<PAGE> 1
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. )
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, For Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
SIPEX CORPORATION
- --------------------------------------------------------------------------------
(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.
[ ] 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 transactions 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:
------------------------------------------------------------------------
[ ] 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 and 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:
------------------------------------------------------------------------
<PAGE> 2
SIPEX CORPORATION
22 LINNELL CIRCLE
BILLERICA, MASSACHUSETTS 01821
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 28, 1998
------------------------
TO THE SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of SIPEX
Corporation, a Massachusetts corporation (the "Company"), will be held at
BankBoston, Conference and Training Center, 35th Floor, Room 27, 100 Federal
Street, Boston, Massachusetts 02110, on May 28, 1998, at 10:00 a.m., local time,
for the purposes of considering and acting upon the following matters:
1. To elect three members to the Board of Directors, each to serve for
a three-year term as a Class II Director.
2. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Information relating to the above matters is set forth in the attached
Proxy Statement. Only shareholders of record at the close of business on April
9, 1998 will be entitled to notice of and to vote at the meeting and any
adjournment thereof.
All shareholders are cordially invited to attend the meeting.
By Order of the Board of Directors,
James E. Donegan
Clerk
Billerica, Massachusetts
Date: April 23, 1998
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE READ THE ATTACHED PROXY
STATEMENT AND THEN COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND MAIL IT
PROMPTLY IN THE ENCLOSED ENVELOPE IN ORDER TO ENSURE REPRESENTATION OF YOUR
SHARES AT THE MEETING. NO POSTAGE NEED BE AFFIXED IF THE PROXY IS MAILED IN THE
UNITED STATES.
<PAGE> 3
SIPEX CORPORATION
22 LINNELL CIRCLE
BILLERICA, MASSACHUSETTS 01821
------------------------
PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 28, 1998
------------------------
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of SIPEX Corporation (the "Company") for use
at the Annual Meeting of Shareholders to be held at BankBoston, Conference and
Training Center, 35th Floor, Room 27, 100 Federal Street, Boston, Massachusetts,
02110 on Friday, May 28, 1998, at 10:00 a.m. local time, and at any adjournments
thereof.
Only shareholders of record as of the close of business on April 9, 1998,
the record date fixed by the Board of Directors, will be entitled to notice of,
and to vote at, the Annual Meeting and at any adjournments thereof. At the close
of business on April 9, 1998, there were an aggregate of 17,780,518 shares of
common stock, par value $.01 per share (the "Common Stock"), of the Company
issued, outstanding and entitled to vote. The holders of Common Stock are
entitled to one vote per share on any proposal presented at the Annual Meeting.
Shareholders may vote in person or by proxy. Execution of a proxy will not in
any way affect a shareholder's right to attend the meeting and vote in person.
Any proxy may be revoked by a shareholder at any time before it is exercised by
delivering a written revocation or a later dated proxy to the Clerk of the
Company or by attending the Annual Meeting and voting in person.
The Company's Annual Report to Shareholders containing financial statements
for the fiscal year ended December 31, 1997 is being mailed together with this
Proxy Statement to all shareholders entitled to vote. It is anticipated that
this Proxy Statement and the accompanying proxy will be first mailed to
shareholders on or about April 23, 1998.
QUORUM AND VOTES REQUIRED
The representation, in person or by proxy, of at least a majority of the
outstanding shares of Common Stock entitled to vote at the Annual Meeting is
necessary to constitute a quorum for the transaction of business. Shares
represented by proxies pursuant to which votes have been withheld from any
nominee for director, or which contain one or more abstentions or broker
"non-votes," are counted as present or represented for purposes of determining
the presence or absence of a quorum for the Annual Meeting. A "non-vote" occurs
when a broker or other nominee holding shares for a beneficial owner votes on
one proposal, but does not vote on another proposal because, with respect to
such other proposal, the broker does not have discretionary voting power and has
not received instructions from the beneficial owner.
In the election of Class II Directors, the three nominees receiving the
highest number of affirmative votes of the shares present or represented and
entitled to vote at the Annual Meeting shall be elected as Class II Directors.
For all other matters being submitted to shareholders at the Annual Meeting, the
affirmative vote of the majority of shares present, in person or represented by
proxy, and voting on that matter is required for approval. The vote on each
matter submitted to shareholders is tabulated separately. Abstentions are
included in the number of shares present and represented and voting on each
matter. Broker "non-votes" are not considered voted for the particular matter
and have the practical effect of reducing the number of affirmative votes
required to achieve a majority for such matter by reducing the total number of
shares from which the majority is calculated.
<PAGE> 4
The persons named as attorneys in the proxies are officers of the Company.
All properly executed proxies returned in time to be counted at the Annual
Meeting will be voted. Any shareholder giving a proxy has the right to withhold
authority to vote for any individual nominee to the Board of Directors by
writing that nominee's name in the space provided on the proxy.
ALL PROXIES WILL BE VOTED IN ACCORDANCE WITH THE SHAREHOLDERS'
INSTRUCTIONS, AND IF NO CHOICE IS SPECIFIED, THE ENCLOSED PROXY CARD (OR ANY
SIGNED AND DATED COPY THEREOF) WILL BE VOTED IN FAVOR OF THE MATTERS SET FORTH
IN THE ACCOMPANYING NOTICE OF MEETING.
The Board of Directors knows of no other matter to be presented at the
Annual Meeting. If any other matter upon which a vote may properly be taken
should be presented at the Annual Meeting, shares represented by all proxies
received by the Board of Directors will be voted with respect thereto in
accordance with the judgment of the persons named as attorneys in the proxies.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of April 9, 1998 information with respect
to the beneficial ownership of the Company's Common Stock by (i) each person who
is known to the Company to be the beneficial owner of more than five percent of
its Common Stock, (ii) each director, or nominee for director, of the Company,
(iii) each of the executive officers named in the Summary Compensation Table
under the caption "Executive Compensation Summary" below, and (iv) all
directors, nominees for director and executive officers of the Company as a
group. Except as otherwise indicated in the footnotes to the table, the
beneficial owners listed have sole voting and investment power (subject to
community property laws where applicable) as to all of the shares beneficially
owned by them.
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME AND ADDRESS OF BENEFICIAL OWNER(1) OF BENEFICIAL OWNERSHIP PERCENT OF CLASS
- --------------------------------------- ----------------------- ----------------
<S> <C> <C>
Putnam Family of Funds(2)................................... 2,131,343 12.0%
One Post Office Square
Boston, Massachusetts 02109
Pilgrim Baxter & Associates, Ltd(3)......................... 1,824,400 10.3%
825 Duportail Road
Wayne, PA 19087
Janus Capital Corporation(4)................................ 1,789,700 10.1%
100 Fillmore Street, Suite 300
Denver, CO 80206-4923
AMVESCAP PLC(5)............................................. 1,495,400 8.4%
11 Devonshire Square
London EC2M 4YR
England
Tractebel S.A............................................... 1,093,872 6.2%
Place du Trone 1
1000 Brussels, Belgium
James E. Donegan(6)......................................... 30,490 *
Frank R. DiPietro(7)........................................ 1,152 *
Raymond W.B. Chow(8)........................................ 5,000 *
Sanford Cohen(9)............................................ 200 *
Timothy A. Dhuyvetter(10)................................... 6,000 *
Manfred Loeb(11)............................................ 2,000 *
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
AMOUNT AND NATURE
NAME AND ADDRESS OF BENEFICIAL OWNER(1) OF BENEFICIAL OWNERSHIP PERCENT OF CLASS
- --------------------------------------- ----------------------- ----------------
<S> <C> <C>
Lionel H. Olmer(12)......................................... 10,000 *
Daniel Deroux(13)........................................... -0- *
Steward S. Flaschen(14)..................................... 2,000 *
John L. Sprague(15)......................................... 4,000 *
Willy M.C. Sansen(16)....................................... 0 *
All directors and executive officers as a group (12
persons)(17).............................................. 60,842 *
</TABLE>
- ---------------
* Less than 1% of the outstanding Common Stock
(1) Unless otherwise indicated, to the knowledge of the Company, each person
listed above maintains a mailing address at: c/o SIPEX Corporation, 22
Linnell Circle, Billerica, MA 01821.
(2) Based solely on information provided in a Schedule 13G filed with the
Securities and Exchange Commission, as of December 31, 1997, Putnam
Investment Management, Inc., has shared dispositive power over 1,862,443
shares. The Putnam Advisory Company, Inc. has shared dispositive power over
268,900 shares. Putnam Investments, Inc., which is a wholly-owned
subsidiary of Marsh & McLennan Company, Inc. has shared dispositive power
over 2,131,343 shares and wholly owns these two registered investment
advisers: Putnam Investment Management, Inc., which is the investment
advisor to the Putnam family of mutual funds (including the Putnam Voyager
Fund) and The Putnam Advisory Company, Inc., which is the investment
adviser to Putnam's institutional clients.
(3) Based solely on information provided in a Schedule 13G filed with the
Securities and Exchange Commission, as of December 31, 1997, Pilgrim Baxter
& Associates, Ltd had sole dispositive power of 1,579,400 and shared
dispositive power of 1,824,400.
(4) Based solely on information provided in a Schedule 13G filed with the
Securities and Exchange Commission, as of December 31, 1997, Janus Capital
Corporation, a registered investment advisor, together with Mr. Bailey its
President and CEO may be deemed to beneficially own 1,789,700 shares held
by their Managed Portfolios. Both Janus Capital Corporation and Mr. Bailey
disclaim beneficial ownership of the shares.
(5) Based solely on information provided in a Schedule 13G filed with the
Securities and Exchange Commission, as of December 31, 1997, AMVESCAP Plc,
together with its wholly-owned subsidiaries, AMVESCAP Group Services, Inc.,
AVZ, Inc., AIM Management Group, Inc., INVESCO, Inc., INVESCO North
American Holdings, Inc., and INVESCO Funds Group, Inc. has shared
dispositive and voting power over 1,495,400 shares.
(6) Includes 30,490 shares issuable pursuant to stock options which are
exercisable prior to June 8, 1998. Excludes 124,000 shares issuable
pursuant to stock options which are exercisable after June 8, 1998.
(7) Excludes 104,000 shares issuable pursuant to stock options which are
exercisable after June 8, 1998.
(8) Includes 5,000 shares issuable pursuant to stock options which are
exercisable prior to June 8, 1998. Excludes 151,500 shares issuable
pursuant to stock options which are exercisable after June 8, 1998.
(9) Excludes 40,000 shares issuable pursuant to stock options exercisable after
June 8, 1998.
(10) Includes 6,000 shares issuable pursuant to stock options which are
exercisable prior to June 8, 1998. Excludes 90,000 shares issuable pursuant
to stock options which are exercisable after June 8, 1998.
(11) Excludes all shares held by Tractebel S.A., with which Mr. Loeb is
affiliated and as to whose shares he disclaims beneficial ownership of,
except to the extent of any individual interest in such entity. Excludes
22,000 shares issuable pursuant to stock options exercisable after June 8,
1998.
3
<PAGE> 6
(12) Includes 8,000 shares issuable pursuant to stock options which are
exercisable prior to June 8, 1998. Excludes 22,000 shares issuable pursuant
to stock options exercisable after June 8, 1998.
(13) Excludes all shares held by Tractebel S.A., with which Mr. Deroux is
affiliated and as to whose shares he disclaims beneficial ownership of,
except to the extent of any individual interest in such entity. Excludes
22,000 shares issuable pursuant to stock options exercisable after June 8,
1998.
(14) Includes 2,000 shares issuable pursuant to stock options which are
exercisable prior to June 8, 1998. Excludes 18,000 shares issuable pursuant
to stock options exercisable after June 8, 1998.
(15) Includes 4,000 shares issuable pursuant to stock options which are
exercisable prior to June 8, 1998. Excludes 22,000 shares issuable pursuant
to stock options exercisable after June 8, 1998.
(16) Excludes 10,000 shares issuable pursuant to stock options exercisable after
June 8, 1998.
(17) Includes 55,490 shares issuable pursuant to stock options which are
exercisable prior to June 8, 1998.
PROPOSAL I
ELECTION OF DIRECTORS
The Board of Directors is divided into three classes. Each class serves a
three-year term. However, each Class III director will serve for an initial term
ending at the Annual Meeting of Shareholders to be held in 1999 and each Class I
director is serving a term ending at the Annual Meeting of Shareholders to be
held in 2000. The Class II Directors' term will expire at the Annual Meeting
being held May 28, 1998. All directors will hold office until their successors
have been duly elected and qualified. Prior to the Annual Meeting, Steward S.
Flaschen and Manfred Loeb were the Class I Directors; John L. Sprague, Lionel H.
Olmer and Willy M.C. Sansen were the Class II Directors; and James E. Donegan
and Daniel Deroux were the Class III Directors.
The Board of Directors has nominated and recommended that Lionel H. Olmer,
John L. Sprague and Willy M.C. Sansen who are each currently serving as
Directors of the Company, be elected Class II directors, to hold office until
the Annual Meeting of Shareholders to be held in 2001 or until their successors
have been duly elected and qualified or until their earlier resignation or
removal. All of the nominees have indicated their willingness to serve, if
elected; however if any of them should be unable or unwilling to serve, the
proxies will be voted for the election of a substitute nominee designated by the
Board of Directors or for fixing the number of directors at a lesser number.
Shares represented by all proxies received by the Board of Directors and not so
marked as to withhold authority to vote for Messrs. Olmer, Sprague and Sansen
will be voted FOR the election of all of the nominees.
4
<PAGE> 7
The following table sets forth for each nominee to be elected at the Annual
Meeting and for each director whose term of office will extend beyond the Annual
Meeting, the year each such nominee or director was first elected a director,
his age, the positions currently held by each nominee or director with the
Company, the year each nominee's or director's term will expire and the class of
director of each nominee or director.
<TABLE>
<CAPTION>
NOMINEE OR DIRECTOR'S NAME AND YEAR
NOMINEE OR DIRECTOR YEAR TERM CLASS OF
FIRST BECAME A DIRECTOR AGE POSITION(S) HELD WILL EXPIRE DIRECTOR
----------------------------------- --- ---------------- ----------- --------
<S> <C> <C> <C> <C>
NOMINEES:
Lionel H. Olmer (1988)................. 63 Director 1998 II
John L. Sprague (1993)................. 68 Director 1998 II
Willy M. C. Sansen (1997).............. 55 Director 1998 II
CONTINUING DIRECTORS:
Steward S. Flaschen (1996)............. 72 Director 2000 I
Manfred Loeb (1982-1987; 1992)......... 71 Director 2000 I
James E. Donegan (1985)................ 52 Chairman of the Board, 1999 III
President, Chief
Executive Officer and
Clerk
Daniel Deroux (1992)................... 61 Director 1999 III
</TABLE>
NOMINEES FOR ELECTION AT THE ANNUAL MEETING
Mr. Olmer has been a director of the Company since 1988. From 1981 to 1985,
he served as Undersecretary of Commerce for International Trade in the Reagan
Administration. From 1985 until the present, he has been a partner in the law
firm of Paul, Weiss, Rifkind, Wharton & Garrison, concentrating on international
trade law. In addition to serving as a director of the Company, Mr. Olmer
currently serves as a director of Dresser Industries, a manufacturer of products
and provider of services for the hydrocarbon energy industry.
Dr. Sprague has been a director of the Company since 1993. He has been the
president of John L. Sprague Associates, Inc., a consulting firm, since 1988. In
addition to serving as a director of the Company, Dr. Sprague currently serves
as a director of Aerovox, Inc., a manufacturer of electronic components,
Allmerica Financial Corporation, a financial services company, and California
Micro Devices, a manufacturer of electronic components.
Dr. Sansen has been a director of the Company since July, 1997. He has been
a full professor at the Katholieke University Leuven in Belgium since 1981. He
currently heads the Medical and Integrated Circuits and Sensors Division of the
Electrical Engineering Department. Dr. Sansen is the author of six electronics
books and more than three hundred papers and is currently a Fellow at the
Katholieke University Leuven Institute of Electrical and Electronics
Engineering, and past chairman of the Electrical Engineering Department of
Katholieke University Leuven.
DIRECTORS WHOSE TERMS EXTEND BEYOND THE MEETING
Mr. Donegan joined the Company in April 1985 as Chairman of the Board,
Chief Executive Officer and President of the Company. Before joining the
Company, Mr. Donegan held the position of Group Vice President of the Electronic
Components Group at Midland Ross Corporation. Prior to Midland Ross Corporation,
Mr. Donegan was Vice President and General Manager at Cameron & Barkley and
Company. Prior to working at Cameron & Barkley and Company, Mr. Donegan spent
ten years with the General Electric
5
<PAGE> 8
Company in various manufacturing positions. Mr. Donegan currently serves as a
Director of Genesis Microchip, Inc., a manufacturer of video semiconductors.
Mr. Deroux has been a director of the Company since 1992. From 1963 to
1993, he served Tractebel S.A. in various positions, most recently as the Chief
Executive Officer of the Electricity and Gas International Division of Tractebel
S.A. Since 1993, Mr. Deroux has served as the Managing Director of American
Tractebel Corporation, an affiliate of Tractebel S.A.
Dr. Flaschen has been a director of the Company since August 1996. From
1986 to the present, Dr. Flaschen has served as President of Flaschen and
Davies, a management consulting firm. In addition, Dr. Flaschen is Chairman of
the Board of Directors of TranSwitch Corporation, a digital and mixed-signal
semiconductor company, Chairman of the Board of Telco Systems, a
telecommunications company and an Independent General Partner of Merrill Lynch
Partners II.
Mr. Loeb has been a director of the Company from 1982 to 1987 and from 1992
to the present. From 1983 to December 1992, he served as the Executive Director
of Tractebel S.A. and Chief Executive Officer of the Electricity and Gas
International Division of Tractebel S.A. Since 1993, Mr. Loeb has served as an
Advisor Director of Tractebel S.A. and Chairman of American Tractebel
Corporation. In addition to serving as a director of the Company, Mr. Loeb
currently serves as a director of Telfin S.A., an affiliate of Tractebel S.A.
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors of the Company held eight (8) meetings during the
fiscal year ended December 31, 1997. During their tenure, each of the directors
attended at least 75% of the aggregate of all meetings of the Board of Directors
during fiscal 1997.
The Company has standing Compensation and Audit Committees. The
Compensation Committee, of which Mr. Loeb and Drs. Flaschen and Sprague are
members, reviews and evaluates the compensation and benefits of all officers of
the Company, reviews general policy matters relating to compensation and
benefits of employees of the Company and makes recommendations concerning these
matters to the Board of Directors. The Compensation Committee administers the
Company's 1988 Non-Statutory Stock Option Plan, 1991 Non-Statutory Stock Option
Plan, 1993 Stock Option and Incentive Plan, 1994 Stock Option and Incentive
Plan, 1996 Incentive Stock Option Plan, 1996 Non-Employee Director Stock Option
Plan, 1996 Employee Stock Purchase Plan and 1997 Stock Option Plan. The
Compensation Committee held two meetings during fiscal 1997 and Mr. Loeb and
Drs. Flaschen and Sprague attended these meetings.
The Audit Committee, of which Messrs. Olmer and Sprague are members,
reviews the Company's independent auditors, the scope and timing of their audit
services and any other services they are asked to perform, the auditor's report
on the Company's consolidated financial statements following completion of their
audit and the Company's policies and procedures with respect to internal
accounting and financial controls. The Audit Committee held two meetings during
fiscal 1997.
The Board of Directors does not have a standing nominating committee or
committee performing similar functions.
6
<PAGE> 9
COMPENSATION AND OTHER
INFORMATION CONCERNING DIRECTORS AND OFFICERS
EXECUTIVE COMPENSATION SUMMARY
The following table sets forth certain information concerning the annual
and long-term compensation for services in all capacities to the Company for the
fiscal years ended December 31, 1995, 1996 and 1997, of those persons who were,
during this time (i) the chief executive officer and (ii) the other four most
highly compensated executive officers of the Company (such five officers
collectively, the "Named Executive Officers").
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG TERM
ANNUAL COMPENSATION COMPENSATION(1)
----------------------- ---------------------
FISCAL SECURITIES UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($)(2) OPTIONS(#)(3) COMPENSATION(4)($)
- --------------------------- ------ --------- ----------- --------------------- ------------------
<S> <C> <C> <C> <C> <C>
James E. Donegan..................... 1997 $240,000 $130,690 100,000(5) $12,677
Chairman, Chief Executive 1996 227,652 25,000 30,000 10,879
Officer and President 1995 226,800 25,000 -- 7,298
Frank R. DiPietro.................... 1997 165,000 79,300 6,065
Executive Vice President, Treasurer
and 1996 150,866 20,000 80,000 2,891
Chief Financial Officer 1995 150,000 20,000 -- 2,869
Raymond W.B. Chow.................... 1997 160,000 74,200 4,739
Chief Technology 1996 154,808 20,000 80,000 4,482
Officer 1995 145,000 15,000 -- 3,737
Sanford Cohen........................ 1997 145,000 0 6,770
Senior Vice President of 1996 145,000 7,000 -- 6,508
Technology 1995 145,000 0 -- 5,572
Timothy A. Dhuyvetter................ 1997 145,000 49,413 30,000(5) 4,541
Senior Vice President of Low Power
Analog
</TABLE>
- ---------------
(1) The Company did not make any restricted stock awards, grant any stock
appreciation rights or make any long-term incentive payments during fiscal
years 1995, 1996 or 1997.
(2) Bonuses are reported in year earned even if actually paid in subsequent
year.
(3) Reflects the stock split effected by the Company through a 100% stock
dividend on August 18, 1997.
(4) Consists of contributions made by the Company on behalf of the Named
Executive Officers to the Company's Tax Deferred Savings Plan, and insurance
premiums paid by the Company.
(5) Options granted pursuant to the repricing of options described under the
caption "Option Repricing" and disclosed in the table "Ten Year Option
Repricing" set forth below.
7
<PAGE> 10
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth grants of stock options pursuant to the 1996
Incentive Stock Option Plan granted during the year ended December 31, 1997 to
the Named Executive Officers. No stock appreciation rights ("SARs") were granted
during the year ended December 31, 1997.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
-------------------------------------------------------------- VALUE AT ASSUMED
PERCENT OF ANNUAL RATES OF
NUMBER OF TOTAL OPTIONS STOCK PRICE
SECURITIES GRANTED TO APPRECIATION FOR
UNDERLYING EMPLOYEES EXERCISE OR OPTION TERMS($)(3)
OPTIONS IN FISCAL BASE PRICE PER ----------------------
NAME GRANTED(#) YEAR(%)(1) SHARE($)(2) EXPIRATION DATE 5% 10%
---- ---------- ------------- -------------- --------------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
James E. Donegan....... 100,000(4) 15.6% $12.44 5/5/2007 $783,000 $1,982,000
Frank R. DiPietro...... -- -- -- -- -- --
Raymond W.B. Chow...... -- -- -- -- -- --
Sanford Cohen.......... -- -- -- -- -- --
Timothy A.
Dhuyvetter........... 30,000(4) 4.7% $12.44 5/5/2007 $234,900 $594,600
</TABLE>
- ---------------
(1) A total of 639,260 options were granted to employees (including the Named
Executive Officers) in fiscal year 1997 under the Company's 1996 Incentive
Stock Option Plan and 1997 Incentive Stock Option Plan.
(2) All options were granted at fair market value on the date of the grant as
determined in accordance with the 1996 Incentive Stock Option Plan or 1997
Stock Option Plan, as the case may be.
(3) Amounts reported in these columns represent amounts that may be realized
upon exercise of the options immediately prior to the expiration of their
term assuming the specified compound rates of appreciation (5% and 10%) on
the market value of the Company's Common Stock on the date of option grant
over the term of the options. These numbers are calculated based on rules
promulgated by the Securities and Exchange Commission and do not reflect the
Company's estimate of future stock price growth. Actual gains, if any, on
stock option exercises and Common Stock holdings are dependent on the timing
of such exercise and the future performance of the Company's Common Stock.
There can be no assurance that the rates of appreciation assumed in this
table can be achieved or that the amounts reflected will be received by the
individuals.
(4) Options granted pursuant to the repricing of options described under the
caption "Option Repricing." These options will vest in equal annual
increments over five years beginning May 5, 1998.
OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table sets forth information with respect to options to
purchase the Company's Common Stock granted under the Company's various stock
plans to the Named Executive Officers, including (i) the number of shares of
Common Stock purchased upon exercise of options in the fiscal year ended
December 31,
8
<PAGE> 11
1997; (ii) the net value realized upon such exercise; (iii) the number of
unexercised options outstanding at December 31, 1997; and (iv) the value of such
unexercised options at December 31, 1997.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR-END OPTION VALUE TABLE
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF SECURITIES IN-THE-MONEY
SHARES UNDERLYING UNEXERCISED OPTIONS AT
ACQUIRED OPTIONS AT YEAR-END YEAR-END(2)($)
ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED(1)($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
James E. Donegan....... 241,500 $4,703,678 10,490 144,000 $315,225 $2,935,440
Frank R. DiPietro...... 86,000 1,522,888 -- 104,000 -- 2,420,240
Raymond W.B. Chow...... 73,500 1,614,385 -- 136,500 -- 3,396,865
Sanford Cohen.......... 40,000 850,260 10,000 40,000 300,500 1,200,200
Timothy A.
Dhuyvetter........... 9,000 170,802 4,000 71,000 120,200 1,536,750
</TABLE>
- ---------------
(1) Amounts disclosed in this column do not reflect amounts actually received by
the Named Executive Officers but are calculated based on the difference
between the fair market value of the Company's Common Stock on the date of
exercise and the exercise price of the options. The Named Executive Officers
will receive cash only if and when they sell the Common Stock issued upon
exercise of the options, and the amount of cash received by such individuals
is dependent on the price of the Company's Common Stock at the time of such
sale.
(2) Value is based on the difference between the option exercise price and the
fair market value of the Company's Common Stock on December 31, 1997,
multiplied by the number of shares underlying the options.
OPTION REPRICING
The following table sets forth information concerning all of the repricings
of options held by officers of the Company who were officers at the time of the
repricing over the last ten years, including (i) the date of the repricing, (ii)
the number of shares subject to the repriced options, (iii) the market price at
the time of the repricing, (iv) the exercise price prior to repricing, (v) the
new exercise price and (vi) the original option term remaining at the date of
repricing:
TEN YEAR OPTION REPRICING
<TABLE>
<CAPTION>
LENGTH OF
ORIGINAL
OPTION TERM
NUMBER OF MARKET PRICE REMAINING AT
OPTIONS OF STOCK AT EXERCISE PRICE DATE OF
REPRICED OR TIME OF AT TIME OF REPRICING OR
AMENDED REPRICING OR REPRICING OR NEW EXERCISE OF AMENDMENT
NAME DATE (#) AMENDMENT AMENDMENT PRICE (YEARS)
---- ----------- ----------- ------------ -------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
James E. Donegan...... May 5, 1997 100,000 12.44 13.63 12.44 9.5 yrs
Timothy A.
Dhuyvetter.......... May 5, 1997 30,000 12.44 13.63 12.44 9.5 yrs
</TABLE>
- ---------------
(1) All data reflects effect of 2-for-1 stock split effected on August 18, 1997.
9
<PAGE> 12
EXECUTIVE EMPLOYMENT AGREEMENTS
The Company has entered into the following employment agreements with the
Named Executive Officers:
Mr. Donegan and the Company entered into an employment agreement on January
1, 1988. The employment agreement provides that Mr. Donegan will serve as
Chairman of the Board, President and Chief Executive Officer of the Company
until December 31, 1989 and for consecutive two-year terms thereafter unless the
Company provides at least six (6) months advance notice to the contrary prior to
expiration of any two year term; however, Mr. Donegan may voluntarily terminate
this employment and the Company may terminate his employment at any time for
cause. If the Company terminates Mr. Donegan's employment without cause, he will
be entitled to the salary and bonus benefits guaranteed under the employment
agreement until the end of the employment term. Pursuant to the employment
agreement, Mr. Donegan's salary is established annually by the Board of
Directors, but may not be less than $210,000 per year. The amount of his annual
bonus is calculated by a formula based upon a comparison of the actual annual
consolidated after-tax income or loss of the Company to the budgeted income or
loss approved by the Board of Directors for that year. The Company must maintain
a term life insurance policy in the amount of $500,000 for Mr. Donegan's
designees and a long term disability insurance policy for up to $10,000 per
month for the benefit of Mr. Donegan or his designees. Furthermore, Mr. Donegan
has agreed that he will not directly or indirectly compete with the Company
during the course of his employment and for an additional one-year period
thereafter if he voluntarily terminates his employment or is terminated for
cause.
Mr. DiPietro and the Company entered into an employment agreement on
January 1, 1988. The employment agreement provides that Mr. DiPietro will serve
as a Senior Vice President and Treasurer of the Company until December 31, 1989
and for consecutive two-year terms thereafter unless the Company provides at
least six (6) months advance notice to the contrary prior to expiration of any
two-year term; however, Mr. DiPietro may voluntarily terminate this employment
or the Company may terminate his employment for cause. If the Company terminates
Mr. DiPietro's employment without cause, he will be entitled to the salary
guaranteed under the employment agreement until the end of the employment term.
Pursuant to the employment agreement, Mr. DiPietro's salary is established
annually by the Board of Directors, but may not be less than $96,500 per year.
If Mr. DiPietro's employment is terminated for any reason by either party, the
employment agreement entitles the Company to retain him as a consultant pursuant
to specific terms. Furthermore, Mr. DiPietro has agreed that he will not
directly or indirectly compete with the Company during the course of his
employment and for an additional one-year period thereafter so long as the
Company is continuing to pay either his salary or consulting fees. Mr. DiPietro
became Executive Vice President in November 1996.
Mr. Chow and the Company entered into an employment agreement on January 1,
1996. The employment agreement provides that Mr. Chow will serve as Chief
Technology Officer of the Company until December 31, 1998 and for consecutive
two-year terms thereafter unless the Company provides at least six (6) months
advance notice to the contrary prior to expiration of any two-year term;
however, Mr. Chow may voluntarily terminate his employment or the Company may
terminate his employment for cause. If the Company terminates Mr. Chow's
employment without cause, he will be entitled to the salary guaranteed under the
employment agreement until the end of the employment term and he may not
directly or indirectly compete with the Company while the Company is continuing
to pay his salary. Pursuant to the employment agreement, Mr. Chow's salary is
established annually by the Board of Directors but may not be less than $145,000
per year.
Mr. Cohen and the Company entered into an employment agreement on July 18,
1988. The employment agreement provides that Mr. Cohen will serve as a Senior
Vice President of the Company until August 17,
10
<PAGE> 13
1990 and for consecutive two-year terms thereafter unless the Company provides
at least six (6) months advance notice to the contrary prior to expiration of
any two-year term; however, Mr. Cohen may voluntarily terminate his employment
or the Company may terminate his employment for cause. If the Company terminates
Mr. Cohen's employment without cause, he will be entitled to the salary
guaranteed under the employment agreement until the earlier of one year from the
date of termination or the obtainment of substantially equivalent employment.
Furthermore, Mr. Cohen has agreed that he will not directly or indirectly
compete with the Company during such period so long as the Company is continuing
to pay his salary. Pursuant to the employment agreement, Mr. Cohen's salary is
established annually by the Board of Directors, but may not be less than
$135,000 per year. In February 1998, the Company provided notice that this
agreement will not be renewed.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors currently consists of
Mr. Loeb and Drs. Flaschen and Sprague, each of whom is an independent,
non-employee director. The Compensation Committee is responsible for developing
the compensation programs that relate to the Company's executive officers,
senior management and other key employees and for establishing the specific
short- and long-term compensation elements thereunder. The Compensation
Committee also oversees the general compensation structure for all of the
Company's employees. In addition, the Compensation Committee administers the
Company's 1988 Non-Statutory Stock Option Plan, 1991 Non-Statutory Stock Option
Plan, 1993 Stock Option and Incentive Plan, 1994 Stock Option and Incentive
Plan, 1996 Incentive Stock Option Plan, 1996 Non-Employee Director Stock Option
Plan, 1996 Employee Stock Purchase Plan and 1997 Stock Option Plan.
The Company's executive compensation program established by the
Compensation Committee is designed to provide levels of compensation in formats
that assist the Company in attracting, motivating and retaining qualified
executives by providing a competitive compensation package geared to individual
and corporate performance. The Compensation Committee strives to establish
performance criteria, evaluate performance and establish base salary, annual
bonuses and long-term incentives for the Company's key decision makers based
upon performance and is designed to provide appropriate incentives for
maximization of the Company's short- and long-term financial results for the
benefit of the Company's shareholders.
In order to meet its objectives, the Compensation Committee has chosen
three basic components for the Company's executive compensation program to meet
the Company's compensation philosophy. Base salaries, the fixed regular
component of executive compensation, are based upon (i) base salary levels among
a competitive peer group, (ii) the Company's past financial performance and
future expectations, (iii) the general and industry-specific business
environment and (iv) individual performance. Annual bonuses, which are directly
linked to the Company's yearly performance, are designed to provide additional
cash compensation based on short-term performance of certain key employees.
Stock option grants, under the long-term component of executive compensation,
are designed to incentivize and reward executive officers and key employees for
delivering value to the Company's shareholders over a longer, measurable period
of time. Historically, the Company has used the grant of stock options that vest
over some measurable period of time, currently five years, to accomplish this
objective.
Mr. Donegan is the President, Chief Executive Officer and Chairman of the
Board of Directors. His fiscal 1997 performance was evaluated on the basis of
the factors described above applicable to executive officers generally. His base
salary was based on a number of factors, including the base salaries of
executives performing similar functions for peer companies and his employment
contract. The annual bonus and stock option grant components of his
compensation, as well as his salary, reflect the Company's strong financial
performance, the continued strength of the trading price for the Company's
Common Stock. The continued
11
<PAGE> 14
introduction and commercialization of new products and progress toward achieving
business goals, as well as the achievement by Mr. Donegan of other non-financial
goals. The Company's performance in 1997 included a significant increase in
total revenues and net income. In assessing Mr. Donegan's performance for fiscal
1997, the Compensation Committee concluded that the financial and non-financial
goals on which his compensation was based had been achieved.
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), generally prevents publicly-held corporations from deducting, for
federal income tax purposes, compensation (including compensation recognized by
the executive as a result of exercising a non-qualified stock option) in excess
of $1 million paid to the Named Executive Officers, with certain exceptions. The
Compensation Committee has considered these requirements and it is the
Compensation Committee's present intention that, so long as it is consistent
with its overall compensation objectives, substantially all of the Named
Executive Officers' compensation will be deductible for federal income tax
purposes.
Respectfully submitted by the Compensation Committee:
Manfred Loeb
Steward S. Flaschen
John L. Sprague
COMPENSATION COMMITTEE REPORT ON REPRICING OF OPTIONS
On May 5, 1997 the Compensation Committee approved a regranting of certain
options previously granted to executive officers, including Messrs. Donegan and
Dhuyvetter. Options originally granted in November of 1996 at an exercise price
of $13.63 per share, were regranted for the same number of shares at an exercise
price of $12.44 per share, the fair market value of the Corporation's Common
Stock on May 5, 1997. The Compensation Committee conditioned the regrant of
these options on the individual executive officer's surrender of the previously
granted option and on the officer's acceptance of an extended vesting schedule.
The new options vest 20% annually on the anniversary of the grant date; the
options surrendered would have vested 20% annually on the anniversary of the
initial grant date of such options. For additional information, see the table
above entitled "Option Grants in Last Fiscal Year."
As described in the Compensation Committee Report on Executive Compensation
above, the equity component of the Company's executive compensation program is
designed to (i) provide levels of compensation in formats that assist the
Company in attracting, motivating and retaining qualified executives by
providing a competitive compensation package geared to individual and corporate
performance and (ii) to incentivize and reward executive officers and key
employees for delivering value to the Company's shareholders over a longer,
measurable period of time. In taking the action to effectively reprice the
existing options, the Compensation Committee determined that options with
exercise prices at the then current market value provided better incentives to
executive officers for performance than options with exercise prices in excess
of such prices.
The Compensation Committee regranted and reinitiated the vesting of the
options rather than simply repricing the outstanding options. By restarting the
vesting of the options, the Compensation Committee extended the retention value
of the options to the Corporation. Executive officers accepting the regranted
options will not be able to realize any economic benefit from the regranted
options until at least one year following the regrant.
Respectfully submitted by the Compensation Committee:
Manfred Loeb
Steward S. Flaschen
John L. Sprague
12
<PAGE> 15
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Board of Directors has established a Compensation Committee
consisting of Mr. Loeb and Drs. Flaschen and Sprague. No person who served as a
member of the Compensation Committee was, during the fiscal year ended December
31, 1997, an officer or employee of the Company or any of its subsidiaries, was
formerly an officer of the Company or any of its subsidiaries, or had any
relationship requiring disclosure herein. No executive officer of the Company
serves as a member of the board of directors or compensation committee of any
entity which has one or more executive officers serving as a member of the
Company's Board of Directors or Compensation Committee.
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company receive $2,000 per quarter
as a retainer, $1,000 for each meeting of the Board of Directors attended in
person, $500 for each teleconference meeting of the Board of Directors and
$1,000 for each committee meeting, unless such committee meeting is held on the
same day as a meeting of the Board of Directors in which case the compensation
is reduced to $500. No employee of the Company receives separate compensation
for services rendered as a director. All directors are reimbursed for expenses
in connection with attending Board and committee meetings.
On March 14, 1997, the Board of Directors of the Company adopted the 1997
Stock Option Plan, which was approved by the Company's shareholders at the
Special Meeting in Lieu of Annual Meeting held on May 30, 1997. Among other
provisions of the 1997 Stock Option Plan, each director, who is not also an
employee or consultant of the Company, will receive on the third Monday in July,
1997 (and on the same day each year thereafter) an option to purchase 10,000
shares of Common Stock (the "Director Options"). Each person who is not also an
employee or consultant of the Company and becomes a director after the third
Monday in July, 1997 will receive, upon the date of his or her initial election
as a director, an option to purchase 10,000 shares of Common Stock. The Director
Options granted will vest one-fifth on each anniversary of the date of grant and
have an exercise price equal to the fair market value of the Common Stock on the
date of grant. The term of each Director Option will be for a period of ten
years from the date of grant. Director Options will be subject to accelerated
vesting under certain circumstances and may be transferred to the extent vested.
The Company has purchased directors' and officers' liability insurance
covering all of the Company's directors and officers. The aggregate premium for
this insurance policy in 1997 was $180,600.
13
<PAGE> 16
STOCK PERFORMANCE GRAPH
The following performance graph compares the percentage change in the
cumulative total shareholder return on the Company's Common Stock during the
period from the Company's initial public offering on April 2, 1996 through
December 31, 1997, with the cumulative total return on (i) a group consisting of
the Company's peer corporations on a line-of-business basis (the "Peer Group")
and (ii) the Nasdaq Composite Index (Total Return). The comparison assumes $100
was invested on April 2, 1996 in the Company's Common Stock, the Peer Group and
the Nasdaq Composite Index and assumes reinvestment of dividends, if any. The
Peer Group consists of all corporations that are members of the semiconductor
industry with 3674 as their Primary Standard Industrial Classification Number.
COMPARISON OF FIVE YEAR* CUMULATIVE TOTAL RETURN AMONG
SIPEX CORPORATION, PEER GROUP AND NASDAQ COMPOSITE INDEX (TOTAL RETURN) (1)(2)
<TABLE>
<CAPTION>
NASDAQ
MEASUREMENT PERIOD SIPEX PEER GROUP COMPOSITE
(FISCAL YEAR COVERED) CORPORATION INDEX INDEX
<S> <C> <C> <C>
4/2/96 100 100 100
6/30/96 180 110 110
9/30/96 175 140 112
12/31/96 273 157 120
3/31/97 250 175 110
6/30/97 305 195 140
9/30/97 540 240 150
12/31/97 505 175 145
</TABLE>
<TABLE>
<CAPTION>
APRIL 2, 1996 DECEMBER 31, 1997
($) ($)
------------- ------------------
<S> <C> <C>
SIPEX Corporation Common Stock.............................. 100.0 509.47
Peer Group.................................................. 100.0 170.42
Nasdaq Composite Index (Total Return)....................... 100.0 141.76
</TABLE>
- ---------------
* $100 invested on April 2, 1996 in Common Stock or the appropriate index,
including reinvestment of dividends, through fiscal year ended December 31,
1997.
(1) Prior to April 2, 1996, the Company's Common Stock was not publicly traded.
Comparative data is provided only for the period since that date. This chart
is not "soliciting material," is not deemed filed with the Securities and
Exchange Commission and is not to be incorporated by reference in any
filings of the Company under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as
14
<PAGE> 17
amended, whether made before or after the date hereof and irrespective of
any general incorporation language in any such filing.
(2) The stock price performance shown on the graph is not necessarily indicative
of future price performance. Information used on this graph was obtained
from Media General Financial Services, Inc., a source believed to be
reliable, although the Company is not responsible for any errors or
omissions in such information.
CERTAIN TRANSACTIONS
Pursuant to an Agreement of Lease, dated January 31, 1996, the Company
leases its Billerica facility of approximately 46,600 square feet from ATC
Billerica Corporation, an affiliate of Tractebel S.A. Under the Agreement of
Lease, the Company will pay monthly rent of $9,917 for the first year of the
lease, which payments are subject to an annual escalation. The Agreement of
Lease expires on January 31, 2001, subject to an option of the Company to extend
such lease for an additional five-year period. Tractebel S.A. beneficially owns
approximately 6% of the Company's Common Stock as of April 9, 1998 and Messrs.
Deroux and Loeb are affiliated with Tractebel S.A.
On July 30, 1997, the Board approved a loan to Timothy A. Dhuyvetter,
Senior Vice President of Low Power Analog, in the sum of $100,000 cash. The Loan
was secured by a Pledge and Security Agreement dated July 31, 1997 and was
evidenced by the issuance and delivery to the Company of a Promissory Note
bearing interest at a rate of 9% per annum, with interest payable on a monthly
basis and the principal and any remaining interest payable to the order of the
Company on July 31, 1998.
INDEPENDENT ACCOUNTANTS
The Board of Directors has selected the firm of KPMG Peat Marwick LLP as
the Company's independent accountants for the 1998 fiscal year. KPMG Peat
Marwick LLP has served as the Company's independent accounts commencing with the
year ended December 31, 1995. Representatives of KPMG Peat Marwick LLP are
expected to be present at the Annual Meeting. They will have the opportunity to
make a statement if they desire to do so and will also be available to respond
to appropriate questions from stockholders.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers, directors and persons who own more than ten percent of a
registered class of the Company's equity securities (collectively, "Reporting
Persons"), to file reports of ownership on Forms 3, 4 and 5 with the Securities
and Exchange Commission and the Company. Based on the Company's review of copies
of such forms and written representations from the Reporting Persons, the
Company believes that all its officers, directors and greater than ten percent
shareholders complied with all filing requirements applicable to them with
respect to transactions during fiscal year 1997, with the following exceptions:
Mr. DiPietro failed to file a monthly report covering the sale of shares during
the month of July in a timely manner. Mr. Chow failed to file a monthly report
covering the sale of shares during the month of May in a timely manner. Each of
Messrs. DiPietro and Chow subsequently filed a Form 4.
15
<PAGE> 18
EXPENSES AND SOLICITATION
The cost of soliciting proxies on behalf of the Company will be borne by
the Company. The Company will pay banks, brokers and other entities that
exercise fiduciary powers which hold shares of Common Stock of record in nominee
name or otherwise or as a participant in a registered clearing agency or which
hold shares of Common Stock on behalf of beneficial owners and deposit such
shares for safekeeping with another entity that exercises fiduciary powers their
reasonable expenses for completing the mailing to security holders of proxy
soliciting material and annual reports supplied by the Company. Further
solicitation may be made by the officers and employees of the Company by mail,
telephone, telegraph or personal interview without additional compensation. The
Company also may retain a professional proxy solicitation service at the
Company's expense to assist in the solicitation of proxies if necessary.
DEADLINE FOR SUBMISSION OF SHAREHOLDER PROPOSALS
Proposals of Shareholders intended to be presented at the next Annual
Meeting of Shareholders must be received by the Company at its principal office
in Billerica, Massachusetts, not later than February 28, 1999 for inclusion in
the proxy statement for that meeting.
------------------------
THE BOARD OF DIRECTORS ENCOURAGES SHAREHOLDERS TO ATTEND THE MEETING.
WHETHER OR NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE. PROMPT RESPONSE WILL
GREATLY FACILITATE ARRANGEMENTS FOR THE MEETING AND YOUR COOPERATION WILL BE
APPRECIATED. SHAREHOLDERS WHO ATTEND THE MEETING MAY VOTE THEIR STOCK PERSONALLY
EVEN THOUGH THEY HAVE SENT IN THEIR PROXIES.
16
<PAGE> 19
SKU# 1504-PS-98
<PAGE> 20
SPX49 1 DETACH HERE
PROXY
SIPEX CORPORATION
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
MAY 28, 1998
SOLICITED BY THE BOARD OF DIRECTORS
The undersigned shareholder of SIPEX Corporation, a Massachusetts
corporation (the "Corporation"), hereby acknowledges receipt of the Notice of
Annual Meeting of Shareholders and Proxy Statement, each dated April 23, 1998
and hereby appoints James E. Donegan and Frank R. DiPietro, and each of them,
proxies and attorneys-in-fact, with full power to each of substitution, on
behalf and in the name of the undersigned, to represent the undersigned at the
Annual Meeting of Shareholders of the Corporation to be held at BankBoston,
Conference & Training Center, 35th Floor, Room 27, 100 Federal Street, Boston,
Massachusetts 02110 on Friday, May 28, 1998 at 10:00 a.m., local time, and at
any adjournment or adjournments thereof, and to vote all shares of Common Stock
which the undersigned would be entitled to vote if then and there personally
present, on the matter set forth on the reverse side:
- ------------- -------------
SEE REVERSE SEE REVERSE
SIDE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SIDE
- ------------- -------------
<PAGE> 21
<TABLE>
<S> <C>
SPX49 1 DETACH HERE
___ PLEASE MARK
| X | VOTES AS IN
|___| THIS EXAMPLE.
THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS INDICATED,
WILL BE VOTED FOR THE ELECTION OF DIRECTORS AND AS SAID PROXIES DEEM ADVISABLE
ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING OF
SHAREHOLDERS.
1. To elect three (3) members of the
Board of Directors to serve for three-
year terms as Class II Directors.
Nominees: Lionet H. Olmer,
John L. Sprague
and Willy M.C. Sansun
___ FOR ___ WITHHELD
| | ALL | | FROM ALL
|___| NOMINEES |___| NOMINEES
___
| |
|___| ___________________________________
If you want to withhold authority to
vote for any individual nominee, write
that nominee's name on the line above. ___
MARK HERE FOR ADDRESS | |
CHANGE AND NOTE BELOW |___|
(This Proxy should be marked dated and signed
by the shareholder(s) exactly as his or her name
appears hereon, and returned promptly in the
enclosed envelope. Persons signing in a fiduciary
capacity should so indicate. If shares are held
by joint tenants or as community property, both
should sign.)
Signature:_________________ Date:____________ Signature:______________________ Date:____________
</TABLE>
