SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
EMCORE CORPORATION
(Name of Registrant as Specified in its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how it
was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
EMCORE CORPORATION
145 Belmont Drive
Somerset, New Jersey 08873
-----------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON FEBRUARY 28, 2002
-----------------------------------------------------
To the Shareholders of
EMCORE Corporation:
NOTICE IS HEREBY GIVEN that the 2002 Annual Meeting of Shareholders (the
"Annual Meeting") of EMCORE Corporation (the "Company"), will be held at 10:00
A.M. local time, on Thursday, February 28, 2002, at the Marriott Hotel, 110
Davidson Avenue, Somerset, New Jersey 08873, for the following purposes:
(1) To elect three members to the Company's Board of Directors;
(2) To ratify the selection of Deloitte & Touche LLP as independent
auditors of the Company for the fiscal year ending September 30, 2002;
and
(3) To transact such other business as may properly come before the Annual
Meeting and any adjournments or postponements thereof.
The Board of Directors has fixed the close of business on January 16, 2002
as the record date for determining those shareholders entitled to notice of, and
to vote at, the Annual Meeting and any adjournments or postponements thereof.
Whether or not you expect to be present, please sign, date and return the
enclosed proxy card in the enclosed pre-addressed envelope as promptly as
possible. No postage is required if mailed in the United States.
By Order of the Board of Directors,
/s/ Howard W. Brodie
HOWARD W. BRODIE
SECRETARY
Somerset, New Jersey
January 28, 2002
THIS IS AN IMPORTANT MEETING AND ALL SHAREHOLDERS ARE INVITED TO ATTEND THE
MEETING IN PERSON. ALL SHAREHOLDERS ARE RESPECTFULLY URGED TO EXECUTE AND RETURN
THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE. SHAREHOLDERS WHO EXECUTE A
PROXY CARD MAY NEVERTHELESS ATTEND THE MEETING, REVOKE THEIR PROXY AND VOTE
THEIR SHARES IN PERSON.
EMCORE CORPORATION
145 Belmont Drive
Somerset, New Jersey 08873
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
THURSDAY, FEBRUARY 28, 2002
This Proxy Statement is being furnished to shareholders of record of EMCORE
Corporation ("EMCORE", "Company", "we" or "us") as of January 16, 2001, in
connection with the solicitation on behalf of the Board of Directors of EMCORE
of proxies for use at the Annual Meeting of Shareholders to be held on Thursday,
February 28, 2002 at 10 o'clock a.m. (E.S.T.), at the Marriott Hotel, 110
Davidson Avenue, Somerset, New Jersey 08873, or at any adjournments thereof, for
the purposes set forth in the accompanying Notice of Annual Meeting of
Shareholders. The approximate date that this Proxy Statement and the enclosed
proxy are first being sent to shareholders is January 28, 2002. Shareholders
should review the information provided herein in conjunction with the Company's
2001 Annual Report to Shareholders which accompanies this Proxy Statement. The
Company's principal executive offices are located at 145 Belmont Drive,
Somerset, New Jersey 08873, and its telephone number is (732) 271-9090.
INFORMATION CONCERNING PROXY
The enclosed proxy is solicited on behalf of the Company's Board of
Directors. The giving of a proxy does not preclude the right to vote in person
should any shareholder giving the proxy so desire. Shareholders have an
unconditional right to revoke their proxy at any time prior to the exercise
thereof, either in person at the Annual Meeting or by filing with the Company's
Secretary at the Company's headquarters a written revocation or duly executed
proxy bearing a later date; however, no such revocation will be effective until
written notice of the revocation is received by the Company at or prior to the
Annual Meeting.
The cost of preparing, assembling and mailing this Proxy Statement, the
Notice of Annual Meeting of Shareholders and the enclosed proxy is borne by the
Company. In addition to the use of mail, employees of the Company may solicit
proxies personally and by telephone. The Company's employees will receive no
compensation for soliciting proxies other than their regular salaries. The
Company may request banks, brokers and other custodians, nominees and
fiduciaries to forward copies of the proxy material to their principals and to
request authority for the execution of proxies. The Company may reimburse such
persons for their expenses in so doing.
PURPOSES OF THE MEETING
At the Annual Meeting, the Company's shareholders will consider and vote
upon the following matters:
(1) To elect three members to the Company's Board of Directors;
(2) To ratify the selection of Deloitte & Touche LLP as independent
auditors of the Company for the fiscal year ending September 30, 2002;
and
(3) To transact such other business as may properly come before the Annual
Meeting and any adjournments or postponements thereof.
Unless contrary instructions are indicated on the enclosed proxy, all
shares represented by valid proxies received pursuant to this solicitation (and
which have not been revoked in accordance with the procedures set forth above)
will be voted (1) FOR the election of the three nominees for director named
1
below, (2) FOR ratification of the independent auditors named above, and (3) by
the proxies in their discretion upon any other proposals as may properly come
before the Annual Meeting. In the event a shareholder specifies a different
choice by means of the enclosed proxy, such shareholder's shares will be voted
in accordance with the specification so made.
OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS
As of the close of business on January 16, 2002 (the "Record Date"), the
Company had 36,584,637 shares of no par value common stock ("Common Stock")
outstanding. Each share of Common Stock is entitled to one vote on all matters
presented at the Annual Meeting. The presence, either in person or by properly
executed proxy, of the holders of the majority of the shares of Common Stock
entitled to vote at the Annual Meeting is necessary to constitute a quorum at
the Annual Meeting. Attendance at the Annual Meeting will be limited to
shareholders as of the Record Date, their authorized representatives and guests
of the Company.
If the enclosed proxy is signed and returned, it may nevertheless be
revoked at any time prior to the voting thereof at the pleasure of the
shareholder signing it, either by a written notice of revocation received by the
person or persons named therein or by voting the shares covered thereby in
person or by another proxy dated subsequent to the date thereof.
Proxies in the accompanying form will be voted in accordance with the
instructions indicated thereon, and, if no such instructions are indicated, will
be voted in favor of the nominees for election as directors named below and for
the other proposals herein.
The vote required for approval of each of the proposals before the
shareholders at the Annual Meeting is specified in the description of such
proposal below. For the purpose of determining whether a proposal has received
the required vote, abstentions and broker non-votes will be included in the vote
total, with the result that an abstention or broker non-vote, as the case may be
will have the same effect as if no instructions were indicated.
PROPOSAL I: ELECTION OF DIRECTORS
Pursuant to EMCORE's Restated Certificate of Incorporation, the Board of
Directors of EMCORE is divided into three classes as set forth in the following
table. Each Class consists of three directors. The directors in each class hold
office for staggered terms of three years. The three Class A directors, Messrs.
Thomas J. Russell, Reuben F. Richards, Jr. and John J. Hogan, Jr., whose present
terms expire in 2002, are being proposed for new three year terms (expiring in
2005) at this Annual Meeting.
The shares represented by proxies returned executed will be voted, unless
otherwise specified, in favor of the three nominees for the Board of Directors
named below. If, as a result of circumstances not known or unforeseen, any of
such nominees shall be unavailable to serve as director, proxies will be voted
for the election of such other person or persons as the Board of Directors may
select. Each nominee for director will be elected by a plurality of votes cast
at the Annual Meeting of Shareholders. Proxies will be voted FOR the election of
the three nominees unless instructions to "withhold" votes are set forth on the
proxy card. Withholding votes will not influence voting results. Abstentions may
not be specified as to the election of directors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR"
THE THREE NOMINEES FOR THE BOARD OF DIRECTORS NAMED BELOW.
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The following tables set forth certain information regarding the members of
and nominees for the Board of Directors:
Class and
Year in
Name and Other Which Term Principal Served as
Information Age Will Expire Occupation Director Since
- -------------------------------- ---------- ------------------- ------------------------ ----------------
NOMINEES FOR ELECTION AT THE 2002 ANNUAL MEETING
Thomas J. Russell(1)(2) 69 Class A Chairman of the Board, 1995
2002 EMCORE Corporation
Reuben F. Richards, Jr.(1) 46 Class A President and Chief 1995
2002 Executive Officer,
EMCORE Corporation
John J. Hogan, Jr. (3) 51 Class A President of private 1999
2002 investment management
company
DIRECTORS WHOSE TERMS CONTINUE
Richard A. Stall(1) 45 Class B Vice President - 1996
2004 Technology, EMCORE
Corporation
Robert Louis-Dreyfus 54 Class B Chairman of the Board 1997
2004 of Directors and Chief
Executive Officer of
adidas-Salomon AG
Charles Scott (2)(3) 52 Class B Chairman, Cordiant 1998
2004 Communications Group
plc
Hugh H. Fenwick(2)(3) 64 Class C Mayor of Bernardsville 1990-1995 &
2003 New Jersey, and 1997
formerly Executive
Director of the
Alliance for
Technology Management
at the Stevens
Institute
Thomas G. Werthan 45 Class C Chief Financial 1992
2003 Officer, EMCORE
Corporation
Shigeo Takayama 85 Class C Chairman, President & 1997
2003 Founder of Hakuto Co.,
Ltd.
- ------------------------
(1) Member of Nominating Committee
(2) Member of Compensation Committee
(3) Member of Audit Committee
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DIRECTORS AND EXECUTIVE OFFICERS
Set forth below is certain information with respect to each of the nominees
for the office of director and other directors and executive officers of EMCORE.
THOMAS J. RUSSELL, PH.D. Dr. Russell has been a director of the Company
since May 1995 and was elected Chairman of the Board on December 6, 1996. Dr.
Russell founded Bio/Dynamics, Inc. in 1961 and managed the company until its
acquisition by IMS International in 1973, following which he served as President
of that company's Life Sciences Division. From 1984 until 1988, he served as
Director, then as Chairman of IMS International until its acquisition by Dun &
Bradstreet in 1988. From 1988 to 1992, he served as Chairman of Applied
Biosciences, Inc. Since 1992, he has been an investor and director of several
companies. Dr. Russell currently serves as a director of LD COM Networks.
REUBEN F. RICHARDS, JR. Mr. Richards joined the Company in October 1995 as
its President and Chief Operating Officer and became Chief Executive Officer in
December 1996. Mr. Richards has been a director of the Company since May 1995.
From September 1994 to December 1996, Mr. Richards was a Senior Managing
Director of Jesup & Lamont Capital Markets Inc. ("Jesup & Lamont" (an affiliate
of a registered broker-dealer)). From December 1994 to 1997, he was a member and
President of Jesup & Lamont Merchant Partners, L.L.C. From 1992 through 1994,
Mr. Richards was a principal with Hauser, Richards & Co., a firm engaged in
corporate restructuring and management turnarounds. From 1986 until 1992, Mr.
Richards was a Director at Prudential-Bache Capital Funding in its Investment
Banking Division. Mr. Richards also serves on the board of one of the Company's
joint ventures, GELcore LLC.
THOMAS G. WERTHAN Mr. Werthan joined the Company in 1992 as its Chief
Financial Officer and a director. Mr. Werthan is a Certified Public Accountant
and has over eighteen years experience in assisting high technology, venture
capital financed growth companies. Prior to joining the Company in 1992, he was
associated with The Russell Group, a venture capital partnership, as Chief
Financial Officer for several portfolio companies. The Russell Group was
affiliated with Thomas J. Russell, Chairman of the Board of Directors of the
Company. From 1985 to 1989, Mr. Werthan served as Chief Operating Officer and
Chief Financial Officer for Audio Visual Labs, Inc., a manufacturer of
multimedia and computer graphics equipment.
RICHARD A. STALL, PH.D. Dr. Stall became a director of the Company in
December 1996. Dr. Stall helped found the Company in 1984 and has been Vice
President--Technology at the Company since October 1984, except for a sabbatical
year in 1993 during which Dr. Stall acted as a consultant to the Company and his
position was left unfilled. Prior to 1984, Dr. Stall was a member of the
technical staff of AT&T Bell Laboratories and was responsible for the
development of MBE technologies. He has co-authored more than 75 papers and
holds four patents on MBE and MOCVD technology and the characterization of
compound semiconductor materials.
ROBERT LOUIS-DREYFUS Mr. Louis-Dreyfus has been a director of the Company
since March 1997. Mr. Louis-Dreyfus has been the President and CEO of Louis
Dreyfus Communications since May 2000. From 1993 through 2001, he was Chairman
of the Board of Directors and Chief Executive Officer of adidas-Salomon AG.
Prior to that time, he had been from 1990 until 1993 the Chief Executive Officer
of Saatchi & Saatchi plc (now Cordiant plc) and a director of Saatchi & Saatchi
plc from January 1990 until December 1994. Since 1992, he has been an investor
and a director of several other companies, including director of Heidrick &
Struggles since September 1999, advisory board member of The Parthenon Group
since October 1998 and President of Salomon S.A. since August 1998. From 1982
until 1988, he served as Chief Operating Officer (1982 to 1983) and then as
Chief Executive Officer (from 1984 to 1988) of IMS International until its
acquisition by Dun & Bradstreet in 1988.
HUGH H. FENWICK Mr. Fenwick served as a director of the Company from 1990
until 1995, and was again elected to serve on the Company's Board of Directors
in June 1997. Since 1992, Mr. Fenwick has been a private investor, and he
currently holds the office of Mayor of Bernardsville, New
4
Jersey, to which he was elected in 1994. From 1990 until 1992, Mr. Fenwick was
the Executive Director of the Alliance for Technology Management at the Stevens
Institute in Hoboken, New Jersey. Prior to that time, Mr. Fenwick worked as a
marketing executive with Lockheed Electronics and with Alenia (formerly
Selenia), an Italian subsidiary of Raytheon.
SHIGEO TAKAYAMA Mr. Takayama became a director of the Company in July 1997.
Mr. Takayama is the Chairman of Hakuto Co., Ltd. ("Hakuto"), which he founded in
the 1950's and which is the Company's distributor in Japan, China and Singapore.
Mr. Takayama is a Director Emeritus of Semiconductor Equipment & Material
International (SEMI), Chairman of the Japan Electronics Products Importers
Association (JEPIA), and Director of the Japan Machinery Importers' Association
(JMIA).
CHARLES SCOTT Mr. Scott has served as a director of the Company since
February 1998. Mr. Scott is presently Chairman of Cordiant Communications Group
plc, the successor corporation of the Saatchi & Saatchi Advertising Group. He
joined Saatchi & Saatchi Company in 1990 and served as Chief Financial Officer
until 1992 when he was appointed Chief Operating Officer. In 1993, be became
Chief Executive Officer and held that position until 1995 when he assumed the
title of Chairman.
JOHN J. HOGAN, JR. Mr. Hogan has served on the Company's Board of Directors
since February 1999. Mr. Hogan has been President of a private investment
management company since October 1997. Prior to that time, he had been with the
law firm of Dewey Ballantine since 1969. He also serves as a director of several
other corporations and is a former executive officer and/or director of various
subsidiaries of S.A. Louis Dreyfus et Cie.
EXECUTIVE OFFICERS:
HOWARD W. BRODIE, ESQ. 34, joined the Company in August 1999 and serves as
Vice President, General Counsel and Secretary of the Company. From September
1995 to August 1999, Mr. Brodie was an Associate at the law firm of White & Case
LLP, a New York law firm that has served as outside counsel to the Company since
1997. While at White & Case LLP, Mr. Brodie practiced securities law and mergers
and acquisitions. Mr. Brodie has worked on EMCORE matters since 1998, helping to
negotiate and structure several EMCORE joint ventures, including the joint
venture with General Electric Lighting, as well as assisting in the Company's
June 1999 and March 2000 public offerings. From August 1994 to August 1995, Mr.
Brodie served as a judicial law clerk to Chief Judge Gilbert S. Merritt on the
Sixth Circuit Court of Appeals. Mr. Brodie received his J.D. degree from Yale
Law School.
ROBERT P. BRYAN, PH.D., 35, joined the Company as a result of the Company's
acquisition of MicroOptical Devices, Inc. ("MODE") on December 5, 1997 and now
serves as a Vice President of the Company. Prior to co-founding MODE in 1995, he
was a co-founder of Vixel Corporation in 1992, a Bloomfield, Colorado company
which, at the time, was the first commercial company to develop and manufacture
VCSEL devices for data links. He was the specific oversight executive for
optoelectronic product development, including all engineering management to
include all components and products. From 1990 to 1992, he was a senior member
of the technical staff at Sandia National Laboratories where his research
focused on the areas of VCSEL design, fabrication and characterization.
CRAIG W. FARLEY, PH.D., 42, joined the Company in June 1998 and currently
serves as Vice President-Corporate Operations and Planning. Dr. Farley has
experience in all phases of compound semiconductor device design and
manufacturing. Prior to joining EMCORE, he spent 11 years at Rockwell
International Corporation ("Rockwell") where he served as a member of the
technical staff at Rockwell's Science Center from 1987 to 1994 and as Manager of
Advanced Device Technology for Rockwell's Gallium Arsenide Manufacturing
facility from 1994 to 1998.
EARL FULLER, 51, joined the Company in October 2001 as Vice President of
Emcore PhotoVoltaics. Prior to coming to Emcore, Mr. Fuller spent nine years as
President of Novus Technologies. In addition, from December 1999 through October
2001, Mr. Fuller served a president of
5
PicoDyne, a semiconductor start-up that used technology licensed from the
University of New Mexico for various customers, including NASA.
HONG Q. HOU, PH.D., 37, joined the Company in March 1998 and serves as a
Vice President and Chief Technology Officer of EMCORE Optical Devices. Dr. Hou
helped found EMCORE PhotoVoltaics in 1998 as EMCORE PhotoVoltaics' Chief
Technology Officer. Prior to joining the Company, Dr. Hou was a Principal Member
of Technical Staff at Sandia National Laboratories from 1995 to 1998, and a
Member of Technical Staff at AT&T Bell Laboratories from 1993 to 1995. Dr. Hou
has many seminal technical contributions to the fundamentals and
manufacturability of high-efficiency solar cells, VCSELs, pHEMTs, and other
optoelectronic and electronic devices, as well as MOCVD technology. Dr. Hou has
published more than 250 papers and holds a number of patents, issued and
pending.
LARRY W. KAPITAN, 45, joined the Company in 2001 as Vice
President/Manufacturing and Operations. Starting in January 1997, Mr. Kapitan
worked at RF Micro Devices in various capacities, the last being Director of
Operations.
TOM MIEHE, 42, joined the Company in 1997 as Marketing Manager for the
E(2)M Division prior to becoming Director of Marketing and Sales at corporate
headquarters in Somerset. In March of 1999, Mr. Miehe assumed the post of
Corporate Vice President, Sales and Marketing. Prior to joining the Company, Mr.
Miehe worked at Sumitomo Electric. He held various positions at Sumitomo, the
last being Senior Manager Sales & Marketing for compound semiconductor products.
PAUL ROTELLA, 46, joined the Company in 1996 as Director of Manufacturing
and has served since October 1997 as Vice President of EMCORE TurboDisc Tools
for which he has overall business unit responsibility. Prior to 1996, Mr.
Rotella served for three years as worldwide Manufacturing Operations Manager for
Datacolor International, a manufacturer of color measurement and control
instrumentation. Prior to working at Datacolor International, Mr. Rotella spent
18 years with AlliedSignal Inc., where he was responsible for Manufacturing and
Manufacturing Engineering for various Space, Flight, Missile and Test systems.
6
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth as of January 15, 2002 certain information
regarding the beneficial ownership of voting Common Stock by (i) each person or
"group" (as that term is defined in Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) known by the Company to be the
beneficial owner of more than 5% of the voting Common Stock, (ii) each named
executive officer of the Company, (iii) each director and nominee and (iv) all
directors and executive officers as a group (17 persons). Except as otherwise
indicated, the Company believes, based on information furnished by such persons,
that each person listed below has the sole voting and investment power over the
shares of Common Stock shown as beneficially owned, subject to common property
laws, where applicable. Unless otherwise indicated, the address of each of the
beneficial owners is c/o the Company, 145 Belmont Drive, Somerset, New Jersey
08873.
Shares Percent of
Beneficially Common Stock
Name Owned
- -------------------------------------------------------------------------- ------------------- ---------------
Thomas J. Russell(1) 5,471,048 14.8%
Reuben F. Richards, Jr.(2) 1,178,795 3.2%
Thomas G. Werthan(3) 282,748 *
Richard A. Stall(4) 399,697 1.1%
Robert Louis-Dreyfus(5) 3,301,916 9.0%
Hugh H. Fenwick 16,507 *
Shigeo Takayama(6) 1,551,908 4.2%
Charles Scott(7) 15,610 *
John J. Hogan, Jr. 8,761 *
Robert Bryan(8) 462,909 1.3%
Hong Hou(9) 185,464 *
All directors and executive officers as a group (17 persons) (10) 13,120,348 34.3%
Capital Guardian Trust Co. (11) 4,095,000 11.2%
Gallium Enterprises, Inc.(12) 3,301,916 9.0%
Capital International, Inc.(13) 2,971,900 8.1%
Franklin Advisors, Inc.(14) 2,458,800 6.7%
The AER 1997 Trust(15) 2,280,035 6.2%
Hakuto Co., Ltd.(16) 1,551,908 4.2%
- -----------------------
* Less than 1.0%
Includes shares and underlying warrants and options exercisable within 60
days of January 15, 2001.
1) Includes 2,280,035 shares are held by The AER 1997 Trust and warrants to
purchase 455,494 shares.
2) Includes options to purchase 258,824 shares.
3) Includes options to purchase 242,495 shares.
4) Includes options to purchase 249,768 shares.
5) All 3,301,916 shares held by Gallium Enterprises Inc.
6) All 1,551,908 shares owned by Hakuto Co. Ltd.; Hakuto & Co. Ltd. is
controlled by Shigeo Takayama, although Mr. Takayama disclaims beneficial
ownership of such shares.
7) Includes 3,610 shares owned by Kircal, Ltd.
8) Includes options to purchase 37,500 shares.
9) Includes options to purchase 167,925 shares.
10) Includes warrants and options to purchase a total of 1,645,093 shares.
11) The address of Capital Guardian Trust Co. is 222 South Hope Street, 56th
Floor, Los Angeles, CA 90071.
12) Gallium Enterprises, Inc. is controlled by Robert Louis-Dreyfus, a member
of the Board of Directors
7
of the Company. The address of Gallium Enterprises, Inc. is 152 West 57th
Street, 21st Floor, NYC, NY 10019.
13) The address of Capital International, Inc. is 11100 Santa Monica Blvd., Los
Angeles, CA 90071.
14) The address of Franklin Advisors, Inc. is 1 Franklin Parkway, San Mateo, CA
94403.
15) Avery E. Russell, the daughter of Thomas J. Russell, Chairman of the Board
of Directors of the Company, is he primary beneficiary of the AER 1997
Trust. The address of the trust is 117 Leabrook Lane, Princeton, NJ 08541.
16) The address of Hakuto Co., Ltd. is CPO Box 25, Tokyo 11-8691, Japan.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The President of Hakuto, the Company's Asian distributor, is a member of
the Company's Board of Directors and Hakuto is a minority shareholder of the
Company. During the year ended September 30, 2001, sales made through Hakuto
approximated $14.5 million.
In August 2001, the Company made a $5.0 million aggregate principal amount
bridge loan (the "Bridge Loan") to Uniroyal Technologies Corporation ("UTCI"),
the proceeds of which were to be used by UTCI for working capital and other
corporate purposes. The Bridge Loan had an interest rate equal to the prime rate
and had a maturity date of the earlier of the second anniversary of the date of
the Bridge Loan and the closing of the sale of the adhesives and sealants
business of Uniroyal Engineered Products L.L.C., a subsidiary of UTCI. The
Bridge Loan was guaranteed by Uniroyal Optoelectronics, LLC ("UOE") and several
other subsidiaries of UTCI, and it was fully secured by a lien on, among other
things, UOE's cash, accounts receivable and a portion of UOE's equipment. The
Bridge Loan was also convertible under certain circumstances into UTCI common
stock at the Company's option. In November 2001, UTCI repaid the loan and
accrued interest in cash. Emcore owns approximately 2.0 million shares of UTCI
(approximately 7.1% of the total outstanding as reported in UTCI's most recent
annual report) and Dr. Russell, Chairman of the Company's Board of Directors,
owns approximately 3.6 million shares of UTCI (approximately 12.8% of the total
outstanding).
From time to time, the Company has lent money to certain of its executive
officers and directors. Pursuant to due authorization of the Company's Board of
Directors, the Company lent $85,000 to Thomas G. Werthan, Chief Financial
Officer and a director of the Company. The promissory note executed by Mr.
Werthan does not bear interest and provides for forgiveness of the loan via
bonuses payable to Mr. Werthan over a period of up to 25 years. The balance
outstanding on the loan is currently $82,000, and no larger amount has been
outstanding since the beginning of Fiscal Year 2001. Similarly, pursuant to due
authorization of the Company's Board of Directors, the Company lent funds to
Reuben F. Richards, Jr., Chief Executive Officer and a director of the Company.
One promissory note executed by Mr. Richards did not bear interest and was
repaid by Mr. Richards in December 2001 through payment of a bonus by the
Company, in accordance with the terms of the note. The balance outstanding on
that loan did not exceed $215,000 since the beginning of Fiscal Year 2001. Mr.
Richards has signed an additional note in the principal amount of $3,000,000 due
February 22, 2004 which bears interest at 5.18% per annum and which is secured
by a pledge of shares of the Company's common stock. Finally, pursuant to due
authorization of the Company's Board of Directors, the Company lent $100,000 to
Craig W. Farley. The note bears interest at 5.5% per annum and matures on March
1, 2002. On September 30, 2001, the balance outstanding on such loan was
$100,000.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based on the Company's review of copies of all disclosure reports filed by
Directors and executive officers of the Company pursuant to Section 16(a) of the
Exchange Act, as amended, the Company believes that there was compliance with
all filing requirements of Section 16(a) applicable to Directors and executive
officers of the Company during the fiscal year, except for a Form 3 by Dr. Hou
and one Form 4 by Mr. Werthan.
8
COMPENSATION OF DIRECTORS
The Board of Directors held four meetings during fiscal year 2001 and took
certain actions by telephonic meeting and unanimous written consent. Pursuant to
its Directors' Stock Award Plan, the Company pays non-employee directors a fee
in the amount of $3,000 per Board meeting attended and $500 for each committee
meeting attended ($600 for the Chairman of the committee), including in each
case reimbursement of reasonable out-of-pocket expenses incurred in connection
with such Board or committee meeting. Payment of all fees will be made in common
stock of the Company at the average of the last reported bid and ask prices as
of the close of trading the previous day on the Nasdaq National Market. No
director who is an employee of the Company will receive compensation for
services rendered as a director. From time to time, Board members are invited to
attend meetings of Board committees of which they are not members; in such
cases, such Board members receive a committee meeting fee of $500. During fiscal
year 2001, all directors of the Company, except for Messrs. Louis-Dreyfus and
Takayama, attended at least 75% of the aggregate meetings of the Board and
committees on which they served. Mr. Louis-Dreyfus attended one of the four
meetings and Mr. Takayama attended no Board meetings in fiscal year 2001.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation Committee currently consists of Messrs. Russell,
Scott and Fenwick. The Compensation Committee reviews and recommends to the
Board of Directors the compensation and benefits of all executive officers of
the Company, reviews general policy matters relating to compensation and
benefits of executive officers and employees of the Company and administers the
issuance of stock options and stock appreciation rights and awards of restricted
stock to the Company's officers and key salaried employees. No member of the
Compensation Committee is now or ever was an officer or an employee of the
Company. No executive officer of the Company serves as a member of the
Compensation Committee of the Board of Directors of any entity one or more of
whose executive officers serves as a member of the Company's Board of Directors
or Compensation Committee. The Compensation Committee meets once annually
NOMINATING COMMITTEE
The Company's Nominating Committee currently consists of Messrs. Russell,
Richards and Stall. The Nominating Committee recommends new members to the
Company's Board of Director's. The Nominating Committee meets once annually.
AUDIT COMMITTEE
The Company's Audit Committee currently consists of Messrs. Fenwick, Scott
and Hogan. The Audit Committee recommends the engagement of the Company's
independent accountants, approves the auditing services performed, and reviews
and evaluates the Company's accounting policies and systems of internal
controls. Each member of the Audit Committee is independent within the meaning
of NASD Rule 4200(a)(15). The Audit Committee meets four times per year. The
Audit Committee's responsibilities are set forth in a written charter, a copy of
which is annexed hereto as Appendix 1.
The Audit Committee has reviewed and discussed the Company's audited
financial statements for Fiscal Year 2001 with management of the Company. The
Audit Committee has discussed with the Company's independent auditors the
matters required to be discussed by SAS 61. The Audit Committee has received the
written disclosures and letter from the Company's independent accountants
required by independence Standards Board Standard No. 1, and has discussed with
such accountants the independence of such accountants. Based on the foregoing
review and discussions, the Audit Committee recommended to
9
the Board of Directors that the Company's audited financial statements for
Fiscal Year 2001 be included in the Company's Annual Report on Form 10-K for
Fiscal Year 2001.
Audit Fees
The aggregate fees billed by the Company's independent accountants for
professional services rendered in connection with the audit of the Company's
financial statements included in the Company's Annual Report on Form 10-K for
Fiscal Year 2001, as well as for the review of the Company's financial
statements included in the Company's Quarterly Reports on Form 10-Q during
Fiscal Year 2001 totaled $163,000 (excluding expenses reimbursed by the
Company).
Financial Information Systems Design and Implementation Fees
No fees other than those described above under the caption "Audit Fees" and
those described below under the caption "All Other Fees" were billed to the
Company by the Company's independent accountants for professional services in
Fiscal Year 2001.
All Other Fees
The only fees billed to the Company by its principal accountant during
Fiscal Year 2001 other than those described above related to services provided
with regard to the Company's convertible debt resale pursuant to a registration
statement on Form S-3 and various miscellaneous matters, and such fees totaled
$140,035 (excluding expenses reimbursed by the Company. The Audit Committee
believes that the foregoing expenditures are compatible with maintaining the
independence of the Company's principal accountant.
Audit Committee:
Hugh H. Fenwick
Charles Scott
John J. Hogan, Jr.
10
LIMITATION OF OFFICERS' AND DIRECTORS' LIABILITY AND INDEMNIFICATION
MATTERS
The Company's Restated Certificate of Incorporation and By-Laws include
provisions (i) to reduce the personal liability of the Company's directors for
monetary damage resulting from breaches of their fiduciary duty and (ii) to
permit the Company to indemnify its directors and officers to the fullest extent
permitted by New Jersey law. The Company has obtained directors' and officers'
liability insurance that insures such persons against the costs of defense,
settlement or payment of a judgment under certain circumstances. There is no
pending litigation or proceeding involving any director, officer, employee or
agent of the Company as to which indemnification is being sought. The Company is
not aware of any pending or threatened litigation that might result in claims
for indemnification by any director or executive officer.
11
EXECUTIVE COMPENSATION
The following table sets forth certain information concerning the annual
and long-term compensation for services in all capacities to the Company for
fiscal years ended September 30, 2001, 2000 and 1999 of those persons who during
such fiscal year (i) served as the Company's chief executive officer and (ii)
were the four most highly-compensated officers (other than the chief executive
officer) (collectively, the "Named Executive Officers"):
Annual Compensation
------------------------------------------------
Long-term
Compensation
Other Securities
Name and Fiscal (1) Annual Underlying All Other
Principal Position Year Salary Bonus Compensation Options Compensation
- ------------------------- -------- ------------- ------------- ------------- -------------- --------------
Reuben F. Richards, Jr. 2001 $298,750 $215,000 -- -- --
President and 2000 $250,000 $162,500 -- 25,000 --
Chief Executive 1999 $250,000 $ 75,000 -- 50,000 --
Officer
Richard A. Stall 2001 $182,500 $340,000 -- -- --
Vice President - 2000 $175,000 $278,500 -- 75,000 --
Chief Technology 1999 $168,750 $150,000 -- -- --
Officer
Hong Q. Hou 2001 $171,250 $306,000 -- --
Vice President 2000 $157,500 $75,000 -- 40,000 --
1999 $150,000 $70,000 -- -- --
Robert Bryan 2001 $166,250 $88,000 -- -- --
Vice President 2000 $136,250 $25,000 -- 25,000 --
1999 $125,000 $50,000 -- -- --
Thomas G. Werthan 2001 $171,250 $80,000 -- -- --
Chief Financial 2000 $156,250 $86,250 -- 105,000 --
Officer 1999 $135,000 $33,750 -- -- --
- ----------------------
(1) The Company's bonus compensation is based on a calendar year schedule.
Accordingly, bonus amounts are included with respect to the fiscal year in
which they were actually paid.
12
The following table sets forth the number of shares acquired by the Named
Executive Officers upon options exercised during Fiscal Year 2001 and the value
thereof, together with the number of exercisable and unexercisable options held
by the Named Executive Officers on September 30, 2001 and the aggregate gains
that would have been realized had these options been exercised on September 30,
2001, even though such options had not been exercised by the Named Executive
Officers. No options were granted to the Named Executive Officers in Fiscal Year
2001.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 2001
AND YEAR-END OPTION VALUES
Shares
Acquired on Value
Name Exercise Realized
- ----------------------------- --------------- ----------------
Reuben F. Richards, Jr. -- --
Richard A. Stall 65,000 $ 2,849,626
Hong Q. Hou 17,075 $ 537,014
Robert P. Bryan 53,302 $ 1,421,031
Thomas G. Werthan 21,000 $ 865,500
Total Number of Value of Unexercised
Unexercised Options at In-the-Money Options
September 30, 2001(1) at September 30, 2001(2)
------------------------------------- ------------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ----------------------------- --------------- ----------------- --------------- ----------------
Reuben F. Richards, Jr. 223,824 10,000 $698,040 $ 0
Richard A. Stall 207,344 22,424 $353,353 $ 42,897
Hong Q. Hou 94,925 104,000 $211,914 $214,800
Robert P. Bryan 15,000 10,000 $ 0 $ 0
Thomas G. Werthan 210,860 32,010 $493,745 $ 34,635
- --------------------
(1) This represents the total number of shares subject to stock options held by
the named executives at September 30, 2001. These options were granted on
various dates during the fiscal years 1995 through 2001.
(2) These amounts represent the difference between the exercise price of the
stock options and the closing price of the Common Stock on September 30,
2001, for all the in-the-money options held by each named executive. The
in-the-money stock option exercise prices range from $1.515 to $8.50. These
stock options were granted at the fair market value of the Common Stock on
the grant date.
13
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
The Compensation Committee recommends compensation arrangements for the
Company's executive officers and administers the Company's 1995 Incentive and
Non-Statutory Stock Option Plan and the 2000 Stock Option Plan. The Compensation
Committee also administers the MicroOptical Devices, Inc. 1996 Stock Option
Plan. The Company's compensation program is designed, with the advice of
independent consultants, to be competitive with companies similar in structure
and business to the Company.
The Company's executive compensation program is structured to help the
Company achieve its business objectives by:
* setting levels of compensation designed to attract and retain superior
executives in a highly competitive environment;
* designing equity-related and other performance-based incentive
compensation programs to align the interests of management with the
ongoing interests of shareholders;
* providing incentive compensation that varies directly with both
Company financial performance and individual contributions to that
performance; and
* linking compensation to elements that affect short- and long-term
stock price performance.
The Company has used a combination of salary and incentive compensation,
including cash bonuses and equity-based incentives to achieve its compensation
goals.
COMPENSATION OF EXECUTIVE OFFICERS
SALARY
The salary levels of the Company's executive officers including the Chief
Executive Officer, are intended to reflect the duties and level of
responsibilities inherent in each position. Comparison of the salaries paid by
other companies in similar industries are considered in establishing the salary
level for each position. The particular qualifications of the individual holding
the position, relevant experience and the importance to the Company of the
individual's expected contribution are also considered in establishing salaries.
In general, compensation payments in excess of $1.0 million to any of the
executive officers are subject to a limitation on deductibility by the Company
under Section 162(m) of the Internal Revenue Code of 1986, as amended. The
deduction limit does not apply to performance based compensation that satisfies
certain requirements. The Compensation Committee has not yet determined a policy
with regard to Section 162(m); however, no officer of the Company is expected to
earn compensation in excess of $1.0 million in fiscal year 2002.
PERFORMANCE AND INCENTIVE COMPENSATION
Arrangements for bonus compensation for the Company's executive officers
are negotiated individually with each executive officer. Bonus compensation
arrangements take various forms, but generally are based on factors such as the
Company's financial performance, operating performance and individual
performance.
14
EQUITY-RELATED INCENTIVES
The Company's primary method of compensating senior executives has been
through the grant of stock options granted at the commencement of their
employment agreements. Stock options grants to executive officers are generally
long-term and usually vest over a three- to five-year period. The Company has
favored stock options as a way of aligning management's interests with the
long-term interests of the Company's shareholders and inducing executives to
remain with the Company on a long-term basis. Individual option grants have been
based on the performance and level of responsibility of the optionee.
Compensation Committee:
Thomas J. Russell
Charles Scott
Hugh H. Fenwick
15
STOCK PERFORMANCE GRAPH
The following graph and table compares the cumulative total shareholders'
return on the Company's Common Stock from the initial public offering date
through September 30, 2001 with the cumulative total return on the Nasdaq Stock
Market Index and the Nasdaq Electronic Components Stocks Index (SIC Code 3674).
The comparison assumes $100 was invested on March 6, 1997 in the Company's
Common Stock. The Company did not declare, nor did it pay any dividends during
the comparison period. Notwithstanding any statement to the contrary in any of
the Company's previous or future fillings with the Commission, the graph and
table shall not be incorporated by reference into any such fillings.
COMPARISON OF 55 MONTH CUMULATIVE TOTAL RETURN*
AMONG EMCORE CORPORATION,
THE NASDAQ STOCK MARKET (U.S.) INDEX
AND THE NASDAQ ELECTRONIC COMPONENTS INDEX
[GRAPH]
*$100 INVESTED ON 3/6/97 IN STOCK OR INDEX-
INCLUDING REINVESTMENT OF DIVIDENDS.
FISCAL YEAR ENDING SEPTEMBER 30.
Cumulative Total Return
------------------------------------------------------------------------------------
3/6/97 3/97 6/97 9/97 12/97 3/98 6/98 9/98 12/98 3/99
EMCORE CORPORATION 100.00 107.88 163.03 181.82 189.09 151.52 96.97 75.76 169.70 136.36
NASDAQ STOCK MARKET (U.S.) 100.00 92.98 110.01 128.62 120.41 140.93 144.80 130.65 169.77 190.39
NASDAQ ELECTRONIC COMPONENTS 100.00 94.49 101.02 131.13 98.30 108.17 100.04 104.39 151.86 156.06
Cumulative Total Return
------------------------------------------------------------------------------------
6/99 9/99 12/99 3/00 6/00 9/00 12/00 3/01 6/01 9/01
EMCORE CORPORATION 195.15 134.55 329.70 1115.76 1163.64 806.36 911.52 486.07 596.36 166.01
NASDAQ STOCK MARKET (U.S.) 208.28 213.46 315.50 354.20 307.98 283.40 189.77 141.65 166.95 115.84
NASDAQ ELECTRONIC COMPONENTS 177.77 212.17 282.41 452.53 443.31 373.14 232.09 141.60 163.07 105.03
PROPOSAL II: APPOINTMENT OF INDEPENDENT AUDITORS
APPOINTMENT OF AUDITORS
Deloitte & Touche LLP, independent certified public accountants, audited
the financial statements of EMCORE Corporation for the fiscal year ending
September 30, 2001. The Audit Committee and the Board of Directors have selected
Deloitte & Touche LLP as the independent auditors of the Company for the fiscal
year ending September 30, 2002. The ratification of the appointment of Deloitte
& Touche LLP will be determined by the vote of the holders of a majority of the
shares present in person or represented by proxy at the Annual Meeting. If the
foregoing appointment of Deloitte & Touche LLP is not ratified by shareholders,
the Board of Directors will appoint other independent accountants whose
appointment for any period subsequent to the 2003 Annual Meeting of Shareholders
will be subject to the approval of shareholders at that meeting.
Representatives of Deloitte & Touche LLP are expected to attend the Annual
Meeting of Shareholders and will have the opportunity to make a statement if
they desire to do so and are expected to be available to answer appropriate
questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE RATIFICATION
OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE INDEPENDENT AUDITORS OF THE
COMPANY.
17
GENERAL
OTHER MATTERS
The Board of Directors knows of no other business which will be presented
at the meeting. If, however, other matters are properly presented, the persons
named in the enclosed proxy will vote the shares represented thereby in
accordance with their judgment on such matters.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the 2003 Annual Meeting
of Shareholders must be received by the Company no later than October 27, 2002.
Proposals may be mailed to the Company, to the attention of Howard W. Brodie,
Secretary, 145 Belmont Drive, Somerset, New Jersey 08873.
By Order of the Board of Directors
/s/ Howard W. Brodie
----------------------------------
Howard W. Brodie
Secretary
18
Please Detach and Mail in the Envelope Provided
- ----------------------------------------------------------------------------------------------------------------------------------
A [X] Please mark
your votes as
in this example.
VOTE FOR
all nominees
listed at THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2
right (except
as marked to VOTE WITHHELD
the contrary from all
below) nominees
1. ELECTION OF [ ] [ ] Nominees: 2. RATIFICATION OF FOR AGAINST ABSTAIN
DIRECTORS DELOITTE & TOUCHE,
Thomas J. Russell LLP AS THE COMPANY'S [ ] [ ] [ ]
Reuben F. Richards, Jr. INDEPENDENT AUDITORS
John J. Hogan, Jr.
(Instruction: To withhold 3. Upon such other business as may properly
authority for an individual come before the Annual Meeting or any
nominee, write that nominee's adjournment thereof.
name on the line provided below.)
In their discretion, the proxies are
___________________________________ authorized to vote upon such other business
as may properly come before the Annual
Meeting, and any adjournments or postponements
thereof.
PLEASE MARK, SIGN AND DATE THIS PROXY CARD
AND PROMPTLY RETURN IT IN THE ENVELOPE PROVIDED.
NO POSTAGE NECESSARY IF MAILED WITHIN THE
UNITED STATES.
The undersigned hereby acknowledges receipt
of (i) the Notice of Annual Meeting, (ii) the
Proxy Statement, and (iii) the Company's 2001
Annual Report to Shareholders.
Signature________________________________________ Signature____________________________________ Date____________________________
(IF HELD JOINTLY)
NOTE: Please sign exactly as your name appears hereon and mail it promptly even though you now plan to attend the meeting. When
shares are held by joint tenants, both should sign. When signing as attorney, 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 the partnership name by authorized person.