<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendments No. )
<TABLE>
<S> <C>
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
Same
-----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
</TABLE>
Payment of Filing Fee (check the appropriate box):
<TABLE>
<S> <C> <C>
/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:
----------------------------------------------------------
(2) Aggregate number of securities to which transaction
applies:
----------------------------------------------------------
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
----------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
----------------------------------------------------------
(3) Filing Party:
----------------------------------------------------------
(4) Date Filed:
----------------------------------------------------------
</TABLE>
<PAGE>
SEMX CORPORATION
ONE LABRIOLA COURT
ARMONK, NEW YORK 10504
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON
MAY 16, 2000
------------------------
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 16, 2000, 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 six 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, John U. Moorhead II, Steven B. Sands, Mark 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, 2000.
(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 March 27, 2000 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.
<TABLE>
<S> <C>
Date: April 17, 2000
By order of the Board of Directors,
Mark A. Koch, Secretary
</TABLE>
<PAGE>
SEMX CORPORATION
ONE LABRIOLA COURT
ARMONK, NEW YORK 10504
(914) 273-5500
------------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON
MAY 16, 2000 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 16, 2000 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, 2000. 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.
<PAGE>
This Proxy Statement, the accompanying Notice of Annual Meeting of
Stockholders, the Proxy and the 1999 Annual Report to Stockholders including
financial statements, are expected to be mailed commencing on or about
April 17, 2000 to stockholders of record on March 27, 2000.
VOTING SECURITIES
March 27, 2000, 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 6,116,741
shares of Common Stock outstanding (which figure excludes 334,600 treasury
shares not entitled to vote). The Company has no shares of Preferred Stock, $.10
par value, issued.
The following table sets forth, as of March 27, 2000, 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
BENEFICIAL OWNER AND AMOUNT AND NATURE OF
IDENTITY OF GROUP (1)(2) BENEFICIAL OWNERSHIP PERCENT OF CLASS
- ------------------------ -------------------- ----------------
<S> <C> <C>
Richard J. Brown (3).................................... 5,000 *
Richard D. Fain (4)..................................... 38,700 *
Kenneth J. Huth (5)..................................... 55,665 *
Mark A. Koch (6)........................................ 1,250 *
Andrew Lozyniak......................................... 82,500 1.3%
John U. Moorhead, II (7)................................ 105,100 1.7%
Mark A. Pinto (8)....................................... 81,500 1.3%
Frank J. Polese (9)..................................... 437,359 7.1%
Gilbert D. Raker (10)................................... 716,425 11.5%
Steven B. Sands (11).................................... 213,250 3.5%
All Executive officers and Directors
as a group (10 persons) (12).......................... 1,736,749 27.1%
Dimensional Fund Advisors, Inc. (13).................... 491,550(14) 8.1%
</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 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) Consists of underlying options to purchase 5,000 shares of Common Stock.
(4) 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 22,500 shares of Common Stock.
2
<PAGE>
(5) Includes underlying options to purchase 21,000 shares of Common Stock, and
options held by his spouse to purchase 2,375 shares of Common Stock.
(6) Consists of underlying options to purchase 1,250 shares of Common Stock.
(7) Includes 3,600 shares of Common Stock owned by his spouse, as to which
Mr. Moorhead disclaims beneficial ownership and underlying options to
purchase 47,500 shares of Common Stock.
(8) 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
option to purchase 20,000 shares of Common Stock but excludes any shares
owned by Sutro & Company, Mr. Pinto's employer.
(9) Includes underlying options to purchase 63,125 shares of Common Stock.
(10) Includes underlying options to purchase 92,025 shares of Common Stock.
(11) 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
22,500 shares of Common Stock.
(12) Includes an aggregate of 294,900 shares of Common Stock issuable upon
exercise of options described in notes (3), (4), (5), (6), (7), (8), (9),
(10) and (11).
(13) The address of Dimensional Fund Advisors, Inc. ("Dimensional") is 1299
Ocean Avenue, 11(th) Floor, Santa Monica, CA 90401.
(14) The number of shares is based upon a Schedule 13-G filed by Dimensional on
February 4, 2000 as of December 31, 1999. All shares reported are owned by
investment companies and other investment vehicles managed by Dimensional,
as to which Dimensional disclaims beneficial ownership therein.
PROPOSAL 1
ELECTION OF DIRECTORS
The six (6) 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.
3
<PAGE>
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............ Chairman of the Board, President and Chief Executive
56 Officer
Frank J. Polese............. 43 Vice Chairman and Director
John U. Moorhead, II........ 47 Director
Steven B. Sands............. 41 Director
Mark A. Pinto............... 43 Director
Andrew Lozyniak............. 69 Director
</TABLE>
GILBERT D. RAKER, Chairman of the Board, and Chief Executive Officer of the
Company since May 1990, President since December 31, 1995. Mr. Raker is a
director of CyberSentry, Inc., a communications software company.
FRANK J. POLESE--Vice Chairman of the Company since January 1996 and a
Director of the Company since July 1993. In December 1999, in addition to
remaining Vice Chairman of the Company, Mr. Polese was appointed President of
the Company's Material Group. 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.
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 bookstore chain) and Command Security Corporation (security guard
service company).
MARK 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.
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 had been 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 was a member of the Board of Directors of CTS
Corporation.
RICHARD FAIN who has served as a Director of the Company since October 1991
did not stand for reelection.
4
<PAGE>
CERTAIN INFORMATION CONCERNING THE BOARD OF DIRECTORS
The Company held 6 meetings of the Board of Directors during the fiscal year
ended December 31, 1999 ("Fiscal 1999") and conducted other business by
unanimous written consent. All of the directors attended at least 75% of the
aggregate of all Board Meetings and meetings of Committees of the Board of which
he is a member, with the exception of Mr. Sands and Mr. Fain.
The Company has a standing audit committee of the Board of Directors,
comprised of Messrs. Lozyniak, Sands and Pinto, of which Mr. Lozyniak is the
Chairman. During Fiscal 1999, the audit committee met 2 times.
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 Fiscal 1999, 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............ 56 Chairman of the Board, President and Chief Executive
Officer
Frank J. Polese............. 43 Vice Chairman of the Board, President of the Materials
Group and Polese Company
Kenneth J. Huth............. 61 Executive Vice President
Mark A. Koch................ 41 Chief Accounting Officer and Secretary
Richard J. Brown............ 50 President, ASP
</TABLE>
KENNETH J. HUTH--Executive Vice President of the Company since
January 1994. President of the Company from January 1990 to December 1993. 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.
RICHARD J. BROWN--President of the Services Group and the ASP subsidiary
since May 1999. From March 1998 to March 1999 Mr. Brown was the Chief Operating
Officer at Geroge H. Fuller and Son Company, a gold jewelry fabricating company.
From June 1995 until he joined George H. Fuller and Son Company, he was the Vice
President of Finance of ASP. Prior to joining ASP, Mr. Brown held a number of
positions with Kendal Company, last serving as Director of Risk and Asset
Management.
MARK A. KOCH--Chief Accounting Officer and Secretary of the Company since
February 1999. Mr. Koch joined the Company in September 1998 as Corporate
Controller. Prior to joining the Company, Mr. Koch was Corporate Controller of
Reunion Industries, Inc. a publicly traded manufacturer of specialty plastics
and molded products. Prior to joining Reunion Industries in December 1996,
Mr. Koch was Assistant Controller of Terex Corporation, a publicly traded
manufacturer of equipment for the construction, infrastructure and mining
industries.
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.
5
<PAGE>
Based solely on a review of the copies of such forms furnished to the
Company, the Company believes that during Fiscal 1999, 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 1997, 1998
and 1999 fiscal years, for services rendered in all capacities to the Company
during such year.
(A) SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION AWARDS
---------------------------------- ----------------------------------
SECURITIES
UNDERLYING
NAME AND FISCAL OPTIONS/ ALL OTHER
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($)* SAR'S (#) COMPENSATION ($)(1)
- ------------------------------------ -------- ---------- ---------- ---------- -------------------
<S> <C> <C> <C> <C> <C>
Gilbert D. Raker,................... 1999 $295,662 $ -- 45,000
Chairman, President and Chief 1998 $271,992 $75,000 3,750 (3)
Executive Officer 1997 $259,384 $75,000 32,800
Frank J. Polese..................... 1999 $197,230 $ -- 50,000 $250,000 (4)
Vice Chairman, President of Polese 1998 $188,154 $25,000 3,750 (3)
Company and the President of the 1997 $156,923 $25,000 5,000
Company's Material Group (2)
Kenneth J. Huth,.................... 1999 $164,568 $ -- 25,000
Executive Vice President 1998 $160,356 $35,000 2,000 (3)
1997 $152,057 $30,000 5,000
Richard J. Brown,................... 1999 $111,654 $ -- 20,000
President, ASP
Mark A. Koch,....................... 1999 $122,574 $15,000 2,500
Chief Accounting Officer
</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 President of the Company's Material Group in
December 1999.
(3) These options were received in exchange for options previously granted in
fiscal 1998.
(4) Represents payments under an agreement relating to pre-tax profits in
connection with sales of copper-tungsten products, see "Certain
Transactions." An additional $250,000 was accured as of fiscal year 1999 as
being owed to Mr. Polese.
6
<PAGE>
(B) OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
PERCENTAGE OF
TOTAL OPTIONS/
SAR'S
NUMBER OF GRANTED TO
SECURITIES EMPLOYEES IN EXERCISE OR HYPOTHETICAL
UNDERLYING FISCAL BASE PRICE EXPIRATION VALUE AT DATE
NAME OF INDIVIDUAL OPTIONS/SAR YEAR (2) ($ SHARE) DATE OF GRANT (1)
- ------------------------------------ ----------- -------------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Gilbert Raker....................... 25,000 11.2% $1.787 04/09/04 $22,250
20,000 $4.000 09/02/09 $40,600
Frank Polese........................ 25,000 12.4% $1.625 04/04/09 $27,000
25,000 $4.000 09/02/09 $50,750
Kenneth J. Huth..................... 20,000 6.2% $1.625 04/09/09 $16,200
5,000 $4.000 09/04/09 $10,150
Richard J. Brown.................... 10,000 5% $3.000 03/15/09 $20,000
10,000 $1.625 04/04/09 $10,800
Mark A. Koch........................ 2,500 .6% $1.625 04/04/09 $ 2,700
</TABLE>
- ------------------------
(1) The estimated present value at grant of options during fiscal year 1999 has
been calculated using the Black-Scholes option pricing model, based upon the
following assumptions; estimated time until exercise: 3 years for 25,000
options and 5 years for the remaining 20,000 options 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 rate of 4.96% for Mr. Raker for
25,000 options was used and 5.8% for the remaining 20,000 options, 5% for
Mr. Polese for 25,000 options and 5.86% for the remaining 25,000 options,
4.96% for Mr. Huth for 20,000 options and 5.86% for the remaining 5,000
options, 5.03% for Mr. Brown's 10,000 options and 5% for the remaining
10,000 options and 5% for Mr. Koch's options, representing in each case
Treasury Note rates of 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."
(2) Based on the aggreagate of 403,000 options granted under SEMX's 1999 Stock
Options Plans.
(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 1999 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 1999, and
(c) the aggregate dollar value of all such unexercised options that
7
<PAGE>
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 1999:
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED IN
NUMBER OF UNEXERCISED THE MONEY OPTIONS/SARS
SHARES OPTIONS/SARS AT FISCAL AT FISCAL YEAR-END
ACQUIRED/ VALUE YEAR-END (#) EXERCISABLE/
NAME EXERCISCE (#) REALIZE (1) EXERCISABLE/UNEXERCISABLE UNEXERCISABLE (2)
- ---- ------------- ----------- ------------------------- -----------------------
<S> <C> <C> <C> <C>
Gilbert D. Raker............. 5,000 $15,315 89,838/27,812 $378,701/$153,755
Frank J. Polese.............. -- -- 83,438/27,812 $278,398/$157,809
Kenneth J. Huth.............. -- -- 15,500/21,500 $63,789/$122,917
Mark A. Koch................. -- -- 625/4,375 $2,852/$23,089
Richard J. Brown............. -- -- --/20,000 $--/$102,510
</TABLE>
- ------------------------
(1) Based on the fair market value of SEMX's common stock on the date of
exercise, less the exercise price payable for such shares.
(2) Based on the fair market value of SEMX's common stock at fiscal year end of
$7.438 per share less the exercise price payable for such shares
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
As of August 1, 1999, the Company entered into a three-year employment
agreement with Gilbert Raker (the "Agreement"). Mr. Raker's employment will
continue on a year to year basis after the expiration of the initial term of the
Agreement. Pursuant to the Agreement Mr. Raker will receive an initial annual
salary of $312,000 (the "Base Salary"), which effective August 1, 2000 and
August 1, 2001 respectively, shall be increased by the percentage increase of
the Consumer Price Index ("CPI") or $12,000 per annum, whichever is greater.
Mr. Raker shall receive annual bonuses as may be determined by the Compensation
Committee. The Company will reimburse Mr. Raker for certain expenses incurred.
In the event of a change of control (as defined), the Company will pay
Mr. Raker (I) his full Base Salary through the date of termination, (ii) any
bonus due to him, (iii) an amount equal to the highest of the annual incentive
award earned by him under any Incentive Plans in the five calendar years ended
as of December 31(st), immediately preceding the date of termination, and
(iv) in lieu of further salary payments, the Company shall pay, as severance, a
lump sum equal to Mr. Raker's Base Salary for a period of three years. In the
event that his employment is terminated by disability (as defined), the
agreement provides for payment to Mr. Raker of his Base Salary for a period of
two and one-half (2 1/2) years following the date of termination. In the event
of his death, in addition to life insurance benefits payable to his estate, the
Company shall pay his estate a lump sum representing his Base Salary and
pro-rated bonus for a period of two years following the date of his death.
Mr. Raker has agreed not to engage in a business that is competitive with the
Company during the term of his employment agreement and for a period of one year
thereafter.
8
<PAGE>
In connection with his employment agreement Mr. Raker also entered into an
Intellectual Property Protection Agreement, pursuant to which he agreed that all
inventions and works of authorship which he makes, during his employment by the
Company and for one year after the termination of his employment, which relate
to the business of the Company or are related to actual or anticipated research
and development, will be the sole and exclusive property of the Company. The
Intellectual Property Protection Agreement also restricts Mr. Raker from using
Company trade secrets indefinitely after termination of his employment and
restricts his use of confidential information for a period of five (5) years
following his termination of employment with the Company.
As of August 1, 1999, the Company and Polese Company entered into a
five-year employment agreement with Frank Polese (the "Agreement").
Mr. Polese's employment will continue on a year to year basis after the
expiration of the initial term of the Agreement. Pursuant to the Agreement,
Mr. Polese will receive an annual salary of $218,000 (the "Base Salary"), which
may be increased, but not decreased, in the future by the Company. In addition,
Mr. Polese may be paid an annual bonus at the discretion of the Compensation
Committee.
In the event of a termination due to change in control (as defined) the
Company will pay Mr. Polese (I) his full Base Salary through the date of
termination; (ii) any bonus for a past calendar year which is due, (iii) an
amount equal to the annual incentive award earned by him under any of the
Company's Incentive Plans in the calendar year ended as of December 31(st)
immediately preceding the date of termination, and (iv) in lieu of further
salary payments, a severance lump sum payment equal to Mr. Polese's Base Salary
for a period of three years. In the event Mr. Polese becomes incapable of
fulfilling his obligations because of injury or physical or mental illness for a
period of three consecutive months or six months in the aggregate during any
twelve consecutive months, the Company may terminate his employment upon thirty
(30) days written notice. Mr. Polese has agreed not to engage in any business
that is competitive with the Company during the term of his employment agreement
and for one year thereafter.
In connection with his employment agreement Mr. Polese also entered into an
Intellectual Property Protection Agreement, pursuant to which he agreed that all
inventions and works of authorship which he makes, during his employment by the
Company and for one year after the termination of his employment, which relate
to the business of the Company or are related to actual or anticipated research
and development, will be the sole and exclusive property of the Company. The
Intellectual Property Protection Agreement also restricts Mr. Polese from using
Company trade secrets indefinitely after termination of his employment and
restricts his use of confidential information for a period of five (5) years
following his termination of employment with the Company.
On December 15, 1994, the Company entered into a three-year employment
agreement with Kenneth Huth, which agreement expired on December 15, 1997.
Subsequent to 1997, Mr. Huth has continued to be employed on a year to year
basis. He received an annual salary of $164,568 in fiscal 1999. Future annual
salary increases are at the discretion of the Compensation Committee.
Mr. Huth's agreement contains change of control and non-competition provisions.
As of May 1, 1999 the Company's American Silicon Products, Inc. subsidiary
("ASP") entered into an employment agreement with Richard Brown. The agreement
is for an initial term of one year, thereafter renewing daily for a term of one
year. Pursuant to the agreement, Mr. Brown is employed as President and Chief
Executive Officer of ASP and will receive an annual salary of $150,000 (the
"Base Salary"). The Base Salary may be increased but not decreased in the future
by ASP. Mr. Brown may be paid an annual bonus at the discretion of the Board of
Directors. Mr. Brown's agreement contains the same terms relating to termination
due to change of control as contained in Mr. Polese's agreement, except that in
the event of termination due to change of control, in lieu of further salary
payments, Mr. Brown will receive a lump sum severance payment equal to his Base
Salary for one year. Mr. Brown's agreement also contains the same disability
provisions as contained in Mr. Polese's agreement.
Mr. Brown has also entered into an Intellectual Property Protection
Agreement that contains the same provisions as contained in Messrs. Raker's and
Polese's agreements.
9
<PAGE>
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 in fiscal 1998, 652,750 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 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 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 in fiscal 1998, 172,500 options have been granted
under the Non-Qualified Plan.
STOCK OPTIONS OUTSIDE OF A PLAN
After giving effect to the exchange and repricing of certain options in
fiscal 1998, the Company has issued options for 211,250 shares outside of its
option plans to certain Directors of the Company, consultants and employees.
10
<PAGE>
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 fiscal 1999, the Company
paid Mr. Polese $250,000 pursuant to the aforementioned agreement, with an
additional $250,000 accrued.
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. Transactions with
affiliates have been and will continue to 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 August 1999, the Company entered into a three-year
employment agreement with Mr. Raker (see "Employment Agreements"). Mr. Raker
currently receives a base salary of $312,000 per annum, with increases equal to
the CPI or $12,000, whichever is greater, on August 1, 2000 and August 1, 2001,
respectively. Future increases in his salary will be 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 1999 fiscal year.
In addition to receiving a bonus, Mr. Raker participates in the Company's
Stock Option Plans.
11
<PAGE>
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 contributions 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.
<TABLE>
<S> <C>
THE COMPENSATION COMMITTEE: John U. Moorhead, II
Richard D. Fain
</TABLE>
12
<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 1994 = 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 that the Company is engaged in. The common stocks of the following
companies have been included in the peer group index: Aavid Thermal
Technologies, Amkor Technology, AVX Corp., Brush Wellman, Inc., CTS Corp.,
Kulicke & Soffa Ind., and Sheldahl, Inc.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
COMPARISON OF CUMULATIVE TOTAL RETURNS*
<S> <C> <C> <C>
YEARS SEMX CORP S&P 500 PEER GROUP
1994 $100.00 $100.00 $100.00
1995 $148.00 $137.58 $95.58
1996 $174.00 $169.17 $82.28
1997 $120.99 $225.60 $87.91
1998 $46.00 $290.08 $85.10
1999 $119.01 $351.12 $226.37
*Total return based on $100 initial investment &
reinvestment of dividends.
</TABLE>
A $100 investment in SEMX Corporation's Common Stock in December 1994 would
be equal to $119 in December 1999. The Board of Directors recognizes that the
market price of stock is influenced by many factors, only one of 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.
13
<PAGE>
PROPOSAL 2
RATIFICATION OF THE APPOINTMENT OF
GOLDSTEIN GOLUB KESSLER P.C. 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, 2000. 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 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, 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 18,
2000. 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.
14
<PAGE>
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
Commission'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.
BY ORDER OF THE BOARD OF DIRECTORS
Mark A. Koch, Secretary
Armonk New York
April 17, 2000
Copies of the Company's Annual Report on Form 10-K for the year ended
December 31, 1999 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.
15
<PAGE>
PROXY
SEMX CORPORATION
ONE LABRIOLA COURT
ARMONK, NEW YORK 10504
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON MAY 16, 2000
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 March 27, 2000, at the Annual Meeting of Stockholders of the
Company to be held at the Club 101, 101 Park Avenue, New York, New York at
11:00 a.m. E.D.T on May 16, 2000 and any adjournment(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 ANY INDIVIDUAL NOMINEE, STRIKE
A LINE THROUGH OR OTHERWISE STRIKE OUT THE NOMINEE'S NAME BELOW)
Gilbert D. Raker/Frank J. Polese/Mark A. Pinto/John U. Moorhead, II/Steven 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, 2000
/ / 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 Proposals 1 and 2
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 this time of the solicitation hereof, said proxies are authorized to
vote in accordance with their best judgment. (continued and to be signed on
opposite side)
<PAGE>
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 17, 2000 relating to the
Annual Meeting and the 1999 Annual Report to Stockholders.
Dated: ________________, 2000
___________________________________
___________________________________
Signature of Stockholder(s)
(Please sign exactly as name
appears herein. When signing as
executor, administrator, trustee,
guardian, 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.
