CalPERS to Vote Against Steris Corporation Compensation Committee Members

Business Wire, July 20, 2000

Business Editors

SACRAMENTO, Calif.--(BUSINESS WIRE)--July 20, 2000

The California Public Employees' Retirement System (CalPERS) announced today that it will vote against two compensation committee members at Ohio-based STERIS Corporation in protest of the "outrageous" contract being awarded to the Company's departing Chief Executive Officer and Chairman Bill R. Sanford.

CalPERS, who owns more than 357,000 shares of STERIS, will withhold votes for Jerry E. Robertson and Loyal W. Wilson, sitting members on the Company's compensation committee up for re-election. "The employment contract bestowed to Sanford is clearly outrageous and lacks proper oversight by the Company's board of directors," said Dan Szente, Chief Investment Officer for CalPERS. "Millions of shareowners' dollars and special rights are being granted at a time when the company's performance is terrible. This is a waste of corporate assets and is not in the best interests of the company and its shareowners." STERIS Corporation, a worldwide provider of infection and contamination prevention systems and products, recently announced that Sanford will retire immediately following the Company's annual meeting on July 21, but will remain Executive Founder and Special Executive Advisor to the company's board.

Under his new employment agreement, Sanford is afforded several benefits, including:

-- A lump sum payment in the amount of $3.3 million;

-- The option to sell 600,000 shares back to the company between

July 21, 2001 and February 28, 2002, at $15, regardless of the

trading price at the time of the sale (the stock is currently

trading at 8 5/8);

-- Forgiveness of a loan, currently valued at $2.6 million plus

interest and made in 1997 to Sanford to assist him in

exercising stock options, if Sanford "observes all of his

obligations" through February 28, 2002; and

-- An annual salary of $50,000 for his work as Special Executive

Advisor (which is not described in the proxy materials), or

$15,000 if he takes on other full-time employment.

The employment agreement comes at a time when STERIS' stock performance struggles to keep pace with its industry peers.

According to the company proxy, $100 invested in STERIS in March 1995 would have been worth $102.50 five years later. During the same time period, $100 invested in the Dow Jones Medical Supplies Index would have been worth $189.88 and $100 invested in S & P Health Care Sector would have earned a shareowner $327.29.

CalPERS posts its proxy votes on the internet for more than 300 companies from the System's domestic equity portfolio. The System's proxy votes and corporate governance positions can be found on CalPERS Shareowner Forum at www.calpers-governance.org.

CalPERS is the nation's largest public pension fund with assets totaling more than $170 billion. The System provides retirement and health benefits to more than 1 million state and local public employees and their families.