<PAGE>
SCHEDULE 14A
Information Required in Proxy Statement
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] 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 Section 240.14a-11(c) or
Section 240.14a-12
MISONIX, INC.
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(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:
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(2) Aggregate number of securities to which transaction applies:
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<PAGE>
(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
January 9, 1997
Dear Shareholder:
On behalf of the Board of Directors, I cordially invite you to attend the Annual
Meeting of Shareholders of MISONIX, INC. ("Company"), which will be held at the
office of Ernst & Young LLP at 395 North Service Road, Melville, New York, at
10:00 a.m. on Wednesday, February 19, 1997.
As described in the accompanying Notice of Annual Meeting of Shareholders and
Proxy Statement, you will be asked to consider and vote upon the Election of
Directors, approval of the 1996 Employee Incentive and Non-Employee Director
Stock Option Plans and to ratify grants previously made thereunder. In order for
your vote to be counted, you must return your signed proxy in the enclosed
postage-paid envelope prior to the Annual Meeting of Shareholders which is to be
held on February 19, 1997. Management is recommending that the shareholders vote
"FOR" approval of the proposals.
On March 27, 1996, the Board of Directors adopted, subject to shareholder
approval, the 1996 Employee Incentive and Non-Employee Director Stock Option
Plans. The purpose of the Employee's Plan is to provide an incentive to key
employees (including directors and officers who are key employees) of the
Company and to offer an additional inducement in obtaining the services of such
individuals. The purpose of the Outside Directors' Plan is to provide long-term
incentive supplemental compensation for the members of the Board of Directors of
the Company who are not employees of the Company through the ownership of the
Company's Common Shares, thereby further aligning their interest with the
interests of shareholders. Stock option plans for non-employee directors have
served other companies and their shareholders well by directly relating
incentive compensation to the building of long-term shareholder values. Such
plans are increasingly common throughout American industry and are found in
other companies with which the Company competes for the services of qualified
individuals to serve as directors.
YOUR VOTE IS VERY IMPORTANT, regardless of the amount of stock you own. Please
complete and sign each proxy card you receive and return it as soon as possible
in the postage-paid envelope provided even if you currently plan to attend the
Annual Meeting. This will not prevent you from voting in person, but will assure
that your vote is counted if you are unable to attend the meeting. Management
recommends a vote "FOR" approval of all the proposals. Should you have any
questions or need help in voting your stock, please telephone Investor
Relations, or call our proxy solicitor, McCormick & Pryor at 1 (800)-476- 2508
PIN #6766.
Thank you for your consideration of these matters and vote today.
Sincerely,
s/Joseph Librizzi
Joseph Librizzi
President and Chief
Executive Officer
<PAGE>
MISONIX, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
February 19, 1997
To the Shareholders of
MISONIX, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
MISONIX, INC., a New York corporation (the "Company"), will be held at the
office of Ernst & Young LLP at 395 North Service Road, Melville, New York 11747
on Wednesday, February 19, 1997 at 10:00 a.m., or at any adjournment thereof,
for the following purposes:
1. To elect four Directors to the Board of Directors;
2. To consider and vote upon (i) approval of the 1996 Employee
Incentive Stock Option Plan; (ii) approval of the 1996
Non-Employee Director Stock Option Plan; and (iii)
ratification of grants previously made under such Plans; and
3. To consider and act upon such other business as may properly
come before this meeting or any adjournment thereof.
The above matters are set forth in the Proxy Statement attached to this
Notice to which your attention is directed.
Only shareholders of record on the books of the Company at the close of
business on January 2, 1997 will be entitled to vote at the Annual Meeting of
Shareholders or at any adjournment thereof. You are requested to sign, date and
return the enclosed Proxy at your earliest convenience in order that your shares
may be voted for you as specified.
By Order of the Board of Directors
PETER GERSTHEIMER
Secretary
Dated: January 9, 1997
Farmingdale, New York
<PAGE>
MISONIX, INC.
1938 New Highway
Farmingdale, New York 11735
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PROXY STATEMENT
- -----------------
ANNUAL MEETING OF SHAREHOLDERS
Wednesday, February 19, 1997
----------------------------
The Annual Meeting of Shareholders of MISONIX, INC. (the "Company")
will be held on Wednesday, February 19, 1997 at the office of Ernst & Young LLP
at 395 North Service Road, Melville, New York 11747 at 10:00 a.m. for the
purposes set forth in the accompanying Notice of Annual Meeting of Shareholders.
The enclosed proxy is solicited by and on behalf of the Board of Directors of
the Company for use at the Annual Meeting of Shareholders to be held on February
19, 1997 and at any adjournments of such meeting. The approximate date on which
this proxy statement and the enclosed proxy are being first mailed to
shareholders is January 9, 1997.
If a proxy in the accompanying form is duly executed and returned, the
shares represented by such proxy will be voted as specified. Any person
executing a proxy may revoke it prior to its exercise either by letter directed
to the Company or in person at the Annual Meeting.
Voting Rights
On January 2, 1997 (the "Record Date"), the Company had outstanding
2,911,000 shares of its only class of voting securities, namely common stock,
$.01 par value per share (the "Common Shares"). Shareholders are entitled to one
vote for each share registered in their names at the close of business on the
Record Date. The affirmative vote of a plurality of the votes cast at the Annual
Meeting is required for the election of Directors; the affirmative vote of a
majority of all outstanding shares entitled to vote is required for the approval
of (i) the 1996 Employee Incentive Stock Option Plan, (ii) the 1996 Non-Employee
Director Stock Option Plan, and (iii) the ratification of grants previously made
under such Plans; on all other matters which may come before the meeting, the
affirmative vote of a majority of the votes cast at the meeting is required. For
purposes of determining whether proposals have received a majority vote,
abstentions will not be included in the vote totals and, in instances where
brokers are prohibited from exercising discretionary authority for beneficial
owners who have not returned a proxy ("broker non-votes"), those votes will not
be included in the vote totals. Therefore, abstentions and broker non-votes will
be counted in the determination of a quorum and (i) will have no effect on the
vote for the election of Directors; (ii) will have the effect of a vote against
approval with respect to the 1996 Employee Incentive Stock Option Plan and the
1996 Non-Employee Director Stock Option Plan; and (iii) will have the effect of
a vote against the ratification of grants previously made under such Plans.
<PAGE>
SECURITY OWNERSHIP
The following table sets forth as of the Record Date certain
information with regard to ownership of the Company's Common Shares by (i) each
beneficial owner of more than 5% of the Company's Common Shares; (ii) each
Director and nominee for Director; (iii) each executive officer named in the
"Summary Compensation Table" below; and (iv) all executive officers and
Directors of the Company as a group. Unless otherwise stated, the persons named
in the table have sole voting and investment power with respect to all Common
Shares shown as beneficially owned by them.
Common Shares Percent
Name and Address(1) Beneficially Owned of Class
- ------------------- ------------------ --------
Howard Alliger 728,072(2) 25.0%
Joseph Librizzi 161,661(3) 5.5%
Gary Gelman 337,930(4) 11.6%
Arthur Gerstenfeld 26,300(5) *
All executive officer and Directors as a
group (seven persons) 1,331,266(6) 45.7%
- --------------------
*Less than 1%
(1) The business address of each of the named individuals in this table is
c/o MISONIX, INC., 1938 New Highway, Farmingdale, New York 11735.
(2) Includes 27,000 Common Shares held by Mr. Alliger's daughter, of which he
disclaims all beneficial interest, but does not include options for
50,000 Common Shares which are to be voted upon at the Annual Meeting
(see PROPOSAL TWO).
(3) Includes 60,000 Common Shares which Dr. Librizzi has the right to acquire
upon exercise of stock options which are currently exercisable, but does
not include options for 40,000 Common Shares which are to be voted upon
at the Annual Meeting (see PROPOSAL TWO).
(4) Does not include options for 459,000 Common Shares which are to be voted
upon at the Annual Meeting (see PROPOSAL TWO).
(5) Includes 2,000 Common Shares which Mr. Gerstenfeld has the right to
acquire upon exercise of stock options which are currently exercisable,
but does not include options for 10,000 Common Shares which are to be
voted upon at the Annual Meeting (see PROPOSAL TWO).
(6) Includes the Common Shares indicated in notes (2), (3), and (5) but does
not include options for 569,000 Common Shares to be voted upon at the
Annual Meeting (see PROPOSAL TWO).
-2-
<PAGE>
PROPOSAL ONE
ELECTION OF DIRECTORS
The Company currently has four Directors, all four of whom are to be elected at
the Annual Meeting. The term of each director expires at the Annual Meeting,
with all four current directors, Messrs. Alliger, Librizzi, Gerstenfeld, and
Gelman, standing for reelection for a term of one year. The following tables
contains information regarding all Directors and executive officers of the
Company:
Director
Name Age Position With Company Since
- ---- --- --------------------- -----
Gary Gelman 49 Chairman of the Board 1995
of Directors
Joseph Librizzi 58 Director, President, Chief 1975
Executive Officer, and Treasurer
Peter Gerstheimer 47 Vice President, Chief --
Financial Officer, and Secretary
Ronald Manna 42 Vice President - Operations --
Robert Lee 37 Vice President - Sales and Marketing --
Howard Alliger 69 Director 1971
Arthur Gerstenfeld 68 Director 1992
- ---------------------
Principal Occupations and Business Experience of Directors and Executive
Officers
The following is a brief account of the business experience for the past five
years of the Company's Directors and executive officers:
Gary Gelman, the founder of American Claims Evaluation, Inc., a publicly traded
company engaged in auditing hospital bills and providing vocational
rehabilitational counseling, has been Chairman of the Board and a Director of
that company for more than ten years. Since 1973, Mr. Gelman has also been
President and a principal of American Para Professional Systems, Inc., which
provides nurses who perform physical examinations of applicants for life and/or
health insurance for insurance companies. He received a B.A. Degree from Queens
College. Mr. Gelman was elected Chairman of the Board of the Company in March
1996.
-3-
<PAGE>
Joseph Librizzi became President and Chief Executive Officer of the Company in
March 1995. Prior to this he was Executive Vice President, Chief Operating
Officer, Treasurer and Secretary of the Company since September 1991. Dr.
Librizzi was previously President of the Company (prior to the merger between
the Company and Sonic Needle Corp.) from 1986 to September 1991. Dr. Librizzi
holds a doctorate in applied mechanics and aerospace engineering from
Polytechnic Institute of Brooklyn.
Peter Gerstheimer became Vice President and Chief Financial Officer of the
Company in September 1992. From December 1984 to September 1992, he was Vice
President of Finance at Thermex-Thermatron, Inc., a manufacturer of
high-frequency electronic heat sealing and processing equipment. Previously, he
served as Treasurer and Controller of LogiMetrics, a manufacturer of electronic
test components and systems for military and non-military use. Mr. Gerstheimer
is a licensed certified public accountant in the State of New York and was a
senior accountant at Touche Ross & Co. Mr. Gerstheimer holds a B.A. Degree from
Hofstra University.
Ronald Manna became Vice President - Operations of the Company in September
1989. For more than three years prior thereto, Mr. Manna served as the Director
of Engineering of the Company. Mr. Manna holds a B.S. Degree in mechanical
engineering from Hofstra University.
Robert Lee became Vice President of Sales and Marketing in August 1996. For the
year prior thereto, he served as Director of Sales and Marketing for the
laboratory products division of the Company. Prior to Misonix, Mr. Lee was a
Divisional General Manager, National Sales Manager and Regional Sales Manager
for Pall Corporation, a filtration company, where he worked for seven years.
Prior to Pall Corporation, Mr Lee worked for American Bionetics as a Regional
Manager. Mr. Lee holds a B.A. Degree in Chemistry from the State University of
New York at Plattsburg.
Howard Alliger has served since 1955 as the sole proprietor or as the Chairman
of the Board of Directors of the Company and its predecessors. Mr. Alliger holds
a B.A. degree in economics from Allegheny College and attended Cornell
University's School of Engineering. He has received 15 patents, has published
various papers on ultrasonic technology and, for the three years ended in June
1991, was the President of the Ultrasonic Industry Association.
Arthur Gerstenfeld is a Professor at Worcester Polytechnic Institute and
Director of its Advanced Automation Technology Program. He is also the President
of UFA, Inc., a manufacturer of air traffic control simulation systems, and has
served in that capacity since 1980. Dr. Gerstenfeld received a B.M.E. from
Rensselaer Polytechnic Institute in 1950 and an M.S. and Ph.D. from the
Massachusetts Institute of Technology in 1966 and 1967, respectively.
Officers of the Company serve until the first meeting of the Board of Directors
after the Annual Meeting of Shareholders.
-4-
<PAGE>
PROPOSAL TWO
APPROVAL OF THE 1996 EMPLOYEE INCENTIVE STOCK OPTION PLAN,
THE 1996 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN AND
RATIFICATION OF TRANSACTIONS WHEREBY STOCK OPTIONS WERE
PREVIOUSLY ISSUED PURSUANT TO SUCH PLANS
1996 Employee Incentive Stock Option Plan
On March 27, 1996, the Board of Directors adopted, subject to approval of the
shareholders, the 1996 Employee Incentive Stock Option Plan (the "Employees'
Plan"). The following description of the Employees' Plan is qualified in its
entirety by reference to the text of the Employees' Plan, a copy of which is
annexed hereto as Exhibit "A".
Purpose
The purpose of the Employees' Plan is to provide an incentive to key employees
(including directors and officers who are key employees) of the Company and to
offer an additional inducement in obtaining the services of such individuals.
Administration Of The Employees' Plan
The Employees' Plan is administered by a committee of the Board of Directors
consisting of non-employee directors (the "Committee"). The Committee is
authorized, subject to the provisions of the Employees' Plan, to determine the
employees who will receive options under the Employees' Plan, the number of
Shares subject to each option and the terms of those options, and to interpret
the Employees' Plan and to make such rules and regulations relating to the
Employees' Plan as the Committee may deem proper.
Shares of Stock Subject To The
Employees' Plan and Exercise Price
Options granted under the Employees' Plan are Incentive Stock options under the
provisions and subject to the limitations of Section 422 of the Internal Revenue
Code. The Employees' Plan permits the granting of an aggregate of 300,000 Shares
at a price equal to not less than one hundred percent (100%) of the fair market
value of the Common Stock on the date that the option is granted. Further no
Incentive Stock Option may be granted to an employee owning Shares having more
than 10% of the voting power of the Company unless the option price for such
employee's option is at least 110% of the fair market value of the Shares
subject to the option at the time the option is granted and the option is not
exercisable after five years from the date of granting. No option may be granted
under the Employees' Plan after the tenth anniversary of the adoption of the
Employees' Plan. Options may be granted through March 26, 2006.
-5-
<PAGE>
Upon the granting of any option, the optionee must enter into a written
agreement with the Company setting forth the terms upon which the option may be
exercised. Such an agreement sets forth the length of the term of the option and
the timing of its exercise as determined by the Committee. In no event shall the
length of an option extend beyond ten years from the date of its grant. An
optionee may exercise an option by delivering payment to the Company in cash,
previously acquired Shares or a combination thereof.
Under the Employees' Plan, if the employment of any person to whom an option has
been granted is terminated for any reason other than the death or disability of
the optionee, the optionee may exercise within ninety days of such termination
such options as the optionee could have exercised if his or her employment had
continued for such ninety day period. If the optionee dies while employed by the
Company or its subsidiaries, or during a period after termination of employment
in which the optionee could exercise an option, the optionee's beneficiary may
exercise the option within one year of the date of the optionee's death but in
no event may the option be exercised later than the date on which the option
would have expired if the optionee had lived. If the termination is by reason of
disability, the optionee may exercise the option, in whole or in part, at any
time within one year following such termination of employment, but in no event
may the option be exercised later than the date on which the option would have
expired if the optionee had not been terminated for disability. Notwithstanding
the above, an optionee terminated either (a) for cause or (b) without the
consent of the Company may not exercise his or her outstanding options.
Option
The Board of Directors, subject to shareholder approval, granted the following
options under the Employees' Plan:
Number of Common
Grantee Shares Covered
------- --------------
Joseph Librizzi 40,000
Peter Gerstheimer 5,000
Ronald Manna 5,000
Various Employees 20,000
The foregoing grants are immediately exercisable at a price of $6.00 per Common
Share for the options granted to Messrs. Librizzi, Gerstheimer and Manna and
$9.00 per Common Share for the grants made to various employees. Mr. Librizzi's
options are exercisable through July 24, 2006; Messrs.' Gerstheimer and Manna's
options are exercisable through July 26, 2006 and the options granted to various
employees are exercisable through December 23, 2006. The fair market value of
the Common Shares on December 23, 1996 was $7.75.
The Committee may, from time to time during the term of the Employees' Plan,
grant further options pursuant to such Plan.
-6-
<PAGE>
Federal Income Tax Consequences
With respect to the tax effects of Incentive Stock Options, the optionee does
not recognize any taxable income when the option is granted or exercised. If no
disposition of shares issued to an optionee pursuant to the exercise of an
Incentive Stock Option is made by the optionee within two years from the date of
grant or within one year after the transfer of such shares to the optionee then
(a) upon sale of such shares, any amount realized in excess of the option price
(the amount paid for the shares) will be taxed to the optionee as long-term
capital gain and any loss sustained will be a long-term capital loss and (b) no
deduction will be allowed to the Company for Federal income tax purposes. The
exercise of an Incentive Stock Option will give rise to an item of tax
preference that may result in alternative minimum tax liability for the
optionee.
If Shares acquired upon the exercise of an Incentive Stock Option are disposed
of prior to the expiration of the two year and one year holding periods
described above (a "Disqualifying Disposition") generally (a) the optionee will
realize ordinary income in the year of disposition in an amount equal to the
excess (if any) of the fair market value of the shares at exercise (or, if less,
the amount realized upon the sale of such shares) over the option price thereof,
and (b) the Company will be entitled to deduct such amount, subject to
applicable withholding requirements. Any further gain realized will be taxed as
short-term or long-term capital gain and will not result in any deduction by the
Company. A Disqualifying Disposition will eliminate the item of tax preference
associated with the exercise of the Incentive Stock Option.
If an optionee is permitted to, and does, make the required payment of the
option price by delivering Shares, the optionee generally will not recognize any
gain as a result of such delivery, but the amount of gain, if any, which is not
so recognized will be excluded from his basis in the new Shares received.
However, the use by an optionee of Shares previously acquired pursuant to the
exercise of an Incentive Stock Option to exercise an Incentive Stock Option will
be treated as a taxable disposition if the transferred Shares are not held by
the optionee for the requisite holding period described above.
Amendment To The Employees' Plan
The Employees' Plan may be terminated, suspended, or modified at any time by the
Board of Directors, but no amendment increasing the maximum number of Shares for
which options may be granted (except to reflect a stock split, stock dividend or
other distribution), materially increasing the benefits accruing to an optionee
or changing the class of persons eligible to be optionees shall be made without
first obtaining approval by a majority of the outstanding shares of the Company
entitled to vote. No termination, suspension or modification of the Employees'
Plan shall adversely affect any right previously acquired by the optionee or
other beneficiary under the Employees' Plan without such optionee's or
beneficiary's consent.
Options granted under the Employees' Plan may not be transferred other than by
will or by the laws of descent and distribution or a qualified domestic
relations order and, during the optionee's lifetime, may be exercised only by
the optionee.
-7-
<PAGE>
Plan Benefits
The benefits or amounts that will be received by or allocated to any
participants are not now determinable, except that the following grants have
been made under the Employees' Plan:
Name and Dollar Number
Principal Position Value($) of Units
------------------ -------- --------
Joseph Librizzi, President and CEO 240,000(1) 40,000
Executive Group 60,000(1) 10,000(2)
Peter Gerstheimer, Vice President, Chief 30,000(1) 5,000
Financial Officer, and Secretary
Ronald Manna, Vice President- Operations 30,000(1) 5,000
Non-Executive Officer Employee Group 180,000(3) 20,000
Non-Executive Director Group 0(4) 0
- --------------------
(1) Based on an exercise price of $6.00 per Common Share.
(2) Consists of options granted to Messrs. Gerstheimer and Manna.
(3) Based on an exercise price of $9.00 per Common Share.
(4) The number of units and dollar value are shown as zero for the named
individual or group because non-employee directors are not eligible to
participate in the Plan, although they are required by the rules and
regulations of the Securities and Exchange Commission to be listed in
the table.
1996 Non-Employee Director Stock Option Plan
On March 27, 1996, the Board of Directors adopted, subject to approval of the
shareholders, the 1996 Non-Employee Director Stock Option Plan ("Outside
Directors' Plan"). The following description of the Outside Directors' Plan is
qualified in its entirety by reference to the text of the Outside Directors'
Plan, a copy of which is annexed hereto as Exhibit "B".
Purpose
The purpose of the Outside Directors' Plan is to provide long-term incentive
supplemental compensation for members of the Board of Directors of the Company
who are not employees of the Company through the ownership of the Company's
Common Shares, thereby further aligning their interest with the interests of
shareholders. Stock option plans for non-employee directors have served other
companies and their shareholders well by directly relating incentive
compensation to the building of long-term shareholder values. A plan is being
proposed for the first time for directors to provide equity-related compensation
for this important group as well. Such plans are increasingly common throughout
American industry and are found in other companies with which the Company
competes for the services of qualified individuals to serve as directors.
-8-
<PAGE>
Administration Of The Outside Directors' Plan
The Outside Directors' Plan will be administered by the Board of Directors of
the Company. The Board, subject to the terms of the Outside Directors' Plan,
will have discretion affecting the timing, price and amount of any grants made
under the Outside Directors' Plan.
Shares Of Stock Subject To The Outside Directors' Plan
The aggregate number of shares that may be subject to options during the term of
the Outside Directors' Plan is limited to 750,000 Common Shares of the Company.
This limit may not be increased during the term of the Outside Directors' Plan
except by equitable adjustment following recapitalization, stock splits, stock
dividends or any similar adjustment in the number of shares subject to
outstanding options, and in the related option exercise price. If the
shareholders approve the Outside Directors' Plan, additional shares (which can
be authorized but unissued shares or treasury shares or a combination thereof)
will be set aside for the award of options.
Eligibility
Directors of the Company, who at the time of receiving any grant are not
employees of the Company, are eligible to receive benefits under the Outside
Directors' Plan.
Duration Of The Outside Directors' Plan
No awards of stock options may be made after 2006, but termination will not
affect the rights of any participant with respect to any grants made prior to
termination.
Option
The Board of Directors, subject to shareholder approval, granted the following
options under the Outside Directors' Plan:
Number of Common
Grantee Shares Covered
- ------- --------------
Gary Gelman 459,000
Howard Allliger 50,000
Arthur Gerstenfeld 10,000
Each of the foregoing grants are immediately exercisable at a price of $1.10 per
Common Share (110% of the fair market value of the Common Shares on the date of
the grants) and are exercisable through March 27, 2006. The fair market value of
the Common Shares on December 23, 1996 was $7.75.
The Board may, from time to time during the term of the Outside Directors' Plan,
grant further options pursuant to such Plan.
-9-
<PAGE>
Exercise Price
The exercise price with respect to an option awarded under the Outside
Directors' Plan will be not less than 100% of the fair market value of the
Common Stock as of the date the option is granted. It will be paid for in full,
in cash, by the delivery of Common Shares acquired by the Director more than six
months prior to the option exercise date or in any other medium and manner
satisfactory to the Company at the time the option is exercised. If Common
Shares are used, the Common Shares shall be credited toward the exercise price
in the amount of the fair market value of the Common Shares surrendered on the
date of exercise of options. The optionee must satisfactorily provide for the
payment of any taxes which the Company is obligated to collect or withhold
before the Common Shares are transferred to the optionee.
Provisions Relating To Options
Options may be exercised immediately from the date of the grant and not after
ten years from the date of the grant, except in the case of death of the grantee
in the final year prior to expiration of the 10-year term. In that case, stock
options may be exercised for a period of eleven years from the date of grant.
The Committee may make provision for exercises within the 10-year terms of a
grant but following termination of Board membership. Recipients will have no
rights as shareholders until the date of exercise in the case of an exercise
involving receipt of stock. Options may not be transferred except upon the death
of the grantee, in certain other instances as provided by law, and for the
benefit of immediate family members if permitted by law and under uniform
standards adopted by the Board.
Amendment To The Outside Directors' Plan
The Board of Directors may amend or terminate the Outside Directors' Plan,
except that no amendment shall affect the timing, price or amount of any grants
to eligible Directors. In addition, shareholders must approve any change (i)
increasing the number of shares subject to the Outside Directors' Plan (except
as described under "Shares of Stock subject to the Outside Directors' Plan") or
(ii) changing the eligibility for grant. Provisions of the Outside Directors'
Plan may not be amended more than once every six months, other than to comply
with provisions of applicable law.
Federal Income Tax Consequences
A recipient of options incurs no income tax liability as a result of having been
granted those options. The exercise by an individual of a stock option normally
results in the immediate realization of income by the individual of the
difference between the market value of the stock which is being purchased on the
date of exercise and the price being paid for such stock. The amount of such
income also is deductible by the Company. If the exercise price is paid in whole
or in part in Shares, no income, gain or loss is recognized by a director or
former director on the receipt of Shares equal in number to the Shares delivered
in payment of the exercise price, and the fair market value of the remainder of
the Shares received upon exercise of the option, determined as of the date of
exercise, less the amount of cash, if any, paid upon exercise, is treated as
compensation income received by the director or former director.
-10-
<PAGE>
Under current law an individual who sells stock which was acquired upon the
exercise of options will receive long-term capital gains or loss treatment, if
the individual has held such stock for longer than one year following the date
of such exercise, on gain or loss equal to the difference between the price for
which such stock was sold and the market value of the stock on the date of the
exercise. If the individual has held the stock for one year or less the gain or
loss will be treated as short-term capital gain or loss.
Plan Benefits
The benefits or amounts that will be received by or allocated to any
participants are not now determinable, except that the following grants have
been made under the Outside Directors' Plan:
Name and Dollar Number
Principal Position Value ($) of Units
- ------------------ --------- --------
Joseph Librizzi 0 0
Executive Group 0 0(1)
Non-Executive Officer Employee Group 0 0(1)
Non-Executive Director Group 570,900(2) 519,000
- ---------------
(1) The number of units and dollar value are shown as zero for the named
individual or group because executive officers and non-executive
officers are not eligible to participate in the Plan, although they are
required by the rules and regulations of the Securities and Exchange
Commission to be listed in the table.
(2) Based on an exercise price of $1.10 per Common Share.
Financial and Accounting Aspects
The grant of the stock options made to directors under the Outside Directors'
Plan will result in a non-cash compensation charge to the Company measured by
the difference between the exercise price ($1.10) and the fair market value
(i.e., market price) of the Common Shares on the date of approval of the
transaction (which will be the date of the Annual Meeting of Shareholders,
assuming such approval is forthcoming). By way of example, if the market price
of the Common Shares is $7.10 per Common Share on the date of approval, the
compensation deemed paid by the Company would be $6.00 multiplied by the total
number of Common Shares (519,000) of $3,114,000. While this is one-time charge,
it will have the effect of reducing the Company's net income for financial
statement reporting by this amount or increasing the Company's loss to the
extent it exceeds net income. This is a non-cash charge in accordance with
Accounting Principles Board Opinion Number 25, which will have no affect on the
Company's tax liability or benefits, will not affect its cash position, and will
not reduce the Company's net worth. These outstanding options will however, like
any other options at similar prices, have the effect of increasing dilution in
any calculation of earnings per share.
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Vote Required
The Employees' Plan, the Outside Directors' Plan and the ratification of grants
previously made under such Plans requires the affirmative vote of a majority of
the outstanding shares of the Company entitled to vote. If the Employees' Plan
and the Outside Directors' Plan are not approved by shareholders, they will not
become effective and the grants previously made under such Plans will be voided.
The Board of Directors recommends a vote FOR approval of the 1996 Employee
Incentive Stock Option Plan, the 1996 Non-Employee Director Stock Option Plan
and the ratification of grants previously made under such Plans.
* * *
Meetings of the Board of Directors
During the last fiscal year ended June 30, 1996, the Board of Directors
held five meetings and the Stock Option Committees each held one meeting. No
Director attended less than 75% of the aggregate of the total number of meetings
of the Board of Directors and meetings of Committees of which they were a member
that were held during the Company's last fiscal year.
Currently, the only standing committees of the Board of Directors of
the Company are its Stock Option Committees. The Stock Option Committee for the
proposed Employees' Plan, to be voted upon at the Annual Meeting, consists of
Messrs. Gelman, Alliger, and Gerstenfeld. The Stock Option Committees for both
the 1991 Employee Stock Option Plan and the proposed Outside Directors' Plan, to
be voted upon at the Annual Meeting, consists of Messrs. Gelman, Librizzi,
Alliger and Gerstenfeld, the entire Board of Directors. The Stock Option
Committees are responsible for administering the Company's stock option plans as
described herein under the captions "Proposal Two - Administration Of The
Employees' Plan;" "Proposal Three - Administration Of The Outside Directors'
Plan;" and "Executive Compensation - Stock Options."
Director Compensation
Each non-employee Director receives $1,500 for each meeting of the
Board of Directors attended (to a maximum of $7,500), $2,500 for dual attendance
at the Annual Meeting of Shareholders and of the Board, and an award of $5,000
payable in a cash or the Company's Common Shares at the end of the fiscal year.
Each non-employee Director is also reimbursed for reasonable expenses incurred
while traveling to attend meetings of the Board of Directors or while traveling
in furtherance of the business of the Company.
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EXECUTIVE COMPENSATION
The following table sets forth for the fiscal years indicated the
compensation paid by the Company to its Chief Executive Officer and each of the
four other highest paid executive officers with annual compensation exceeding
$100,000:
Summary Compensation Table
Long Term
Annual Compensation (1) Compensation
----------------------- ------------
Awards
Name and Underlying
Principal Position Fiscal Year Salary Options/SARS (#)
- ------------------ ----------- ------ ----------------
Joseph Librizzi, President 1996 $160,000 ---
Chief Executive Officer, 1995 135,000 ---
Treasurer and Secretary 1994 135,000 ---
- ------------------------
(1) No other annual compensation is shown because the amounts of
perquisites and other non-cash benefits provided by the Company do not
exceed the lesser of $50,000 or 10% of the total annual base salary and
bonus disclosed in this table for the respective officer.
Employment Agreements
On September 1, 1995, the Company entered into an employment agreement
with Dr. Librizzi, who is employed as President and Chief Executive Officer. The
agreement provides for an annual salary of $160,000. Dr. Librizzi receives
additional benefits that are generally provided to other employees of the
Company. The agreement is automatically renewed for a successive one year term
unless the Company or the executive elects not to renew. This agreement was
automatically renewed on August 31, 1996.
In conformity with the Company's policy, all of its Directors, officers
and employees execute confidentiality and nondisclosure agreements upon the
commencement of employment with the Company. The agreements generally provide
that all inventions or discoveries by the employee related to the Company's
business and all confidential information developed or made known to the
employee during the term of employment shall be the exclusive property of the
Company and shall not be disclosed to third parties without prior approval of
the Company. Messrs. Librizzi, Gerstheimer, and Manna also have agreements with
the Company which provide for the payment of six months severance upon their
termination for any reason. The Company's employment agreement with Dr. Librizzi
also contains non-competition provisions that preclude him from competing with
the Company for a period of one year from the date of his termination of
employment unless his employment is terminated by the Company without cause.
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Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values
No options were exercised by any executive officer named in the Summary
Compensation Table during the fiscal year ended June 30, 1996. The following
table contains information concerning the number and value, at June 30, 1996, of
unexercised options held by executive officers named in the Summary Compensation
Table:
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options at Fiscal
Options Held at FY-End (#) Year-End
Name (Exercisable/Unexercisable) (Exercisable/Unexercisable)($)(1)
- ---- --------------------------- ---------------------------------
Joseph Librizzi 60,000/0 172,800/0
- ----------------
(1) Fair market value of underlying securities (the closing price of the
Company's Common Shares on the National Association of Securities
Dealers Automated Quotation System) at fiscal year end (June 30, 1996)
minus the exercise price.
Stock Options
In September 1991, in order to attract and retain persons necessary for
the success of the Company, the Company adopted a stock option plan (the "Plan")
which, as amended, covers up to 250,000 of the Company's Common Shares. Pursuant
to the Plan, officers, Directors, consultants and key employees of the Company
are eligible to receive incentive and/or non-incentive stock options. The Plan,
which expires on December 31, 2003, is administered by the Board of Directors
with the right to designate a committee. The selection of participants,
allotments of options, determination of price and other conditions relating to
options will be determined by the Board of Directors, or a committee thereof, in
its sole discretion. Incentive stock options granted under the Plan are
exercisable for a period of up to ten years from the date of grant at any
exercise price which is not less than the fair market value of the Common Shares
on the date of the grant, except that the term of an incentive stock option
granted under the Plan to a shareholder owning more than 10% of the outstanding
Common Shares may not exceed five years and its exercise price may not be less
than 110% of the fair market value of the Common Shares on the date of grant. At
June 30, 1996, options to purchase 250,000 Shares were outstanding under the
plan at $ .75 to $6.50 per share and no options had been exercised.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities and Exchange Act of 1934, as amended,
requires the Company's officers, Directors and persons who own more than ten
percent of a registered class of the Company's equity securities ("Reporting
Persons") to file reports of ownership and changes in ownership on Forms 3, 4,
and 5 with the Securities and Exchange Commission (the "SEC"), the Boston Stock
Exchange, and the National Association of Securities Dealers, Inc. (the "NASD").
These Reporting Persons are required by SEC regulation to furnish the Company
with copies of all Forms 3, 4 and 5 they file with the SEC and NASD. Based
solely on the Company's review of the copies of the forms it has received, the
Company believes that
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all Reporting Persons complied on a timely basis with all filing requirements
applicable to them with respect to transactions during fiscal year 1996.
ACCOUNTANTS
The Board of Directors has continued to retain the firm Ernst & Young LLP to act
as the Company's independent certified public accountants. A representative of
such firm is expected to be available either personally or by telephone hookup
at the Annual Meeting to respond to appropriate questions from shareholders and
will be given the opportunity to make a statement if he desires to do so.
MISCELLANEOUS INFORMATION
As of the date of this Proxy Statement, the Board of Directors does not
know of any business other than that specified above to come before the meeting,
but, if any other business does lawfully come before the meeting, it is the
intention of the persons named in the enclosed Proxy to vote in regard thereto,
in accordance with their judgment.
The Company will pay the cost of soliciting proxies in the accompanying
form and as set forth below. In addition to solicitation by use of the mails,
certain officers and regular employees of the Company may solicit proxies by
telephone, telegraph or personal interview without additional remuneration
therefor. The Company has retained McCormick & Pryor, Ltd., for a fee of $5,000
plus out-of-pocket expenses, to assist it in soliciting proxies. The Company may
also request brokerage houses and other custodians, nominees and fiduciaries, to
forward soliciting material to the beneficial owners of the Common Shares held
of record by such persons, and may make reimbursement for payments made for
their expense in forwarding soliciting material to the beneficial owners of the
Common Shares held of record by such persons.
SHAREHOLDER PROPOSALS
Shareholder proposals with respect to the Company's next Annual Meeting
of Shareholders must be received by the Company no later than September 5, 1997
to be considered for inclusion in the Company's next Proxy Statement.
A copy of the Company's Annual Report of Shareholders for the fiscal
year ended June 30, 1996 has been provided to all shareholders. Shareholders are
referred to the report for financial and other information about the Company,
but such report is not incorporated in this proxy statement and is not a part of
the proxy soliciting material.
By Order of the Board of Directors,
PETER GERSTHEIMER
Secretary
Dated: January 9, 1997
Farmingdale, New York
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EXHIBIT A
1996 EMPLOYEE INCENTIVE STOCK OPTION PLAN
of
MISONIX, INC.
1. PURPOSES OF THE PLAN.
This stock option plan (the "Plan") is designed to provide an incentive
to key employees (including directors and officers who are key
employees) of MISONIX, INC., a New York corporation (the "Company"),
and its present and future subsidiary corporations, as defined in
Paragraph 19 ("Subsidiaries"), and to offer an additional inducement in
obtaining the services of such individuals. The Plan provides for the
grant of "incentive stock options" ("ISOs") within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), but the Company makes no warranty as to the qualification of
any option as an "incentive stock option" under the Code.
2. STOCK SUBJECT TO THE PLAN.
Subject to the provisions of Paragraph 12, the aggregate number of
shares of Common Stock, $.01 par value per share, of the Company
("Common Stock") for which options may be granted under the Plan shall
not exceed 300,000. Such shares of Common Stock may, in the discretion
of the Board of Directors of the Company (the "Board of Directors"),
consist either in whole or in part of authorized but unissued shares of
Common Stock or shares of Common Stock held in the treasury of the
Company. The Company shall at all times during the term of the Plan
reserve and keep available such number of shares of Common Stock as
will be sufficient to satisfy the requirements of the Plan. Subject to
the provisions of Paragraph 13, any shares of Common Stock subject to
an option which for any reason expires, is canceled or is terminated
unexercised or which ceases for any reason to be exercisable shall
again become available for the granting of options under the Plan.
3. ADMINISTRATION OF THE PLAN.
The Plan shall be administered by a committee of the Board of Directors
(the "Committee") consisting of not less than three Directors, each of
whom shall be a "Non-Employee Director" within the meaning of Rule
16b-3 (or any successor rule or regulation) promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). A
majority of the members of the Committee shall constitute a quorum, and
the acts of a majority of the members present at any meeting at which a
quorum is present, and any acts approved in writing by all members
without a meeting, shall be the acts of the Committee.
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Subject to the express provisions of the Plan, the Committee shall have
the authority, in its sole discretion, to determine the key employees
who shall receive options; the times when they shall receive options;
the number of shares of Common Stock to be subject to each option; the
term of each option; the date each option shall become exercisable;
whether an option shall be exercisable in whole, in part or in
installments, and, if in installments, the number of shares of Common
Stock to be subject to each installment; whether the installments shall
be cumulative; the date each installment shall become exercisable and
the term of each installment; whether to accelerate the date of
exercise of any installment; whether shares of Common Stock may be
issued on exercise of an option as partly paid, and, if so, the dates
when future installments of the exercise price shall become due and the
amounts of such installments; the exercise price of each option; the
form of payment of the exercise price; the amount, if any, necessary to
satisfy the Company's obligation to withhold taxes; whether to restrict
the sale or other disposition of the shares of Common Stock acquired
upon the exercise of an option and to waive any such restriction;
whether to subject the exercise of all or any portion of an option to
the fulfillment of contingencies as specified in the contract referred
to in Paragraph 11 (the "Contract"), including, without limitation,
contingencies relating to entering into a covenant not to compete with
the Company and its Parent and Subsidiaries, to financial objectives
for the Company, a Subsidiary, a division, a product line or other
category, and/or the period of continued employment of the optionee
with the Company, its Parent or its Subsidiaries, and to determine
whether such contingencies have been met; to construe the respective
Contracts and the Plan; with the consent of the optionee, to cancel or
modify an option, provided such option as modified would be permitted
to be granted on such date under the terms of the Plan; to prescribe,
amend and rescind rules and regulations relating to the Plan; and to
make all other determinations necessary or advisable for administering
the Plan. The determinations of the Committee on the matters referred
to in this Paragraph 3 shall be conclusive.
4. ELIGIBILITY.
The Committee may, consistent with the purposes of the Plan, grant
options from time to time, to key employees (including directors and
officers who are key employees) of the Company or any of its
Subsidiaries. Options granted shall cover such number of shares of
Common Stock as the Committee may determine; provided, however, that
the aggregate market value (determined at the time the option is
granted) of the shares of Common Stock for which any eligible person
may be granted ISOs under the Plan or any other plan of the Company, or
of a Parent or a Subsidiary of the Company, which are exercisable for
the first time by such optionee during any calendar year shall not
exceed $100,000. The $100,000 ISO limitation shall be applied by taking
ISOs into account in the order in which they were granted. Any option
(or the portion thereof) granted in excess of such amount shall be
treated as a nonqualified stock option.
5. EXERCISE PRICE.
The exercise price of the shares of Common Stock under each option
shall be determined by the Committee; provided, however, that the
exercise price shall not be less than 100% of the fair market value of
the Common Stock subject to such option on the date of
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grant; and further provided, that if, at the time an ISO is granted,
the optionee owns (or is deemed to own under Section 424(d) of the
Code) stock possessing more than 10% of the total combined voting power
of all classes of stock of the Company, of any of its Subsidiaries or
of a Parent, the exercise price of such ISO shall not be less than 110%
of the fair market value of the Common Stock subject to such ISO on the
date of grant.
The fair market value of the Common Stock on any day shall be (a) if
the principal market for the Common Stock is a national securities
exchange, the average between the high and low sales prices of the
Common Stock on such day as reported by such exchange or on a
consolidated tape reflecting transactions on such exchange, (b) if the
principal market for the Common Stock is not a national securities
exchange and the Common Stock is quoted on the National Association of
Securities Dealers Automated Quotations System ("NASDAQ"), and (i) if
actual sales price information is available with respect to the Common
Stock, the average between the high and low sales prices of the Common
Stock on such day on NASDAQ, or (ii) if such information is not
available, the average between the highest bid and the lowest asked
prices for the Common Stock on such day on NASDAQ, or (c) if the
principal market for the Common Stock is not a national securities
exchange and the Common Stock is not quoted on NASDAQ, the average
between the highest bid and lowest asked prices for the Common Stock on
such day as reported on the NASDAQ OTC Bulletin Board Service or by
National Quotation Bureau, Incorporated or a comparable service;
provided that if clauses (a), (b) and (c) of this Paragraph are all
inapplicable, or if no trades have been made or no quotes are available
for such day, the fair market value of the Common Stock shall be
determined by the Committee by any method consistent with applicable
regulations adopted by the Treasury Department relating to stock
options. The determination of the Committee shall be conclusive in
determining the fair market value of the Common Stock.
6. TERM.
The term of each option granted pursuant to the Plan shall be such term
as is established by the Committee, in its sole discretion, at or
before the time such option is granted; provided, however, that the
term of each option granted pursuant to the Plan shall be for a period
not exceeding 10 years from the date of grant thereof, and further,
provided, that if, at the time an option is granted, the optionee owns
(or is deemed to own under Section 424(d) of the Code) stock possessing
more than 10% of the total combined voting power of all classes of
stock of the Company, of any of its Subsidiaries or of a Parent, the
term of the option shall be for a period not exceeding five years from
the date of grant. Options shall be subject to earlier termination as
hereinafter provided.
7. EXERCISE.
An option (or any part or installment thereof), to the extent then
exercisable, shall be exercised by giving written notice to the Company
at its principal office (at present 1938 New Highway, Farmingdale, New
York 11735, Attn: Employee Stock Option Committee), stating which
option is being exercised, specifying the number of shares of Common
Stock as to which such option is being exercised and accompanied by
payment
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in full of the aggregate exercise price therefor (or the amount
due on exercise if the Contract permits installment payments) (a) in
cash or by certified check or (b) if the Contract (at the time of
grant) so permits, with previously acquired shares of Common Stock
having an aggregate fair market value, on the date of exercise, equal
to the aggregate exercise price of all options being exercised, or with
any combination of cash, certified check or shares of Common Stock.
A person entitled to receive Common Stock upon the exercise of an
option shall not have the rights of a shareholder with respect to such
shares of Common Stock until the date of issuance of a stock
certificate to him for such shares; provided, however, that until such
stock certificate is issued, any option holder using previously
acquired shares of Common Stock in payment of an option exercise price
shall continue to have the rights of a shareholder with respect to such
previously acquired shares.
In no case may a fraction of a share of Common Stock be purchased or
issued under the Plan.
8. TERMINATION OF EMPLOYMENT.
Any holder of an option whose employment with the Company (and its
Parent and Subsidiaries) has terminated for any reason other than his
death or Disability (as defined in Paragraph 19) may exercise such
option, to the extent exercisable on the date of such termination, at
any time within 90 days after the date of termination, but not
thereafter and in no event after the date the option would otherwise
have expired; provided, however, that if his employment shall be
terminated either (a) for cause, or (b) without the consent of the
Company, said option shall terminate immediately. Options granted under
the Plan shall not be affected by any change in the status of the
holder so long as he continues to be a full-time employee of the
Company, its Parent or any of its Subsidiaries (regardless of having
been transferred from one corporation to another).
For the purposes of the Plan, an employment relationship shall be
deemed to exist between an individual and a corporation if, at the time
of the determination, the individual was an employee of such
corporation for purposes of Section 422(a) of the Code. As a result, an
individual on military, sick leave or other bona fide leave of absence
shall continue to be considered an employee for purposes of the Plan
during such leave if the period of the leave does not exceed 90 days,
or, if longer, so long as the individual's right to reemployment with
the Company (or a related corporation) is guaranteed either by statute
or by contract. If the period of leave exceeds 90 days and the
individual's right to reemployment is not guaranteed by statute or by
contract, the employment relationship shall be deemed to have
terminated on the 91st day of such leave.
Nothing in the Plan or in any option granted under the Plan shall
confer on any individual any right to continue in the employ of the
Company, its Parent or any of its Subsidiaries, or interfere in any way
with the right of the Company, its Parent or any of its Subsidiaries to
terminate the employee's employment at any time for any reason
whatsoever without liability to the Company, its Parent or any of its
Subsidiaries.
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9. DEATH OR DISABILITY OF AN OPTIONEE.
If an optionee dies (a) while he is employed by the Company, its Parent
or any of its Subsidiaries, (b) within 90 days after the termination of
his employment (unless such termination was for cause or without the
consent of the Company) or (c) within one year following the
termination of his employment by reason of Disability, the option may
be exercised, to the extent exercisable on the date of his death, by
his executor, administrator or other person at the time entitled by law
to his rights under such option, at any time within one year after
death, but not thereafter and in no event after the date the option
would otherwise have expired.
Any optionee whose employment has terminated by reason of Disability
may exercise his option, to the extent exercisable upon the effective
date of such termination, at any time within one year after such date,
but not thereafter and in no event after the date the option would
otherwise have expired.
10. COMPLIANCE WITH SECURITIES LAWS.
The Committee may require, in its discretion, as a condition to the
exercise of any option that either (a) a Registration Statement under
the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the shares of Common Stock to be issued upon such exercise
shall be effective and current at the time of exercise, or (b) there is
an exemption from registration under the Securities Act for the
issuance of shares of Common Stock upon such exercise. Nothing herein
shall be construed as requiring the Company to register shares subject
to any option under the Securities Act.
The Committee may require the optionee to execute and deliver to the
Company his representation and warranty, in form and substance
satisfactory to the Committee, that the shares of Common Stock to be
issued upon the exercise of the option are being acquired by the
optionee for his own account, for investment only and not with a view
to the resale or distribution thereof. In addition, the Committee may
require the optionee to represent and warrant in writing that any
subsequent resale or distribution of shares of Common Stock by such
optionee will be made only pursuant to (i) a Registration Statement
under the Securities Act which is effective and current with respect to
the shares of Common Stock being sold, or (ii) a specific exemption
from the registration requirements of the Securities Act, but in
claiming such exemption, the optionee shall prior to any offer of sale
or sale of such shares of Common Stock provide the Company with a
favorable written opinion of counsel, in form and substance
satisfactory to the Company, as to the applicability of such exemption
to the proposed sale or distribution.
In addition, if at any time the Committee shall determine in its
discretion that the listing or qualification of the shares of Common
Stock subject to such option on any securities exchange or under any
applicable law, or the consent or approval of any governmental
regulatory body, is necessary or desirable as a condition to, or in
connection with, the granting of an option or the issue of shares of
Common Stock thereunder, such option may not be exercised in whole or
in part unless such listing, qualification, consent or
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approval shall have been effected or obtained free of any conditions
not acceptable to the Committee.
11. STOCK OPTION CONTRACTS.
Each option shall be evidenced by an appropriate Contract which shall
be duly executed by the Company and the optionee, and shall contain
such terms and conditions not inconsistent herewith as may be
determined by the Committee.
12. ADJUSTMENTS UPON CHANGES IN COMMON STOCK.
Notwithstanding any other provisions of the Plan, in the event of any
change in the outstanding Common Stock by reason of a stock dividend,
recapitalization, merger or consolidation in which the Company is the
surviving corporation, split-up, combination or exchange of shares or
the like, the aggregate number and kind of shares subject to the Plan,
the aggregate number and kind of shares subject to each outstanding
option and the exercise price thereof shall be appropriately adjusted
by the Board of Directors, whose determination shall be conclusive.
In the event of (a) the liquidation or dissolution of the Company, (b)
a merger or consolidation in which the Company is not the surviving
corporation, or (c) any other capital reorganization in which more than
50% of the shares of Common Stock of the Company entitled to vote are
exchanged, any outstanding options shall vest in their entirety and
become exercisable within the period of thirty (30) days commencing
upon the date of the action of the shareholders (or the Board of
Directors if shareholders' action is not required) is taken to approve
the transaction and upon the expiration of that period all options and
all rights thereto shall automatically terminate, unless other
provision is made therefor in the transaction.
13. AMENDMENTS AND TERMINATION OF THE PLAN.
The Plan was adopted by the Board of Directors on March 27, 1996. No
option may be granted under the Plan after March 26, 2006. The Board of
Directors, without further approval of the Company's shareholders, may
at any time suspend or terminate the Plan, in whole or in part, or
amend it from time to time in such respects as it may deem advisable,
including, without limitation, in order that options granted hereunder
meet the requirements for "incentive stock options" under the Code, to
comply with applicable requirements of the Securities Act and the
Exchange Act, and to conform to any change in applicable law or to
regulations or rulings of administrative agencies; provided, however,
that no amendment shall be effective without the requisite prior or
subsequent shareholder approval which would (a) except as contemplated
in Paragraph 12, increase the maximum number of shares of Common Stock
for which options may be granted under the Plan, (b) materially
increase the benefits to participants under the Plan or (c) change the
eligibility requirements for individuals entitled to receive options
hereunder. No termination, suspension or amendment of the Plan shall,
without the consent of the holder of an existing option affected
thereby, adversely affect his rights under such option. The power of
the Committee to construe and administer any options granted
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under the Plan prior to the termination or suspension of the Plan
nevertheless shall continue after such termination or during such
suspension.
14. NON-TRANSFERABILITY OF OPTIONS.
No option granted under the Plan shall be transferable otherwise than
by will or the laws of descent and distribution or a qualified domestic
relations order ("QDRO") as defined by the Code or Title I of the
Employee Retirement Income Security Act of 1974, as amended, or the
rules thereunder, and options may be exercised, during the lifetime of
the holder thereof, only by him or his legal representatives or
pursuant to a QDRO. Except to the extent provided above, options may
not be assigned, transferred, pledged, hypothecated or disposed of in
any way (whether by operation of law or otherwise) and shall not be
subject to execution, attachment or similar process.
15. WITHHOLDING TAXES.
The Company may withhold cash and/or shares of Common Stock to be
issued with respect thereto having an aggregate fair market value equal
to the amount which it determines is necessary to satisfy its
obligation to withhold Federal, state and local income taxes or other
taxes incurred by reason of the grant or exercise of an option, its
disposition, or the disposition of the underlying shares of Common
Stock. Alternatively, the Company may require the holder to pay to the
Company such amount, in cash, promptly upon demand. The Company shall
not be required to issue any shares of Common Stock pursuant to any
such option until all required payments have been made. Fair market
value of the shares of Common Stock shall be determined in accordance
with Paragraph 5.
16. LEGENDS; PAYMENT OF EXPENSES.
The Company may endorse such legend or legends upon the certificates
for shares of Common Stock issued upon exercise of an option under the
Plan and may issue such "stop transfer" instructions to its transfer
agent in respect of such shares as it determines, in its discretion, to
be necessary or appropriate to (a) prevent a violation of, or to
perfect an exemption from, the registration requirements of the
Securities Act, (b) implement the provisions of the Plan or any
agreement between the Company and the optionee with respect to such
shares of Common Stock, or (c) permit the Company to determine the
occurrence of a "disqualifying disposition," as described in Section
421(b) of the Code, of the shares of Common Stock transferred upon the
exercise of an option granted under the Plan.
The Company shall pay all issuance taxes with respect to the issuance
of shares of Common Stock upon the exercise of an option granted under
the Plan, as well as all fees and expenses incurred by the Company in
connection with such issuance.
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17. USE OF PROCEEDS.
The cash proceeds from the sale of shares of Common Stock pursuant to
the exercise of options under the Plan shall be added to the general
funds of the Company and used for such corporate purposes as the Board
of Directors may determine.
18. SUBSTITUTIONS AND ASSUMPTIONS OF OPTIONS OF CERTAIN
CONSTITUENT CORPORATIONS.
Anything in this Plan to the contrary notwithstanding, the Board of
Directors may, without further approval by the shareholders, substitute
new options for prior options of a Constituent Corporation (as defined
in Paragraph 19) or assume the prior options of such Constituent
Corporation.
19. DEFINITIONS.
a. Subsidiary. The term "Subsidiary" shall have the same
definition as "subsidiary corporation" in Section 424(f) of
the Code.
b. Parent. The term "Parent" shall have the same definition as
"parent corporation" in Section 424(e) of the Code.
c. Constituent Corporation. The term "Constituent Corporation"
shall mean any corporation which engages with the Company, its
Parent or any Subsidiary in a transaction to which Section
424(a) of the Code applies (or would apply if the option
assumed or substituted were an ISO), or any Parent or any
Subsidiary of such corporation.
d. Disability. The term "Disability" shall mean a permanent and
total disability within the meaning of Section 22(e)(3) of the
Code.
20. GOVERNING LAW.
The Plan, such options as may be granted hereunder and all related
matters shall be governed by, and construed in accordance with, the
laws of the State of New York.
21. PARTIAL INVALIDITY.
The invalidity or illegality of any provision herein shall not affect
the validity of any other provision.
22. SHAREHOLDER APPROVAL.
The Plan shall be subject to approval by the holders of a majority of
the Company's stock outstanding and entitled to vote thereon at the
next meeting of its shareholders. No options granted hereunder may be
exercised prior to such approval, provided that the
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date of grant of any options granted hereunder shall be determined as
if the Plan had not been subject to such approval. Notwithstanding the
foregoing, if the Plan is not approved by a vote of the shareholders of
the Company on or before March 26, 1997, the Plan and any options
granted hereunder shall terminate.
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EXHIBIT B
MISONIX, INC.
1996 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
1. GENERAL
1.1 Purpose Of The Plan
The purpose of the MISONIX, INC. 1996 Non-Employee Director Stock
Option Plan (the "Plan") is to enable MISONIX, INC. (the "Company") to
attract and retain persons of exceptional ability to serve as directors
of the Company and to align the interests of directors and shareholders
in enhancing the value of the Company's common stock, par value $.01
per share (the "Common Stock").
1.2 Administration Of The Plan
The Plan shall be administered by the Board of Directors (the "Board")
which shall have full and final authority in its discretion to
interpret, administer and amend the provisions of the Plan; to adopt
rules and regulations for carrying out the Plan; to decide all
questions of fact arising in the application of the Plan; and to make
all other determinations necessary or advisable for the administration
of the Plan.
1.3 Eligible Participants
Commencing March 27, 1996 each member of the Board who is not an
employee of the Company or any of its subsidiaries shall be a
participant (a "Participant") in the Plan.
1.4 Grants Under The Plan
Grants under the Plan shall be in the form of stock options as
described in Section II (an "Option" or "Options").
1.5 Shares
The aggregate number of shares of Common Stock, including shares
reserved for issuance pursuant to the exercise of Options, which may be
issued under the terms of the Plan may not exceed 750,000 shares and
hereby are reserved for such purpose. Whenever any outstanding grant or
portion thereof expires, is canceled or forfeited or is otherwise
terminated for any reason without having been exercised, the Common
Stock allocable to the expired, canceled, forfeited or otherwise
terminated portion of the grant may again be the subject of further
grants hereunder.
Notwithstanding the foregoing, the number of shares of Common Stock
available for grants at any time under the Plan shall be reduced to
such lesser amount as may be required pursuant to the methods of
calculation necessary so that the exemptions provided pursuant to Rule
16b-3 under the Securities Exchange Act of 1934, as amended (the
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"Exchange Act") will continue to be available for transactions
involving all current and future grants. In addition, during the period
that any grants remain outstanding under the Plan, the Committee may
make good faith adjustments with respect to the number of shares of
Common Stock attributable to such grants for purposes of calculating
the maximum number of shares of Common Stock available for the granting
of future grants under the Plan, provided that following such
adjustments the exemptions provided pursuant to Rule 16b-3 under the
Exchange Act will continue to be available for transactions involving
all current and future grants.
1.6 Definitions
The following definitions shall apply to the Plan:
(a) "Disability" shall have the meaning Provided in the Company's
applicable disability plan or, in the absence of such a
definition, when a Participant becomes totally disabled (as
determined by a physician mutually acceptable to the
Participant and the Company) before termination of his or her
service on the Board if such total disability continues for
more than three (3) months.
(b) "Fair Market Value" of the Common Stock on any day shall be
(a) if the principal market for the Common Stock is a national
securities exchange, the average between the high and low
sales prices of the Common Stock on such day as reported by
such exchange or on a consolidated tape reflecting
transactions on such exchange, (b) if the principal market for
the Common Stock is not a national securities exchange and the
Common Stock is quoted on the National Association of
Securities Dealers Automated Quotations System ("NASDAQ"), and
(i) if actual sales price information is available with
respect to the Common Stock, the average between the high and
low sales prices of the Common Stock on such day on NASDAQ, or
(ii) if such information is not available, the average between
the highest bid and the lowest asked prices for the Common
Stock on such day on NASDAQ, or (c) if the principal market
for the Common Stock is not a national securities exchange and
the Common Stock is not quoted on NASDAQ, the average between
the highest bid and lowest asked prices for the Common Stock
on such day as reported on the NASDAQ OTC Bulletin Board
Service or by National Quotation Bureau, Incorporated or a
comparable service; provided that if clauses (a), (b) and (c)
of this Paragraph are all inapplicable, or if no trades have
been made or no quotes are available for such day, the fair
market value of the Common Stock shall be determined by the
Board by any method consistent with applicable regulations
adopted by the Treasury Department relating to stock options.
The determination of the Board shall be conclusive in
determining the fair market value of the Common Stock.
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2. OPTIONS
2.1 Terms And Conditions Of Options
Each Participant shall be granted such number of Options as determined
from time to time during the term of the Plan by the Board.
2.2 Nonqualified Stock Options
The terms of the Options shall, at the time of grant, provide that the
Options will not be treated as incentive stock options within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended
(the "Code").
2.3 Option Price
The Option price per Share shall be determined by the Board of
Directors but shall not be less than the Fair Market Value of the
Common Stock on the date the Option is granted.
2.4 Term And Exercise Of Options
(a) The term of an Option shall not exceed ten (10) years from the date
of grant. Except as provided in this Section 2.4, after a Participant
ceases to serve as a director of the Company for any reason, including,
without limitation, retirement, or any other voluntary or involuntary
termination of a Participant's service as a director (a "Termination"),
the unexercisable portion of an Option shall immediately terminate and
be null and void, and the unexercised portion of any outstanding
Options held by such Participant shall terminate and be null and void
for all purposes after three (3) months have elapsed from the date of
the Termination unless extended by the Board, in its sole discretion,
within thirty (30) days from the date of the Termination. Upon a
Termination as a result of death or Disability, any outstanding Options
may be exercised by the Participant or the Participant's legal
representative within twelve (12) months after such death or
Disability; provided, however, that in no event shall the period extend
beyond the expiration of the Option term.
(b) Options shall become exercisable in whole or in part immediately
from the date of grant. In no event, however, shall an Option be
exercised after the expiration of ten (10) years from the date of
grant.
(c) A Participant, by written notice to the Company, may designate one
or more persons (and from time to time change such designation)
including his legal representative, who, by reason of his or her death,
shall acquire the right to exercise all or a portion of the Option. If
no designation is made before the death of the Participant, the
Participant's Option may be exercised by the personal representative of
the Participant's estate or by a person who acquired the right to
exercise such option by will or the laws of descent and distribution.
If the person with exercise rights desires to
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exercise any portion of the Option, such person must do so in
accordance with the terms and conditions of this Plan.
2.5 Notice Of Exercise
When exercisable pursuant to the terms of the Plan and the governing
stock option agreement, an Option shall be exercised by the Participant
as to all or part of the shares subject to the Option by delivering
written notice of exercise to the Company at its principal business
office or such other office as the Company may from time to time
direct, (a) specifying the number of shares to be purchased, (b)
accompanied by cash or a certified check payable to the Company in an
amount equal to the full exercise price of the number of shares being
exercised or with previously acquired shares of Common Stock having an
aggregate Fair Market Value, on the date of exercise, equal to the
aggregate exercise price of all Options being exercised (provided that
such shares were not acquired less than six (6) months prior to such
exercise date) or with any combination of cash, certified check or
shares of Common Stock, and (c) containing such further provisions
consistent with the provisions of the Plan as the Company may from time
to time prescribe. No Option may be exercised after the expiration of
the term specified in Section 2.4 hereof.
2.6 Limitation Of Exercise Periods
The Board may limit the time periods within which an Option may be
exercised if a limitation on exercise is deemed necessary in order to
effect compliance with applicable law.
3. GENERAL PROVISIONS
3.1 General Restrictions
Each grant under the Plan shall be subject to the requirement that if
the Board shall determine, at any time, that (a) the listing,
registration or qualification of the shares of Common Stock subject or
related thereto upon any securities exchange or under any state or
federal law, or (b) the consent or approval of any government
regulatory body, or (c) an agreement by the Participant with respect to
the disposition of shares of Common Stock, is necessary or desirable as
a condition of, or in connection with, the granting or the issuance or
purchase of shares of Common Stock thereunder, such grant may not be
consummated in whole or in part unless such listing, registration,
qualification, consent, approval or agreement shall have been effected
or obtained free of any conditions not acceptable to the Board.
3.2 Adjustments For Changes In Capitalization
Notwithstanding any other provisions of the Plan, in the event of any
change in the outstanding Common Stock by reason of a stock dividend,
recapitalization, merger or consolidation in which the Company is the
surviving corporation, split-up, combination or exchange of shares or
the like, the aggregate number and kind of shares subject to the
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Plan, the aggregate number and kind of shares subject to each
outstanding option and the exercise price thereof shall be
appropriately adjusted by the Board, whose determination shall be
conclusive.
In the event of (a) the liquidation or dissolution of the Company, (b)
a merger or consolidation in which the Company is not the surviving
corporation, or (c) any other capital reorganization in which more than
50% of the shares of Common Stock of the Company entitled to vote are
exchanged, any outstanding options shall then remain exercisable within
the period of thirty (30) days commencing upon the date of the action
of the shareholders (or the Board of Directors if shareholders' action
is not required) is taken to approve the transaction and upon the
expiration of that period all options and all rights thereto shall
automatically terminate, unless other provision is made therefor in the
transaction.
3.3 Amendments
Without further approval of the shareholders, the Board may discontinue
the Plan at any time and may amend it from time to time in such respect
as the Board may deem advisable, unless shareholder or regulatory
approval is required by law or regulation, and subject to any
conditions established by the terms of such amendment; provided,
however, that the Plan may not be amended more than once every six (6)
months other than to comport with changes in the Code, the Employee
Retirement Income Security Act or the rules thereunder.
3.4 Modification, Substitution Or Cancellation Of Grants
No rights or obligations under any outstanding Option may be altered or
impaired without the Participant's consent. Any grant under the Plan
may be canceled at any time with the consent of the Participant, and a
new grant may be provided to such Participant in lieu thereof.
3.5 Shares Subject To The Plan
Shares distributed pursuant to the Plan shall be made available from
authorized but unissued shares or from shares purchased or otherwise
acquired by the Company for use in the Plan, as shall be determined
from time to time by the Board.
3.6 Rights Of A Shareholder
Participants under the Plan, unless otherwise provided by the Plan,
shall have no rights as shareholders by reason thereof unless and until
certificates for shares of Common Stock are issued to them; provided,
however, that until such stock certificate is issued, any Option holder
using previously acquired shares of Common Stock in payment of an
Option exercise price shall continue to have the rights of a
shareholder with respect to such previously acquired shares.
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3.7 Withholding
If a Participant is to experience a taxable event in connection with
the receipt of shares of Common Stock pursuant to an Option exercise,
the Participant shall pay the amount equal to the federal, state and
local income taxes and other amounts as may be required by law to be
withheld to the Company prior to the issuance of such shares of Common
Stock.
3.8 Non-assignability
Except as expressly provided in the Plan, no grant shall be
transferable except by will, the laws of descent and distribution or a
qualified domestic relations order ("QDRO") as defined by the Code or
Title I of the Employee Retirement Income Security Act of 1974, as
amended, or the rules thereunder. During the lifetime of the
Participant, except as expressly provided in the Plan, grants under the
Plan shall be exercisable only by such Participant or by the guardian
or legal representative of such Participant or pursuant to a QDRO.
3.9 Nonuniform Determinations
Determinations by the Board under the Plan (including, without
limitation, determinations of the persons to receive grants, the form,
amount and timing of such grants, and the terms and provisions of such
grants and the agreements evidencing the same) need not be uniform and
may be made by it selectively among persons who receive, or are
eligible to receive, awards under the Plan, whether or not such persons
are similarly situated.
3.10 Effective Date; Duration
The Plan shall be subject to approval by the holders of a majority of
the Company's stock outstanding and entitled to vote thereon at the
next meeting of its shareholders. No Options granted hereunder may be
exercised prior to such approval, provided that the date of grant of
any Options granted hereunder shall be determined as if the Plan had
not been subject to such approval. Notwithstanding the foregoing, if
the Plan is not approved by a vote of the shareholders of the Company
on or before March 26, 1997, the Plan and any Options granted hereunder
shall terminate.
3.11 Governing Law
The Plan and all actions taken thereunder shall be governed by and
construed in accordance with the laws of the State of New York.
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PROXY
MISONIX, INC.
This Proxy is solicited on behalf of the Board of Directors
The undersigned hereby appoints Gary Gelman and Joseph Librizzi, as Proxies,
each with the power to appoint a substitute, and hereby authorizes them to
represent and to vote, as designated below, all the Common Shares held of record
by the undersigned on January 2, 1997 at the Annual Meeting of Shareholders to
be held on February 19, 1997 or any adjournment thereof.
PLEASE MARK, SIGN, DATE AND RETURN
THE PROXY CARD PROMPTLY IN THE ENVELOPE PROVIDED
------------------ --------------------
ACCOUNT NUMBER NO. OF COMMON SHARES
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1. Election of Directors: Gary Gelman, Joseph Librizzi, Howard Alliger,
Arthur Gerstenfeld.
FOR all Nominees listed (except WITHHOLD AUTHORITY
as marked to the contrary) vote for all Nominees listed
/ / / /
(Instruction: To withhold authority to vote for
one or more individual nominees write the
nominee's name(s) in the line provided below).
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2. Approval of (i) the 1996 Employee Incentive Stock Option Plan; (ii) the
1996 Non-Employee Director Stock Option Plan; and (iii) ratification of
the grants previously made under such Plans.
FOR AGAINST ABSTAIN
/ / / / / /
- ------------------------------------------------------------------------------
In their discretion, the Proxies are authorized to vote upon such other business
as may properly come before the meeting. This Proxy, when properly executed,
will be voted in the manner directed herein by the undersigned shareholder. If
no direction is made, the Proxy will be voted FOR the election of all Directors
and Proposal 2.
Please sign exactly as name appears hereon.
----------------------------------
(Signature)
- ----------------------- ----------------------------------
Dated (Signature if held jointly)
When shares are held by joint tenants, both should sign. When signing as
attorney, as executor, administrator, trustee, or guardian, please give full
title as such. If a corporation, please sign in full corporate name by President
or other authorized officer. If a partnership, please sign in partnership name
by authorized person. Please note any change in your address alongside the
address as it appears in the proxy.
PLEASE MARK IN BLUE OR BLACK INK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
