Definitive Proxy Solicitation Material — Schedule 14A
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1: DEF 14A Proxy Statement, Feb. 20, 2003 Annual Meeting 36 145K
3: EX-99 Corporate Document 12 40K
2: EX-99 Form 10-K, FY 6/30/02 138 574K
DEF 14A — Proxy Statement, Feb. 20, 2003 Annual Meeting
Document Table of Contents
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(A) of the
Securities Exchange Act of 1934 (Amendment No. ____)
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Check the appropriate box:
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[ ] Confidential, for Use of the Commission Only (as determined by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
ENERGY CONVERSION DEVICES, INC.
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(Name of Registrant as Specified In Its Charter)
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COMPANY LOGO
ENERGY CONVERSION DEVICES, INC.
2956 Waterview Drive
Rochester Hills, Michigan 48309
January 15, 2003
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
of Energy Conversion Devices, Inc., which will be held at the Michigan State
University Management Education Center, 811 West Square Lake Road, Troy,
Michigan on Thursday, February 20, 2003, at 10:00 a.m. (EST). If you plan to
attend the meeting, we would appreciate your calling the Investor Relations
department at (248) 293-0440 or sending us an e-mail at
investor.relations@ovonic.com.
Details of the business to be conducted at this meeting are given in the
attached Notice of Meeting of Stockholders and Proxy Statement.
You may vote your shares by telephone, by the Internet or by signing,
dating and returning the enclosed proxy promptly in the accompanying reply
envelope. Representation of your shares at the meeting is very important.
Accordingly, whether or not you plan to attend the meeting, we urge you to
submit your proxy promptly by one of the methods offered.
We look forward to seeing you at the meeting.
Sincerely,
/S/ Robert C. Stempel
Robert C. Stempel
Chairman of the Board
YOUR VOTE IS IMPORTANT
In order to assure your representation at this meeting, you are requested
to vote your shares by telephone, by the Internet or by signing, dating and
returning the enclosed proxy as promptly as possible in the enclosed envelope.
No postage need be affixed if mailed in the United States.
ENERGY CONVERSION DEVICES, INC.
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NOTICE OF MEETING OF STOCKHOLDERS
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Rochester Hills, Michigan
January 15, 2003
To the Stockholders of
ENERGY CONVERSION DEVICES, INC.:
NOTICE is hereby given that the Annual Meeting of Stockholders (the
"Meeting") of ENERGY CONVERSION DEVICES, INC. (the "Company" or "ECD") will be
held at 10:00 a.m. (E.S.T.) on Thursday, February 20, 2003, at the Michigan
State University Management Education Center, 811 West Square Lake Road, Troy,
Michigan. The purpose of the Meeting is to:
1. Elect thirteen directors to hold office until the next Annual
Meeting of Stockholders of the Company.
2. Approve the appointment of Deloitte & Touche LLP as independent
auditors for the fiscal year ending June 30, 2003.
3. Transact such other business as may properly come before the Meeting.
Stockholders of record at the close of business on December 31, 2002 will
be entitled to vote at the Meeting. A list of stockholders entitled to vote at
the Meeting will be available for inspection at our offices. Whether or not you
plan to attend the Meeting in person, please vote your shares by telephone, by
the Internet or by signing, dating and returning the enclosed proxy promptly in
the accompanying reply envelope.
The Company's Annual Report on Form 10-K for its fiscal year ended June
30, 2002 accompanies the enclosed Proxy Statement.
By Order of the Board of Directors
/S/ Ghazaleh Koefod
Ghazaleh Koefod
Secretary
Energy Conversion Devices, Inc.
2956 Waterview Drive
Rochester Hills, MI 48309
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PROXY STATEMENT
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This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Energy Conversion Devices, Inc. (the
"Company" or "ECD"), a Delaware corporation, to be voted at the Annual Meeting
of Stockholders (the "Meeting") to be held at the Michigan State University
Management Education Center, 811 West Square Lake Road, Troy, Michigan on
Thursday, February 20, 2003, at 10:00 a.m. (EST).
This proxy statement and accompanying proxy were first mailed to
stockholders on or about January 15, 2003.
Purpose of the Meeting. The specific proposals to be considered and acted
upon at the Meeting are summarized in the accompanying notice and are described
in more detail in this proxy statement.
Voting Rights of Stockholders. Holders of record of the Company's Common
Stock at the close of business on December 31, 2002, are entitled to vote at the
Meeting. As of December 31, 2002, there were outstanding 21,249,082 shares of
the Company's Common Stock, $.01 par value ("Common Stock"); 219,913 shares of
the Company's Class A Common Stock, $.01 par value ("Class A Common Stock"); and
430,000 shares of the Company's Class B Common Stock, $.01 par value ("Class B
Common Stock"). Each share of Common Stock is entitled to one vote per share,
Class B Common Stock is entitled initially to one vote per share, and each share
of Class A Common Stock is entitled to 25 votes per share. The three classes
vote as one class on all matters, including the election and removal of
directors, except that with respect to (i) a merger or consolidation of the
Company with another corporation, (ii) the liquidation or dissolution of the
Company, (iii) the sale of all or substantially all of the assets of the
Company, (iv) an amendment to the Company's Certificate of Incorporation for
which class voting is required by Section 242 of the Delaware General
Corporation Law, or (v) the authorization of additional shares of Common Stock,
Class A Common Stock or Class B Common Stock, the affirmative vote of a majority
of the outstanding shares of Common Stock, the majority of the outstanding
shares of Class A Common Stock and the majority of the outstanding shares of
Class B Common Stock, voting as separate classes, is required. Section 242 of
the Delaware General Corporation Law provides that "the holders of the
outstanding shares of a class shall be entitled to vote as a class upon a
proposed amendment [to the corporation's certificate of incorporation], whether
or not entitled to vote thereon by the certificate of incorporation, if the
amendment would increase or decrease the aggregate number of authorized shares
of such class, increase or decrease the par value of the shares of such class,
or alter or change the powers, preferences or special rights of the shares of
such class so as to affect them adversely."
Stanford R. Ovshinsky and his wife, Dr. Iris M. Ovshinsky, executive
officers, directors and founders of the Company, are record owners of 153,420
and 65,601 shares (or approximately 69.8% and 29.8%), respectively, of the
outstanding shares of Class A Common Stock, with the balance of the outstanding
shares (892 shares) owned by members of their family. Mr. and Dr. Ovshinsky also
own of record 19,749 shares of Common Stock. In
addition, Mr. Ovshinsky has the right to vote 126,500 shares of Common Stock
(the "Sanoh Shares") owned by Sanoh Industrial Co., Ltd. ("Sanoh") under the
terms of an agreement dated November 3, 1992 between the Company and Sanoh.
Robert C. Stempel, Chairman and Executive Director of the Company, is
entitled to all voting rights with respect to 430,000 shares, or 100%, of the
outstanding shares of Class B Common Stock awarded to Mr. Stempel on January 15,
1999, under a Restricted Stock Agreement. Mr. Stempel also owns of record 61,404
shares of Common Stock.
The directors and officers of the Company have advised the Company that
they intend to vote FOR each of the proposals set forth in the accompanying
Notice of Meeting of Stockholders. Such persons together hold approximately
22.78% of the combined voting power of the outstanding Common Stock, Class A
Common Stock and Class B Common Stock.
Pursuant to the Stock Purchase Agreement dated as of May 1, 2000,
ChevronTexaco Corporation has agreed that (i) so long as it beneficially owns an
aggregate of 5% of ECD's Common Stock and (ii) so long as Mr. and Dr. Ovshinsky
are the beneficial owners of Class A Common Stock, or Mr. Stempel is the
beneficial owner of Class B Common Stock, ChevronTexaco will vote its shares of
ECD Common Stock in accordance with the votes cast by the holders of Class A
Common Stock (prior to its conversion) or Class B Common Stock (after conversion
of the Class A Common Stock). As of December 31, 2002, ChevronTexaco owns
4,376,633 shares of ECD Common Stock.
Record Date. Stockholders of record as of the close of business on
December 31, 2002, will be entitled to vote at the Meeting.
Quorum. The required quorum for the transaction of business at the Meeting
is a majority of the votes eligible to be cast by holders of record of the
Common Stock, Class A Common Stock and Class B Common Stock as of the close of
business on the record date. If a stockholder withholds his or her vote for the
election of directors or abstains from voting on the other proposals to be
considered at the Meeting, the shares owned by such stockholder will be
considered to be present at the Meeting for purposes of establishing the
presence or absence of a quorum for the transaction of business. If a broker
indicates on the form of proxy that he or she does not have discretionary
authority as to certain shares to vote on any proposal, those shares will also
be considered to be present at the Meeting for purposes of establishing the
presence or the absence of a quorum for the transaction of business.
Required Vote. The affirmative vote of a plurality of the votes cast at
the Meeting will be required to elect the directors of the Company. Because
directors are elected by a plurality vote, abstentions and withheld votes have
no impact in the election of directors once a quorum is established.
The affirmative vote of a majority of the votes cast at the Meeting will
be required to approve the proposal with respect to the appointment of the
Company's independent accountants. Abstentions will be considered as votes cast
with respect to such proposal and will have the same effect as a vote against
the proposal.
2
Voting of Proxies. All shares represented by signed proxies received at or
prior to the Meeting from stockholders of record as of the close of business on
December 31, 2002, will be voted at the Meeting. Unless a stockholder specifies
otherwise, all proxies will be voted FOR each of the proposals set forth in the
accompanying Notice of Meeting of Stockholders.
Voting by telephone or Internet. Stockholders of record (those who hold
stock in their own name) may vote their shares over the telephone or Internet as
follows:
By telephone: If you have a touch-tone phone, call 1-877-PRX-VOTE
(1-877-779-8683) toll free. You will be asked to enter the
Control Number located on your Proxy Card. Then follow the
instructions.
By Internet: If you have an e-mail and Internet access, point your
browser to http://www.eproxyvote.com/ener. You will be
asked to enter the Control Number located on your Proxy
Card. Then follow the instructions.
If you have your shares in "street name," you must vote your shares in the
manner prescribed by your broker or nominee. Your broker or nominee has enclosed
or provided a voting instruction form for you to use in directing the broker or
nominee how to vote your shares.
Voting in Person. If you plan to attend the meeting and wish to vote in
person, we will give you a ballot at the meeting. However, if your shares are
held in the name of your broker, bank or other nominee, you must bring an
account statement or letter from the nominee indicating that you are the
beneficial owner of the shares on December 31, 2002, the record date for voting.
Revocation of Proxies. You may revoke your proxy before it is voted by:
o submitting a new proxy with a later date, including a proxy given by
telephone or Internet;
o notifying the Company's Secretary in writing before the meeting that
you have revoked your proxy; or
o voting in person at the Meeting.
3
ITEM NO. 1
ELECTION OF DIRECTORS
At the Meeting, the directors are to be elected to serve until the next
annual meeting of stockholders and until their successors are duly elected and
qualified. Pursuant to the provisions of the Company's bylaws, the Board has, by
resolution, set the number of directors comprising the full Board at thirteen.
In the unanticipated event that any nominee for director should become
unavailable, it is intended that all proxies will be voted for such substitute
nominee as may be designated by the Board of Directors. The affirmative vote of
a plurality of the votes cast at the Meeting will be required to elect the
directors.
Mr. William M. Wicker, who served as a member of the Board of Directors
since 2000, will not be standing for re-election due to his business
responsibilities as a managing director in the investment banking division of
Goldman Sachs.
Information concerning the nominees for election as directors, including
the year each nominee first became a director, is set forth on the following
pages.
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THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR ALL
THIRTEEN NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS.
[Enlarge/Download Table]
Director
of the
Company Principal Occupation and
Name Since Office Business Experience
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Stanford R. Ovshinsky 1960 President, Mr. Ovshinsky, 80, the founder, Chief
Chief Executive Officer and President of ECD,
Executive has been an executive officer and
Officer and director of ECD since its inception in
Director 1960. Mr. Ovshinsky is the principal
inventor of ECD's technologies. He
also serves as the chief executive
officer and a director of Ovonic
Battery Company, Inc.; chief executive
officer and chairman of United Solar
Systems Corp.; president and member of
the Management Committees of Texaco
Ovonic Fuel Cell Company LLC and Texaco
Ovonic Hydrogen Systems LLC; a member
of the Management Committee of Texaco
Ovonic Battery Systems LLC and Bekaert
ECD Solar Systems, LLC; chairman and
director of Ovonyx, Inc.; a member of
the Alliance Board of Ovonic Media,
LLC; and co-chairman of the Board of
Directors of Sovlux Co., Ltd. Mr.
Ovshinsky is the husband of Dr. Iris M.
Ovshinsky.
4
Iris M. Ovshinsky 1960 Vice Dr. Ovshinsky, 75, co-founder and Vice
President and President of ECD, has been an executive
Director officer and director of ECD since its
inception in 1960. Dr. Ovshinsky also
serves as a director of Ovonic Battery.
Dr. Ovshinsky is the wife of Stanford R.
Ovshinsky.
Robert C. Stempel 1995 Chairman of Mr. Stempel, 69, is Chairman of the
the Board and Board and Executive Director of ECD.
Executive Prior to his election as a director in
Director December 1995, Mr. Stempel served as
senior business and technical advisor
to Mr. Ovshinsky. He is also the
chairman of Ovonic Battery; a
director of United Solar; vice
chairman and director of Ovonyx;
a member of the Management Committee
of Texaco Ovonic Fuel Cell, Texaco
Ovonic Hydrogen Systems and Bekaert
ECD Solar Systems; chief executive
officer and a member of the
Management Committee of Texaco
Ovonic Battery Systems and a
member of the Alliance Board of
Ovonic Media. From 1990 until his
retirement in 1992, he was the
chairman and chief executive
officer of General Motors
Corporation; prior to serving as
chairman, he was GM's president
since 1987. He is a director of
Southwall Technologies, Inc.
Nancy M. Bacon 1977 Senior Vice Mrs. Bacon, 56, Senior Vice President,
President and joined ECD in 1976 as its Vice
Director President of Finance and Treasurer.
Mrs. Bacon also serves as a
director of United Solar and
Sovlux and is a member of the
Management Committee of Bekaert
ECD Solar Systems.
Umberto Colombo 1995 Director Professor Colombo, 75, is Chairman
of the Scientific Councils of the
ENI Enrico Mattei Foundation and of
the Instituto Per l'Ambiente in
Italy. He was chairman of the
Italian National Agency for New
Technology, Energy and the Environment
until 1993 and then served as Minister
of Universities and Scientific and
Technological Research in the Italian
Government until 1994. Professor Colombo
is a member of the board of directors of
several Italian-based public companies.
He is also active as a consultant in
international science and technology policy
institutions related to economic growth.
5
Subhash K. Dhar 1999 Director Mr. Dhar, 51, President and Chief
Operating Officer of Ovonic Battery,
joined ECD in 1981 and has held various
positions with Ovonic Battery since its
inception in October 1982. He also
serves as a director of Ovonic Battery.
Hellmut Fritzsche 1969 Vice Dr. Fritzsche, 75, was a professor of
President and physics at the University of Chicago
Director from 1957 until his retirement in
1996. He was chairman of the
Department of Physics at the
University of Chicago until 1986.
Dr. Fritzsche has been a vice
president of ECD since 1965,
acting on a part-time basis,
chiefly in ECD's research and
product development activities.
He serves on the Board of
Directors of United Solar.
Walter J. McCarthy, Jr. 1995 Director Mr. McCarthy, 77, until his retirement
in 1990, was the chairman and chief
executive officer of Detroit Edison
Company. Prior to his election to the
ECD Board, he served as a consultant to
ECD. Mr. McCarthy also served as a
director and a member of the Audit
Committee of Comerica Bank,
Federal-Mogul Corporation and Perry
Drug Company. He is a member of the
National Academy of Engineering. Mr.
McCarthy serves as chairman of the
Compensation Committee and is on the
Audit Committee of the ECD Board.
Florence I. Metz 1995 Director Dr. Metz, 73, until her retirement in
1996, held various executive positions
with Inland Steel: General Manager, New
Ventures, Inland Steel Company
(1989-1991); General Manager, New
Ventures, Inland Steel Industries
(1991-1992) and Advanced Graphite
Technologies (1992-1993); Program
Manager for Business and Strategic
Planning at Inland Steel (1993-1996).
Dr. Metz also serves on the Board of
Directors of Ovonic Battery and is on
the Compensation and Audit Committees
of the ECD Board.
6
James R. Metzger 2000 Director Mr. Metzger, 55, is Vice Chairman of
the Board of Directors of ECD. Prior
to joining ECD as an employee on
November 1, 2002, he was Executive Vice
President of Administration at Mercy
College in Dobbs Ferry, New York from
March 1, 2002 - October 31, 2002.
Prior to his retirement from
ChevronTexaco on March 1, 2002
following the merger of Chevron and
Texaco on October 9, 2001, he was Vice
President and Chief Technology Officer
at Texaco Inc. and held various
positions since joining Texaco in
1969. Mr. Metzger's responsibilities
at Texaco included all aspects of
technology, Corporate Planning and
Economics, Safety, Health and
Environment, Corporate Services and
Purchasing. He was a member of the
Diversity Council, chaired the
Corporate Technology Council and served
on Texaco's Executive Council, the
company's senior management committee.
Donald L. Paul 2001 Director Mr. Paul, 56, is Vice President and
Chief Technology Officer of
ChevronTexaco. Previously, he served
as Vice President of Technology and
Environmental Affairs for Chevron
Corp., a position he assumed in 1996,
in which role he was also the corporate
officer for Chevron's worldwide health,
safety and environmental compliance
function. Mr. Paul joined Chevron in
1975 as a research geophysicist with
Chevron Oil Field Research Co. and has
held a variety of management positions
in both business and technology,
including president of Chevron
Petroleum Technology Co. and president
of Chevron Canada. Mr. Paul holds a
doctorate in geophysics from MIT.
Stanley K. Stynes 1977 Director Dr. Stynes, 71, was Dean, College of
Engineering at Wayne State University
from 1970 to August 1985, and a
professor of engineering at Wayne State
University from 1985 until his
retirement in 1992. He has been
involved in various administrative,
teaching, research and related
activities. Dr. Stynes serves as
chairman of the Audit Committee of the
ECD Board.
7
Greg M. Vesey 2001 Director Mr. Vesey, 44, is President of
ChevronTexaco Technology Ventures. In
this position, he is responsible for
the commercialization of both internal
and external technologies in which
ChevronTexaco finds current or
strategic applications. Previously, he
was Vice President, ebusiness and
General Manager, Business Service
Center for Texaco Inc., a position he
assumed in November 1999. He has held
many positions since joining Texaco in
1984, including assistant to the
Chairman of the Board (1999). Mr.
Vesey is a member of the Management
Committee of Texaco Ovonic Fuel Cell,
Texaco Ovonic Hydrogen Systems and
Texaco Ovonic Battery Systems.
MEETINGS OF THE BOARD OF DIRECTORS AND COMPENSATION OF DIRECTORS
During the fiscal year ended June 30, 2002, the Board of Directors held
five meetings. All the directors attended more than 75% of the meetings of the
Board and the committees on which such directors served, except for Drs.
Fritzsche and Stynes.
Officers of ECD who serve on ECD's Board do not receive compensation for
their services as a director. The other directors of the Company are issued
approximately $5,000 per year in ECD Common Stock based on the closing price of
the Common Stock on the first business day of each year and are paid $1,000 for
attendance at each Board meeting and each Compensation Committee meeting (in
person or via telephone conference call). Effective February 2002, directors
serving on the Audit Committee are paid $2,000 for attendance (in person or via
telephone conference call) at each meeting ($1,000 prior to February 2002).
Directors who are not employed by the Company are also reimbursed for all
expenses incurred for the purpose of attending board of directors and committee
meetings, including airfare, mileage, parking, transportation and hotel. During
the year ended June 30, 2002, Mr. Metzger received options to purchase 10,000
shares of ECD Common Stock at $19.31 per share, the fair market value of the
stock on the day of the grant. Messrs. Paul and Vesey have waived any
entitlement to compensation for serving as directors of ECD.
COMMITTEES OF THE BOARD OF DIRECTORS
The Audit Committee of the Board of Directors (the "Audit Committee")
is composed of Dr. Stanley K. Stynes (Chairman), Mr. Walter J. McCarthy, Jr.
and Dr. Florence Metz (since May 2001), all of whom are independent directors
as defined under Rule 4200(a)(14) of the Listing Standards of the National
Association of Security Dealers, Inc. ("NASD"). Mr. James Metzger was a
member of the Audit Committee from February 2001 through October 31, 2002.
He became an employee and vice chairman of the Board of Directors of ECD
effective November 1, 2002 and, therefore, is not deemed to be independent
under Nasdaq rules.
In accordance with its written charter adopted by the Board of Directors
and filed with the Proxy Statement dated January 19, 2001, the Audit Committee
assists the Board of Directors in fulfilling its responsibility for oversight of
the quality and integrity of the accounting, auditing, and financial reporting
practices of ECD.
8
The Compensation Committee of the Board of Directors (the "Compensation
Committee") met three times during the fiscal year ended June 30, 2002 and was
composed of Mr. Walter J. McCarthy, Jr. (Chairman) and Dr. Florence I. Metz. The
Compensation Committee is responsible for administering the policies which
govern both annual compensation of executive officers and the Company's stock
option plans. The Compensation Committee meets during the year to review
recommendations from management regarding stock options and compensation. None
of the Compensation Committee members are, or were during the past fiscal year,
officers or employees of the Company or of any of its subsidiaries, nor had they
any business relationship with the Company or any of its subsidiaries.
The Company does not have a standing nominating committee.
AUDIT COMMITTEE REPORT
The Audit Committee is comprised of three outside directors, all of whom
presently are independent under the rules of the Nasdaq Stock Market, Inc. Until
October 31, 2002, the Audit Committee was comprised of four outside directors.
Mr. Metzger, formerly a member of the Audit Committee, is no longer deemed to be
independent under Nasdaq rules when he became an employee and vice chairman of
the Company effective November 1, 2002.
In accordance with its written charter adopted by the Board of Directors,
the Audit Committee assists the Board of Directors in fulfilling its
responsibility for oversight of the quality and integrity of the accounting,
auditing, and financial reporting practices of the Company. During fiscal year
2002, the Audit Committee met five times with management and the independent
auditors, Deloitte & Touche LLP (Deloitte) and discussed the interim financial
information contained in each quarterly earnings report prior to public release.
In discharging its oversight responsibility as to the audit process, the
Audit Committee obtained from Deloitte a formal written statement describing all
relationships between Deloitte and the Company that might bear on the auditors'
independence consistent with Independence Standards Board Standard No. 1,
"Independence Discussions with Audit Committees," discussed with the auditors
any relationships that may impact their objectivity and independence and
satisfied itself as to the auditors' independence. The Audit Committee also
discussed with management and Deloitte the quality and adequacy of the Company's
internal controls. The Audit Committee reviewed with Deloitte their audit plans,
audit scope, and identification of audit risks.
The Audit Committee discussed and reviewed with Deloitte all
communications required by generally accepted auditing standards, including
those described in Statement on Auditing Standards No. 61, as amended,
"Communication with Audit Committees," and, with and without management present,
discussed and reviewed the results of Deloitte's examination of the financial
statements.
The Audit Committee reviewed with management and Deloitte the audited
financial statements of the Company as of and for the fiscal year ended June 30,
2002. Management has the responsibility for the preparation of the Company's
financial statements and Deloitte has the responsibility for the examination of
those statements.
Based on the above-mentioned reviews and discussions with management and
Deloitte, the Audit Committee recommended to the Board of Directors that the
Company's audited
9
financial statements be included in its Annual Report on Form 10-K for the
fiscal year ended June 30, 2002, for filing with the Securities and Exchange
Commission.
AUDIT FEES
The aggregate fees billed or expected to be billed to the Company for the
fiscal year ended June 30, 2002 by the Company's principal accounting firm,
Deloitte & Touche LLP, are as follows:
Audit Fees ..................................................... $ 374,000
Financial Information Systems Design and Implementation Fees..... -0-
All Other Fees................................................... 135,000
---------
Total................................................... $ 509,000
The Audit Committee, based on its reviews and discussions with management
and Deloitte noted above, determined that the provision of All Other Fees by
Deloitte was compatible with maintaining Deloitte's independence.
AUDIT COMMITTEE
Stanley K. Stynes, Chairman
Walter J. McCarthy Jr.
Florence I. Metz
10
ITEM NO. 2
APPROVAL OF THE APPOINTMENT OF INDEPENDENT ACCOUNTANTS
Upon the recommendation of the Audit Committee, the Board of Directors has
appointed Deloitte & Touche LLP as independent accountants for the Company to
audit its consolidated financial statements for the fiscal year ending June 30,
2003 and to perform audit-related services. Such services include review of
periodic reports and registration statements filed by the Company with the
Securities and Exchange Commission and consultation in connection with various
accounting and financial reporting matters. Deloitte & Touche also performs
audit services for certain of the Company's joint ventures and limited non-audit
services for the Company.
The Board of Directors has directed that the appointment of Deloitte &
Touche be submitted to the stockholders for approval. The affirmative vote of a
majority of the votes cast at the Meeting will be required to approve such
appointment. If the stockholders should not approve such appointment, the Audit
Committee and the Board of Directors would reconsider the appointment.
The Company has been advised by Deloitte & Touche that it expects to have
a representative present at the Meeting and that such representative will be
available to respond to appropriate questions. Such representative will also
have the opportunity to make a statement if he or she desires to do so.
----------
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
APPROVAL OF THE APPOINTMENT OF DELOITTE & TOUCHE AS INDEPENDENT ACCOUNTANTS.
11
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS
Equity Compensation Plan Information
The following table sets forth aggregate information regarding grants
under all equity compensation plans of ECD as of June 30, 2002.
[Enlarge/Download Table]
Number of Number of securities
securities to be remaining available for
issued upon Weighted-average future issuance under
exercise of out- exercise price of equity compensation
standing op- outstanding plans (excluding securi-
tions, warrants options, warrants ties reflected in 1st
Plan category and rights and rights column)
--------------------------- --------------- ----------------- ------------------------
Equity compensation plans
approved by security holders(1) 2,531,753 $18.67 1,784,605
Equity compensation plans not
approved by security holders 959,749(2)(3) $13.55 (2)(3)
Total 3,491,502 $17.26 1,784,605
---------------
(1) These plans consist of: (i) the 1976 Amended and Restated Stock Option
Plan, (ii) the 1987 Stock Option and Incentive Plan, (iii) the 1995
Non-Qualified Stock Option Plan and (iv) the 2000 Non-Qualified Stock
Option Plan.
(2) Of the 959,749 shares issuable upon exercise, options to acquire 659,749
shares were issued to Mr. and Dr. Ovshinsky pursuant to Stock Option
Agreements dated November 1993 which are subject to periodic antidilution
protection adjustments based on changes in the number of outstanding shares
of ECD Common Stock. Under those Stock Option Agreements, if ECD issues any
equity securities, other than pursuant to the exercising of options by Mr.
and Dr. Ovshinsky under their respective Stock Option Agreements, ECD is
obligated to grant to Mr. and Dr. Ovshinsky additional options covering
sufficient additional shares of ECD Common Stock so that their respective
proportionate equity interest in ECD as of November 1993 is maintained on a
fully-diluted basis. Such adjustments are calculated quarterly as of the
last day of each of ECD's fiscal quarters and coincident with significant
issuances of ECD Common Stock.
(3) Of the 959,749 shares issuable upon exercise, options to acquire 300,000
shares were issued to Mr. Robert Stempel pursuant to a Stock Option
Agreement dated January 15, 1999. There are no securities available for
future issuance under this Stock Option Agreement.
12
Security Ownership of Certain Beneficial Owners and Management
CLASS A COMMON STOCK
Mr. Stanford R. Ovshinsky and his wife, Dr. Iris M. Ovshinsky (executive
officers, directors and founders of ECD), own of record 153,420 shares and
65,601 shares, respectively (or approximately 69.8% and 29.8%, respectively), of
the outstanding shares of Class A Common Stock. Such shares are owned directly
or indirectly through certain trusts of which Mr. and Dr. Ovshinsky are
co-trustees. Common Stock is entitled to one vote per share and each share of
Class A Common Stock is entitled to 25 votes per share. Class A Common Stock is
convertible into Common Stock on a share-for-share basis at any time and from
time to time at the option of the holders, and will be deemed to be converted
into Common Stock on a share-for-share basis on September 30, 2005. Under
applicable Delaware law, the September 30, 2005 mandatory conversion date may be
extended in the future from time to time with approval of ECD's stockholders
voting together as a single class.
As of December 31, 2002, Mr. Ovshinsky also had the right to vote 126,500
shares of Common Stock (Sanoh Shares) owned by Sanoh Industrial Co., Ltd.
(Sanoh) under the terms of an agreement dated as of November 3, 1992 between ECD
and Sanoh which, together with the Class A Common Stock and 19,749 shares of
Common Stock Mr. and Dr. Ovshinsky own, give Mr. and Dr. Ovshinsky voting
control over shares representing approximately 20.69% of the combined voting
power of ECD's outstanding stock.
The following table sets forth, as of December 31, 2002, information
concerning the beneficial ownership of Class A Common Stock by each director and
all executive officers and directors of ECD as a group. All shares are owned
directly except as otherwise indicated. Under the rules of the Securities and
Exchange Commission, Stanford R. Ovshinsky and Iris M. Ovshinsky may each be
considered to beneficially own the shares held by the other.
Class A
Common Stock Total Number Percentage
Name of Beneficially of Shares of
Beneficial Owner Owned(1)(2) Beneficially Owned Class
------------------ --------------- ------------------ ------------
Stanford R. Ovshinsky 153,420 153,420 69.8%
Iris M. Ovshinsky 65,601 65,601 29.8%
All other executive
officers and directors
as a group (12 persons) -- -- --
-------- ------- -----
Total 219,021 219,021 99.6%
======== ======= =====
---------------
(1) The balance of the 219,913 shares of Class A Common Stock outstanding, 892
shares, or approximately 0.4%, are owned by other members of Mr. and Dr.
Ovshinsky's family. Neither Mr. nor Dr. Ovshinsky has voting or investment
power with respect to such shares.
13
(2) On November 10, 1995, the Compensation Committee recommended, and the
Board of Directors approved, an amendment to Mr. and Dr. Ovshinsky's Stock
Option Agreements dated November 18, 1993 (the "Agreements") to permit Mr.
and Dr. Ovshinsky to exercise a portion (126,082 and 84,055 shares,
respectively) of their existing Common Stock option for Class A Common
Stock on the same terms and conditions as provided in the Agreements. The
shares of Class A Common Stock issuable upon exercise of the options under
the Agreements, as amended, are not included in the number of shares
indicated in the above table, but are included in the shares of Common
Stock beneficially owned by Mr. and Dr. Ovshinsky (see table of beneficial
ownership of Common Stock).
CLASS B COMMON STOCK
At the Company's Annual Meeting held on March 25, 1999, the Company's
stockholders approved a proposal to increase the Company's authorized capital
stock and to authorize 430,000 shares of a new Class B Common Stock. All of the
authorized shares of Class B Common Stock were awarded to Mr. Robert C. Stempel
pursuant to the terms of a Restricted Stock Agreement dated as of January 15,
1999 between the Company and Mr. Stempel.
The terms of the Class B Common Stock are substantially similar to those
of the Company's Class A Common Stock. The principal difference between the
Class A Common Stock and the Class B Common Stock is with respect to voting
rights. Each share of Class B Common Stock will initially entitle the holder to
one vote on all matters to be voted upon by the Company's stockholders. However,
each share of Class B Common Stock will become entitled to 25 votes as of the
first date upon which all of the outstanding shares of Class A Common Stock have
been converted into Common Stock and no shares of Class A Common Stock are
outstanding. The preferential voting rights of the Class B Common Stock, if
triggered, will expire on September 30, 2005.
The Class B Common Stock will be convertible into Common Stock on a
share-for-share basis at any time at the option of the holder. In addition, the
Class B Common Stock will be deemed to be converted into Common Stock on
September 30, 2005. The Company's amended Certificate of Incorporation provides
that the foregoing September 30, 2005 mandatory conversion date may be extended
in the future with the approval of the Company's stockholders voting together as
a single class.
Pursuant to the Stock Purchase Agreement dated as of May 1, 2000,
ChevronTexaco has agreed that (i) so long as it beneficially owns an aggregate
of 5% of ECD's Common Stock and (ii) so long as Mr. and Dr. Ovshinsky are the
beneficial owners of Class A Common Stock, or Mr. Stempel is the beneficial
owner of Class B Common Stock, ChevronTexaco will vote its shares of ECD Common
Stock in accordance with the votes cast by the holders of Class A Common Stock
(prior to its conversion) or Class B Common Stock (after conversion of the Class
A Common Stock). As of December 31, 2002, Chevron Texaco owns 4,376,633 shares
of ECD Common Stock.
14
COMMON STOCK
Directors and Executive Officers. The following table sets forth, as of
December 31, 2002, information concerning the beneficial ownership of Common
Stock by each director and executive officer and for all directors and executive
officers of the Company as a group. All shares are owned directly except as
otherwise indicated.
Amount and Nature of Percentage
Name of Beneficial Owner Beneficial Ownership(1) of Class(2)
---------------------------------- ----------------------- -------------
Robert C. Stempel 1,127,904 (3) 5.05%
Stanford R. Ovshinsky 928,616 (4) 4.21%
Iris M. Ovshinsky 506,248 (5) 2.33%
Nancy M. Bacon 207,615 (6) *
Subhash K. Dhar 72,540 (7) *
Hellmut Fritzsche 21,250 (8) *
Stephan W. Zumsteg 18,800 (9) *
Walter J. McCarthy, Jr. 15,699 (10) *
Stanley K. Stynes 14,580 (11) *
Florence I. Metz 12,396 (12) *
Umberto Colombo 10,663 (13) *
James R. Metzger 6,500 (14) *
Donald L. Paul _
Greg M. Vesey _
All executive officers and directors
as a group (14 persons) 2,942,811 12.31%
========= ======
---------------
* Less than 1%.
(1) Under the rules and regulations of the Securities and Exchange
Commission, a person is deemed to be the beneficial owner of a
security if that person has the right to acquire beneficial
ownership of such security within sixty days, whether through the
exercise of options or warrants or through the conversion of another
security.
(2) Under the rules and regulations of the Securities and Exchange
Commission, shares of Common Stock issuable upon exercise of options
and warrants or upon conversion of securities which are deemed to be
beneficially owned by the holder thereof (see Note (1) above) are
deemed to be outstanding for the purpose of computing the percentage
of outstanding securities of the class owned by such person but are
not deemed to be outstanding for the purpose of computing the
percentage of the class owned by any other person.
(3) Includes 430,000 shares of Class B Common Stock and 636,000 shares
represented by options exercisable within 60 days.
15
(4) Includes 636,456 shares (adjusted as of June 30, 2002) represented
by options exercisable within 60 days, the 126,500 Sanoh Shares over
which Mr. Ovshinsky has voting power and 153,420 shares of Class A
Common Stock which are convertible into Common Stock. Under the
rules and regulations of the Securities and Exchange Commission, Mr.
Ovshinsky may be deemed a beneficial owner of the shares of Common
Stock and Class A Common Stock owned by his wife, Iris M. Ovshinsky.
Such shares are not reflected in Mr. Ovshinsky's share ownership in
this table.
(5) Includes 433,138 shares (adjusted as of June 30, 2002) represented
by options exercisable within 60 days and 65,601 shares of Class A
Common Stock which are convertible into Common Stock. Under the
rules and regulations of the Securities and Exchange Commission, Dr.
Ovshinsky may be deemed a beneficial owner of the shares of Common
Stock and Class A Common Stock owned by her husband, Stanford R.
Ovshinsky. Such shares are not reflected in Dr. Ovshinsky's share
ownership in this table.
(6) Includes 182,600 shares represented by options exercisable within 60
days.
(7) Includes 71,040 shares represented by options exercisable within 60
days.
(8) Includes 11,388 shares represented by options exercisable within 60
days.
(9) Includes 16,800 shares represented by options exercisable within 60
days.
(10) Includes 2,000 shares represented by options exercisable within 60
days.
(11) Includes 2,000 shares represented by options exercisable within 60
days.
(12) Includes 5,000 shares represented by options exercisable within 60
days.
(13) Includes 7,000 shares represented by options exercisable within 60
days.
(14) Includes 4,000 shares represented by options exercisable within 60
days.
16
Principal Shareholders. The following table sets forth, as of December 31,
2002, to the knowledge of the Company, the beneficial holders of more than 5%
of the Company's Common Stock (see footnotes for calculation used to determine
"percentage of class" category):
Name and Address of Amount and Nature of Percentage of
Beneficial Holder Beneficial Ownership Class(1)
------------------------------ ---------------------- -----------------
TRMI Holdings Inc. (ChevronTexaco)
6001 Bollinger Canyon Road
San Ramon, CA 94583 4,376,633 (2) 19.99%
Stanford R. and Iris M. Ovshinsky
2956 Waterview Drive
Rochester Hills, MI 48309 1,434,864 (3) 6.54% (4)
Robert C. Stempel
2956 Waterview Drive 1,127,904 (5) 5.02%
Rochester Hills, MI 48309
---------------
(1) Under the rules and regulations of the Securities and Exchange Commission,
shares of Common Stock issuable upon exercise of options and warrants or
upon conversion of securities which are deemed to be beneficially owned by
the holder thereof are deemed to be outstanding for the purpose of
computing the percentage of outstanding securities of the class owned by
such person, but are not deemed to be outstanding for the purpose of
computing the percentage of the class owned by any other person.
(2) Pursuant to the Stock Purchase Agreement dated as of May 1, 2000,
ChevronTexaco has agreed that (i) so long as it beneficially owns an
aggregate of 5% of ECD's Common Stock and (ii) so long as Mr. and Dr.
Ovshinsky are the beneficial owners of Class A Common Stock, or Mr.
Stempel is the beneficial owner of Class B Common Stock, ChevronTexaco
will vote its ECD Common Stock in accordance with the votes cast by the
holders of Class A Common Stock (prior to its conversion) or Class B
Common Stock (after conversion of the Class A Common Stock). TRMI
Holdings' percentage of class is computed based on 21,249,082 shares of
Common Stock outstanding, 219,913 shares of Class A Common Stock
outstanding and 430,000 shares of Class B Common Stock outstanding.
(3) Includes 219,021 shares of Class A Common Stock owned by Mr. and Dr.
Ovshinsky (which shares are convertible at any time into Common Stock and
will be deemed to be converted into Common Stock on September 30, 2005),
19,749 shares of Common Stock owned by Mr. and Dr. Ovshinsky, 126,500
shares of Sanoh Shares over which Mr. Ovshinsky has voting rights, and
1,069,594 (adjusted as of June 30, 2002) shares represented by options
exercisable within 60 days.
(4) Represents the sum of Mr. and Dr. Ovshinsky's respective ownership
interests calculated separately.
(5) Includes 430,000 shares of Class B Common Stock owned by Mr. Stempel
(which shares are convertible at any time into Common Stock and will be
deemed to be converted into Common Stock on September 30, 2005), 61,404
shares of Common Stock and 636,500 shares represented by options
exercisable within 60 days.
17
EXECUTIVE OFFICERS
The executive officers of the Company are as follows:
Served As An
Executive
Officer or
Name Age Office Director Since
----------------- ----- ---------------------------- ---------------
Stanford R. Ovshinsky 80 President, Chief Executive 1960 (1)
Officer and Director
Iris M. Ovshinsky 75 Vice President and Director 1960 (1)
Robert C. Stempel 69 Executive Director and 1995
Chairman of the Board
Nancy M. Bacon 56 Senior Vice President and 1976
Director
Hellmut Fritzsche 75 Vice President and Director 1969
Subhash K. Dhar 51 President and Chief Operating 1986
Officer of Ovonic Battery and
Director
James R. Metzger 55 Vice Chairman 2002
Stephan W. Zumsteg 56 Vice President and Chief 1997
Financial Officer
---------------
(1)The predecessor of ECD was originally founded in 1960. The present
corporation was incorporated in 1964 and is the successor by merger of the
predecessor corporation.
See "Item No. 1, Election of Directors" for information relating to
Stanford R. Ovshinsky, Iris M. Ovshinsky, Robert C. Stempel, Nancy M. Bacon,
Subhash K. Dhar, Hellmut Fritzsche and James R. Metzger.
Stephan W. Zumsteg joined ECD in March 1997. He was elected treasurer in
April 1997 and vice president and chief financial officer in February 2001. Mr.
Zumsteg also serves as treasurer of Ovonic Battery, Texaco Ovonic Fuel Cell and
Texaco Ovonic Hydrogen Systems. Prior to joining ECD, Mr. Zumsteg was chief
financial officer of the Kirlin Company from July 1996 to February 1997 and vice
president of finance & administration and chief financial officer of Lincoln
Brass Works from July 1991 to June 1996.
18
COMPLIANCE WITH SECTION 16(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and officers to file with the Securities and Exchange
Commission reports of ownership and changes in ownership with respect to the
securities of the Company and its affiliates and to furnish copies of these
reports to the Company. Based on a review of these reports and written
representations from the Company's directors and officers regarding the
necessity of filing a report, the Company believes that during fiscal year ended
June 30, 2002, all filing requirements were met on a timely basis.
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid to ECD's Chief
Executive Officer and the next four most highly compensated executive officers
for the fiscal years ended June 30, 2002, 2001 and 2000.
[Enlarge/Download Table]
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
--------------------------- ----------------------------------
All
Restricted Options Other
Name and Principal Fiscal Stock (Number of Compen-
Position Year(1) Salary(2) Bonus Award Shares) sation(3)
----------------------- ------- --------- ------- ---------- ---------- ---------
Stanford R. Ovshinsky, 2002 $349,713 $24,076 44,530(4) $12,362
President and Chief 2001 $334,408 118,239(5) $10,361
Executive Officer 2000 $303,908 106,611(4) $12,657
Iris M. Ovshinsky, 2002 $299,730 29,687(4) $12,362
Vice President 2001 $284,636 82,160(5) $10,361
2000 $265,918 71,074(4) $12,657
Robert C. Stempel, 2002 $294,247 25,000 $ 4,191
Chairman and 2001 $270,004 100,000 $ 4,191
Executive Director(6) 2000 $270,004 _ $ 5,035
Nancy M. Bacon, 2002 $275,017 12,000 $ 8,942
Senior Vice President 2001 $264,243 60,000 $ 6,041
2000 $255,008 _ $ 6,538
Subhash K. Dhar, 2002 $274,241 10,000 $ 8,111
President and Chief 2001 $247,703 50,000 $ 5,528
Operating Officer, 2000 $224,421 _ $ 5,829
Ovonic Battery
---------------
19
(1) ECD's fiscal year is July 1 to June 30. ECD's 2002 fiscal year ended
June 30, 2002.
(2) Amounts shown include compensation deferred under ECD's 401 (k) Plan.
(3) "All Other Compensation" is comprised of (i) contributions made by ECD to
the accounts of each of Mr. Ovshinsky, Dr. Ovshinsky, Mrs. Bacon and Mr.
Dhar in the amount of $6,800 under ECD's 401(k) Plan with respect to
calendar year ended December 31, 2001 and $4,800 with respect to each of the
calendar years ended December 31, 2000 and 1999; (ii) the dollar value of
any life insurance premiums paid by ECD in the fiscal year ended June 30,
2002 and calendar years ended December 31, 2000 and 1999 with respect to
term-life insurance for the benefit of each of the named executives as
follows: Mr. Ovshinsky $5,562, $5,561 and $7,857; Dr. Ovshinsky $5,562,
$5,561 and $7,857; Mr. Stempel $4,191, $4,191 and $5,035; Mrs. Bacon $2,142,
$1,241 and $1,738; Mr. Dhar $1,311, $728 and $1,029. Under the 401 (k) Plan,
which is a qualified defined-contribution plan, ECD makes matching
contributions periodically on behalf of the participants. Effective October
2000, the Board of Directors approved employer matching contribution in the
amount of 100% of the first 2% and 50% of the next 4% of each such
participant's contributions. These matching contributions were limited to
4% of a participant's salary, up to $170,000, for calendar year 2001 and 3%
of salary, up to $160,000, for calendar years 2000 and 1999. Mr. Stempel
does not participate in the Company's 401(k) plan.
(4) The stock options were issued to Mr. and Dr. Ovshinsky pursuant to Stock
Option Agreements dated November 1993 which are subject to periodic
antidilution protection adjustments based on changes in the number of
outstanding shares of ECD Common Stock. Under those Stock Option Agreements,
if ECD issues any equity securities, other than pursuant to the exercising
of options by Mr. and Dr. Ovshinsky under their respective Stock Option
Agreements, ECD is obligated to grant to Mr. and Dr. Ovshinsky additional
options covering sufficient additional shares of ECD Common Stock so that
their respective proportionate equity interest is maintained on a fully-
diluted basis. Such adjustments are calculated quarterly as of the last
day of each of our fiscal quarters and coincident with significant issuances
of ECD Common Stock.
(5) In fiscal year 2001, of the stock options issued to Mr. and Dr. Ovshinsky in
the amount of 118,239 shares and 82,160 shares, respectively, 18,239 shares
(Mr. Ovshinsky) and 12,160 shares (Dr. Ovshinsky) were issued pursuant to
Stock Option Agreements dated November 1993 which are subject to periodic
antidilution protection adjustments based on changes in the number of
outstanding shares of ECD Common Stock. The balance of the stock options
issued to Mr. and Dr. Ovshinsky (100,000 shares and 70,000 shares,
respectively) were granted under the 2000 Non-Qualified Stock Option Plan.
(6) See Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters for a description of Class B Common Stock
awarded to Mr. Stempel under a Restricted Stock Agreement dated January 15,
1999. All shares of Restricted Stock will be deemed to vest if Mr. Stempel
is serving as a director and officer of ECD on September 30, 2005 or upon
the occurrence of a change in control of ECD.
20
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth all options granted to the named executive
officers during the fiscal year ended June 30, 2002.
[Enlarge/Download Table]
Individual Grants
--------------------------------------------------------- Potential Realizable Value at
Number of Percent of Assumed Annual Rates of
Securities Total Stock Price Appreciation for
Underlying Options Exercise Option Term(1)
Options Granted of Base ----------------------------
Granted to Employees Price Expiration
Name (#) in Fiscal Year ($/Sh) Date 5% 10%
----------------------- ---------- --------------- --------- ---------- ------------ -------------
Stanford R. Ovshinsky 44,530(2) 22.93% $20.38(3) (4) $570,717 $1,446,310
Iris M. Ovshinsky 29,687(2) 15.29% $20.38(3) (4) $380,482 $964,217
Robert C. Stempel 25,000 12.87% $23.36 7/31/11 $367,274 $930,745
Nancy M. Bacon 12,000 6.18% $23.36 7/31/11 $176,291 $446,757
Subhash K. Dhar 10,000 5.15% $23.36 7/31/11 $146,909 $372,298
-------
(1) The potential realizable value amounts shown illustrate the values that
might be realized upon exercise immediately prior to the expiration of
their term using 5% and 10% appreciation rates as required to be used
in this table by the Securities and Exchange Commission, compounded
annually, and are not intended to forecast possible future appreciation,
if any, of the Company's stock price. Additionally, these values do not
take into consideration the provisions of the options providing for
nontransferability or termination of the options following termination
of employment.
(2) The stock options were issued to Mr. and Dr. Ovshinsky pursuant to Stock
Option Agreements dated November 1993 which are subject to periodic
antidilution protection adjustments based on changes in the number of
outstanding shares of ECD Common Stock.
(3) The exercise price is the weighted average exercise price of the stock
options granted in fiscal year 2002.
(4) November 18, 2003 or 12 months after termination of employment, whichever
is later.
21
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR END OPTION VALUES
The following table sets forth all stock options exercised by the named
executives during the fiscal year ended June 30, 2002, and the number and value
of unexercised options held by the named executive officers at fiscal year end.
[Enlarge/Download Table]
Shares Number of Securities
Acquired Underlying Unexercised Value of Unexercised
on Value Options at Fiscal in-the-Money Options
Exercise Realized Year End at Fiscal Year End
Name (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable
-------------------------- --------- -------- ------------------------- ---------------------------
Stanford R. Ovshinsky(1) - - 636,456/60,000 $850,163/$0
Iris M. Ovshinsky(2) - - 433,138/42,000 $540,222/$0
Robert C. Stempel(3) - - 629,000/75,000 $1,245,260/$0
Nancy M. Bacon(4) - - 179,000/43,200 $477,638/$0
Subhash K. Dhar(5) - - 68,040/36,000 $0/$0
----------
(1) Mr. Ovshinsky's exercisable and unexercisable options are exercisable at
a weighted average price of $14.35 and $22.63 per share, respectively.
(2) Dr. Ovshinsky's exercisable and unexercisable options are exercisable at
a weighted average price of $14.44 and $22.63 per share, respectively.
(3) Mr. Stempel's exercisable and unexercisable options are exercisable at a
weighted average price of $13.71 and $22.77 per share, respectively.
(4) Mrs. Bacon's exercisable and unexercisable options are exercisable at a
weighted average price of $14.78 and $22.75 per share, respectively.
(5) Mr. Dhar's exercisable and unexercisable options are exercisable at a
weighted average price of $18.87 and $22.75 per share, respectively.
22
EMPLOYMENT AGREEMENTS
On September 2, 1993, Stanford R. Ovshinsky entered into separate
employment agreements with each of ECD and Ovonic Battery in order to define
clearly his duties and compensation arrangements and to provide to each company
the benefits of his management efforts and future inventions. The initial term
of each employment agreement was six years. In February 1999, the Board of
Directors of ECD and Ovonic Battery renewed each of Mr. Ovshinsky's employment
agreements for an additional term ending September 30, 2005. Mr. Ovshinsky's
employment agreement with ECD provides for an annual salary of not less than
$100,000, while his agreement with Ovonic Battery provides for an annual salary
of not less than $150,000. Both agreements provide for annual increases to
reflect increases in the cost of living, discretionary annual increases and an
annual bonus equal to 1% of pre-tax income of ECD (excluding Ovonic Battery) and
1% of the operating income of Ovonic Battery. Mr. Ovshinsky's annual salary
increases for fiscal year 2000 was determined based upon increases in the cost
of living as determined by the Compensation Committee using as a guide the
percentage increase in the Consumer Price Index for the Detroit-metropolitan
area published by the Bureau of Labor Statistics. In recognition and
acknowledgement of Mr. Ovshinsky's invaluable contributions, the Compensation
Committee determined that Mr. Ovshinsky's salary increase in fiscal years 2002
and 2001 should be above the nominal cost-of-living increase.
Mr. Ovshinsky's employment agreement with Ovonic Battery additionally
contains a power of attorney and proxy from ECD providing Mr. Ovshinsky with the
right to vote the shares of Ovonic Battery held by ECD following a change in
control of ECD. For purposes of the agreement, change in control means (i) any
sale, lease, exchange or other transfer of all or substantially all of ECD's
assets; (ii) the approval by ECD's stockholders of any plan or proposal of
liquidation or dissolution of ECD; (iii) the consummation of any consolidation
or merger of ECD in which ECD is not the surviving or continuing corporation;
(iv) the acquisition by any person of 30% or more of the combined voting power
of the then outstanding securities having the right to vote for the election of
directors; (v) changes in the constitution of the majority of the Board of
Directors; (vi) the holders of the Class A Common Stock ceasing to be entitled
to exercise their preferential voting rights other than as provided in ECD's
charter and (vii) bankruptcy. In the event of mental or physical disability or
death of Mr. Ovshinsky, the foregoing power of attorney and proxy will be
exercised by Dr. Iris M. Ovshinsky.
Pursuant to his employment agreement with Ovonic Battery, Mr. Ovshinsky
was granted stock options, exercisable at a price of $16,129 per share to
purchase 186 shares (adjusted from a price of $50,000 per share to purchase 60
shares pursuant to the anti-dilution provisions of the option agreement) of
Ovonic Battery's common stock, representing approximately 6% of Ovonic Battery's
outstanding common stock. The Ovonic Battery stock options vested on a quarterly
basis over six years commencing with the quarter beginning October 1, 1993, and
are now fully vested.
In February 1998, the Compensation Committee of the Board of Directors
recommended and the Board of Directors approved an Employment Agreement between
ECD and Dr. Iris M. Ovshinsky. The purpose of the Employment Agreement is to
clearly define Dr. Ovshinsky's duties and compensation arrangements. The
Employment Agreement also provides for ECD to have the benefits of Dr.
Ovshinsky's services as a consultant to ECD following the termination of her
active employment for consulting fees equal to 50% of the salary payable to Dr.
Ovshinsky at the date of the termination of her active employment. Dr. Ovshinsky
shall have the right to retire at any time during her services as a consultant
and receive retirement benefits equal to the consulting fees for the remainder
of Dr. Ovshinsky's life.
23
The initial term of Dr. Ovshinsky's employment period was until September
2, 1999 and is automatically renewed for successive one-year periods unless
terminated by Dr. Ovshinsky or ECD upon 120 days' notice in advance of the
renewal date. Dr. Ovshinsky's employment agreement provides for an annual salary
of not less than $250,000, annual increases to reflect increases in the cost of
living and discretionary annual increases.
On January 15, 1999, ECD entered into an Executive Employment Agreement
with Mr. Stempel and a Restricted Stock Agreement awarding Mr. Stempel 430,000
shares of Class B Common Stock. See Class B Common Stock under Security
Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters. The Executive Employment Agreement provides that Mr. Stempel will serve
as the Executive Director of ECD for a term ending September 30, 2005. During
the term of his employment, Mr. Stempel will be entitled to receive an annual
salary as determined from time to time. The Executive Employment Agreement also
provides for discretionary bonuses based on Mr. Stempel's individual performance
and the financial performance of ECD. The Executive Employment Agreement also
requires ECD to provide Mr. Stempel with non-wage benefits of the type provided
generally by ECD to its senior executive officers.
The Executive Employment Agreement permits Mr. Stempel to retire as an
officer and employee of ECD and will permit him to resign his employment at any
time in the event he becomes subject to any mental or physical disability which,
in the good faith determination of Mr. Stempel, materially impairs his ability
to perform his regular duties as an officer of ECD. The Executive Employment
Agreement permits ECD to terminate Mr. Stempel's employment upon the occurrence
of certain defined events, including the material breach by Mr. Stempel of
certain non-competition and confidentiality covenants contained in the Executive
Employment Agreement, his conviction of certain criminal acts or his gross
dereliction or malfeasance of his duties as an officer and employee of ECD
(other than as a result of his death or mental or physical disability).
Mr. Stempel's entitlement to compensation and benefits under the Executive
Employment Agreement will generally cease effective upon the date of the
termination of his employment, except that ECD will be required to continue to
provide Mr. Stempel and his spouse with medical, disability and life insurance
coverage for the remainder of their lives or until the date they secure
comparable coverage provided by another employer.
24
COMPENSATION COMMITTEE REPORT
Compensation Committee
The Compensation Committee is composed of Mr. McCarthy (Chairman) and Dr.
Metz, both independent outside directors. Neither of the Compensation Committee
members is or was during the last fiscal year an officer or employee of ECD or
any of its subsidiaries, or had any business relationship with ECD or any of its
subsidiaries.
The Compensation Committee is responsible for administering the policies
which govern both annual compensation of executive officers and ECD's stock
option plans. The Compensation Committee meets several times during the year to
review recommendations from management regarding stock options and compensation.
Compensation and stock option recommendations are based upon performance,
current compensation, stock option ownership, and years of service to ECD. ECD
does not have a formal bonus program for executives, although it has awarded
bonuses to its executives from time to time.
Compensation of Executive Officers
The Compensation Committee considers ECD's financial position and other
factors in determining the compensation of its executive officers. These factors
include remaining competitive within the relevant hiring market-whether
scientific, managerial or otherwise-so as to enable ECD to attract and retain
high quality employees, and, where appropriate, linking a component of
compensation to the performance of ECD's Common Stock-such as by a granting of
stock option or similar equity-based compensation-to instill ownership thinking
and align the employees' and stockholders' objectives. ECD has been successful
at recruiting and retaining and motivating executives who are highly talented,
performance-focused and entrepreneurial.
During ECD's last fiscal year, the Compensation Committee determined that
ECD had again achieved several important scientific and business milestones. The
Compensation Committee also concluded that the achievement of these milestones
had not yet been fully reflected in ECD's financial results. However, the
Compensation Committee determined that it was advisable to raise executive base
salaries, and separately to grant stock options to certain executives. There
were no bonuses awarded to ECD executives for the fiscal year ended June 30,
2002.
Chief Executive Officer Compensation
In September 1993, Mr. Ovshinsky entered into separate employment
agreements with each of ECD and Ovonic Battery. The purpose of these agreements,
which provide for the payment to Mr. Ovshinsky of an annual salary of not less
than $250,000 by ECD and by Ovonic Battery, was to define clearly Mr.
Ovshinsky's duties and compensation arrangements and to provide to each company
the benefits of his management efforts and future inventions. See "Employment
Agreements." Mr. Ovshinsky's compensation for fiscal year 2002 was determined in
accordance with his Employment Agreements with ECD and Ovonic Battery and
included a discretionary increase above the nominal cost-of-living increase.
Based on Mr. Ovshinsky's employment agreement with ECD, he was entitled to a
bonus, paid in fiscal year 2002, based on ECD's financial performance in fiscal
year 2001.
COMPENSATION COMMITTEE
Walter J. McCarthy, Jr.
Florence I. Metz
25
PERFORMANCE GRAPH
Two line graphs are presented below.
The first graph compares the cumulative total stockholder return on ECD's
Common Stock over a five-year period ending June 30, 2001 with the return on the
NASDAQ Stock Market - U.S. Index, the JP Morgan H&Q Technology Index and the
Russell 2000 Index.
The JP Morgan H&Q Technology Index ceased publication in April 2002 and
therefore could not be used for measurement purposes for the entire period
ending June 30, 2002. In order to provide stockholders with a basis against
which to evaluate ECD's results consistent with the indices contained in the
2001 10-K, this first graph presents a comparison of ECD's stockholder return
with the Russell 2000 Index, the Index chosen by ECD in substitution for the JP
Morgan H&Q Technology Index for the period ended June 30, 2001.
The second graph compares the cumulative total stockholder return on ECD's
Common Stock over a five-year period ending June 30, 2002 with the return on the
NASDAQ Stock Market - U.S. Index and the Russell 2000 Index.
[Enlarge/Download Table]
Cumulative Total Return
-------------------------------------------------------------------
6/96 6/97 6/98 6/99 6/00 6/01
ENERGY CONVERSION DEVICES, INC. 100.00 56.04 42.58 43.68 111.54 123.08
NASDAQ STOCK MARKET (U.S.) 100.00 121.60 160.06 230.22 340.37 184.51
JP MORGAN H & Q TECHNOLOGY 100.00 130.60 165.43 267.75 469.74 233.62
RUSSELL 2000 100.00 116.33 135.53 137.56 157.27 158.30
The total return with respect to NASDAQ Stock Market - U.S. Index, JP
Morgan H&Q Technology Index and the Russell 2000 Index assumes that $100 was
invested on June 30, 1996, including reinvestment of dividends.
26
[Enlarge/Download Table]
Cumulative Total Return
---------------------------------------------------------------------------
6/97 6/98 6/99 6/00 6/01 6/02
ENERGY CONVERSION DEVICES, INC. 100.00 75.98 77.94 199.02 219.61 123.06
NASDAQ STOCK MARKET (U.S.) 100.00 131.62 189.31 279.93 151.75 103.40
RUSSELL 2000 100.00 116.51 118.26 135.19 136.08 124.28
The total return with respect to NASDAQ Stock Market - U.S. Index and the
Russell 2000 Index assumes that $100 was invested on June 30, 1997, including
reinvestment of dividends.
We have not paid any cash dividends in the past and do not expect to pay
any in the foreseeable future.
The Report of the Compensation Committee on Executive Compensation and the
Performance Graph are not deemed to be filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, or Securities Exchange
Act of 1934, as amended, or incorporated by reference in any documents so filed.
27
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ChevronTexaco. Pursuant to the Stock Purchase Agreement between ECD and
Texaco Inc. dated as of May 1, 2000, Texaco purchased a 20% equity stake in ECD
for $67.4 million. As part of this Stock Purchase Agreement, Texaco received
rights to purchase additional shares of ECD Common Stock or other ECD securities
(ECD Stock). On October 9, 2001, the shareholders of Texaco and Chevron Corp.
voted on the merger of Texaco and Chevron. The combined companies have been
renamed ChevronTexaco Corporation and TRMI Holdings is a wholly owned subsidiary
of ChevronTexaco.
So long as ChevronTexaco owns more than 5% of ECD Stock and in the event
ECD issues additional ECD Stock other than to ChevronTexaco, ChevronTexaco has
the right to purchase additional ECD Stock in order for ChevronTexaco to
maintain its same proportionate interest in ECD Stock as ChevronTexaco held
prior to the issuance of the additional ECD Stock. If ChevronTexaco elects to
purchase ECD Common Stock, the purchase price will be the average of the closing
price on NASDAQ of the ECD Common Stock as reported in The Wall Street Journal
for the five trading days prior to the closing date of the sale multiplied by
the number of shares of the ECD Common Stock which ChevronTexaco is entitled to
purchase. If ChevronTexaco does not exercise its right to purchase additional
ECD Stock within 15 days after delivery of a Rights Notice from ECD,
ChevronTexaco's right to purchase such additional ECD Stock which are the
subject of the Rights Notice will terminate.
Donald L. Paul, a director of ECD, is Vice President and Chief Technology
Officer of ChevronTexaco and Greg M. Vesey, an ECD director, is President of
ChevronTexaco Technology Ventures.
Texaco Ovonic Fuel Cell. Stanford R. Ovshinsky, a director of ECD, is
president of Texaco Ovonic Fuel Cell as well as a member of its Management
Committee. Robert C. Stempel and Greg M. Vesey, directors of ECD, are members of
the Management Committee of Texaco Ovonic Fuel Cell. ECD owns 50% of Texaco
Ovonic Fuel Cell.
For the years ended June 30, 2002 and 2001, ECD recorded revenues of
$8,887,000 and $8,831,000, respectively, from Texaco Ovonic Fuel Cell for
product development services and facilities.
Texaco Ovonic Hydrogen Systems. Stanford R. Ovshinsky, a director of ECD,
is president of Texaco Ovonic Hydrogen Systems as well as a member of its
Management Committee. Robert C. Stempel and Greg M. Vesey, directors of ECD, are
members of the Management Committee of Texaco Ovonic Hydrogen Systems. ECD owns
50% of Texaco Hydrogen.
For the years ended June 30, 2002 and 2001, ECD recorded revenues of
$18,581,000 and $11,818,000, respectively, from Texaco Ovonic Hydrogen Systems
for product development services and facilities.
Texaco Ovonic Battery Systems. Stanford R. Ovshinsky and Robert C.
Stempel, directors of ECD and Ovonic Battery, are members of the Management
Committee of Texaco Ovonic Battery Systems. Mr. Stempel is the chief executive
officer of Texaco Ovonic Battery. Greg M. Vesey, a director of ECD, is a member
of the Management Committee of Texaco Ovonic Battery Systems. Ovonic Battery
owns 50% of Texaco Ovonic Battery Systems.
28
For the year ended June 30, 2002, Ovonic Battery recorded revenues of
$16,315,000 from Texaco Ovonic Battery Systems for product development services.
Ovonyx. Stanford R. Ovshinsky, a director of ECD, is chairman and a
director of Ovonyx. Robert C. Stempel, a director of ECD, is vice chairman and a
director of Ovonyx. ECD currently owns 41.7% of Ovonyx.
ECD recorded revenues from Ovonyx of $215,000 and $382,000 for the years
ended June 30, 2002 and 2001, respectively, representing services performed for
its operations which commenced on January 15, 1999. ECD has received payment of
$3,263,000 for these services as of June 30, 2002, and the remaining balance is
included in accounts receivable.
Ovonic Media. Stanford R. Ovshinsky and Robert C. Stempel, directors of
ECD, are members of the Alliance Board of Ovonic Media. ECD has a 49% interest
in this joint venture.
For the years ended June 30, 2002, 2001 and 2000, the Company had revenues
of $1,923,000, $2,298,000 and $634,000, respectively, from Ovonic Media for
providing product development services.
United Solar. Stanford R. Ovshinsky, Robert C. Stempel, Nancy M. Bacon and
Hellmut Fritzsche, directors of ECD, are directors of United Solar. The
financial statements of United Solar are included in the consolidated financial
statements of ECD for the period from April 11, 2000 through June 30, 2002.
Bekaert ECD Solar Systems. Stanford R. Ovshinsky, Robert C. Stempel and
Nancy M. Bacon, directors of ECD, are members of the Management Committee of
Bekaert ECD Solar Systems, of which United Solar owns 40%.
Bekaert ECD Solar Systems was formed on April 11, 2000. For the years
ended June 30, 2002 and 2001 and for the period from April 11, 2000 through June
30, 2000, the Company recorded revenues of $10,121,000, $9,948,000 and
$2,291,000, respectively, from Bekaert ECD Solar Systems for product sales.
Southwall. Robert C. Stempel, a director of ECD, is a member of the Board
of Directors of Southwall.
For the year ended June 30, 2002, the Company had revenues of $9,000 from
Southwall under a contract to build large-area deposition equipment. The
completed equipment was shipped to Southwall in July 2000. $206,000 of the sale
price is included in accounts receivable at June 30, 2002.
Herbert Ovshinsky, Stanford R. Ovshinsky's brother, is employed by ECD as
Director of the Production Technology and Machine Building Division working
principally in the design of manufacturing equipment. He received $195,395 in
salary during the year ended June 30, 2002.
Benjamin Ovshinsky, Stanford R. Ovshinsky's son, is employed on a
part-time basis by ECD as its business representative for the Western United
States. He received compensation of $69,386 during the year ended June 30, 2002.
29
HKO Media, Inc., owned by Harvey Ovshinsky, Stanford R. Ovshinsky's son,
performed video production services on behalf of ECD. HKO Media, Inc. was paid
$144,370 by ECD for its services during the fiscal year ended June 30, 2002.
ADDITIONAL INFORMATION
Cost of Solicitation. The cost of solicitation will be borne by the
Company. In addition to solicitation by mail, directors, officers and other
employees of the Company may solicit proxies personally or by telephone or
other means of communication. Arrangements may be made with brokerage houses
and other custodians, nominees and fiduciaries to forward, at the expense of
the Company, copies of the proxy materials to the beneficial owners of shares
held of record by such persons. The Company also intends to hire Morrow & Co.,
at an anticipated cost of approximately $6,000 plus out-of-pocket expenses, to
assist it in the solicitation of proxies personally, by telephone, or by other
means.
Other Action at the Meeting. The Company's management, at the time hereof,
does not know of any other matter to be presented which is a proper subject for
action by the stockholders at the Meeting. If any other matters shall properly
come before the Meeting, the shares represented by a properly executed proxy
will be voted in accordance with the judgment of the persons named on the
proxy.
Stockholder Proposals for 2003 Annual Meeting. Proposals of stockholders
intended to be presented at the Company's next annual meeting of stockholders,
presently expected to be held during February 2004, must be received by the
Company no later than September 20, 2003 in order for those proposals to be
included in the proxy materials for the meeting.
---------------
Stockholders are urged to send in their proxies without delay.
By Order of the Board of Directors
/s/ Ghazaleh Koefod
Ghazaleh Koefod
Secretary
January 15, 2003
BACK PAGE
MAP: DIRECTIONS TO MICHIGAN STATE UNIVERSITY MANAGEMENT EDUCATION CENTER,
811 WEST SQUARE LAKE ROAD
TROY, MI
(248) 879-2456
ENERGY CONVERSION DEVICES, INC.
ANNUAL MEETING OF STOCKHOLDERS
THURSDAY, FEBRUARY 20, 2003 - 10:00 a.m.
ECVCM-PS-02
ENERGY CONVERSION DEVICES, INC.
C/O EQUISERVE TRUST COMPANY N.A.
P.O. BOX 8694
EDISON, NJ 08818-8694
[Enlarge/Download Table]
VOTER CONTROL NUMBER
Your vote is important. Please vote immediately.
------------------------------------------------------------- --------------------------------------------------------
Vote by Internet Vote by Telephone
------------------------------------------------------------- --------------------------------------------------------
------------------------------------------------------------- --------------------------------------------------------
1. Log on to the Internet and go to 1. Call toll free
http://www.eproxyvote.com/ener. 1-877-PRX-VOTE (1-877-779-8683)
2. Enter your Voter Control Number listed above 2. Enter your Vote Control Number listed above
and follow the easy steps outlined on the secured website. and follow the easy recorded instructions
------------------------------------------------------------- --------------------------------------------------------
If you vote over the Internet or by telephone, please do not mail your card
DETACH HERE
[X] PLEASE MARK
VOTES AS IN
THIS EXAMPLE
[Enlarge/Download Table]
1. Election of Directors. ----------------------------------------------------
Nominees as Directors: ENERGY CONVERSION DEVICES, INC.
----------------------------------------------------
(01) Stanford R. Ovshinsky, (02) Iris M. Ovshinsky,
(03) Robert C. Stempel, (04) Nancy M. Bacon, For Against Abstain
(05) Umberto Colombo, (06) Subhash K. Dhar, 2. Proposal to approve the appointment of
(07) Hellmut Fritzsche, (08) Walter J. McCarthy, Jr., Deloitte & Touche LLP as independent [ ] [ ] [ ]
(09) Florence I. Metz, (10) James R. Metzger, accountants for the fiscal year
(11) Donald L. Paul, (12) Stanley K. Stynes, ending June 30, 2003.
(13) Greg M. Vesey
3. In their discretion, the Proxies are authorized to vote upon
For [ ] [ ] Withhold such other business as may properly come before the Meeting.
All All
For all
Except [ ] ______________________________________
For all nominees except as noted above
Mark box at right if an address change or comment has been [ ]
noted on the reverse side of this card.
Mark box at right if you plan to Attend the Annual Meeting. [ ]
Please be sure to sign and date this Proxy.
Signature: -------------------------- Date:--------------- Signature: --------------------------- Date: --------------
ENERGY CONVERSION DEVICES, INC.
Dear Stockholder,
Please take note of the important information enclosed with this Proxy Ballot.
The matters you are asked to vote upon are discussed in detail in the enclosed
proxy materials.
Your vote counts, and you are strongly encouraged to exercise your right to vote
your shares.
Please mark the boxes on the proxy card to indicate how your shares will be
voted. Then sign the card, detach it and return your proxy vote in the enclosed
postage paid envelope.
Your vote must be received prior to the Annual Meeting of Stockholders,
February 20, 2003.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
Energy Conversion Devices, Inc.
DETACH HERE
ENERGY CONVERSION DEVICES, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints ROGER JOHN LESINSKI and GHAZALEH KOEFOD and each
of them, with full power of substitution, and in place of each, in case of
substitution, his or her substitute, the attorneys for and on behalf of the
undersigned to attend the Annual Meeting of Stockholders (the "Meeting") to be
held at Michigan State University Management Education Center, 811 West Square
Lake Road, Troy, Michigan, on Thursday, February 20, 2003 at 10:00 a.m. (EST)
and any adjournments thereof, and to cast the number of votes the undersigned
would be entitled to vote if then personally present. The undersigned instructs
such proxies to vote as specified on this card.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED "FOR" ALL NOMINEES FOR THE BOARD OF DIRECTORS AND "FOR" PROPOSAL 2 AS
DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT.
The Board of Directors of the Company recommends a vote FOR Proposals 1 and 2.
--------------------------------------------------------------------------------
PLEASE VOTE, DATE AND SIGN ON REVERSE AN RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Please sign this Proxy exactly as your name(s) appear(s) on the books of the
Company. Joint owners should each sign personally. Trustees and other
fiduciaries should indicate the capacity in which they sign, and where more
than one name appears, a majority must sign. If a corporation, this signature
should be that of an authorized officer who should state his or her title.
--------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
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Dates Referenced Herein and Documents Incorporated by Reference
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