K!SK[$T<#&TL3*UY=W@Y]_BZ./EZ^;I[>GK[^SM\>_P\_+S]O;W^/?X^?[^_@``````
M````````````````````````````````````````````````````````````
M`````````````````````````````````````````````````"'Y!```````
M+`````#;`#$```?^@&*"@X2%AH>(B8J+C(V.CY"1A28"!P:7EP4&`D.%3P29
MF)H#&F&2IZBIJJNLK9!A&*`&FI@&!%)BIJ8^E:*SFRRNPL/$Q<:25K7*!`]?
MA2P"OP6TFS^YQ]C9VMN/ID;1TI@"(H5A&@/*M`1/W.WN[]HUE;2T!P(WA5F6
MRI<$#EWP`@H<>"H$NG"CDEPSE>0@OP$?"$J<2'&0EP>RZ/VR_V0:G_?#R9D
M^(`"1Q*`AZB\D,&\N7/F,+`@F@+CN749+ZX8"C-ER(P0&WK_=O``PP82-8S@
MA:1%B8X5'S3T7N"[_`81,XQ0:92B*$P!0:!D177,Q5"@###HH`@61MAPPF[B
M.4"?;Q)@P`$)-ASGB!4R1#``3@,,0,"())(8XDX-T(`<(5U(H--.,.X$P`R'
M91'!BS'""``^;6&A0P8$@"ABB29^*(`"*W#^Q$@81I2P@)%#$DG`B=&$P(0B
M863@4#_]1#&(*3\`8"2,/9&`2!(EV".DE`04,.*8#=2P(B)!V%,7/WB*9$L`
M&61A2!(@[7.))80:L,`6A72A94B7,$IH`@/P0`@8.#00P`":")KG/D$>L$0B
MIC"A`4^@:+KI)1_2.-@5MN#ICQ>%O#!`H8.69(U<(_"$B:EYBL+G>H;@$$!9
MO?I22TD@Z!4&!W?B&8""@WSA027-UA(`#H*)804'P_+*#S7U$'"`DH?L$&*Q
M,!E[P+7;B0%H.B(-`$(Y8_VBS`!."&A!:\2B2TL"`8Q`9P#PUN*MO8,*\.F7
M8BSA'TR:$!"!,Z;^G/"P,O;8D*T5#SS<+[%EV:,"(CA$B*>N"WL$,(J
MEY8''>)+B`_`@2%?8(2G)N2:LL,\"-L3]353W%G6AT.*^"'"R@C00\RR3!Z3
M!DZ@UD41=-$=$SF'D(#.U9E00\`)W\(4P`N%M'URD`($H!-9X**J4%O^D>-.
M2S0:A$"""!\XX'8H6L-*B$L%$S"!7I04/$`G:D$3SB\#A``$$U*8@A2DL`04
MB&M0A4H``7XR""(,(`$C$0,HW*0P<)"Q]0,7@NA"\:0QBA`D8@,WR1%.,C>($8A)BP"0E&3$\(W+B2P1
M*4!'M030`6=TH(FB6-<)]'*X&<:$!5P3@[DLEY!LR2`KN7O==B+0K*LE0#I^
M!.16NM(6*N@LB,VX!A(`60\!$$$,-&D+0V#^,(-.RJ"3G;1!;<@8A%*:\I3`
MRM;J++<)C;6+"OVRAP;!5_,D\D`LA!(L`PF]F@Y@L3".8EZ-,`
M^CC6L3J3IA4)P8ME*(UZ+')`VG#'$5-<88IED>9./">N!4R``S`8`B(7`84=
MH"`\#FBL8QM`VP4T%G32G-%5`;BF@LMK?`7ZV!%%!3;#R*Y
MB43I&E_4(.>R2EJC+E..'B7!R`!E8$"U!.`>(1O1<4$!W
M1!T=FST"JH@:`.``7E),"`"@@502(AGQBV0JP.2?-G'.7Z&U1X"^!*3^X_8#
M"@PCBJ"N=A1";&&*'6UHL<(6@+T:X@H?N%3EZI8G`13A,(;@`O`6X80,2$4Q
M96.Y&@U?H1`<;LU6V6,!Y!=&0K$DS(H6H
ME]T&<)9L,4$`!9@PUCXFW@EP]PL;P)E5U6$WYTV`K(G2``&("-(&'%H1[7R(
M0E;!8SOB^%ZZO<9',O@?50UB+KTKRUT,428+A#2S`5:FBEK^7@XB6+B"LK&0;&8K^PK)AK:S
MD[W.+A98'"/,`\L0V)G!TJP'L2A2D-N"WAU@FU@:@A$6``!SS30U5H?EE
MBLK\I'EZ3"*P(((1C*#G(NAY"4+``KYT&9V8"("OLX6**62-?8\F!`IPIN!O
M"H:[@[B,9KC0A2LD83H,)`!')7E4B$WC25YKZ8A!'+6K`5Q7
M$&-7US2Q'(4*36`"%O@]\".`V4%TF6[VP-9_>W7,809P"M"/O@#[;0@HR"YA
MKW."8N6G^*R+09M(S[,`1C8875I.B(B(C3
M1V&@<-J5`-56"$;U$M0@``1X"$'6*R8A!BPP-W@B`()D?'Z5-(]!!%'^,$!/
M,`0F4'\Q$3>$T$Y)0P`6X%]?@`,X>`!LAW89\5=$N!8M8SGV4#3^=S%Y-@#(
M@P@E@#99\P^"4`,AAV8#,`)6H$E7$`3!EG/Y8@@O@#/JL`#A4S`;P3",`R^C
M8&IM0CO14W:3H'KI,@`/(`,\,`0_P`,RP$1V$R^/=PV?8#^A]U1?4T.$D'NN
MH@-;\!9?8`5:V#B;$%`Q@#0:@0X9T`$;(!^0$
MIG\K@!(2%EEU4U`2@!JF`'[&8PLYLH74,`!<)`@::#?C5PC`U"M*8@HCL#Z]
MN``9P`'Q(1]Z-S/T<`#K48G[,SN>,V*6=7G^V82*,J8T`J,/*#-Y:N%!&I8S
M959U:L$0"Q=5>G)-)30],J=+&51"(H@2\.,J\T,(A.=@ZC`EGP,Z(&1V@N!`
MN1A>,;$"#8!\+(@2-J""=I-2G2$&:QA:F4(XD'=]W1-E91$`(N`7#X<[(AD]
ME:0!R%0('&5Y7&0*1D1V&)DME95JER:/;0%J,HDQ`1`"/<`O6U%.8O`1!2--
M/W@-YGA@RY`YW@"1[NA$&B%+'4@(951XW5,L>N5?XBB2;_64?\0K]J`@-?EV
M$",V@X@Q00(;24$PJ&8)(Y4%_8%4N&`*0-DK;]<`/"0&!O$S>T<([H>#E=2"$$`@*@&-KK8``QD"#I``)7P
M`><)G_7!`!])C$D0`QO0`);@.0&Y9!,``C70!)YA"$Y0`R`@`;TEH*7R`!WP
M`D-0A(>P`@CPGO&)`&O3%D_0`/AY4R&@&%P`!"8P`=XIH`/*C"6``\%HPW2[
M]01+8`0TF@1/8*&F$1J9$4];H!E>D!D_"J29@7"$=1HZV@4_2AE1-`5.D`0T
M^J1*X`11<`4(YPA>0`5/H`1/RE5,\`160%R'`!I!.AO;X:-&RAF,\`57\`1,
- -L*5/VE52,%:.$`@`.S\_
`
end
GRAPHIC
3
g83721bci002.gif
GRAPHIC
begin 644 g83721bci002.gif
M1TE&.#EAP``G`/?Y``````$!`0("`@,#`P0$!`4%!08&!@<'!P@("`D)"0H*
M"@L+"PP,#`T-#0X.#@\/#Q`0$!$1$1(2$A,3$Q04%!45%186%A<7%Q@8&!D9
M&1H:&AL;&QP<'!T='1X>'A\?'R`@("$A(2(B(B,C(R0D)"4E)28F)B7E]?7V!@8&%A86)B8F-C8V1D9&5E969F9F=G
M9VAH:&EI:6IJ:FMK:VUM;6YN;F]O;W!P<'%Q<7)R'EY>7IZ>GM[>WQ\?'U]?7Y^?G]_?X"`@(&!@8*"@H.#@X2$A(6%A8:&
MAH>'AXB(B(F)B8N+BXR,C(V-C8Z.CH^/CY"0D)&1D9*2DI.3DY24E)65E9:6
MEI>7EYB8F)F9F9N;FYRGI^?GZ"@H*&AH:*BHJ.CHZ2DI*6EI::F
MIJ>GIZBHJ*FIJ:JJJJNKJZRLK*VMK:ZNKJ^OK["PL+&QL;*RLK.SL[2TM+6U
MM;:VMK>WM[BXN+FYN;JZNKN[N[R\O+V]O;Z^OK^_O\#`P,'!P<+"PL/#P\3$
MQ,7%Q<;&QL?'Q\C(R,G)RWM_?W^#@X.'AX>+B
MXN/CX^3DY.7EY>;FYN?GY^CHZ.GIZ>KJZNOKZ^SL[.WM[>[N[N_O[_#P\/'Q
M\?+R\O/S\_3T]/7U]?;V]O?W]_CX^/GY^?KZ^OO[^_S\_/W]_?[^_O___P``
M`````````````````````"'Y!```````(?XU($EM86=E(&=E;F5R871E9"!B
M>2!!1E!,($=H;W-TQH\>/($.*?.B,
M5!P@&U)N8!&'U\B7,&/*?*F.T08"/?X0XU;-F1H(#4#-E`ALRQ8[I);!&\JT
MJ4-G3`@`(:6N8#Q>(624<]IP&8L&%,(:&<21JUFNSF@T,%/VX"`*QLXN)$>M
M&K4_$`;0(,5-KE^8U6BLX!5/(3$(0O\R!':'R8H2<6BU54Q9XIL$I1BJ`]*I
M2Z[%B8SHU4?>J@.-[3\\<8*`PS0
M0`]Q=&+B0=P8L4$J$Q%S1QQO_$'-CP3QTH%+`H%#BAH=$,!$*DU2!,\="1#P
MAGL"Q<,-(D"\84<<<=AQ:*);R,`"#33(T-\`!&P01B;&`&K="AO``E$\?X3%
MA!$$K$`+FP*!`AJ6-,*5LDD"4!0BAZ1R%_A%%"E@.$
M`.FQD1Y+098EA/%'*=1\Z1`Q)82PYE,4=.KD'0-@@6H^C`Q0PHLLE<+A2/&$
MT2>E3'21``Z*/@+,@0/TT`-<\'P(S[[\@H/#`&94\U$J$-SQT",#&"R0.C10
M49`SP!"3)V7Q@&/3`!1T\M
ML*+^651LT!C00*L0A50V(&DS@40C!K&`%+``A%M2@!D38(E,*
M@2!"J,$(!TK$%L/J@!,V,(#$V*(#P*A&"'1&D/]IR1;^!0%'&(1`G7!-(B2T
M@$#!WL`"8F5)#0:)0WCR40H*/.AI*P*(3PLIB4HQSJ`&,8OQ0/4B"B$*!P
M!CR^%(8I$@0>Q@#"`)PP0*L0I!I8V@(UED`?@('D8H@0P(8#:"(,P_TB)%
MELP@D&KT(`2P@-M#]A."#N2E6'&8!!4(T"V#N(D4A8#`%D`4#^FDS@C7"A3M
MSD(.+`U@/3@8"R)HP0TU4"![Y0">$"#`20B40AWQ6,8C$+&%'JS/&(\HYAL0
MD8E'&"%+*P"")
FG'$3<74SB0/^8`$P"B,H4+P!"/;"0B$0@0A&V*(`4`3)A&GCP@@G$Z@`LR@&.3#"!ABU;AC,Z(9U7]L`,:'7""HX'HRW`
M+J$?<49)JY=1#C#V90@Q,X>;*S@@(
MY2`&^1X)0B'$P1:`%4DJ6/`[@ZC#"1``!A@?PHT0>,T@]:D7**A!C5;)``)"
MX$4Y>!$&SJY`=$Z:1`\@0`^*@@YU)"=L!"@`V'@!:`0"]M\4.,1%>Y"H!#ENH(0R%"-JW
M$*(.<-"B,1N@0"SOP`MJ2+DAQNB`B0>;
M01%3L)AY(KY+`%L(P@0W/L1D%$@EG!<4#V"4XLT5(<4@:?`'8'`$"X&."#=H
MB--!6WHBY'A$@!O`@AGZ,2+1&8`,(GSI4D\6%$=#WO`@`HL&=,!SIHXU0ZB1
4$5`H)R*@4$.19
GRAPHIC
4
g83722bgi001.jpg
GRAPHIC
begin 644 g83722bgi001.jpg
M_]C_X``02D9)1@`!`0$`8`!@``#_VP!#``H'!P@'!@H("`@+"@H+#A@0#@T-
M#AT5%A$8(Q\E)"(?(B$F*S7J#A(6&AXB)BI*3E)66EYB9FJ*CI*6FIZBIJK*SM+6VM[BYNL+#Q,7&
MQ\C)RM+3U-76U]C9VN'BX^3EYN?HZ>KQ\O/T]?;W^/GZ_\0`'P$``P$!`0$!
M`0$!`0````````$"`P0%!@<("0H+_\0`M1$``@$"!`0#!`<%!`0``0)W``$"
M`Q$$!2$Q!A)!40=A<1,B,H$(%$*1H;'!"2,S4O`58G+1"A8D-.$E\1<8&1HF
M)R@I*C4V-S@Y.D-$149'2$E*4U155E=865IC9&5F9VAI:G-T=79W>'EZ@H.$
MA8:'B(F*DI.4E9:7F)F:HJ.DI::GJ*FJLK.TM;:WN+FZPL/$Q<;'R,G*TM/4
MU=;7V-G:XN/DY>;GZ.GJ\O/T]?;W^/GZ_]H`#`,!``(1`Q$`/P#TO3_$!OK^
MYM?LVSR+QK;=OSNP"=W3VZ55N_%IM;:2;[$&V&(8\S&=[LOIVVY_&J.@?\A[
M4O\`L+R?^@FLO5O^0;/_`+UM_P"C9*V45S6/
M7%O]E\OR;M[;=OSG:,YZ?I56[\7&VMFF^Q!MK1+CS,??9AZ=MOZU0\-?\A>_
M_P"PM+_Z":R]5_Y!TG_72T_]#DHY5S6''"476Y>73W>_5ZG71>(#+K-YIWV;
M'V66*/?O^]O&9C=B0)Z>^:SK7_D<=8_Z^K;
M_P!!JAXB_P"//5?^N$G_`*4+0HKF2]":>%HRK1BUHU'OU2N=)8^)#>:A<6GV
M79Y,D2;M^<[USGIVJ'4?%9L+>ZF^Q!_LZ%\>9C=B4)Z?C65HG_(P7_\`U\6O
M_HNJGB+_`)!^J?\`7%O_`$I%"BN9+T*CA*+KQ@XZ>[WZVN=/8^(S>:A<6GV7
M9Y$T<6[?G.Y[WZVN=58^(C>:A@0PE%UU!QT]WOUM9C.YV3T[;<_C6?H'_((3J-W/;_9?+\F[>WW;\YVC.>GZ55NO%
MIMK73W>_5G6:7XA.I7,T/V7R_*NY+?._.=HSGIW]*JW/BTV\(
MD^Q!LR0ICS/^>A;GIVV_K5#PQ_R$;W_L*W'\C67J/_'D/^OBS_G)1RKF:".$
MHNLX\NFG?JSK=+\0G4IIH_LOE^79_
MST#<].VVJ/A?_C\N_P#L)7/\JRM2_P"/./\`Z^K+^3T**YF@AA*+KN+CIIW[
MGI%%%%8GA%"VT6RM+F6XA1Q)-.9W)6=IVRY/SD8-0S>&M,GB,4DWJI\W,[DZ:+91W\]ZJ/YUPZ/(=YP2HP.*BNO#NG7D<
MR31N1.I5\.1D%@Y_4"BBB[$J]5.ZD[_Y;#[?0K"UNI;F)'$DK([$N3RHP/TJ
M.Z\.:;>131S1R%9E*OB0C(W[_P"=%%',]QJO53YN9W_RV)+?0[&UN9;B)'$D
MKK(Q+D\J,#]*CNO#>FWD,L4T*2.
M0J^W.)#_``L6'ZL:**+L/;U4[\SO_D36NB6-G<2SPHX>68SL2Y/SD8J&?PUI
MEQ$T4DJG?F=_\`(FM-$L;&>2:!'#RSM.V7)^.0J2A_UAZH25_P#0C111S,/;U;WYG-Q^\/5,[?YFBBCF8*O53YN9W-:BBBD8G_V3\_
`
end
GRAPHIC
5
g83722bgi002.jpg
GRAPHIC
begin 644 g83722bgi002.jpg
M_]C_X``02D9)1@`!`0$`8`!@``#_VP!#``H'!P@'!@H("`@+"@H+#A@0#@T-
M#AT5%A$8(Q\E)"(?(B$F*S7J#A(6&AXB)BI*3E)66EYB9FJ*CI*6FIZBIJK*SM+6VM[BYNL+#Q,7&
MQ\C)RM+3U-76U]C9VN'BX^3EYN?HZ>KQ\O/T]?;W^/GZ_\0`'P$``P$!`0$!
M`0$!`0````````$"`P0%!@<("0H+_\0`M1$``@$"!`0#!`<%!`0``0)W``$"
M`Q$$!2$Q!A)!40=A<1,B,H$(%$*1H;'!"2,S4O`58G+1"A8D-.$E\1<8&1HF
M)R@I*C4V-S@Y.D-$149'2$E*4U155E=865IC9&5F9VAI:G-T=79W>'EZ@H.$
MA8:'B(F*DI.4E9:7F)F:HJ.DI::GJ*FJLK.TM;:WN+FZPL/$Q<;'R,G*TM/4
MU=;7V-G:XN/DY>;GZ.GJ\O/T]?;W^/GZ_]H`#`,!``(1`Q$`/P#TGQ!K-YI<
ML*VQT\"123]KN1$>/3)YK'_X2[5?70?_``9+_C6_K$XADBS%?29!_P"/69$`
M^NYUK-^VK_SZZU_X%P__`!VM(VML>MA_9>S7-33?K_P2&R\4:E<7UO!(=$V2
M2JC>7?JS8)QP,\GT%=;7.VMV&NX5^S:N,NHS)=1%1SW`D)(_"NBI2MT.7%\G
M,N6*7HXM/M%KI\V$;:;N],!'(Z889KF/L&F_]`[0?_!RW_Q=>@:Q
M.(9(LQ7TF0?^/69$`^NYUK-^VK_SZZU_X%P__':TA-I6_4]+"XJ<*,8K_P!*
M:_"YSFE66GIJ]FR6&B*PN$*M'JS.P.XS9+#1%87"%6CU9G8'<.0N
M_D^@[UZ57.VMV&NX5^S:N,NHS)=1%1SW`D)(_"NBJ*DFV<6/K2JRBY?G?]6<
MCXUM[:>XM/M%KI\V$;:;N],!'(Z889KF/L&F_P#0.T'_`,'+?_%UZ!K$XADB
MS%?29!_X]9D0#Z[G6LW[:O\`SZZU_P"!\`\=JX3:5OU.W"XJ<*,8K_`-*:
M_"YSFE66GIJ]FR6&B*PN$*M'JS.P.XFKV;)8:(K"X0JT>K,[`[AR%W\GT'>O2JYVUNPUW"OV;5QEU&9+J(J.>X$
MA)'X5T514DVSBQ]:5647+\[_`*LY'QK;VT]Q:?:+73YL(VTW=Z8".1TPPS7,
M?8--_P"@=H/_`(.6_P#BZ]`UB<0R19BOI,@_\>LR(!]=SK6;]M7_`)]=:_\`
M`N'_`..U<)M*WZG;A<5.%&,5_P"E-?AS9+#1%87"%6CU9G8'<.
M0N_D^@[UZ57.VMV&NX5^S:N,NHS)=1%1SW`D)(_"NBJ*DFV<6/K2JRBY?G?]
M6XM/M%KI\V$;:;N],!'(Z889KF/L&F_]`[0?_!RW_P`77H&L3B&2
M+,5])D'_`(]9D0#Z[G6LW[:O_/KK7_@7#_\`':N$VE;]3MPN*G"C&*_]*:_"
MYSFE66GIJ]FR6&B*PN$*M'JS.P.XE5SMK=AKN%?LVKC+J,R7414<]P)"2/PKHJBI)MG%CZTJLHN7YW_`%9F
MZKX>TK6WC?4;7SVB!"'S&7&>O0BL_P#X0+PQ_P!`S_R/)_\`%445*G):)G-#
M%8B$>6$VEY-DMOX)\.VES%=(<,#D'EO6MVBBDY-[LBI6J57>I
&)OU=S__9
`
end
GRAPHIC
6
g83722bgi003.jpg
GRAPHIC
begin 644 g83722bgi003.jpg
M_]C_X``02D9)1@`!`0$`8`!@``#_VP!#``H'!P@'!@H("`@+"@H+#A@0#@T-
M#AT5%A$8(Q\E)"(?(B$F*S7J#A(6&AXB)BI*3E)66EYB9FJ*CI*6FIZBIJK*SM+6VM[BYNL+#Q,7&
MQ\C)RM+3U-76U]C9VN'BX^3EYN?HZ>KQ\O/T]?;W^/GZ_\0`'P$``P$!`0$!
M`0$!`0````````$"`P0%!@<("0H+_\0`M1$``@$"!`0#!`<%!`0``0)W``$"
M`Q$$!2$Q!A)!40=A<1,B,H$(%$*1H;'!"2,S4O`58G+1"A8D-.$E\1<8&1HF
M)R@I*C4V-S@Y.D-$149'2$E*4U155E=865IC9&5F9VAI:G-T=79W>'EZ@H.$
MA8:'B(F*DI.4E9:7F)F:HJ.DI::GJ*FJLK.TM;:WN+FZPL/$Q<;'R,G*TM/4
MU=;7V-G:XN/DY>;GZ.GJ\O/T]?;W^/GZ_]H`#`,!``(1`Q$`/P#U3^UO^*D_
ML;R/^7/[3YN__;V[<8_'.:T:Y74+P6'CR2Z9"X31Q\H.,YG`_K6I=Z]':-J@
M:!F_LV%)6PWWPP)P/3[M6X[6.VIAI/E=-;I??M^J);K68+2:]B>.0FSM?M3D
M8Y7YN!SU^4U=@F6XMXYE!"R(&`/4`C-%O!."UT_%+]6:T&H1SZE=6*HPDM5C9V.,
M'?G&/^^30E_&^J2Z>%;S(H5E+=B&)`_'Y36*U\NF:UXBOF0R+!;6[E0<$X#T
MVXU%;#Q3/.T9<2VUK$`#C!>1QG]:.4/JUV^5=%;UM&_YFYJ6H1Z78O=S(SHK
M(I"8S\S!1^IH@U".?4KJQ5&$EJL;.QQ@[\XQ_P!\FL3Q'J"W>CZG;B,J;2ZM
MXR2?O9>-OZTK7RZ9K7B*^9#(L%M;N5!P3@/0HZ?UY!##7I7M[W3[X6_]*-K4
M+^/3H8Y959A),D0"^K,%'X6B(P>S9%<
MGN4,,?@:=:W:7?G;%8>3*T1SW(K!@U!;#Q-J:M&7^U7UO`,'&TF#.?_':G
MMM073DG9HR_GZL8!@XP7(&:;B5/#-?"MU%KYI7-6SOX[R:[B164VLWE.6[G:
M&X]N:+R_CLYK2)U9C=3>4A7L=I;GVXK%M=073)-:N&C,@.I)'@''WEC7^M%U
MJ"ZG)HMPL9C`U)X\$Y^ZLB_THY?Z^0_JWO7M[MOQY;FU8:A'J"3M$C*()W@;
M=CDJ<$CVJU7,Z5J"Z=:W3-&7\_6Y8!@XP7DQFKZ>((WU==.^SL&:Y>#?NXRL
M8DS^1Q2<7?0BKAIJ3!3^>:H^%;P0^']%M2A)N(GPV?N[>:7
M+H9?5Y*FW):W7W>]?\C9NK^.TNK2W=6+79+"
MTH;L`I`/X_,*PKK5%U!]#U!8BB_:I_D)R?D21?\`V6I8KQ;SQ!I=\J%5GTN2
M4*3R`3&M>';Y4,:SVUPX4G)&0E6+'Q/%?>;MMG7R[9[@Y89+"TH;L`I`/X_,*)]0C@U*UL61C)=+(R
M,,8&S&<_]]"L>*\6\\0:7?*A59]+DE"D\@$QG'ZU4O\`6HVN=%UKR6V?8KJ?
MR\\X"H<9H42XX5N25NC^^TK?D=&-0C.K-INQO-6`3EN-N"Q7'UXH>_C35(M/
M*MYDL+2ANP"D`_C\PK(^TA/%5Q=[20ND))MS_MN<4D5XMYX@TN^5"JSZ7)*%
M)Y`)C./UHY1?5U?;2WXVN6;;Q!]I\67F@_9=OV6$2^=YF=V0G&W''W_7M17.
M>&;Y=3^(M_?*AC6>P1PI.2,B*BG4BHM+R#&T(T9QBE;W4WZVU.QETJQGOC>R
MVZO.T/D%F)(*;MV,=.O.<9J22QM)?.,EM$_VA0LV5!\P#H#Z]311479R>TGW
M![*UD,A>WC8RQ^5(2H.Y.?E/J.3Q[TW^SK(Q/%]DAV2%2Z[!ABN-I/TP/R%%
M%*XN>2ZCI+&TE\XR6T3_`&A0LV5!\P#H#Z]3226%I+)YDEM$[_+\S("?E.5_
M(\BBBBX<\NX/8VDBRJ]M$PF8/("H^=AC!/J1@?E2R6-I+YQDMHG^T*%FRH/F
M`=`?7J:**+ASR[B?8+/:R_9HMK2"5AL'+C&&^O`Y]J5K*U?S-UO&?-=7DRH^
M=AC!/J1@?D***+ASR[B-86C3&9K:(R%Q(7*#.X#`;/J!Q2M96K##6\9'FB;E
M1]\7<(["TB$`CMHD%MGR0$`\O(P<>G!I5L;1!&%MH@(
MG,B`*/E8YRP]^3^=%%%PYY=P2RM8Y1,EO&L@+$,%`(+'+?F>31%96L"Q+%;Q
MHL`(B"J!L!ZX]***`YY/J(-/LU2-%M8@L3,R`(,*6SDCTSD_F:5+*UC,92WC
M4Q1^5&0H&U./E'H.!Q[4447#GD^H1V-I%Y)CMHD^SJ5APH'E@]0/3H*;'IUE
M#GRK2%-R&,[4`RI))'TR2?Q-%%.X^>7<QQTHHHNPYY=R0V=L7+F"/
GRAPHIC
7
g83722bgi004.jpg
GRAPHIC
begin 644 g83722bgi004.jpg
M_]C_X``02D9)1@`!`0$`8`!@``#_VP!#``H'!P@'!@H("`@+"@H+#A@0#@T-
M#AT5%A$8(Q\E)"(?(B$F*S7J#A(6&AXB)BI*3E)66EYB9FJ*CI*6FIZBIJK*SM+6VM[BYNL+#Q,7&
MQ\C)RM+3U-76U]C9VN'BX^3EYN?HZ>KQ\O/T]?;W^/GZ_\0`'P$``P$!`0$!
M`0$!`0````````$"`P0%!@<("0H+_\0`M1$``@$"!`0#!`<%!`0``0)W``$"
M`Q$$!2$Q!A)!40=A<1,B,H$(%$*1H;'!"2,S4O`58G+1"A8D-.$E\1<8&1HF
M)R@I*C4V-S@Y.D-$149'2$E*4U155E=865IC9&5F9VAI:G-T=79W>'EZ@H.$
MA8:'B(F*DI.4E9:7F)F:HJ.DI::GJ*FJLK.TM;:WN+FZPL/$Q<;'R,G*TM/4
MU=;7V-G:XN/DY>;GZ.GJ\O/T]?;W^/GZ_]H`#`,!``(1`Q$`/P`UWQGX[T;Q
M.^A>?%+*TH6WQ`O[U6/RG_/?->N:=%=Q:=`E].)KH(/-=5`!;O@#M4-SHFGW
3>L6NK30!KNT5EB<]@>M:%`'_V3\_
`
end
GRAPHIC
8
g83722bgi005.jpg
GRAPHIC
begin 644 g83722bgi005.jpg
M_]C_X``02D9)1@`!`0$`8`!@``#_VP!#``H'!P@'!@H("`@+"@H+#A@0#@T-
M#AT5%A$8(Q\E)"(?(B$F*S7J#A(6&AXB)BI*3E)66EYB9FJ*CI*6FIZBIJK*SM+6VM[BYNL+#Q,7&
MQ\C)RM+3U-76U]C9VN'BX^3EYN?HZ>KQ\O/T]?;W^/GZ_\0`'P$``P$!`0$!
M`0$!`0````````$"`P0%!@<("0H+_\0`M1$``@$"!`0#!`<%!`0``0)W``$"
M`Q$$!2$Q!A)!40=A<1,B,H$(%$*1H;'!"2,S4O`58G+1"A8D-.$E\1<8&1HF
M)R@I*C4V-S@Y.D-$149'2$E*4U155E=865IC9&5F9VAI:G-T=79W>'EZ@H.$
MA8:'B(F*DI.4E9:7F)F:HJ.DI::GJ*FJLK.TM;:WN+FZPL/$Q<;'R,G*TM/4
MU=;7V-G:XN/DY>;GZ.GJ\O/T]?;W^/GZ_]H`#`,!``(1`Q$`/P#V&ZN%M+2:
MY<$K#&SL!U(`S5#PYKUMXFT6#5K2.6.&;.U90`PP<2Z",_P`QSP3Q
MS0!ZY14=NTKVT33H(Y60%T!R%;'(S]:*`([ZW:[T^YME8*TT3(">@)!%97@S
>0)O#'ABUTF>=)Y(-V7C!`.23W^M%%`&[1110!__9
`
end
GRAPHIC
9
g83722bgi006.jpg
GRAPHIC
begin 644 g83722bgi006.jpg
M_]C_X``02D9)1@`!`0$`8`!@``#_VP!#``H'!P@'!@H("`@+"@H+#A@0#@T-
M#AT5%A$8(Q\E)"(?(B$F*S7J#A(6&AXB)BI*3E)66EYB9FJ*CI*6FIZBIJK*SM+6VM[BYNL+#Q,7&
MQ\C)RM+3U-76U]C9VN'BX^3EYN?HZ>KQ\O/T]?;W^/GZ_\0`'P$``P$!`0$!
M`0$!`0````````$"`P0%!@<("0H+_\0`M1$``@$"!`0#!`<%!`0``0)W``$"
M`Q$$!2$Q!A)!40=A<1,B,H$(%$*1H;'!"2,S4O`58G+1"A8D-.$E\1<8&1HF
M)R@I*C4V-S@Y.D-$149'2$E*4U155E=865IC9&5F9VAI:G-T=79W>'EZ@H.$
MA8:'B(F*DI.4E9:7F)F:HJ.DI::GJ*FJLK.TM;:WN+FZPL/$Q<;'R,G*TM/4
MU=;7V-G:XN/DY>;GZ.GJ\O/T]?;W^/GZ_]H`#`,!``(1`Q$`/P#LI=;U)?B)
M-I@N2+182PBVC&?*W=>O6G+K6HGP%8:B;D_:I9D5Y-HY!D(/Z5GS_P#)6+C_
M`*]S_P"B:KQW7AI%O&"WL,;3C:/G);![54\2?
M\@GQ!_V%4_\`0:KWO_'[X/\`^N$/_H=5&*MM_5CIHT*3A%N*Z]/[B9U5OJ]^
M^B^))VN"9+*YG2!L#Y%4<"JD^N:DD-VRW1!CT6*Y7Y1Q(>K4VU_Y%[Q?_P!?
MES_Z"*I7/_'O??\`8O0U'*KG)"C3YY>ZMUT_PE-_%>N#1M(G%^WF7%Q*DK;%
M^8`I@=/>(XWF)6S8"`8'R?(3_.O.G_`.1?T#_K[G_G'7>:;_R$
M/%O^^/\`T6:JI%):+^KF^.H4HT[QBE\73^^E^6A5M-L%NNB[R/3=*U&[N/$6IVLLQ:&"W@>-<#Y2R9)_
M.LO2MZMH_\`IN3_`#U,Z/Q=KK>&;J[-^WG1W<<:OL7A2KDC
MI["NOT;5+VY\0Q6LTY>%M)BG*X'^L)&37F\/_(G7O_7_``_^@25WOA__`)&N
M'_L!P_S%:5(I)V1W9A0I1A/EBEOT\HC;'6]1EFTU7N21-J<\+_*/F10<"L*+
MQ7K;:7K*WCT7\[7Y'<:'K.H76J:/#/<%TN-.::48'S/NQFF-K>H^
M>R_:3@:\MK]T?ZK&=M5?#?\`R&?#_P#V"&_]"J)O^/E_^QF7_P!!K/E5SBE1
MI^UDN5;=O[S*[^)]9%YXB07K;;-&,`VK\A$JKZ>A-:>B:[J5U+X;$UT7%ZMR
M9_E'S[<[?RKEI/\`C_\`%G_7-_\`TBG_A6.F#!S]HCXQ_TV-=+^S\OU/HY_#1_[A_E(H^)/^03X
M@_["J?\`H-5[W_C]\'_]<(?_`$.K/B16.E>(,*>=53M_LU7O%;[;X0^4\00Y
MXZ?/5QV_KL=5#^''Y_\`I"-RU_Y%[Q?_`-?ES_Z"*I7/_'O??]B]#5ZU!_X1
M[Q=P>;RYQQUX%4KE6^SWWRG_`)%Z$=*CJ_Z[''3^.7JO_;3FW_Y%_0/^ON?^
M<==YIO\`R$/%O^^/_19KA)$;_A']!&UN+N?M[QUW>F@_;_%G!Y<8X_Z9FJJ[
M?UW.C,/X;_[>_P#3B,:Q_P!78_\`8O3?SKEF_P"1(B_["3_^BUKJK%6\NQ^4
M_P#(O2CI[URS(_\`PA,0VMG^TG[?],UJH;_UYG5AG[[]5^2OM>D?_3(_E;F6'
M''_30T0W^[\RZ'Q2]8_^G&=5X;_Y#/A__L$-_P"A5$W_`!\O_P!C,O\`Z#4W
MAQ2-9T#(/&DMV_VJB93]I?Y3_P`C,IZ?[-1]IG#+^-+T_P#;F8$G_'_XL_ZY
MO_Z.2MKPY_KO"'^[=_UK&D1OM_BOY6YC?''_`$V2MKPZK";PAE3PMWGCIUJY
M?#_78[<3_`?S_P#33.PT;_CYU7_K]/\`Z`E%&C_\?.J_]?I_]`2BN.6Y\C7^
M/[OR1IT444C(,48HHH`****`#`HHHH`,48%%%`!1BBB@`P/2BBB@`HP/2BB@
0`HHHH`,"BBB@`HHHH`__V3\_
`
end
GRAPHIC
10
g83722bgi007.jpg
GRAPHIC
begin 644 g83722bgi007.jpg
M_]C_X``02D9)1@`!`0$`8`!@``#_VP!#``H'!P@'!@H("`@+"@H+#A@0#@T-
M#AT5%A$8(Q\E)"(?(B$F*S7J#A(6&AXB)BI*3E)66EYB9FJ*CI*6FIZBIJK*SM+6VM[BYNL+#Q,7&
MQ\C)RM+3U-76U]C9VN'BX^3EYN?HZ>KQ\O/T]?;W^/GZ_\0`'P$``P$!`0$!
M`0$!`0````````$"`P0%!@<("0H+_\0`M1$``@$"!`0#!`<%!`0``0)W``$"
M`Q$$!2$Q!A)!40=A<1,B,H$(%$*1H;'!"2,S4O`58G+1"A8D-.$E\1<8&1HF
M)R@I*C4V-S@Y.D-$149'2$E*4U155E=865IC9&5F9VAI:G-T=79W>'EZ@H.$
MA8:'B(F*DI.4E9:7F)F:HJ.DI::GJ*FJLK.TM;:WN+FZPL/$Q<;'R,G*TM/4
MU=;7V-G:XN/DY>;GZ.GJ\O/T]?;W^/GZ_]H`#`,!``(1`Q$`/P#V-I$3&]U7
M/J<5S?A/Q#%/AYHEU+K2ZOH)V1ZC(EKYOF)^Y_AV\C(]Z`/2P
GRAPHIC
11
g83722bgi008.jpg
GRAPHIC
begin 644 g83722bgi008.jpg
M_]C_X``02D9)1@`!`0$`8`!@``#_VP!#``@&!@<&!0@'!P<)"0@*#!0-#`L+
M#!D2$P\4'1H?'AT:'!P@)"XG("(L(QP<*#7J#A(6&AXB)BI*3E)66EYB9FJ*CI*6FIZBIJK*SM+6VM[BYNL+#Q,7&
MQ\C)RM+3U-76U]C9VN'BX^3EYN?HZ>KQ\O/T]?;W^/GZ_\0`'P$``P$!`0$!
M`0$!`0````````$"`P0%!@<("0H+_\0`M1$``@$"!`0#!`<%!`0``0)W``$"
M`Q$$!2$Q!A)!40=A<1,B,H$(%$*1H;'!"2,S4O`58G+1"A8D-.$E\1<8&1HF
M)R@I*C4V-S@Y.D-$149'2$E*4U155E=865IC9&5F9VAI:G-T=79W>'EZ@H.$
MA8:'B(F*DI.4E9:7F)F:HJ.DI::GJ*FJLK.TM;:WN+FZPL/$Q<;'R,G*TM/4
MU=;7V-G:XN/DY>;GZ.GJ\O/T]?;W^/GZ_]H`#`,!``(1`Q$`/P#,^*?B?7].
M^)&K6MEKFIVUNGD[(8;N1$7,*$X`.!R2?QKCO^$T\5?]#+K/_@?+_P#%5N?%
M_P#Y*EK/_;#_`-$1UP]`S<_X33Q5_P!#+K/_`('R_P#Q5%8=%`S[*O/#&@:C
M=/=7NAZ9
-----END PRIVACY-ENHANCED MESSAGE-----