Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendments 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 240.14a-11(c) or 240.14a-12
SEMX Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
same
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than 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).
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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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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<PAGE>
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:
<PAGE>
SEMX CORPORATION
One Labriola Court
Armonk, New York 10504
----------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON
May 26, 1999
----------
To the Stockholders of SEMX Corporation:
You are cordially invited to attend the Annual Meeting of Stockholders
(the "Annual Meeting") of SEMX Corporation (the "Company"), which will be held
at 11:00 a.m. (E.D.T.) on May 26, 1999, at The Club 101, 101 Park Avenue, New
York, New York 10178, telephone number (212) 687-1045, to consider and act upon
the following matters:
(1) The election of a Board of Directors consisting of seven persons to
hold office for a one-year term and until their successors are duly
elected and qualified. The persons nominated by the Board of Directors
(Gilbert D. Raker, Frank J. Polese, Richard D. Fain, John U. Moorhead
II, Steven B. Sands, Mark A. Pinto and Andrew Lozyniak) are described in
the accompanying Proxy Statement.
(2) The ratification of the appointment of Goldstein Golub Kessler LLP as
the Company's auditors for the year ending December 31, 1999.
(3) The transaction of such other business as may properly come before the
Annual Meeting or any adjournments thereof.
Only stockholders of record at the close of business on April 9, 1999 will
be entitled to notice of, and to vote at, the Annual Meeting or any
adjournments thereof.
Whether or not you expect to attend the Annual Meeting in person, please
complete, date and sign the accompanying proxy card which is being solicited on
behalf of the Board of Directors, and return it without delay in the enclosed
postage prepaid envelope. Your proxy is revocable and will not be used if you
are present and prefer to vote in person or if you revoke the proxy.
Date: April 28, 1999 By order of the Board of Directors,
Mark A. Koch, Secretary
<PAGE>
SEMX CORPORATION
One Labriola Court
Armonk, New York 10504
(914) 273-5500
----------
Proxy Statement
Annual Meeting of Stockholders
To Be Held On
May 26, 1999 At
THE CLUB 101, 101 PARK AVENUE
NEW YORK, NEW YORK
These proxy materials are furnished to holders of Common Stock, $.10 par
value ("Common Stock"), of SEMX Corporation, a Delaware corporation (the
"Company"), in connection with the solicitation of proxies by the Board of
Directors of the Company for use at the Annual Meeting of Stockholders of the
Company and for any adjournment or adjournments thereof (the "Annual Meeting"),
to be held at 11:00 A.M. (E.D.T.) on May 26, 1999, for the purposes set forth
in the accompanying Notice of Annual Meeting of Stockholders. A proxy (the
"Proxy") for the Annual Meeting is enclosed, by means of which you may indicate
your votes as to each of the proposals described in this Proxy Statement.
All Proxies which are properly completed, signed and returned to the
Company prior to the Annual Meeting, and which have not been revoked, will be
voted in accordance with the stockholder's instructions contained in such
Proxy. The affirmative vote by holders of a majority of the Common Stock
represented at the Annual Meeting is required for the election of Directors,
and for the ratification of the appointment of the Company's auditors. In the
absence of contrary instructions, shares represented by such Proxy will be
voted FOR the election of the nominees for Director as set forth herein, and
FOR the ratification of the appointment of the Company's auditors for the year
ending December 31, 1999. Shares represented by proxies which are marked
"abstain" for Item 2 on the proxy card, and proxies which are marked to deny
discretionary authority on all other matters, will not be included in the vote
totals with respect to those items, and therefore will have no effect on the
vote. An automated system administered by the Company's transfer agent counts
the votes. The Company's Certificate of Incorporation and By-laws do not
contain provisions concerning the treatment of abstentions and broker
non-votes. Broker non-votes will be included in the determination of the
presence of a quorum, but will not be counted for purposes of determining
whether a proposal or nominee has been approved.
The Board of Directors does not anticipate that the nominees will be
unavailable for election and does not know of any other matters that may be
brought before the Annual Meeting. In the event that any other matter shall
come before the Annual Meeting or the nominees are not available for election,
the persons named in the enclosed Proxy will have discretionary authority to
vote all Proxies not marked to the contrary with respect to such matter in
accordance with their best judgment.
A stockholder may revoke their Proxy at any time before it is exercised by
filing with the Secretary of the Company at its executive offices at One
Labriola Court, Armonk, New York 10504, either by written notice of revocation
or a duly executed Proxy bearing a later date, or by appearing in person at the
Annual Meeting and expressing a desire to vote their shares in person. All
costs of this solicitation are to be borne by the Company.
A list of stockholders entitled to vote at the Annual Meeting will be open
to examination by any stockholder, for any purpose germane to the meeting, at
the executive offices of the Company, One Labriola Court, Armonk, New York
10504, during ordinary business hours for ten days prior to the Annual Meeting.
Such list will also be available during the Annual Meeting.
This Proxy Statement, the accompanying Notice of Annual Meeting of
Stockholders, the Proxy and the 1998 Annual Report to Stockholders including
financial statements, are expected to be mailed commencing on or about April
28, 1999 to stockholders of record on April 9, 1999.
VOTING SECURITIES
April 9, 1999, has been fixed as the record date for the determination of
stockholders entitled to notice of and to vote at the Annual Meeting or any
adjournment or adjournments thereof. As of that date, the Company had
outstanding 6,041,016 shares of Common Stock (which figure excludes 334,600
treasury shares not entitled to vote). The Company has no shares of Preferred
Stock, $.10 par value issued.
3
<PAGE>
The following table sets forth, as of April 9, 1999, certain information
concerning those persons known to the Company to be the beneficial owners (as
such term is defined in Rule 13d-3 under the Securities Exchange Act of 1934
(the "Exchange Act") of more than five (5%) percent of the outstanding shares
of Common Stock of the Company and the number of shares of Common Stock of the
Company owned by all Directors and nominees of the Company, individually, the
Chief Executive Officer of the Company, each of the Named Executive Officers,
and by all Directors and executive officers of the Company as a group:
<TABLE>
<CAPTION>
Name and Address of Amount and Nature
Beneficial Owner and of Beneficial Percent of
Identity of Group (1)(2) Ownership Class
- ---------------------------------------------------- ------------------ -----------
<S> <C> <C>
Richard D. Fain (3) 28,700 *
Kenneth J. Huth (4) 48,040 *
John U. Moorhead, II (5) 95,100 1.6%
Mark A. Pinto (6) 79,000 1.3%
Frank J. Polese (7) 420,984 6.9%
Gilbert D. Raker (8) 748,925 12.2%
Steven B. Sands (9) 203,250 3.4%
Andrew Lozyniak 35,000 *
Douglas G. Sages (10) 7,500 *
All executive officers and Directors as a group (9
persons) (11) 1,670,249 26.6%
</TABLE>
- ----------
* Less than 1% of outstanding shares of Common Stock
(1) Unless otherwise noted, the Company believes that all persons named in the
table have sole investment power with respect to all shares of Common
Stock beneficially owned by them. A person is deemed to be the beneficial
owner of securities that can be acquired by such person within 60 days
from the date hereof upon the exercise of warrants or options. Each
beneficial owner's percentage ownership is determined by assuming that
options or warrants that are held by such person (but not those held by
any other person) and which are exercisable within 60 days from the date
hereof have been exercised.
(2) The address of all of the persons is c/o SEMX Corporation, One Labriola
Court, Armonk, New York 10504.
(3) Includes 2,700 shares of Common Stock held in trust for Mr. Fain's
children, as to which Mr. Fain disclaims beneficial ownership. Includes
underlying options to purchase 12,500 shares of Common Stock.
(4) Includes underlying options to purchase 12,000 shares of Common Stock, and
options held by his spouse to purchase 3,750 shares of Common Stock.
(5) Includes 3,600 shares of Common Stock owned by his spouse, as to which Mr.
Moorhead disclaims beneficial ownership and underlying options to purchase
37,500 shares of Common Stock.
(6) Includes 29,500 shares of Common Stock owned by Mr. Pinto's father, as to
which Mr. Pinto disclaims beneficial ownership, and includes an underlying
options to purchase 17,500 shares of common stock but excludes any shares
owned by Sutro & Company, Mr. Pinto's employer.
(7) Includes underlying options to purchase 61,250 shares of Common Stock.
(8) Includes underlying options to purchase 77,650 shares of Common Stock,
12,500 shares of Common Stock beneficially owned by Mr. Raker's minor
daughter, as to which Mr. Raker disclaims beneficial ownership and 1,625
shares beneficially owned by his spouse, as to which Mr. Raker disclaims
beneficial ownership.
(9) Includes an aggregate of 190,000 shares owned by three limited
partnerships, the general partners of which are corporations of which Mr.
Sands is a 50% stockholder. Includes underlying options to purchase 12,500
shares of Common Stock.
(10) Sages resigned as Executive Vice President and Chief Financial Officer
effective February 22, 1999. Mr. Sages shares are owned indirectly by his
spouse. Upon his resignation, Mr. Sages' options were cancelled.
(11) Includes an aggregate of 230,900 shares of Common Stock issuable upon
exercise of options described in notes (3), (4), (5), (6), (7), (8) and
(9).
4
<PAGE>
PROPOSAL 1
ELECTION OF DIRECTORS
The seven (7) nominees of management for election as Directors of the
Company at the Annual Meeting and certain information concerning each member
are set forth below. All the nominees are currently serving as Directors of the
Company. If elected, a Director of the Company, will hold office until the next
Annual Meeting of Stockholders or until their successor is duly elected and
qualified or until their death, resignation or removal. It is intended that the
accompanying form of Proxy will be voted FOR the election as Directors of the
nominees named below, unless the Proxy contains contrary instructions to
withhold authority. Proxies cannot be voted for a greater number of persons
than the number of nominees named in the Proxy Statement.
Management has no reason to believe that the nominees will not be
candidates or will be unable to serve. However, in the event that any nominee
should become unable or unwilling to serve as a Director, the Proxy will be
voted for the election of the remainder of those named, and for such substitute
person as shall be designated by the Directors.
The following persons, each of whom is currently serving as a Director of
the Company are nominated for election.
<TABLE>
<CAPTION>
Name Age Position
- ---------------------- ----- -------------------------------------------
<S> <C> <C>
Gilbert D. Raker 55 Chairman of the Board, President and Chief
Executive Officer
Frank J. Polese 42 Vice Chairman and Director
Richard D. Fain 51 Director
John U. Moorhead, II 46 Director
Steven B. Sands 40 Director
Mark A. Pinto 42 Director
Andrew Lozyniak 68 Director
</TABLE>
Gilbert D. Raker--Chairman of the Board, and Chief Executive Officer of
the Company since May 1990, President since December 31, 1995.
Frank J. Polese--Vice Chairman of the Company since January 1996 and a
Director of the Company since July 1993. Mr. Polese also served as President of
the Company between January, 1994 and December, 1995. Mr. Polese has served
since August 1991 as President of Polese Company, Inc., a California
corporation ("Polese Company"), which was acquired by the Company on May 27,
1993, prior to which Mr. Polese was its sole shareholder. Prior to August 1991,
Mr. Polese was a manufacturer's representative specializing in products
incorporated into microelectronic packages for the electronics industry.
Richard D. Fain--a Director of the Company since October 1991. Since April
1988, Mr. Fain has been Chairman of the Board of Directors and Chief Executive
Officer of Royal Caribbean Cruises, Ltd., a company engaged in the operation of
cruise ships. From 1975 until April 1988, Mr. Fain served in various executive
capacities and as a Director of Gotaas Larsen Shipping Corporation, a company
engaged in operating tankers and liquid natural gas vessels.
John U. Moorhead, II--a Director of the Company since October 1991. Since
January, 1995, Mr. Moorhead has been a managing director of V. M. Equity
Partners, an investment banking firm. Since November, 1990 Mr. Moorhead has
been President of The Moorhead Group, Inc., an investment banking and
consulting firm. From January 1988 to October 1990, Mr. Moorhead was Director
of the New Business Group of the Investment Banking Division of Lehman
Brothers. From November 1984 to December 1987, Mr. Moorhead was a senior
executive at E.F. Hutton. He is a director of ICG Communications, Inc.
Steven B. Sands--a Director of the Company since January 1992. Since
November 1990, Mr. Sands has been Chairman of Sands Brothers & Co., Ltd., an
investment banking and brokerage firm. From 1987 to 1989, Mr. Sands served as a
Managing Director of Rodman & Renshaw, a NYSE member firm. From 1984 to 1986,
Mr. Sands served as a Managing Director of Laidlaw Adams & Peck, an investment
banking firm. Mr. Sands serves as a Director of Brightpoint, Inc. (wholesale
distributor of cellular phones), The Village Green Bookstore, Inc. (owns and
operates book store chain) and Command Security Corporation (security guard
service).
Mark A. Pinto--a Director of the Company since July 1995. He has been Vice
President/Institutional Sales, Corporate Bond Department of Sutro & Co. since
1990. From 1987 until 1990, Mr. Pinto was Vice President/Fixed Income of Kidder
Peabody & Co. Mr. Pinto has been employed in the securities industry since
1983.
5
<PAGE>
Andrew Lozyniak--a Director of the Company since September 1998. Mr.
Lozyniak was formerly the Chairman of Dynamics Corporation of America ("DCA"),
a New York Stock Exchange listed company which manufactured electrical
appliances and electronic devices, power and controlled environmental systems
and fabricated metal products and equipment. He was associated with DCA since
1961 in various capacities, including Executive Vice President, President,
Chief Executive Officer and was elected Chairman in 1978. DCA merged with CTS
Corporation, a NYSE listed manufacturer of electronic components, in October
1997. Mr. Lozyniak is a member of the Board of Directors of CTS Corporation.
Certain Information Concerning the Board of Directors
The Company held 6 meetings of the Board of Directors during the fiscal
year ended December 31, 1998 ("Fiscal 1998") and conducted other business by
unanimous written consent. All of the directors attended at least 75% of the
Board of Directors, with the exception of Richard D. Fain.
The Company has a standing audit committee of the Board of Directors,
comprised of Messrs. Sands and Pinto, of which Mr. Pinto is the Chairman.
During 1998, the audit committee met 1 time.
The Company has a standing compensation committee of the Board of
Directors (the "Compensation Committee"), which is comprised of Messrs. Fain
and Moorhead, of which Mr. Moorhead is the Chairman. During 1998, the
Compensation Committee met 2 times.
The Board of Directors does not have a standing nominating committee.
Executive Officers
The Executive Officers of the Company are as follows:
<TABLE>
<CAPTION>
Name Age Position
- ------------------- ----- --------------------------
<S> <C> <C>
Gilbert D. Raker 55 Chairman of the Board,
President and
Chief Executive Officer
Frank J. Polese 42 Vice Chairman of the
Board, President of
Polese Company
Kenneth J. Huth 60 Executive Vice President
Douglas Sages (1) 48 Executive Vice President,
Chief Financial Officer
</TABLE>
- ----------
(1) Mr. Sages resigned as Executive Vice President and Chief Financial Officer,
effective February 22, 1999.
Kenneth J. Huth--Executive Vice President of the Company since January,
1994. President of the Company from January 1990 to December 1993 and President
of the Semiconductor Packaging Materials division since July 1998. From 1972 to
December 1989, Mr. Huth served as President of Kenneth J. Huth, Inc., a
manufacturer's representative specializing in precision stampings and related
products for the electronics industry.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's officers and Directors, and persons who
beneficially own more than 10% of a registered class of the Company's equity
securities, to file reports of ownership and changes in ownership with the
Securities and Exchange Commission (the "Commission") and the NASDAQ. Officers,
Directors and greater-than-10% stockholders are required by the Commission's
regulations to furnish the Company with copies of all Section 16(a) forms they
file.
Based solely on a review of the copies of such forms furnished to the
Company, the Company believes that during Fiscal 1998, all Section 16(a) filing
requirements applicable to its officers, Directors and greater-than-10%
beneficial owners were complied with in a timely fashion.
Executive Compensation
The following table summarizes the compensation paid to, or earned by, the
Company's Chief Executive Officer and each of the four most highly compensated
executive officers, other than its Chief Executive Officer (the "Named
Executive Officers"), who were serving as executive officers at the end of the
1996, 1997 and 1998 fiscal years, for services rendered in all capacities to
the Company during such year.
6
<PAGE>
(A) SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Awards
-------------------------------------- --------------------------------------
Name and Securities
Principal Fiscal Underlying All Other(1)
Position Year Salary ($) Bonus ($)* Options/SARs (#) Compensation ($)
- ----------------------------- -------- ------------ ------------ ------------------ -----------------
<S> <C> <C> <C> <C> <C>
Gilbert D. Raker 1998 $271,992 $75,000 3,750(4)
Chairman, President and 1997 $259,384 $75,000 32,800
Chief Executive Officer 1996 $237,000 $60,000 37,500
Frank J. Polese, 1998 $188,154 $25,000 3,750(4)
Vice Chairman and President 1997 $156,923 $25,000 5,000
of Polese Company (2) 1996 $160,654 0 10,000
Kenneth J. Huth, 1998 $160,356 $35,000 2,000(4)
Executive Vice President 1997 $152,057 $30,000 5,000
1996 $140,000 $40,000 10,000
Douglas G. Sages, 1998 $147,116 0 25,000
Executive Vice President,
Chief Financial Officer (3)
</TABLE>
- ----------
* The bonuses shown, had been accrued in the prior year and were paid to the
executive in the year noted in the table.
(1) The aggregate amount of such compensation is the lesser of either $50,000
or 10% of such person's total annual salary and bonus.
(2) Mr. Polese became Vice Chairman in January 1996.
(3) Douglas Sages joined the Company as Executive Vice President and Chief
Financial Officer in May of 1998. Mr. Sages resigned as Executive Vice
President and Chief Financial Officer effective February 22, 1999, at
which time, the 25,000 options which had been granted to Mr. Sages by the
Company were cancelled.
(4) These options were received in exchange for options previously granted in
fiscal 1998. See "Ten Year Information Regarding Repricing, Cancellation
and Regrant of Options".
(B) OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Number of Percent of Hypothetical
Securities Total Options/SAR Value at
Underlying Granted to Employees Exercise or Base Expiration Date of
Name of Individual Options/SARs In Fiscal Year Price ($ Share) Date Grant(1)
- ---------------------- -------------- ---------------------- ------------------ ------------ -------------
<S> <C> <C> <C> <C> <C>
Gilbert Raker 3,750(2) 2.5% $ 3.00 5/15/03 $ 4,577
Frank Polese 3,750(2) 2.5% $ 3.00 5/15/08 $ 6,480
Kenneth J. Huth 2,000(2) 1.3% $ 3.00 5/15/08 $ 3,456
Douglas G. Sages (3) 10,000 6.7% $ 6.25 5/15/08 $37,780
15,000 10.0% $ 6.50 5/4/03 $47,030
</TABLE>
- ----------
(1) The estimated present value at grant of options during fiscal year 1998
has been calculated using the Black-Scholes option pricing model, based
upon the following assumptions; estimated time until exercise: 3 years
from the original grant date for Mr. Raker's options and 5 years from the
original grant date for all other options presented; a risk free interest
rate of 4.44% for Mr. Raker's options, 4.33% for Mr. Polese and Mr. Huth's
options and approximately 5.6% for Mr. Sages options was used,
representing in each case Treasury Note rates for the expected life of the
option at the time of grant. The approach used in developing the
assumptions upon which the Black-Scholes valuation was done is consistent
with the requirements of Statement of Financial Accounting Standard No.
123, "Accounting for Stock-Based Compensation."
The approach used in developing the assumptions upon which the
Black-Scholes valuation was done is consistent with the requirements of
Statement of Financial Accounting Standard No. 123, "Accounting for
Stock-Based Compensation."
(2) These Options were received in exchange for options previously granted in
fiscal 1998. See "Ten Year Information Regarding Repricing, Cancellation
and Regrant of Options."
7
<PAGE>
(3) Douglas Sages joined the Company as Executive Vice President and Chief
Financial Officer in May of 1998. Mr. Sages resigned as Executive Vice
President and Chief Financial Officer effective February 22, 1999, at
which time, the 25,000 options which had been granted to Mr. Sages by the
Company were cancelled.
(C) AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-
END OPTION/SAR VALUES
The following table sets forth (a) the number of shares received and the
aggregate dollar value realized in connection with each exercise of outstanding
stock options during the 1998 fiscal year by the Chief Executive Officer and
each of the Named Executive Officers, (b) the total number of all outstanding,
unexercised options (separately identifying exercisable and unexercisable
options) held by such executive officers as of the end of Fiscal 1998, and (c)
the aggregate dollar value of all such unexercised options that are
in-the-money (i.e., options as to which the fair market value of the underlying
Common Stock that is subject to the option exceeds the exercise price of the
option), as of the end of Fiscal 1998:
<TABLE>
<CAPTION>
Number of Value of Unexercised
Unexercised In the Money
Options/SARs at Options/SARs at
Shares Fiscal Year-End (#) Fiscal Year-End (#)
Acquired/ Value Exercisable/ Exercisable/
Name Exercise (#) Realized ($) Unexercisable Unexercisable
- ------------------ -------------- -------------- --------------------- ---------------------
<S> <C> <C> <C> <C>
Gilbert D. Raker -- -- 73,900/3750 $0/$0
Frank J. Polese -- -- 57,500/3750 $0/$0
Kenneth J. Huth -- -- 10,000/2000 $0/$0
Douglas G. Sages -- -- 0/25,000 $0/$0
</TABLE>
(D) TEN YEAR INFORMATION REGARDING REPRICING, CANCELLATION AND REGRANT OF
OPTIONS.
In December 1998, the Company repriced certain outstanding stock options
which were granted from 1993 to 1998. In connection with the repricing, the
Company made an offer to certain holders of the options, including the Chief
Executive Officer and the Named Executive Officers, to reduce by one-half the
number of shares covered by these options in consideration of a reduction in
the exercise price of the options from their original exercise price, to $3.00
per share. The following table sets forth certain information with respect to
the repricing of options held by the Chief Executive Officer and the Named
Executive Officers.
<TABLE>
<CAPTION>
Original Amended Closing Length of
Number of Number of market Original
Securities Securities Price of Exercise Option Term
Underlying Underlying Stock at Price at New Remaining
Options Options Time of Time of Exercise at Date of
Name Date Repriced Repriced Repricing Repricing Price Repricing
- ----------------- ---------- ------------ ------------ ----------- ----------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Gilbert Raker 12/01/98 20,000 10,000 $2.469 $ 4.40 $ 3.00(1) 5.5 years
12/01/98 40,000 20,000 2.469 5.00 3.00(1) 5.5 years
12/01/98 10,000 5,000 2.469 4.26 3.00(1) .5 years
12/01/98 20,000 10,000 2.469 8.46 3.00(1) 1.5 years
12/01/98 17,500 8,750 2.469 9.08 3.00(1) 2.1 years
12/01/98 20,000 10,000 2.469 9.25 3.00(1) 2.9 years
12/01/98 12,500 6,250 2.469 11.625 3.00(1) 3.9 years
12/01/98 7,800 3,900 2.469 12.788 3.00(1) 3.9 years
12/01/98 7,500 3,750 2.469 6.875 3.00(1) 4.5 years
Frank J. Polese 12/10/98 10,000 5,000 2.938 8.46 3.00 6.5 years
12/10/98 5,000 2,500 2.938 8.25 3.00 7.1 years
12/10/98 5,000 2,500 2.938 9.25 3.00 7.9 years
12/10/98 5,000 2,500 2.938 8.00 3.00 8.5 years
12/10/98 7,500 3,750 2.938 6.25 3.00 9.5 years
Kenneth J. Huth 12/10/98 5,000 2,500 2.938 7.69 3.00 6.5 years
12/10/98 5,000 2,500 2.938 8.25 3.00 7.1 years
12/10/98 5,000 2,500 2.938 9.25 3.00 7.9 years
12/10/98 5,000 2,500 2.938 8.00 3.00 8.5 years
12/10/98 4,000 2,000 2.938 6.25 3.00 9.5 years
</TABLE>
- ----------
(1) Represents at least 110% of the closing sales price of the Common Stock on
the date of the repricing.
8
<PAGE>
Compensation of Directors
The independent Directors of the Company, Messrs. Fain, Moorhead, Sands,
Pinto and Lozyniak, are each compensated $6,000 per fiscal year and $500 per
meeting for serving on the Board of Directors. The Chairman of each committee
of the Board receives $1,000 for their service. Members of each committee
receive $500 per meeting attended.
Pursuant to the Company's Non-Qualified Stock Option Plan (the
"Non-Qualified Plan"), non-employee Directors (Messrs. Fain, Moorhead, Pinto,
Sands and Lozyniak) will receive options to purchase 2,500 shares of Common
Stock as of the date of the Annual Meeting. The options will be exercisable at
a price equal to 100% of the fair market value of the common stock on the date
of grant.
Employment Agreements
On December 15, 1994, the Company entered into a five-year employment
agreement with Gilbert Raker, pursuant to which Mr. Raker will receive an
annual salary in 1999 of $284,000. Mr. Raker's future increases in salary are
at the discretion of the Board. Bonuses may be paid at the discretion of the
Compensation Committee. In the event of a change of control (as defined) of the
Company, Mr. Raker may terminate his employment with the Company, and receive
the remaining compensation under his employment agreement. Mr. Raker has agreed
not to engage in a business that is competitive with the Company during the
term of the agreement and for a period of one year thereafter.
On December 15, 1994, Polese Company entered into a five-year employment
agreement with Frank J. Polese, pursuant to which Mr. Polese received an annual
salary in 1998 of $182,000. Subsequent to 1998, Mr. Polese's annual salary
increases are at the discretion of the Compensation Committee. For a period of
ten years, Mr. Polese has the right to receive 10% of (i) the pre-tax profit
from Polese Company's copper tungsten product line, after allocating operating
costs, and (ii) the proceeds of the sale, if any, by the Company of the
copper/tungsten heat dissipation technology. Mr. Polese's agreement contains
the same change of control and non-competition provisions as Mr. Raker's
agreement.
On December 15, 1994, the Company entered into a three-year employment
agreement with Kenneth Huth, pursuant to which Mr. Huth received an annual
salary in 1998 of $157,500. Subsequent to 1998, Mr. Huth's future annual salary
increases are at the discretion of the Compensation Committee. The agreement
with Mr. Huth continues on a year-to-year basis unless terminated. Mr. Huth's
agreement contains the same change of control and non-competition provisions as
Mr. Raker's agreement.
Employee Stock Option Plan
The SEMX Corporation Amended Employees' Incentive Stock Option Plan (the
"Plan") provides for shares of the Company's Common Stock to be reserved for
issuance upon exercise of options designated as "incentive stock options"
within the meaning of Section 422A of the Internal Revenue Code of 1986, as
amended. There are 900,000 shares reserved for issuance upon exercise of
options.
The Plan is administered for the Board of Directors by the Stock Option
Committee, currently comprised of John U. Moorhead II and Richard D. Fain,
which determines among other things, the persons to be granted options under
the Plan, the number of shares subject to each option and the option price. The
exercise price of any stock option granted under the Plan may not be less than
the fair market value of the shares subject to the option on the date of grant,
provided that the exercise price of any incentive option granted to an optionee
owning more than 10% of the outstanding Common Stock may not be less than 110%
of the fair market value of the shares underlying such option on the date of
grant and the aggregate fair market value of stock with respect to which
incentive options are exercisable for the first time by an optionee during any
calendar year shall not exceed $100,000. The term of each option and the manner
in which it may be exercised is determined by the Board of Directors or the
Stock Option Committee, provided that any option granted to an optionee owning
more than 10% of the Common Stock shall have a term of no more than five years.
Incentive Options may be granted only to employees and no option granted to an
employee may be exercised unless the optionee is an employee of the Company and
has been in such position for at least one year after the date of grant.
Options are not transferable, except upon death of the optionee. To date, after
giving effect to the exchange and repricing of certain options, 495,025 options
(as adjusted) have been granted under the Plan.
Non-Qualified Stock Option Plan
The Company's Non-Qualified Stock Option Plan (the "Non-Qualified Plan")
provides for the grant of non-qualified stock options, which are not intended
to qualify under Section 422A(b) of the Internal Revenue Code of 1986, as
amended, to purchase an aggregate of 300,000 shares. The Non-Qualified Plan
provides that non-qualified
9
<PAGE>
stock options ("NQSOs" or "Options") may be granted to employees,
non-employees, Directors and consultants to the Company and its subsidiaries,
all of whom are eligible to participate in the Non-Qualified Plan (the
"Participants"). The Plan, as amended, provides that all non-employee Directors
will receive options to purchase 2,500 shares of Common Stock as of the date of
the Annual Meeting, commencing with the Annual Meeting of 1997. The options are
exercisable at a price equal to 100% of the fair market value of the common
stock on the date of grant. The Non-Qualified Plan is administered by a stock
option committee (the "Non-Qualified Committee") consisting of two
disinterested members appointed by the Board of Directors. The Non-Qualified
Committee is currently comprised of Mark A. Pinto and Steven B. Sands. The
terms of the options granted under the Non-Qualified Plan are to be determined
by the Non-Qualified Committee. An option must be granted within ten years from
the date that the Non-Qualified Plan was adopted. Options will be exercisable
in whole or part at any time during the ten-year period, but will not have an
expiration date later than ten years from the date of grant. Options are non-
transferable, except upon death of the optionee. To date, after giving effect
to the exchange and repricing of certain options 85,000 options have been
granted under the Non-Qualified Plan.
Stock Options Outside Of A Plan
After giving effect for the exchange and repricing of certain options, the
Company has granted and presently has outstanding options for 188,750 shares,
which were granted outside of its option plans, to certain Directors of the
Company, consultants and employees.
CERTAIN TRANSACTIONS
In connection with the acquisition of all of the issued and outstanding
shares of Common Stock of Polese Company in 1993, for a ten-year period
commencing on January 1, 1994, Mr. Polese has the right to receive 10% of (i)
the pre-tax profit from the copper tungsten product line after allocating
operating costs and (ii) the proceeds of the sale, if any, by the Company of
the tungsten/copper heat dissipation technology.
During 1997, a company owned by Mr. Polese acquired machinery and
equipment from the Company for $254,000. The Company recognized a $46,000 gain
on this sale.
The Company believes that transactions between the Company, its officers,
Directors, principal stockholders, its subsidiaries or its or their affiliates
have been, and in the future will be, on terms no less favorable to the Company
than could be obtained from unaffiliated third-parties. Future transactions
with affiliates will be approved by a majority of the disinterested members of
the Board of Directors.
REPORT OF COMPENSATION COMMITTEE
The Report of the Compensation Committee and the Performance Graph herein
shall not be incorporated by reference into any filing notwithstanding anything
to the contrary set forth in any of the Company's previous filings under the
Securities Act of 1933, as amended, or the Securities Exchange Act of 1934 that
might incorporate future filings in whole or in part, including this Proxy
Statement.
The Compensation Committee of the Board of Directors (the "Committee") is
composed entirely of independent non-employee directors. The Committee is
responsible for establishing and administering the Company's employee
compensation plans, subject to the approval of the Board of Directors. The
Committee applies a philosophy based on the premise that the achievements and
successes of the Company result from the coordinated efforts of all individuals
working toward common objectives.
Compensation Philosophy
The goals of the Company's compensation program are to align compensation
with business performance and to enable the Company to attract and retain
competent executives who contribute to the success and profitability of the
Company.
The Committee is committed to providing compensation that helps attract
and retain highly competent executive officers. Executive Officers are rewarded
based upon corporate performance and profitability through the payment of
bonuses and the grant to them of stock options. The Company believes stock
ownership by management fosters an interest in the enhancement of stockholder
value and thus aligns management's interest with that of the stockholders.
Compensation of the Chief Executive Officer
Gilbert D. Raker, the Chairman of the Board, President and Chief Executive
Officer has been instrumental in the expansion and growth of the Company. He
has played and continues to play a pivotal role in the movement of the Company
into new areas of business. In 1994, the Company entered into a five year
employment agreement
10
<PAGE>
with Mr. Raker. Mr. Raker currently receives a base salary of $284,000 per
annum. Increases in his salary are at the discretion of the Board. In addition,
the Compensation Committee, in its discretion may pay Mr. Raker a bonus. Mr.
Raker did not receive a bonus for the 1998 fiscal year. In addition to being
eligible to receive a bonus, Mr. Raker participates in the Company's Stock
Option Plans.
COMPENSATION VEHICLES
The Company uses a total compensation program that consists of cash and
equity based compensation.
CASH BASED COMPENSATION
Salary and Bonuses
Individual salary determinations of the Company's executive officers are
based on experience, duties and functions, performance and comparison to peers,
both inside and outside of the Company.
The Board of Directors in its discretion, may award bonuses to executive
officers in recognition of their performance and their contribution to the
success of the Company.
401-K Plan
The Company has a 401-K Plan and matches up to 2% of the total
compensation of participants in the Plan up to a maximum allowed by law.
EQUITY BASED COMPENSATION
The Company utilizes its Amended Employees' Incentive Stock Option Plan
and Non-Qualified Stock Option Plan (the "Plans"), to provide executive
officers, among others, involved in the Company's development, an opportunity
to acquire or increase their proprietary interest in the financial successes
and progress of the Company by means of grants of options to purchase Company
Common Stock. The Plans utilize vesting periods, which are determined by the
committees of the Board which administer the Plans, to encourage executive
officers to continue in the employ of the Company.
REPRICING OF STOCK OPTIONS
In December of 1998 the Committee agreed to offer the Chief Executive
Officer and the Named Executive Officers and others the opportunity to exchange
previously granted options for a reduced number of options at a lower exercise
price. As per the offer, the individuals could exchange options which had been
granted to them with exercise prices ranging from $4.26 to $12.79, for half the
amount of options with an exercise price of $3.00 per share. The Closing sale
price of the common stock on the dates of the exchanges was $2.469 and $2.938,
respectively. Due to a drop in the price of the Company's stock, the Committee
felt it was in the best interest of the Company, to make the aforementioned
offer to the Chief Executive Officer and the Named Executive Officers and
others in order to maintain and strengthen their desire to remain with the
Company and stimulate their efforts on the Company's behalf.
THE COMPENSATION COMMITTEE: John U. Moorhead, II
Richard D. Fain
11
<PAGE>
PERFORMANCE GRAPH
Set forth below is a Performance Graph that shows the cumulative total
return on the Company's Common Stock compared with the cumulative total return
of the Small Cap 600 and a peer group index for the period of the Company's
last five fiscal years (December 1993 = 100):
Because the Company is involved in a variety of microelectronic and
semiconductor businesses, no published peer group accurately mirrors the
Company's business or weighs those businesses to match their relative
contributions to the Company's overall performance. Accordingly, the Company
had created a special per group index that includes companies in the principal
lines of business which the Company does business. The common stocks of the
following companies have been included in the peer group index: Alpha
Technologies Group, Inc., Brush Wellman, Inc., Kulicke & Soffa Industries,
Inc., Merix Corp., Methode Electronics, Inc., Robinson Nugent Inc. and
Sheldahl.
<GRAPHIC OMITTED>
[PLOT POINTS FOR PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Small Cap 600 $100 95 123 149 187 185
SEMX 100 150 222 261 181 69
Peer Group 100 149 208 215 218 177
</TABLE>
A $100 investment in the Company's Common Stock in December, 1993 would be
equal to $69.00 in December, 1998. The Board of Directors recognize that the
market price of stock is influenced by many factors, only one in which is
company performance. The stock price performance shown on the Performance Graph
is not necessarily indicative of future price performance.
THE BOARD OF DIRECTORS RECOMMEND THAT THE STOCKHOLDERS VOTE "FOR" ALL THE
NOMINEES LISTED IN THE FOREGOING PROPOSAL 1.
12
<PAGE>
PROPOSAL 2
RATIFICATION OF THE APPOINTMENT OF
GOLDSTEIN GOLUB KESSLER LLP AS
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Goldstein Golub Kessler LLP of New York have been selected by the
Company's Board of Directors as the Company's independent public accountants
for the year ending December 31, 1999. Goldstein Golub Kessler LLP have been
the Company's independent certified public accountants since 1988. It is
expected that a representative of Goldstein Golub Kessler LLP will have an
opportunity to make a statement if he or she so desires to do so and to respond
to appropriate questions. Proxies are being solicited by management in favor of
ratifying the appointment of Goldstein Golub Kessler LLP.
THE BOARD OF DIRECTORS RECOMMEND A VOTE "FOR" PROPOSAL 2.
OTHER MATTERS
The Board of Directors is not aware of any business to be presented at the
Annual Meeting except the matters set forth in the Notice and described in this
Proxy Statement. Unless otherwise directed, all shares represented by Board of
Directors' Proxies will be voted in favor of the proposals of the Board of
Directors described in this Proxy Statement. If any other matters come before
the Annual Meeting, the persons named in the accompanying Proxy will vote on
those matters according to their best judgment.
EXPENSES
The entire cost of preparing, assembling, printing and mailing this Proxy
Statement, the enclosed Proxy and other materials, and the cost of soliciting
Proxies with respect to the Annual Meeting, will be borne by the Company. The
Company will request banks and brokers to solicit their customers who
beneficially own shares listed of record in names of nominees, and will
reimburse those banks and brokers for the reasonable out-of-pocket expenses of
such solicitations. The original solicitation of Proxies by mail may be
supplemented by telephone and telegram by officers and other regular employees
of the Company, but no additional compensation will be paid to such
individuals.
STOCKHOLDER PROPOSALS
No person who intends to present a proposal for action at a forthcoming
stockholders' meeting of the Company may seek to have the proposal included in
the proxy statement or form of proxy for such meeting unless that person (a) is
a record beneficial owner of at least 1% or $2,000 in market value of shares of
Common Stock, has held such shares for at least one year at the time the
proposal is submitted, and such person shall continue to own such shares
through the date on which the meeting is held (a beneficial owner may submit a
proposal through the record holder of his or her shares); (b) provides the
Company in writing with his or her name, address, the number of shares held and
the date upon which they were acquired, and with documentary support for a
claim of beneficial ownership; (c) notifies the Company of his or her intention
to appear personally at the meeting or by a qualified representative under
Delaware law to present the proposal for action; and (d) submits the proposal
timely. A proposal to be included in the proxy statement or proxy for the
Company's next annual meeting of stockholders will be submitted timely only if
the proposal has been received at the Company's principal executive office no
later than December 24, 1999. If the date of such meeting is changed by more
than 30 calendar days from the date such meeting is scheduled to be held under
the Company's By-Laws, or if the proposal is to be presented at any meeting
other than the next annual meeting of stockholders, the proposal must be
received at the Company's principal executive office at a reasonable time
before the Company begins to print and mail its proxy materials.
Even if the foregoing requirements are satisfied, a person may submit only
one proposal of not more than 500 words with a supporting statement if the
latter is requested by the proponent for inclusion in the proxy materials, and
under certain circumstances enumerated in the Securities and Exchange
Commissions's rules relating to the solicitation of proxies, the Company may be
entitled to omit the proposal and any statement in support thereof from its
proxy statement and form of proxy.
13
<PAGE>
BY ORDER OF THE BOARD OF DIRECTORS
Armonk New York Mark A. Koch
April 28, 1999 Secretary
Copies of the Company's Annual Report on Form 10-K for the year ended
December 31, 1998 as filed with the Securities and Exchange Commission,
including the financial statements, can be obtained without charge by
stockholders (including beneficial owners of the Company's Common Stock) upon
written request to Mark A. Koch, the Company's Secretary, SEMX Corporation, One
Labriola Court, Armonk, New York 10504.
14
<PAGE>
PROXY SEMX CORPORATION
One Labriola Court, Armonk, New York 10504
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD
ON MAY 26, 1999
The undersigned, a holder of Common Stock of SEMX Corporation, a Delaware
corporation (the "Company"), hereby appoints GILBERT D. RAKER and MARK A. KOCH
and each of them, the proxies of the undersigned, each with full power to
appoint their substitutes, and hereby authorizes them to attend, represent and
vote for the undersigned, all of the shares of the Company held of record by
the undersigned on April 9, 1999, at the Annual Meeting of Stockholders of the
Company to be held at The Club 101, 101 Park Avenue, New York at 11:00 a.m.
E.D.T. on May 26, 1999 and any adjournments(s) thereof, as follows:
1. ELECTION OF DIRECTORS, as provided in the Company's Proxy Statement:
[ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY
to vote for all the nominees listed
below.
[Instructions: To withhold authority to vote for an individual nominee, strike a
line through or otherwise strike out the nominee's name below.]
Gilbert D. Raker/Frank J. Polese/Mark A. Pinto/Richard D. Fain/John U.
Moorhead, II/Stephen B. Sands/Andrew Lozyniak.
2. The ratification of the appointment of Goldstein Golub Kessler LLP as the
Company's auditors for the year ending December 31, 1999.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Upon such other matters as may properly come before the meeting or any
adjournments thereof.
The Board of Directors recommends a vote FOR Proposal 1 and 2.
(Continued and to be signed on opposite side)
<PAGE>
The undersigned hereby revokes any other proxy to vote at such Annual Meeting
and hereby ratifies and confirms all that said attorneys and proxies, and each
of them, may lawfully do by virtue hereof. With respect to matters not known at
the time of the solicitations hereof, said proxies are authorized to vote in
accordance with their best judgment.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN ACCORDANCE WITH THE
INSTRUCTIONS ON THE OTHER SIDE HEREOF, IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR THE ELECTION OF THE DIRECTORS NAMED IN PROPOSAL 1, FOR THE
ADOPTION OF PROPOSAL 2, AND AS SAID PROXIES SHALL DEEM ADVISABLE ON SUCH OTHER
BUSINESS AS MAY COME BEFORE THE MEETING.
The undersigned acknowledges receipt of a copy of the Notice of Annual
Meeting and accompanying Proxy Statement dated April 28, 1999 relating to the
Annual Meeting and the 1998 Annual Report to Stockholders.
Date: , 1999
---------------------------------
-------------------------------------------
-------------------------------------------
Signature(s) of Stockholder(s)
[Please sign exactly as name appears herein.
When sign ing as executor, administrator,
trustee, guardians, attorney, please give
full title as such. For joint accounts or as
fiduciaries, all joint or co-fiduciaries
should sign.]
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF SEMX CORPORATION.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
IT IS IMPORTANT FOR YOU TO VOTE.
