SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. ____)
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
SALEX HOLDING CORPORATION
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(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
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|X| No fee required.
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was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
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4) Date Filed:
SALEX HOLDING CORPORATION
P.O. BOX 18029
50 LASER COURT
HAUPPAUGE, NEW YORK 11788-8829
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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AT 10:00 A.M. MARCH 30, 1999
--------------------------
TO THE SHAREHOLDERS OF
SALEX HOLDING CORPORATION:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the
"Annual Meeting") of Salex Holding Corporation, a Delaware corporation
(hereinafter "Company"), will be held at the Smithtown Sheraton Hotel, 110
Vanderbilt Motor Parkway, Smithtown, New York, on March 30, 1999 at 10:00 a.m.
1. To elect directors of the Company to hold office until the next
Annual Meeting or until their respective successors are duly elected and
qualified;
2. To ratify the appointment of Feldman Sherb Ehrlich & Co., P.C. as
the Company's independent certified public accountants for the ensuing year; and
3. To transact such other business as may properly come before the
meeting and any continuations and adjournments thereof.
The Board of Directors has fixed the close of business on March 15,
1999 as the record date for the determination of shareholders entitled to notice
of, and to vote at, the Annual Meeting or any adjournments thereof.
The list of shareholders entitled to vote at the Annual Meeting will be
available for examination by any shareholder at the Company's offices at 50
Laser Court, Hauppauge, New York 11788, for eleven (11) days prior to March 30,
1999. Therefore, whether you expect to attend the Annual Meeting in person or
not, please sign fill out, date and promptly return enclosed proxy card in the
enclosed self-addressed, envelope. You may revoke your proxy at any time.
March 19, 1999
By Order of the Board of Directors,
/s/ Angelo Crimi
Angelo Crimi
Secretary
SALEX HOLDING CORPORATION
P.O. BOX 18029
50 LASER COURT
HAUPPAUGE, NEW YORK 11788-8829
(516) 436-5000
March 19, 1999
Dear Shareholders:
On behalf of the Board of directors and management of Salex Holding
Corporation (the "Company"), I cordially invite you to attend the Annual Meeting
of Shareholders to be held on March 30, 1999, at 10:00 a.m., at the Smithtown
Sheraton Hotel, 110 Vanderbilt Motor Parkway, Smithtown, New York.
The matters to be acted upon at the meeting are fully described in the
attached Notice of Annual Meeting of Shareholders and Proxy Statement. In
addition, the directors and executive officers of the company will be present to
respond to any questions that you may have.
We look forward to greeting you at the meeting.
Sincerely,
/s/ Salvatore Crimi
Salvatore Crimi
Chairman of the Board and
Chief Executive Officer
SALEX HOLDING CORPORATION
P.O. BOX 18029
50 LASER COURT
HAUPPAUGE, NEW YORK 11788-8829
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PROXY STATEMENT
--------------------
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AT 10:00 A.M. ON MARCH 30, 1999
Approximate Mailing Date of Proxy Statement and Form of Proxy: March 19, 1999.
INFORMATION CONCERNING VOTE
GENERAL
This Proxy Statement and the enclosed form of proxy is furnished in
connection with the solicitation of proxies by the Board of Directors of Salex
Holding Corporation, a Delaware corporation (hereinafter, the "Company"), for
use at the Annual Meeting of Shareholders to be held at the Smithtown Sheraton
Hotel, 110 Vanderbilt Motor Parkway, Smithtown, New York on Tuesday, March 30,
1999, at 10:00 a.m., and at any and all adjournments thereof (the "Annual
Meeting"), with respect to the matters referred to in the accompanying notice.
VOTING RIGHTS AND OUTSTANDING SHARES
Only shareholders of record at the close of business on March 15, 1999
are entitled to notice of and to vote at the Annual Meeting. As of the close of
business on March 10, 1999, 15,964,500 shares of common stock, par value $.01
per share (the "Common Stock"), 1,000 shares of Series B Convertible Preferred
Stock, par value $.01 per share (the "Series B Preferred Stock") and 25,000
shares of Series C Preferred Stock, par value $.01 per share (the "Series C
Preferred Stock") were issued and outstanding. Each share of Common Stock
entitles the record holder thereof to 1 vote on all matters properly brought
before the Annual Meeting. Each share of Series B Preferred Stock entitles the
record holder thereof to 2,059.106 votes on all matters properly brought before
the Annual Meeting. Each share of Series C Preferred Stock entitles the record
holder to 100 votes on all matters properly brought before the Annual Meeting.
REVOCABILITY OF PROXIES
A shareholder who executes and mails a proxy in the enclosed return
envelope may revoke such proxy at any time prior to its use by notice in writing
to the Secretary of the Company, at the above address, or by revocation in
person at the Annual Meeting. Unless so revoked, the shares represented by duly
executed proxies received by the Company prior to the Annual Meeting will be
presented at the Annual Meeting and voted in accordance with the shareholder's
instructions marked thereon. If no instructions are marked thereon, proxies will
be voted (1) FOR the election as directors, the nominees named below under the
caption
"ELECTION OF DIRECTORS;" (2) FOR the ratification of the appointment of
Feldman Sherb Ehrlich & Co., P.C. as the Company's independent certified
public accountants for the ensuing year; and (3) In their discretion, the
proxies are authorized to consider and vote upon such matters incident to the
conduct of the meeting and upon such other business matters or proposals as may
properly come before the meeting that the Board of Directors of the Company does
not know at a reasonable time prior to this solicitation will be presented at
the meeting.
SHAREHOLDER PROPOSALS
If any shareholder of the Company intends to present a proposal for
consideration at the next Annual Meeting of Shareholders and desires to have
such proposal included in the Proxy Statement and form of Proxy distributed by
the Board of Directors with respect to such meeting, such proposal must be
received at the Company's principal executive offices, P.O. Box 18029, 50 Laser
Court, Hauppauge, New York 11788-8829, Attention: Salvatore Crimi, not later
than March 23, 1999.
VOTING PROCEDURES
All votes shall be tabulated by the inspector of elections appointed
for the meeting, who shall separately tabulate affirmative and negative votes,
abstentions and broker non-votes. The presence of a quorum for the Annual
Meeting, defined here as a majority of the holders of the stock issued and
outstanding and entitled to vote at the meeting, being present in person or
represented by proxy, is required. Votes withheld from director nominees and
abstentions will be counted in determining whether a quorum has been reached.
Broker-dealer non-votes are not counted for quorum purposes.
Assuming a quorum has been reached, a determination must be made as to
the results of the vote on each matter submitted for shareholder approval.
Director nominees must receive a plurality of the votes cast at the meeting,
which means that a vote withheld from a particular nominee or nominees will not
affect the outcome of the meeting
COST OF SOLICITATION OF PROXIES
The solicitation of proxies pursuant to this Proxy Statement is made by
and on behalf of the Company's Board of Directors. The cost of such solicitation
will be paid by the Company. Such cost includes the preparation, printing and
mailing of the Notice of Annual Meeting, Proxy Statement, Annual Report and form
of proxy. The solicitation will be conducted principally by mail, although
directors, officers and employees of the Company (at no additional compensation)
may solicit proxies personally or by telephone or telegram. Arrangements will be
made with brokerage houses and other custodians, nominees and fiduciaries for
the forwarding of proxy material, to the beneficial owners of shares held of
record by such fiduciaries, and the Company may reimburse such persons for their
reasonable expenses in so doing.
Each holder of the Company's Common Stock who does not expect to be
present at the Annual Meeting or who plans to attend, but who does not wish to
vote in person, is urged to fill in, date and sign the enclosed proxy and return
it promptly in the enclosed return envelope.
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PROPOSAL 1
ELECTION OF THE BOARD OF DIRECTORS
The Board of Directors has nominated six (6) persons, Salvatore Crimi,
Angelo Crimi, Franklin Pinter, Francis Fitzpatrick, Pershing Sun and Syd
Mandelbaum to be elected as Directors at the Annual Meeting and to hold office
until the next Annual Meeting or until their successors have been duly elected
and qualified. It is intended that each proxy received by the Company will be
voted For the election, as directors of the Company, of the nominees listed
below, unless authority is withheld by the shareholder executing such proxy.
Shares may not be voted cumulatively. Each of such nominees has consented to
being nominated and to serve as a director of the Company if elected. If any
nominee should become unavailable for election or unable to serve, it is
intended that the proxies will be voted for a substitute nominee designated by
the Board of Directors. At the present time, the Board of Directors knows of no
reason why any nominee might be unavailable for election or unable to serve. The
proxies cannot be voted for a greater number of persons than the number of
nominees named herein.
STOCKHOLDER VOTE REQUIRED
The election of the directors will require the affirmative vote of the
majority of the shares present in person or represented by proxy at the Annual
Meeting of Stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ELECTION TO THE BOARD OF
DIRECTORS OF THE COMPANY OF EACH OF THE NOMINEES
DIRECTORS AND EXECUTIVE OFFICERS
Set forth below is certain information with respect to each of the
nominees for the office of Director, each Director and each executive officer of
the Company.
NAME AGE COMPANY POSITION AND OFFICES HELD
- ---- --- ---------------------------------
Salvatore Crimi 74 Chief Executive Officer and Chairman of the
Board of Directors
Pershing Sun 56 President and Director
Angelo Crimi 47 Secretary, Vice President and Vice Chairman
of the Board of Directors
Franklin Pinter 49 Director
Francis Fitzpatrick 58 Director
Syd Mandelbaum 49 Director
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Salvatore Crimi has served as the Chairman of the Board of Directors
and Chief Executive Officer of the Company since September 18, 1996. Mr. Crimi
served as President of the Company from September 18, 1996 to April 1998. From
1974 to 1996 Mr. Crimi served as Chairman of the Board and Chief Executive
Officer of the Company. He is the father of Angelo Crimi, the Vice Chairman of
the Board of Directors, Vice President and Secretary of the Company.
Pershing Sun has served as a Director of the Company of the Company
since September 18, 1996 and as President of the Company since April 1998. From
1991 to 1996, Mr. Sun served as Chief Information Officer of the Company.
Angelo Crimi has served as the Vice Chairman of the Board of Directors,
Vice President, and Secretary of the Company since September 18, 1996. From 1995
to 1996, Mr. Crimi served as President of the Company. From 1989 to 1995, Mr.
Crimi served as Executive Vice President of the Company. He is the son of
Salvatore Crimi, the Chief Executive Officer and Chairman of the Board of
Directors of the Company.
Franklin Pinter has served as a Director of the Company since January
7, 1997. Mr. Pinter is currently affiliated with Roger L. Flore & Associates.
From 1984 to 1998, Mr. Pinter served as an investment and estate planner with
the firm of Amonc, Lowth, Fanning.
Syd Mandelbaum has served as a Director of the Company since December
29, 1997. He is currently northern regional manager with ChromaVision and served
as an account executive for Toshiba American Medical Systems from 1997 to 1998.
From 1993 to 1997, Mr. Mandelbaum served as a laser flow cytometry specialist
with the Coulter Corporation. From 1990 to 1993, Mr. Mandelbaum was a Vice
President of Cell Measurement Systems for Imager Instrumentation.
Francis Fitzpatrick has served as Director since September 18, 1996.
Mr. Fitzpatrick has served as a Vice President of Fitzpatrick Brothers
Corporation, an auto collision repair facility, since 1982.
COMMITTEES OF THE BOARD OF DIRECTORS AND MEETING ATTENDANCE
The Board of Directors held eight (8) meetings during fiscal year ended
April 30, 1998.
The Compensation Committee is authorized to review all forms of
compensation paid to middle and senior management, make recommendations in terms
of employment contracts, issuing or awarding bonus type compensation, and
oversee and make recommendations for approval to the Board. The members of the
Compensation Committee for the fiscal year ended April 30, 1998 were Messrs.
Fitzpatrick, Pinter and Mandelbaum. The Committee did not meet during the fiscal
year ended April 30, 1998.
The Audit Committee is responsible for making recommendations to the
Board of Directors as to all financial information of the Company. The members
of the Audit Committee for the fiscal year ended April 30, 1998 were Messrs.
Fitzpatrick, Pinter and Mandelbaum. The Committee did not meet during the fiscal
year ended April 30, 1998.
During the fiscal year ended April 30, 1998, all directors who are
nominated for election attended at least 75% of the aggregate number of meetings
of the Board held during the period for which they have been a director.
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EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY COMPENSATION TABLE
The following table sets forth the cash and noncash compensation
awarded to or earned by the Chief Executive Officer during fiscal year ended
April 30, 1998 and 1997, and the most highly compensated executive officers of
the Company earning at least $100,000 per year during the fiscal year ended
April 30, 1998 and 1997.
ANNUAL COMPENSATION
-------------------
OTHER ANNUAL
NAME AND PRINCIPAL POSITION FISCAL YEAR SALARY COMPENSATION
- --------------------------- ----------- ------ ------------
Salvatore Crimi,
Chairman of the Board and Chief 1998 $140,000(1) $10,072(3)
Executive Officer 1997 $ 95,866(2) $12,214(4)
Pershing Sun, 1998 $120,000(5) $ 8,449(6)
President 1997 $ 66,365(2) $12,299(7)
Angelo Crimi, 1998 $100,000(8) $11,477(9)
Secretary 1997 $ 67,654(2) $11,782(10)
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(1) Includes $47,946 representing accrued but unpaid salary. See
"Certain Transactions."
(2) Includes the compensation earned prior to the acquisition by the
Company of the prior Company on September 18, 1996.
(3) Includes $6,110 representing car and commuting allowance and
$3,962 representing the value of certain health insurance
benefits provided by the Company.
(4) Includes $7,041 representing car and commuting allowance and
$5,173 representing the value of certain health insurance
benefits provided by the Company.
(5) Includes $34,615 representing accrued but unpaid salary. See
"Certain Transactions."
(6) Includes $4,207 representing car and commuting allowances and
$4,242 representing the value of certain health insurance
benefits provided by the Company.
(7) Includes $4,750 representing car and commuting allowances and
$7,549 representing the value of certain health insurance
benefits provided by the Company.
(8) Includes $21,154 representing accrued but unpaid salary.
(9) Includes $5,212 representing car and commuting allowances and
$6,264 representing the value of certain health insurance
benefits provided by the Company.
(10) Includes $5,686 representing car and commuting allowances and
$6,096 representing the value of certain health insurance
benefits provided by the Company.
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STOCK OPTION GRANTS
No options were granted to the named executive officers during the
period May 1, 1997 to April 30,1998.
AGGREGATED OPTIONS EXERCISED IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT FISCAL YEAR-END OPTIONS AT FISCAL YEAR-END
(#) ($)(1)
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---- ------------------------- -------------------------
Salvatore Crimi 31,844 / 47,766 - - / - -
Pershing Sun 15,190 / 22,706 - - / - -
Angelo Crimi - - / - - - - / - -
- ---------------------------
(1) Calculated based on the average closing bid and asked prices as quoted
by the OTC Bulletin Board for the last business day of the fiscal year
($0.017 per share) less the exercise price payable for such shares.
DIRECTORS' COMPENSATION
Directors of the Company who are also employees of the Company do not
receive compensation for serving on the Board of Directors or any of its
committees. Each non-employee director receives options, as a formula grant, to
purchase 5,000 shares of Common Stock at an exercise price equal to their market
value on the first trading day of each May. In December 1998, the Company paid
each non-employee director $1,500 for serving in such capacity.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT
AND CHANGE-IN-CONTROL ARRANGEMENTS
SALVATORE CRIMI
On April 24, 1998, the Company entered into a new employment agreement
with Salvatore Crimi, ending August 31, 1999. Mr. Crimi's employment agreement
provides for his appointment as Chief Executive Officer through August 31, 1999.
The term is automatically extended for additional one-year periods unless either
party gives written notice to the other of its desire not to renew such term
which notice must be given no later than ninety (90) days prior to the end of
each term on any such renewal. The agreement provides that Mr. Crimi receive an
annual base salary at the rate of $75,000. The agreement provides that the
Company reserves the right to adjust Mr. Crimi's salary during the term of the
agreement. To demonstrate his commitment to the Company during the fiscal year
ended April 30, 1997, Mr. Crimi reduced his base salary approximately 31.52%
from $140,000 to $95,866.
In the event that the Company terminates Mr. Crimi's employment, other
than for cause, or Mr. Crimi terminates his employment as a result of a breach
by the Company of the agreement, Mr. Crimi will be paid severance compensation
equal to his annual base salary (at the rate payable at the time of such
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termination) and accrued benefits plus an amount equal to the lesser of one
year's full base salary (as in effect at the time of such termination and any
other amounts owed to him under the agreement or the full base salary (as in
effect at the time of such termination) and any other amounts that would have
been payable to Mr. Crimi from the date of termination through the original
stated expiration date of the employment agreement. In the event that the
Company terminates Mr. Crimi's employment for cause or Mr. Crimi shall terminate
his employment for reasons other than a breach of the agreement by the Company,
the Company shall pay Mr. Crimi his full base salary and accrued benefits
through the date of termination at the rate in effect at the time notice of
termination is given. For a period of two years following termination of Mr.
Crimi's employment for any reason (other than a termination by the Company
without cause) Mr. Crimi cannot perform services for or have an equity interest
in (except for an interest of 2% of less in an entity which is engaged in a
competitive business and which is publicly traded) any competitive business. In
addition, the Agreement provides that for the two year period following
termination of Mr. Crimi's employment for any reason, with or without cause, Mr.
Crimi cannot, directly or indirectly (including without limitation, as owner,
employee, agent, consultant or independent contractor) provide or solicit
services of the type provided by the Company to any of its existing customers or
potential customers with which or with whom the Company has negotiated within
the twelve months preceding the date of termination of Mr. Crimi's employment.
PERSHING SUN
On April 24, 1998, the Company entered into a new employment agreement
with Pershing Sun, ending August 31, 1999. Mr. Sun's employment agreement
provides for his appointment as President of the Company through August 31,
1999. The term is automatically extended for additional one (1) year periods
unless either party gives written notice to the other of its desire not to renew
such term which notice must be given no later than ninety (90) days prior to the
end of each term on any such renewal. The agreement provides that Mr. Sun
received an annual base salary at the rate of $75,000. The agreement provides
that the Company reserves the right to adjust Mr. Sun's salary during the term
of the agreement. To demonstrate his commitment to the Company during the fiscal
year ended April 30, 1997, Mr. Sun reduced his base salary approximately 44.47%
from $120,000 to $66,635.
In the event that the Company terminates Mr. Sun's employment, other
than for cause, or Mr. Sun terminates his employment as a result of a breach by
the Company of the agreement, Mr. Sun will be paid severance compensation equal
to his annual base salary (at the rate payable at the time of such termination)
and accrued benefits plus an amount equal to the lesser of one year's full base
salary (as in effect at the time of such termination)owed to him under the
agreement or the full base (as in effect at the time of such termination) and
any other amounts that would have been payable to Mr. Sun from the date of
termination through the original stated expiration date of the employment
agreement. In the event that the Company terminates Mr. Sun's employment for
cause or Mr. Sun shall terminate his employment for reasons other than a breach
of the agreement by the Company, the Company shall pay Mr. Sun his full base
salary and accrued benefits through the date of termination at the rate in
effect at the time notice of termination is given. For a period of two years
following termination of Mr. Sun's employment for any reason (other than a
termination by the company without cause) Mr. Sun cannot perform services for or
have an equity interest in (except for an interest of 2% or less in an entity
which is engaged in a competitive business and which is publicly traded) any
competitive business. In addition, the Agreement provides that for the two year
period following termination of Mr. Sun's employment for any reason, with or
without cause, Mr. Sun cannot, directly or indirectly (including without
limitation, as owner, employee, agent, consultant or independent contractor)
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provide or solicit services of the type provided by the Company to any of its
existing customers or potential customers with which or with whom the Company
has negotiated within the twelve months preceding the date of termination of Mr.
Sun's employment.
ANGELO CRIMI
On April 24, 1998 the Company entered into a new employment agreement
with Angelo Crimi, ending August 31, 1999. Mr. Crimi's employment agreement
provides for his appointment as Secretary through August 31, 1999. The term is
automatically extended for additional one (1) year periods, unless either party
gives written notice to the other of its desire not to renew such term which
notice must be given no later than ninety (90) days prior to the end of each
term on any such renewal. The agreement provides that Mr. Crimi receive an
annual base salary at the rate of $75,000. The agreement further provides that
the Company reserves the right to adjust Mr. Crimi's salary during the term of
the agreement. To demonstrate his commitment to the Company during fiscal year
ended April 30, 1997, Mr. Crimi reduced his base salary approximately 32.35%
from $100,000 to $67,654.
In the event that the Company terminates Mr. Crimi's employment, other
than for cause, or Mr. Crimi terminates his employment agreement as a result of
a breach by the Company of the agreement, Mr. Crimi will be paid severance
compensation equal to his annual base salary (at the rate payable at the time of
such termination) and accrued benefits plus an amount equal to the lesser of one
year's full base salary (as in effect at the time of such termination) and any
other amounts owed to him under the agreement or the full base (as in effect at
the time of such termination) and any other amounts that would have been payable
to Mr. Crimi from the date of termination through the original stated expiration
date of the employment agreement. In the event that the Company terminates Mr.
Crimi's employment for cause or Mr. Crimi shall terminate his employment for
reasons other than a breach of the agreement by the Company, the Company shall
pay Mr. Crimi his full base salary and accrued benefits through the date of
termination at the rate in effect at the time notice of termination is given.
For a period of two years following termination of Mr. Crimi's employment for
any reason (other than a termination by the Company without cause) Mr. Crimi
cannot perform services for or have an equity interest in (except for an
interest of 2% or less in an entity which is engaged in a competitive business
and which is publicly traded) any competitive business. In addition, the
Agreement provides that for the two year period following termination of Mr.
Crimi's employment for any reason, with or without cause, Mr. Crimi can not,
directly or indirectly (including without limitation, as owner, employee, agent,
consultant or independent contractor) provide or solicit services of the type
provided by the Company to any of its existing customers or potential customers
with which or with whom the Company has negotiated within the twelve months
preceding the date of termination of Mr. Crimi's employment.
The following table sets forth certain information, as of March 10,
1999, regarding the beneficial ownership of the Company's Common Stock by: (i)
each shareholder known by the Company to be the beneficial owner of more than
five percent of the outstanding shares of the Company's Common Stock; (ii) each
Director of the Company and nominees for director; (iii) each Named Executive
Officer (as hereinafter defined) of the Company; and (iv) all Directors,
nominees and executive officers of the Company as a group.
-8-
AMOUNT AND NATURE OF PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(2)(3) OF CLASS
- ------------------------------------ ------------------------ --------
Salvatore Crimi Family Limited Partnership 1,631,696 10.2%
c/o Salex Holding Corporation
50 Laser Court
Hauppauge, New York 11788
Meadows Management, LLC 1,250,000(4)(5) 7.3%
1500 Hempstead Turnpike
East Meadow, New York 11554
Dr. Robert Cohen 1,250,000(4)(5)(6) 7.3%
1500 Hempstead Turnpike
East Meadow, New York 11554
Dr. Alan Cohen 1,250,000(4)(5)(7) 7.3%
1500 Hempstead Turnpike
East Meadow, New York 11554
Guardian Angel Management, Ltd. 1,250,000(4)(5)(8) 7.3%
147 Redpoll Circle
North Hills, New York 11577
Jonathan Pratt 1,250,000(4)(5)(9) 7.3%
147 Redpoll Circle
North Hills, New York 11577
Pershing Sun 3,822,155 (10) 23.9%
c/o Salex Holding Corporation
50 Laser Court
Hauppauge, New York 11788
Salvatore Crimi 3,639,249 (11) 22.7%
c/o Salex Holding Corporation
50 Laser Court
Hauppauge, New York 11788
Franklin Pinter 125,000(12) *
Francis Fitzpatrick 55,951(13) *
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AMOUNT AND NATURE OF PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(2)(3) OF CLASS
- ------------------------------------ ------------------------ --------
Angelo Crimi -- --
Syd Mandelbaum -- --
All directors and executive
officers as a group (6 persons) 9,274,051(14) 57.5%
- ----------------------------------
*Less than one percent (1%)
(1) These tables are based upon information supplied by Schedules
13D and 13G, if any, filed with the Securities and Exchange
Commission (the "SEC"). Unless otherwise indicated in the
footnotes to the table and subject to the community property
laws where applicable, each of the shareholders named in this
table has sole voting and investment power with respect to the
shares shown as beneficially owned by him. Applicable
percentage of ownership is based on 15,964,500 shares of
Common Stock, which were outstanding on March 10, 1999.
(2) Beneficial ownership is determined in accordance with the
rules of the SEC. In computing the number of shares
beneficially owned by a person and the percentage of ownership
of that person, shares of Common Stock subject to options or
preferred stock held by that person that are currently
exercisable or convertible within sixty (60) days of March 10,
1999 are deemed outstanding. To the Company's knowledge,
except as set forth in the footnotes to this table and subject
to applicable community property laws, each person named in
the table has sole voting and investment power with respect to
the shares set forth opposite such person's name.
(3) In calculating the percent of the outstanding shares of Common
Stock, all shares issuable on exercise of stock options or
conversion of preferred stock held by the particular
beneficial owner that are included in the column to the left
of this column are deemed to be outstanding.
(4) Represent shares of Common Stock which may acquired upon the
conversion of 12,500 shares of Series C Preferred Stock.
(5) At the annual meeting of shareholders, Meadows Management, LLC
("Meadows"), of which Dr. Robert Cohen and Dr. Alan Cohen are
managing members, and Guardian Angel Management, LTD
("Guardian Angel"), of which Jonathan Pratt is the sole
shareholder, intend to vote together on all matters presented
as such meeting. In the aggregate this group beneficially owns
2,500,000 shares.
(6) This amount includes all of the shares beneficially owned by
Meadows. Dr. Robert Cohen, a managing member of Meadows, has
shared voting power and shared investment power. Dr. Robert
Cohen disclaims beneficial ownership of such shares.
(7) This amount includes all of the shares beneficially owned by
Meadows. Dr. Alan Robert Cohen, a managing member of Meadows,
has shared voting power and shared investment power. Dr. Alan
Cohen disclaims beneficial ownership of such shares.
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(8) The Company intends to challenge the validity of the transfer
of 12,500 shares of Series C Preferred Stock from Meadows to
Guardian Angel of which Jonathan Pratt is the sole
shareholder.
(9) This amount includes all of the shares beneficially owned by
Guardian Angel. Jonathan Pratt disclaims beneficial ownership
of such shares.
(10) Includes 54,550 shares which may be acquired upon exercise of
options which are currently exercisable or will be exercisable
within 60 days.
(11) Includes 79,610 shares which may be acquired upon exercise of
options which are currently exercisable or will be exercisable
within 60 days.
(12) Includes warrants to purchase 25,000 shares of Common Stock.
(13) Includes 2,391 shares which may be acquired upon the exercise
of options which are currently exercisable or will be
exercisable within 60 days.
(14) Includes 161,551 shares which may be acquired upon the
exercise of options and/or warrants which are currently
exercisable or will be exercisable within 60 days.
BOARD OF DIRECTORS
REPORT ON EXECUTIVE COMPENSATION
It is the duty of the Compensation Committee to develop, administer,
and review the Company's compensation plans, programs, and policies, to monitor
the performance and compensation of executive officers and other key employees
and to make appropriate recommendations and reports to the Board of Directors
relating to executive compensation. The Company's compensation program is
intended to motivate, retain and attract management, linking incentives to
financial performance and enhanced shareholder value. The program's fundamental
philosophy is to tie the amount of compensation "at risk" for an executive to
his or her contribution to the Company's success in achieving superior
performance objectives. For the fiscal year ended April 30, 1998, the
Compensation Committee did not meet. During the fiscal year ended April 30, 1998
there were no salary increases or bonuses granted by the Board of Directors to
executive officers of the Company.
COMPENSATION STRUCTURE
The annual cash compensation of most of the executive officers,
including the Chief Executive Officer, consists primarily of annual salary.
Non-cash compensation of executive officers consists of options granted. The
compensation of each executive officer is based on an annual review of such
officer's performance by the Chief Executive Officer and his recommendations to
the Compensation Committee. In establishing and administering the variable
elements in the compensation of the Company's executive officers, the
Compensation Committee tries to recognize individual contributions, as well as
overall business results. Compensation levels are also determined based upon the
executive's responsibilities, the efficiency and effectiveness with which he
marshals resources and oversees the matter under his supervision, and the degree
to which he has contributed to the accomplishments of major tasks that advance
the Company's goals. In determining the size of option awards for a particular
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executive officer, the Compensation Committee considers the amount of stock
options awarded to other executive officers in a like position, in addition to
the other compensation considerations discussed above.
CHIEF EXECUTIVE OFFICER COMPENSATION FOR FISCAL YEAR ENDED APRIL 30, 1998
Mr. Crimi, the Chief Executive officer of the Company, was employed
under an employment agreement which became effective on August 4, 1995, and had
a three year term that is renewable, automatically, for additional one year
periods unless either party gives written notice not to renew such term which
notice must be given not less than ninety (90) days prior to the end of such
term. In order to demonstrate his commitment to the Company, Mr. Crimi reduced
his annual base salary by 31.52% from $140,000 to $95,866 for the fiscal year
ended April 30, 1997. For the fiscal year ending April 30, 1998, Mr. Crimi was
paid a base salary of $140,000 and for the fiscal year ending April 30, 1999,
Mr. Crimi will be paid a base salary of $75,000.
March 10, 1999
Respectfully submitted,
Salvatore Crimi
Pershing Sun
Francis Fitzpatrick
Franklin Pinter
Angelo Crimi
Syd Mandelbaum
Board of Directors
ADDITIONAL INFORMATION WITH RESPECT TO COMPENSATION COMMITTEE
INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION DECISIONS
Mr. Salvatore Crimi, the Chief Executive Officer of the Company, served
as a Member of the Compensation Committee for the fiscal year ended April 30,
1998.
STOCK PERFORMANCE CHART
The following graph sets forth the average of the high and low closing sale
price for the Common Stock (based on transaction data as reported by the NASDAQ
SmallCap Market and the OTC Bulletin Board) for the fiscal years ended 1995,
1996, 1997 and 1998 and for a peer group selected by the Company consisting of
companies which provide commercial services. The businesses included in the
Company-selected peer group are: Bettis Corporation(1), CRW Financial Inc.(2)
and Cypress Financial Services Inc.(3) (the "Peer Group"). Bettis Corporation
and CRW Financial Inc. are listed on the Nasdaq Small Cap Market and Cypress
Financial Services Inc. is quoted on the OTC Bulletin Board. The Company's
Common Stock began trading on the Nasdaq Small Cap Market on June 3, 1994 at a
price of $3.88 per share. On April 16, 1997, the Company was delisted. As of
such date the OTC Bulletin Board began quoting the Company's Common Stock.
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COMPARISON OF 47 MONTH CUMULATIVE TOTAL RETURN*
AMONG SALEX HOLDING CORPORATION, THE S&P SMALLCAP 600 INDEX
AND A PEER GROUP
[GRAPHIC OMITTED]
THE GRAPH OMITTED HERE DEPICTS THE COMPARISON OF A 47-MONTH CUMULATIVE TOTAL
RETURN BETWEEN SALEX HOLDING CORPORATION, THE S&P SMALLCAP 600 INDEX AND A PEER
GROUP FROM JUNE 3, 1994 TO APRIL 1998.
CUMULATIVE TOTAL RETURN
-----------------------
6/3/94 4/95 4/96 4/97 4/98
SALEX HOLDING CORPORATION 100 58 77 5 6
PEER GROUP 100 144 145 121 176
S & P SMALLCAP 600 100 108 147 152 223
*$100 INVESTED 6/3/94 IN STOCK OR ON 5/31/94
IN INDEX - INCLUDING REINVESTMENT
OF DIVIDENDS. FISCAL YEAR ENDING
APRIL 30.
- ----------------------------------
(1) In December 1996 Bettis Corporation merged with Daniel
Industries, Inc.
(2) The Common Stock of CRW Financial Inc. began trading on the
Nasdaq Small Cap Market on May 15, 1995 at a price of $3.82
per share.
(3) The OTC Bulletin Board began quoting the Common Stock of
Cypress Financial Services, Inc. on October 1, 1996. The
average closing bid and asked price of the Common Stock of
Cypress Financial Services, Inc. on October 1, 1996 was $2.75.
OTHER MATTERS ARISING AT THE ANNUAL MEETING
The matters referred to in the Notice of Annual Meeting and described
in this Proxy Statement are, to the knowledge of the Board of Directors, the
only matters that will be presented for consideration at the Annual Meeting. If
any other matters should properly come before the Annual Meeting, the persons
appointed by the accompanying proxy will vote on such matters in accordance with
their best judgment pursuant to the discretionary authority granted to them in
the proxy.
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LEGAL PROCEEDINGS
There are no material legal proceedings now pending or threatened
against the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On November 12, 1998, the Company and Betty Sun agreed to enter into a
consulting agreement whereby Betty Sun shall serve as a consultant to the
Company for an initial term of one year (which term is deemed to have commenced
on June 20, 1998) with automatic one year extensions until canceled by either
party. Ms. Sun shall be compensated for her services at the annual rate of
$75,000, payable in biweekly installments, except that the portion of Ms. Sun's
compensation which relates to the services rendered by Ms. Sun from June 20,
1998 to November 12, 1998 is payable to Ms.
Sun in a single cash payment.
On September 18, 1996, the Company retired 1,453,600 shares of Common
Stock purchased by the Company from Mr. Crimi for a purchase price of
$2,000,000. As payment for this obligation, the Company and Mr. Crimi agreed to
offset the amount owed Mr. Crimi against certain loans made by the Company to
Mr. Crimi totaling $1,004,212. In addition, the Company assumed a note payable
(the "Note") by Mr. Crimi to a former shareholder of the Company in the amount
of $995,788. The Note bears interest at the rate of 10.5% per annum. Payments of
$55,086 (representing principal plus accrued interest) are payable on a
quarterly basis. Mr. Crimi is the Chairman of the Board of Directors and Chief
Executive Officer of the Company. As of January 4, 1999, the outstanding amount
owed under the Note was $561,591.
On December 23, 1998, the Company entered into a real estate purchase
agreement ("Purchase Agreement") by and among the Company, Salvatore Crimi and
Sun Associates, LLC ("Sun Associates"), a limited liability company controlled
by Betty Sun, (as record title holder) who is the wife of Pershing Sun an
executive officer and director of the Company. Pursuant to the terms of the
Purchase Agreement, the Company and Salvatore Crimi agreed to sell to Sun
Associates certain property located in Hauppauge, New York which is improved
with the Company's executive offices containing approximately 12,000 square feet
of space and a surface parking lot (the "Property"). The purchase price for the
Property was $1,100,000. Mr. Crimi was not personally entitled to any portion of
the proceeds for the sale of the Property and was only involved in the
transaction to the extent that certain title issues required his involvement. Of
the proceeds received by the Company $782,325.74 was used to pay the mortgage
securing the Property. The balance of the proceeds was used for working capital
by the Company. Simultaneously with the sale of the Property, the Company and
Sun Associates entered into a lease agreement (the "Lease Agreement") pursuant
to which Sun Associates leased the property to the Company. Under the lease
agreement, the annual base rent for the Property during the period commencing
December 31, 1998 and ending on December 31, 1999 is $168,000. Such annual base
rent increases, by an amount not greater than $8,985 during each year of the
term of the Lease Agreement. As part of the Lease Agreement, the Company and Sun
Associates entered into a repurchase option agreement (the "Option Agreement")
which provides that the Company may repurchase the property at any time prior to
June 23, 1999 at a purchase price of $1,155,000, net of Sun Associates'
transaction costs, provided that the Company is not in default under the Lease
Agreement. The Lease Agreement further provides that if Sun Associates sells the
Property prior to December 23, 1999 then 50% of the profits resulting from the
sale will be paid to the Company provided that the Company is not in default
under the Lease Agreement.
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On January 11, 1999, the Company entered into a Settlement Agreement
with Pershing Sun, the Company's President and a Director of the Company and
Salvatore Crimi, the Company's Chief Executive Officer and a Director of the
Company. The Agreement provides for the issuance by the Company of an aggregate
of 5,000,000 shares (the "Shares") of its Common Stock (2,500,000 to each of Mr.
Sun and Mr. Crimi) in lieu of salary for the period from May 1, 1997 through
August 30, 1998 which was not paid to such officers. The Agreement further
provides that in the event that the Company sells or transfers more than 51% of
its Capital Stock and/or assets to a third party prior to January 11, 2000 and
Mr. Sun and Mr. Crimi receive consideration for the Shares in excess of 110% of
the market value of the Shares (which shall be deemed to be $.019 per share)
then any such excess will be deemed for the benefit of the Company and shall be
repaid to the Company by Mr. Sun and Mr. Crimi.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company will enter into indemnity agreements with each of its
directors and executive officers. The indemnity agreements provide that
directors and executive officers (the "Indemnities") will be indemnified and
held harmless to the fullest possible extent permitted by law, including against
all expenses (including attorney's fees), judgments, fines, penalties and
settlement amounts paid or incurred by them in any action, suit or proceeding on
account of their services as director, officer, employee, agent or fiduciary of
the Company or as directors, officers, employees or agent's of any other company
or entity at the request of the Company. The Company will not, however, be
obligated pursuant to the agreements to indemnify or advance expenses to an
indemnified party with respect to any action: (1) in which a judgment adverse to
the Indemnitee establishes (a) that the Indemnitee's acts were committed in bad
faith or were the result of active and deliberate dishonesty and, in either
case, were material, or (b) that the Indemnitee personally gained in fact a
financial profit or other advantage to which he or she was not legally entitled,
or (2) which the Indemnitee initiated, prior to a change in control of the
Company, against the Company or any director or officer of the Company unless
the Company consented to the initiation of such claim., The indemnity agreements
require an Indemnitee to reimburse the Company for expenses advanced only to the
extent that it is ultimately determined that the director or executive officer
is not entitled, under Section 145 of the General Corporation Law of the State
of Delaware and the indemnity agreement, to indemnification for such expenses.
PROPOSAL 2
RATIFICATION OF FELDMAN SHERB EHRLICH & CO., P.C. AS THE
COMPANY'S INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS.
The Board of Directors has unanimously approved and unanimously
recommends that the Stockholders approve the appointment of Feldman Sherb
Ehrlich & Co., P.C. as the Company's independent certified public accountants
for the ensuing year. Unless a shareholder signifies otherwise the persons named
in the proxy will so vote.
STOCKHOLDER VOTE REQUIRED
Ratification of the appointment of Feldman Sherb Ehrlich & Co., P.C. as
independent certified public accountants will require the affirmative vote of
the majority of the shares present in person or represented by proxy at the
Annual Meeting of Stockholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE APPOINTMENT
OF FELDMAN SHERB EHRLICH & CO., P.C. AS THE COMPANY'S INDEPENDENT CERTIFIED
PUBLIC ACCOUNTANTS.
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SECTION 16(A) REPORTING
Section 16(a) of the Securities and Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who beneficially own
more than ten percent (10%) of a registered class of the Company's equity
securities, to file with the SEC reports of ownership and changes in ownership
of Common Stock and other equity securities of the Company. Executive officers,
directors and greater than ten percent (10%) beneficial owners are required by
SEC regulation to furnish the Company with copies of all Section 16(a) reports
that they file. Based solely upon a review of the copies of such reports
furnished to the Company or written representations that no other reports were
required, the Company believes that, during fiscal year ended April 30, 1998,
all filing requirements, other than those disclosed herein, applicable to its
executive officers, directors, and greater than ten percent (10%) beneficial
owners were met.
ANNUAL REPORT ON FORM 10-K
The Company will provide without charge to each person whose proxy is
solicited, upon the written request of any such person, a copy of the Company's
Annual Report on Form 10-K for the fiscal year ended April 30, 1998, filed with
the SEC, including the financial statements and the schedules thereto. The
Company does not undertake to furnish without charge copies of all exhibits to
its Form 10-K, but will furnish any exhibit upon the payment of Twenty Cents
($0.20) per page or a minimum charge of Five Dollars ($5.00). Such written
requests should be directed to Mr. Salvatore Crimi, P.O. Box 18029, 50 Laser
Court, Hauppauge, New York 11788-8829. Each such request must set forth a good
faith representation that, as of December 8, 1998, the person making the request
was a beneficial owner of securities entitled to vote at the Annual Meeting. The
Company incorporates herein the Annual Report by reference.
By Order of the Board of Directors,
/s/ Angelo Crimi
------------------
Angelo Crimi
Secretary
Hauppauge, New York
March 19, 1999
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