CHEMFAB CORPORATION
701 Daniel Webster Highway
Merrimack, New Hampshire 03054
NOTICE OF 1999 ANNUAL MEETING OF SHAREHOLDERS
TO THE SHAREHOLDERS OF CHEMFAB CORPORATION:
NOTICE IS HEREBY GIVEN that the 1999 Annual Meeting of Shareholders of
Chemfab Corporation will be held at the Corporation's principal executive
office, 701 Daniel Webster Highway, Merrimack, New Hampshire, on Tuesday,
October 26, 1999 at 9:00 A.M. (local time) for the following purposes:
(a) To elect directors of the Corporation; and
(b) To consider and vote upon a proposal to ratify the adoption
and approval of the Corporation's 1999 Stock Option Plan; and
(c) To consider and vote upon a proposal to ratify the selection
by the Board of Directors of the firm of Ernst & Young LLP as
independent auditors of the Corporation for the fiscal year
ending June 30, 2000; and
(d) To transact such other business as may properly come before
the meeting or any adjournments or postponements thereof.
The Board of Directors has fixed September 1, 1999 as the record date
for the determination of shareholders entitled to notice of, and to vote at, the
1999 Annual Meeting of Shareholders. Accordingly, only shareholders of record at
the close of business on September 1, 1999 will be entitled to notice of, and to
vote at, such meeting or any adjournments thereof.
By order of the Board of Directors
Thomas C. Platt III
Secretary
September 23, 1999
- --------------------------------------------------------------------------------
NOTE: THE BOARD OF DIRECTORS SOLICITS THE EXECUTION AND PROMPT RETURN OF THE
ACCOMPANYING PROXY. A RETURN ENVELOPE IS ENCLOSED.
- --------------------------------------------------------------------------------
<PAGE>
CHEMFAB CORPORATION
PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors of Chemfab
Corporation (the "Corporation") for use at the 1999 Annual Meeting of
Shareholders on Tuesday, October 26, 1999 and at any adjournments or
postponements thereof (the "Meeting").
The Corporation's principal executive office is located at 701 Daniel
Webster Highway, P.O. Box 1137, Merrimack, New Hampshire 03054.
The cost of soliciting proxies by mail, telephone, telegraph or in
person will be borne by the Corporation. The Corporation has retained the
services of W.F. Doring & Company, a proxy solicitation firm based in New
Jersey, to whom the Corporation will pay a fee of $1,500 plus reimbursement for
mailing and out-of-pocket expenses. In addition to solicitation by mail, the
Corporation will reimburse brokerage houses and other nominees for their
expenses incurred in sending proxies and proxy material to the beneficial owners
of shares held by them.
You may revoke your proxy at any time prior to its use by giving
written notice to the Secretary of the Corporation, by executing a revised proxy
at a later date or by attending the Meeting and voting in person. Proxies in the
form enclosed, unless previously revoked, will be voted at the Meeting in
accordance with the specifications made by you thereon or, in the absence of
such specifications, (i) in favor of the election of the nominees for directors
listed herein, (ii) in favor of the proposals to adopt and approve of the
Corporation's 1999 Stock Option Plan, and to ratify the selection of Ernst &
Young LLP as independent auditors for the fiscal year ending June 30, 2000, and
(iv) with respect to any other business which may properly come before the
meeting, in the discretion of the named proxies. If, in a proxy submitted on
your behalf by a person acting solely in a representative capacity, the proxy is
marked clearly to indicate that the shares represented thereby are not being
voted with respect to one or more proposals, then your proxy will not be counted
as present at the meeting with respect to such proposals. Proxies submitted with
abstentions as to one or more proposals will be counted as present for purposes
of establishing a quorum for such proposals.
All holders of record of the common stock, par value $0.10 per share,
of the Corporation (the "Common Stock") at the close of business on September 1,
1999, will be eligible to vote at the Meeting. Each share is entitled to one
vote. As of September 1, 1999, the Corporation had outstanding 7,686,070 shares
of Common Stock. The presence, in person or by proxy, of a majority of the
issued and outstanding Common Stock will constitute a quorum for the transaction
of business at the Meeting. This proxy statement and the enclosed proxy are
first being mailed or given to shareholders on or about September 23, 1999.
<PAGE>
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information with respect to each
person known to the Corporation to be the beneficial owner of more than 5% of
the issued and outstanding Common Stock as of August 10, 1999 or other date
noted below. As of August 10, 1999, 7,707,320 shares of Common Stock were
outstanding.
Amount and Nature of Percentage of
Name and Address Beneficial Ownership Outstanding Shares of
of Beneficial Owner of Common Stock Common Stock Owned
Peter B. Cannell & 938,437 (1) 12.2%
Co., Inc. ("Cannell")
645 Madison Ave.
New York, NY 10022
Dimensional Fund Advisors Inc. 413,150 (2) 5.4%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
(1) Based upon information provided to the Corporation by Cannell as of
July 31, 1999. Consists entirely of shares of Common Stock of the
Corporation owned by investment advisory clients of Cannell, principals
of Cannell, and The Peter B. Cannell 401(k) Plan. Cannell disclaims
beneficial ownership of all such shares.
(2) Based upon information as of June 30, 1999 provided to the Corporation
by Dimensional Fund Advisors Inc. Dimensional Fund Advisors Inc.
("Dimensional"), an investment advisor registered under Section 203 of
the Investment Advisors Act of 1940, furnishes investment advice to
four investment companies registered under the Investment Company Act
of 1940, and serves as investment manager to certain other investment
vehicles, including commingled group trusts. (These investment
companies and investment vehicles are the "Portfolios"). In its role as
investment advisor and investment manager, Dimensional possesses both
voting and investment power over 413,150 shares of Common Stock of the
Corporation as of June 30, 1999. All of such shares are owned, in the
aggregate, by the Portfolios, and Dimensional disclaims beneficial
ownership of such securities.
<PAGE>
ELECTION OF DIRECTORS
Nominees for Election as Directors
The Board of Directors has set the number of Board members at seven for
the upcoming year. Each director is elected to hold office until the next annual
meeting of shareholders, or special meeting in lieu thereof, and until their
respective successors are duly elected and qualified. The Board has nominated
all of the current members of the Board for reelection. The affirmative vote of
a plurality of the shares of Common Stock present at the Meeting, in person or
by proxy, is required for the election of the members of the Board.
Unless authority to do so is withheld, the persons named in each proxy
(and/or their substitutes) will vote the shares represented thereby "FOR" the
election of the director nominees named below. If for any reason any nominee is
not a candidate (which is not now expected), a new nominee will be designated by
the Board to fill such vacancy, unless the Board of Directors shall reduce the
number of directors in accordance with the By-Laws of the Corporation.
Information as to Directors and Nominees for Director
There is shown below for each director and nominee for director, as
reported to the Corporation, the name, age and family relationship, if any, with
any other director or officer, the principal occupation and employment over at
least the last five years, the position, if any, with the Corporation, the
period of service as a director of the Corporation, and certain other
directorships held.
Name Age Office Held Director Since
Paul M. Cook 75 Director March 1976
Warren C. Cook 54 Director September 1976
Robert E. McGill, III 68 Director October 1995
James E. McGrath 65 Director October 1993
Duane C. Montopoli 50 Director February 1986
Nicholas Pappas 69 Director and Chairman May 1991
John W. Verbicky 47 President, Chief October 1997
Executive Officer
and Director
- ------------------------
PAUL M. COOK has served as Chief Executive Officer and Chairman of the
Board of Diva Systems Corporation since June 1995. He served as Chairman of the
Board of Directors of SRI International, Menlo Park, California, from December
1993 through July 1999. Mr. Cook also served as Chairman of the Board of
Directors of CellNet Data Systems, Inc. (formerly Domestic Automation Company)
of San Carlos, California from June 1990 through November 1997 and served as
Chief Executive Officer of that company from August 1990 through August 1994.
Mr. Cook continues to be a director of SRI International and Sarnoff
Corporation. Mr. Cook was a member of the Board of Directors of Raychem
Corporation, Menlo Park, California, from the time he founded the company in
1957 through August 1996, and served as Chairman of the Board of Directors from
April 1990 through October 1995. Mr. Cook is the uncle of Mr. Warren Cook, also
a director of the Corporation.
<PAGE>
WARREN C. COOK assumed his current position as President of JAX
Research Systems at The Jackson Laboratory in February 1999. Prior to that he
was Senior Vice President and Chief Operating Officer of American Skiing
Company. He had held those positions since June 1997 and August 1998,
respectively. Between June 1994 and June 1996, Mr. Cook served as Vice President
of S.K.I. Ltd. Prior to that time, he served as President, Chief Executive
Officer and Chairman of the Board of Sugarloaf Mountain Corporation from April
1986 through June 1996. He also served as Managing Director of Sugarloaf
Mountain Corporation from June 1996 through July 1998. Prior to his resignation
in June 1986, Mr. Cook was President and Chief Executive Officer of the
Corporation. Mr. Cook is the nephew of Mr. Paul Cook, also a director of the
Corporation.
ROBERT E. McGILL, III has been Managing Director of the Berkshires
Management Company L.L.C., the general partner of the Berkshires Capital
Investors Limited Partnership, since February 1997. From 1989 through December
1994, Mr. McGill served as Executive Vice President - Finance and Administration
of The Dexter Corporation, Windsor Locks, Connecticut and also served as a
director of The Dexter Corporation from 1983 through April 1995. Prior to his
appointment as Executive Vice President, Mr. McGill served as Vice President and
Senior Vice President of Finance and Administration from 1975 through 1989. He
is currently a member of the Board of Directors of Ravenswood Winery, Inc,
Lydell, Inc. Mr. McGill is also a Trustee for Travelers Mutual and Variable
Annuity Funds.
JAMES E. McGRATH, Ph.D., is the Ethyl Chaired and University
Distinguished Professor of Chemistry and Director of the National Science
Foundation's Science and Technology Center for High Performance Polymer
Adhesives and Composites at Virginia Polytechnic Institute and State University
("VPI"). Prior to his appointment as Director of the Science and Technology
Center in February 1989, Dr. McGrath served as Director of the Materials
Institute at VPI. Dr. McGrath also held various positions as a research
scientist and chemist during his 17 years in private industry with several
companies, including Union Carbide and Goodyear Tire and Rubber Co.
DUANE C. MONTOPOLI is President, Chief Executive Officer and Director
of Medical Resources, Inc. which is headquartered in Hackensack, New Jersey.
From June 1986 until January 1998, Mr. Montopoli was President and Chief
Executive Officer of the Corporation. From December 1983 until January 1990, he
was a partner in Oak Grove Ventures, Menlo Park, California. Prior to that time,
he was employed by Arthur Young & Company (now Ernst & Young LLP) where he was a
general partner from October 1982 through December 1983.
NICHOLAS PAPPAS, Ph.D., is the retired Vice Chairman of the Board of
Directors of Rollins Environmental Services, Inc., Wilmington, Delaware. Prior
to his appointment as Vice Chairman, Mr. Pappas served as President and Chief
Operating Officer from July 1991 through September 1995. Dr. Pappas was employed
by the Du Pont Company in various capacities from 1956 until his retirement in
December 1990. Dr. Pappas served as Executive Vice President of Du Pont from
1988 to December 1990, and was Group Vice President - Polymer Products from 1983
to 1988. He is also a director of Yenkin-Majestic Corp. of Dayton, Ohio, Nova
Corporation, a Canadian company, Witco Corporation of Greenwich, Connecticut,
and Biotraces Inc. of Fairfax, Virginia. In October 1997, the Board of Directors
named Dr. Pappas to the newly created position of Chairman of the Board of
Directors of the Corporation effective January 1998.
JOHN W. VERBICKY, Ph.D., is President and Chief Executive Officer of
the Corporation. He has held these positions since January 1998. Between March
1996 and January 1998, Dr. Verbicky served as Executive Vice President and Chief
Operating Officer of the Corporation. Prior to that time, he served as Vice
President - Research & Development from January 1993 to April 1994, and as Vice
President - U.S. Business Group from April 1994 to March 1996. From November
1990 until the commencement of his employment with the Corporation, Dr. Verbicky
was employed by General Electric ("GE") as manager of the Environmental
Technology Laboratory at GE's Research and Development Center. He previously
served as manager of the Chemical Synthesis Laboratory after joining GE in 1979.
<PAGE>
As compensation for service as director, each non-employee director
receives cash compensation and annual stock option grants. The Corporation pays
to each non-employee director $1,000 for every in-person meeting of the Board of
Directors attended in person by such director, and $250 for every telephonic
meeting of the Board of Directors (or committee thereof) in which such director
participates. In addition, pursuant to the Corporation's Third Amended and
Restated 1991 Stock Option Plan (the "1991 Plan"), the non-employee directors of
the Corporation receive annual automatic grants of options to purchase shares of
Common Stock. During fiscal 1999, each of the non-employee directors received an
automatic grant of options under the 1991 Plan to purchase 6,000 shares of the
Common Stock at fair market value as of the date of grant ($20.50 per share),
and such options became fully vested over the course of that fiscal year. The
Board of Directors met 10 times last year. Each director attended at least 75%
of the aggregate of the total number of such meetings of the Board of Directors
and the total number of meetings held by all committees on which he served.
In addition to his regular compensation as a Director, Dr. Pappas
received additional compensation during fiscal 1999 for services rendered as a
consultant. Pursuant to an arrangement approved and recommended by the
Option/Compensation Committee (with Dr. Pappas absent and not participating),
and adopted unanimously by the full Board (with Dr. Pappas absent and not
participating), Dr. Pappas earned $40,000 in consulting fees during the 1999
fiscal year. In fiscal year 1998 Dr. Pappas received an award of options under
the 1991 Plan to purchase 20,000 shares of the Common Stock at fair market
values as of the date of the grant ($21.125 per share), which options vest at
the rate of 25% per year, commencing with 25% on October 30, 1997 and 25% on
each anniversary for the next three years thereafter.
Committees
During fiscal 1999, the Audit Committee of the Board of Directors
consisted of Mr. Robert McGill, Dr. James McGrath and Mr. Duane C. Montopoli.
This committee met two times in fiscal 1999. The functions of the Audit
Committee include: (1) making recommendations to the Board of Directors with
respect to the engagement of the independent auditors; (2) reviewing the audit
plans developed by the independent auditors for the annual audit of the
Corporation's books and records and the results of such audit; (3) reviewing the
annual financial statements; (4) reviewing the professional services provided by
the independent auditors and the auditors' independence; (5) reviewing the
adequacy of the Corporation's system of internal controls and the responses to
management letters issued by the independent auditors and (6) reviewing any
related party contracts brought to its attention.
During fiscal 1999, the Option/Compensation Committee of the Board of
Directors consisted of Mr. Paul M. Cook, Mr. Warren C. Cook, and Dr. Nicholas
Pappas. This committee met two times in fiscal 1999. The principal functions of
the Option/Compensation Committee are to review and approve salary plans and
bonus awards, as well as other forms of compensation, and to administer the
Corporation's stock option plans pursuant to the terms of such plans.
During fiscal 1999, the Environmental, Health and Safety (EHS)
Committee consisted of Mr. Warren Cook and Drs. Pappas and McGrath. The
Committee met twice in fiscal 1999. The principal functions of the EHS Committee
are to review and approve the Corporation's safety programs and safety record,
and to monitor and make recommendations to the Corporation's management on
safety, health, environmental and corporate compliance matters.
<PAGE>
Ownership of Equity Securities by Management
The table below sets forth information as of August 10, 1999, as
reported to the Corporation, as to the beneficial ownership of the Common Stock
of the Corporation by each director, each nominee for election as a director,
and each named executive officer, and by all directors and executive officers as
a group.
Amount and Nature of Percentage of
Beneficial Ownership Outstanding Shares of
Name of Common Stock (1) Common Stock Owned
---- ------------------- ------------------
Paul M. Cook (2)................... 295,590 3.81%
Warren C. Cook (3)................. 193,627 2.49%
Michael P. Cushman(4).............. 21,484 *
Robert E. McGill, III (5).......... 25,000 *
James E. McGrath .................. 31,500 *
Duane C. Montopoli (6)............. 174,000 2.22%
Moosa E. Moosa .................... 48,750 *
Nicholas Pappas ................... 68,000 *
Thomas C. Platt III................ 23,030 *
Charles Tilgner III (7)............ 25,522 *
John W. Verbicky .................. 128,250 1.63%
All directors and executive
officers as a group (12 persons)... 1,072,603 12.71%
* Indicates less than 1%
(1) Except as set forth in the footnotes below, each stockholder has sole
investment and voting power with respect to the shares beneficially
owned. Includes options with respect to shares of Common Stock that can
be exercised on or before October 9, 1999. Assumes exercise of options
covering 54,000 shares for Mr. Paul Cook, 54,000 shares for Mr. Warren
Cook, 20,975 shares for Mr. Cushman, 18,000 shares for Mr. McGill,
18,000 shares for Dr. McGrath, 111,500 shares for Mr. Montopoli, 39,250
shares for Mr. Moosa, 58,000 shares for Dr. Pappas, 21,750 shares for
Mr. Platt, 22,725 shares for Mr. Tilgner, 107,750 shares for Dr.
Verbicky, and 540,450 shares for all directors and executive officers
as a group.
(2) Consists of 269,560 shares held by the Paul and Marcia Cook Living
Trust, as to which Mr. Cook and his wife share voting and investment
power as co-trustees.
(3) Includes 86,300 shares held in trust for the benefit of Mr. Warren
Cook's two children, as to which Mr. Cook has no voting or investment
power and disclaims beneficial ownership.
(4) Includes 224 shares held by his two children, as to which Mr. Cushman
disclaims beneficial ownership.
(5) Includes 7,000 shares held in a trust of which Mr. McGill is a
beneficiary and over which Mr. McGill shares voting control.
(6) Includes 4,500 shares held by Mr. Montopoli as custodian for his two
children, as to which Mr. Montopoli disclaims beneficial ownership.
(7) Includes 15 shares owned by Mr. Tilgner's wife, as to which Mr. Tilgner
disclaims beneficial ownership.
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The table below sets forth certain compensation information for the
fiscal years ended June 30, 1999, 1998 and 1997 with respect to the
Corporation's Chief Executive Officers and those four other executive officers
of the Corporation who were the most highly paid for fiscal 1999.
ANNUAL COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($)(1) BONUS($)
JOHN W. VERBICKY 1999 $245,000 0
President, Chief Executive 1998 $212,000 $84,500(3)
Officer and Director 1997 $180,000 $44,000
MOOSA E. MOOSA 1999 $149,000 0
Vice President-Finance, 1998 $143,000 $44,000
Treasurer and Chief 1997 $129,000 $31,500
Financial Officer
MICHAEL P. CUSHMAN 1999 $142,000 0
Vice President-Americas 1998 $130,000 $44,000
Business Group 1997 $112,000 $16,000
THOMAS C. PLATT III(5) 1999 $133,000 0
Vice President-General 1998 $115,000 $37,000
Counsel and Administration
CHARLES TILGNER III 1999 $119,000 0
Vice President and Director 1998 $115,000 $35,000
of U.S. Operations & Eng. 1997 $111,000 $25,000
LONG TERM
COMPENSATION
AWARDS ALL OTHER
NAME AND PRINCIPAL POSITION YEAR OPTIONS(#) COMPENSATION($)(2)
JOHN W. VERBICKY 1999 15,000 $28,947(3)
President, Chief Executive 1998 80,000 $ 6,562
Officer and Director 1997 0 $ 1,531
MOOSA E. MOOSA
Vice President-Finance, 1999 12,000 $ 7,983
Treasurer and Chief 1998 5,000 $ 2,668
Financial Officer 1997 45,000 $11,250(4)
MICHAEL P. CUSHMAN 1999 10,000 $ 7,164
Vice President-Americas 1998 6,000 $ 3,061
Business Group 1997 16,000 $ 718
THOMAS C. PLATT III(5) 1999 7,000 $ 5,812
Vice President-General 1998 40,000 $ 1,069
Counsel and Administration
CHARLES TILGNER III 1999 4,000 $ 3,290
Vice President and Director 1998 4,000 $ 6,453
of U.S. Operations & Eng. 1997 5,300 $ 5,881
(1) Salary includes amounts deferred pursuant to the Corporation's 401(k) Plan.
(2) All Other Compensation includes (i) the Corporation's matching
contributions and discretionary payments made by the Corporation under the
Corporation's 401(k) Plan and (ii) life insurance premiums paid by the
Corporation on behalf of the named executive officer and (iii) travel
awards paid in accordance with corporation policy.
(3) Pursuant to the terms of Dr. Verbicky's employment agreement, the
Corporation has forgiven $10,000 indebtedness and $4,000 of related
interest owed by Dr. Verbicky to the Corporation for fiscal 1999; and the
Corporation forgave $10,000 of indebtedness owed by Dr. Verbicky to the
Corporation for fiscal 1998.
(4) Pursuant to the terms of Mr. Moosa's employment agreement, the Corporation
paid Mr. Moosa a $10,000 signing bonus a the commencement of his
employment.
(5) Mr. Platt joined the Corporation in July 1997.
<PAGE>
Option Grants in Last Fiscal Year
The following table discloses information regarding stock options
granted during the fiscal year ended June 30, 1999 pursuant to the Corporation's
Third Amended and Restated 1991 Stock Option Plan to the individuals listed in
the Summary Compensation Table. In accordance with Securities and Exchange
Commission rules, also shown are the hypothetical gains or "option spreads," on
a pre-tax basis, that would exist for the respective options. These gains are
based on assumed rates of annual compound stock price appreciation of 0%, 5% and
10% from the date the options were granted over the full option term of ten (10)
years.
Individual Grants
% of Total
Options Granted
Options to Employees Exercise Expiration
Name Granted(#)(1) in FY 1999 Price (per sh) Date
- ---- ------------- ---------------- -------------- ----------
John W. Verbicky .. 15,000 6.42% $21.9375 8/4/08
Moosa E. Moosa .... 12,000 5.14% $21.9375 8/4/08
Michael P. Cushman 10,000 4.28% $21.9375 8/4/08
Thomas C. Platt III 7,000 3.00% $21.9375 8/4/08
Charles Tilgner III 4,000 1.71% $21.9375 8/4/08
Potential Realizable Value at
Assumed Annual Rates of
Stock Price Appreciation for
Option Term
----------------------------------------------------------
0% 5% 10%
-- -- ---
John W. Verbicky .. $0 $206,946 $524,441
Moosa E. Moosa .... $0 $165,557 $419,553
Michael P. Cushman $0 $137,964 $349,627
Thomas C. Platt III $0 $ 96,575 $244,739
Charles Tilgner III $0 $ 55,186 $139,851
(1) Each option grant is exercisable, cumulatively, in increments of 25% on
each of the first four anniversaries of the grant date. Options granted to
executive officers provide for accelerated vesting in the event of a
change in control of the Corporation.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Option
Values
The following table sets forth information as to options exercised
during the fiscal year ended June 30, 1999, and unexercised options held at the
end of such fiscal year, by the individuals listed in the Summary Compensation
Table.
Numbers of Unexercised
Shares Acquired Value Options at 6/30/99(#)
Name on Exercise(#) Realized($) Exercisable/Unexercisable
John W. Verbicky ...... 2,500 36,094 98,438/99,562
Moosa E. Moosa ........ 0 0 23,750/38,250
Michael P. Cushman .... 8,525 64,955 12,413/23,062
Thomas C. Platt III ... 0 0 10,000/37,000
Charles Tilgner III ... 3,000 21,688 17,900/11,150
Value of Unexercised
In-the Money Options
at 6/30/99 ($)
Exercisable/Unexercisable(1)
John W. Verbicky .. 418,739/123,282
Moosa E. Moosa .... 91,406/91,406
Michael P. Cushman 96,035/35,282
Thomas C. Platt III 0/0
Charles Tilgner III 98,825/20,528
(1) Value is based on the closing sale price of $18.1875 per share of the
Common Stock as of June 30, 1999 (the last trading date during fiscal 1999)
minus the exercise price.
<PAGE>
Defined Benefit Plan
The Corporation maintains a defined benefit pension plan (the "Defined
Benefit Plan") for its U.S. employees. The following table shows the estimated
annual benefit payable at age 65 upon retirement to participants in the
Corporation's Defined Benefit Plan at the specified compensation and
years-of-service classifications.
<TABLE>
<CAPTION>
Years of Service
10 15 20 25 and over
---------------- ---------------- ---------------- ----------------
Range of Officer Range of Officer Range of Officer Range of Officer
Average Birth Dates Birth Dates Birth Dates Birth Dates
Remuneration* 1960 1935 1960 1935 1960 1935 1960 1935
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$100,000 $ 9,300 $11,600 $14,000 $17,400 $18,600 $23,300 $23,200 $29,100
125,000 12,800 15,100 19,000 22,700 25,500 30,200 32,000 37,800
150,000 16,200 18,600 24,400 27,900 32,500 37,200 40,600 46,400
175,000 19,700 22,100 29,600 33,100 39,400 44,100 49,300 55,100
200,000 23,200 25,500 34,800 38,300 46,400 51,100 58,000 63,900
225,000 26,700 29,000 40,000 43,500 53,300 58,000 66,700 72,500
250,000 30,100 32,500 45,200 48,700 60,300 65,000 75,400 81,200
275,000 33,600 36,000 50,400 54,000 67,200 72,000 84,000 89,900
</TABLE>
* Represents the average annual compensation paid during the sixty (60) months
preceding retirement.
Compensation for purposes of computing retirement benefits under the
Defined Benefit Plan includes salary and only those bonuses paid under the
Corporation's sales incentive program. For the purpose of computing retirement
benefits under the Defined Benefit Plan, compensation for fiscal 1999, reported
to the pension trustee in August 1999, for Dr. Verbicky was $244,808, for Mr.
Moosa $148,962, for Mr. Cushman was $138,269, for Mr. Platt was $133,269, and
for Mr. Tilgner was $119,308.
Benefits are computed on a straight-life annuity basis and, in general,
are payable monthly commencing at age 65. Early retirement is permitted between
the ages of 55 and 65, but at a considerably reduced benefit and subject to
certain restrictions. Benefits are not subject to any reduction for social
security or other offset amounts.
For the purpose of computing retirement benefits under the Defined
Benefit Plan, on June 30, 1999 Mr. Cushman had 21 years of credited service; Mr.
Moosa, 3 years; Mr. Platt, 2 years; Mr. Tilgner, 21 years; and Dr. Verbicky, 6
years.
Executive Employment Agreements
Dr. John Verbicky became the Corporation's President and Chief
Executive Officer as of January 2, 1998. Under Dr. Verbicky's current employment
agreement with the Corporation (the "Verbicky Employment Agreement"), Dr.
Verbicky's annual base salary is subject to annual review and increase by the
Board of Directors of the Corporation. Dr. Verbicky is also eligible to
participate in the Chemfab Corporate Officer Bonus Plan and may receive an
annual cash bonus depending on the Corporation's financial performance for the
year. Furthermore, Dr. Verbicky is entitled to fringe benefits under the
Verbicky Employment Agreement, including life insurance, health insurance and a
company car. (See Option/Compensation Committee Reports.)
<PAGE>
The Verbicky Employment Agreement also provides that Dr. Verbicky's
employment with the Corporation may be terminated by either Dr. Verbicky or the
Corporation, at any time and for any reason whatsoever, by giving up to ninety
(90) days' written notice of termination. If the Corporation terminates Dr.
Verbicky's employment under certain specified circumstances, the Corporation
will continue to pay Dr. Verbicky's base salary and fringe benefits for a period
of nine (9) months following such termination. These payments would be subject
to offset by the amount of any salary or bonus received by Dr. Verbicky from
subsequent employment (unless such termination occurs after a sale of the
Corporation). The Verbicky Employment Agreement contains similar compensation
provisions in the event that Dr. Verbicky's employment with the Corporation
terminates as a result of his death or disability, except that, in the case of
Dr. Verbicky's disability, the compensation payable by the Corporation to Dr.
Verbicky is expected to be funded, in part, from disability insurance coverage
maintained by the Corporation.
The Verbicky Employment Agreement contains provisions for an
interest-free loan by the Corporation to Dr. Verbicky in the amount of $50,000,
which loan is to be forgiven over a five-year period in equal annual amounts and
completely if the Corporation terminates Dr. Verbicky's employment under certain
specified circumstances.
The Corporation also has employment agreements with three other
corporate officers, Moosa E. Moosa, Vice President - Finance, Treasurer and
Chief Financial Officer; Thomas C. Platt III, Vice President - General Counsel
and Administration, and Secretary; and Dennis Filger, Vice President, Business
Development and Technology. If the Corporation terminates Mr. Moosa's or Mr.
Platt's employment under certain specified circumstances, the Corporation will
continue to pay Mr. Moosa's or Mr. Platt's base salary and fringe benefits, as
the case maybe, for a period of six (6) months following such termination. If
the Corporation terminates Mr. Filger's employment under certain specified
circumstances, the Corporation will continue to pay Mr. Filger's base salary and
fringe benefits for a period of nine (9) months following such termination.
These payments would be subject to offset by the amount of any salary or bonus
received by Mr. Moosa, Mr. Platt or Mr. Filger, as the case may be, from
subsequent employment (unless such termination occurs after a sale of the
Corporation).
<PAGE>
OPTION/COMPENSATION COMMITTEE REPORT
ON EXECUTIVE OFFICER COMPENSATION
Compensation Philosophy and Objectives
The Corporation's executive officer compensation consists of three
primary components: base salary, annual bonuses, and grants of stock options.
Each component is intended to further the Corporation's overall compensation
philosophy, and to achieve the compensation objectives of the Corporation. The
Corporation's compensation philosophy is that executive officer compensation
should reflect the value created and protected for shareholders, while
furthering the Corporation's short and long-term strategic goals and values by
aligning compensation with business objectives and individual performance. Short
and long-term compensation should motivate and reward high levels of performance
and are geared to attract and retain qualified executive officers.
The Corporation's executive officer compensation program is based on
the following principles and objectives:
o Competitive, Fair and Balanced Compensation
The Corporation is committed to providing an executive officer
compensation program that helps attract and retain highly qualified
executive officers. To ensure that compensation is competitive, the
Corporation compares its compensation practices with those of other
companies and compensation for similar positions in the market. The
Corporation also seeks to achieve a balance of the compensation paid to
a particular individual and the compensation paid to other executive
officers inside the Corporation, and strives to achieve a balance
between the fixed and variable components, and between the short and
long-term components, of each executive officer's compensation.
o Performance
Executive officers are rewarded based upon both corporate and
individual performance. Corporate performance is evaluated by reviewing
the extent to which strategic and business plan goals are met.
Individual performance is evaluated by reviewing the achievement of
specified individual objectives and the degree to which the executive
officer contributed to the overall success of the Corporation and the
management team.
In evaluating each executive officer's performance, the Corporation
generally follows the process described below:
o Prior to or shortly after the beginning of each fiscal year,
the Corporation's goals and objectives are set through the
preparation of the annual plan, which is reviewed with, and
ultimately approved by, the full Board of Directors. Dr.
Verbicky reports to the Board on the Corporation's progress
toward achieving its strategic goals and operating plan
throughout the year at quarterly Board meetings and at other
times as necessary.
o In conjunction with the August Board meeting, the
Option/Compensation Committee (the "Committee") meets with Dr.
Verbicky to review the performance of each executive officer
other than Dr. Verbicky during the fiscal year just ended,
with particular emphasis on the contribution made toward the
attainment of the Corporation's goals and objectives for that
year. At that time, Dr. Verbicky makes specific salary, bonus
and option award recommendations to the Committee for each
executive officer. Based upon all the information available,
including the performance of the individual officer and
compensation information for individuals holding similar
positions in other companies, the Committee makes the final
determination of the salary, bonus and option awards for each
executive officer.
<PAGE>
o At the same time, the Committee also addresses certain aspects
of Dr. Verbicky's compensation. Since his base salary level is
set by his Employment Agreement (see "EXECUTIVE COMPENSATION
-- Executive Employment Agreement" above), this annual
determination by the Committee relates only to his annual
salary increase, if any, the discretionary portion of his
annual bonus and stock option grants.
Compensation for Fiscal 1999
Salary
As described above, the Committee sets the base salary for executive
officers after reviewing the Chief Executive Officer's recommendations and
evaluations of performance, compensation for competitive positions in the market
and the historical compensation levels of the executive officers. In Dr.
Verbicky's case, this process applies only to any annual increase in his base
salary under the Verbicky Employment Agreement. At its August 1998 meeting, the
Committee reviewed the salaries of the Corporation's executive officers,
including Dr. Verbicky, and the Corporation's financial performance for fiscal
year ended June 30, 1998. Based upon this review, the Committee concluded that
increases ranging from 3.5% to 13.6% were appropriate for some of the executive
officers.
Bonus Awards
For fiscal 1999, the Corporation's executive officers, including Dr.
Verbicky, were eligible to receive bonuses pursuant to the terms of the Chemfab
Corporate Officer Bonus Plan (the "Plan"), which was approved by the Committee
early in fiscal 1999. Under the terms of the Plan, executive officer bonuses are
paid from a bonus pool which is funded based upon a formula tied to the
Corporation's consolidated pretax profit for the year. The individual's total
bonus opportunity is divided into two components: 60% of the opportunity is tied
to the individual's annualized base pay as of July 1, 1998 and 40% is variable
based upon an assessment by the Committee of the individual's achievements and
contributions to the success of the business during the year.
Based upon the Corporation's actual pretax profit for fiscal 1999,
there was no bonus pool created under the Plan. Consequently, there were no
bonuses or other payments made under this plan for fiscal 1999.
Stock Option Grants
The Committee believes that stock options have been and remain an
excellent vehicle for compensating employees. Because the option exercise price
for the employee is generally the fair market value of the stock on the date of
grant, employees recognize a gain only if the value of the stock increases.
Thus, employees with stock options are rewarded for their efforts to improve
long-term performance of the Corporation's stock. The size of stock option
grants is generally intended by the Committee to reflect the executive officer's
position with the Corporation and his other contributions to the Corporation,
while at the same time considering his other prior equity holdings in the
Corporation and the stock option awards made to other executive officers of the
Corporation. Grants to executive officers under the stock option program
typically involve a four-year vesting period (subject to accelerated vesting
upon a change of control of the Corporation) to encourage key employees to
continue in the employ of the Corporation. At its July 1999 meeting, the
Compensation Committee granted stock options to the named officers as follows:
Dr. Verbicky, 15,000 shares; Mr. Moosa, 10,000 shares; Mr. Cushman, 8,000
shares; Mr. Platt, 10,000 shares; Mr. Tilgner, 6,000 shares.
<PAGE>
Conclusion
The Committee believes that the total fiscal 1999-related compensation
of the Chief Executive Officer and each of the other named officers, as
described above, including the stock option grants made in July 1999, is fair,
and is well within the range of compensation for executive officers in similar
positions at comparable companies.
Option/Compensation Committee
Paul M. Cook
Warren C. Cook
Nicholas Pappas
<PAGE>
CERTAIN TRANSACTIONS
The Company's Board of Directors (with Dr. Pappas absent and
abstaining) negotiated and, upon recommendation of its Audit Committee, approved
entering into a consulting relationship with Dr. Nicholas Pappas, who currently
serves as Chairman of the Company's Board of Directors. On October 30, 1997, the
Company accordingly entered into a Consulting Agreement with Dr. Pappas to
reflect the terms negotiated and approved by the Board. The Consulting Agreement
requires that Dr. Pappas provide various on-going strategic consulting services
to the Company from and after October 30, 1997. In consideration for these
consulting services, Dr. Pappas was awarded a one-time, non-qualified stock
option to purchase 20,000 shares of the Company's Common Stock at a price of
$21.125 per share (the closing price on the date the Board of Directors approved
the Consulting Agreement). This option vests at a rate of 25% per year,
commencing with the first 25% on October 30, 1997 and continuing on each
anniversary of that date for the ensuing three years. The Consulting Agreement
also requires the Company to pay Dr. Pappas $10,000 quarterly with the first
payment being made on December 30, 1997. The Consulting Agreement continues in
effect, but may be canceled by either party with thirty days notice.
On December 1, 1997, the Company entered into a contract (the
"Contract") for a twelve-month research project with Virginia Polytechnic
Institute and State University and Virginia Tech Intellectual Properties
("VPI"). Under the terms of the Contract, the Company paid VPI $60,000 over
twelve months to cover facilities and equipment costs and the costs of time and
materials for the research services rendered by VPI graduate students supervised
by Drs. McGrath and Wilkes (an associate of Dr. McGrath). Under the agreement no
compensation or any other consideration was paid to Dr. McGrath or Dr. Wilkes.
The Company has the right under the Contract, upon payment of additional
consideration, to acquire exclusive license(s) for inventions and other
intellectual property conceived (in whole or in part) by VPI from this Contract.
Dr. McGrath is the Ethyl Chaired Professor of Chemistry at VPI and serves as a
Director of the Company. The Board of Directors (with Dr. McGrath abstaining),
upon the recommendation of its Audit Committee, found that the Contract was
negotiated at arm's length, and concluded that the Contract with VPI was in the
Company's best interests, and approved and ratified its execution. The Contract
has expired in accordance with its terms.
Each of the above transactions was negotiated at arms-length, and the
Company believes that each transaction was on terms no less favorable to the
Company than could have been obtained at arms-length negotiations with third
parties.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under Section 16(a) of the Securities Exchange Act of 1934, as amended,
the Company's directors and certain of its officers and persons holding more
than ten percent of the Company's Common Stock are required to report their
ownership of the Common Stock and any changes in such ownership to the
Securities and Exchange Commission and the Company. Based on the Company's
review of copies of such reports, no untimely reports were made during the
fiscal year ended June 30, 1999.
SHAREHOLDER RETURN PERFORMANCE GRAPH
The following graph compares the performance of the Corporation's
Common Stock to the Russell 2000 Index and the Dow Jones Specialty Chemicals
Index since June 30, 1994. The graph assumes that the value of an investment in
the Corporation's Common Stock and each index was $100 at June 30, 1994 and that
all dividends were reinvested. The total cumulative return reflected in the
graph below in respect of the fiscal year ended June 30, 1994 and June 30, 1995
has been computed based on the closing sale price of the Corporation's Common
Stock on June 29 and June 27, respectively, the last trading days of the
Corporation's Common Stock in such fiscal years.
<PAGE>
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
CUMULATIVE TOTAL RETURN
--------------------------------------------
6/94 6/95 6/96 6/97 6/98 6/99
CHEMFAB CORPORATION CFA 100 134 175 263 260 227
RUSSELL 2000 IR20 100 120 149 173 206 206
DJ SPECIALTY CHEMICALS ICHS 100 129 142 170 183 202
*$100 INVESTED ON 6/30/94 IN STOCK OR INDEX - INCLUDING REINVESTMENT OF
DIVIDENDS. FISCAL YEAR ENDING JUNE 30.
PROPOSAL TO ADOPT AND APPROVE 1999 STOCK OPTION PLAN
The Board of Directors will propose at the Meeting that the shareholders
adopt and approve the Corporation's 1999 Stock Option Plan. The Corporation has
reserved 500,000 shares of its Common Stock for issuance upon exercise of
options granted and to be granted pursuant to the 1999 Plan, none of which
shares have been issued.
As of June 30, 1999, the 1991 Plan had only 186,706 shares available for
future grants of options.
In light of the small number of shares available under and the pending
expiration of the 1991 Plan in 2001, the Board determined that it would be
advisable to adopt a new stock option plan to provide what the Board believes to
be the necessary additional availability of shares for option grants.
The 1999 Plan has been adopted by the Board of Directors: (i) to encourage
stock ownership by key employees (as determined by the Committee, as defined
below) and directors of, and consultants to, the Corporation and its
subsidiaries; and (ii) to provide additional incentive for them to promote the
success of the Corporation's business. Participation in the Plan is limited to
such key employees, directors and consultants. The 1999 Plan also qualifies as
an incentive stock option plan within the meaning of Section 422 of the Internal
Revenue Code.
The provisions of the 1999 Plan are substantially identical to those of the
1991 Plan. The 1999 Plan will be administered by the Option/Compensation
Committee (the "Committee") appointed by the Corporation's Board of Directors,
to serve at the pleasure of the Board (which may at any time at its discretion
take over any or all functions of the Committee under the 1999 Plan other than
the granting of options to officers of the Corporation). The committee which
administers the 1999 Plan must consist of no fewer than two (2) directors who
are not officers or employees of the Corporation ("Nonemployee Directors").
Nonemployee Directors may be granted options under the 1999 Plan only by
automatic grant under Section 6 of the Plan ("Automatic Grant"). Only
Nonemployee Directors receive Automatic Grants. Automatic Grants occur, as the
name implies, automatically by the terms of the 1999 Plan itself in the
circumstances described below, and require no action by the Committee or the
Board.
<PAGE>
Non-qualified options granted by Automatic Grant have an exercise price
equal to the fair market value of the Common Stock on the date of the Automatic
Grant. Subject to shareholder ratification of the adoption and approval of the
1999 Plan, options are granted by Automatic Grant in the amounts set forth below
(and become exercisable as set forth below) to each Nonemployee Director on the
date of (i) his or her initial election to the Board; and (ii) each annual
meeting of shareholders (including the Meeting) at which he or she is
re-elected:
1. Each Nonemployee Director elected or re-elected at an annual
shareholders meeting (including the Meeting) or special meeting in lieu of
annual meeting, or who continues to serve after such meeting, is
automatically granted, on the date of such meeting (an "Automatic Grant
Date"), an option to purchase 6,000 shares of Common Stock (as
appropriately adjusted for capital changes) to vest as follows if the
director continues to serve as such:
o 25% on the Automatic Grant Date
o 25% on the last day of the fiscal quarter which includes the Automatic
Grant Date (unless the Automatic Grant Date is itself the last day of a
fiscal quarter, in which case this second 25% portion vests on the last
day of the immediately subsequent fiscal quarter)
o 25% on the last day of each of the next two fiscal quarters
2. Each Nonemployee Director elected other than at an annual
shareholders meeting is automatically granted, on the date of such
election, an option to purchase the number shares of Common Stock set forth
below (as appropriately adjusted for capital changes) based on the number
of quarters remaining in the fiscal year during which he or she was
elected, to vest as follows if the director continues to serve as such:
o If a Nonemployee Director is elected after the annual meeting but on or
before December 31, he or she is automatically granted an option to
purchase 4,500 shares of Common Stock, 33 1/3% of which vests on each
of December 31, March 31 and June 30 of the fiscal year of such
director's election.
o If a Nonemployee Director is elected on or after January 1 but on or
before March 31, he or she is automatically granted an option to
purchase 3,000 shares of Common Stock, 50% of which vests on each of
March 31 and June 30 of the fiscal year of such director's election.
o If a Nonemployee Director is elected on or after April 1 but on or
before June 30, he or she is automatically granted an option to
purchase 1,500 shares of Common Stock which vests on June 30 of the
fiscal year of such director's election.
Options other than those granted by Automatic Grant under the 1999
Plan ("non-automatic options") are granted at the times, to the optionees, and
in the amounts determined by the Committee. Non-automatic options may be
incentive stock options or nonqualified stock options, at the Committee's
discretion, but only employees of the Corporation and its subsidiaries are
eligible to receive grants of incentive stock options under the 1999 Plan.
<PAGE>
The exercise price of an incentive stock option must not be less than
100% (or 110% with respect to any optionee owning more than 10% of the total
combined voting power of all classes of stock of the Corporation) of the fair
market value of the Common Stock to any one employee on the date of grant, and
the aggregate fair market value (determined at the time of grant) of shares
issuable pursuant to incentive options which first become exercisable in any
calendar year may not exceed $100,000. In the case of nonqualified stock
options, the exercise price of each such option (other than an option granted by
Automatic Grant) is determined by the Committee, and need not be the market
value of such stock. The vesting schedule, if any, of each non-automatic option.
and its date of termination (which may not be more than ten (10) years after the
date of grant), are also established by the Committee at the time of grant,
except that the date of termination of any incentive option granted to an
optionee who owns more than 10% of the total combined voting power of all
classes of the stock of the Corporation may not be more than five (5) years
after the date of grant.
The Federal income tax aspects of incentive stock options and nonqualified
stock options are generally as described below. An employee will generally not
be taxed at the time of grant or exercise of an incentive stock option, although
exercise of an incentive stock option will give rise to an item of tax
preference that may result in an alternative minimum tax. If the employee holds
the shares acquired upon exercise of an incentive stock option until at least
one year after issuance and two years after the option grant, he or she will
have long-term capital gain (or loss) based on the difference between the amount
realized on the sale or disposition and his or her option price. If these
holding periods are not satisfied, then upon disposition (a "disqualifying
disposition") of the shares the employee will recognize ordinary income equal,
in general, to the excess of the fair market value of the shares at time of
exercise over the option price, plus capital gain in respect of any additional
appreciation. With respect to a nonqualified stock option, an optionee will not
be taxed at the time of grant; upon exercise, however, he or she will generally
realize compensation income to the extent the then fair market value of the
stock exceeds the option price. The Corporation will generally have a tax
deduction to the extent that, and at the time that, an optionee realizes
compensation income with respect to an option; in the case of an incentive stock
option, this means that the Corporation ordinarily is not entitled to a Federal
income tax deduction.
Options under the 1999 Plan may not be granted later than November 1,
2009. The Board of Directors of the Corporation may, at any earlier time,
terminate the 1999 Plan or make such modifications to the 1999 Plan as it shall
deem advisable. The Board may not, however, (i) without further approval of the
Corporation's shareholders, increase the maximum number of shares available for
option under the 1999 Plan, or extend the period during which options may be
granted or exercised; or (ii) amend certain provisions of the 1999 Plan,
including provisions relating to Automatic Grants, more than once in any six (6)
month period. No termination or amendment of the 1999 Plan may, without the
consent of each optionee to whom an option under the 1999. Plan shall
theretofore have been granted, adversely affect the rights of such optionee
under such option.
As of the date of this proxy statement, no options have been granted under
the 1999 Plan. The reported closing price of the Common Stock on the New York
Stock Exchange on September 1, 1999 was $17.00 per share.
Management and the Board of Directors believe that the interests of the
Corporation and its shareholders are advanced by the possibility of encouraging
stock ownership by key employees and directors of, and consultants to, the
Corporation and its subsidiaries, and by providing them with additional
incentive to promote the success of the Corporation's business. The affirmative
vote of the holders of a majority of the outstanding shares is required to adopt
and approve the 1999 Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO ADOPT AND APPROVE
THE 1999 PLAN, AND PROXIES SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR THEREOF
UNLESS A SHAREHOLDER HAS INDICATED OTHERWISE ON THE PROXY.
<PAGE>
RATIFICATION OF INDEPENDENT AUDITORS
Based upon the recommendation of its Audit Committee, the Board of
Directors has selected the firm of Ernst & Young LLP as the independent auditors
of the Corporation for the fiscal year ending June 30, 2000. Ernst & Young LLP
(together with one of its predecessor firms, Arthur Young & Company) have acted
in such capacity for the Corporation since the 1980 fiscal year. The Board will
propose at the Meeting that the shareholders ratify this selection.
Representatives of Ernst & Young LLP are expected to be present at the
Meeting and will be afforded the opportunity to make a statement if they so
desire and to respond to appropriate questions.
The affirmative vote of a majority of the shares of Common Stock
present at the Meeting, in person or by proxy, is required for the ratification
of the appointment of Ernst & Young LLP as the Corporation's auditors. If the
proposal to ratify the appointment of Ernst & Young LLP is not approved, the
Board of Directors will select and appoint an independent accounting firm for
the fiscal year ending June 30, 2000 without further shareholder action.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO APPROVE
THE SELECTION OF ERNST & YOUNG LLP AS THE INDEPENDENT AUDITORS OF THE
CORPORATION FOR THE FISCAL YEAR ENDING JUNE 30, 2000, AND PROXIES SOLICITED BY
THE BOARD WILL BE VOTED IN FAVOR THEREOF UNLESS A SHAREHOLDER HAS INDICATED
OTHERWISE ON THE PROXY.
MISCELLANEOUS
Other Matters
The Board of Directors does not know of any other matters that may be
presented at the Meeting, except for routine matters. If other business does
properly come before the Meeting, however, the persons named on the accompanying
proxy intend to vote on such matters in accordance with their best judgment.
2000 Shareholder Proposals
In order for shareholder proposals to be presented at the Corporation's
2000 annual meeting of shareholders, such proposals must be received by the
Secretary of the Corporation at the Corporation's principal office in Merrimack,
New Hampshire not later than May 21, 2000 for inclusion in the proxy statement
for that meeting, subject to the applicable rules of the Securities and Exchange
Commission. Delivery of such proposals should be by Certified Mail, Return
Receipt Requested.
Annual Report on Form 10-K
The Corporation will provide free of charge to any stockholder from
whom a proxy is solicited by means of this proxy statement, upon written request
from such stockholder, a copy of the Corporation's Annual Report on Form 10-K
(without exhibits) for the fiscal year ended June 30, 1999. Requests for such
report should be directed to: Secretary, Chemfab Corporation, 701 Daniel Webster
Highway, P.O. Box 1137, Merrimack, New Hampshire 03054.
September 23, 1999
