<PAGE>
SCHEDULE 14A
(Rule 14a-101)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Exchange Act Rule 240.14a-11 or 14a-12
ConMat Technologies, Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No Fee Required
[ ] Fee computed on table below per Exchange Act Rules 14(a)-6(i)(1) and 0-11.
(1) Title of each class of securities to which investment applies:
___________________________________________
(2) Aggregate number of securities to which investment applies:
___________________________________________
(3) Per unit price or other underlying value of investment 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 investment:
___________________________________________
(5) Total Fee paid
___________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
________________________________________________________________________________
(2) Form, Schedule or Registration Statement No.:
________________________________________________________________________________
(3) Filing Party:
________________________________________________________________________________
(4) Date Filed:
________________________________________________________________________________
<PAGE>
ConMat Technologies, Inc.
Franklin Avenue and Grant Street
Phoenixville, PA 19360
April 30, 2000
DEAR FELLOW STOCKHOLDER:
You are cordially invited to attend the annual meeting of stockholders (the
"Stockholders' Meeting") of ConMat Technologies, Inc. ("ConMat") to be held on
Tuesday, June 6, 2000 at 10:00 a.m., local time at the offices of Klehr,
Harrison, Harvey, Branzburg & Ellers LLP, 260 S. Broad Street, Philadelphia,
Pennsylvania.
At the Stockholders' Meeting, you will be asked to consider and vote upon
the election of two members of the Board of Directors and to consider and
approve Cogan & Sklar LLP as ConMat's independent auditors for the fiscal year
ending December 31, 2000. Our Annual Report to Stockholders for the fiscal year
ended December 31, 1999 accompanies this Proxy Statement.
We look forward to seeing you at the Stockholders' Meeting and we urge your
favorable vote on the proposals in the Proxy Statement. Whether or not you are
planning to attend, we urge you to return the enclosed proxy at your earliest
convenience.
Sincerely,
/s/ Paul A. DeJuliis
Paul A. DeJuliis
Chairman of the Board and
Chief Executive Officer
<PAGE>
ConMat Technologies, Inc.
Franklin Avenue and Grant Street
Phoenixville, PA 19360
-------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held On June 6, 2000
To the Stockholders of ConMat Technologies, Inc. ("ConMat"):
The annual meeting of stockholders (the "Stockholders' Meeting") of ConMat will
be held on June 6, 2000, at 10:00 a.m., local time at the offices of Klehr,
Harrison, Harvey, Branzburg & Ellers LLP, 260 S. Broad Street, Philadelphia,
Pennsylvania, for the following purposes:
o To consider and vote upon the election of two members of the Board
of Directors;
o To consider and vote upon a proposal to ratify the appointment of
Cogan & Sklar LLP as ConMat's independent auditors for the fiscal
year ending December 31, 2000; and
o To transact such other business as may properly come before the
Stockholders' Meeting and any or all adjournments or postponements
thereof.
The Board of Directors of ConMat recommends that stockholders vote FOR the
Directors nominated herein and FOR ratification of Cogan & Sklar LLP as ConMat's
independent auditors for the fiscal year ending December 31, 2000.
The Board of Directors of ConMat has fixed the close of business on May 10,
2000 as the record date for determining the stockholders entitled to receive
notice of and to vote at the Stockholders' Meeting and at any and all
adjournments or postponements thereof.
Management welcomes your attendance at the Stockholders' Meeting. Whether or not
you expect to attend the Stockholders' Meeting in person, you are requested to
complete, sign, date and promptly return the enclosed proxy in the accompanying
postage-paid envelope. The prompt return of your proxy will save expenses
involved in further communication. Your proxy will not affect your right to vote
in person if you attend the Stockholders' Meeting.
By Order of the Board of Directors
/s/ Paul A. DeJuliis
Paul A. DeJuliis
Chairman
Your vote is important.
To vote your shares, please sign, date and complete the enclosed proxy
and mail it promptly in the enclosed, postage paid return envelope.
<PAGE>
TABLE OF CONTENTS
VOTING AT THE SPECIAL MEETING; REVOCATION OF PROXIES......................... 1
ADDITIONAL INFORMATION....................................................... 2
SOLICITATION OF PROXIES...................................................... 2
PROPOSAL I - ELECTION OF DIRECTORS........................................... 3
PROPOSAL II - RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS............ 5
SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS.................. 6
EXECUTIVE COMPENSATION....................................................... 8
RELATED PARTY TRANSACTIONS................................................... 9
OTHER STOCKHOLDER MATTERS.................................................... 9
OTHER BUSINESS...............................................................10
<PAGE>
ConMat Technologies, Inc.
Franklin Avenue and Grant Street
Phoenixville, PA 19360
------------------------------
PROXY STATEMENT
------------------------------
The enclosed proxy is solicited by the Board of Directors of ConMat
Technologies, Inc. ("ConMat"), a Florida corporation, for use at the annual
meeting of stockholders (the "Stockholders' Meeting") of ConMat to be held on
Tuesday, June 6, 2000 at 10:00 a.m., local time, at the offices of Klehr,
Harrison, Harvey, Branzburg & Ellers LLP, 260 S. Broad Street, Philadelphia,
Pennsylvania, or any adjournments or postponements thereof. This Proxy Statement
and accompanying proxy are first being mailed to ConMat's stockholders on or
about May 17, 2000.
VOTING AT THE SPECIAL MEETING; REVOCATION OF PROXIES
The Board of Directors has fixed the close of business on May 10, 2000 as
the record date (the "Record Date") for determining the stockholders entitled to
notice of and to vote at the Stockholders' Meeting. As of the Record Date there
were 2,541,666 shares of common stock ("Common Stock") issued and outstanding,
each of which is entitled to one vote as to all matters to be acted upon at the
Stockholders' Meeting. The presence, in person or by properly executed proxy, of
the holders of a majority of the Common Stock entitled to vote at the
Stockholders' Meeting is necessary to constitute a quorum at the Stockholders'
Meeting. Only stockholders of record at the close of business on the Record Date
will be entitled to vote at the Stockholders' Meeting or any adjournments or
postponements thereof.
Shares of Common Stock represented at the Stockholders' Meeting in person or
by proxy will be counted for the purposes of determining whether a quorum is
present at the Stockholders' Meeting. Shares which abstain from voting as to a
particular matter will be treated as shares that are present and entitled to
vote at the Stockholders' Meeting for purposes of determining whether a quorum
exists, but will not be counted as votes cast on such matter. Abstentions,
therefore, will have the same effect as votes against approval of the proposals
set forth in this Proxy Statement. If a broker or nominee holding stock in
"street name" indicates on a proxy that it does not have discretionary authority
to vote as to a particular matter ("broker non-votes"), those shares will be
treated as present and entitled to vote at the Stockholders' Meeting for
purposes of determining whether a quorum exists, but will not be counted as
votes cast on such matter.
The holders of Common Stock do not have cumulative voting rights in
connection with the election of Directors. All shares of Common Stock which are
entitled to vote and are represented at the Stockholders' Meeting by properly
executed proxies received prior to or at the Stockholders' Meeting, and not
revoked, will be voted at the Stockholders' Meeting in accordance with the
instructions indicated on such proxies. If no instructions are indicated (other
than in the case of broker non-votes), such proxies will be voted for approval
and adoption of the proposals set forth in this Proxy Statement.
The Board of Directors does not intend to bring any matter before the
Stockholders' Meeting other than the matters specifically referred to in the
notice of the Stockholders' Meeting, nor does the Board of Directors know of any
other matter which anyone else proposes to present for action at the
Stockholders' Meeting. However, if any other matter is properly brought before
the Stockholders' Meeting, the persons named in the accompanying proxy or their
duly constituted substitutes acting at the Stockholders' Meeting will be deemed
authorized to vote or otherwise act thereon in accordance with their judgment on
such matter. Proxies indicating a vote against the proposals contained herein
may not be voted by the persons marked in the accompanying proxy or their duly
constituted substitutes for adjournment of the Stockholders' Meeting for the
purpose of giving management additional time to solicit votes to approve such
proposals.
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before it is voted. Proxies may be revoked by (i) filing
with the Secretary of ConMat, at or before the taking of a vote at the
Stockholders' Meeting, a written notice of revocation bearing a later date than
the proxy, (ii) duly executing a later dated proxy relating to the same shares
and delivering it to the Secretary of ConMat before the taking of a vote at the
Stockholders' Meeting or (iii) attending the Stockholders' Meeting and voting in
1
<PAGE>
person (although attendance at the Stockholders' Meeting will not in and of
itself constitute a revocation of a proxy). Any written notice of revocation or
subsequent proxy should be sent to ConMat Technologies, Inc., Franklin Avenue
and Grant Street, Phoenixville, PA 19360, Attention: Corporate Secretary, or
hand delivered to the Secretary of ConMat at or before the taking of the vote at
the Stockholders' Meeting.
Enclosed herewith are proxy card(s) for use by holders of ConMat's Common
Stock. Properly executed proxies will be voted in accordance with the
instructions therein. In the absence of instruction, the shares of Common Stock
represented at the Stockholders' Meeting by the enclosed proxy will be voted FOR
each of the proposals set forth herein.
ADDITIONAL INFORMATION
A copy of ConMat's Annual Report for the fiscal year ended December 31, 1999
accompanies this Proxy Statement. ConMat will furnish without charge to any
stockholder, upon written or oral request, any other documents filed by ConMat
pursuant to the Securities Exchange Act of 1934 (the "Exchange Act"). Requests
for such documents should be addressed to Paul A. DeJuliis, Chief Executive
Officer, ConMat Technologies, Inc., Franklin Avenue and Grant Street,
Phoenixville, PA 19360, telephone number (610) 935-0225. Documents filed by
ConMat pursuant to the Exchange Act may be reviewed and/or obtained through the
Securities and Exchange Commission's (the "SEC") Electronic Data Gathering
Analysis and Retrieval System, which is publicly available through the SEC's Web
site (http://www.sec.gov).
SOLICITATION OF PROXIES
All expenses of ConMat's solicitation of proxies for the Stockholders'
Meeting will be borne by ConMat. In addition to solicitation by use of the
mails, proxies may be solicited from ConMat stockholders by directors, officers
and employees of ConMat in person or by telephone, telegram or other means of
communication. Such directors, officers and employees will not be additionally
compensated, but may be reimbursed for reasonable out-of-pocket expenses in
connection with such solicitation. ConMat reserves the right to retain a proxy
solicitation firm for assistance in connection with the solicitation of proxies
for the Stockholders' Meeting, should the Board of Directors deem such action
prudent. Arrangements will also be made with brokerage houses, custodians,
nominees and fiduciaries for forwarding of proxy solicitation materials to
beneficial owners of shares held of record by such brokerage houses, custodians,
nominees and fiduciaries, and ConMat will reimburse such brokerage houses,
custodians, nominees and fiduciaries for their reasonable expenses incurred in
connection therewith.
2
<PAGE>
PROPOSAL I
ELECTION OF DIRECTORS
The Board of Directors is currently composed of three Directors. Pursuant to
ConMat's charter, the holder of the outstanding shares of Series B Preferred
Stock has the right to designate one Director of ConMat. Therefore, ConMat is
nominating two Directors for election at the Stockholders' Meeting by the
holders of the Common Stock.
Set forth below is certain information with respect to the persons nominated
for election by the Board of Directors. With respect to each such person, such
information includes his age, the period, if any, during which he has served as
a Director of ConMat and his principal occupation and employment during at least
the past five years. Unless otherwise specified on the enclosed proxy card, each
proxy received from the holders of shares of Common Stock entitled to vote will
be voted for the election as Directors of the two nominees named below as
nominees to serve until the next annual meeting of stockholders and until a
successor in office shall be duly elected and qualified. Each of the nominees
has consented to be named as a nominee in this Proxy Statement and to serve as a
Director if elected. Should any nominee become unable or unwilling to accept his
nomination or election, the persons named in the enclosed proxy will vote for
the election of a nominee designated by the Board of Directors.
Vote Required for Approval
The two Directors are required to be elected by a plurality of the votes
cast as to the subject Board of Directors seat. Votes may be cast in favor of or
withheld for any or all of the appropriate nominees. Unless otherwise instructed
by a record holder submitting a proxy, the persons named in a proxy will vote
the shares represented thereby for the election of all such appropriate
nominees. Abstentions and broker non-votes will not be counted toward a
nominee's achievement of a plurality and thus will have no effect on the outcome
of the election of Directors.
The Board of Directors unanimously recommends a vote FOR both of the
nominees listed below.
The following persons have been nominated for election as Directors by the
holders of the Common Stock:
Name Description
- ---- -----------
Paul A. DeJuliis Prior to assuming his current role as Chairman of the
Board of Directors and Chief Executive Officer of
ConMat and Polychem and since 1991, Mr. DeJuliis was
Chairman and Chief Executive Officer of The Eastwind
Group, Inc., a publicly traded holding company.
Previously, Mr. DeJuliis was a partner in Phoenix
Management Services, Inc., a turnaround consulting firm
(1989-91), Vice-President, Corporate Finance for Colmen
& Co., a national investment banking firm (1987-89),
and Manager, Corporate Turnaround Consulting Group for
Coopers & Lybrand (1986-87). Mr. DeJuliis has a B.S. in
finance and accounting from the University of Delaware.
He is also a certified public accountant.
Richard R. Shutte Mr. Shutte has served in his current position as
President of ConMat and Polychem since April, 2000.
From May, 1999 until such time, Mr. Shutte was Vice
President of Marketing and Business Development of
Polychem. From 1998 until May, 1999 Mr. Shutte was a
principal in Skipping Stone, Inc., a consulting firm.
From 1996 to 1997, Mr. Shutte was President of
Cot'nWash, Inc. , a start-up consumer products company.
From 1995 to 1996, Mr. Shutte was a principal of
Chesword Group, Inc., a consulting firm. Prior to such
time and since 1973, Mr. Shutte held various positions
at Kimberly-Clark Company, most recently Global
Category Leader, Wet Wipes Division.
3
<PAGE>
The holder of the outstanding shares of ConMat's Series B Preferred Stock
intends to designate Edward F. Sager, Jr. as a Director of ConMat.
Edward F. Sager, Jr. Mr. Sager has been the President of Mentor Management
Company, general partner of Mentor Special Situation
Fund LP, an investment fund, and President of Mentor
Capital Partners Ltd., a venture capital firm, since
1994. From 1985 to 1994 Mr. Sager was President of
Sager & Associates, a merchant banking firm providing
access to venture capital for small to medium size
companies. He is a graduate of Lafayette College with a
B.S. degree in Mechanical Engineering and he received
an MBA in finance from New York University.
Meetings of the Board of Directors
The Board of Directors did not conduct any meetings during the fiscal year ended
December 31, 1999. The Board of Directors acted several times by unanimous
written consent in lieu of a meeting as permitted by Florida law. ConMat's Board
of Directors has not established any committees.
Executive Officers
Set forth below is information regarding the executive officers of ConMat
and its wholly-owned subsidiary, Polychem Corporation, who are not nominees for
the Board of Directors.
William J. Crighton Prior to his current role as Vice President and
Treasurer of ConMat and Polychem and since 1975, Mr.
Crighton served as the divisional controller of The
Polychem division of The Budd Company. Prior to joining
Polychem, Mr. Crighton was employed in the automotive
division and technical center of The Budd Company. Mr.
Crighton graduated with a bachelor's degree in
accounting from LaSalle University and holds an MBA
from Widener University.
J.R. Hannum Mr. Hannum has served in his current role as Vice
President of Product Development and Support of
Polychem since 1995. Prior thereto, Mr. Hannum served
as General Manager of the Polychem Division of The Budd
Company and as manager of domestic sales, research and
development and manufacturing engineering. Mr. Hannum
graduated with a bachelor's degree in engineering from
Villanova University and graduated with a master's
degree in engineering from Penn State University.
Donald L. Hutton Mr. Hutton has served in his current position as
National Sales Manager of Polychem since 1995. Prior
thereto, he was employed with The Budd Company for 36
years in several roles including advertising manager,
manager of distributor sales and manager of customer
services. Mr. Hutton is a graduate of the University of
Delaware.
4
<PAGE>
PROPOSAL II
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has, subject to the ratification by the stockholders,
appointed Cogan & Sklar LLP, independent auditors, to audit the financial
statements of ConMat for the fiscal year ending December 31, 2000. Cogan & Sklar
LLP audited the financial statements of ConMat for the fiscal year ended
December 31, 1999. Representatives of Cogan & Sklar LLP are not expected to be
present at the Stockholders' Meeting.
Vote Required for Approval
The proposal to ratify the appointment of Cogan & Sklar LLP requires the
affirmative vote of the majority of shares of Common Stock present in person or
represented by proxy at the Stockholders' Meeting for its approval. Abstentions
may be specified on the proposal and will be considered present at the
Stockholders' Meeting, but will not be counted as affirmative votes.
Abstentions, therefore, will have the practical effect of voting against the
proposal because the affirmative vote of a majority of the shares of Common
Stock present at the Stockholders' Meeting is required to approve the proposal.
Broker non-votes will not be voted or have any effect on Proposal II.
The Board of Directors unanimously recommends a vote FOR Proposal II.
Change in Independent Auditors
On January 26, 2000, ConMat's board of directors approved the dismissal of
Grant Thornton LLP, the principal accountant previously engaged to audit
ConMat's financial statements. Neither of the reports provided by Grant Thornton
LLP for the past two years contained an adverse opinion or a disclaimer of
opinion, or was qualified or modified as to uncertainty, audit scope, or
accounting principles. During ConMat's two most recent fiscal years and the
subsequent period, there were no disagreements with the former accountant on any
matter of accounting principles or practices, financial statement disclosure, or
auditing scope or procedures, which disagreement, if not resolved to the
satisfaction of the former accountant, would have caused it to make reference to
the subject matter of the disagreement in connection with its report.
On January 26, 2000, ConMat's board of directors approved the engagement of
Cogan & Sklar LLP as the principal accountant to audit ConMat's financial
statements. During ConMat's two most recent fiscal years and the subsequent
period prior to such appointment, ConMat did not consult Cogan & Sklar LLP
regarding either the application of accounting principles to a specified
transaction or the type of audit opinion that might be rendered on ConMat's
financial statements, nor on any matter that was either the subject of a
disagreement or a reportable event.
5
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS
The following table sets forth information concerning the beneficial ownership
of ConMat's common stock as of April 26, 2000, by each director and executive
officer, all directors and officers as a group, and each person known to ConMat
to beneficially own 5% or more of its outstanding common stock.
<TABLE>
<CAPTION>
Amount and Nature
Name and Address of of Beneficial Percentage
Title of Class Beneficial Owner Ownership (1) of Class (1)
-------------- ------------------- ----------------- ------------
<S> <C> <C> <C>
Common Stock Paul A. DeJuliis 1,278,333 (2) 49.3
Franklin Avenue & Grant Street
Phoenixville, PA 19460
Edward F. Sager, Jr. 196,667 (3) 7.2
P.O. Box 560
Yardley, PA 19067
The Eastwind Group, Inc. 735,000 (4) 22.4
275 Geiger Road
Philadelphia, PA 19115
The DAR Group, Inc. 240,000 9.4
30 Broad Street
43rd Floor
New York, NY 10004
Odyssey Capital Group, L.P. 382,500 (5) 13.1
950 West Valley Rd., Suite 2902
Wayne, PA 19087
Polychem Corporation 313,333 12.3
Franklin Avenue & Grant Street
Phoenixville, PA 19460
The Eastwind Group, Inc. 925,000 36.4
Shareholder Trust
c/o Paul A. DeJuliis
Franklin Avenue & Grant Street
Phoenixville, PA 19460
Directors and Executive Officers 1,475,000 (2)(3) 52.9
(4 persons)
Series A Convertible The Eastwind Group, Inc. 735,000 100.0
Preferred Stock 275 Geiger Road
Philadelphia, PA 19115
Series B Preferred Stock Mentor Special Situation Fund, L.P. (6) 166,667 100.0
P.O. Box 560
Yardley, PA 19067
Series C Preferred Stock Odyssey Capital Group, L.P. 382,500 100.0
950 West Valley Rd., Suite 2902
Wayne, PA 19087
</TABLE>
6
<PAGE>
(1) Based upon 2,541,666 shares of common stock issued and outstanding as of
April 26, 2000, calculated in accordance with Rule 13d-3 promulgated under
the Exchange Act. It also includes shares owned by (i) a spouse, minor
children or by relatives sharing the same home, (ii) entities owned or
controlled by the named person and (iii) other persons if the named person
has the right to acquire such shares within 60 days by the exercise of any
right or option. Unless otherwise noted, shares are owned of record and
beneficially by the named person.
(2) Includes 50,000 shares issuable upon the exercises of options. Includes
925,000 shares held by The Eastwind Group, Inc. Shareholder Trust, of which
Mr. DeJuliis is Trustee, as to which he disclaims beneficial ownership. If
such 925,000 shares were not included in calculating Mr. DeJuliis'
beneficial ownership, Mr. DeJuliis would be deemed to beneficially own 13.6%
of ConMat's common stock.
(3) Includes 166,667 shares issuable upon the exercise of warrants to Mentor
Special Situation Fund, L.P., of which Mr. Sager is a general partner, and
30,000 shares issuable upon the exercise of warrants to Mentor Management
Company, of which Mr. Sager is President.
(4) Consists of shares issuable upon conversion of Series A convertible
preferred stock.
(5) Consists of shares of common stock issuable upon exercise of warrants.
(6) Edward F. Sager, Jr., a director of ConMat, is a general partner of Mentor
Special Situation Fund, L.P.
7
<PAGE>
EXECUTIVE COMPENSATION
The following summary compensation table sets forth the total annual
compensation paid to ConMat's Chief Executive Officer and the four most highly
compensated executive officers other than the Chief Executive Officer who were
serving as executive officers at the end of the fiscal year ended December 31,
1999, the only full fiscal year of ConMat's operations.
Securities
Name and Position Salary ($) Options
----------------- ---------- -------
Paul A. DeJuliis, Chairman & Chief $170,240 --
Executive Officer of ConMat and
Polychem
Theodore A. Rutkowski, President 153,887 70,000
of ConMat and Polychem (1)
Richard R. Shutte, President of 52,641(2) 100,000
ConMat and Polychem
William J. Crighton, Vice President 87,719 --
and Treasurer of ConMat and
Polychem
J.R. Hannum, Vice President of 101,919 --
Product Development and Support
of Polychem
- -------------------
(1) Mr. Rutkowski died on January 26, 2000.
(2) Represents salary from May 17, 1999 through December 31, 1999. Mr. Shutte
was appointed President of ConMat and Polychem effective April 3, 2000.
Employment Agreements
On December 8, 1998, ConMat entered into an Employment Agreement with Paul A.
DeJuliis, ConMat's Chief Executive Officer and Chairman of the Board of
Directors. Under the agreement, Mr. DeJuliis will be paid an annual base salary
ranging from $170,000 to $250,000 depending on ConMat's annual net income. As
additional incentive compensation, upon executing the Employment Agreement, Mr.
DeJuliis received (i) 250,000 shares of common stock for an aggregate purchase
price of $50,000, paid by delivery of a two-year promissory note at 5% interest;
and (ii) 250,000 options to purchase shares of common stock at an exercise price
of $3.00 per share. 50,000 of the options are exercisable upon registration of
the underlying shares of common stock. 100,000 of the options are exercisable
following registration of the underlying shares of common stock if ConMat
realizes $750,000 in pre- tax income during a fiscal year. The remaining 100,000
options are exercisable following registration of the underlying shares of
common stock if ConMat realizes $1,000,000 in pre-tax income during a fiscal
year. All of the options are immediately exercisable upon a merger, sale of
assets or other transaction resulting in a change of control in which the
holders of shares of common stock receive not less than $5.00 per share.
Stock Options Granted During Fiscal Year Ended December 31, 1999
The following table sets forth certain information concerning options to
purchase Common Stock of ConMat granted to directors or executive officers of
ConMat in the fiscal year ended December 31, 1999. No directors or executive
officers exercised options to purchase ConMat Common Stock during fiscal year
ended December 31, 1999.
8
<PAGE>
<TABLE>
<CAPTION>
Individual Grants
--------------------------------------------------------------------------------------------
Number of Shares of Common
Stock Underlying Options % of Total Options Granted to Exercise Expiration
Name Granted Employees in Fiscal Year Price Date
- ---- -------------------------- ----------------------------- -------- -----------
<S> <C> <C> <C> <C>
Richard R. Shutte 100,000 (1) 100% $3.00 May 17, 2004
</TABLE>
- --------
(1) Half of these options to purchase the Common Stock of ConMat are exercisable
if ConMat realizes $750,000 in pre-tax income during a fiscal year and half
are exercisable if ConMat realizes $1,000,000 in pre-tax income during a
fiscal year. All of the options are immediately exercisable upon a merger,
sale of assets, or other transaction in which the holders of shares of
Common Stock receive not less than $5.00 per share.
Members of ConMat's Board of Directors are not compensated for their service
as Directors.
RELATED PARTY TRANSACTIONS
On December 8, 1998, ConMat acquired 100% of the common stock of Polychem from
Eastwind. The basic structure and terms of the transaction were as follows:
o ConMat acquired all of the outstanding shares of common stock of Polychem
from Eastwind in exchange for (i) 1,000,000 shares of newly issued common
stock of ConMat and (ii) 1,333,333 shares of newly issued Series A
convertible preferred stock.
o ConMat assumed and discharged the following liabilities of Eastwind: (i)
$160,000 owed to Paul A. DeJuliis, Eastwind's former Chairman and Chief
Executive Officer, who is the current Chairman and Chief Executive Officer
of ConMat, discharged by the issuance to Mr. DeJuliis of 53,333 shares of
Series A convertible preferred stock; (ii) $100,000 owed to Clifton
Capital, Ltd., discharged by the payment to Clifton Capital, Ltd. of
$100,000; and (iii) $500,000 owed to Mentor Special Situation Fund, L.P.,
discharged by the issuance to Mentor Special Situation Fund, L.P. of
166,667 shares of newly issued Series B preferred stock of ConMat and
warrants to purchase 166,667 shares of common stock. In addition, Mentor
Management Company exchanged warrants to purchase 30,000 shares of
Eastwind common stock for warrants to purchase 30,000 shares of ConMat
common stock.
o Prior to the acquisition, Eastwind had caused Polychem to distribute to
Eastwind approximately $940,000. As part of the acquisition, Eastwind
agreed to repay these distributions with interest, or forego a portion of
the Series A preferred stock issued to it as an adjustment to the purchase
price. To reflect this agreement, Eastwind issued to Polychem a promissory
note in the amount of $940,000, secured by the pledge of 313,333 shares of
Series A convertible preferred stock. This note accrued interest at 8% per
year and principal and interest were due and payable November 30, 2000.
Eastwind defaulted under the terms of the note as a result of a default by
Eastwind on a guarantee of an unrelated debt obligation and as a result of
a material adverse change in Eastwind's financial condition. Following
such default, ConMat sought to foreclose on the pledged shares. Pursuant
to a Settlement Agreement dated June 29, 1999, Eastwind transferred the
pledged shares to Polychem in exchange for cancellation of the note. The
amounts previously paid to Eastwind have been accounted for as
distributions by Polychem to Eastwind in the form of dividends. For
financial accounting purposes, the return of the pledged shares was
treated as a reduction in the number of shares of Series A convertible
preferred stock issued to Eastwind in connection with the acquisition of
Polychem and in the number of Series A convertible preferred stock
outstanding.
OTHER STOCKHOLDER MATTERS
Stockholder Proposals and Nominations of Directors for ConMat's Next Annual
Meeting of Stockholders
Any stockholder who intends to present a proposal for consideration at
ConMat's next annual meeting of stockholders intended to occur on or about June
6, 2001 must, submit his proposal to ConMat on or before January 17, 2001 in
order to have ConMat consider the inclusion of such proposal in ConMat's Proxy
Statement and form of proxy relating to such annual meeting. Reference is made
to Rule 14a-8 under the Exchange Act for information concerning the content and
form of such proposal and the manner in which such proposal must be made.
9
<PAGE>
Nominations for election to the Board of Directors at ConMat's next annual
meeting may be made only in writing by a stockholder entitled to vote at such
annual meeting and must be addressed to the Corporate Secretary, ConMat
Technologies, Inc., Franklin Avenue and Grant Street, Phoenixville, PA 19360 who
will forward such information to the Board of Directors. Nominations must be
received by the Secretary on or before March 1, 2001, and must be accompanied by
the written consent of the nominee. Nominations should also be accompanied by a
description of the nominee's business or professional background and otherwise
contain the information required by Schedule 14A of the Exchange Act.
OTHER BUSINESS
The Board of Directors is not aware of any other matters that may be brought
before the Stockholders' Meeting. If other matters not now known come before the
Stockholders' Meeting, the persons named in the accompanying form of proxy or
their substitutes will vote such proxy in accordance with their judgment.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires ConMat's directors, certain of
its officers and persons who own more than ten percent (10%) of ConMat's Common
Stock (collectively the "Reporting Persons") to file reports of ownership and
changes in ownership with the Securities and Exchange Commission and to furnish
ConMat with copies of these reports.
Initial Statements of Beneficial Ownership of Securities relating to
ConMat's directors and executive officers identified in this Proxy Statement
were filed with the Securities and Exchange Commission on March 11, 2000. Such
statements were not filed on a timely basis. ConMat believes that no other
filings were required to be made by the Reporting Persons during the fiscal year
ended December 31, 1999.
Independent Auditors
Representatives of Cogan & Sklar LLP are not expected to be present at the
Stockholders' Meeting.
Annual Report to Stockholders
A copy of ConMat's Annual Report to Stockholders on Form 10-KSB for the
fiscal year ended December 31, 1999 (the "Annual Report") which contains copies
of ConMat's audited financial statements is being sent to stockholders with this
Proxy Statement. The Annual Report shall not be deemed proxy solicitation
material.
10
<PAGE>
CONMAT TECHNOLOGIES, INC.
COMMON STOCK PROXY
This Proxy is solicited on behalf of the Board of Directors
I hereby constitute and appoint Paul A. DeJuliis and William J. Crighton,
and each of them acting individually, my true and lawful agents and proxies,
with full power of substitution in each, to vote all shares of Common Stock held
of record by me at the Meeting of Stockholders of ConMat Technologies, Inc. to
be held on June 6, 2000 and any adjournments or postponements thereof. I direct
said proxies to vote as specified on the reverse side.
Unless otherwise specified, all shares will be voted for the election of all
nominees listed and for each of the proposals to be acted upon at the Meeting of
Stockholders. This Proxy also delegates discretionary authority to vote with
respect to any matters as to which a choice is not specified by the Stockholder
and any matters that ConMat did not have notice of a reasonable time before
ConMat mailed the proxy materials relating to the Stockholder's Meeting.
Please mark, sign, date and return the Proxy Card promptly.
[Reverse Side]
1. Proposal I, Election of Directors
<TABLE>
<CAPTION>
<S> <C> <C>
To withhold authority to vote for any
FOR all nominees listed (except WITHHOLD individual nominee, strike a line through
as indicated to the contrary below) AUTHORITY the nominee's name listed below:
[ ] [ ]
</TABLE>
Paul A. DeJuliis
Richard R. Shutte
Authority to vote for either nominee may be withheld by lining through or
otherwise striking out the name of the nominee.
2. Proposal II, to ratify the Board of Directors' appointment of Cogan & Sklar
LLP, independent auditors, as auditors for ConMat for the fiscal year ending
December 31, 2000.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
The undersigned hereby revokes all previous proxies for the Meeting of
Stockholders and acknowledges receipt of the Notice of Meeting and Proxy
Statement of ConMat Technologies, Inc.
Date:__________________________________, ____
_____________________________________________
_____________________________________________
_____________________________________________
By:__________________________________________
NOTE: Please sign this proxy exactly as name(s) appear in address.
When signing as attorney-in-fact, executor, administrator,
trustee or guardian, please add your title as such.
