<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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:
[X] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Memry 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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction 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:
-------------------------------------------------------------------------
[_] 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:
-------------------------------------------------------------------------
Notes:
<PAGE>
MEMRY CORPORATION
57 Commerce Drive
Brookfield, Connecticut 06804
(203) 740-7311
_____________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
_____________
October 28, 1999
To the Holders of Common Stock of
MEMRY CORPORATION
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the "Annual
Meeting") of Memry Corporation (the "Company") will be held at the Radisson
Hotel, 42 Lake Avenue Extension, Danbury, Connecticut, on Tuesday, November 23,
1999, at 10:00 a.m., for the following purposes:
1. To elect six persons to the Board of Directors, each to hold office
until the next Annual Meeting of Stockholders and until his respective
successor is elected and qualified.
2. To consider and vote upon an amendment to the Company's Certificate of
Incorporation to increase the number of authorized shares of the
Company's Common Stock from 30,000,000 to 40,000,000.
3. To consider and act upon such other business as may properly come before
the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on October 11, 1999
as the record date for the determination of stockholders entitled to notice of,
and to vote at, the Annual Meeting. A list of stockholders entitled to vote at
the Annual Meeting will be available for examination by any stockholder, for any
purpose relevant to the meeting, on and after October 28, 1999, during ordinary
business hours at the Company's principal executive offices located at the
address first set forth above.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THIS MEETING. PLEASE
COMPLETE, DATE, AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED STAMPED RETURN ENVELOPE, WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL
MEETING. YOU MAY REVOKE YOUR PROXY IN THE MANNER DESCRIBED IN THE ACCOMPANYING
PROXY STATEMENT AT ANY TIME BEFORE IT HAS BEEN VOTED AT THE ANNUAL MEETING.
Dated: Brookfield, Connecticut By Order of the Board of Directors,
October 28, 1999
Robert P. Belcher
Secretary
<PAGE>
MEMRY CORPORATION
57 Commerce Drive
Brookfield, Connecticut 06804
(203) 740-7311
_____________
PROXY STATEMENT
_____________
Annual Meeting of Stockholders
Tuesday, November 23, 1999
_____________
INTRODUCTION
This proxy statement ("Proxy Statement") is being furnished in connection
with the solicitation of proxies by the Board of Directors of Memry Corporation
(the "Company") for use at the Annual Meeting of Stockholders (the "Annual
Meeting") to be held on November 23, 1999, and at any adjournment of that
meeting. All proxies will be voted in accordance with the stockholders'
instructions and, if no choice is specified, the proxies will be voted in favor
of election of the six nominees for directors specified herein and in favor of
the other matters set forth herein.
The Company's Annual Report on Form 10-KSB for the Company's fiscal year
ended June 30, 1999 was mailed to stockholders, along with these proxy
materials, on or about October 28, 1999.
The Annual Meeting of Stockholders of Memry Corporation will be held on
Tuesday, November 23, 1999 at the Radisson Hotel, 42 Lake Avenue Extension,
Danbury, Connecticut, at 10:00 a.m. local time.
VOTING RIGHTS AND PROXY INFORMATION
Proxies in the accompanying form are solicited on behalf of and at the
direction of the Board of Directors, which has fixed the close of business of
Monday, October 11, 1999 as the record date (the "Record Date") for the
determination of holders of outstanding shares of the Company's Common Stock
entitled to notice of and to vote at the Annual Meeting or any adjournment
thereof. Holders of record of Common Stock at the close of business on October
11, 1999, are entitled to notice of and to vote at the meeting. As of October
11, 1999, there were issued and outstanding 20,680,289 shares of the Company's
Common Stock, each entitled to one vote, which were held of record on such date
by approximately 1,262 record holders. All six directors shall be elected by a
plurality of the shares of the Company's Common Stock present and voting (in
other words, the six individuals receiving the largest number of votes will be
elected). The affirmative vote of the holders of a majority of the voting power
of the shares of the Company's Common Stock is required for the adoption of the
resolution authorizing and approving the Capitalization Amendment (as defined
below). Because of these voting requirements, a stockholder who does not vote at
the Annual Meeting or who abstains from voting on the resolution to authorize
and approve the Capitalization Amendment, would in effect be voting against such
proposal because such shares would not be counted in determining whether the
necessary majority vote had been obtained. Broker non-votes would likewise have
the effect of being counted as a vote against such proposal.
<PAGE>
All shares of the Company's Common Stock represented by properly executed
proxies will be voted at the Annual Meeting in accordance with the directions
indicated on the proxies unless such proxies have previously been revoked. To
the extent that no direction is indicated, the shares will be voted FOR the
election of all of the Company's nominees as directors and FOR the adoption of a
resolution approving the Capitalization Amendment. See "PROPOSAL NO. 1 -ELECTION
OF DIRECTORS" and "PROPOSAL NO. 2 - AMENDMENT TO MEMRY CORPORATION'S CERTIFICATE
OF INCORPORATION." If any other matters are properly presented at the Annual
Meeting for action, including a question of adjourning the meeting from time to
time, the persons named in the proxies and acting thereunder will have
discretion to vote on such matters in accordance with their best judgment. The
Annual Meeting may be adjourned, and additional proxies solicited, if at the
time of the Annual Meeting a quorum is not present or the votes necessary to
approve the Capitalization Amendment have not been obtained. Any adjournment of
the Annual Meeting would require the affirmative vote of the holders of at least
a majority of the shares of the Company's Common Stock represented at the Annual
Meeting (regardless of whether such shares constituted a quorum).
Any stockholder who has executed and returned a proxy has the power to
revoke it at any time before it is voted. A stockholder who wishes to revoke a
proxy can do so by attending the Annual Meeting and voting in person, by
executing a later-dated proxy relating to the same shares or by a writing
revoking the proxy and, in the latter two cases, delivering such later-dated
proxy or writing to the Secretary of the Company prior to the vote at the Annual
Meeting. Any writing intended to revoke a proxy should be sent to the Company at
its principal executive offices, 57 Commerce Drive, Brookfield, Connecticut
06804, Attention: Robert P. Belcher, Secretary.
In addition to the use of the mail, proxies may be solicited via personal
interview and telephone or telegraph by the directors, officers and regular
employees of the Company. Such persons will receive no additional compensation
for such services. Arrangements will also be made with certain brokerage firms
and certain other custodians, nominees and fiduciaries for the forwarding of
solicitation materials to the beneficial owners of the Company's Common Stock
held of record by such persons, and such brokers, custodians, nominees and
fiduciaries will be reimbursed by the Company for reasonable out-of-pocket
expenses incurred by them in connection therewith.
The stockholders of the Company have no dissenters' rights in connection
with any of the proposals.
2
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of September 20, 1999, information
regarding beneficial ownership of the Company's Common Stock by (i) each person
who is known by the Company to own beneficially more than 5% of the outstanding
Common Stock (based on information furnished to the Company on behalf of such
persons or otherwise known to the Company), (ii) each of the directors of the
Company, (iii) each of the executive officers named in the annual compensation
table captioned "Summary Compensation Table" below, and (iv) all current
directors and executive officers as a group. Beneficial ownership of a security
is determined pursuant to Section 13d-3 of the Securities Exchange Act of 1934,
as amended. A person is deemed to be the beneficial owner of a security, subject
to Section 13d-3(b) if, among other things, that person has the right to acquire
such security within 60 days.
COMMON STOCK
<TABLE>
<CAPTION>
Percentage of
Name and Address Amount and Nature of Common Stock
of Beneficial Owner Beneficial Ownership Outstanding (1)
- ------------------- -------------------- -----------
<S> <C> <C>
Connecticut Innovations, 2,791,963 (2) 12.66%
Incorporated
40 Cold Spring Road
Rocky Hill, Connecticut 06067
Raychem Corporation 1,662,928 7.97%
300 Constitution Drive
Menlo Park, California 94025
James G. Binch 589,940 (3) 2.79%
362 Canoe Hill Road
New Canaan, Connecticut 06840
Jack H. Halperin, Esq. 45,375 *
361 Silver Court
Woodmere, New York 11598
W. Andrew Krusen, Jr. 360,403 (4) 1.73%
7650 Courtney Campbell Causeway
Suite 1120
Tampa, Florida 33607
John A. Morgan 84,939 (5) *
121 Elderwood Avenue
Pelham, New York 10803
Patrick F. Cleary 9,751 *
416 Roundhouse Creek Road
Trinidad, California 95570
Kempton J. Coady III 0 *
4 Fernwood Road
Westport, Connecticut 06880
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Percentage of
Name and Address Amount and Nature of Common Stock
of Beneficial Owner Beneficial Ownership Outstanding (1)
- ------------------- -------------------- -----------
<S> <C> <C>
Robert J. Thatcher 50,000 (6) *
14315 Wedgeway Court
Eden Prairie, Minnesota 55346
William H. Morton, Jr.** 359,774 (7) 1.71%
6 Hunting Ridge
Wilton, Connecticut 06897
James Proft** 69,999 *
2 Williams Lane
Foster City, California 94404
Thomas D. Carey** 20,000 (8) *
19 Heartstone Lane
Wilton, Connecticut 06987
Ming H. Wu 35,166 (9) *
12 Briar Cliff Manor
Bethel, Connecticut 06801
All directors and 1,195,574 (10) 5.63%
executive officers as
a group (10 persons)
</TABLE>
________________________________
* Less than one percent.
** Former executive officer of the Company.
(1) In each case where shares subject to warrants or options are included as
beneficially owned by an individual or group, the percentage of all shares
owned by such individual or group is calculated as if all such warrants or
options had been exercised prior to such calculation.
(2) Includes (i) 482,450 shares of Common Stock for which Class I warrants
issued by the Company to Connecticut Innovations Incorporated (ACII@) may
be exercised at $0.853 per share, which warrants expire on April 25, 2002,
and (ii) 705,485 shares of Common Stock for which Class II warrants issued
by the Company to CII may be exercised at $1.19 per share, which warrants
expire on April 25, 2002. The expiration dates of these warrants are
subject to extension under certain circumstances.
(3) Includes currently exercisable options (or options exercisable within 60
days of September 20, 1999) to purchase (i) 200,000 shares of the Common
Stock at $1.50 per share, (ii) 13,333 shares of Common Stock at $1.78 per
share, and (iii) 70,000 shares of Common Stock at $4.00 per share.
Additional options granted to Mr. Binch to purchase 210,000 shares of
Common Stock at $4.00 per share and 6,667 shares of Common Stock at $1.78
per share will not be exercisable within 60 days of September 20, 1999.
Also includes 1,007 shares of Common Stock owned by Mr. Binch's daughter.
Mr. Binch disclaims beneficial ownership of such shares owned by his
daughter. Also includes 196,532 shares of Common Stock owned by Harbour
Investment Corporation. Mr. Binch is the President, Chief Executive Officer
and sole shareholder of Harbour Investment Corporation.
4
<PAGE>
(4) Includes 82,328 shares of Common Stock owned by WIT Ventures, LTD. ("WIT"),
20,000 shares of Common Stock owned by 169855 Canada Inc., 8,000 shares of
Common Stock owned by Krusen-Vogt & Co, and 218,000 shares of Common Stock
owned by Dominion Financial Group International LDC ("DFGI"). Mr. Krusen is
the President and a principal shareholder of JAWIT Corporation which is the
managing General Partner of WIT, President of 169855 Canada Inc., a General
Partner of Krusen-Vogt & Co. and a limited partner of WIT. In addition, Mr.
Krusen is the chairman of the Executive Committee of DFGI, and also
indirectly beneficially owns certain outstanding securities of DFGI through
WIT.
(5) 1,307 of such shares of Common Stock are owned jointly by Mr. Morgan and
his wife, Deborah Morgan. Another 120 of such shares of Common Stock are
owned solely by Mrs. Morgan, and Mr. Morgan disclaims beneficial ownership
of such 120 shares. Another 10,000 of such shares are owned by a trust for
Annette Morgan for which Mr. Morgan is the trustee.
(6) Consists of options to purchase 50,000 shares of Common Stock at a purchase
price of $2.00 per share. Options granted to Mr. Thatcher to purchase
150,000 additional shares of Common Stock at $2.00 per share are not
exercisable within 60 days of September 20, 1999.
(7) Includes 20,000 shares of Common Stock owned by Mr. Morton's children. Mr.
Morton disclaims beneficial ownership of such shares. Also includes options
to purchase 125,000 shares of the Company's Common Stock at $0.90 per
share, options to purchase 90,000 shares of the Company's Common Stock at
$1.68 per share, options to purchase 5,000 shares of the Company's Common
Stock at $1.78 per share, and warrants issued to Mr. Morton's wife, Dawn
Morton, to purchase 18,000 shares of Common Stock at a purchase price of
$1.50 per share, which warrants expire on July 16, 2000. All of such
options are currently exercisable.
(8) Consists of currently exercisable options to purchase 20,000 shares of the
Company's Common Stock at $2.00 per share.
(9) Includes currently exercisable options to purchase 14,500 shares of Common
Stock at $1.50 per share and 2,500 shares of Common Stock at $4.00 per
share. Also includes currently exercisable options to purchase 14,666
shares of Common Stock at $1.78 per share. Options granted to Dr. Wu to
purchase 7,500 shares at an exercise price of $4.00 per share and 7,334
shares at an exercise price of $1.78 per share are not exercisable within
60 days of September 20, 1999.
(10) See prior footnotes.
___________________
5
<PAGE>
PROPOSAL NO. 1 - ELECTION OF DIRECTORS
The Board of Directors of the Company currently consists of seven members.
However, effective upon the conclusion of the Annual Meeting of Stockholders,
the size of the Board of Directors is being decreased from seven members to six
members. All of the directors are elected annually and hold office until the
next succeeding Annual Meeting of Stockholders or until their respective
successors are duly elected and qualified. The Board of Directors recommends the
election of all the following six nominees for director. It is intended that the
persons named as proxies will vote FOR the election of the following nominees as
directors, all of whom currently are directors of the Company.
Positions with Director
Name Age the Company Since
---- --- ----------- -----
James G. Binch 52 CEO and Chairman of the Board 1989
Robert J. Thatcher 45 President and COO 1999
W. Andrew Krusen, Jr./1, 2/ 51 Director 1994
Jack H. Halperin, Esq./1, 2/ 53 Director 1994
Patrick F. Cleary /2/ 41 Director 1999
Kempton J. Coady III 51 Director 1999
___________________
/1/ Member of Compensation Committee.
/2/ Member of Audit Committee.
_____________________
Nominees For Director
James G. Binch has been Chief Executive Officer of the Company since
December 11, 1991 and Chairman of the Board since September 24, 1993. He also
served as President of the Company from December 11, 1991 to July 7, 1999 and
Treasurer of the Company from July 19, 1994 to September 14, 1999. He was the
President and a director of Trinity Capital Corporation, a merchant banking
firm, from its inception in June 1987 to August 1994. He has been the President,
Chief Executive Officer and the sole shareholder of Harbour Investment
Corporation, the general partner of Harbour Holdings Limited Partnership, an
investment management company, since its inception in June 1992. From 1985 to
1987, he served as President and Chief Operating Officer of Lummus Crest, Inc.,
the principal engineering subsidiary of Combustion Engineering, Inc., with
annual revenues of $300,000,000 and approximately 4,000 employees. From 1980 to
1985, Mr. Binch served as Vice President, Corporate Strategic Planning for
Combustion Engineering, Inc., a manufacturing and engineering firm. Mr. Binch is
a graduate engineer from Princeton University. He also holds an M.B.A. from the
Wharton School of the University of Pennsylvania.
Robert J. Thatcher has been President and Chief Operating Officer of the
Company since July 7, 1999. Mr. Thatcher joined the Company in March 1999 as
Vice President of Worldwide Sales and Marketing. From 1996 to October 1997, Mr.
Thatcher was Director of Sales and Marketing for Medtronic Instent and
subsequently became Instent's General Manager until the division was sold in
December 1998. During the years 1993 to 1996, Mr. Thatcher served as Director of
6
<PAGE>
Marketing and Director of Business Development for Medtronic's Neurological
Division. Prior to 1993, Mr. Thatcher held several significant sales and
marketing positions in the Cardiology and Peripheral Divisions of Schneider
(USA) and product management positions with Boston Scientific and The Kendall
Company. Mr. Thatcher holds a B.S. degree in Business Administration from the
University of Florida and an M.B.A. degree from Rollins College.
W. Andrew Krusen, Jr., is a graduate of Princeton University with a
Bachelor's Degree in Geology. Since 1989, he has been President (as well as a
principal shareholder) of Dominion Financial Group, Inc., a family-controlled
corporation in real estate development, construction, leasing and manufacturing,
as well as Chairman of Dominion Energy and Minerals Corporation, an oil and gas
concern. Mr. Krusen is also the Chairman of the Executive Committee of Dominion
Financial Group International, LDC, President and principal shareholder of
169855 Canada Inc., and a General Partner of Krusen-Vogt & Co. Mr. Krusen is
also the President and a principal shareholder of JAWIT Corporation which is the
managing General Partner of WIT Ventures, LTD and he is a limited partner of WIT
Ventures, LTD. He is a director of Raymond James Trust Company, Northstar Energy
Corporation, S&P Cellular Holding, Inc., and Florida Banks, Inc.
Jack H. Halperin, Esq., has practiced corporate and securities law in New
York for more than 20 years. Since 1987, he has been in private practice,
concentrating on international financing transactions. Mr. Halperin holds a B.A.
degree (summa cum laude) from Columbia College and a J.D. from New York
University School of Law, where he was Note-and-Comment Editor of the Law
Review. Mr. Halperin is a director of AccuMed International, Inc., I-Flow
Corporation and Nocopi Technologies, Inc.
Patrick F. Cleary is a private investor and consultant specializing in
financing small and mid-sized companies. From 1994 through 1997, he was a
managing director of Chase Manhattan Bank, where he concentrated on raising
capital for communications companies throughout the world. From 1987 to 1994,
Mr. Cleary was a partner of TCW Capital, an affiliate of Trust Company of the
West, where he oversaw investments of over $700 million in middle market
companies, serving as a director of ten portfolio companies. He is currently a
director of the Icelandic Broadcasting Corporation. Mr. Cleary holds a
Bachelor's of Science in Foreign Service from Georgetown University with a major
in International Economics.
Kempton J. Coady III has served as the Group Chief Executive Officer of
Deltex Medical Holdings Limited, a hemodynamic monitoring company based in the
United Kingdom, since 1998. Prior to that, from 1997 to 1998, Mr. Coady was
Senior Managing Director at Quintiles MTC/BRI Corporation, a medical device
contract research company. Mr. Coady was the Vice President of Business
Development from 1996 to 1997 and Vice President - Worldwide Marketing from 1995
to 1996 for the Patient Monitoring Division of Datascope Corporation, a medical
device company. From 1992 to 1994, Mr. Coady was the President and Chief
Executive Officer of MCG International, a medical device company. Mr. Coady
holds a B.S. degree in Chemistry/Biology from Bates College, and an M.P.S.
degree in Health Care Administration and an M.B.A. degree, both from Cornell
University.
Retiring Director
John A. Morgan has been a Vice President of Solomon Smith Barney, an
investment banking firm, since 1992. Prior to that, Mr. Morgan was a Vice
President of Kidder Peabody & Co. since 1982. After serving as a director of the
Company for ten years, Mr. Morgan will retire from the Board effective November
23, 1999.
Committees
The Audit Committee consists of Messrs. Halperin, Krusen and Cleary. The
Audit Committee is authorized (i) to select the Company's independent auditors,
(ii) to review all recommendations made by such independent auditors with
respect to the Company's accounting methods or internal controls, and (iii) to
review the scope of the audit conducted by such independent auditors.
7
<PAGE>
The Compensation Committee, the members of which are currently Messrs.
Morgan, Halperin and Krusen, is authorized, subject to review by the entire
Board (i) to determine the compensation of officers and directors of the Company
and its subsidiaries and (ii) to review the adequacy of all employee benefit
plans and revise existing plans or develop new plans when appropriate. The
Compensation Committee is also authorized to make awards under, and oversee the
administration of, the Company's stock option plans. The Compensation Committee
met 4 times during the fiscal year ended June 30, 1999.
The full Board of Directors acts as its own Nominating Committee. In its
role as the Nominating Committee, the Board of Directors is authorized (i) to
establish criteria and procedures for the election of directors, (ii) to review
the qualifications of candidates proposed for nomination to the Board, (iii) to
recommend, prior to each annual meeting of stockholders, a slate of directors to
be elected at such meeting, and (iv) to recommend, when appropriate, changes in
the structure, size or function of the Board. The Board will consider nominees
recommended by stockholders. Stockholders wishing to recommend nominees for
election as directors at an annual meeting should submit such recommendation,
together with any relevant information that they wish the Board to consider, to
the Company no later than 120 days prior to such annual meeting of stockholders.
Attendance at Meetings
The Board of Directors held 9 meetings during the fiscal year ended June
30, 1999. Each incumbent director attended 75% or more of the aggregate of the
total number of meetings of the Board of Directors from the time each such
director was duly elected or appointed to serve as director in fiscal 1999 and
the total number of meetings held by all committees of the Board on which he
served during such period.
Compensation of Directors
All non-employee directors who remain as such as of the last day of any
given fiscal quarter are issued quarterly, in arrears, within sixty days of the
last day of each fiscal quarter, such number of shares of Common Stock as shall
have a fair market value equal to $7,500. Such stock grants are "restricted"
such that the shares of Common Stock granted to each non-employee director will
vest in equal thirds over a period of three years and such shares are subject to
forfeiture if, prior to their vesting, the director voluntarily resigns (other
than following certain defined "changes in control"). In addition, all non-
employee directors are entitled to receive $1,000 for each meeting of the entire
board, and $600 for each committee meeting, attended by them. Directors are all
reimbursed for expenses reasonably incurred in connection with the performance
of their duties.
8
<PAGE>
Executive Officers of the Company
The following table lists information regarding the current executive
officers of the Company:
Name Position Age
---- -------- ---
James G. Binch Chief Executive Officer and Chairman of the Board 52
Robert J. Thatcher President and Chief Operating Officer 45
Robert P. Belcher Chief Financial Officer, Vice President, Secretary 51
and Treasurer
Joseph Pasqualucci Vice President - Operations 36
Ming H. Wu Vice President and General Manager - Eastern
Operations 44
Executive officers are elected until the next annual meeting of the Board
of Directors and until their respective successors are elected and qualified.
Information with respect to Messrs. Binch and Thatcher is set forth above.
Robert P. Belcher was employed by the Company on July 19, 1999 and was
elected by the Board of Directors to serve as Chief Financial Officer, Vice
President, Secretary and Treasurer on September 14, 1999. Prior to joining
Memry, he served as Chief Financial Officer for Eatwell Enterprises, as well as
Managing Director, Associated Asset Management Inc. From 1996 through 1998, Mr.
Belcher was the Chief Financial Officer for Anderson Group Inc. From 1994 to
1996, he served as a Principal of Booz, Allen & Hamilton in their New York
office. From 1988 to 1994, Mr. Belcher was Executive Vice President of Trinity
Capital Corporation, a privately held merchant banking business based in
Stamford, Connecticut. From 1981 until 1988, Mr. Belcher served in a variety of
senior staff positions with Combustion Engineering, Inc., including Corporate
Vice President - Operations Consulting and Corporate Vice President - Strategic
Planning. His experience with Combustion Engineering, Inc., as well as with
Kendall Company's Hospital Products Division, involved numerous manufacturing
cost studies, budget development and control, as well as information systems
development. Mr. Belcher received his B.A. and M.A. in Economics from Vanderbilt
University and his M.B.A. with high distinction from the Harvard Business
School. In addition, he served in the U.S. Navy as a Duty Supply Officer from
1971 to 1974.
Joseph Pasqualucci joined the Company in January 1999 as Vice President and
General Manager, Western Division and was elected by the Board of Directors to
serve as Vice President - Operations on September 14, 1999. From 1991 through
1998, Mr. Pasqualucci worked for United States Surgical Corporation, most
recently as Senior Director of the Manufacturing Engineering Department, where
he was responsible for product and process improvements on devices representing
$1 billion of annual revenues. Previously he served as Senior Project Engineer
from 1988 to 1991 at Sensor Engineering Company. Prior engineering positions
were at Davis and Geck and Sherwood Medical. In the last 10 years, Mr.
Pasqualucci has received four U.S. patents for different medical devices, has
authored technical papers, and has provided consultation services to Welch Allyn
Company, Steri-Safe Corporation, and Sherwood Medical. Mr. Pasqualucci holds a
Bachelor of Science in Electrical Engineering from the University of Hartford
and a Master of Science in Management Engineering from the University of
Bridgeport.
Dr. Ming H. Wu has served the Company since July 1, 1998 as Vice President
and General Manager - Eastern Operations. From January 16, 1998 through June 30,
1998, Dr. Wu was Vice President of Engineering of Eastern Operations and from
September 1, 1996 through January 15, 1998, he served as Director of
Engineering. From July 1, 1987 through August 31, 1996, Dr. Wu served the
Company as Chief Metallurgist. Prior to his employment at the Company, Dr. Wu
was Adjunct Research Professor at Naval Postgraduate School in Monterey,
California. Dr. Wu holds an M.S. degree and a Ph.D. degree in Materials Science
and Engineering from the University of Illinois-Champaign-Urbana.
9
<PAGE>
Executive Compensation
The following table sets forth certain information for the fiscal years
ended June 30, 1999, 1998 and 1997 regarding the total remuneration paid to the
Company's chief executive officer and its next four most highly compensated
executive officers in fiscal 1999.
Summary Compensation Table
--------------------------
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Long Term
Compensation
Annual Compensation Awards
-------------------- ------------
- -----------------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (g) (i)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Shares of
Common Stock All Other
Underlying Compensation
Name & Principal Position* Fiscal Year Salary ($) Bonus ($) Options (#) ($)
- ------------------------- ---------- ---------- --------- ------------ ------------
- -----------------------------------------------------------------------------------------------------------------------------
James G. Binch 1999 $240,750 /(1)/ $ -0- -0- $ 4,569 /(2)/
President, Chief Executive 1998 $208,750 /(1)/ $115,000 /(3)/ 280,000 /(4)/ $ 3,600 /(2)/
Officer, Treasurer and 1997 $167,500 /(1)/ $ -0- 20,000 /(5)/ $ -0-
Chairman
- -----------------------------------------------------------------------------------------------------------------------------
William H. Morton, Jr. /6)/ 1999 $203,000 /(7)/ $ -0- -0- $ 3,600 /(8)/
Senior Vice President and 1998 $185,000 $ 67,500 /(3)/ 90,000 /(9)/ $ 3,600 /(8)/
Chief Operating Officer 1997 $161,666 $ -0- 5,000 /(10)/ $ -0-
- -----------------------------------------------------------------------------------------------------------------------------
Thomas D. Carey /11)/ 1999 $152,250 /(12)/ $ 25,000/(13)/ -0- $ 42,613/(14)/
Vice President, 1998 $ 96,635 /(15)/ $ 80,000/(3)//(13)/ 115,000 /(16)/ $ 50,272/(17)/
Corporate Development and 1997 $ -0- $ -0- -0- $ -0-
Chief Financial Officer
- -----------------------------------------------------------------------------------------------------------------------------
Ming H. Wu 1999 $137,500 /(18)/ $ -0- -0- $ 2,126 /(19)/
Vice President and General 1998 $119,000 $ 25,000/(3)//(20)/ 10,000 /(21)/ $ -0-
Manager - Eastern Operations 1997 $ 95,000 $ -0- 22,000 /(22)/ $ -0-
- -----------------------------------------------------------------------------------------------------------------------------
James Proft /23)/ 1999 $177,642 /(24)/ $ -0- -0- $ 54,220 /(25)/
1998 $151,667 $ 42,000 /(3)/ 28,000 /(26)/ $ 59,499 /(27)/
1997 $135,404 $ 10,000 45,000 /(28)/ $ 92,548 /(29)/
=============================================================================================================================
</TABLE>
______________________
* Principal position listed is as of June 30, 1999.
(1) Does not include any amounts which may be deemed to have been paid to Mr.
Binch by Harbour Investment Corporation for serving as President of the
Company. See discussion below. During the first half of fiscal 1999, Mr.
Binch's annual salary was $237,500. Effective January 1, 1999, Mr. Binch's
annual salary was increased to $244,000. In addition, because the Company
switched its payroll procedures in January 1999 from a semi-monthly payment
schedule to a bi-weekly payment schedule, the actual salary payments made
by the Company and received by Mr. Binch in fiscal year 1999 totaled
$232,304.
(2) Mr. Binch received car allowances in fiscal 1998 and 1999 in the amounts of
$3,600 and $4,569, respectively.
10
<PAGE>
(3) The full amount of the bonuses awarded in fiscal 1998 were paid on
September 21, 1998.
(4) With respect to 180,000 of the aggregate 280,000 options granted to Mr.
Binch in fiscal year 1998, 45,000 are exercisable and 135,000 become
exercisable in equal installments on February 2 of each of 2000, 2001 and
2002. With respect to the remaining 100,000 options, 25,000 are
exercisable. The remaining 75,000 options become exercisable in equal
installments on June 1 of each of 2000, 2001 and 2002. The exercise price
for all 280,000 options is $4.00 per share.
(5) 13,333 of such 20,000 options are exercisable. The remaining 6,667 options
become exercisable on December 5, 1999. The exercise price for such
options is $1.78 per share.
(6) Pursuant to a letter agreement, dated August 17, 1999, between the Company
and William H. Morton, Mr. Morton is no longer an executive officer or an
employee of the Company. See discussion below.
(7) During the first half of fiscal 1999, Mr. Morton's annual salary was
$200,000. Effective January 1, 1999, Mr. Morton's annual salary was
increased to $206,000. Because the Company switched its payroll procedures
in January 1999 from a semi-monthly payment schedule to a bi-weekly
payment schedule, the actual salary payments made by the Company and
received by Mr. Morton in fiscal year 1999 totaled $195,869.
(8) Mr. Morton received a car allowance in each of fiscal 1998 and 1999 in the
amount of $3,600.
(9) With respect to 40,000 of the options granted to Mr. Morton in fiscal year
1998, as of June 30, 1999, 10,000 were exercisable and 30,000 would have
become exercisable in equal installments on February 2 of each of 2000,
2001 and 2002. With respect to the remaining 50,000 options, as of June
30, 1999, 12,500 were exercisable. The remaining 37,500 options would have
become exercisable in equal installments on June 1 of each of 2000, 2001
and 2002. The exercise price for all 90,000 options was $4.00 per share.
In connection with Mr. Morton's separation from the Company, the Company
issued to Mr. Morton currently exercisable options to purchase 90,000
shares of the Company's Common Stock at an exercise price of $1.68 per
share in lieu of the options set forth in the table.
(10) As of June 30, 1999, 3,333 of such 5,000 options were exercisable. The
remaining 1,667 options would have become exercisable on December 5, 1999.
In connection with Mr. Morton's separation from the Company, these
remaining options became fully exercisable pursuant to the letter
agreement. The exercise price for such options is $1.78 per share.
(11) Pursuant to a letter agreement, dated July 12, 1999, between the Company
and Thomas D. Carey, Mr. Carey is no longer an executive officer or an
employee of the Company. See discussion below.
(12) During the first half of fiscal 1999, Mr. Carey's annual salary was
$150,000. Effective January 1, 1999, Mr. Carey's annual salary increased
to $155,000. Because the Company switched its payroll procedures in
January 1999 from a semi-monthly payment schedule to a bi-weekly payment
schedule, the actual salary payments made by the Company and received by
Mr. Carey in fiscal year 1999 totaled $147,135.
(13) Of the $80,000 of bonuses paid in fiscal 1998 to Mr. Carey, $50,000 was
the first installment of a contractual signing bonus and the remaining
$30,000 was a year-end bonus. The $25,000 bonus paid in fiscal 1999 was
the final installment of the contractual signing bonus.
(14) The Company paid Mr. Carey $32,463 for expenses related to the tax
liability on relocation expenses previously received by Mr. Carey and his
family. He also received $6,550 for expenses related to income tax
liability on bonuses paid to Mr. Carey under his employment agreement. In
fiscal 1999, Mr. Carey received $3,600 as a car allowance.
11
<PAGE>
(15) These amounts reflect Mr. Carey's compensation for the period from October
27, 1997 (the date of the commencement of Mr. Carey's employment with the
Company) through June 30, 1998.
(16) With respect to 75,000 of the 115,000 options granted to Mr. Carey in
fiscal year 1998, as of June 30, 1999, 35,000 had already vested, and
20,000 would have vested on each of October 29, 1999 and 2000. The
exercise price for such 75,000 options was $3.75 per share. With respect
to another 25,000 of such 115,000 options, as of June 30, 1999, 8,333 had
already vested and the remaining 16,667 would have vested in equal
installments on July 23, 2000 and 2001. The exercise price for such 25,000
options was $4.25 per share. With respect to the remaining 15,000 of the
options granted to Mr. Carey during fiscal year 1998, as of June 30, 1999,
3,750 had already vested and the remaining 11,250 would have vested in
equal installments on each of June 1, 2000, 2001 and 2002. The exercise
price for such 15,000 options was $4.00 per share. In connection with Mr.
Carey's separation from the Company, the Company issued to Mr. Carey
currently exercisable options to purchase 20,000 shares of the Company's
Common Stock at an exercise price of $2.00 per share in lieu of the
foregoing options (which have all terminated).
(17) Pursuant to Mr. Carey's employment agreement, the Company paid him $47,572
for expenses related to the relocation of Mr. Carey and his family from
the Raleigh, North Carolina area to the Brookfield, Connecticut area,
including the moving of household effects, brokerage fees and closing
costs. During the period from October 27, 1998 (the date Mr. Carey
commenced employment with the Company) through the Company's fiscal year
end, Mr. Carey received $2,700 as a car allowance pursuant to his
employment agreement.
(18) During the first half of fiscal 1999, Dr. Wu's annual salary was $133,000.
Effective January 1, 1999, Dr. Wu's annual salary was increased from
$133,000 to $142,000. Because the Company switched its payroll procedures
in January 1999 from a semi-monthly payment schedule to a bi-weekly
payment schedule, the actual salary payments made by the Company and
received by Dr. Wu in fiscal year 1999 totaled $132,584.
(19) The Company paid Dr. Wu $2,126 for expenses related to the tax liability
on restricted stock issued to Dr. Wu during calendar year 1998.
(20) In addition to his base salary and bonus, on February 6, 1998, Dr. Wu was
granted 500 shares of the Company's Common Stock. The market price of the
Company's Common Stock on February 6, 1998 was $4.19 per share.
(21) 2,500 of such 10,000 options are exercisable. The remaining 7,500 of such
options become exercisable in equal installments on June 1 of each of
2000, 2001and 2002. The exercise price for such options is $4.00 per
share.
(22) 14,666 of such 22,000 options are exercisable. The remaining 7,334 of such
options become exercisable on December 5, 1999. The exercise price for
such options is $1.78 per share.
(23) Pursuant to a letter agreement, dated February 2, 1999, between the
Company and James Proft, Mr. Proft was not employed by the Company at the
end of fiscal year 1999. See discussion below.
(24) This amount represents payments to Mr. Proft in fiscal year 1999 of
$95,023 in salary, $61,538 in severance, and $23,181 for unpaid vacation
and sick days.
(25) The Company paid Mr. Proft $50,620 to cover the tax liability to Mr. Proft
on his exercise of certain common stock purchase warrants. In addition,
Mr. Proft received a car allowance of $3,600 in fiscal 1999.
(26) These 28,000 options expired unexercised.
(27) The Company paid Mr. Proft $55,899 to cover the tax liability to Mr. Proft
arising as the result of the vesting of certain common stock purchase
warrants by him. In addition, Mr. Proft received a car allowance of $3,600
in fiscal 1998.
12
<PAGE>
(28) 13,333 of such 45,000 options were exercised at a price of $1.59 per share
and 16,666 of such options were exercised at a price of $1.78 per share in
April and May of 1999. The remaining 15,001 of such options expired
unexercised.
(29) Pursuant to the terms of an employment agreement between the Company and
Mr. Proft, dated as of June 26, 1996, as described below, the Company
issued to Mr. Proft on September 19, 1996 warrants exercisable to purchase
40,000 shares of Common Stock, of which warrants to purchase 20,000 shares
of Common Stock were immediately exercisable. As of September 19, 1996,
such 20,000 immediately exercisable warrants were valued at $1.59 per
warrant or $31,800 aggregate value. In addition, also pursuant to the
agreement between the Company and Mr. Proft, the Company paid $60,748 for
expenses related to the relocation of Mr. Proft and his family from the
Portland, Oregon area to the San Francisco, California area, including the
moving of household effects, brokerage fees and closing costs, and also for
expenses related to an earlier move to the Portland, Oregon area.
____________________
Because there were no option grants made to any of the named executive
officers listed in the Summary Compensation Table above in the 1999 fiscal year,
the table entitled "Option/SAR Grants in the Last Fiscal Year" has not been
included in this Proxy Statement.
Aggregated Option/SAR Exercises in Last
Fiscal Year and FY-End Option/SAR Values
----------------------------------------
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Shares Number of Shares of Common Value of Unexercised In-the-
Acquired Stock Underlying Unexercised Money Options/
on Value Options/ SARs at FY-End (#) SARs at FY-End (#)
Name Exercise Realized Exercisable/Unexercisable(1) Exercisable/Unexercisable(2)
---- -------- -------- ----------------------------- -----------------------------
<S> <C> <C> <C> <C>
James G. Binch 283,333 Options Exercisable/ $ 76,267/$ 633
216,667 Options Unexercisable
William H. Morton Jr.(3) 100,833 Options Exercisable/ $73,442/$48,908
119,167 Options Unexercisable
Thomas D. Carey(4) 35,000 Options Exercisable/
80,000 Options Unexercisable
Ming H. Wu 31,666 Options Exercisable/ $ 6,831/$ 697
14,834 Options Unexercisable
1,000 SARs $ 375
James Proft 29,999 $5,383 -0- Options Exercisable/
-0- Options Unexercisable
</TABLE>
______________________________
(1) Amounts reflect the status of outstanding options as of June 30, 1999.
(2) Based on the average of the bid and asked prices per share of the Company's
Common Stock on June 30, 1999 of $1.875.
13
<PAGE>
(3) In connection with Mr. Morton's separation from the Company, certain
options previously issued to Mr. Morton became exercisable, 90,000 options
with an exercise price of $4.00 per share expired unexercised, and the
Company issued Mr. Morton 90,000 options with an exercise price of $1.68
per share.
(4) In connection with Mr. Carey's separation from the Company, the options
previously issued to Mr. Carey expired unexercised and the Company issued
Mr. Carey 20,000 options with an exercise price of $2.00 per share.
___________________________
Effective September 24, 1993, the Company and James G. Binch entered into a
two-year employment agreement, which automatically renews for successive one-
year periods unless or until Mr. Binch or the Company gives notice of its
intention not to renew. Pursuant to said renewal provision, this agreement
automatically renewed for a one-year period ending September 24, 2000. The
agreement entitled Mr. Binch to an annual salary of $150,000 from and after
January 1, 1993, which salary was increased effective January 1, 1999 to
$244,000. The agreement also entitled Mr. Binch to (i) $20,000 as compensation
for services rendered from October 1, 1992 to December 31, 1992, (ii) a bonus of
$50,000 and 80,000 shares of the Company's Common Stock as inducement to enter
into the contract, and (iii) an option to purchase up to 240,000 shares of the
Company's Common Stock at an exercise price of $4.40 per share under and
pursuant to the Memry Corporation Stock Option Plan, subject to the approval of
such Plan by the Company's stockholders (which approval was obtained in the
first quarter of fiscal 1995). The options are exercisable and will expire on
September 24, 2003. The Agreement also provides that if Mr. Binch's employment
is terminated due to either the failure by the Company to observe or comply with
any of the provisions of such agreement (if such failure has not been cured
within 10 days after written notice of same to the Company), or, at the election
of Mr. Binch, upon a change in control of the Company (and within 6 months of
such change in control), Mr. Binch will be entitled to a lump-sum payment equal
to two times his annual salary at the rate in effect immediately prior to the
date of termination. During the fiscal year ended June 30, 1996, Mr. Binch and
the Company agreed to the termination of 40,000 of his options (for no value)
and the repricing of his remaining options from $4.40 per share to $1.50 per
share simultaneously with the repricing of all of the Company's outstanding
incentive stock options with exercise prices above $1.50 to $1.50.
Mr. Binch is President, the sole director and the sole stockholder of
Harbour Investment Corporation, a Delaware corporation ("HIC"). HIC is managing
general partner of Harbour Holdings Limited Partnership, a Connecticut limited
partnership ("Harbour"), which was, until fiscal 1999, a significant shareholder
of the Company. Pursuant to Harbour's amended and restated Agreement of Limited
Partnership, Harbour retained HIC to act as its managing general partner, and to
perform investment manager, custodial and administrative services, in
consideration of custodial fees of (i) $465,000 for the period commencing on
February 24, 1993, and continuing through December 31, 1993, and (ii) $350,000
for each of calendar years 1994 and 1995. HIC's retention was extended for
calendar 1996 on January 1, 1996, for an additional $350,000 custodial fee.
Although HIC has continued to serve as Harbour's managing general partner, and
to perform such services since the expiration of such extension without
compensation, and it is not anticipated that any further compensation will be
paid. One of a number of services performed by HIC for Harbour is providing the
services of Mr. Binch in the capacity of the Company's President. Because (i)
there is no allocation of the annual fee paid by Harbour to HIC as between
providing the services of Mr. Binch as the Company's President and other
services, (ii) HIC does not pay Mr. Binch a salary, and (iii) HIC incurs
numerous expenses in fulfilling its duties to Harbour that must be paid before
it pays either salary or dividends to Mr. Binch, it is impossible to quantify
the amount, if any, that Harbour or HIC could be deemed to be paying Mr. Binch
for serving as President of the Company. Therefore, Mr. Binch's compensation as
set forth in the foregoing compensation table does not include any such amounts.
On November 7, 1995, William H. Morton, Jr. joined the Company as Senior
Vice President and Chief Operating Officer. Mr. Morton's employment agreement
provided for a two-year term of employment, which term automatically renewed for
successive one-year periods unless either Mr. Morton or the Company gave the
other notice of his or its intention not to renew such contract. This agreement
entitled Mr. Morton to an annual salary of $150,000, which salary was increased
effective January 1, 1999 to $206,000. In addition, as consideration for past
services rendered by either Mr. Morton individually or through The Risor
Corporation, this agreement entitled Mr. Morton to 50,000 shares of Common Stock
of the Company as well as payment of $50,000 to The Risor Corporation. This
agreement also granted to Mr. Morton
14
<PAGE>
options under and pursuant to the Memry Corporation Stock Option Plan
exercisable to purchase 125,000 shares of Common Stock for an exercise price of
$0.90, exercisable in five equal annual installments, commencing on November 7,
1996 and terminating on November 7, 2005. In the event of a change in control of
the Company, these options will become immediately exercisable.
Mr. Morton and the Company entered into a letter agreement, dated August
17, 1999, regarding Mr. Morton's separation from the Company. The agreement
requires, among other things, that the Company pay to Mr. Morton his incentive
bonus award for the year ended June 30, 1998 and compensation for unpaid
vacation and accrued but unpaid sick time. In addition, the Company will
continue to pay Mr. Morton a salary through December 31, 2001 reduced by the
cash value that the Company reasonably determines of certain benefits that Mr.
Morton may be required to receive under applicable law. Mr. Morton will
continue to be eligible to participate in employee benefits and perquisite
programs in which he was eligible to participate prior to the termination of his
employment agreement. The Company issued Mr. Morton 90,000 options at an
exercise price of $1.68 per share. The 90,000 options previously issued to Mr.
Morton in 1998 expired unexercised. Mr. Morton will also be entitled to 80% of
any incentive bonus award that may be granted to the CEO with respect to the
fiscal year ended June 30, 1999. The Company's Board of Directors subsequently
decided not to award an incentive bonus to the Company's CEO with respect to
fiscal 1999.
On July 23, 1996, James Proft joined the Company as Vice President and
General Manager - Western Operations. A letter agreement, dated June 26, 1996,
between the Company and Mr. Proft entitled Mr. Proft to an annual salary of
$140,000. In addition, as inducement to Mr. Proft to enter into such employment
agreement, the agreement entitled Mr. Proft to: (i) warrants exercisable to
purchase 40,000 shares of Common Stock at an exercise price of $0.01 per share,
of which warrants exercisable to purchase 20,000 shares of Common Stock became
exercisable on September 19, 1996, and one-half of the remaining 20,000 warrants
became exercisable on each of September 19, 1997 and 1998; (ii) non-qualified
stock options, pursuant to the Company's Stock Option Plan, to purchase 20,000
shares of Common Stock at $1.59 per share (representing a discount of 25% from
market price on June 28, 1996), which options were granted on July 1, 1996 and
which were exercisable in three equal annual installments commencing July 1997,
and which would have expired July 2006; (iii) a cash bonus of $25,000 on March
31, 1997 to be applied to any tax liability arising from the grant of warrants;
(iv) cash compensation from February 1, 1997 and March 31, 1997 equal to an
aggregate of $3,710 (35% of the difference between the actual closing price per
share of the Common Stock on June 28, 1996 of $2 1/8 and $1.59, times 20,000
options) to cover the tax effect of such option grant; (v) incentive stock
options exercisable to purchase 25,000 shares of Common Stock, which options
were granted on December 5, 1996 and which were exercisable in three
installments commencing on the first anniversary of the date of grant; (vi)
reimbursement of certain relocation expenses (including those associated with an
earlier move to another entity); (vii) a mortgage assistance loan of $25,000 at
an annual interest rate of 6.75%, secured by a second mortgage on Mr. Proft's
residence (with only interest due for the first two years, principal being due
in five annual installments thereafter, with the entire balance being payable
within thirty days of the termination of Mr. Proft's employment with the
Company); and (viii) a cash signing bonus of $10,000 payable in equal
installments on July 31, 1996 and August 31, 1996. The issuance of the 20,000
shares of Common Stock to Mr. Proft upon exercise of 20,000 of the above-
described warrants was subject to the right of the Company to repurchase any or
all of such shares at a price of $0.01 per share if Mr. Proft did not remain an
employee of the Company as of September 19, 1997.
The provisions in Mr. Proft's letter agreement regarding payments related
to tax liability were modified by an oral agreement between the Company and Mr.
Proft. Pursuant to such agreement, Mr. Proft and the Company agreed to defer the
payment of such amount with respect to the grant of 20,000 options, being 35% of
the difference between (i) the actual closing price per share of the Common
Stock on the date of exercise of all or a portion of the 20,000 options, and
(ii) $1.59, times the number of options exercised, until 30 days after the date
on which Mr. Proft actually incurred taxable income with respect to such
options. With respect to the payment to be made to Mr. Proft by the Company with
respect to the remaining 10,000 warrants, the parties agreed that the Company
would pay to Mr. Proft 33% of the difference between (i) the actual closing
price per share of the Common Stock on September 19, 1998, and (ii) $0.01, times
10,000, within 30 days after the end of calendar year 1998. In fiscal 1999, Mr.
Proft exercised the remaining 10,000 warrants.
15
<PAGE>
On February 2, 1999, Mr. Proft and the Company entered into a letter
agreement regarding Mr. Proft's separation from the Company. This agreement
requires, among other things, that the Company pay Mr. Proft severance payments
and provide certain health benefits for twenty-six weeks after the date of this
separation agreement. Mr. Proft exercised 29,999 of his options in April and May
of 1999 in connection with his separation with the Company. The remaining 15,001
options expired unexercised.
On October 27, 1997, Thomas D. Carey joined the Company as Vice President
of Corporate Development and Chief Financial Officer. Mr. Carey's employment
agreement provided for a one-year term of employment, which term automatically
renewed for successive one-year periods unless either Mr. Carey or the Company
gave the other notice of his or its intention not to renew such contract.
Pursuant to the Agreement, Mr. Carey received a signing bonus of $75,000, of
which (i) two-thirds ($50,000) was paid to Mr. Carey upon executing the
agreement and (ii) the remaining one-third ($25,000) was paid to Mr. Carey on
October 29, 1998. The agreement entitled Mr. Carey to an annual base salary of
$150,000 (which was increased effective January 1, 1999 to $155,000) plus such
annual bonuses as may be determined by the Compensation Committee, and to fringe
benefits comparable to the benefits afforded to other executive employees of the
Company, a car allowance of $300.00 per month, twenty working days of vacation
per calendar year and eight paid sick days. The agreement also granted to Mr.
Carey options under and pursuant to the Memry Corporation Long Term Incentive
Plan exercisable to purchase 75,000 shares of Common Stock for an exercise price
of $3.75 per share, 15,000 of which became exercisable on the date of grant and
an additional 20,000 would have become exercisable on each of the first, second
and third anniversaries of the date of grant. The agreement also entitled Mr.
Carey to an additional 25,000 options, which were exercisable at $4.25 per share
and would have vested in three equal annual installments commencing on July 23,
1999.
On July 12, 1999, the Company and Mr. Carey entered into a letter agreement
regarding Mr. Carey's separation from the Company. This agreement requires,
among other things, that the Company continue to provide to Mr. Carey his
current salary and benefits through October 31, 1999. In addition, the Company
issued 20,000 non-qualified options at an exercise price of $2.00 per share.
The options previously issued to Mr. Carey expired unexercised.
On March 18, 1999, the Company entered into a letter agreement with Robert
J. Thatcher regarding his employment with the Company. On July 7, 1999, the
Board of Directors of the Company adopted a resolution electing Mr. Thatcher
President and Chief Operating Officer of the Company in accordance with the
terms of the letter agreement. Mr. Thatcher's letter agreement provides, among
other things, for a one-year renewable term of employment. Pursuant to the
agreement, Mr. Thatcher will receive an annual base salary of $195,000 and
target cash bonus equal to 45% of base salary. In addition, the Company will
attempt to provide an annual long term incentive award having a target value,
based on a complex calculation, of $325,000 annually, subject to the approval of
the Compensation Committee of the Board of Directors. Pursuant to the agreement,
275,000 incentive stock options were issued to Mr. Thatcher, with 50,000 of such
options immediately vested, with the remainder vesting in four equal annual
installments from the dates of grant at an exercise price equal to $2.00 per
share. The agreement also provides that Mr. Thatcher will be able to participate
in the Company's benefit programs and will be reimbursed for certain relocation
and other expenses.
On July 19, 1999, the Company entered into a letter agreement with Robert
P. Belcher regarding his employment with the Company. On September 14, 1999,
the Board of Directors of the Company adopted a resolution electing Mr. Belcher
Vice President, Chief Financial Officer, Treasurer and Secretary of the Company
in accordance with the terms of the letter agreement. Pursuant to the letter
agreement, Mr. Belcher will receive an annual base salary of $160,000 and target
cash bonus equal to 35% of base salary. Pursuant to the agreement, 125,000
incentive stock options were issued to Mr. Belcher, with 25,000 of such options
immediately vested, with the remainder vesting in four equal annual installments
from the date of grant at an exercise price equal to $2.00 per share. The
agreement also provides that Mr. Belcher will be entitled to $300 per month as a
car allowance. The letter agreement provides that Mr. Belcher and the Company
will enter a formal agreement which will include, among other things, a one
year, automatically renewing term (unless notified to the contrary by either
party on 90 days written notice) and six months of severance for any "not-for-
cause" discharge.
On July 20, 1999, the Company entered into a letter agreement with Joseph
Pasqualucci regarding his employment with the Company. On September 14, 1999,
the Board of Directors of the Company adopted a resolution electing Mr.
16
<PAGE>
Pasqualucci Vice President - Operations of the Company in accordance with the
terms of the letter agreement. Under the agreement, Mr. Pasqualucci will
receive an annual base salary of $165,000 and target cash bonus equal to 40% of
base salary. Pursuant to the agreement, 100,000 incentive stock options were
issued to Mr. Pasqualucci vesting in four equal annual installments from the
date of grant at an exercise price equal to $2.00 per share. These options are
in addition to the 15,000 options that Mr. Pasqualucci currently holds at an
exercise price of $3.00 per share (and the 10,000 options with an exercise price
of $3.00 per share that the Company will be required to issue to Mr. Pasqualucci
if he remains with the Company after taking a planned sabbatical). The agreement
also provides that Mr. Pasqualucci will be able to participate in the Company's
benefit programs, will be reimbursed for certain relocation and other expenses,
and will be entitled to $300 per month as a car allowance. The letter agreement
provides that Mr. Pasqualucci and the Company will enter a formal agreement
which will include a one year term, a change of control provision that will
ensure Mr. Pasqualucci receives one year of severance pay if the acquiring
entity changes, in a negative way, his responsibilities or compensation. If the
Company is not acquired and he is separated from the Company for any reason,
other than cause, he will receive six months of severance pay.
Certain Relationships and Transactions
On July 15 and 16, 1996, as part of bridge financing for working capital
purposes until financing could be obtained from Affiliated Business Credit
Corporation, the Company borrowed $100,000 from each of Dawn Morton and Dominion
Capital Partners (for an aggregate of $200,000), at an annual interest rate of
10%, such notes to be due on the earlier of August 15, 1996 and the date of
consummation of financing in the amount of at least $1,500,000 from Affiliated
Business Credit Corporation to the Company. As additional consideration for
such loans, the Company issued to each of Ms. Morton and Dominion Capital
Partners warrants exercisable to purchase 18,000 shares of Common Stock at an
exercise price of $1.50 per share. Each of Ms. Morton and DFG Management, Inc.
was also paid a facility fee of $5,000 in connection with such bridge financing.
These notes were paid in full by the Company on August 9, 1996. Ms. Morton is
the wife of William H. Morton, Jr., at the time the Company's Senior Vice
President and Chief Operating Officer. The managing general partner of Dominion
Partners is Dominion Financial Group, Inc., of which W. Andrew Krusen, Jr. is a
principal shareholder and the President. In addition, Mr. Krusen is the sole
stockholder of DFG Management, Inc. The warrants held by DFG Management, Inc.
were exercised in July, 1999. The warrants held by Ms. Morton had their
expiration date extended to August 15, 2000 as part of the severance
arrangements between Mr. Morton and the Company described above.
On August 17, 1999, July 12, 1999 and February 2, 1999, respectively, the
Company entered into severance agreements with Messrs. Morton, Carey and Proft,
each at the time executive officers of the Company. For a description of the
terms of these agreements, see " PROPOSAL NO. 1 - ELECTION OF DIRECTORS -
Executive Compensation." On March 18, 1999, July 19, 1999 and July 20, 1999,
respectively, the Company entered into letter agreements with Messrs. Thatcher,
Belcher and Pasqualucci, each an executive officer of the Company. For a
description of the terms of these agreements, see "PROPOSAL NO. 1 - ELECTION OF
DIRECTORS - Executive Compensation."
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
directors, executive officers and 10% beneficial owners of the Company's Common
Stock to file certain reports concerning their ownership of the Company's equity
securities. Based solely upon a review of Forms 3 and 4 and amendments thereto
furnished to the Company during its most recently completed fiscal year, and
Forms 5 and amendments thereto furnished to the Company with respect to its most
recently completed fiscal year, the directors, officers and beneficial owners of
10% or more of the Registrant's Common Stock which failed to make the requisite
filings on a timely basis are set forth below.
Harbour Holdings Limited Partnership failed to timely file a Form 4 to
report the liquidation of its investment in the Company on February 3, 1999 of
1,913,265 shares of common stock which were distributed among its partners.
Harbour Holdings Limited Partnership subsequently filed a Form 4 regarding this
transaction on April 9, 1999. James G. Binch failed to timely file a Form 4 to
report (i) the liquidation on February 3, 1999 of Harbour Holdings Limited
Partnership's investment in the Company, through the distribution among Harbour
Holdings Limited Partnership's partners, of 1,913,265
17
<PAGE>
shares of common stock, which Mr. Binch is deemed to beneficially own, (ii) the
acquisition on February 3, 1999 by Harbour Investment Corporation, as a partner
of Harbour Holdings Limited Partnership, of 315,232 shares of the Company's
common stock, which Mr. Binch is deemed to beneficially own, and (iii) the
acquisition on February 3, 1999 by Mr. Binch individually of 13,381 shares of
the Company's common stock as part of such liquidation. Mr. Binch subsequently
filed a Form 4 regarding these transactions on April 9, 1999. William H. Morton,
Jr. failed to timely file a Form 4 to report his acquisition on February 3, 1999
of 51,774 shares of the Company's common stock due to Harbour Holdings Limited
Partnership's distribution among its partners of its shares of the Company's
common stock. Mr. Morton subsequently filed a Form 4 regarding this transaction
on April 8, 1999. Harbour Investment Corporation failed to timely file a Form 4
to report the liquidation of its indirect investment in the Company of 1,913,265
shares of common stock and its acquisition of 315,232 shares of the Company's
common stock with respect to the same transaction. Harbour Investment
Corporation subsequently filed a Form 4 regarding this transaction on April 9,
1999. Patrick Cleary failed to timely file a Form 3 to report his becoming a
director on February 22, 1999, although a Form 3 was subsequently filed by Mr.
Cleary on April 13, 1999. W. Andrew Krusen and John A. Morgan failed to timely
file a Form 5 for the Company's 1999 fiscal year, each of which was subsequently
filed on September 20, 1999. Jack Halperin failed to timely file a Form 5 for
the Company's 1999 fiscal year, which was subsequently filed on September 8,
1999. Ming H. Wu failed to timely file a Form 3 to report his becoming an
executive officer, although a Form 5 was subsequently filed by Dr. Wu on October
11, 1999.
PROPOSAL NO. 2 - AMENDMENT TO MEMRY CORPORATION'S
CERTIFICATE OF INCORPORATION
On September 14, 1999, the Company's Board of Directors adopted a
resolution in which it declared it advisable and in the best interests of the
Company to amend the Company's Certificate of Incorporation to increase the
number of shares of common stock that the Company has the authority to issue by
Ten Million (10,000,000) shares (the "Capitalization Amendment") and directed
that the Capitalization Amendment be submitted to a vote of the stockholders at
the Annual Meeting. If the Capitalization Amendment is adopted, the number of
shares of stock that the Company has the authority to issue would be increased
to an aggregate of Forty Million One Hundred Thousand (40,100,000) shares, of
which Forty Million (40,000,000) shares would be Common Stock and One Hundred
Thousand (100,000) shares would be preferred stock.
If this proposal is adopted, the text of the revised first paragraph of
Section 4 of the Company's Certificate of Incorporation will be amended to read
as follows:
4. The total number of shares of all classes of stock which the
Corporation shall have authority to issue is Forty Million One Hundred
Thousand (40,100,000) shares consisting of (a) Forty Million
(40,000,000) shares of common stock of the par value of One Cent
($0.01) per share, and (b) One Hundred Thousand (100,000) shares of
preferred stock of the par value of One Hundred Dollars ($100.00) per
share.
The Certificate of Incorporation currently authorizes the issuance of up to
30,100,000 shares, consisting of 30,000,000 shares of Common Stock and 100,000
shares of preferred stock. As of September 20, 1999, the Company had 20,860,289
shares of Common Stock and no shares of preferred stock outstanding. In
addition, 1,432,602 shares of Common Stock were reserved for issuance upon the
exercise of outstanding warrants and approximately 3,000,000 shares of Common
Stock were reserved for issuance in connection with the Company's two stock
option plans.
Reasons for and the Effect of the Increase in Number of Authorized Shares
The Board of Directors believes that it is in the best interest of the
Company and its stockholders to increase the number of authorized shares of
Common Stock in order to have additional shares available for issuance to meet
various business needs as they may arise and to enhance the Company's
flexibility in connection with possible future actions. These business needs
and actions may include stock dividends, stock splits, employee benefit
programs, corporate business combinations, funding of business acquisitions, and
other corporate purposes. In addition, financing may be required to fund
18
<PAGE>
operations if the Company is unable to achieve and maintain a positive cash flow
or to finance the expansion of the Company's business, and some or all of that
financing might best be obtained by the sale of Common Stock. The Company is
not able to accurately forecast whether additional shares of Common Stock will
need to be sold, or how many, because it is not certain at this time whether
additional financing will be required, or how much, nor what portion, if any, of
such financing will consist of sales of Common Stock, as opposed to loans or
sales of preferred stock.
The authorization of additional shares of Common Stock pursuant to this
proposal will have no dilutive effect upon earnings per share or the
proportionate voting power of the present stockholders of the Company. However,
to the extent that shares are subsequently issued in connection with any
corporate action to persons other than the present stockholders, such issuance
could have a dilutive effect on the earnings per share and voting powers of
present stockholders.
Although the Board periodically considers transactions such as those
referred to above, it currently does not have plans to issue any significant
amount of such Common Stock, except as reserved for issuance upon the exercise
of outstanding warrants and options to purchase the Company's Common Stock.
The authorized shares of Common Stock and preferred stock in excess of
those currently issued will be available for issuance at such times and for such
purposes as the Board of Directors may deem advisable without further action by
the Company's stockholders, except as may be required by applicable laws or
regulations.
In connection with this proposal, the Company recommends that each
stockholder consider the financial statements of the Company as set forth in the
Company's Annual Report on Form 10-KSB for the fiscal year ended June 30, 1999,
a copy of which is being furnished to each stockholder together with this Proxy
Statement.
Recommendation of the Board of Directors
The Board of Directors recommends approval of the Capitalization Amendment.
The approval of the Capitalization Amendment will require the affirmative vote
of the holders of a majority of the outstanding shares of the Company's Common
Stock. Proxies solicited by the Board of Directors will be voted FOR the
Capitalization Amendment unless stockholders specify otherwise.
INDEPENDENT AUDITORS
McGladrey & Pullen, LLP ("M&P") have audited the consolidated financial
statements of the Company for the fiscal years ended June 30, 1999 and June 30,
1998. The selection of M&P was made by the Audit Committee of the Board of
Directors at the time of each such selection, which reviewed the professional
competence of the firm and its audit scope. The Company currently intends to
use M&P as independent auditors for the fiscal year ending June 30, 2000. It is
expected that a representative of M&P will be present at the Annual Meeting to
respond to appropriate questions of stockholders and to make a statement if he
so desires.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the Company's 2000 Annual
Meeting of Stockholders, which the Company contemplates holding in November
2000, must be received at the Company's principal executive offices located at
57 Commerce Drive, Brookfield, Connecticut 06804 on or before July 10, 2000 for
consideration for inclusion in the Company's Proxy Statement and form of proxy
relating to that meeting.
19
<PAGE>
OTHER MATTERS
As of the date of this Proxy Statement, the Company's management does not
know of any business, other than that mentioned above, which will be presented
for consideration at the Annual Meeting. However, if any other matters should
properly come before the Annual Meeting, it is the intention of the persons
named in the accompanying form of proxy to vote the proxies in accordance with
their judgment on such matters.
EXHIBITS TO ANNUAL REPORT ON FORM 10-KSB
The Company is mailing herewith to each stockholder of record as of October
11, 1999 a copy of its Annual Report on Form 10-KSB for the fiscal year ended
June 30, 1999, including financial statements. The Company will provide, at a
charge of $0.10 per page to cover photocopying expenses, to each beneficial
holder of its Common Stock on the Record Date, upon the written request of any
such person, copies of the exhibits to the Company's Annual Report on Form 10-
KSB for the fiscal year ended June 30, 1999, as filed with the Securities and
Exchange Commission. Any such request should be made in writing to Robert P.
Belcher, Secretary, Memry Corporation, 57 Commerce Drive, Brookfield,
Connecticut 06804.
By Order of the Board of Directors,
Robert P. Belcher
Secretary
October 28, 1999
20
<PAGE>
APPENDIX A
----------
MEMRY CORPORATION
PROXY FOR ANNUAL MEETING
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, revoking all previous proxies, hereby appoints James G.
Binch and Robert P. Belcher, or either of them (the "Proxies"), as attorneys and
proxies, each with full power of substitution and all of the powers which the
undersigned would possess, if present in person, to represent and vote, as
designated on the reverse side of this proxy, all of the shares of Common Stock
of Memry Corporation (the "Company") registered in the name of the undersigned
at the Annual Meeting of Stockholders of the Company to be held on November 23,
1999 and at any adjournment thereof.
The shares represented hereby will be voted as directed by this Proxy. If
no direction is made, the Proxies will vote such shares FOR the election of all
nominees for director listed under Proposal No. 1 and FOR the adoption of the
amendment to Memry Corporation's Certificate of Incorporation described in
Proposal No. 2, and such Proxies will vote in accordance with their discretion
on such other matters as may properly come before the meeting.
(IMPORTANT - TO BE MARKED, SIGNED AND DATED ON REVERSE SIDE)
<PAGE>
1. ELECTION OF DIRECTORS
NOMINEES: James G. Binch, Robert J. Thatcher, W. Andrew Krusen, Jr., Jack
H. Halperin, Patrick F. Cleary, Kempton J. Coady III.
[_] FOR all nominees [_] WITHHELD from all nominees
FOR, except vote withheld from the following nominee(s): [_]_____________
2. Proposal to adopt the amendment to the Certificate of Incorporation of
Memry Corporation.
[_] FOR [_] AGAINST [_] ABSTAIN
In their discretion, the Proxies are authorized to vote upon such other business
as may properly come before the meeting.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
________________________________
Signature of Stockholder
________________________________
Signature if held jointly
Date: ____________________, 1999
Note: Please sign exactly as name appears hereon.
When shares are held by joint tenants, both
should sign. Executors, administrators,
trustees and other fiduciaries should so
indicate when signing. If a corporation,
please sign in full corporate name by
president, or other authorized officer. If a
partnership, please sign in partnership name
by authorized person. This proxy may be
mailed, postage-free, in the enclosed
envelope.
