SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-12
MISONIX, INC.
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(Name of Registrant as Specified In Its Charter)
-----------------------------------------
(Name of Person(s) Filing Proxy Statement
if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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4) Date Filed:
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MISONIX, INC.
-------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
-------------------------
JANUARY 20, 2004
TO THE SHAREHOLDERS OF
MISONIX, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of MISONIX,
INC., a New York corporation (the "Company"), will be held at the Huntington
Hilton Hotel, 598 Broad Hollow Road, Melville, New York 11747 on Tuesday,
January 20, 2004 at 10:00 a.m., or at any adjournment thereof, for the
following purposes:
1. To elect five Directors to the Board of Directors;
2. To ratify the selection of Ernst & Young LLP as the Company's
independent auditors; and
3. To consider and act upon such other business as may properly come before
this meeting or any adjournment thereof.
The above matters are set forth in the Proxy Statement attached to this
Notice to which your attention is directed.
Only shareholders of record on the books of the Company at the close of
business on December 16, 2003 will be entitled to vote at the Annual Meeting of
Shareholders or at any adjournment thereof. You are requested to sign, date and
return the enclosed Proxy at your earliest convenience in order that your
shares may be voted for you as specified.
By Order of the Board of Directors,
RICHARD ZAREMBA
Secretary
Dated: December 19, 2003
Farmingdale, New York
MISONIX, INC.
1938 New Highway
Farmingdale, New York 11735
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PROXY STATEMENT
------------------------------------
ANNUAL MEETING OF SHAREHOLDERS
Tuesday, January 20, 2004
The Annual Meeting of Shareholders of MISONIX, INC. (the "Company") will
be held on Tuesday, January 20, 2004, at the Huntington Hilton Hotel, 598 Broad
Hollow Road, Melville, New York 11747 at 10:00 a.m. for the purposes set forth
in the accompanying Notice of Annual Meeting of Shareholders. THE ENCLOSED
PROXY IS SOLICITED BY AND ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
FOR USE AT THE ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON JANUARY 20, 2004
AND AT ANY ADJOURNMENTS OF SUCH MEETING. The approximate date on which this
proxy statement and the enclosed proxy are being first mailed to shareholders
is December 19, 2003.
If a proxy in the accompanying form is duly executed and returned, the
shares represented by such proxy will be voted as specified. Any person
executing a proxy may revoke it prior to its exercise either by letter directed
to the Company or in person at the Annual Meeting.
VOTING RIGHTS
On December 16, 2003 (the "Record Date"), the Company had outstanding
6,655,865 shares of its only class of voting securities, namely common stock,
$.01 par value per share (the "Common Stock"). Shareholders are entitled to one
vote for each share registered in their names at the close of business on the
Record Date. The affirmative vote of a plurality of the votes cast at the
Annual Meeting is required for the election of Directors. Therefore, the five
nominees who receive the most votes will be elected. The affirmative vote of a
majority of the votes cast at the Annual Meeting is required for the
ratification of Ernst & Young LLP as the Company's independent auditors; on all
other matters which may come before the Annual Meeting, the affirmative vote of
a majority of the votes cast at the Annual Meeting is required. For purposes of
determining whether proposals have received a majority vote, abstentions will
not be included in the vote totals and, in instances where brokers are
prohibited from exercising discretionary authority for beneficial owners who
have not returned a proxy ("broker non-votes"), those votes will not be
included in the vote totals. Therefore, abstentions and broker non-votes will
be counted in the determination of a quorum and will have no effect on the vote
for the election of Directors or ratification of Ernst & Young LLP.
SECURITY OWNERSHIP
The following table sets forth as of December 8, 2003 certain information
with regard to the ownership of the Company's Common Stock by (i) each
beneficial owner of more than 5% of the Company's Common Stock; (ii) each
Director and nominee for Director; (iii) each executive officer named in the
"Summary Compensation Table" below; and (iv) all executive officers and
Directors of the Company as a group. Unless otherwise stated, the persons named
in the table have sole voting and investment power with respect to all Common
Stock shown as beneficially owned by them.
COMMON STOCK PERCENT
NAME AND ADDRESS(1) BENEFICIALLY OWNED OF CLASS
------------------------------------ -------------------- -----------------
Michael A. McManus, Jr. ............ 1,032,450(2) 13.6%
Gary Gelman ........................ 755,750(3) 11.2%
Howard Alliger ..................... 579,608(4) 8.6%
Ronald Manna ....................... 128,727(5) 1.9%
Richard Zaremba .................... 91,537(6) 1.4%
Daniel Voic ........................ 39,167(7) *
Kenneth Coviello ................... 33,867(8) *
Bernard Berger ..................... 20,000(9) *
T. Guy Minetti ..................... 5,000(10) *
Thomas F. O'Neill .................. 5,000(11) *
All executive officers and Directors
as a group (ten people) ........... 2,691,106(12) 33.6%(13)
----------
*Less than 1%
(1) Except as otherwise stated, the business address of each of the named
individuals in this table is c/o MISONIX, INC., 1938 New Highway,
Farmingdale, New York 11735.
(2) Includes 912,500 shares of Common Stock which Mr. McManus has the right
to acquire upon exercise of stock options, which are currently
exercisable.
(3) Includes 65,000 shares of Common Stock which Mr. Gelman has the right to
acquire upon exercise of stock options which are currently exercisable.
(4) Includes 115,000 shares of Common Stock which Mr. Alliger has the right
to acquire upon exercise of stock options, which are currently
exercisable.
(5) Includes 75,833 shares of Common Stock which Mr. Manna has the right to
acquire upon exercise of stock options, which are currently exercisable.
(6) Includes 74,667 shares of Common Stock which Mr. Zaremba has the right
to acquire upon exercise of stock options, which are currently
exercisable.
(7) Includes 39,167 shares of Common Stock which Mr. Voic has the right to
acquire upon exercise of stock options, which are currently exercisable.
(8) Includes 31,667 shares of Common Stock which Mr. Coviello has the right to
acquire upon exercise of stock options, which are currently exercisable.
(9) Represents 20,000 shares of Common Stock which Mr. Berger has the right to
acquire upon exercise of stock options, which are currently exercisable.
(10) Includes 5,000 shares of Common Stock which Mr. Minetti has the right to
acquire upon exercise of stock options, which are currently exercisable.
(11) Includes 5,000 shares of Common Stock which Mr. O'Neill has the right to
acquire upon exercise of stock options, which are currently exercisable.
(12) Includes the shares of Common Stock indicated in notes
(2),(3),(4),(5),(6),(7),(8),(9),(10) and (11).
(13) Based upon 6,655,865 outstanding shares of Common Stock and presently
exercisable options to acquire 1,343,834 shares of Common Stock held by
the persons noted.
2
PROPOSAL ONE
ELECTION OF DIRECTORS
The Company currently has five Directors. The term of each Director
expires at the Annual Meeting, with Messrs. Alliger, Gelman, Minetti, O'Neill
and McManus standing for reelection for a term of one year. The following table
contains information regarding all Directors and executive officers of the
Company:
DIRECTOR
NAME AGE POSITION WITH COMPANY SINCE
--------------------------------- ----- --------------------------------------------- ---------
Gary Gelman ..................... 56 Chairman of the Board of Directors 1995
Howard Alliger .................. 76 Director 1971
T. Guy Minetti .................. 52 Director 2003
Thomas F. O'Neill ............... 57 Director 2003
Michael A. McManus, Jr. ......... 60 Director, President and Chief Executive 1998
Officer
Richard Zaremba ................. 48 Vice President and Chief Financial Officer, --
Secretary and Treasurer
Kenneth Coviello ................ 51 Vice President -- Medical Devices --
Dan Voic ........................ 41 Vice President of Research and Development --
and Engineering
Bernhard Berger ................. 41 Vice President of Industrial/Scientific --
Products
Ronald Manna .................... 49 Vice President of New Product Development --
and Regulatory Affairs
PRINCIPAL OCCUPATIONS AND BUSINESS EXPERIENCE OF DIRECTORS AND EXECUTIVE
OFFICERS
The following is a brief account of the business experience for the past
five years of the Company's Directors:
GARY GELMAN, the founder of American Claims Evaluation, Inc., a publicly-traded
company engaged in auditing hospital bills and providing vocational
rehabilitation counseling, has been Chairman of the Board and a Director of
that company for more than ten years. Since 1973, Mr. Gelman has also been
Chief Executive Officer of American Para Professional Systems, Inc., a
privately-held entity, which provides nurses who perform physical examinations
of applicants for life and/or health insurance for insurance companies. He
received a BA degree from Queens College. Mr. Gelman became Chairman of the
Board of the Company in March 1996.
HOWARD ALLIGER founded the Company's predecessor in 1955 and the Company was a
sole proprietorship until 1960. The Company name then was Heat
Systems-Ultrasonics. Mr. Alliger was President of the Company until 1982 and
Chairman of the Board until 1996. He has been awarded 25 patents and has
published various papers on ultrasonic technology. In 1959, Mr. Alliger sold
the first sonicator in the United States. For three years, ending in 1991, Mr.
Alliger was the President of the Ultrasonic Industry Association. Mr. Alliger
holds a BA degree in Economics from Allegheny College and attended Cornell
University School of Engineering for four years. He has also established, and
is President of, two privately-held entities, which are engaged in
pharmaceutical research and development.
T. GUY MINETTI currently serves as the Vice Chairman of the Board of Directors
of 1-800-Flowers.Com, a publicly-traded specialty gift retailer based in
Westbury, New York. Before joining 1-800-Flowers.Com in 2000, Mr. Minetti was
the Managing Director of Bayberry Advisors, an investment-banking firm he
founded in 1989 to provide corporate finance advisory services to
small-to-medium-sized businesses. From 1981 through 1989, Mr. Minetti was a
Managing Director of the investment-banking firm, Kidder, Peabody & Company.
While at Kidder, Peabody, Mr. Minetti worked in the investment banking and high
yield bond departments.
3
THOMAS F. O'NEILL, a founding principal of Sandler O'Neil & Partners L.P., an
investment-banking firm, began his Wall Street career at L.F. Rothschild in
1972. At Rothschild, Mr. O'Neill specialized in working with financial
institutions in Rothschild's Bank Service Group. He was appointed Managing
Director of the Bank Service Group, a group comprised of fifty-five
professionals, in 1985 and became a Bear Stearns Managing Director and
Co-Manager of the Group. Mr. O'Neill is a graduate of New York University and a
veteran of the United States Air Force.
MICHAEL A. MCMANUS, JR. became President and Chief Executive Officer of the
Company on October 30, 1998. Prior to this, he served as President and Chief
Executive Officer of New York Bancorp Inc. from 1991 through March 1998 and as
a director of such company from 1990 through March 1998. He also served as
President and Chief Executive Officer of Home Federal Savings Bank, the
principal subsidiary of New York Bancorp Inc., from February 1995 through March
1998. From 1990 through November 1991, Mr. McManus was President and Chief
Executive Officer of Jamcor Pharmaceuticals Inc. Mr. McManus served as an
Assistant to the President of the United States from 1982 to 1985 and held
positions with Pfizer Inc. and Revlon Group. Mr. McManus received a BA in
Economics from the University of Notre Dame and a JD from the Georgetown
University Law Center. He serves as a member of the Board of Directors of the
United States Olympic Committee, American Home Mortgage Holdings, Inc., NWH,
Inc. and Novavax, Inc.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION OF THESE
NOMINEES AS DIRECTORS.
The following is a brief account of the business experience for the past
five years of the Company's executive officers:
MICHAEL A. MCMANUS, JR. became President and Chief Executive Officer of the
Company on October 30, 1998. Prior to this, he served as President and Chief
Executive Officer of New York Bancorp Inc. from 1991 through March 1998 and as
a director of such company from 1990 through March 1998. He also served as
President and Chief Executive Officer of Home Federal Savings Bank, the
principal subsidiary of New York Bancorp Inc., from February 1995 through March
1998. From 1990 through November 1991, Mr. McManus was President and Chief
Executive Officer of Jamcor Pharmaceuticals Inc. Mr. McManus served as an
Assistant to the President of the United States from 1982 to 1985 and held
positions with Pfizer Inc. and Revlon Group. Mr. McManus received a BA in
Economics from the University of Notre Dame and a JD from the Georgetown
University Law Center. He serves as a member of the Board of Directors of the
United States Olympic Committee, American Home Mortgage Holdings, Inc., NWH,
Inc. and Novavax, Inc.
RICHARD ZAREMBA became Vice President and Chief Financial Officer in February
1999. Mr. Zaremba became Secretary and Treasurer in March 1999. From March 1995
to February 1999, he was the Vice President and Chief Financial Officer of
Comverse Information Systems, Inc., a manufacturer of digital voice recording
systems. Previously, Mr. Zaremba was Vice President and Chief Financial Officer
of Miltope Group Inc., a manufacturer of electronic equipment. Mr. Zaremba is a
licensed certified public accountant in the State of New York and holds BBA and
MBA degrees in Accounting from Hofstra University.
KENNETH COVIELLO became Vice President -- Medical Devices in June 2000. Prior
to joining the Company he was Vice President -- Sales and Marketing at FNC
Medical Corp. Mr. Coviello was Vice President of Graham Field Health Products,
Inc. from 1992 to 1998 and President of Lumex, a medical products manufacturer
and a division of Lumex/Cybex Inc., from 1986 to 1991. Mr. Coviello holds a BS
degree in Marketing from Long Island University.
DAN VOIC became Vice President of Research and Development and Engineering in
January 2002. Prior thereto, he served as Engineering Manager and Director of
Engineering with the Company. Mr. Voic has approximately 14 years experience in
both medical and industrial product development. Mr. Voic holds a MS degree
in mechanical engineering from Polytech University "Traian Vuia" of Timisoara,
Romainia and a MS degree in Applied Mechanics from Polytechnic University of
New York.
BERNHARD BERGER became Vice President of Industrial/Scientific Products in May
2001. Mr. Berger has approximately 20 years of sales and engineering experience
in Ultrasound Products and Process Control
4
Instrumentation. From 1995 through 2000, he was Sales Manager-Worldwide for the
Ultrasonic Product Division of Introltek International, an Edgewood, New
York-based manufacturer of process instrumentation. Mr. Berger holds a BS
degree in Chemistry from Adelphi University.
RONALD MANNA became Vice President of New Product Development and Regulatory
Affairs of the Company in July 2002. For more than five years prior thereto,
Mr. Manna served as the Vice President -- Operations of the Company. Mr. Manna
holds a BS degree in Mechanical Engineering from Hofstra University.
***
MEETINGS OF THE BOARD OF DIRECTORS
During the fiscal year ended June 30, 2003, the Board of Directors held
four meetings and the Stock Option Committee held one meeting. The Audit
Committee met four times and the Compensation Committee met once during the
last fiscal year. No Director attended less than 75% of the aggregate of the
total number of meetings of the Board of Directors and meetings of Committees
of which he was a member that were held during the Company's last fiscal
year.
COMMITTEES OF THE BOARD
Currently, the only standing committees of the Board of Directors of the
Company are its Stock Option Committees, the Audit Committee and the
Compensation Committee. The Stock Option Committee for the 1996 Employee Stock
Option Plan, the 1998 Employee Stock Option Plan and the 2001 Employee Stock
Option Plan consists of Messrs. Gelman, Alliger, Minetti and O'Neill. The Stock
Option Committees for both the 1991 Employee Stock Option Plan and the 1996
Non-Employee Director Stock Option Plan consist of Messrs. Gelman, McManus,
Alliger, Minetti and O'Neill, the entire Board of Directors. The Stock Option
Committees are responsible for administering the Company's stock option plans.
The Audit Committee consists of Messrs. Gelman, Minetti and O'Neill. The
functions of the Audit committee are to recommend to the Board of Directors the
selection, retention, or termination of its independent auditors; determine
through consultation with management the appropriateness of the scope of the
various professional services provided by the independent auditors, and consider
the possible effect of the performance of such services on the independence of
the auditors; review the arrangements and the proposed overall scope of the
annual audit with management and the independent auditors; discuss matters of
concern to the Audit Committee with the independent auditors and management
relating to the annual financial statements and results of the audit; obtain
from management, the independent auditors and the Chief Financial Officer their
separate opinions as to the adequacy of the Company's system of internal
accounting control; review with management and the independent auditors the
recommendations made by the auditors with respect to changes in accounting
procedures and internal accounting control; discuss with management any concerns
the Audit Committee may have with regard to the Company's business practices and
hold regularly scheduled meetings, separately and jointly, with representatives
of management, the independent auditors and the Chief Financial Officer to make
inquiries into and discuss their activities; and review the overall activities
of the Company's internal auditors. Our Board of Directors has determined that
all members of the Audit Committee are "independent" as defined by the standards
of the NASDAQ National Market. Our Board of Directors has adopted a written
charter for the Audit Committee.
The Compensation Committee consists of Messrs. Gelman, Alliger, Minetti
and O'Neill. The Compensation Committee is responsible for considering and
authorizing remuneration arrangements for senior management.
DIRECTOR COMPENSATION
Each non-employee Director receives an annual fee of $15,000. In addition,
Mr. Gelman receives a special Chairman's fee of $15,000 per year. For the
fiscal year ended June 30, 2003, Mr. Minetti and Mr. O'Neill were each granted
options to purchase 15,000 shares of Common Stock. Each non-employee Director
is also reimbursed for reasonable expenses incurred while traveling to attend
meetings of the Board of Directors or while traveling in furtherance of the
business of the Company.
5
AUDIT COMMITTEE
The Audit Committee has furnished the following report. The information
contained in the "Audit Committee Report" is not to be deemed to be "soliciting
material" or to be "filed" with the Securities and Exchange Commission, nor is
such information to be incorporated by reference into any future filings under
the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934,
as amended, except to the extent that the Company specifically incorporates it
by reference into such filings.
AUDIT COMMITTEE REPORT
The Audit Committee has reviewed and discussed the audited financial
statements contained in the Company's Annual Report on Form 10-K for the year
ended June 30, 2003 with management; has discussed with the independent
auditors the matters required to be discussed by statement of Auditors
Standards No. 61, Communication with Audit Committees, as amended by statement
on Auditing Standards No. 90, Audit Committee Communications, as well as our
Audit Committee Charter; has discussed with the independent auditors the
independent auditors' independence; and has the written disclosures and the
letter from the independent auditors required by Independence Standards Board
Standard No. 1 (Independence Discussions with Audit Committees).
Based on the review and discussions of the above, the Audit Committee
recommended to the Board of Directors that the audited financial statements be
included in the Company's Annual Report on Form 10-K for the year ended June
30, 2003 for filing with the Securities and Exchange Commission.
Reported upon by the Audit Committee
Gary Gelman
T. Guy Minetti
Thomas F. O'Neill
***
EXECUTIVE COMPENSATION
The following report and the performance graph on page 11 do not
constitute soliciting materials and are not considered filed or incorporated by
reference into any other of the Company's filings under the Securities Act of
1933, as amended, or the Securities Exchange Act of 1934, as amended, unless
the Company states otherwise.
REPORT OF THE COMPENSATION COMMITTEE
COMPENSATION POLICIES. The principal goal of the Company's compensation
program as administered by the Board of Directors is to help the Company
attract, motivate and retain the executive talent required to develop and
achieve the Company's strategic and operating goals with a view to maximizing
shareholder value. The key elements of this program and the objectives of each
element are as follows:
BASE SALARY. Base salaries paid to the Company's executive officers are
intended to be competitive with those paid to executives holding comparable
positions in the marketplace. Individual performance and the Company's
performance are considered when setting salaries within the range for each
position. Annual reviews are held and adjustments are made based on attainment
of individual goals in a manner consistent with operating and financial
performance.
BONUSES. Annual cash bonuses are intended to motivate performance by
creating the potential to earn incentive awards that are contingent upon
personal and business performance. The Company sets goals of revenue and
profitability for each segment.
LONG TERM INCENTIVES. The Company provides its executive officers with
long-term incentive compensation through grants of stock options under the
Company's stock option plans. The grant of stock options aligns the executive's
interest with those of the Company's shareholders by providing the
6
executive with an opportunity to purchase and maintain an equity interest in
the Company's stock and to share in the appreciation of its value. In fiscal
2003 options to purchase 260,000 shares of Common Stock were granted to the
Company's executive officers.
CEO'S COMPENSATION. Michael A. McManus is entitled to receive an annual
base salary of $275,000 and is entitled to receive a minimum bonus of $250,000
and a maximum bonus of $350,000 per year based on the Company's pretax
operating earnings. Mr. McManus also received options to purchase 125,000
shares of Common Stock at a purchase price of $4.66 per share. The factors
involved in determining the CEO's compensation are the Company's revenues and
profits, his lengthy experience and business acumen, his responsibilities, and
the efforts exerted by him in performance of his duties. The options to
purchase the 125,000 shares vest as follows: 50% of the options vested
immediately and the balance vest on November 1, 2004. The options expire on the
tenth anniversary of the date of grant.
Reported upon by the Compensation Committee
Gary Gelman
Howard Alliger
T. Guy Minetti
Thomas F. O'Neill
* * *
7
The following table sets forth for the fiscal years indicated the
compensation paid by the Company to its Chief Executive Officer and other
executive officers with annual compensation exceeding $100,000:
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION (1) LONG TERM COMPENSATION
------------------------------ -------------------------------
AWARDS
------------
SECURITIES
FISCAL YEAR UNDERLYING
NAME AND PRINCIPAL POSITION ENDED JUNE 30 SALARY ($) BONUS ($) OPTIONS (#)
----------------------------------------- --------------- ------------ ---------------- ------------
Michael A. McManus, Jr. 2003 275,000 100,000(2) 150,000
President and Chief 2002 275,000 150,000 150,000
Executive Officer 2001 266,687 250,000 250,000
Richard Zaremba 2003 154,121 1,595 40,000
Vice President, Chief 2002 150,000 28,000 32,000
Financial Officer, Secretary 2001 135,610 33,000 30,000
and Treasurer
Kenneth Coviello 2003 135,093 2,562 35,000
Vice President -- Medical Devices 2002 130,000 15,000 15,000
2001 126,620 0 10,000
Dan Voic 2003 116,645 12,129 10,000
Vice President of Research and 2002 97,729 10,000 6,500
Development and Engineering 2001 92,519 6,000 7,500
Bernhard Berger 2003 108,748 17,021 20,000
Vice President of Industrial/Scientific 2002 105,000 3,000 5,000
Products 2001 15,952 0 10,000
Ronald Manna 2003 114,231 1,000 5,000
Vice President of New Product 2002 121,072 10,000 10,000
Development and Regulatory Affairs 2001 116,340 25,000 0
----------
(1) No other annual compensation is shown because the amounts of perquisites
and other non-cash benefits provided by the Company do not exceed the
lesser of $50,000 or 10% of the total annual base salary and bonus
disclosed in this table for the named officer.
(2) Mr. McManus volunteered to receive a reduced bonus from the guaranteed
amount.
EMPLOYMENT AGREEMENTS
The Company has entered into an employment agreement with Mr. McManus
providing for his employment as President and Chief Executive Officer. The term
of the agreement expires on October 31, 2004 and is automatically renewable for
one-year periods unless 60 days notice is given by the Company or Mr. McManus
declines to renew the agreement. The agreement provides for an annual salary of
$275,000 and a Company provided automobile. The agreement also provides for an
annual bonus based on the Company's pretax operating earnings of up to $350,000
with a minimum guaranteed bonus of $250,000. Mr. McManus also was granted
options to purchase 125,000 shares of the Company's Common Stock at an exercise
price of $4.66 per share. The options vest as follows: 50% vested immediately
and the balance vests on November 1, 2004. Mr. McManus will also receive such
benefits as are generally provided to other executives of the Company. Upon the
occurrence of certain "Changes in Control" events (as defined in the
agreement), Mr. McManus will receive a one-time payment equal to his annual
base salary and a bonus of no less than $250,000.
8
In conformity with the Company's policy, all of its Directors, officers
and employees execute confidentiality and nondisclosure agreements upon the
commencement of employment with the Com-pany. The agreements generally provide
that all inventions or discoveries by the employee related to the Company's
business and all confidential information developed or made known to the
employee during the term of employment shall be the exclusive property of the
Company and shall not be disclosed to third parties without prior approval of
the Company. Mr. Manna has an agreement with the Company which provides for
the payment of six months severance upon his termination for any reason. Mr.
Zaremba has an agreement for payment of six months annual base salary upon a
change in control of the Company. The Company's employment agreement with Mr.
McManus also contains non-competition provisions that preclude him from
competing with the Company for a period of 18 months from the date of his
termination of employment.
OPTION GRANTS IN LAST FISCAL YEAR
The following table contains information concerning options granted to
executive officers named in the Summary Compensation Table during the fiscal
year ended June 30, 2003:
INDIVIDUAL GRANTS
POTENTIAL REALIZABLE
VALUE
AT ASSUMED ANNUAL
NUMBER OF RATES OF STOCK PRICE
SECURITIES % OF TOTAL APPRECIATION FOR
UNDERLYING OPTIONS GRANTED OPTION TERM
OPTIONS TO EMPLOYEES IN EXERCISE EXPIRATION ---------------------
NAME GRANTED (#) FISCAL YEAR PRICE ($/SH) DATE 5% ($) 10% ($)
----------------------------- ------------ ----------------- -------------- ----------- --------- ----------
Michael A. McManus, Jr. ..... 150,000 57.7 5.10 9/30/2012 481,500 1,219,500
Richard Zaremba ............. 40,000 15.4 5.10 9/30/2012 128,400 325,200
Kenneth Coviello ............ 35,000 13.5 5.10 9/30/2012 112,350 284,550
Dan Voic .................... 10,000 3.8 5.10 9/30/2012 32,100 81,300
Bernhard Berger ............. 20,000 7.7 5.10 9/30/2012 64,200 162,600
Ronald Manna ................ 5,000 1.9 5.10 9/30/2012 16,050 40,650
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
No options were exercised by any executive officer named in the Summary
Compensation Table during the fiscal year ended June 30, 2003. The following
table contains information concerning the number and value, at June 30, 2003, of
unexercised options held by executive officers named in the Summary
Compensation Table:
VALUE OF UNEXERCISED
NUMBER OF SECURITIES UNDERLYING IN-THE-MONEY OPTIONS
UNEXERCISED OPTIONS AT FY-END (#) AT FY-END ($)
NAME (EXERCISABLE/UNEXERCISABLE) (EXERCISABLE/UNEXERCISABLE)(1)
--------------------------------- ----------------------------------- -------------------------------
Michael A. McManus, Jr. ......... 850,000/0 12,000/0
Richard Zaremba ................. 64,000/53,000 3,600/0
Kenneth Coviello ................ 26,667/23,333 0/0
Ronald Manna .................... 72,500/10,000 3,600/0
Dan Voic ........................ 37,000/11,000 900/0
Bernhard Berger ................. 21,667/10,000 0/0
----------
(1) Fair market value of underlying securities (the closing price of the
Company's Common Stock on the National Association of Securities Dealers
Automated Quotation System at fiscal year end (June 30, 2003)) minus the
exercise price.
STOCK OPTIONS
In September 1991, in order to attract and retain persons necessary for
the success of the Company, the Company adopted a stock option plan (the "1991
Plan") which covers up to 375,000 shares of Common Stock. Pursuant to the 1991
Plan, officers, Directors, consultants and key employees of the
9
Company are eligible to receive incentive and/or non-incentive stock options.
At June 30, 2003 options to purchase 30,000 shares of Common Stock were
outstanding under the 1991 Plan at an exercise price of $7.38 per share with a
vesting period of two years, options to purchase 327,750 shares of Common Stock
had been exercised and options to purchase 47,250 shares have been forfeited
(of which options to purchase 30,000 shares have been reissued). No more
options can be granted under the 1991 Plan.
In March 1996, the Board of Directors approved the 1996 Employee Incentive
Stock Option Plan covering an aggregate of 450,000 shares of Common Stock (the
"1996 Plan") and the 1996 Non-Employee Director Stock Option Plan (the "1996
Directors Plan") covering an aggregate of 1,125,000 shares of Common Stock of
the Company. At June 30, 2003, options to purchase 312,207 shares of Common
Stock were outstanding at exercise prices ranging from $3.07 to $18.50 with a
vesting period of immediate to three years under the 1996 Plan and options to
acquire 773,500 shares of Common Stock were outstanding at exercise prices
ranging from $0.73 to $7.10 with a vesting period of immediate to two years
under the 1996 Directors Plan. At June 30, 2003, options to purchase 97,195
shares of Common Stock under the 1996 Plan have been exercised and options to
purchase 182,543 shares of Common Stock have been forfeited (of which options
to purchase 141,945 shares have been reissued). At June 30, 2003, options to
purchase 703,500 shares of Common Stock under the 1996 Directors Plan have been
exercised and options to purchase 40,000 shares have been forfeited, of which
none have been reissued.
In October 1998, the Board of Directors adopted and in January 1999, the
shareholders approved the 1998 Employee Stock Option Plan (the "1998 Plan")
covering an aggregate of 500,000 shares of Common Stock of the Company. At June
30, 2003, options to purchase 462,225 shares of Common Stock were outstanding
under the 1998 Plan at exercise prices ranging from $3.07 to $7.31 per share
with a vesting period of immediate to two years. At June 30, 2003, options to
purchase 7,250 shares of Common Stock under the 1998 Plan have been exercised
and options to purchase 58,950 shares of Common Stock under the 1998 Plan have
been forfeited (of which options to purchase 28,925 shares have been reissued).
In October 2000, the Board of Directors adopted and in February 2001, the
shareholders approved the 2001 Employee Stock Option Plan (the "2001 Plan")
covering an aggregate of 1,000,000 shares of Common Stock of the Company. At
June 30, 2003, options to purchase 595,079 shares of Common Stock were
outstanding under the 2001 Plan at exercise prices ranging from $5.10 to $6.07
per share with a vesting period of one to three years. At June 30, 2003,
options to purchase 35,315 shares of Common Stock have been forfeited and no
options have been exercised or reissued.
The plans are administered by the Board of Directors with the right to
designate a committee. The selection of participants, allotments of shares,
determination of price and other conditions relating to options are determined
by the Board of Directors, or a committee thereof, in its sole discretion.
Incentive stock options granted under the plans are exercisable for a period of
up to ten years from the date of grant at an exercise price which is not less
than the fair market value of the Common Stock on the date of the grant, except
that the term of an incentive stock option granted under the plans to a
shareholder owning more than 10% of the outstanding Common Stock may not exceed
five years and its exercise price may not be less than 110% of the fair market
value of the Common Stock on the date of grant. Options shall become
exercisable at such time and in such installments as the Board of Directors
shall provide in the terms of each option agreement.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Gelman, the Chairman of the Board of Directors, Mr. Alliger, Mr.
Minetti and Mr. O'Neill are the members of the Compensation Committee. No
Company executive officer currently serves on the Compensation Committee or any
similar committee of another public company, one of whose executive officers
sits on the Compensation Committee of the Company.
SHARE PERFORMANCE GRAPH
The following graph compares the cumulative total return on the Company's
Common Stock during the last five fiscal years with the NASDAQ Total U.S. and
Foreign Return Index and the NASDAQ Medical Devices, Index during the same
period. The graph shows the value, at the end of
10
each of the last five fiscal years, of $100 invested in the Common Stock or the
indices on June 30, 1999. The graph depicts the change in value of the
Company's Common Stock relative to the noted indices as of the end of each
fiscal year and not for any interim period. Historical stock price performance
is not necessarily indicative of future stock price performance.
1999 2000 2001 2002 2003
------ ------ ------ ------ -----
MISONIX, INC. ..................................... 100 123 113 98 51
NASDAQ Total U.S. and Foreign Return Index ........ 100 148 80 55 61
NASDAQ Medical Devices, Instruments and
Supplies Index ................................... 100 115 108 98 105
[GRAPHIC OMITTED]
NASDAQ TOTAL NASDAQ MEDICAL DEVICES,
MISONIX, INC U.S. AND FOREIGN INSTRUMENTS AND
RETURN INDEX SUPPLIES INDEX
-------------------------------------------------------------------------
1999 100 100 100
2000 123 148 115
2001 113 80 108
2002 98 55 98
2003 51 61 105
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers, Directors and persons who own more than ten percent of
a registered class of the Company's equity securities ("Reporting Persons") to
file reports of ownership and changes in ownership on Forms 3, 4 and 5 with the
Securities and Exchange Commission (the "SEC") and the National Association of
Securities Dealers, Inc. (the "NASD"). These Reporting Persons are required by
SEC regulation to furnish the Company with copies of all Forms 3, 4 and 5 they
file with the SEC and NASD. Based solely on the Company's review of the copies
of the forms it has received, the Company believes that all Reporting Persons
complied on a timely basis with all filing requirements applicable to them with
respect to transactions during fiscal year 2003.
11
PROPOSAL TWO
ACCOUNTANTS
The Board of Directors has selected the firm of Ernst & Young LLP to act
as the Company's independent auditors, subject to ratification by the
shareholders. A representative of Ernst & Young LLP is expected to be available
either personally or by telephone hookup at the Annual Meeting to respond to
appropriate questions from shareholders and will be given the opportunity to
make a statement if he desires to do so.
AUDIT FEES:
Ernst & Young LLP billed the Company $137,800 in the aggregate for
services rendered for the audit of the Company's annual financial statements
for the Company's 2003 fiscal year and the review of the interim financial
statements included in the Company's Quarterly Reports on Form 10-Q for the
Company's 2003 fiscal year.
ALL OTHER FEES:
Ernst & Young LLP has billed the Company $29,800 in the aggregate for
professional services rendered for all other services other than those covered
in the section captioned "Audit Fees" for the Company's 2003 fiscal year. These
other services include (i) assistance with regulatory filings, (ii) audit of
the Company's 401K plan, (iii) consultations on the effects of various
accounting issues and changes in professional statements and (iv) income tax
returns for Labcaire, the Company's UK subsidiary.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE PROPOSAL TO
APPROVE THE RETENTION OF ERNST & YOUNG LLP.
MISCELLANEOUS INFORMATION
As of the date of this Proxy Statement, the Board of Directors does not
know of any business other than that specified above to come before the Annual
Meeting, but, if any other business does lawfully come before the Annual
Meeting, it is the intention of the persons named in the enclosed Proxy to vote
in regard thereto in accordance with their judgment.
The Company will pay the cost of soliciting proxies in the accompanying
form and as set forth below. In addition to solicitation by use of the mails,
certain officers and regular employees of the Company may solicit proxies by
telephone, telegraph or personal interview without additional remuneration
therefor.
SHAREHOLDER PROPOSALS
Shareholder proposals with respect to the Company's next Annual Meeting of
Shareholders must be received by the Company no later than August 23, 2004 to be
considered for inclusion in the Company's next proxy statement. Under the SEC's
proxy rules, proxies solicited by the Board of Directors for the 2004 Annual
Meeting may be voted at the discretion of the persons named in such proxies (or
their substitutes) with respect to any shareholder proposal not included in the
Company's proxy statement if the Company does not receive notice of such
proposal on or before November 4, 2004, unless the 2004 Annual Meting is not
held within 30 days before or after the anniversary date of the 2003 Annual
Meeting.
A copy of the Company's Annual Report to Shareholders for the fiscal year
ended June 30, 2003 has been provided to all shareholders. Shareholders are
referred to the Report for financial and other information about the Company,
but such Report is not incorporated in this Proxy Statement and is not part of
the proxy soliciting material.
By Order of the Board of
Directors,
Dated: December 19, 2003
Farmingdale, New York RICHARD ZAREMBA
Secretary
12
MISONIX, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Gary Gelman and Michael A. McManus, Jr.,
as Proxies, each with the power to appoint a substitute, and hereby authorizes
them to represent and to vote, as designated below, all the shares of Common
Stock held of record by the undersigned on December 16, 2003 at the Annual
Meeting of Shareholders to be held on January 20, 2004 or any adjournment
thereof.
PLEASE MARK, SIGN, DATE AND RETURN
THE PROXY CARD PROMPTLY IN THE ENVELOPE PROVIDED
1. Election of Directors: GARY GELMAN, MICHAEL A. MCMANUS, JR., HOWARD ALLIGER,
T. GUY MINETTI, THOMAS F. O'NEILL
FOR all Nominees WITHHOLD AUTHORITY (INSTRUCTION: To withhold authority
listed (except as to vote to vote for one or more individual
marked to the contrary) for all Nominees listed nominees write the nominee's name(s)
[ ] [ ] in the line provided below).
--------------------------------------------------------------------------------
2. Approval of the selection of Ernst & Young LLP as the Company's independent
accountants.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER
BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING. THIS PROXY, WHEN PROPERLY
EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED
SHAREHOLDER. IF NO DIRECTION IS MADE, THE PROXY WILL BE VOTED FOR THE ELECTION
OF ALL DIRECTORS AND PROPOSAL 2.
PLEASE SIGN EXACTLY AS NAME
APPEARS HEREON.
-------------------------------
(Signature)
-------------------------------
(Signature if held jointly)
Dated:
---------------------------
When shares are held by joint
tenants, both should sign. When
signing as attorney, as
executor, administrator,
trustee, or guardian, please
give full title as such. If a
corporation, please sign in
full corporate name by
President or other authorized
officer. If a partnership,
please sign in partnership name
by authorized person. Please
note any change in your address
alongside the address as it
appears in the proxy.
PLEASE MARK IN BLUE OR BLACK
INK, SIGN, DATE AND RETURN THE
PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.