SCI
ENGINEERED MATERIALS, INC.
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
to
be held
June
2, 2008
and
PROXY
STATEMENT
IMPORTANT
Please
mark, sign and date your proxy
and
promptly return it in the enclosed envelope.
SCI
ENGINEERED MATERIALS,
INC.
2839
Charter Street
Columbus,
Ohio 43228
(614)
486-0261
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
TO
BE HELD JUNE 2, 2008
April
18,
2008
To
Our
Shareholders:
The
Annual Meeting of Shareholders of SCI Engineered Materials, Inc. (the “Company”)
will be held at our offices located at 2839 Charter Street, Columbus, Ohio
43228, on June 2, 2008, at 9:30 a.m. local time, for the following
purposes:
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1.
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To
elect five directors of the Company, each to serve for terms expiring
at
the next Annual Meeting of
Shareholders;
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2.
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To
ratify the selection of the independent registered public accounting
firm
for the year ending December 31, 2008;
and
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3.
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To
transact any other business which may properly come before the meeting
or
any adjournment thereof.
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Accompanying
this Notice of Annual Meeting is a form of a Proxy, Proxy Statement, and a
copy
of our Form 10-KSB Annual Report for the year ended December 31, 2007, all
to be
mailed on or about April 18, 2008.
Our
Board
of Directors has fixed April 10, 2008, as the record date for the determination
of shareholders entitled to notice and to vote at the annual meeting and any
adjournment thereof. A list of shareholders will be available for examination
by
any shareholder at the annual meeting and for a period of 10 days before the
annual meeting at our executive offices.
You
will
be most welcome at the annual meeting and we hope you can attend. Our directors
and officers as well as representatives of our registered independent public
accounting firm are expected to be present to answer your questions and to
discuss the Company’s business.
We
urge
you to execute and return the enclosed proxy as soon as possible so that your
shares may be voted in accordance with your wishes. If you attend the annual
meeting, you may cast your vote in person and your proxy will not be used.
If
your shares are held in an account at a brokerage firm or bank, you must
instruct them on how to vote your shares.
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By
Order of the Board of Directors,
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Daniel
Rooney
Chairman
of the Board of Directors,
President
and Chief Executive Officer
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PLEASE
SIGN AND MAIL THE ENCLOSED PROXY
IN
THE ACCOMPANYING ENVELOPE
NO
POSTAGE NECESSARY IF MAILED IN THE UNITED
STATES
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SCI
ENGINEERED MATERIALS, INC.
2839
Charter Street
Columbus,
Ohio 43228
PROXY
STATEMENT
ANNUAL
MEETING OF SHAREHOLDERS
June
2, 2008
This
proxy statement is furnished to the shareholders of SCI Engineered Materials,
Inc., an Ohio corporation (the “Company”), in connection with the solicitation
of proxies to be used in voting at the Annual Meeting of Shareholders to be
held
at our executive offices located at 2839 Charter Street, Columbus, Ohio 43228
on
June 2, 2008 at 9:30 a.m., and at any adjournment or postponement thereof (the
“Annual Meeting”). The enclosed proxy is being solicited by our Board of
Directors. This proxy statement and the enclosed proxy will be first sent or
given to our shareholders on approximately April 18, 2008.
We
will
bear the cost of the solicitation of proxies, including the charges and expenses
of brokerage firms and others for forwarding solicitation material to beneficial
owners of stock. Representatives of the Company may solicit proxies by mail,
telegram, telephone, fax, or personal interview.
The
shares represented by the accompanying proxy will be voted as directed if the
proxy is properly signed and received by us prior to the Annual Meeting. If
no
directions are made to the contrary, the proxy will be voted
FOR
the
election of Daniel Rooney, Robert J. Baker, Jr., Walter J. Doyle, Robert H.
Peitz, and Edward W. Ungar as directors of the Company and, at the discretion
of
persons acting under the proxy, to ratify the selection of Maloney + Novotny
LLC
as our independent registered public accounting firm for the year ending
December 31, 2008 and to transact such other business as may properly come
before the meeting or any adjournment thereof. Any shareholder voting the
accompanying proxy has the power to revoke it at any time before its exercise
by
giving notice of revocation to us, by duly executing and delivering to us a
proxy card bearing a later date, or by voting in person at the annual meeting.
The officers, directors, and nominees for directors of the Company are the
beneficial owners of 31.1% of the Company’s issued and outstanding shares. The
officers, directors and nominees for directors of the Company have indicated
that they will vote in favor of each nominee for director and in favor of the
ratification of the selection of the independent public accountants of the
Company.
Only
holders of record of our common stock at the close of business on April 10,
2008
will be entitled to vote at the Annual Meeting. At that time, we had
3,502,050
shares
of
common stock outstanding and entitled to vote. Each share of our common stock
outstanding on the record date entitles the holder to one vote on each matter
submitted at the Annual Meeting.
The
presence, in person or by proxy, of a majority of the outstanding shares of
our
common stock is necessary to constitute a quorum for the transaction of business
at the Annual Meeting. Abstentions and broker non-votes will be counted for
purposes of determining the presence or absence of a quorum. Broker non-votes
occur when brokers, who hold their customers’ shares in street name, sign and
submit proxies for such shares and vote such shares on some matters, but not
others. Typically, this would occur when brokers have not received any
instructions from their customers, in which case the brokers, as the holders
of
record, are permitted to vote on “routine” matters, which typically include the
election of directors.
The
proposal to ratify the selection of the independent registered public accounting
firm for the year ending December 31, 2008, is considered a routine matter
and
broker/dealers who hold their customers’ shares in street name may, under the
applicable rules of the exchanges and other self-regulatory organizations of
which such broker/dealers are members, sign and submit proxies for such shares
and may vote such shares on this matter.
The
election of the director nominees requires the favorable vote of a plurality
of
all votes cast by the holders of our common stock at a meeting at which a quorum
is present. Proxies that are marked “Withhold Authority” and broker non-votes
will not be counted toward such nominee’s achievement of a plurality and thus
will have no effect.
Each
other matter to be submitted to the shareholders for approval or ratification
at
the Annual Meeting requires the affirmative vote of the holders of a majority
of
our common stock present and entitled to vote on the matter. For purposes of
determining the number of shares of our common stock voting on the matter,
abstentions will be counted and will have the effect of a negative vote; broker
non-votes will not be counted and thus will have no effect.
ELECTION
OF DIRECTORS
Our
Restated Code of Regulations provides that the number of directors shall be
fixed by the Board. The total number of authorized directors currently is fixed
at five. The nominees for director, if elected, will serve for one-year terms
expiring at the next Annual Meeting of Shareholders. Daniel Rooney, Robert
J.
Baker, Jr., Walter J. Doyle, Robert H. Peitz, and Edward W. Ungar currently
serve as directors of the Company and are being nominated by the Board of
Directors for re-election as directors.
It
is
intended that, unless otherwise directed, the shares represented by the enclosed
proxy will be voted
FOR
the
election of Messrs. Rooney, Baker, Doyle, Peitz, and Ungar as directors. In
the
event that any nominee for director should become unavailable, the number of
directors of the Company may be decreased pursuant to the Restated Code of
Regulations or the Board of Directors may designate a substitute nominee, in
which event the shares represented by the enclosed proxy will be voted for
such
substitute nominee.
The
Board of Directors recommends that the shareholders vote FOR the election of
the
nominees for director.
The
following table sets forth each nominee’s name, age, and his position with the
Company:
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Name
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Age
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Position
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Daniel
Rooney
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54
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Chairman
of the Board of Directors,
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President
and Chief Executive Officer
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Robert
J. Baker, Jr.
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68
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Director
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Walter
J. Doyle
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73
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Director
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Robert
H. Peitz
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47
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Director
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Edward
W. Ungar
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71
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Director
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Daniel
Rooney
has
served as a Director of our Company since joining us in March 2002 as President
and Chief Executive Officer. Mr. Rooney was elected as the Chairman of the
Board
of Directors of our Company on January 8, 2003. Prior to joining us, Mr. Rooney
was General Manager for Johnson Matthey, Color and Coatings Division, Structural
Ceramics Sector North America from 1994 to 2001. Prior to that, Mr. Rooney
held
various management positions at TAM Ceramics, Inc., a Cookson Group Company.
Mr.
Rooney has a Bachelor of Science in Ceramic Engineering from Rutgers College
of
Engineering and an MBA from Niagara University.
Robert
J. Baker, Jr., Ph.D.
has
served as a Director of our Company since 1992. Dr. Baker is the President
and
founder of Venture Resources International and the co-founder of Business Owners
Consulting Group, which assists companies in the development of growth
strategies, including marketing position and competitive strategies. Dr. Baker
was graduated from the University of Illinois with B.S., M.S., and Ph.D. degrees
in Ceramic Engineering. In addition, he is a Sloan Fellow at MIT where he earned
a Management Science degree.
Edward
W. Ungar
has been
a Director of our Company since 1990. Mr. Ungar is the President and founder
of
Taratec Corporation, a technology business-consulting firm in Columbus, Ohio.
Prior to forming Taratec Corporation in 1986, Mr. Ungar was an executive with
Battelle Memorial Institute. Mr. Ungar earned Ph.D. and M.S. degrees in
Mechanical Engineering from The Ohio State University and a B.M.E. in Mechanical
Engineering from The City College of New York.
Walter
J. Doyle
has
served as a Director of our Company since 2004. Mr.
Doyle
is
the President of Forest Capital, an angel capital firm. Previously, Mr. Doyle
was President and CEO of Industrial Data Technologies Corp. for 21 years. Mr.
Doyle earned an Electrical Engineering degree from City College of New York
and
an MBA from the Harvard Business School.
Robert
H. Peitz
has
served as a Director of our Company since 2004. Mr. Peitz is the former Managing
Director and Head of Financial Markets for PB Capital in New York, New York.
Previously, Mr. Peitz was a Managing Director at BHF Capital, Treasurer of
BHF-Bank New York Branch and an Associate at Morgan Stanley in International
Operations. Mr. Peitz graduated from the University of Cincinnati with a
Bachelor of Arts in Economics and has an MBA from the Thunderbird School of
Global Management.
The
Board
of Directors is seeking an individual(s) to strengthen our
board.
INFORMATION
CONCERNING THE BOARD OF DIRECTORS, EXECUTIVE OFFICERS,
AND
PRINCIPAL SHAREHOLDERS
Meetings
and Compensation of the Board of Directors
Our
Board
of Directors had a total of seven meetings during the year ended December 31,
2007. During 2007, no director attended fewer than 86% of the meetings of the
Board of Directors, held during the period for which he has been a director,
and
the total number of meetings held by all committees of the Board of Directors
in
which he served. Directors who are employed by the Company receive no
compensation for serving as directors.
As
compensation for their service as directors of our Company, non-employee
directors may periodically receive cash, grants of stock or grants of stock
options with an exercise price equal to the fair market value of our common
stock on the date of grant and a ten-year term. Directors are also reimbursed
for all reasonable out-of-pocket expenses. In the year ended December 31, 2007,
each of Messrs. Baker, Jr., Doyle, Peitz and Ungar received compensation of
1,819 shares of the Company’s common stock and $5,000 in cash.
It
is our
expectation that all members of the Board of Directors attend the Annual Meeting
of Shareholders. All members of our Board of Directors were present at our
2007
Annual Meeting of Shareholders.
Shareholder
Communication
Our
Board
of Directors welcomes communications from shareholders. Shareholders may send
communications to the Board of Directors or to any director in particular,
c/o
Gerald S. Blaskie, SCI Engineered Materials, Inc., 2839 Charter Street,
Columbus, Ohio 43228. Any correspondence addressed to the Board of Directors
or
to any one of our directors in care of our offices will be forwarded to the
addressee without review by management.
Committees
of the Board of Directors
We
have
an Audit Committee and a Stock Option and Compensation Committee (the
“Compensation Committee”).
The
Audit
Committee consults with our Chief Financial Officer and other key members of
our
management and with our independent auditors with regard to the plan of audit;
reviews, in consultation with the independent auditors, their report of audit,
or proposed report of audit and the accompanying management letter, if any;
and
consults with our Chief Financial Officer and other key members of our
management and with our independent auditors with regard to the adequacy of
the
internal accounting controls. The Chairman of the Audit Committee is Mr. Ungar,
and the members are Messrs. Baker and Doyle. The Audit Committee met two times
during 2007. The Board of Directors has not adopted a charter for the Audit
Committee. The Board of Directors has determined that Messrs. Doyle and Ungar
qualify as “audit committee financial experts” as that term is defined in Item
401(e) of Regulation S-B. Messrs. Doyle and Ungar and Dr. Baker each meet the
criteria for audit committee independence as defined in NASDAQ Rule 4350, and
Rule 10A-3 promulgated under the Securities Exchange Act of 1934, as
amended.
The
Compensation Committee of the Board of Directors reviews executive compensation
and administers our stock incentive and incentive compensation performance
plans. The Chairman of the Compensation Committee is Dr. Baker and the members
are Messrs. Doyle and Ungar. The Compensation Committee met once during
2007.
Due
to
the limited size of our Board of Directors, the Board of Directors has
determined that it is not necessary to establish a nominating committee.
Nominations for directors are considered by the entire Board of Directors.
The
directors take a critical role in guiding the strategic direction and oversee
the management of the Company. Director candidates are considered based on
various criteria, such as their broad based business and professional skills
and
experiences, a global business and social perspective, concern for long term
interests of shareholders, and personal integrity and judgment. In addition,
directors must have available time to devote to Board activities and to enhance
their knowledge of the industry.
Accordingly,
we seek to attract and retain highly qualified directors who have sufficient
time to attend to their substantial duties and responsibilities to the Company.
Recent developments in corporate governance and financial reporting have
resulted in an increased demand for such highly qualified and productive public
company directors.
The
Board
of Directors will consider the recommendations of shareholders regarding
potential director candidates. In order for shareholder recommendations
regarding possible director candidates to be considered by the Board of
Directors:
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such
recommendations must be provided to the Board of Directors c/o Gerald
S.
Blaskie, SCI Engineered Materials, Inc., 2839 Charter Street, Columbus,
Ohio 43228, in writing at least 120 days prior to the date of the
next
scheduled annual meeting;
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the
nominating shareholder must meet the eligibility requirements to
submit a
valid shareholder proposal under Rule 14a-8 of the Securities Exchange
Act
of 1934, as amended; and
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the
shareholder must describe the qualifications, attributes, skills
or other
qualities of the recommended director
candidate.
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Compensation
Committee Interlocks and Insider Participation
None
of
our executive officers have served:
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as
a member of the Compensation Committee of another entity which has
had an
executive officer who has served on our Compensation Committee;
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as
a director of another entity which has had an executive officer who
has
served on our Compensation Committee;
or
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as
a member of the Compensation Committee of another entity which has
had an
executive officer who has served as one of our
directors.
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INDEMNIFICATION
OF DIRECTORS AND OFFICERS
Section
1701.13(E) of the Ohio Revised Code gives a corporation incorporated under
the
laws of Ohio power to indemnify any person who is or has been a director,
officer or employee of that corporation, or of another corporation at the
request of that corporation, against expenses, judgments, fines and amounts
paid
in settlement actually and reasonably incurred by him in connection with any
threatened, pending or completed action, suit or proceeding, criminal or civil,
to which he is or may be made a party because of being or having been such
director, officer, employee or agent, provided that in connection therewith,
such person is determined to have acted in good faith in what he reasonably
believed to be in or not opposed to the best interest of the corporation of
which he is a director, officer, employee or agent and without reasonable cause,
in the case of a criminal matter, to believe that his conduct was unlawful.
The
determination as to the conditions precedent to the permitted indemnification
of
such person is made by the directors of the indemnifying corporation acting
at a
meeting at which, for the purpose, any director who is a party to or threatened
with any such action, suit or proceeding may not be counted in determining
the
existence of a quorum and may not vote. If, because of the foregoing
limitations, the directors are unable to act in this regard, such determination
may be made by the majority vote for the corporation’s voting shareholders (or
without a meeting upon two-thirds written consent of such shareholders), by
judicial proceeding or by written opinion of legal counsel not retained by
the
corporation or any person to be indemnified during the five years preceding
the
date of determination.
Section
1701.13(E) of the Ohio Revised Code further provides that the indemnification
thereby permitted shall not be exclusive of, and shall be in addition to, any
other rights that directors, officers, employees or agents have, including
rights under insurance purchased by the corporation.
Article
5
of the Company’s Restated Code of Regulations contains extensive provisions
related to indemnification of officers, directors, employees and agents. The
Company is required to indemnify its directors against expenses, including
attorney fees, judgments, fines and amounts paid in settlement of civil,
criminal, administrative, and investigative proceedings, if the director acted
in good faith and in a manner he reasonably believed to be in, or not opposed
to, the best interests of the Company. When criminal proceedings are involved,
indemnification is further conditioned upon the director having no reasonable
cause to believe that his conduct was unlawful.
Entitlement
of a director to indemnification shall be made by vote of the disinterested
directors of the Company. If there are an insufficient number of such directors
to constitute a quorum, the determination to indemnify directors shall be made
by one of the following methods: (1) a written opinion of independent legal
counsel, (2) vote by the shareholders, or (3) by the court in which the action,
suit or proceeding was brought.
The
Company may pay the expenses, including attorney fees of any director, as
incurred, in advance of a final disposition of such action, suit or proceeding,
upon receipt by the Company of an undertaking by the affected director(s) in
which he (they) agree(s) to cooperate with the Company concerning the action,
suit or proceeding, and agree(s) to repay the Company in the event that a court
determines that the director’s action, or failure to act, involved an act, or
omission, undertaken with reckless disregard for the best interests of the
Company.
The
indemnification provisions of the Articles of Incorporation relating to
officers, employees and agents of the Company are similar to those relating
to
directors, but are not mandatory in nature. On a case-by-case basis, the Company
may elect to indemnify them, and may elect to pay their expenses, including
attorney fees, in advance of a final disposition of the action, suit or
proceeding, upon the same conditions and subject to legal standards as relate
to
directors. These indemnification provisions are also applicable to actions
brought against directors, officers, employees and agents in the right of the
Company. However, no indemnification shall be made to any person adjudged to
be
liable for negligence or misconduct in the performance of his duty to the
Company unless, and only to the extent that a court determines, that despite
the
adjudication of liability, but in view of all of the circumstances of the case,
shall deem proper. The Company currently carries directors and officers
insurance in the amount of one million dollars.
The
above
discussion of the Company’s Restated Code of Regulations and of Section
1701.13(E) of the Ohio Revised Code is not intended to be exhaustive and is
respectively qualified in its entirety by such documents and
statutes.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933
(the
“Act”) may be permitted to directors, officers and controlling persons of the
Company issuer pursuant to the foregoing provisions, or otherwise, the Company
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable.
REPORT
OF AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The
Audit
Committee consults with our Chief Financial Officer and other key members of
our
management and with our independent auditors with regard to the plan of audit;
reviews, in consultation with the independent auditors, their report of audit,
or proposed report of audit and the accompanying management letter, if any;
and
consults with our Chief Financial Officer and other key members of our
management and with our independent auditors with regard to the adequacy of
the
internal accounting controls.
In
fulfilling its responsibilities, the Audit Committee selected Maloney + Novotny
LLC as our independent accountants for purposes of auditing our financial
statements for 2007. The Audit Committee has reviewed and discussed with
management and the independent auditors our audited financial statements;
discussed with the independent auditors the matters required to be discussed
by
Codification of Statements on Auditing Standards No. 61; received the written
disclosures and the letter from the independent auditors required by
Independence Standards Board Standard No. 1; and discussed with the independent
accountants their independence from our Company.
Based
on
the reviews and discussions with management and Maloney + Novotny LLC, the
Audit
Committee recommended to the Board of Directors that our audited consolidated
financial statements be included in our Annual Report on Form 10-KSB for the
fiscal year ended December 31, 2007, filed with the Securities and Exchange
Commission.
The
Board
of Directors evaluated the independence of each member of the Audit Committee.
As part of its evaluation, the Board of Directors determined, in the exercise
of
its business judgment, that Messrs. Ungar and Doyle, and Dr. Baker are
independent under Rule 4350(d) of the Nasdaq Stock Market and are financially
literate each in his own capacity.
Based
upon its work and the information received in the inquiries outlined above,
the
Audit Committee is satisfied that its responsibilities for the period ended
December 31, 2007, were met and that our financial reporting and audit processes
are functioning effectively.
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Submitted
by the Audit Committee
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of
the Board of Directors:
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Robert
J. Baker, Jr.
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Edward
W. Ungar
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Executive
Officers
In
addition to Mr. Rooney, the following persons serve as executive officers of
the
Company:
Gerald
S. Blaskie
,
age 50,
has served as our Chief Financial Officer since April 2001. On March 2, 2006,
our Board of Directors appointed Mr. Blaskie to the position of Vice President
and Chief Financial Officer. Prior to joining us, Mr. Blaskie was the Controller
at Cable Link, Inc. from February 2000 to March 2001. From 1997 to 2000, he
was
the Plant Manager at Central Ohio Plastics Corporation, where he also served
as
Controller from 1993 to 1997. Mr. Blaskie earned a B.S. degree in Accounting
from Central Michigan University and passed the CPA exam in the State of Ohio.
Scott
Campbell
,
Ph.D
.,
age
50,
has served as our Vice President of Technology since March 2005. Dr. Campbell
served as our Vice-President of Research and Engineering from July 2004 to
March
2005. Dr. Campbell joined us in July 2002 as our Technical Director. Prior
to
joining us, he was Senior Research Manager at Oxynet, Inc. for five years.
Dr.
Campbell earned his Ph.D., Metallurgy, from the University of Illinois at
Chicago. In addition, he earned M.S. and B.S. degrees in Ceramic Engineering
from The Ohio State University. He is a member of the American Vacuum Society
and the Materials Research Society.
Michael
K. Barna
,
age 51,
has served as Vice President, Sales-Photonics, since March 2, 2006. Mr. Barna
joined us as Director of Sales and Marketing in January 2004. Prior to joining
us, Mr. Barna had more than 20 years of experience in thin film sales, including
major account sales of Physical Vapor Deposition equipment, high purity targets
and evaporation materials for these systems, hybrid microelectronic,
telecommunications, and the commercial glass coating markets. Mr. Barna earned
a
B.S. degree in Mechanical Engineering from the University of
Kentucky.
Officers
are elected annually by our Board of Directors and serve at its
discretion.
Ownership
of Common Stock by Directors and Executive Officers
The
following table sets forth, as of April 10, 2008, the beneficial ownership
of
the Company’s common stock by each of the Company’s directors, each executive
officer named in the Summary Compensation Table, and by all directors and
executive officers as a group.
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Name
of Beneficial Owner
(1)
|
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Number
of Shares Beneficially Owned
(2)
|
|
Percentage
of
Class
(3)
|
|
|
Robert
H. Peitz
(4)
|
|
|
714,953
|
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19.3
|
%
|
|
Daniel
Rooney
(5)
|
|
|
141,152
|
|
|
3.9
|
%
|
|
Walter
J. Doyle
(6)
|
|
|
120,238
|
|
|
3.4
|
%
|
|
Robert
J. Baker, Jr.
(7)
|
|
|
75,051
|
|
|
2.1
|
%
|
|
Scott
Campbell
(8)
|
|
|
66,000
|
|
|
1.8
|
%
|
|
Edward
W. Ungar
(9)
|
|
|
56,188
|
|
|
1.6
|
%
|
|
Michael
K. Barna
(10)
|
|
|
55,000
|
|
|
1.5
|
%
|
|
|
|
|
|
|
|
|
|
|
All
directors and executive officers as
a
group (8 persons)
(11)
|
|
|
1,284,582
|
|
|
31.1
|
%
|
(1)
The
address of all directors and executive officers is c/o SCI Engineered Materials,
Inc., 2839 Charter Street, Columbus, Ohio 43228.
(2)
For
purposes of the above table, a person is considered to “beneficially own” any
shares with respect to which he exercises sole or shared voting or investment
power or as to which he has the right to acquire the beneficial ownership within
60 days of April 10, 2008. Unless otherwise indicated, voting power and
investment power are exercised solely by the person named above or shared with
members of his or her household.
(3)
“Percentage
of Class” is calculated by dividing the number of shares beneficially owned by
the total number of outstanding shares of the Company on April 10, 2008, plus
the number of shares such person has the right to acquire within 60 days of
April 10, 2008.
(4)
Mr.
Peitz’ ownership includes 199,162 shares of common stock beneficially owned by
Park National Bank (Trustee for the Ingeborg Funk Children’s Trust), of which
43,750 shares of common stock can be acquired under stock purchase warrants
exercisable within 60 days of April 10, 2008 (Mr. Peitz includes these shares
because he has the power to dispose of the shares). Mr. Peitz’ ownership also
includes 154,712 shares of common stock, which can be acquired by Mr. Peitz
under stock options and purchase warrants exercisable within 60 days of April
10, 2008.
(5)
Includes
128,000 common shares, which may be acquired by Mr. Rooney under stock options
exercisable within 60 days of April 10, 2008 and 7,800 shares which are held
in
Mr. Rooney’s IRA.
(6)
Includes
24,250 common shares, which may be acquired by Mr. Doyle under stock purchase
warrants exercisable within 60 days of April 10, 2008.
(7)
Includes
51,000 common shares, which may be acquired by Dr. Baker under stock options
exercisable within 60 days of April 10, 2008, and 16,063 shares which are held
in Dr. Baker’s IRA.
(8)
Includes
66,000 common shares, which may be acquired by Dr. Campbell under stock options
exercisable within 60 days of April 10, 2008.
(9)
Includes
51,000 common shares, which may be acquired by Mr. Ungar under stock options
exercisable within 60 days of April 10, 2008.
(10)
Includes
52,000 common shares, which may be acquired by Mr. Barna under stock options
exercisable within 60 days of April 10, 2008.
(11)
Includes
626,712 common shares, which may be acquired under stock options and stock
purchase warrants exercisable within 60 days of April 10, 2008.
Ownership
of Common Stock by Principal Shareholders
The
following table sets forth information as of April 10, 2008, relating to the
beneficial ownership of common stock by each person known by the Company to
own
beneficially more than 5% of the outstanding shares of common stock of the
Company.
|
Name
of Beneficial Owner
(1)
|
|
Number
of Shares Beneficially Owned
(2)
|
|
Percentage
of
Class
(3)
|
|
|
Robert
H. Peitz
(4)
|
|
|
714,953
|
|
|
19.3
|
%
|
|
Thomas
G. Berlin
(5)
|
|
|
408,197
|
|
|
11.4
|
%
|
|
Laura
Shunk
(6)
|
|
|
403,328
|
|
|
11.2
|
%
|
|
Daniel
Funk
(7)
|
|
|
401,129
|
|
|
11.2
|
%
|
|
Curtis
A. Loveland
(8)
|
|
|
334,956
|
|
|
9.4
|
%
|
|
Windcom
Investments SA
(9)
|
|
|
332,810
|
|
|
9.4
|
%
|
|
Lake
Street Fund L.P.
(10)
|
|
|
310,300
|
|
|
8.7
|
%
|
|
Berlin
Capital Growth L.P.
(11)
|
|
|
290,497
|
|
|
8.2
|
%
|
|
Mid
South Investor Fund L.P.
|