<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
CEM Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which 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:
<PAGE> 2
CEM Corporation Logo
MATTHEWS, NORTH CAROLINA
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 6, 1997
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of CEM
Corporation (the Company) will be held at the principal office of the Company,
3100 Smith Farm Road, Matthews, North Carolina, on Thursday, November 6, 1997,
at 11:00 a.m., Local Time, for the purpose of considering and acting upon the
following:
1. The election of four Directors.
2. A proposal to ratify the selection of Coopers & Lybrand L.L.P. as
independent public accountants for the fiscal year ending June 30,
1998.
3. Any and all other matters that may properly come before the meeting or
any adjournment thereof.
The Board of Directors has fixed the close of business on September 8, 1997
as the record date for determining the shareholders entitled to notice of and to
vote at the meeting and any adjournment thereof, and only holders of Common
Stock of the Company of record at such date will be entitled to notice of or to
vote at the meeting.
THE BOARD OF DIRECTORS WILL APPRECIATE THE PROMPT RETURN OF THE ENCLOSED
PROXY, DATED AND SIGNED. THE PROXY MAY BE REVOKED BY YOU AT ANY TIME BEFORE IT
IS EXERCISED AND WILL NOT BE EXERCISED IF YOU ATTEND THE MEETING AND VOTE IN
PERSON.
By Order of the Board of Directors
/s/ Michael J. Collins
MICHAEL J. COLLINS
President and Chief Executive Officer
Matthews, North Carolina
October 2, 1997
<PAGE> 3
CEM CORPORATION
Post Office Box 200, Matthews, North Carolina 28106
PROXY STATEMENT
GENERAL
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of proxies to be used at the Annual Meeting of
Shareholders of CEM Corporation (the Company) to be held at its principal
office, 3100 Smith Farm Road, Matthews, North Carolina, at 11:00 a.m., Local
Time, on Thursday, November 6, 1997. This Proxy Statement and accompanying proxy
are first being sent to the shareholders of the Company on October 2, 1997.
Solicitation other than by mail may be made personally and by telephone by
regularly employed officers and employees of the Company who will not be
additionally compensated therefor. The Company will request brokers, dealers,
banks or voting trustees, or their nominees, who hold stock in their names for
others or hold stock for others who have the right to give voting instructions,
to forward proxy materials to their principals and request authority for the
execution of the proxy and will reimburse such institutions for their reasonable
expenses in so doing. In addition, the Company has engaged Corporate
Communications, Inc. (CCI) to solicit proxies from these institutions. CCI will
be reimbursed for its printing costs, postage and freight charges, and other
expenses and will be paid a solicitation fee of approximately $3,500. The total
cost of soliciting proxies will be borne by the Company.
Any proxy delivered in the accompanying form may be revoked by the person
executing the proxy at any time, before the authority thereby granted is
exercised, by written request addressed to Secretary, CEM Corporation, Post
Office Box 200, Matthews, North Carolina 28106 or by attending the meeting and
electing to vote in person. Proxies received in such form will be voted as
therein set forth at the meeting or any adjournment thereof.
The only matters to be considered at the meeting, so far as known to the
Board of Directors, are the matters set forth in the Notice of Annual Meeting of
Shareholders, and routine matters incidental to the conduct of the meeting.
However, if any other matters should come before the meeting or any adjournment
thereof, it is the intention of the persons named in the accompanying form of
proxy, or their substitutes, to vote said proxy in accordance with their
judgment on such matters.
Shareholders present or represented and entitled to vote on a matter at the
meeting or any adjournment thereof will be entitled to one vote on such matter
for each share of the Common Stock of the Company held by them of record at the
close of business on September 8, 1997, which is the record date for determining
the shareholders entitled to notice of and to vote at such meeting or any
adjournment thereof. Voting on all matters, including the election of Directors,
will be by voice vote or by show of hands, unless the holders of at least 25% of
the shares represented at the meeting and entitled to vote on such matter demand
a vote by ballot prior to the vote. The number of shares of Common Stock of the
Company outstanding on September 8, 1997 was 3,485,997.
<PAGE> 4
PRINCIPAL SHAREHOLDERS AND HOLDINGS OF MANAGEMENT
At September 8, 1997, the only persons known to the Company to be the
beneficial owners of more than 5% of the $.05 par value Common Stock of the
Company (the Common Stock) were as follows:
<TABLE>
<CAPTION>
Name and Address of Number of Shares and Nature Percent of Common Stock
Beneficial Owner of Beneficial Ownership Outstanding
- ------------------------------------------ ------------------------------------ --------------------------------
<S> <C> <C>
Michael J. Collins 515,612 (1) 14.6% (2)
10225 Thomas Payne Circle
Charlotte, North Carolina 28277
David L. Babson & Co., Inc. 420,000 (3) 12.0%
One Memorial Drive
Cambridge, MA 02142-1300
T. Rowe Price Associates, Inc. 318,500 (4) 8.8%
100 E. Pratt Street
Baltimore, MD 21202
Royce & Associates, Inc. 292,400 (5) 8.1%
1414 Avenue of the Americas
New York, NY 10019
Dimensional Fund Advisors Inc. 207,600 (6) 6.0%
1299 Ocean Avenue, 11th Floor
Santa Monica, CA 90401
</TABLE>
- --------------------
(1) Includes 35,470 shares subject to options that are currently exercisable or
which are exercisable within 60 days and 16,350 shares held by Mr. Collins'
wife as custodian for their children.
(2) Based on the number of shares outstanding plus options that are currently
exercisable or that are exercisable within 60 days.
(3) David L. Babson & Company, Inc. (Babson) is an investment adviser. Babson
has sole voting power over 271,100 of the shares, shared voting power over
148,900 of the shares and sole dispositive power over all of the shares. All
information herein concerning Babson is based upon that furnished by Babson
in its Schedule 13G dated February 7, 1997.
(4) The shares are owned by the T. Rowe Price Small-Cap Value Fund which T. Rowe
Price Associates, Inc. (Price Associates) serves as investment adviser.
Price Associates has sole dispositive power but no voting power over such
shares. For purposes of the reporting requirements of the Securities
Exchange Act of 1934, Price Associates is deemed to be a beneficial owner of
such securities; however, Price Associates expressly disclaims that it is,
in fact, the beneficial owner of such securities. All information herein
concerning Price Associates is based upon that furnished by Price Associates
by letter dated February 14, 1997.
(5) Royce & Associates, Inc. (Royce) has sole voting and dispositive power over
all shares. All information herein concerning Royce is based upon that
furnished by Royce in its Schedule 13G dated February 3, 1997 and verbally
updated on August 8, 1997.
2
<PAGE> 5
(6) Dimensional Fund Advisors Inc. (Dimensional), a registered investment
advisor, is deemed to have beneficial ownership of 207,600 shares as of
December 31, 1996. Dimensional has sole voting power over 162,300, shared
voting power over 45,300 and sole dispositive power over all of the shares.
All of the shares are held in portfolios of DFA Investment Dimensions Group
Inc., a registered open-end investment company, or in a series of the DFA
Investment Trust Company, a Delaware business trust, or the DFA Group Trust
and DFA Participation Group Trust, investment vehicles for qualified
employee benefit plans, all of which Dimensional serves as investment
manager. Dimensional disclaims beneficial ownership of all such shares. All
information herein concerning Dimensional is based upon that furnished by
Dimensional by letter dated February 7, 1997.
The following table sets forth, as of September 8, 1997, information as to
the beneficial ownership of the Common Stock by all Directors and Executive
Officers of the Company as a group and by Richard N. Decker, Brian W.
Renoe and James A. Prendergast:
<TABLE>
<CAPTION>
Number of Shares and Nature Percent of Common Stock
Name of Beneficial Owner of Beneficial Ownership (1) Outstanding (2)
- ------------------------------------------ ----------------------------------- ---------------------------------
<S> <C> <C>
Directors and Executive Officers 587,601 (3) 16.4%
as a group (5 persons)
Richard N. Decker 22,984 (4) (5)
Brian W. Renoe 26,750 (6) (5)
James A. Prendergast 2,968 (5)
</TABLE>
- -------------------
(1) Information as to the beneficial ownership of the Common Stock by the Chief
Executive Officer is included in the immediately preceding table.
(2) Based on the number of shares outstanding plus options that are currently
exercisable or exercisable within 60 days.
(3) Includes 93,720 shares subject to options that are currently exercisable or
that are exercisable within 60 days and does not include any shares or
options of Messrs. Renoe and Prendergast who resigned as officers of the
Company on January 1, 1997.
(4) Includes 21,250 shares subject to options that are currently exercisable or
that are exercisable within 60 days.
(5) Less than 1%.
(6) All shares subject to options that are currently exercisable or that are
exercisable within 60 days.
ELECTION OF DIRECTORS
The Bylaws of the Company provide for not less than four nor more than nine
Directors, as determined from time to time by resolution of the shareholders or
the Board of Directors. The Board of Directors has set the number of Directors
of the Company at four.
At the meeting, four Directors will be elected to serve, subject to the
provisions of the Bylaws, until the 1998 Annual Meeting of Shareholders and
until their successors are duly elected and qualified. The accompanying proxy
may be voted for only four Directors. Directors are elected by a plurality of
the votes cast by the holders of the shares entitled to vote at a meeting at
which a quorum is present. Provided a quorum is present, abstentions and shares
not voted are not taken into account in determining a plurality. A quorum
consists of a majority of votes entitled to be cast. It is the intention of the
persons named in the accompanying proxy to vote all proxies solicited by the
Board of Directors FOR the four nominees listed below unless authority to vote
for the nominees or any individual nominee is withheld by a shareholder in such
shareholder's proxy. If for any reason any nominee shall
3
<PAGE> 6
not become a candidate for election as a Director at the meeting, an event not
now anticipated, the proxies will be voted for the four nominees including such
substitutes as shall be designated by the Board of Directors.
The four nominees for election as Director, all of whom are currently
members of the Board of Directors, are listed below. The four nominees were
elected to their current terms, which expire in 1997, at the Annual Meeting of
Shareholders held on November 7, 1996.
<TABLE>
<CAPTION>
Shares of Percent of
Name and Common Stock Common Stock
Director Since (1) Age Information about Nominees and Directors Owned (2) Outstanding (3)
- ---------------------- ------ -------------------------------------------- ---------------- -------------------
<S> <C> <C> <C> <C>
Michael J. Collins 54 President and Chief Executive Officer of 515,612 (4) 14.6%
1971 the Company since 1978
Ronald A. Norelli 51 Chairman of the Board of the Company 25,405 (5) (6)
1985 since 1992; President and Chief Executive
Officer of Norelli & Company (strategic
management consulting firm) since 1981
John L. Chanon 54 Area Partner of Tatum CFO Partners LP 17,100 (7) (6)
1987 (CFO Services) since 1996; Senior Vice
President - Finance of Harris-Teeter,
Inc. (regional supermarket chain)
1993-1996; President of Jordan Graphics,
Inc. (printing company) 1989-1993;
Harris-Teeter, Inc. and Jordan Graphics,
Inc. are a subsidiary and former
subsidiary, respectively, of Ruddick
Corporation (holding company)
John D. Correnti 49 Vice Chairman, President and Chief 6,500 (8) (6)
1995 Executive Officer of Nucor Corporation
(steel manufacturer) since 1996,
President and Chief Operating Officer
1991-1996; Director of Nucor Corporation,
Harnischfeger Industries Inc. and
Navistar International Corporation
</TABLE>
- -------------------
(1) The information about the Directors was furnished to the Company by the
Directors.
(2) All shares are owned directly and with sole voting and dispositive power
except as otherwise noted. Common Stock ownership information is as of
September 8, 1997.
(3) Based on the number of shares outstanding plus options held by Directors
that are currently exercisable or exercisable within 60 days.
(4) Includes 35,470 shares subject to options that are presently exercisable or
that are exercisable within 60 days and 16,350 shares held by his wife as
custodian for their children.
(5) Includes 17,000 shares subject to presently exercisable options and 405
shares held as custodian for his children.
(6) Less than 1%.
(7) Includes 14,000 shares subject to presently exercisable options and 100
shares held by his son.
(8) Includes 6,000 shares subject to options that are presently exercisable.
4
<PAGE> 7
THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors met four times during the fiscal year. Each Director
attended all of the meetings of the Board of Directors and Committees on which
he served. The Company has Audit and Compensation Committees. The Board of
Directors does not have a Nominating Committee.
The Audit Committee is composed of John L. Chanon and Ronald A. Norelli and
is responsible for recommending independent auditors for the Company, reviewing
the Company's financial statements, audit report, internal financial controls
and internal audit procedures, and approving services to be performed by the
Company's independent auditors. John L. Chanon is Chairman of the Audit
Committee. The Audit Committee met twice during the fiscal year.
The Compensation Committee is composed of Ronald A. Norelli, John L. Chanon
and John D. Correnti and reviews and makes recommendations with respect to
executive and officer compensation and administers the Company's 1993 Management
Equity Plan and the Management Incentive Compensation Plan. Ronald A. Norelli is
Chairman of the Compensation Committee. The Compensation Committee met twice
during the fiscal year.
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors of the Company, whose
members are named above, provides overall guidance to the Company's executive
compensation process. The Compensation Committee is composed of three outside
members of the Board of Directors and meets periodically to review the Company's
executive and officer compensation. The Compensation Committee's recommendations
regarding the salary of the Chief Executive Officer and the other officers of
the Company are subject to approval by the Board, except for decisions about
grants under the 1987 Stock Option Plan and the 1993 Management Equity Plan (the
Management Equity Plan). As administrator of the 1987 Stock Option Plan and the
Management Equity Plan, the Compensation Committee granted options under the
1987 Stock Option Plan and grants options and makes other equity-based awards
under the Management Equity Plan and determines the terms and conditions of such
awards.
The Compensation Committee's compensation policies are designed to fairly
compensate the officers of the Company for the effective exercise of their
responsibilities, their management of the business functions for which they are
responsible, the motivation of those officers and employees reporting to them,
their extended period of service to the Company and their dedication and
diligence in carrying out their responsibilities. The named Executive Officers'
1997 annual compensation consisted of a base salary. No bonus was earned for the
1997 fiscal year pursuant to the terms of the Company's Management Incentive
Compensation Plan (the MICP). The salary was designed to reward the named
Executive Officers for the performance of their responsibilities and their
long-term commitment to the Company. In fiscal year 1997, the Compensation
Committee, and in prior years, the Board, which served the function of the
Compensation Committee, has usually granted increases in the base salaries of
the named Executive Officers each year based on recommendations from the Chief
Executive Officer who has consulted with other officers of the Company. From
time to time, the Board has made adjustments to such recommendations.
In considering salaries for the 1997 fiscal year, the Compensation
Committee considered the Company's overall performance over a period of years
and the performance of the individual officer and compared the officers'
salaries with the salaries of comparable officers at comparable companies and
did not recommend increases in the base salaries of the named Executive Officers
for fiscal 1997 over fiscal 1996.
The MICP and the Management Equity Plan together provide a comprehensive
incentive compensation program for the Company's key employees through
performance based cash and equity incentives. These two plans are used together
by the Compensation Committee to provide more competitive compensation packages
to the key employees of the Company. Under these plans, key employees of the
Company are eligible to earn increased compensation primarily based on increases
in the Company's net income before interest and taxes as well as individual
performance relative to preestablished individual objectives. Such compensation
is in the form of cash bonuses granted pursuant to the MICP and restricted stock
and other equity-based awards granted under the Management Equity Plan in
amounts determined under the MICP. The Compensation Committee believes that the
combination of the MICP and the Management Equity Plan creates a competitive
compensation package for the Company's key employees, rewarding key employees
for increasing the net income before interest and taxes of the
5
<PAGE> 8
Company and thereby ultimately benefiting the shareholders of the Company. For
the 1997 fiscal year, no bonus awards were made under the MICP.
Stock options granted under the Company's 1987 Stock Option Plan and stock
options and other equity based awards granted under the Management Equity Plan
are designed to create a proprietary interest in the Company among the officers
and other key employees of the Company who are granted stock options and to more
closely align the long-term interests of the optionees with those of the
shareholders of the Company. During the 1997 fiscal year, Messrs. Decker, Renoe
and Prendergast were each granted an option (and related stock appreciation
rights (SARs)) to purchase 5,000, 3,000 and 3,000, respectively, shares of
Common Stock under the Management Equity Plan.
Mr. Collins' 1997 annual compensation consisted of a base salary. No bonus
was earned for the 1997 fiscal year pursuant to the terms of the MICP. Mr.
Collins' base salary was determined based on a number of factors, including the
performance of the Company and his individual performance and by comparison to
the salaries of chief executive officers at comparable companies. Mr. Collins
did not receive a base salary increase for 1997.
The Compensation Committee report is presented by Ronald A. Norelli, John
L. Chanon and John D. Correnti.
SHAREHOLDER RETURN PERFORMANCE GRAPH
Included below is a line graph comparing the yearly percentage change in
the cumulative total shareholder return on the Company's Common Stock against
the cumulative total return of the Nasdaq Stock Market (U.S. Companies) Index
and the Company's Peer Group for the period commencing June 30, 1992 and ending
June 30, 1997 covering the Company's five fiscal years ended June 30, 1997.
The Company has selected a Peer Group consisting of the six publicly-traded
companies, named below, which are in the laboratory and analytical instrument
industry. Many of the Company's direct competitors and peers are privately-held
companies or subsidiaries or divisions of larger publicly-held companies so that
the available members of the Peer Group are limited.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG THE COMPANY, NASDAQ STOCK MARKET INDEX AND PEER GROUP
CEM Corporation
Cumulative Total Return Points
NASDAQ Peer
DATE CEM Corp. (U.S. Co.s) Group
---- --------- ----------- -----
6/30/92 100.000 100.000 100.000
6/30/93 100.000 125.800 83.100
6/30/94 124.300 127.000 98.500
6/30/95 135.100 169.500 142.600
6/30/96 143.200 217.600 164.900
6/30/97 93.200 264.600 141.300
This graph assumes that $100 was invested in the Company's Common Stock on
June 30, 1992, in the Nasdaq Stock Market (U.S. Companies) Index and in the Peer
Group, which consists of Bio-Rad Laboratories, Inc., Instron Corporation, Isco,
Inc., Modern Controls, Inc., O.I. Corporation and Pacific Scientific Company,
and that dividends are reinvested.
6
<PAGE> 9
EXECUTIVE COMPENSATION
The table below shows the compensation paid or accrued by the Company, for
the three fiscal years ended June 30, 1997, to or for the account of the Chief
Executive Officer, Richard N. Decker, Brian W. Renoe and James A. Prendergast,
the only Executive Officers and employees of the Company whose total annual
salary and bonus exceeded $100,000 for the 1997 fiscal year (collectively, the
named Executive Officers).
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Annual Compensation Long Term Compensation
------------------------------------------------------------------
Awards
-----------------------------
Other Annual Restricted Options/ All Other
Name and Fiscal Salary Bonus Compensation Stock Award(s) SARs Compensation
Principal Position Year ($) ($) ($) (1) ($) (2) (#) (3) ($) (4)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Michael J. Collins 1997 202,420 - - - - 4,500/10,894
President and Chief 1996 201,264 - - - - 3,000/2,188
Executive Officer 1995 191,769 35,222 - - - 3,000/19,848
Richard N. Decker 1997 124,825 - - - 5,000 3,656/9,439
Vice President-Finance 1996 119,087 - - - 5,000 2,777/1,285
Chief Financial 1995 110,125 15,768 (5) - 3,991 6,000 2,717/11,369
Officer,
Secretary & Treasurer
Brian W. Renoe (6) 1997 122,000 - - - 3,000 27,622 (7)
Vice President- 1996 121,904 - - - 3,000 2,152/1,328
Technology 1995 108,718 17,233 (5) - 4,355 6,000 1,880/12,159
James A. Prendergast (6) 1997 100,818 - - - 3,000 2,476/-
Vice President- 1996 128,957 - - - 3,000 2,341/1,412
Marketing 1995 130,200 18,860 (5) - 4,771 6,000 2,331/13,489
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) No named Executive Officer has received personal benefits during the listed
years in excess of 10% of annual salary.
(2) The value of these awards is based on the closing market price of the
Common Stock on the dates such shares were awarded. These restricted
shares, which vested on August 3, 1996, were awarded as a portion of such
executive officer's bonus earned under the MICP.
(3) The options granted to the named Executive Officers during the three fiscal
years ended June 30, 1997 included related stock appreciation rights
(SARs).
(4) The numbers represent amounts contributed by the Company under the
Company's 401(k) plan/profit-sharing plan.
(5) Includes 307, 335 and 367 shares issued to Messrs. Decker, Renoe and
Prendergast, respectively as a portion of a bonus earned under the MICP.
The fair market value of such shares, based on the average of the high and
low prices of the Common Stock on the date of award as reported on the
Nasdaq Stock Market, was $3,991, $4,355 and $4,771, respectively.
(6) Mr. Renoe and Mr. Prendergast resigned as officers of the Company on
January 1, 1997. Mr. Prendergast was paid as an employee of the Company
through March 31, 1997. Mr. Renoe will be paid as an employee of the
Company through September 30, 1997.
(7) This amount includes $3,058 contributed under the Company's 401(k) plan,
$9,564 contributed under the Company's profit-sharing plan and $15,000 for
outplacement related services.
7
<PAGE> 10
The table below shows all option grants during the fiscal year ended
June 30, 1997 to the Chief Executive Officer and each named Executive Officer
and the potential realizable value of each grant of options assuming annualized
appreciation in the Common Stock at the rate of 5% and 10% over the ten year
term of the option.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed
Annual Rates of Stock
Price Appreciation for
Option Term
------------------------
% of Total
Options/SARs Options Granted Exercise or
Granted to Employees in Base Price Expiration
Name (#) Fiscal Year ($/Share) Date 5% ($) 10% ($)
- ----------------------- ------------- ---------------- ----------------- ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
Michael J. Collins - - - - - -
Richard N. Decker 5,000 8.0% $ 10.6875 8/5/06 33,607 85,166
Brian W. Renoe 3,000 4.8% $ 10.6875 8/5/06 20,164 51,099
James A. Prendergast 3,000 4.8% $ 10.6875 8/5/06 20,164 51,099
</TABLE>
- -------------------
The table below shows, on an aggregated basis, each exercise of stock
options or SARs during the fiscal year ended June 30, 1997 by each of the named
Executive Officers and the 1997 fiscal year-end value of unexercised options and
SARs.
AGGREGATED OPTION/SAR EXERCISES IN THE 1997 FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Options/SARs In-the-Money
at FY-End (# Shares) Options/SARs
at FY-End ($)(1)
Shares Acquired on Value Exercisable/ Exercisable/
Name Exercise (# Shares) Realized ($) Unexercisable Unexercisable
- ----------------------- ------------------- ------------------ --------------------- ---------------------------
<S> <C> <C> <C> <C>
Michael J. Collins - - 31,720/35,470 62,268/-
Richard N. Decker - - 16,500/29,000 -/-
Brian W. Renoe - - 21,250/32,000 -/-
James A. Prendergast - - -/- -/-
</TABLE>
- -------------------
(1) Represents the total gain which would be realized if all options for which
the fair market value of the stock at year-end ($8.25) was greater than the
exercise price were exercised.
DIRECTOR COMPENSATION
Directors who are employees of the Company or its subsidiaries receive no
additional compensation for serving as directors. Directors who are not
employees of the Company or its subsidiaries receive an annual retainer of
$7,000 and $500 for each Committee meeting attended, except the fee for a
Committee meeting held on the same day as a Board meeting is $250. Ronald A.
Norelli also receives $31,000 per year as Chairman of the Board of the Company.
The 1986 Director Plan, which was terminated on November 16, 1993 upon
approval by the shareholders of the 1993 Nonqualified Stock Option Plan for
Non-Employee Directors (the 1993 Director Plan), provided for the issuance of up
to 90,000 shares of Common Stock. Options for a total of 43,000 shares were
granted under the 1986 Director Plan prior to its termination.
The 1993 Director Plan was adopted by the Board of Directors and approved
by the shareholders in 1993. The 1993 Director Plan was amended in 1995 and the
amendments were approved by the shareholders at the 1995 Annual Meeting on
November 8, 1996.
8
<PAGE> 11
The Board of Directors has reserved 25,000 shares of Common Stock for
issuance upon exercise of options granted under the 1993 Director Plan. This
number, as well as the number of shares issuable upon exercise of an option, is
subject to adjustment in the event of stock dividends and splits,
recapitalizations and similar transactions.
The only persons eligible to receive options under the 1993 Director Plan
are Directors of the Company who are not regular employees of the Company on the
date of grant of the option. Under the 1993 Director Plan, each Director who was
eligible to receive options under the Plan was automatically granted an option
to purchase 500 shares of Common Stock on February 1, 1994 and 1995, and was
automatically granted an option to purchase 1,000 shares of Common Stock on
February 1, 1996, each subject to adjustment in the event of stock dividends and
splits, recapitalizations and similar transactions. Pursuant to the 1995
amendments to the 1993 Director Plan each eligible newly elected Director are
automatically granted an option to purchase 5,000 shares of Common Stock and all
eligible Directors are automatically granted an option to purchase 1,000 shares
on February 1, 1997 and 1998. If there are not sufficient shares reserved for
such grants, the eligible Directors will receive an option for a pro rata number
of the remaining shares reserved for grant. The exercise price of options
granted under the 1993 Director Plan is the fair market value of the Common
Stock on the date of grant. On February 1, 1997, Messrs. Norelli, Chanon and
Correnti each received an option to purchase 1,000 shares of Common Stock at an
exercise price of $8.25 per share.
An option granted under the 1993 Director Plan is not exercisable unless
the optionee remains available to serve as a Director of the Company until the
first anniversary of the date of grant. On or after such first anniversary, any
or all of such option may be exercised until the expiration or termination of
the option. Upon the exercise of an option or portion thereof, the exercise
price must be paid in full in cash or its equivalent.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's Directors and
Executive Officers and persons who own more than 10% of the Company's Common
Stock to file with the SEC initial reports of ownership and reports of changes
in ownership of the Common Stock and other equity securities. Officers,
Directors and greater than 10% shareholders are required to furnish the Company
with copies of all such reports they file. To the Company's knowledge, based
solely on a review of the copies of such reports furnished to the Company and
written representations that no other reports were required, during the fiscal
year ended June 30, 1997, all Section 16(a) filing requirements applicable to
its Executive Officers, Directors and greater than 10% beneficial shareholders
were complied with, except that Mr. Renoe did not file a Form 4 for one
transaction in February 1997 which occurred after he resigned as an officer.
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected Coopers & Lybrand L.L.P. as independent
public accountants to audit the financial statements of the Company for the
fiscal year ending June 30, 1998. This selection is being presented to the
shareholders for their ratification at the Annual Meeting of Shareholders. The
firm of Coopers & Lybrand L.L.P. has audited the Company's financial statements
annually since 1981 and is considered well qualified.
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Representatives of Coopers & Lybrand L.L.P. are expected to be present at
the Annual Meeting of Shareholders with an opportunity to make a statement if
they desire to do so, and they are expected to be available to respond to
appropriate questions.
The Board of Directors recommends a vote FOR the ratification of the
selection of Coopers & Lybrand L.L.P. as independent public accountants to audit
the financial statements of the Company for the fiscal year ending June 30,
1998, and proxies solicited by the Board of Directors will be so voted unless
shareholders specify a different choice.
If the shareholders do not ratify the selection of Coopers & Lybrand
L.L.P., the selection of independent public accountants will be reconsidered by
the Board of Directors.
SHAREHOLDER PROPOSALS
Any proposal that a shareholder intends to present for action at the 1998
Annual Meeting of Shareholders, currently scheduled for November 5, 1998, must
be received by the Company no later than June 4, 1998, in order for the proposal
to be included in the proxy statement and form of proxy for the 1998 Annual
Meeting of Shareholders. The proposal should be sent to Secretary, CEM
Corporation, Post Office Box 200, Matthews, North Carolina 28106.
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APPENDIX A
[LOGO] CEM CORPORATION PROXY
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING TO BE HELD NOVEMBER 6, 1997
The undersigned hereby appoints Michael J. Collins and Richard N. Decker,
and each or either of them, proxies, with full power of substitution, with the
powers the undersigned would possess if personally present, to vote, as
designated below, all shares of the $.05 par value Common Stock of the
undersigned in CEM Corporation at the Annual Meeting of Shareholders to be held
on November 6, 1997, and at any adjournment thereof.
THIS PROXY WILL BE VOTED AS SPECIFIED HEREIN AND, UNLESS OTHERWISE
DIRECTED, WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES AS DIRECTORS AND FOR
PROPOSAL 2 BELOW. The Board of Directors recommends voting FOR on each item.
1. ELECTION OF DIRECTORS: Nominees are Michael J. Collins, Ronald A. Norelli,
John L. Chanon and John D. Correnti
[ ] FOR all listed nominees (except do not vote for the nominee(s) whose
name(s) I have written below)
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[ ] WITHHOLD AUTHORITY to vote for the listed nominees
(CONTINUED FROM OTHER SIDE)
2. RATIFICATION OF SELECTION OF COOPERS & LYBRAND L.L.P. AS INDEPENDENT PUBLIC
ACCOUNTANTS
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
Receipt of Notice of Annual Meeting of Shareholders and accompanying Proxy
Statement is hereby acknowledged.
PLEASE DATE AND SIGN EXACTLY AS PRINTED BELOW AND RETURN PROMPTLY IN THE
ENCLOSED POSTAGE PAID ENVELOPE.
Dated: , 1997.
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(When signing as attorney,
executor, administrator,
trustee, guardian, etc., give
title as such. If joint account,
each joint owner should sign.)
