<PAGE>
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 ss.240.14a-12
MISONIX, INC.
-------------------------------------------------------
(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:
<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):
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>
MISONIX, INC.
-------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
-------------------------
FEBRUARY 6, 2001
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
Huntington Hilton Hotel, 598 Broad Hollow Road, Melville, New York 11747 on
Tuesday, February 6, 2001 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 approval of the 2001 Employee Stock
Option Plan;
3. To ratify the selection of KPMG, LLP as the Company's independent
accountants; and
4. 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 4, 2001 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
RICHARD ZAREMBA
Secretary
Dated: January 5, 2001
Farmingdale, New York
<PAGE>
MISONIX, INC.
1938 New Highway
Farmingdale, New York 11735
-------------------------
PROXY STATEMENT
-------------------------
ANNUAL MEETING OF SHAREHOLDERS
Tuesday, February 6, 2001
-------------------------
The Annual Meeting of Shareholders of MISONIX, INC. (the "Company")
will be held on Tuesday, February 6, 2001 at the Huntington Hilton Hotel, 598
Broad Hollow 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 6, 2001 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 5, 2001.
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 4, 2001 (the "Record Date"), the Company had outstanding
6,119,317 shares of its only class of voting securities, namely common stock,
$.01 par value per share (the "Common Stock"). 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 and the ratification of KPMG,
LLP as the Company's independent accountants; the affirmative vote of a majority
of the votes cast at the Annual Meeting is required for the approval of the 2001
Employee Stock Option Plan; on all other matters which may come before the
Annual Meeting, the affirmative vote of a majority of the votes cast at the
Annual 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 or
ratification of KPMG, LLP and (ii) will have the effect of a vote against
approval with respect to the 2001 Employee Stock Option Plan.
<PAGE>
SECURITY OWNERSHIP
The following table sets forth as of December 8, 2000 certain
information with regard to the ownership of the Company's Common Stock by (i)
each beneficial owner of more than 5% of the Company's Common Stock; (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
Stock shown as beneficially owned by them.
Name and Address(1) Common Stock Percent
Beneficially Owned of Class
Howard Alliger 790,608(2) 12.7%
Gary Gelman 755,750(3) 11.2%
Arthur Gerstenfeld 100,100(4) 1.6%
Michael A. McManus, Jr. 496,950(5) 7.6%
Ronald Manna 97,894(6) 1.6%
Christopher Thomas 21,262(7) *
Richard Zaremba 26,370(8) *
All executive officers and Directors 2,294,434(9) 31.0%(10)
as a group (eight persons)
*Less than 1%
(1) Except as otherwise stated, the business address of each of the named
individuals in this table is c/o MISONIX, INC., 938 New Highway,
Farmingdale, New York 11735.
(2) Includes 115,000 shares of Common Stock which Mr. Alliger has the right to
acquire upon exercise of stock options, which are currently exercisable.
(3) Includes 603,500 shares of Common Stock which Mr. Gelman has the right to
acquire upon exercise of stock options, which are currently exercisable.
(4) Includes 58,000 shares of Common Stock which Mr. Gerstenfeld has the right
to acquire upon exercise of stock options, which are currently
exercisable.
(5) Includes 425,000 shares of Common Stock which Mr. McManus has the right to
acquire upon exercise of stock options, which are currently exercisable.
(6) Includes 45,000 shares of Common Stock which Mr. Manna has the right to
acquire upon exercise of stock options, which are currently exercisable.
(7) Includes 19,500 shares of Common Stock which Mr. Thomas has the right to
acquire upon exercise of stock options, which are currently exercisable.
(8) Includes 7,500 shares of Common Stock which Mr. Zaremba has the right to
acquire upon exercise of stock options, which are currently exercisable.
(9) Includes the shares of Common Stock indicated in notes (2), (3), (4), (5),
(6) (7) and (8) and 5,500 shares of Common Stock which officers of the
Company own and/or have a right to acquire upon exercise of stock option
which are currently exercisable.
(10) Based upon 6,119,317 outstanding shares of Common Stock and presently
exercisable options to acquire 1,278,500 shares of Common Stock held by
the persons noted.
2
<PAGE>
PROPOSAL ONE
ELECTION OF DIRECTORS
The Company currently has four Directors, all of whom are to be elected
at the Annual Meeting. The term of each Director expires at the Annual Meeting,
with Messrs. Alliger, Gelman, Gerstenfeld and McManus standing for reelection
for a term of one year. The following table contains information regarding all
Directors and executive officers of the Company:
Director
Name Age Position with Company Since
---- --- --------------------- -----
Gary Gelman 53 Chairman of the Board 1995
Of Directors
Howard Alliger 73 Director 1971
Arthur Gerstenfeld 72 Director 1992
Michael A. McManus, Jr. 57 Director, President, 1998
Chief Executive Officer
Richard Zaremba 45 Vice President, Chief --
Financial Officer, Secretary
and Treasurer
Kenneth Coviello 49 Vice President, Medical Marketing --
and Sales
Ronald Manna 46 Vice President - Operations --
Christopher Thomas 38 Vice President - Mystaire Products --
Gregory Homison 53 Vice President - Industrial Products --
3
<PAGE>
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:
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
Chief Executive Officer of American Para Professional Systems, Inc., a privately
held entity, which provides nurses who perform physical examinations of
applicants for life and/or health insurance for insurance companies. He received
a BA degree from Queens College. Mr. Gelman became Chairman of the Board of the
Company in March 1996.
HOWARD ALLIGER founded the company's predecessor in 1955 and the Company was a
sole proprietorship until 1960. The Company name then was Heat
Systems-Ultrasonics. Mr. Alliger was President of the Company until 1982 and
Chairman of the Board until 1996. He has been awarded 25 patents and has
published various papers on ultrasonic technology. In 1959, Mr. Alliger sold the
first sonicator in the United States. For three years, ending in 1991, Mr.
Alliger was the President of the Ultrasonic Industry Association. Mr. Alliger
holds a BA degree in economics from Allegheny College and attended Cornell
University School of Engineering for four years. He has also established, and is
President of, two privately held entities which are engaged in pharmaceutical
research and development.
ARTHUR GERSTENFELD is currently Professor of Industrial Engineering and
Professor of Management at Worcester Polytechnic Institutes, Worcester,
Massachusetts. Dr. Gerstenfeld received his Ph.D. and Masters degrees from
Massachusetts Institute of Technology (Sloan School of Management). He has
edited and authored seven books and approximately forty articles focusing on
innovation and productivity. Dr. Gerstenfeld's industry experience has been as
founder, CEO, and Chairman of the Board of UFA, Inc. He is the holder of four
patents on which that company is based.
MICHAEL A. MCMANUS, JR. became President and Chief Executive Officer of the
Company on October 30, 1998. Prior to this, he served as President and Chief
Executive Officer of New York Bancorp Inc. from 1991 through March 1998 and as a
director of such company from 1990 through March 1998. He also served as
President and Chief Executive Officer of Home Federal Savings Bank, the
principal subsidiary of New York Bancorp Inc., from February 1995 through March
1998. From 1990 through November 1991, Mr. McManus was President and Chief
Executive Officer of Jamcor Pharmaceuticals Inc. Mr. McManus served as an
Assistant to the President of the United States from 1982 to 1985 and held
positions with Pfizer Inc. and Revlon Group. Mr. McManus received a BA in
economics from the University of Notre Dame and a JD from the Georgetown
University Law Center. He serves as a member of the Board of Directors of the
United States Olympic Committee, Document Imaging System, Corp., National
Wireless Holdings, Inc., and Novavax, Inc.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION OF THESE
NOMINEES AS DIRECTORS.
4
<PAGE>
The following is a brief account of the business experience for the
past five years of the Company's executive officers.
MICHAEL A. MCMANUS, JR. became President and Chief Executive Officer of the
Company on October 30, 1998. Prior to this, he served as President and Chief
Executive Officer of New York Bancorp Inc. from 1991 through March 1998 and as a
director of such company from 1990 through March 1998. He also served as
President and Chief Executive Officer of Home Federal Savings Bank, the
principal subsidiary of New York Bancorp Inc., from February 1995 through March
1998. From 1990 through November 1991, Mr. McManus was President and Chief
Executive Officer of Jamcor Pharmaceuticals Inc. Mr. McManus served as an
Assistant to the President of the United States from 1982 to 1985 and held
positions with Pfizer Inc. and Revlon Group. Mr. McManus received a BA in
economics from the University of Notre Dame and a JD from the Georgetown
University Law Center. He serves as a member of the Board of Directors of the
United States Olympic Committee, Document Imaging System, Corp., National
Wireless Holdings, Inc., and Novavax, Inc.
RICHARD ZAREMBA became Vice President and Chief Financial Officer in February
1999. Mr. Zaremba became Secretary and Treasurer in March 1999. From March 1995
to February 1999, he was the Vice President and Chief Financial Officer of
Comverse Information Systems, Inc., a manufacturer of digital voice recording
systems. Previously, Mr. Zaremba was Vice President and Chief Financial Officer
of Miltope Group, Inc., a manufacturer of electronic equipment. Mr. Zaremba is a
licensed certified public accountant in the State of New York and holds BBA and
MBA degrees in Accounting from Hofstra University.
KENNETH COVIELLO became Vice President of Medical Products in June 2000. Prior
to joining the Company, he was Vice President-Sales and Marketing at FNC Medical
Corp. Mr. Coviello was Vice President of Graham Field Health Products, Inc. from
1992 - 1998 and President of Lumex, a medical products manufacturer and a
division of Lumex/Cybex Inc., from 1986 to 1991. Mr. Coviello holds a BS degree
in Marketing from Long Island 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 BS degree in mechanical
engineering from Hofstra University.
CHRISTOPHER THOMAS became Vice President of Mystaire Products in January 1999.
For three years prior thereto, he served as Director of Air Pollution
Technology. Prior to his employment with the Company, Mr. Thomas was an account
representative for the Business Imaging Systems Division of Eastman Kodak
Company. Mr. Thomas holds a BS degree in General Science from Villanova
University.
GREGORY HOMISON became Vice President of Industrial Products in August 1999.
From November 1998 to August 1999, he was Senior Program Director, IntraMed
Educational Group of Sudler & Hennessey Advertising. From August 1995 to March
1998, Mr. Homison was Senior Vice President of Pall Corporation, a manufacturer
of biomedical products. Previously, Mr. Homison held various sales and marketing
positions with Pall Corporation. Mr. Homison holds BS, MS and Ph.D. degrees in
Biological Sciences from Columbia University.
5
<PAGE>
PROPOSAL TWO
APPROVAL OF THE 2001 EMPLOYEE STOCK OPTION PLAN
2001 EMPLOYEE STOCK OPTION PLAN
On October 30, 2000 the Board of Directors adopted, subject to approval
of the shareholders, the 2001 Employee Stock Option Plan (the "2001 Employees'
Plan"). The following description of the 2001 Employees' Plan is qualified in
its entirety by reference to the text of the 2001 Employees' Plan, a copy of
which is annexed hereto as Exhibit "A".
PURPOSE
The purpose of the 2001 Employees' Plan is to provide an incentive to
key employees (including employee 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 2001 EMPLOYEES' PLAN
The 2001 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 2001 Employees' Plan, to
determine the employees who will receive options under the 2001 Employees' Plan,
the number of shares of Common Stock subject to each option and the terms of
those options, and to interpret the 2001 Employees' Plan and to make such rules
and regulations relating to the 2001 Employees' Plan as the Committee may deem
proper.
SHARES OF STOCK SUBJECT TO THE
2001 EMPLOYEES' PLAN AND EXERCISE PRICE
Options granted under the 2001 Employees' Plan may be (i) Incentive
Stock Options under the provisions and subject to the limitations of Section 422
of the Internal Revenue Code or (ii) non-qualified Stock Options. The 2001
Employees' Plan permits the granting of an aggregate of 1,000,000 shares of
Common Stock 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 Common
Stock 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 Common Stock 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 2001 Employees' Plan after the tenth anniversary of the
adoption of the 2001 Employees Plan. Options may be granted through October 29,
2010.
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
6
<PAGE>
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 of Common Stock, surrender of options or a combination thereof.
Under the 2001 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.
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 and 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
7
<PAGE>
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.
With respect to the tax effects of non-qualified options, 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 shares which are being purchased on the date of
exercise and the price being paid for such shares. 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.
Under current law an individual who sells shares which were acquired
upon the exercise of options will receive long-term capital gains or loss
treatment, if the individual has held such shares 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 shares were sold and the market value of the
shares on the date of the exercise. If the individual has held the shares for
one year or less the gain or loss will be treated as short-term capital gain or
loss.
AMENDMENTS TO THE 2001 EMPLOYEES' PLAN
The 2001 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 of Common Stock 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 shares of the Company voting thereon. No termination, suspension
or modification of the 2001 Employees' Plan shall adversely affect any right
previously acquired by the optionee or other beneficiary under the 2001
Employees' Plan without such optionee's or beneficiary's consent.
Options granted under the 2001 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.
PLAN BENEFITS
The benefits or amounts that will be received by or allocated to any
participants are not now determinable. No options under the 2001 Employee's Plan
have been granted. The following chart is supplied in accordance with the rules
of the Securities and Exchange Commission:
8
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2001 EMPLOYEE STOCK OPTION PLAN
Name and Dollar Number
Principal Position Value($) of Units
------------------ -------- --------
Michael A. McManus, Jr., President and CEO 0 0
Executive Group 0 0
Non-Executive Director Group 0(1) 0
Nominees for Director 0 0
Non-Executive Officer Employee Group 0 0
--------------------
(1) The number of units and dollar value are shown as zero for the named group
because non-employee directors are not eligible to participate in the 2001
Employees' Plan, although they are required by the rules and regulations
of the Securities and Exchange Commission to be listed in the table.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE APPROVAL OF THE
2001 EMPLOYEE STOCK OPTION PLAN.
* * *
MEETINGS OF THE BOARD OF DIRECTORS
During the last fiscal year ended June 30, 2000, the Board of Directors
held four meetings and the Stock Option Committees held four meetings. The Audit
Committee met twice and the Compensation Committee met once during the last
fiscal year. 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.
COMMITTEES OF THE BOARD
Currently, the only standing committees of the Board of Directors of
the Company are its Stock Option Committees, the Audit Committee and the
Compensation Committee. The Stock Option Committee for both the 1996 Employee
Stock Option Plan and the 1998 Employee Stock Option Plan consists of Messrs.
Gelman, Alliger and Gerstenfeld. The Stock Option Committees for both the 1991
Employee Stock Option Plan and the 1996 Non-Employee Director Stock Option Plan
consist of Messrs. Gelman, McManus, Alliger and Gerstenfeld, the entire Board of
Directors. The Stock Option Committees are responsible for administering the
Company's stock option plans.
9
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The Audit Committee consists of Messrs. Gelman and Gerstenfeld. The
functions of the Audit committee are to recommend to the Board of Directors the
selection, retention, or termination of its independent accountants; determine
through consultation with management the appropriateness of the scope of the
various professional services provided by the independent accountants, and
consider the possible effect of the performance of such services on the
independence of the accountants; review the arrangements and the proposed
overall scope of the annual audit with management and the independent
accountants; discuss matters of concern to the audit committee with the
independent accountants and management relating to the annual financial
statements and results of the audit; obtain from management, the independent
accountants and the Chief Financial Officer their separate opinions as to the
adequacy of the Company's system of internal accounting control; review with
management and the independent accounts the recommendations made by the
accountants with respect to changes in accounting procedures and internal
accounting control; discuss with management any concerns the Audit Committee may
have with regard to the Company's business practices; hold regularly scheduled
meetings, separately and jointly, with representatives of management, the
independent accountants and the Chief Financial Officer to make inquiries in to
and discuss their activities; and review the overall activities of the Company's
internal auditors.
The Compensation Committee consists of Messrs. Gelman and Alliger. The
Compensation Committee is responsible for considering and authorizing
remuneration arrangements for senior management.
DIRECTOR COMPENSATION
Each non-employee Director receives an annual fee of $20,000. In
addition, Mr. Gelman receives a special Chairman's fee of $15,000 per year. For
the fiscal year ended June 30, 2000, there were no options granted to
non-employee Directors. 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.
EXECUTIVE COMPENSATION
The following report and the performance graph on page 15 do not
constitute soliciting materials and are not considered filed or incorporated by
reference into any other of the Company's filings under the Securities Act of
1933 or the Securities Exchange Act of 1934, unless the Company states
otherwise.
REPORT OF THE COMPENSATION COMMITTEE
COMPENSATION POLICIES. The principal goal of the Company's compensation
program as administered by the Board of Directors is to help the Company
attract, motivate and retain the executive talent required to develop and
achieve the Company's strategic and operating goals with a view to maximizing
shareholder value. The key elements of this program and the objectives of each
element are as follows:
BASE SALARY. Base salaries paid to the Company's executive officers are
intended to be competitive with those paid to executives holding comparable
positions in the marketplace.
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Individual performance and the Company's performance are considered when setting
salaries within the range for each position. Annual reviews are held and
adjustments are made based on attainment of individual goals in a manner
consistent with operating and financial performance.
BONUSES. Annual cash bonuses are intended to motivate performance by
creating the potential to earn incentive awards that are contingent upon
personal and business performance. The Company sets goals of revenue and
profitability for each group.
LONG TERM INCENTIVES. The Company provides its executive officers with
long-term incentive compensation through grants of stock options under the
Company's stock option plans. The grant of stock options aligns the executive's
interest with those of the Company's shareholders by providing the executive
with an opportunity to purchase and maintain an equity interest in the Company's
stock and to share in the appreciation of its value. In fiscal 2000, there were
no options to purchase Common Stock granted to the Company's executive officers.
CEO'S COMPENSATION. Michael A McManus is entitled to receive an annual
base salary of $275,000 and received a bonus of $250,000 on November 1, 2000.
Mr. McManus is entitled to receive a minimum bonus of $250,000 and a maximum
bonus of $350,000 per year based on the Company's pretax operating earnings. Mr.
McManus also received options to purchase 250,000 shares of Common Stock at a
purchase price of $7.375 per share. The factors involved in determining the
CEO's compensation are the Company's revenues and profits, his lengthy
experience and business acumen, his responsibilities, and the efforts exerted by
him in performance of his duties. The options to purchase the 250,000 shares are
fifty percent vested with the balance to vest on November 2, 2001. The options
expire on the tenth anniversary of the date of grant.
Reported upon by the Compensation Committee
Gary Gelman
Howard Alliger
The following table sets forth for the fiscal years indicated the compensation
paid by the Company to its Chief Executive Officer and other executive officers
with annual compensation exceeding $100,000:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Annual Compensation(1) Compensation
---------------------- ------------
Securities
Name and Fiscal Year Underlying
Principal Position Ended June 30 Salary ($) Bonus ($) Options (#)
------------------ ------------- ---------- --------- -----------
<S> <C> <C> <C> <C>
Michael A. McManus Jr. 2000 250,000 250,000 0
President and Chief 1999 166,667 0 300,000
Executive Officer 1998 0 0 0
Richard Zaremba 2000 129,096 5,000 0
11
<PAGE>
Vice President, Chief 1999 46,875 0 15,000
Financial Officer, Secretary 1998 0 0 0
And Treasurer
Ronald Manna, Vice 2000 113,808 15,000 0
President of Operations 1999 107,481 0 20,000
1998 95,000 0 25,000
Christopher Thomas 2000 87,348 10,000 0
President of Mystaire 1999 111,013 0 15,000
Products 1998 124,150 0 0
</TABLE>
(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 named officer.
EMPLOYMENT AGREEMENTS
The Company has entered into an employment agreement with Mr. McManus
providing for his employment as President and Chief Executive Officer. The term
of the agreement expires on October 31, 2002 and is automatically renewable for
one year periods unless notice is given by the Company or Mr. McManus that it or
he declines to renew the agreement. The agreement provides for an annual salary
of $275,000 and a Company provided automobile. The agreement also provides for
an annual bonus based on the Company's pretax operating earnings of up to
$350,000 with a minimum guaranteed bonus of $250,000. Pursuant to the agreement,
Mr. McManus was granted options to purchase 250,000 shares of the Company's
Common Stock at an exercise price of $7.375 per share. Fifty percent of such
options were exercisable on November 2, 2000 with the balance of the options
becoming exercisable on November 2, 2001. Mr. McManus will also receive such
benefits as are general provided to other executives of the Company. Upon the
occurrence of certain "Changes in Control" events (as defined in the agreement),
Mr. McManus will receive a one-time payment equal to his annual base salary and
a bonus of no less than $250,000.
In conformity with the Company's policy, all of its Directors, officers
and employees execute confidentiality and nondisclosure agreements upon the
commencement of employment with the Company. The agreements generally provide
that all inventions or discoveries by the employee related to the Company's
business and all confidential information developed or made known to the
employee during the term of employment shall be the exclusive property of the
Company and shall not be disclosed to third parties without prior approval of
the Company. Mr. Manna has an agreement with the Company which provides for the
payment of six months severance upon his termination for any reason. Mr. Zaremba
has an agreement for payment of six months annual base salary upon a change in
control of the Company. The Company's employment agreement with Mr. McManus also
contains non-competition provisions that preclude him from competing with the
Company for a period of 18 months from the date of his termination of
employment.
OPTION GRANTS IN LAST FISCAL YEAR
12
<PAGE>
The following table contains information concerning options granted to
executive officers named in the Summary Compensation Table during the fiscal
year ended June 30, 2000:
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
Number of Securities % of Total Options
Underlying Options Granted to Employees Exercise Expiration
Name Granted (#) in Fiscal Year Price ($/sh) Date
---- ----------- -------------- ------------ ----
<S> <C> <C> <C>
Michael A. McManus Jr. 0 0 0 n/a
Richard Zaremba 0 0 0 n/a
Ronald Manna 0 0 0 n/a
Christopher Thomas 0 0 0 n/a
</TABLE>
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, 2000. The following
table contains information concerning the number and value, at June 30, 2000, of
exercised and unexercised options held by executive officers names in the
Summary Compensation Table:
<TABLE>
<CAPTION>
Number of Securities Underlying Value of Unexercised In-The-
Shares Acquired Value Unexercised Options at FY-End (#) Money Options at FY-End ($)
Name on Exercise (#) Realized ($)(1) (Exercisable/Unexercisable) (Exercisable/Unexercisable)(2)
---- --------------- --------------- --------------------------- ------------------------------
<S> <C> <C> <C> <C>
Michael A. McManus Jr. 0 0 300,000 / 0 $960,500 / -
Richard Zaremba 0 0 7,500 / 7,500 36,450 / 36,450
Ronald Manna 0 0 17,500 / 35,000 72,000 / 42,525
Christopher Thomas 0 0 19,500 / 7,500 56,610 / 36,450
</TABLE>
(1) "Value realized" is calculated by determining the difference between
the fair market value of the Common Stock on the date the options are
exercised and the exercise price of the options.
(2) Fair market value of underlying securities (the closing price of the
Company's Common Stock on the National Association of Securities
Dealers Automated Quotation System) at fiscal year end (June 30, 2000)
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 "1991
Plan") which covers up to 375,000 shares of Common Stock. Pursuant to the 1991
Plan, officers, Directors, consultants and key employees of the Company are
eligible to receive incentive and/or non-incentive stock options. At June 30,
2000, options to purchase 40,500 shares of Common Stock were outstanding under
the 1991 Plan at exercise prices ranging from $2.17 to $6.78 per share and
options to purchase 334,500 shares of Common Stock had been exercised or
canceled.
In March 1996, the Board of Directors approved the 1996 Employee Incentive Stock
Option Plan covering an aggregate of 450,000 shares of Common Stock (the "1996
Plan") and the 1996 Non-Employee Director Stock Option Plan (the "1996 Directors
Plan") covering an aggregate of 1,125,000 shares of Common Stock of the Company.
At June 30, 2000, options to purchase 336,020 shares of Common Stock were
outstanding at exercise prices ranging from $3.07 to $18.50 under the 1996 Plan
and options to acquire 823,500 shares of Common Stock were outstanding at
exercise prices ranging from $0.73 to $3.07 under the 1996 Directors Plan. At
June 30, 2000, options to purchase 224,325 shares of Common Stock under the 1996
Plan have
13
<PAGE>
been exercised or canceled. At June 30, 2000, no options to purchase shares of
Common Stock under the 1996 Directors Plan have been exercised or canceled.
In October 1998, the Board of Directors adopted the 1998 Employee Stock
Option Plan (the "1998 Plan") covering an aggregate of 500,000 shares of Common
Stock of the Company. At June 30, 2000, options to purchase 154,000 shares of
Common Stock were outstanding under the 1998 Plan at exercise prices ranging
from $3.07 to $5.50 per share. At June 30, 2000, 4,000 options granted under the
1998 Plan have been canceled.
The plans are administered by the Board of Directors with the right to
designate a committee. The selection of participants, allotments of shares,
determination of price and other conditions relating to options are determined
by the Board of Directors, or a committee thereof, in its sole discretion.
Incentive stock options granted under the plans are exercisable for a period of
up to ten years from the date of grant at an exercise price which is not less
than the fair market value of the Common Stock on the date of the grant, except
that the term of an incentive stock option granted under the plans to a
shareholder owning more than 10% of the outstanding Common Stock may not exceed
five years and its exercise price may not be less than 110% of the fair market
value of the Common Stock on the date of grant.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Gelman, the Chairman of the Board of Directors, and Mr. Alliger are
the members of the Compensation Committee. No Company executive officer
currently serves on the Compensation Committee or any similar committee of
another public company, one of whose executive officers sits on the Compensation
Committee of the Company.
SHARE PERFORMANCE GRAPH
The following graph compares the cumulative total return on the
Company's Common Stock during the last five fiscal years with the NASDAQ Total
U.S. and Foreign Return Index and the NASDAQ Medical Device Manufacturers Index
during the same period. The graph shows the value, at the end of each of the
last five fiscal years, of $100 invested in the Common Stock or the indices on
June 30, 1996. The graph depicts the change in value of the Company's Common
Stock relative to the noted indices as of the end of each fiscal year and not
for any interim period. Historical stock price performance is not necessarily
indicative of future stock price performance.
<TABLE>
<CAPTION>
1996 1997 1998 1999 2000
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
MISONIX, INC. 100 215 225 177 218
NASDAQ Total U.S. & Foreign Return Index 100 122 159 225 333
NASDAQ Medical Devices, Instruments and Supplies 100 97 113 152 174
Index
</TABLE>
14
<PAGE>
[CHART OMITTED]
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") 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 all
Reporting Persons complied on a timely basis with all filing requirements
applicable to them with respect to transactions during fiscal year 2000.
PROPOSAL 3
ACCOUNTANTS
The Board of Directors has recommended retaining the firm KPMG, LLP to act as
the Company's independent accountants. The accounting firm of KPMG, LLP is
different from the accounting firm selected in prior years which was Ernst &
Young LLP. The prior accounting firm (Ernst & Young LLP) for the past two years
did not qualify, disclaim or have an adverse opinion on the Company's financial
statements. The Audit Committee has consented, subject to
15
<PAGE>
shareholder approval, to the change of accountants from Ernst & Young LLP to
KPMG, LLP. A representative of KPMG, LLP 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.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL OF
THE SELECTION OF KPMG, LLP AS THE COMPANY'S INDEPENDENT ACCOUNTANTS.
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 Annual
Meeting, but, if any other business does lawfully come before the Annual
Meeting, it is the intention of the persons names in the enclosed Proxy to vote
in regard thereto in accordance with their judgement.
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.
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 8, 2001
to be considered for inclusion in the Company's next Proxy Statement. Under the
Securities and Exchange Commission's proxy rules, Proxies solicited by the Board
of Directors for the 2001 Annual Meeting may be voted at the discretion of the
persons named in such proxies (or their substitutes) with respect to any
shareholder proposal not included in the Company's proxy statement if the
Company does not receive notice of such proposal on or before November 21, 2001,
unless the 2001 Annual Meting is not held within 30 days before or after the
anniversary date of the 2001 Annual Meeting.
A copy of the Company's Annual Report to Shareholders for the fiscal
year ended June 30, 2000 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 part of
the proxy soliciting material.
By Order of the Board of Directors,
RICHARD ZAREMBA
Secretary
Dated: January 5, 2001
Farmingdale, New York
16
<PAGE>
EXHIBIT A
2001 EMPLOYEE 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 (i) "incentive stock options" ("ISOs") within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code") and (ii) non-qualified stock options.
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 1,000,000. 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.
A-1
<PAGE>
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; whether options shall be ISOs or
non-qualified 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 option; 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 fair 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 non-qualified stock option.
A-2
<PAGE>
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 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 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
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.
A-3
<PAGE>
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 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, (b) with 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 (c)
by reducing the number of shares of Common Stock otherwise deliverable
to the holder of an option upon exercise of the option, or with any
combination of cash, certified check, shares of Common Stock or
reduction as aforesaid.
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) is 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
A-4
<PAGE>
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.
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
A-5
<PAGE>
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 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.
A-6
<PAGE>
13. AMENDMENTS AND TERMINATION OF THE PLAN.
The Plan was adopted by the Board of Directors on October 30, 2000. No
option may be granted under the Plan after October 29, 2010. 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 "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 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.
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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.
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
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<PAGE>
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 require the approval of a majority of the votes cast
thereon by the shareholders of the Company 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
October 29, 2001, the Plan and any options granted hereunder shall
terminate.
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<PAGE>
PROXY
MISONIX, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Gary Gelman and Michael A. McManus, Jr., as
Proxies, each with the power to appoint a substitute, and hereby authorizes them
to represent and to vote, as designated below, all the shares of Common Stock
held of record by the undersigned on January 4, 2001 at the Annual Meeting of
Shareholders to be held on February 6, 2001 or any adjournment thereof.
PLEASE MARK, SIGN, DATE AND RETURN
THE PROXY CARD PROMPTLY IN THE ENVELOPE PROVIDED
----------------------------- -----------------------------
ACCOUNT NUMBER NO. OF SHARES
--------------------------------------------------------------------------------
1. Election of Directors: GARY GELMAN, MICHAEL A. MCMANUS, JR.,
HOWARD ALLIGER, ARTHUR GERSTENFELD.
FOR all Nominees WITHHOLD (Instruction: To withhold
listed (except as AUTHORITY to vote authority to vote for one or
marked to the for all Nominees listed more individual nominees
contrary) write the nominee's name(s)
in the line provided below).
[ ] [ ]
----------------------
2. Approval of the 2001 Employee Stock Option Plan.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Approval of the selection of KPMG, LLP as the Company's
independent accountants.
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 PROPOSALS 2 AND 3.
<PAGE>
PLEASE SIGN EXACTLY AS NAME APPEARS HEREON.
-----------------------------------------------
(Signature)
-----------------------------------------------
(Signature if held jointly)
Dated:
-----------------------------------------
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.
