<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
Customedix Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
Customedix Corporation
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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 0-11:1
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
/ / 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:
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- ---------------
(1) Set forth the amount on which the filing fee is calculated and state how
it was determined.
<PAGE> 2
CUSTOMEDIX CORPORATION
53 NORTH PLAINS INDUSTRIAL ROAD
WALLINGFORD, CONNECTICUT 06492
-----------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 6, 1995
-----------------------
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Customedix Corporation (the "Company") will be held at the Ramada Inn, 275
Research Parkway, Meriden, Connecticut on November 6, 1995 at 9:00 a.m. (Eastern
Time) for the following purposes:
1. To elect seven (7) directors;
2. To transact any other business which may properly come before the
Annual Meeting.
The Board of Directors has fixed the close of business on September 18,
1995 as the time as of which the stockholders of record entitled to notice of
and to vote at the Annual Meeting will be determined.
You are cordially invited to attend the Annual Meeting in person or to
send a Proxy so that your shares may be represented. Even though you have sent a
Proxy, if you attend the Annual Meeting in person, you may revoke the Proxy and
vote your shares in person. The address to which the Proxy card should be sent,
if the return envelope is missing is:
CUSTOMEDIX CORPORATION
53 NORTH PLAINS INDUSTRIAL ROAD
WALLINGFORD, CONNECTICUT 06492
ATTENDANCE AT THE ANNUAL MEETING WILL BE LIMITED TO REGISTERED
STOCKHOLDERS AND INVITED GUESTS OF THE COMPANY. IF YOU ARE A STOCKHOLDER WHOSE
SHARES ARE NOT REGISTERED IN YOUR OWN NAME AND PLAN TO ATTEND, YOU MUST PRESENT
EVIDENCE OF YOUR STOCK OWNERSHIP, WHICH YOU CAN OBTAIN FROM YOUR BANK,
STOCKBROKER, ETC., TO GAIN ADMITTANCE TO THE ANNUAL MEETING.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ BARRY L. KOSOWSKY
- ---------------------
Secretary
September 22, 1995
- --------------------------------------------------------------------------------
YOUR PROXY IS IMPORTANT WHETHER YOU OWN A FEW OR MANY SHARES. PLEASE
SIGN, DATE AND MAIL IT IN TODAY IN THE ACCOMPANYING SELF-ADDRESSED ENVELOPE
WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
- --------------------------------------------------------------------------------
1
<PAGE> 3
CUSTOMEDIX CORPORATION
53 NORTH PLAINS INDUSTRIAL ROAD
WALLINGFORD, CONNECTICUT 06492
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 6, 1995
---------------------------------------------------------------
The enclosed proxy is solicited by the Board of Directors of Customedix
Corporation (the "Company") for use at the Annual Meeting of Stockholders to be
held on November 6, 1995 at 9:00 A.M. (Eastern Time) at the Ramada Inn, 275
Research Parkway, Meriden, Connecticut.
Stockholders who do not plan to be present at the Annual Meeting are
requested to complete, date and execute the enclosed form of proxy and return it
in the postage-paid return envelope provided. The address to which the proxy
card should be sent, if the return envelope is missing, is:
CUSTOMEDIX CORPORATION
53 NORTH PLAINS INDUSTRIAL ROAD
WALLINGFORD, CONNECTICUT 06492
If the enclosed proxy is signed and returned prior to the Annual
Meeting, it will be voted unless subsequently revoked. The enclosed proxy may be
revoked at any time prior to the voting thereof by notifying the Secretary of
the Company in writing of the revocation or by filing with the Secretary another
duly executed proxy bearing a later date. Even though you have sent a proxy, if
you attend the Annual Meeting in person, you may revoke the proxy and vote your
shares in person.
The Proxy Statement and the accompanying form of proxy are first being
mailed to Stockholders on or about September 28, 1995. The expense of preparing,
assembling, printing and mailing these proxy materials will be paid by the
Company.
Arrangements also will be made with brokerage firms and other
custodians, nominees and fiduciaries to forward proxy solicitation material to
certain beneficial owners of the Company's $.01 par value common stock; the
Company will reimburse such brokerage firms, custodians, nominees and
fiduciaries for reasonable out-of-pocket expenses incurred by them in connection
therewith.
STOCKHOLDERS' PROPOSALS
Any proposal which a stockholder expects to present at the next Annual
Meeting of Stockholders of the Company to be held in 1996 must be received at
the Company's principal offices stated above no later than May 31, 1996.
2
<PAGE> 4
STOCKHOLDERS ENTITLED TO VOTE AND SHARES OUTSTANDING
The Company has outstanding one class of voting securities, common
stock, $.01 par value ("Common Stock"). Each share of Common Stock is entitled
to one vote. Only Stockholders of record at the close of business on September
18, 1995 are entitled to vote at the Annual Meeting. There were 3,296,286 shares
of Common Stock issued and outstanding at the close of business on September 18,
1995.
VOTES REQUIRED TO APPROVE PROPOSALS
Holders of each share of the Company's Common Stock outstanding on the
record date are entitled to one vote per share at the Annual Meeting. Proxies
are solicited so that each Stockholder may have an opportunity to vote on all
matters that are scheduled to come before the Annual Meeting. When properly
executed proxies are returned, the shares represented thereby will be voted in
accordance with the Stockholder's directions. Stockholders are urged to specify
their choices by marking the appropriate boxes on the enclosed proxy card; if no
choice has been specified, the shares will be voted as recommended by the Board
of Directors. Under Delaware law, if a quorum is present at the Annual Meeting,
in the election of directors a plurality of votes cast shall elect. Any action
other than a vote for a nominee will have the practical effect of voting against
the nominee. Abstention from voting will have the practical effect of voting
against any other matters which may properly come before the Annual Meeting
since it is one less vote for approval. Broker nonvotes on any matter will have
no impact on such matter since they are not considered "shares present" for
voting purposes.
The proxy cards also confer discretionary authority to vote the shares
authorized to be voted thereby on any matter which was not known on the date of
the proxy statement but may properly be presented for action at the Annual
Meeting.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE
ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors, and persons who beneficially own
more than ten percent of the Company's stock to file initial reports of
ownership and reports of changes in ownership with the Securities and Exchange
Commission and the American Stock Exchange. Executive officers, directors and
greater than ten percent beneficial owners are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms they file.
Based solely on a review of the copies of such forms furnished to the
Company and written representations from the Company's executive officers and
directors, the Company believes that during fiscal 1995 all Section 16(a) filing
requirements applicable to its executive officers, directors and greater than
ten percent beneficial owners were complied with.
3
<PAGE> 5
1. ELECTION OF DIRECTORS
Seven directors are to be elected at the Annual Meeting. Each shall
serve until the next Annual Meeting of Stockholders and until his successor is
elected and qualified.
Proxies received in response to this solicitation will be voted for the
election of the below-named nominees unless otherwise specified in the proxy or
unless authority to vote the proxy is withheld. It is not contemplated that any
of the nominees will be unable or unwilling to serve as a director. However, in
that event, it is intended that the shares represented by the Proxy, unless
otherwise specified therein, will be voted for a substitute nominee or nominees
designated by the Board of Directors.
The Board of Directors has nominated for election Gordon S. Cohen,
Martin L. Schulman, William T. Fitch, Elry C. Bird, Robert S. Cooper, David H.
Leigh, and Robert N. Thomas, all of whom constitute the Company's current Board
of Directors, except Robert N. Thomas.
<TABLE>
<CAPTION>
NAME AGE POSITION WITH COMPANY
---- --- ---------------------
<S> <C> <C>
Gordon S. Cohen 58 Chairman of the Board and Chief Executive Officer
Martin L. Schulman 58 President and Chief Operating Officer, Director
William T. Fitch 58 Director
Elry C. Bird 71 Director
Robert S. Cooper 56 Director
David H. Leigh 60 Director
Robert N. Thomas 57 New Nominee
</TABLE>
DR. GORDON S. COHEN was elected to the Board in 1987 and was also
elected Chairman of the Company at that time. Dr. Cohen was elected Chief
Executive Officer in May, 1989. Dr. Cohen has been Chairman, President and
Treasurer of the Company's subsidiary, Jeneric/Pentron, since 1975. From 1968 to
1976, Dr. Cohen served in various positions at Yale University School of
Medicine, including Assistant Professor of Pathology and Assistant Clinical
Professor of Pathology.
MARTIN L. SCHULMAN was elected to the Board in 1987 and, at the same
time, was appointed as a Vice President of the Company. In May, 1989,
Mr. Schulman was elected as President and Chief Operating Officer.
Mr. Schulman has been Executive Vice President and Secretary of Jeneric/
Pentron since 1977.
WILLIAM T. FITCH has been a director of the Company since 1981.
Mr. Fitch is Chairman and from 1982 until 1994 was President of Star Dynamics
Company, Inc., a manufacturer of hydraulic cylinders.
4
<PAGE> 6
ELRY C. BIRD has been a director since 1982 and served as President of
the Company's former oilfield subsidiaries from 1980 until his retirement in
1985.
ROBERT S. COOPER has been a director since 1987 and has, for more than
five years, been a partner in the law firm of Zeldes, Needle & Cooper, which is
general counsel to Jeneric/Pentron.
DAVID H. LEIGH has been a director since 1992 and is a certified public
accountant. Mr. Leigh has been a partner, for more than five years, at the
accounting firm of Bailey, Moore, Glazer, Schaefer & Proto, which provides
regular accounting services to the Company and its subsidiaries.
ROBERT N. THOMAS has been a Senior Vice President, for more than five
years, of William B. Meyer, a company specializing in household goods
relocation, transportation of special commodities, public warehousing,
electrical contracting and various real estate enterprises. Mr. Thomas has
responsibility for labor, public warehousing, real estate, record retention and
special commodities.
DIRECTORS' FEES, COMMITTEES AND MEETINGS
There were four regularly scheduled meetings of the Board of Directors
in fiscal 1995 and four meetings are scheduled for fiscal 1996. Employee-
directors of the Company are not compensated as such. Outside directors
are currently paid $1,875 per meeting attended. Each director attended at least
75% of the aggregate of (i) the total number of meetings of the Board of
Directors and (ii) the total number of meetings of each committee on which he
serves held during the fiscal year ended June 30, 1995. The Company has no
nominating committee of the Board of Directors nor any committee performing a
similar function; however, the Board of Directors as a whole nominates
individuals for election as directors of the Company.
The Company has established an Audit Committee whose principal
functions are to review the scope of the audit conducted by the Company's
independent auditors; to review recommendations contained in any management
letters from the Company's independent auditors and the methods by which such
recommendations are implemented; and to review the Company's material financial
controls. The Company has also established an Executive Committee, which
possesses authority to exercise all of the powers of the Board of Directors in
the management and direction of the affairs of the Company, subject to specific
limitations imposed by the Board of Directors and by Delaware law; and a
Compensation Committee, which is responsible for establishing the compensation
to be paid to the Company's executive officers.
William T. Fitch is Chairman of the Audit Committee and David H.
Leigh is a member; Gordon S. Cohen is Chairman of the Executive Committee and
Martin L. Schulman is a member; William T. Fitch is Chairman of the Compensation
Committee and Robert S. Cooper and Elry C. Bird are members. There were 2
meetings of the Audit Committee, 5 meetings of the Executive Committee and 1
meeting of the Compensation Committee in fiscal 1995.
5
<PAGE> 7
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding ownership of
Customedix's Common Stock by each person who as of August 31, 1995 is known to
the Company to be the beneficial owner of 5% or more of the Company's Common
Stock and by each of Customedix's directors, executive officers whose regular
annual compensation is in excess of $100,000, and by directors and executive
officers of Customedix as a group.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENTAGE
NAME OWNERSHIP (1) OF CLASS (2)
- ---- ------------- ------------
<S> <C> <C>
Gordon S. Cohen (3) 1,799,589 54.59%
53 North Plains
Industrial Road
Wallingford, CT
William T. Fitch 1,200 *
Elry C. Bird (4) 40,522 1.23%
All officers and directors
as a group
(7 persons) 1,841,311 55.86%
</TABLE>
- -----------------------------
*Less than one percent.
(1) The figures in the table represent record and beneficial ownership,
which includes voting and investment power, except as otherwise
indicated in the notes to the table.
(2) Based upon 3,296,286 shares of Customedix's Common Stock issued and
outstanding at August 31, 1995.
(3) Includes 435, 262 shares held by a partnership whose partners are
trusts for the benefit of Dr. Cohen and his children. Dr. Cohen is a
managing partner of the partnership. Also includes 116,500 shares held
jointly by emancipated adult children of Dr. Cohen and their respective
spouses as to which shares Dr. Cohen disclaims beneficial ownership.
Does not include 12,500 unissued shares which Dr. Cohen has the right
to receive as a bonus under his compensation agreement.
(4) All of such shares are owned jointly by Mr. Bird and his wife.
6
<PAGE> 8
COMPENSATION COMMITTEE REPORT ON EXECUTIVE
COMPENSATION
The Compensation Committee reviews and recommends to the Board of
Directors for approval (i) compensation of all executive officers of the
Company, and (ii) the Company's employee benefit policies and practices.
The Committee's determination of compensation to be paid to Gordon S.
Cohen, the Company's Chairman and Chief Executive Officer, is governed by the
employment agreement entered into by him in January, 1987. This employment
agreement was entered into as a condition of Dr. Cohen agreeing to sell Jeneric
Industries Inc. and Pentron Corporation (now Jeneric/Pentron Incorporated) to
the Company and was extended for a second five year term expiring December 31,
1996 because, under the terms of the employment agreement, the Company would
incur significant severance obligations if the agreement was not renewed for a
second term and because, in the Committee's view, the continued employment of
Dr. Cohen was believed to be in the best interests of the Company because of his
knowledge of and experience in the business conducted by Jeneric/Pentron, which
now accounts for substantially all of the Company's revenues.
Because the compensation paid to Dr. Cohen is substantially governed by
the terms of the employment agreement, there will be no relationship between the
Company's performance and the base compensation paid to him during the term of
the employment agreement. The Committee did not, in light of the substantial
compensation paid to Dr. Cohen under the employment agreement, exercise its
discretion to increase for calendar 1995, his base salary over the minimum 5%
annual increase provided for in the employment agreement. The Committee expects
to explore the advisability of adopting performance based criteria to determine
all or part of the compensation of Dr. Cohen (as well as other executive
officers of the Company) at such time as his employment with the Company is
extended.
On May 1, 1995, following review and approval by the Compensation
Committee and the Board of Directors of the Company (excluding Mr. Schulman),
Jeneric/Pentron Incorporated entered into an employment agreement with Martin L.
Schulman, the Company's President and Chief Operating Officer, which provides
for maximum annual payments of salary, assuming all bonuses are earned,
aggregating approximately $567,000, subject to reduction in certain
circumstances, for a period commencing as of January 1, 1995 and terminating
December 31, 2002. The base salary provided in the Schulman employment agreement
is modified annually by the cost of living adjustment provided generally to
employees of Jeneric/Pentron and is not related to the Company's performance.
However, a bonus payable pursuant to Mr. Schulman's employment agreement (and
included within the aggregate maximum annual payment) not exceeding $250,000, is
related to Jeneric/Pentron's annual performance.
The Schulman employment agreement also includes provisions pursuant
to which 394,328 shares of Company stock, directly or indirectly owned by
Mr. Schulman, were purchased by the Company at a price of $1.50 per share. The
purchase price of the shares has been paid by delivery of Customedix's
subordinated promissory note, which bears interest at 8% per annum which shall
accrue and not be compounded until principal and interest payments begin
January, 2003. Final maturity of the note is December 31, 2014.
7
<PAGE> 9
The employment agreement did not include the previous bonus arrangement pursuant
to which Mr. Schulman was entitled to receive annually 12,500 shares of
Customedix stock.
The compensation of the Company's other executive officer during fiscal
1995 was not tied to the Company's performance, but rather, was based primarily
on recommendations of the Chairman and President of the Company, which
recommendations took into account factors such as the individual officer's level
of responsibility, individual performance, professional degrees held, and
comparisons to the compensation paid to persons holding similar positions,
credentials and experience in companies similar in size and location.
WILLIAM T. FITCH, Chairman
ELRY C. BIRD
ROBERT S. COOPER
8
<PAGE> 10
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION
The members of the Compensation Committee are William T. Fitch, Elry C. Bird and
Robert S. Cooper. Mr. Cooper is a member of the firm Zeldes, Needle & Cooper,
which renders legal services to the Company and its subsidiaries. During the
past fiscal year, fees for legal services rendered amounted to less than 5% of
the Company's consolidated gross revenues and less than 5% of the gross revenues
of Zeldes, Needle & Cooper.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
All
Other
Name and Principal Fiscal Bonus Compen-
Position Year Salary Cash Stock sation(2)
-------- ---- ------- ---- ----- ---------
<S> <C> <C> <C> <C> <C>
Gordon S. Cohen 1995 364,347 130,000 34,375 (1) 45,331
(Chairman and 1994 352,762 130,000 33,594 (1) 45,467
Chief Executive 1993 326,599 130,000 36,719 (1) 46,223
Officer)
Martin L. Schulman 1995 284,190 276,000 --- 34,954
(President and 1994 270,658 276,000 33,594 (1) 34,087
Chief Operating 1993 257,769 276,000 36,719 (1) 34,812
Officer)
</TABLE>
- -------------------------------
(1) Includes the market price of 12,500 shares of Common Stock awarded as a
bonus as of the earlier of the date the named executive exercised his
right to receive such bonus or the last day of the fiscal year in
respect of which the bonus was granted.
(2) All other compensation is comprised of the amount contributed by the
Company's subsidiary, Jeneric/Pentron Incorporated, to the account of
the named executive under the Jeneric/Pentron Incorporated 401(k)
Thrift Plan, premiums paid by the Company on policies of life and
disability insurance, cash allowances and certain other benefits.
9
<PAGE> 11
As a condition to their sale of Jeneric Industries, Inc. and Pentron
Corporation (subsequently merged to become Jeneric/Pentron), Gordon S. Cohen and
Martin L. Schulman required that Jeneric/Pentron enter into five year employment
agreements with them, effective January 1, 1987, pursuant to which Dr. Cohen
serves as President,Treasurer and Chairman of the Board of Directors of
Jeneric/Pentron and Mr. Schulman serves as Executive Vice President, Secretary
and a Director of Jeneric/Pentron. Pursuant to the terms of their respective
employment agreements, Dr. Cohen and Mr. Schulman each receive, among other
benefits, annual compensation of not less than $250,000 and $291,122,
respectively (in each case to be increased annually by the cost of living
adjustment provided generally to all Jeneric/Pentron employees and in the case
of Dr. Cohen, by 5% if that amount exceeds the cost of living adjustment) and an
annual bonus of not less than $130,000 and $26,000, respectively. The employment
agreements also provide that if Dr. Cohen's or Mr. Schulman's employment is
terminated by Jeneric/Pentron without cause (defined to include the placement of
such individual in a position of less responsibility or prestige, whether as a
result of a sale, merger or consolidation of Jeneric/Pentron or otherwise),
Jeneric/Pentron will continue to pay such individual his full compensation for
the remainder of the term of employment without any adjustment or offset.
The employment agreements further provide that if Jeneric/Pentron shall
terminate Dr. Cohen's or Mr. Schulman's employment without cause,
Jeneric/Pentron shall employ Dr. Cohen as a consultant for a period of ten (10)
years and shall employ Mr. Schulman as a consultant for a period of twelve (12)
years. During the first year of Dr. Cohen's consulting term, he will receive the
full compensation to which he is otherwise entitled under his employment
agreement. For the remainder of Dr. Cohen's consulting term, he will be
compensated at the rate of $1,000 per day for services rendered, but in no event
less than $2,000 per month. During Mr. Schulman's consulting term, he will be
compensated at the rate of $6,000 per year (to be increased annually by fifty
(50%) percent of the cost of living adjustment provided generally to all
Jeneric/Pentron employees). In addition, in the event of wrongful termination
Dr. Cohen and Jeneric/Pentron will enter into a non-competition agreement having
a term of ten (10) years during which he will receive an additional $40,000 per
annum; with respect to Mr. Schulman, he has agreed to enter into a
non-competition agreement having a term of twelve (12) years subsequent to the
termination of his employment, conditioned upon his receipt of all payments
which are provided in his employment agreement. In May, 1989, Jeneric/Pentron
extended the terms of Dr. Cohen's and Mr. Schulman's employment agreements to
December 31, 1996 and on May 1, 1995 Jeneric/Pentron entered into an employment
agreement with Mr. Schulman which provides for a term of employment ending
December 31, 2002. With respect to Dr. Cohen, compensation, which may include
the issuance of bonus shares, as described below, will be negotiated from time
to time during the extended five (5) year term but shall not be less than that
provided during the initial term. During fiscal year 1995, the Board did not
approve any increase in the compensation of Dr. Cohen (except for a cost of
living increase). During fiscal 1995, Dr. Cohen received a bonus with respect to
his services during calendar year 1994 entitling him to receive 12,500 shares of
common stock.
In Mr. Schulman's employment agreement entered into on May 1, 1995
effective January 1, 1995, he relinquished all rights to bonus shares to which
he was entitled in his initial and extended employment agreements. The May 1,
1995 agreement between
10
<PAGE> 12
Jeneric/Pentron and Mr. Schulman provides for maximum annual payments of salary,
assuming all bonuses are earned, aggregating approximately $567,000, subject to
reduction in certain circumstances, through the term which ends December 31,
2002. The Schulman employment agreement also contains provisions pursuant to
which 394,328 shares of Customedix Corporation stock held by Mr. Schulman have
been purchased by Customedix at a price of $1.50 per share. The purchase price
of the shares has been paid by delivery of Customedix's subordinated promissory
note, which bears interest at 8% per annum which accrues and is not compounded
until principal and interest payments begin January, 2003. Final maturity of the
note is December 31, 2014. Mr. Schulman's employment agreement provides that he
shall receive as part of his total maximum compensation an annual bonus equal to
7% of the gross sales by Jeneric/Pentron of dental related composite, porcelain
and ceramic products in excess of $1,000,000, but in no event shall such bonus
exceed $250,000 per annum.
The obligations of Jeneric/Pentron under the aforesaid employment
agreements are guaranteed by the Company.
11
<PAGE> 13
STOCK PRICE PERFORMANCE GRAPH
The graph below compares the cumulative total stockholder return on the
Company's Common Stock with the AMEX Market Index and the Media General Medical
Instruments and Supplies Industry Group Index, an index of approximately 270
companies whose stock is publicly traded.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG CUSTOMEDIX CORPORATION,
AMEX MARKET INDEX AND INDUSTRY GROUP INDEX
<TABLE>
<CAPTION>
MEASUREMENT PERIOD CUSTOMEDIX AMEX MARKET MG GROUP
(FISCAL YEAR COVERED) CORP. INDEX INDEX
<S> <C> <C> <C>
1990 100 100 100
1991 100 99 130
1992 60 109 152
1993 96 119 138
1994 80 115 130
1995 88 139 186
</TABLE>
ASSUMES $100 INVESTED ON JULY 1, 1990
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING JUNE 30.
12
<PAGE> 14
EMPLOYEE BENEFIT PLANS
The Company does not have any pension or benefit plans. However, the Company's
subsidiary, Jeneric/Pentron, has two plans under which all of its employees are
eligible to participate and under which Gordon S. Cohen, Martin L. Schulman, and
Barry L. Kosowsky, who are directors and/or officers of Customedix and
Jeneric/Pentron, receive benefits.
PENSION TABLE
The following tabulation shows estimated annual retirement benefits
payable to employees under the Jeneric/Pentron Incorporated Restored Defined
Benefit Pension Plan:
<TABLE>
<CAPTION>
AVERAGE ANNUAL YEARS OF PARTICIPATION
COMPENSATION 10 OR MORE
-------------- ----------------------
<S> <C>
$ 100,000 ...................... $ 20,000
125,000 ...................... 25,000
150,000 ...................... 30,000
175,000 ...................... 35,000
200,000 or more .............. 40,000
</TABLE>
The benefits listed in the pension table are not subject to any
deductions for social security or other offset amounts.
Compensation includes basic pay, including bonuses, overtime and
commissions, determined for the calendar year ending within the plan year.
Average annual compensation are the average earnings received by the participant
in the five (5) consecutive plan years producing the highest such average for
the participant.
An employee who participated in the Jeneric Industries, Inc. Defined
Benefit Pension Plan dated March 1, 1975 would receive an additional benefit
which was funded prior to fiscal 1995.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In connection with the acquisition of Jeneric/Pentron by the Company,
Jeneric/Pentron entered into two lease agreements (the "Leases") with
Wallingford Property Associates, a Connecticut general partnership (the
"Partnership"), with respect to certain property having an aggregate of
approximately 54,000 square feet of rentable space located in Wallingford,
Connecticut. Dr. Cohen and Mr. Schulman, who are members of the Board of
Directors, are the general partners of the Partnership. The independent
directors approved an Amendment and Renewal of the Leases to extend their terms
to December 31, 2006 on substantially the same terms and conditions set forth in
the Leases. The independent directors believed that it was possible that more
favorable rental rates might have been available from third parties for
comparable properties. However, in light of the cost of leasehold improvements
previously made having a net book value at that time of approximately
$1,059,400, the substantial anticipated costs of relocating the business
13
<PAGE> 15
conducted at these facilities, more favorable rate of amortization of leasehold
improvements and the loss of production during the period of any such move, the
independent directors also believed it in the best interests of the Company to
renew the above leases for the extended terms. The aggregate annual rental under
the Leases is currently $388,500. Rental on the Leases is to be increased
annually by the greater of 5% or the increase in a designated consumer price
index. The Leases are "net leases" and all real estate taxes, utilities,
insurance costs and ordinary repairs are paid by the tenant. The obligations of
Jeneric/Pentron under the aforesaid Leases are guaranteed by the Company.
Pursuant to an agreement between Jeneric/Pentron and a trust
(the"Trust") of which Gordon S. Cohen is a beneficiary, Jeneric/Pentron was
granted a worldwide license to use the names Jeneric(R) and Rexillium(R). Under
this license agreement Jeneric/Pentron is obligated to pay annually to the Trust
an amount equal to the sum of 1% of Jeneric/Pentron's net sales of products sold
under the name Rexillium and 0.25% of Jeneric/Pentron's net sales of all
products and services. During the twelve months ended June 30, 1995,
Jeneric/Pentron paid to the trust approximately $145,000.
Management believes that the above license agreement is on terms as
favorable as those available from unaffiliated third parties.
Robert S. Cooper is a member of the firm Zeldes, Needle & Cooper, which
renders legal services to the Company and its subsidiaries. During the past
fiscal year, fees for legal services rendered by Zeldes, Needle & Cooper
amounted to less than 5% of the Company's consolidated gross revenues and less
than 5% of the gross revenues of Zeldes, Needle & Cooper.
David H. Leigh is a partner of the firm Bailey, Moore, Glazer, Schaefer
and Proto, which renders accounting services to the Company and its
subsidiaries. During the past fiscal year, fees for accounting services rendered
by Bailey, Moore, Glazer, Schaefer and Proto amounted to less than 5% of the
Company's consolidated gross revenues and less than 5% of the gross revenues of
Bailey, Moore, Glazer, Schaefer and Proto.
INDEPENDENT AUDITORS
The Board of Directors has designated Arthur Andersen LLP of Hartford,
Connecticut as auditors of the Company for the fiscal year ending June 30, 1996.
Arthur Andersen LLP were the auditors for the fiscal year ended June 30, 1995.
Arthur Andersen LLP does not have any direct or indirect financial interest in
the Company or any of its subsidiaries.
Representatives of Arthur Andersen LLP are expected to be present at
the Annual Meeting. They will be afforded the opportunity to make a statement ,
if they so desire, and are expected to be available to respond to appropriate
questions.
OTHER MATTERS
At the date of this Proxy, the Company has not been informed and is not
aware that any other matters will be brought before the Annual Meeting.
14
<PAGE> 16
CUSTOMEDIX CORPORATION
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints GORDON S. COHEN and MARTIN L. SCHULMAN
as proxies, each with the power to appoint his or her substitute, and hereby
authorizes them to represent and to vote, as designated on the reverse side of
this proxy card, all the shares of Common Stock of CUSTOMEDIX CORPORATION held
of record by the undersigned on September 18, 1995, at the Annual Meeting of
Stockholders to be held on November 6, 1995 or any adjournment thereof.
(The Proxy continues and must be signed on the reverse side.)
/ X / Please mark your
votes as in this
example
<TABLE>
<CAPTION>
WITHHOLD
FOR all nominees AUTHORITY
listed at right to vote for all
(except as marked to nominees listed
the contrary below) at right NOMINEES:
<S> <C> <C> <C>
1. ELECTION Gordon S. Cohen
OF Martin L. Schulman
DIRECTORS / / / / Robert N. Thomas
William T. Fitch
(Instructions: To withhold authority to vote for Elry C. Bird
any individual nominee, write that nominee's Robert S. Cooper
name on the line below.) David H. Leigh
</TABLE>
- ---------------------------------
THE DIRECTORS RECOMMEND A VOTE FOR ITEM 1.
2. In their discretion, to transact any other business as may
properly come before the meeting.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE
MANNER DIRECTED HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF
NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSAL 1.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
SIGNATURE DATE
------------------------------------- --------
DATE
- ---------------------------------------------- --------
SIGNATURE IF HELD JOINTLY
NOTE: Please sign exactly as name appears herein. When shares are held by joint
tenants, any tenant may sign. When signing as attorney, as executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by president or other
authorized officer. If a partnership, please sign in the partnership name
by authorized person.
