##### Table of Contents



---

---

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549




---

FORM 10-K/A

Amendment No. 1

|           |                                                                                      | 
|---------- | ------------------------------------------------------------------------------------ | 
|(Mark One) |                                                                                     
|x          | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the Fiscal Year Ended December 31, 2002

|  |                                                                                         
|- | ----------------------------------------------------------------------------------------
|o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

For the transition period from          to
     Commission File Number 0-27892

SIPEX CORPORATION

(Exact name of registrant as specified in its charter)


|                                               |  |                                     
|---------------------------------------------- |  | ------------------------------------
|Massachusetts                                  |  | 04-6135748                          
|(State of Incorporation)                       |  | (IRS employer identification number)
|                                               |  |                                     
|233 South Hillview Drive, Milpitas, California |  | 95035                               
|(Address of principal executive offices)       |  | (Zip Code)                          

Registrants telephone number, including area code: (408) 934-7500
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $0.01 per share

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes x  No o

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes x  No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrants knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. o

The aggregate market value of common stock held by non-affiliates of the
registrant as of June 28, 2002 was approximately $136,600,000 based upon $4.89
per share, the last reported sale price of the common stock on The Nasdaq
National Market on that date.

The number of shares of the
registrants common stock outstanding on April 7,
2003 was 28,030,659.

DOCUMENTS INCORPORATED BY REFERENCE

None



---

---





---

TABLE OF CONTENTS



|              |                                                                          |  |  |  |  |  |  | 
|------------- | ------------------------------------------------------------------------ |  |  |  |  |  |  | 
|PART III     
|              | Item 10. Directors and Executive Officers of the Registrant:            
|              | Item 11. Executive Compensation:                                        
|              | Item 12. Security Ownership of Certain Beneficial Owners and Management:
|              | Item 13. Certain Relationships and Related Transactions:                
|              | Item 14. Controls and Procedures:                                       
|SIGNATURES   
|EXHIBIT INDEX
|EXHIBIT 99.3 
|EXHIBIT 99.4 



---



##### Table of Contents



Explanatory Note

This Amendment No. 1 on Form 10-K/A (this
Amendment) amends the registrants Annual Report on
Form 10-K for the fiscal year ended December 31, 2002,
originally filed on March 31, 2003 (the Original
Filing). Sipex Corporation (the Company) is
refiling Part III to include the information required by
Items 10, 11, 12 and 13 to Part III because the
Companys definitive proxy statement will not be filed within 120 days
of the end of the Companys fiscal year ended December 31,
2002. In addition, in connection with the filing of this Amendment
and pursuant to the rules of the Securities and Exchange Commission,
the Company is including with this Amendment certain currently dated
certifications.

Except as described above, no other changes have been
made to the Original Filing. This Amendment continues to speak as of
the date of the Original Filing, and the registrant has not updated
the disclosures contained therein to reflect any events which
occurred at a date subsequent to the filing of the Original Filing.

1



---



##### Table of Contents






PART III




Item 10.Directors and Executive Officers of the Registrant:

Set forth below is information regarding the members
of our board of directors and Mr. Thomas P. Redfern, a director
nominee, including their principal occupation at present and for at
least the last five years, certain other directorships held by them,
the year each director was first elected a director, his age, the year each directors term will expire and
the class of director of each director.

|                               |  |     |    |             |  |                                                 |  |          |      |  |  |     |     |  |  | 
|------------------------------ |  | --- | -- | ----------- |  | ----------------------------------------------- |  | -------- | ---- |  |  | --- | --- |  |  | 
|Nominee or Directors Name     |  |     |    |             |  |                                                 |  |         
|and Year Nominee or Director   |  |     |    |             |  | Year Term                                       |  | Class of
|First Became a Director        |  | Age |    | Position(s) |  | Will Expire                                     |  | Director
|                               |  |     |    |             |  |                                                 |  |         
|Thomas P. Redfern              |  |     | 62 |             |  | Nominee                                         |  |          |     |  |  |     |    | 
|Manfred Loeb (1982-1987; 1992) |  |     | 76 |             |  | Director                                        |  |          | 2003 |  |  |     | I   | 
|Douglas M. McBurnie (2000)     |  |     | 60 |             |  | Chairman of the Board                           |  |          | 2003 |  |  |     | I   | 
|Lionel H. Olmer (1988)         |  |     | 68 |             |  | Director                                        |  |          | 2004 |  |  |     | II  | 
|John L. Sprague (1993)         |  |     | 73 |             |  | Director                                        |  |          | 2004 |  |  |     | II  | 
|Willy M. C. Sansen (1997)      |  |     | 59 |             |  | Director                                        |  |          | 2004 |  |  |     | II  | 
|Walid Maghribi (2002)          |  |     | 50 |             |  | Director, Chief Executive Officer and President |  | 2005     |      |  |  | III |    
|Joseph C. Consoli (2002)       |  |     | 59 |             |  | Director                                        |  |          | 2005 |  |  |     | III | 

Board Nominee

From 1989 through 2001, Mr. Redfern was with
National Semiconductor, a manufacturer of semiconductor
products, in various technical and management roles in the field
of analog product development and circuit design. In particular,
Mr. Redfern guided product development in the Interface and
Peripheral Group, Audio/ Video Group and the Analog Products
Group. Before his retirement from National Semiconductor in
2001, Mr. Redfern was a Fellow and a technical advisor in
the Analog Products Group. Prior to National Semiconductor,
Mr. Redfern served for seven years as the Director of MOS
Design at Linear Technology, a manufacturer of linear integrated
circuits.

Directors

Mr. Loeb has
been a director of the Company from 1982 to 1987 and from 1992 to the
present. Mr. Loeb, who would have been subject to re-election at
the Companys Annual Meeting of Stockholders to be held in 2003,
has decided not to stand for re-election. From 1983 to December 1992,
he served as the Executive Director of Tractebel S.A. and Chief
Executive Officer of the Electricity and Gas International Division
of Tractebel S.A. From 1993 to 1999, Mr. Loeb served as an
Honorary Director of Tractebel S.A. and Chairman of Tractebel, Inc.
(USA).

Mr. McBurnie has been a director of the
Company since July 2000 and has been Chairman of the Board from
June 2002 to the present. Mr. McBurnie was formerly Senior
Vice President, Computer, Consumer & Network Products Group,
of VLSI Technology. From June 1994 to August 1997,
Mr. McBurnie was with National Semiconductor, where he was
Senior Vice President and General Manager of its Communications
and Consumer Group. Previously, Mr. McBurnie was Vice
President and General Manager of National Semiconductors
Local Area Network Division. Prior to joining National
Semiconductor, he held key executive positions at a number of
Silicon Valley companies, including Xidex Corporation, a
manufacturer of data storage media, Precision Monolithics, Inc.,
a semiconductor company, and Fairchild Semiconductor, a
semiconductor company.

Mr. Olmer has been a director of the Company
since 1988 and serves as Chairman of the Compensation Committee.
Since July 2002, Mr. Olmer has been Of Counsel to the law
firm of Paul, Weiss, Rifkind, Wharton & Garrison LLP,
focusing on international trade, investment and technology
transfer law. From 1985 until July 2002, Mr. Olmer was a
partner at Paul, Weiss, Rifkind, Wharton & Garrison
LLP. From 1981 to 1985, he served as Undersecretary of Commerce
for International Trade in the Reagan Administration.

Dr. Sprague has been a director of the
Company since 1993. He has been the president of John L.
Sprague Associates, Inc., a consulting firm, since 1988. In
addition to serving as a director of the Company,
Dr. Sprague currently serves as a director of California
Micro Devices, a manufacturer of electronic components.

Dr. Sansen has been a director of the
Company since July 1997. He has been a full professor at the
Katholieke University Leuven in Belgium since 1981. He currently
heads the Medical and Integrated Circuits and Sensors Division
of the Electrical Engineering Department. Dr. Sansen is the
author of six electronics books and more than three hundred
papers and is currently a Fellow at the Katholieke University
Leuven Institute of Electrical and Electronics Engineering, and
past chairman of the Electrical Engineering Department of
Katholieke University Leuven.

Mr. Maghribi joined the Company in August
2002 as the Companys Chief Executive Officer. Since
September 2002, Mr. Maghribi has also served as the
Companys President. Mr. Maghribi has been a director
since August 2002. Before joining the Company, Mr. Maghribi
was President of the Memory Group of Advanced Micro Devices,
Inc., a semiconductor manufacturer. He joined Advanced Micro
Devices in 1986 and was Group Vice President of the Memory Group
before being promoted to President in 2001.

Mr. Consoli has been a director of the
Company since September 2002 and serves as Chairman of the Audit
Committee. Mr. Consoli retired in April 1991. Prior to his
retirement, Mr. Consoli held executive positions in finance
and operations at technology companies including Vice President
Finance and Treasurer of Seagate Technology Inc., a manufacturer
of computer hard drives; Vice President Finance and CFO and
member of the Office of the President of Equatorial
Communications Co., a satellite communications company; Vice
President of Granger Associations and General Manager of its
International Telecommunications Division after serving as Vice
President Finance and CFO; Treasurer of Memorex Corp., a
consumer electronics and computer products company; Vice
President Finance and CFO of Precision Monolithics, Inc., a
semiconductor company; and Group Controller and as Director of
Corporate Development of Fairchild Semiconductor, a
semiconductor company.



Section 16(a) Beneficial Ownership Reporting
Compliance

Section 16(a) of the Securities Exchange Act
of 1934, as amended, requires the Companys officers,
directors and persons who own more than ten percent of a
registered class of the Companys equity securities
(collectively, Reporting Persons), to file reports
of ownership on Forms 3, 4 and 5 with the Securities and
Exchange Commission and the Company. Based solely on the
Companys review of copies of such forms received by it or
written representations from certain Reporting Persons, the
Company believes that all its officers, directors and greater
than ten percent stockholders complied with all filing
requirements applicable to them with respect to transactions
during fiscal year 2002, except that a Form 4 was filed
late in 2002 for each non-employee director, Joseph C.
Consoli, Manfred Loeb, Douglas M. McBurnie, Lionel Olmer, Willy
M.C. Sansen and John Sprague, and that a Form 3 filed in
2002 for Kevin Plouse, Senior Vice President of Business
Development, was amended in April 2003.

2



---



##### Table of Contents






Item 11.Executive Compensation:

Executive Compensation Summary

The following table sets forth certain
information concerning the annual and long term compensation for
services in all capacities to the Company for the fiscal years
ended December 31, 2000, December 31, 2001 and
December 31, 2002, by (i) Walid Maghribi, who became
the Companys Chief Executive Officer during fiscal year
2002, (ii) James E. Donegan, who resigned his position as
Chief Executive Officer of the Company prior to
December 31, 2002, (iii) Frank R. DiPietro, who
resigned his position as Executive Vice President of Finance,
Chief Financial Officer, Treasurer and Clerk of the Company
prior to December 31, 2002, and (iv) the
Companys most highly compensated executive officers of the
Company, other than the Chief Executive Officer, who were
serving in that capacity at the end of fiscal year 2002. These
four individuals are referred to as the Named Executive
Officers.

Phillip A. Kagel joined us as Senior Vice
President, Finance, Chief Financial Officer and Treasurer in
February 2003 and is not included in the tables relating to
summary compensation and option grants. In addition, Joseph T.
Rauschmayer and Kevin Plouse joined us as Senior Vice President
of Operations and Senior Vice President of Business Development,
respectively, in September 2002 and are also not included in the
tables relating to summary compensation and option grants.



Summary Compensation Table


|                            |                                       |                                   |      |                     |      |             |         |                 |         |        |         |   |   |  |           |        |   |   |        |        |     | 
|--------------------------- | ------------------------------------- | --------------------------------- | ---- | ------------------- | ---- | ----------- | ------- | --------------- | ------- | ------ | ------- | - | - |  | --------- | ------ | - | - | ------ | ------ | --- | 
|                            |                                       |                                   |      |                     |      |             |         | Long Term       |         |       
|                            |                                       |                                   |      |                     |      |             |         | Compensation(1) |         |       
|                            |                                       |                                   |      |                     |      |             |         |                
|                            |                                       |                                   |      | Annual Compensation |      | Securities  |         | All Other      
|                            |                                       | Fiscal                            |      |                     |      | Underlying  |         | Compensation   
|Name and Principal Position |                                       | Year                              |      | Salary($)           |      | Bonus($)(2) |         | Options(#)      |         | ($)(3)
|                            |                                       |                                   |      |                     |      |             |         |                 |         |       
|Walid Maghribi(4)           |                                       |                                   | 2002 |                     |      | $           | 121,154 |                 |         | $      | 0       |   |   |  | 1,700,000 |        |   | $ | 0      |       
|                            | Chief Executive Officer and President |                                   |      |                     |      |             |         |                 |         |        |         |   |   |  |           |        |   |   |        |        |    
|James E. Donegan(5)         |                                       |                                   | 2002 |                     |      |             | 105,840 |                 |         |        | 800,000 |   |   |  | 0         |        |   |   | 3,454  |       
|                            | Former Chief Executive Officer        |                                   |      | 2001                |      |             |         | 282,754         |         |        |         | 0 |   |  |           | 60,000 |   |   |        | 36,764 | (6)
|                            |                                       |                                   |      | 2000                |      |             |         | 291,692         |         |        |         | 0 |   |  |           | 0      |   |   |        | 20,922 |    
|Frank R. DiPietro           |                                       |                                   | 2002 |                     |      |             | 228,979 | (7)             |         |        | 0       |   |   |  | 0         |        |   |   | 67,771 | (8)   
|                            | Former Executive Vice President of    |                                   |      | 2001                |      |             |         | 225,731         |         |        |         | 0 |   |  |           | 60,000 |   |   |        | 17,373 | (9)
|                            |                                       | Finance, Chief Financial Officer, |      |                     | 2000 |             |         |                 | 230,000 |        |         |   | 0 |  |           |        | 0 |   |        |        | 0   | 
|                            |                                       | Treasurer and Clerk               |      |                     |      |             |         |                 |         |        |         |   |   |  |           |        |   |   |        |        |     | 
|Philip A. Dube              |                                       |                                   | 2002 |                     |      |             | 146,613 |                 |         |        | 0       |   |   |  | 0         |        |   |   | 1,286  |       
|                            | Interim Chief Financial Officer(10)   |                                   |      |                     |      |             |         |                 |         |        |         |   |   |  |           |        |   |   |        |        |    
|                            |                                       | and Vice President of Finance     |      |                     |      |             |         |                 |         |        |         |   |   |  |           |        |   |   |        |        |     | 




|    |                                                                                                                                                                                                 
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The Company did not make any restricted stock
    awards, grant any stock appreciation rights or make any long
    term incentive payments during fiscal years 2000, 2001 or 2002.              
|   
|(2) | Bonuses are reported in year earned even if
    actually paid in subsequent year.                                                                                                               
|   
|(3) | Includes contributions made by the Company on
    behalf of the Named Executive Officers to the Companys Tax
    Deferred Savings Plan, and insurance premiums paid by the
    Company.        
|   
|(4) | Mr. Maghribi joined the Company as Chief
    Executive Officer in August 2002.                                                                                                                  
|   
|(5) | Mr. Donegan resigned as Chief Executive
    Officer of the Company in June 2002 and the bonus amount
    reported in the above table for 2002 consists of severance
    payments to Mr. Donegan.



|    |                                                                                                                               
|--- | ------------------------------------------------------------------------------------------------------------------------------
|(6) | Includes $11,563 for relocation costs in 2001 in
    connection with Mr. Donegans move from Massachusetts
    to California. 
|   
|(7) | Includes $34,615 of housing allowance in
    connection with a mortgage subsidy.                                              
|   
|(8) | Includes $4,662 of excess life insurance and
    $62,500 of loan forgiveness.                                                 
|   
|(9) | Includes $9,296 for relocation costs for 2001 in
    connection with Mr. DiPietros move from Massachusetts to
    California.



|     |                                                                                                                                                        
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | Mr. Dube served as the Companys
    interim Chief Financial Officer until Phillip A. Kagel was
    appointed Chief Financial Officer in February 2003.

3



---



##### Table of Contents



Option Grants in Last Fiscal Year

The following table sets forth stock options
granted during the year ended December 31, 2002 to the
Named Executive Officers. No stock appreciation rights
(SARs) were granted during the year ended
December 31, 2002.

|                  |  |                   |           |                            |  |                            |      |                              |  |                     |      |     |  |  |         |     |  |   |           |  |  |   |           | 
|----------------- |  | ----------------- | --------- | -------------------------- |  | -------------------------- | ---- | ---------------------------- |  | ------------------- | ---- | --- |  |  | ------- | --- |  | - | --------- |  |  | - | --------- | 
|                  |  |                   |           |                            |  |                           
|                  |  | Individual Grants |           |                           
|                  |  |                   |           | Potential Realizable Value
|                  |  | Number of         |           |                            |  | at Assumed Annual Rates of
|                  |  | Securities        |           | Percent of Total           |  |                            |      | Stock Price Appreciation for
|                  |  | Underlying        |           | Options Granted            |  | Exercise or                |      |                              |  | Option Terms ($)(3)
|                  |  | Options           |           | to Employees in            |  | Base Price per             |      | Expiration                   |  |                    
|Name              |  | Granted(#)        |           | Fiscal Year(%)(1)          |  | Share($)(2)                |      | Date                         |  | 5%                  |      | 10%
|                  |  |                   |           |                            |  |                            |      |                              |  |                     |      |    
|Walid Maghribi(4) |  |                   | 1,700,000 |                            |  |                            | 39.8 | %                            |  | $                   | 3.15 |     |  |  | 8/19/12 |     |  | $ | 3,367,731 |  |  | $ | 8,534,491 | 
|James E. Donegan  |  |                   |          |                            |  |                            |     |                              |  |                     |     |     |  |  |        |     |  |   |          |  |  |   |          | 
|Frank R. DiPietro |  |                   |          |                            |  |                            |     |                              |  |                     |     |     |  |  |        |     |  |   |          |  |  |   |          | 
|Philip A. Dube    |  |                   | 20,000    |                            |  |                            | 0.5  | %                            |  | $                   | 9.11 |     |  |  | 4/11/12 | (5) |  |   |          |  |  |   |          | 



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | A total of 4,044,622 options were granted to
    employees (including the Named Executive Officers) in fiscal
    year 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|(2) | All options were granted at fair market value on
    the date of the grant.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   
|(3) | Amounts reported in these columns represent
    amounts that may be realized upon exercise of the options
    immediately prior to the expiration of their term assuming the
    specified compound rates of appreciation (5% and 10%) on the
    market value of the Companys Common Stock on the date of
    option grant over the term of the options. These numbers are
    calculated based on rules promulgated by the Securities and
    Exchange Commission and do not reflect the Companys
    estimate of future stock price growth. Actual gains, if any, on
    stock option exercises and Common Stock holdings are dependent
    on the timing of such exercise and the future performance of the
    Companys Common Stock. There can be no assurance that the
    rates of appreciation assumed in this table can be achieved or
    that the amounts reflected will be received by the individuals.
|   
|(4) | These options will vest at a rate of 25% of the
    shares subject to the option on the first anniversary of the
    date of grant and  1/48 of the shares subject to the option
    each month thereafter.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   
|(5) | Options granted were tendered to the Company and
    cancelled pursuant to the Companys October 10, 2002
    tender offer. The Company will grant new options to replace the
    tendered options on May 12, 2003. The replacement options
    will be granted at the fair market value as of the grant date.
    Twenty-five percent of the shares underlying the replacement
    options will be immediately vested and, for each succeeding
    year, an additional 25% of the shares subject to the replacement
    option will vest.                                                                                                                                                                                                                                                                                                                                                                             

4



---



##### Table of Contents



Option Exercises and Fiscal Year-End
Values

The following table sets forth information with
respect to options to purchase the Companys Common Stock
granted to the Named Executive Officers, including (i) the
number of unexercised options outstanding at December 31,
2002; and (ii) the value of such unexercised options at
December 31, 2002. There were no shares acquired on
exercise by the Named Executive Officers in the fiscal year
ended December 31, 2002.

Aggregated Option Exercises in Last Fiscal
Year and Year-End Option Value Table

|                  |  |             |   |             |  |                        |   |                           |  |             |         |               |  |  |           |  |  |  |   |  |  |  |          | 
|----------------- |  | ----------- | - | ----------- |  | ---------------------- | - | ------------------------- |  | ----------- | ------- | ------------- |  |  | --------- |  |  |  | - |  |  |  | -------- | 
|                  |  |             |   |             |  |                        |   |                          
|                  |  |             |   |             |  | Number of Securities   |   | Value of Unexercised     
|                  |  |             |   |             |  | Underlying Unexercised |   | In-the Money             
|                  |  | Shares      |   |             |  | Options at Year-End    |   | Options at Year-End(1)($)
|                  |  | Acquired    |   | Value       |  |                        |   |                          
|Name              |  | on Exercise |   | Realized($) |  | Exercisable            |   | Unexercisable             |  | Exercisable |         | Unexercisable
|                  |  |             |   |             |  |                        |   |                           |  |             |         |              
|Walid Maghribi    |  |             |  |             |  |                        |  |                           |  |             |        |               |  |  | 1,700,000 |  |  |  |  |  |  |  | $935,000 | 
|James E. Donegan  |  |             |  |             |  |                        |  |                           |  |             |        |               |  |  |          |  |  |  |  |  |  |  |         | 
|Frank R. DiPietro |  |             |  |             |  |                        |  |                           |  |             | 126,000 |               |  |  |          |  |  |  |  |  |  |  |         | 
|Philip A. Dube    |  |             |  |             |  |                        |  |                           |  |             | 16,900  |               |  |  | 17,000    |  |  |  |  |  |  |  |         | 



---



|    |                                                                                                                                                                                                                        
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Value is based on the difference between the
    option exercise price and the fair market value of the
    Companys Common Stock on December 31, 2002,
    multiplied by the number of shares underlying the options.

Executive Employment and Severance
Agreements

The Company has entered into the following
employment agreements with the Named Executive Officers:

Mr. Maghribi and the Company entered into an
employment agreement on August 16, 2002. The employment
agreement provides that Mr. Maghribi will serve as Chief
Executive Officer of the Company. Mr. Maghribi may
voluntarily terminate this employment at any time with or
without notice. The Company may terminate his employment at any
time with or without cause. If the Company terminates
Mr. Maghribis employment without cause, he will be
entitled to continuing payments equal to his base salary for a
period of six (6) months and 50% of the unvested shares of
his outstanding stock options will become vested. In addition,
if Mr. Maghribi terminates his employment or the Company
terminates Mr. Maghribis employment without cause, in
connection with a change of control (as defined in the
employment agreement) that occurs before August 20, 2003,
Mr. Maghribi will be entitled to continuing payments equal
to his base salary for a period six (6) months and 25% of
the shares subject to a certain option issued to him upon his
commencement of employment with the Company will become vested.
If Mr. Maghribi terminates his employment or the Company
terminates Mr. Maghribis employment without cause, in
connection with a change of control that occurs between
August 20, 2003 and August 20, 2006, Mr. Maghribi
will be entitled to continuing payments equal to his base salary
for a period three (3) years and 100% of the unvested
shares of his outstanding stock options will become vested. If
Mr. Maghribi terminates his employment or the company
terminates Mr. Maghribis employment without cause, in
connection with a change of control that occurs after
August 20, 2006, 100% of the unvested shares of his
outstanding stock options will become vested. Pursuant to the
employment agreement, Mr. Maghribis salary is
$350,000 per year. The amount of his annual bonus is at the sole
discretion of the Board of Directors.

Mr. Donegan, the Companys former Chief
Executive Officer, and the Company entered into an employment
agreement on May 14, 1999. The employment agreement
provides that Mr. Donegan was to serve as President and
Chief Executive Officer of the Company or in such other
positions as the Board of Directors determined. Under the terms of his employment
agreement, Mr. Donegan was permitted to voluntarily
terminate this employment after giving the Company written
notice of intent to terminate at least thirty (30) days
prior to the effective date of such termination. The employment
agreement allowed the Company to terminate his employment at any
time with or without cause. If the Company terminated
Mr. Donegans employment without cause or if
Mr. Donegan terminated his employment for good reason (as
defined in the employment agreement), he was entitled to receive
a lump sum payment equal to twenty-four months base salary
plus his highest annual bonus amount from the three most recent
years. In addition, upon a termination by the Company without
cause or a termination by Mr. Donegan for good reason, all
outstanding stock options of Mr. Donegan were to become
vested. Pursuant to the employment agreement,
Mr. Donegans salary, which could not be less than
$252,000 per year, was established annually by the Board of
Directors. The amount of his annual bonus was at the sole
discretion of the Board of Directors. Furthermore,
Mr. Donegan agreed that he would not directly or indirectly
compete with the Company during the course of his employment and
for an additional one-year period thereafter. Upon
Mr. Donegans resignation from the Company in June
2002, pursuant to the terms of the employment agreement,
Mr. Donegan executed a release of claims against the
Company and he received an aggregate severance of $800,000.

Mr. DiPietro and the Company entered into an
employment agreement on May 14, 1999. The employment
agreement provides that Mr. DiPietro was to serve as
Executive Vice President of Finance and Chief Financial Officer
of the Company or in such other positions as the Board of
Directors determined. Under the terms of his employment
agreement, Mr. DiPietro was permitted to voluntarily
terminate this employment after giving the Company written
notice of intent to terminate at least thirty (30) days
prior to the effective date of such termination. The employment
agreement allowed the Company to terminate his employment at any
time with or without cause. If the Company terminated
Mr. DiPietros employment without cause or if
Mr. DiPietro terminated his employment for good reason (as
defined in the employment agreement), he was entitled to receive
a lump sum payment equal to eighteen months base salary
plus his highest annual bonus from the three most recent years.
In addition, upon a termination by the Company without cause or
termination by Mr. DiPietro for good reason, all
outstanding stock options of Mr. DiPietro become vested.
Pursuant to the employment agreement, Mr. DiPietros
salary, which could not be less than $183,750, was established
annually by the Board of Directors. The amount of his annual
bonus was at the sole discretion of the Board of Directors.
Furthermore, Mr. DiPietro agreed that he would not directly
or indirectly compete with the Company during the course of his
employment and for an additional one-year period thereafter.
Mr. DiPietro resigned as Chief Financial Officer of the
Company in December 2002. The Company has not made any severance
payments to Mr. DiPietro.

Compensation Committee Interlocks and Insider
Participation

The Companys Board of Directors has
established a Compensation Committee consisting of
Mr. Olmer, Mr. Loeb and Dr. Sprague. No person
who served as a member of the Compensation Committee was, during
the fiscal year ended December 31, 2002, an officer or
employee of the Company or any of its subsidiaries, was formerly
an officer of the Company or any of its subsidiaries, or had any
relationship requiring disclosure herein. No executive officer
of the Company serves as a member of the board of directors or
compensation committee of any entity that has one or more
executive officers serving as a member of the Companys
Board of Directors or Compensation Committee.

Compensation of Directors

During 2002, directors who were not employees of
the Company were entitled to receive $2,500 per quarter as a
retainer, $1,000 for each meeting of the Board of Directors
attended in person, $500 for each teleconference meeting of the
Board of Directors and $1,000 for each committee meeting, unless
such committee meeting is held on the same day as a meeting of
the Board of Directors in which case the compensation is reduced
to $500. Such non-employee directors elected not to accept their
fees for the last quarter of 2001 and the first quarter of 2002.
The fees described above were reinstated in the second quarter
of 2002 at 50% of these amounts level and at 100% beginning with
the third quarter of 2002. In addition to these fees, for fiscal
year 2003, the Chairman of the Audit Committee will be entitled
to receive $2,500 per quarter as an additional retainer. No
employee of the Company receives separate compensation for
services rendered as a director. All directors are reimbursed
for expenses in connection with attending Board and committee
meetings.

On March 14, 1997, the Board of Directors of
the Company adopted the 1997 Stock Option Plan, which was
approved by the Companys stockholders at the Special
Meeting in Lieu of Annual Meeting held on May 30, 1997.
Among other provisions of the 1997 Stock Option Plan, each
director, who is not also an employee or consultant of the
Company, received on the third Monday in July, 1997 (and has and
will continue to receive on the same day each year thereafter)
an option to purchase 5,000 shares of Common Stock (the
Director Options). Each person who is not also an
employee or consultant of the Company and becomes a director
after the third Monday in July, 1997 will receive, upon the date
of his or her initial election as a director, an option to
purchase 5,000 shares of Common Stock. In 1999, the Company
increased this option grant from 5,000 to 7,500 shares. The
Director Options granted will vest one-fifth on each anniversary
of the date of grant and have an exercise price equal to the
fair market value of the Common Stock on the date of grant. The
term of each Director Option will be for a period of ten years
from the date of grant. Director Options will be subject to
accelerated vesting under certain circumstances and may be
transferred to the extent vested. On February 17, 1999, the
Board of Directors adopted the 1999 Stock Plan, which was
approved by the Companys stockholders at the Annual
Meeting held on May 28, 1999. The 1999 Stock Plan provides
for 1,200,000 shares of the Companys Common Stock to
be reserved for the grant of incentive stock options to
employees of the Company and the grant of non-qualified stock
options, stock awards and opportunities to make direct purchases
of stock in the Company to employees, directors, officers and
consultants of the Company. Directors are eligible to receive
option grants under the 1999 Stock Plan and the Company intends
to grant options to the Directors consistent with past
practices. On September 21, 2001, the Board of Directors
adopted the 2002 Nonstatutory Stock Option Plan. The 2002
Nonstatutory Stock Option Plan provides for
2,000,000 shares of the Companys Common Stock to be
reserved for grant of non-qualified stock options, stock awards
and opportunities to make direct purchases of stock in the
Company to employees, directors, officers and consultants of the
Company. Directors are eligible to receive option grants under
the 2002 Nonstatutory Stock Option Plan and the Company intends
to grant options to the Directors consistent with past practices.

In October 2002, the Company granted each
director, who is not also an employee or consultant of the
Company, an option to purchase 15,000 shares of Common
Stock under the Companys 2002 Nonstatutory Stock Option
Plan. These options will generally vest one-third on each
anniversary of the date of grant and have an exercise price
equal to the fair market value of the Common Stock on the date
of grant. The term of each option will be for a period of ten
years from the date of grant.

The Company has purchased directors and
officers liability insurance covering all of the
Companys directors and officers. The aggregate premium for
this insurance policy in 2002 was $469,991.

5



---



##### Table of Contents






Item 12. Security
Ownership of Certain Beneficial Owners and Management:

The following table sets forth as of
April 7, 2003 information with respect to the beneficial
ownership of the Companys Common Stock by (i) each
person who is known to the Company to be the beneficial owner of
more than five percent of its Common Stock, (ii) each
director, or nominee for director, of the Company,
(iii) each of the executive officers named in the Summary
Compensation Table under the caption Executive
Compensation Summary below, and (iv) all directors
and executive officers of the Company as a group. Except as
otherwise indicated in the footnotes to the table, the
beneficial owners listed have sole voting and investment power
(subject to community property laws where applicable) as to all
of the shares beneficially owned by them. As of April 7,
2003, there were 28,030,659 shares of common stock
outstanding.



|                                                                     |                                                                   |                      |           |                  |  |  |       |   | 
|-------------------------------------------------------------------- | ----------------------------------------------------------------- | -------------------- | --------- | ---------------- |  |  | ----- | - | 
|                                                                     |                                                                   | Amount and Nature of |           |                 
|Name and Address of Beneficial Owner(1)                              |                                                                   | Beneficial Ownership |           | Percent of Class
|                                                                     |                                                                   |                      |           |                 
|State of Wisconsin Investment Board(2)                               |                                                                   |                      | 5,543,100 |                  |  |  | 19.78 | %
|                                                                     | P.O. Box 7842
    Madison, WI 53707                               |                      |           |                  |  |  |       |   | 
|4080661 Canada Inc.(3)                                               |                                                                   |                      | 3,260,900 |                  |  |  | 11.63 | %
|                                                                     | 237 Hymus Blvd.
    Montreal (Pointe Claire) Quebec H9R 5C7       |                      |           |                  |  |  |       |   | 
|Brown Investment Advisory & Trust
    Company(4)                     |                                                                   |                      | 2,470,188 |                  |  |  | 8.81  | %
|                                                                     | 901 South Bond Street
    Suite 400
    Baltimore, Maryland 21231 |                      |           |                  |  |  |       |   | 
|Kennedy Capital Management, Inc.(5)                                  |                                                                   |                      | 2,392,100 |                  |  |  | 8.53  | %
|                                                                     | 10829 Olive Blvd
    St. Louis, MO 63141                          |                      |           |                  |  |  |       |   | 
|Austin W. Marxe and David M. Greenhouse(6)                           |                                                                   |                      | 2,174,058 |                  |  |  | 7.76  | %
|                                                                     | 153 East 53rd Street
    55th Floor
    New York, NY 10022        |                      |           |                  |  |  |       |   | 
|Walid Maghribi                                                       |                                                                   |                      | 33,500    |                  |  |  | *     |  
|James E. Donegan(7)                                                  |                                                                   |                      |          |                  |  |  | *     |  
|Frank R. DiPietro(8)                                                 |                                                                   |                      | 12,467    |                  |  |  | *     |  
|Philip A. Dube(9)                                                    |                                                                   |                      | 32,590    |                  |  |  | *     |  
|Joseph C. Consoli                                                    |                                                                   |                      |          |                  |  |  | *     |  
|Manfred Loeb(10)                                                     |                                                                   |                      | 69,500    |                  |  |  | *     |  
|Douglas M. McBurnie(11)                                              |                                                                   |                      | 124,500   |                  |  |  | *     |  
|Lionel H. Olmer(12)                                                  |                                                                   |                      | 24,998    |                  |  |  | *     |  
|Thomas P. Redfern                                                    |                                                                   |                      |          |                  |  |  | *     |  
|Willy M.C. Sansen(13)                                                |                                                                   |                      | 38,000    |                  |  |  | *     |  
|John L. Sprague(14)                                                  |                                                                   |                      | 32,000    |                  |  |  | *     |  
|All directors and executive officers as a group
    (11 persons)(15) |                                                                   |                      | 367,550   |                  |  |  | 1.3   | %




| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | *   | Less than 1% of the outstanding Common Stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|
| | (1) | Unless otherwise indicated, to the knowledge of
    the Company, each person listed above has sole voting and
    investment power with respect to the shares and maintains a
    mailing address at: c/o SIPEX Corporation, 233 South
    Hillview Drive, Milpitas, CA 95035.                                                                                                                                                                                                                                                             
|
| | (2) | Based solely on information provided in a
    Schedule 13G/ A filed with the Securities and Exchange
    Commission on February 13, 2003, State of Wisconsin
    Investment Board had sole dispositive power of
    5,543,100 shares and sole voting power of
    5,543,100 shares.                                                                                                                                                                                                                                                        
|
| | (3) | Based solely on information provided in a
    Schedule 13G filed with the Securities and Exchange
    Commission on March 7, 2003 and an amended Form 4
    filed with Securities and Exchange Commission on April 14,
    2003, 4080661 Canada Inc. had sole dispositive power of
    3,260,900 shares and sole voting power of 3,260,900 shares. As
    of April 25, 2003, based solely on a Form 4 filed with the
    Securities and Exchange Commission on April 29, 2003,
    4080661 Canada Inc. beneficially owned 6,085,200 shares.
|
| | (4) | Based solely on information provided in a
    Schedule 13G filed with the Securities and Exchange
    Commission on February 14, 2003, Brown Investment Advisory
    & Trust Company and its wholly owned subsidiary Brown
    Advisory Incorporated had sole dispositive power of 740,413 and
    1,711,225 shares, respectively, and sole voting power of
    758,963 and 1,711,225 shares, respectively. In addition,
    Brown Investment Advisory & Trust Company had shared
    dispositive power of 16,050 shares.                  
|
| | (5) | Based solely on information provided in a
    Schedule 13G filed with the Securities and Exchange
    Commission on February 18, 2003, Kennedy Capital
    Management, Inc. had sole dispositive power of
    2,392,100 shares and sole voting power of
    2,332,900 shares.                                                                                                                                                                                                                                                              



| |     |                                                                                                                                                                                                                                                                                         
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (6) | Based solely on information provided in a
    Schedule 13G filed with the Securities and Exchange
    Commission on February 13, 2003, Austin W. Marxe and David
    M. Greenhouse had shared dispositive power of
    2,174,058 shares and shared voting power of
    2,174,058 shares.
|
| | (7) | Based solely on information provided in a
    Form 5 dated February 11, 2002 and filed with the
    Securities and Exchange Commission.                                                                                                                                                 
|
| | (8) | Based solely on information provided in a
    Form 4 filed with the Securities and Exchange Commission on
    November 4, 2002.                                                                                                                                                         
|
| | (9) | Includes 22,900 shares issuable pursuant to
    stock options which are exercisable prior to June 7, 2003.                                                                                                                                                                              



|     |                                                                                                            
|---- | -----------------------------------------------------------------------------------------------------------
|(10) | Includes 22,500 shares issuable pursuant to
    stock options which are exercisable prior to June 7, 2003. 
|    
|(11) | Includes 109,500 shares issuable pursuant to
    stock options which are exercisable prior to June 7, 2003.
|    
|(12) | Includes 24,998 shares issuable pursuant to
    stock options which are exercisable prior to June 7, 2003. 
|    
|(13) | Includes 28,000 shares issuable pursuant to
    stock options which are exercisable prior to June 7, 2003. 
|    
|(14) | Includes 32,000 shares issuable pursuant to
    stock options which are exercisable prior to June 7, 2003. 
|    
|(15) | Includes 239,898 shares issuable pursuant to
    stock options which are exercisable prior to June 7, 2003.

Securities Authorized for Issuance Under Equity Compensation Plans

The following table provides information as of December 31, 2002 about the
securities authorized for issuance under our equity compensation plans,
consisting of our the 1994 Stock Option and Incentive Plan, 1996 Stock Option
Plan, 1996 Non-Employee Director Stock Option Plan, 1997 Stock Option Plan, the
1999 Stock Option Plan, the 2000 Non-Qualified Stock Option Plan and the 2002
Nonstatutory Stock Option Plan.



| |                                     
| | ------------------------------------
| | Equity Compensation Plan Information

|                                                           |  |                      |           |                   |  |                         |       |  |  |                         |           |    
|---------------------------------------------------------- |  | -------------------- | --------- | ----------------- |  | ----------------------- | ----- |  |  | ----------------------- | --------- | ---
|                                                           |  | (a)                  |           | (b)               |  | (c)                    
|                                                           |  |                      |           |                   |  |                        
|                                                           |  |                      |           |                   |  |                         |       |  |  | Number of securities   
|                                                           |  |                      |           |                   |  |                         |       |  |  | remaining available for
|                                                           |  | Number of securities |           | Weight-average    |  | future issuance under  
|                                                           |  | to be issued upon    |           | exercise price of |  | equity compensation    
|                                                           |  | exercise of          |           | outstanding       |  | plans (excluding       
|                                                           |  | outstanding options, |           | options, warrants |  | securities reflected in
|Plan Category                                              |  | warrants and rights  |           | and rights        |  | column (a))            
|                                                           |  |                      |           |                   |  |                        
|Equity compensation plans
approved by security holders     |  |                      | 1,191,193 |                   |  | $                       | 16.72 |  |  |                         | 1,187,819 | (1)
|Equity compensation plans not
approved by stockholders (2) |  |                      | 5,266,970 |                   |  | $                       | 5.21  |  |  |                         | 904,820   |    
|                                                           |  |                      |           |                   |  |                         |       |  |  |                         |           |    
|Total                                                      |  |                      | 6,458,163 |                   |  | $                       | 7.33  |  |  |                         | 2,092,639 | (1)



| | (1) |  | Includes 162,615 shares issuable under our 1996 Employee Stock
Purchase Plan.                                                                                           
| | --- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (2) |  | Includes 3,649,500 shares issuable pursuant to options granted
outside of any plan, which did not require the approval of and has not
been approved by our stockholders.

6



---



##### Table of Contents





| |                                     
| | ------------------------------------
| | 2000 Non-Qualified Stock Option Plan

In April 2000, our Board of Directors adopted the 2000 Nonqualified Stock
Option Plan pursuant to which non-statutory stock options for up to 1,000,000
shares of common stock may be granted to employees, consultants or advisors.
The 2000 Nonqualified Stock Option Plan was filed as an exhibit to our Annual
Report on Form 10-K for the fiscal year ended December 31, 2000 (File No.
000-27892) as filed with the SEC on March 23, 2001. In October 2002, our Board
of Directors adopted an amendment to the 2000 Nonqualified Stock Option Plan to
decrease the number of shares reserved under the plan by 328,010 shares, from
1,000,000 shares to 671,990 shares.

Our Board of Directors is authorized to administer the 2000 Nonqualified
Stock Option Plan. Our Board of Directors is authorized to adopt rules and
regulations of the 2000 Nonqualified Stock Option Plan and to interpret the
provisions of the 2000 Nonqualified Stock Option Plan. Our Board of Directors
may amend or terminate the 2000 Nonqualified Stock Option Plan at any time. Our
Board of Directors has delegated to the Compensation Committee authority to
administer certain aspects of the 2002 Nonqualified Stock Option Plan.

Our Board of Directors and our Compensation Committee have the authority
to select the recipients of options under the 2000 Nonqualified Stock Option
Plan and determine (i) the number of shares of common stock covered by such
options, (ii) the dates upon which such options become exercisable, (iii) the
exercise price of options (which may not be less than the fair market value of
the common stock on the date of grant), and (iv) the duration of the options
(which may not exceed 10 years).



| |                                    
| | -----------------------------------
| | 2002 Nonstatutory Stock Option Plan

In September 2001, our Board of Directors adopted the 2002 Nonstatutory
Stock Option Plan pursuant to which non-statutory stock options for up to
1,000,000 shares of common stock may be granted to employees, consultants or
advisors. The 2002 Nonstatutory Stock Option Plan was filed recently with our
registration statement on Form S-8 (File No. 333-73880) as filed with the SEC
on November 21, 2001. In October 2002, our Board of Directors adopted an
amendment to the 2002 Nonstatutory Stock Option Plan to increase the number of
shares reserved under the plan by 1,000,000 shares, from 1,000,000 shares to
2,000,000 shares.

Our Board of Directors is authorized to administer the 2002 Nonstatutory
Stock Option Plan. Our Board of Directors is authorized to adopt, amend and
repeal the rules and regulations of the 2002 Nonstatutory Stock Option Plan and
to interpret the provisions of the 2002 Nonstatutory Stock Option Plan. Our
Board of Directors may amend, suspend or terminate the 2002 Nonstatutory Stock
Option Plan at any time. Our Board of Directors has delegated to the
Compensation Committee authority to administer certain aspects of the 2002
Nonstatutory Stock Option Plan.

Our Board of Directors and our Compensation Committee have the authority
to select the recipients of options under the 2002 Nonstatutory Stock Option
Plan and determine (i) the number of shares of common stock covered by such
options, (ii) the dates upon which such options become exercisable, (iii) the
exercise price of options, and (iv) the duration of the options (which may not
exceed 10 years).




Item 13.Certain Relationships and Related Transactions:

On December 14, 1998, the Company made a
loan to Frank R. DiPietro, former Executive Vice President of
Finance, Chief Financial Officer, Treasurer and Clerk of the
Company, in the sum of $250,000 cash. The loan was secured by a
Pledge and Security Agreement dated December 14, 1998 and
was evidenced by the issuance and delivery to the Company of a
Promissory Note bearing interest at a rate of 8% per annum, with
interest payable on a monthly basis and the principal and any
remaining interest payable at maturity. The loan was extended
pursuant to the issuance and delivery of a Promissory Note dated
December 21, 2000. On March 17, 2001, the Company
elected to forgive amounts owed pursuant to the Promissory Note
at a rate of 25% per year over the next four years, so long as
Mr. DiPietro remained an employee of the Company. The
largest aggregate amount of indebtedness under such Promissory
Note during the fiscal year ended December 31, 2002 was
$268,301. As of April 7, 2003, $220,856 remains
outstanding.

In 2001, as part of the relocation arrangements
for Mr. DiPietro, the Company agreed to reimburse
Mr. DiPietro for any difference in the contracted sale
price of his California residence when he sells it and the
original purchase price. In addition, the Chief Executive
Officer of the Company executed a letter agreement obligating
the Company to pay Mr. DiPietros relocation expenses
when he sells his California residence. To offset higher housing
costs in California, the Company provided Mr. DiPietro with
a $3,000 per month mortgage subsidy for 36 months,
commencing on the date of purchase of his California residence.

4080661 Canada Inc., a beneficial owner of more
than five percent of the Companys Common Stock, is the
parent company of Future Electronics, the Companys
exclusive distributor for North America and Europe and also its
largest distributor worldwide. Future Electronics accounted for
approximately $16.2 million of the Companys total net
sales for the year ended December 31, 2002.

On September 27, 2002, the Company sold a
convertible secured note with an attached warrant to S&F
Financial Holdings, Inc., an affiliate of 4080661 Canada Inc.,
for an aggregate cash amount of $12.0 million. The Company
recorded the note at $10.4 million and the warrant at $1.6
million (recorded to paid-in-capital) based upon their estimated
fair values at the date of issuance using the Black-Scholes
option pricing model. The note pays a 5.75% coupon and is
convertible after one year into the Companys Common Stock
at a conversion price of $7.50 per share. Following the one-year
anniversary of the issuance of the note, the Company can require
the conversion of the note in installments if for a period of
time the Companys Common Stock trades at a price in excess
of 150% of the conversion price of $7.50. The private placement
also included a warrant to purchase 900,000 shares of the
Companys Common Stock exercisable for a two-year period
beginning on the one-year anniversary of the date of issuance.
The exercise price for the warrant is equal to 110% of the
average closing price for the 5 days preceding the closing or
$2.9458. The warrant has been recorded as an addition to paid-in
capital with the offset recorded as a discount against the note.
The discount on the note of $1.6 million, recorded at
the time of purchase, is being amortized over the five-year term
of the note and may be accelerated as a result of conversion.
The note matures on September 27, 2007. The note is secured
by a Deed of Trust on the Companys land and building in
Milpitas, California.

The information required by this item is incorporated by reference from
the Companys definitive proxy statement in connection with its Annual Meeting
of Shareholders to be held on May 16, 2003, to be filed with the Commission not
later than 120 days after the close of the fiscal year ended December 31, 2002,
under the caption Certain Transactions.




Item 14. Controls and
Procedures:

During the 90 day period prior to the filing of this annual report, we
carried out an evaluation under the supervision and with the participation of
our senior management, including Walid Maghribi, our Chief Executive Officer,
and Phillip A. Kagel, our Chief Financial Officer, of the effectiveness of the
design and operation of our disclosure controls and procedures. Senior
management and our Audit Committee have been informed by our independent
auditors that they had identified material weaknesses (as defined under
standards established by the American Institute of Certified Public

7



---



##### Table of Contents



Accountants) relating to the deficiencies in the systems and processes
used in the preparation of the financial statements and the lack of proper
management review and account analysis. Mr. Maghribi and Mr. Kagel determined
that these material weaknesses, together with certain other deficiencies, if
unaddressed, could result in accounting errors and impair our ability to
accurately report our financial results in a timely manner.

Based on the above and under the direction of the Audit Committee and the
Board of Directors, senior management have dedicated resources and are taking
steps to strengthen control processes in order both to identify and rectify the
deficiencies and prevent the situations from recurring. To this end, we are
taking, or have taken, the following steps:



| |  |  | we hired Mr. Kagel as our Chief Financial Officer effective February
10, 2003;                                                                                                                                                                                
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | we elected a new independent director to our Board of Directors,
Joseph Consoli, who has extensive financial background and serves as the Chairman of the Audit Committee;                                                                                    
|
| |  |  | we established a Disclosure Committee with a mandate to assist our
Chief Executive Officer and Chief Financial Officer in overseeing the
accuracy and timeliness of our public disclosures and in evaluating
regularly our disclosure controls and procedures;
|
| |  |  | we implemented procedures to ensure accurate and timely
account analysis and reconciliations; and                                                                                                                                                             
|
| |  |  | updated written policies and procedures are being prepared to
standardize and improve processes, including procedures relating to
systems, finance policies and internal controls.                                                                            

We continue to evaluate further improvements, including formalizing our
processes, procedures and policies, to our internal controls and disclosure
controls and procedures.

As a result of the steps taken to improve controls and following the
conclusion of our recently completed review of our financial accounts, Mr.
Maghribi and Mr. Kagel concluded that the information required to be disclosed
in this annual report on Form 10-K has been recorded, processed, summarized and
reported as required. Based upon and as of the date of their evaluation, the
Chief Executive Officer and Chief Financial Officer further concluded that our
disclosure controls and procedures, taking into account the steps listed above
to improve the controls and procedures, are effective in all material respects.

Other than as described above, there have been no significant changes in
our internal controls or in other factors that could significantly affect these
controls subsequent to the date of the evaluation.

8



---



##### Table of Contents








| |           
| | ----------
| | SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized, on the
30th day of
April, 2003.

| |  |                   |                                       |                                      
| |  | ----------------- | ------------------------------------- | -------------------------------------
| |  | SIPEX CORPORATION
| |  |                   |                                       |                                      
| |  | By:               | /s/
Walid Maghribi
Walid Maghribi    
| |  |                   |                                       | Chief Executive Officer, President   
| |  |                   |                                       | and Director                         
| |  |                   |                                       |                                      
| |  | By:               | /s/
Phillip A. Kagel
Phillip A. Kagel
| |  |                   |                                       | Senior Vice
President, Finance       
| |  |                   |                                       | Chief Financial
Officer and Treasurer

9



---



##### Table of Contents



Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Walid Maghribi, President and Chief Executive Officer of Sipex Corporation,
certify that:

|   |  |                                                                                                                                                                                                                                                                                                                         
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. |  | I have reviewed this yearly report on Form 10-K/A of Sipex Corporation;                                                                                                                                                                                                                                                 
|   |  |                                                                                                                                                                                                                                                                                                                         
|2. |  | Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this annual report;
|   |  |                                                                                                                                                                                                                                                                                                                         
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this annual report;                   
|   |  |                                                                                                                                                                                                                                                                                                                         
|4. |  | The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:                                                                                                

| |  |    |  |                                                                                                                                                                                                                                                                                
| |  | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | a. |  | designed such disclosure controls and procedures to
ensure that material information relating to the registrant,
including its subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
annual report is being prepared;
| |  |    |  |                                                                                                                                                                                                                                                                                
| |  | b. |  | evaluated the effectiveness of the registrants
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this annual report (the Evaluation
Date); and                                                                                     
| |  |    |  |                                                                                                                                                                                                                                                                                
| |  | c. |  | presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;                                                                                                           

|   |  |                                                                                                                                                                                                                                              
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|5. |  | The registrants other certifying officer and I have disclosed, based
on our most recent evaluation, to the registrants auditors and the
audit committee of registrants board of directors (or persons
performing the equivalent function):

| |  |    |  |                                                                                                                                                                                                                                                                                               
| |  | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | a. |  | all significant deficiencies in the design or operation
of internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data
and have identified for the registrants auditors any material
weaknesses in internal controls; and
| |  |    |  |                                                                                                                                                                                                                                                                                               
| |  | b. |  | any fraud, whether or not material, that involves
management or other employees who have a significant role in the
registrants internal controls; and                                                                                                                                        

|   |  |                                                                                                                                                                                                                                                                                                                                                                                      
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|6. |  | The registrants other certifying officer and I have indicated in
this annual report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.

|                     |  |                                                     
|-------------------- |  | ----------------------------------------------------
|Date: April 30, 2003 |  | By:  /s/ Walid Maghribi                             
|                     |  |                                                     
|                     |  | Walid Maghribi
President and Chief Executive Officer

10



---



##### Table of Contents



Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Phillip A. Kagel, Senior Vice President , Finance, Chief Financial Officer &
Treasurer of Sipex Corporation, certify that:

|   |  |                                                                                                                                                                                                                                                                                                                         
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. |  | I have reviewed this annual report on Form 10-K/A of Sipex Corporation;                                                                                                                                                                                                                                                 
|   |  |                                                                                                                                                                                                                                                                                                                         
|2. |  | Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by this annual report;
|   |  |                                                                                                                                                                                                                                                                                                                         
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant as of, and for, the periods presented in
this annual report;                   
|   |  |                                                                                                                                                                                                                                                                                                                         
|4. |  | The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:                                                                                                

| |  |    |  |                                                                                                                                                                                                                                                                                
| |  | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | a. |  | designed such disclosure controls and procedures to
ensure that material information relating to the registrant,
including its subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
annual report is being prepared;
| |  |    |  |                                                                                                                                                                                                                                                                                
| |  | b. |  | evaluated the effectiveness of the registrants
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this annual report (the Evaluation
Date); and                                                                                     
| |  |    |  |                                                                                                                                                                                                                                                                                
| |  | c. |  | presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;                                                                                                           

|   |  |                                                                                                                                                                                                                                              
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|5. |  | The registrants other certifying officer and I have disclosed, based
on our most recent evaluation, to the registrants auditors and the
audit committee of registrants board of directors (or persons
performing the equivalent function):

| |  |    |  |                                                                                                                                                                                                                                                                                               
| |  | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | a. |  | all significant deficiencies in the design or operation
of internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data
and have identified for the registrants auditors any material
weaknesses in internal controls; and
| |  |    |  |                                                                                                                                                                                                                                                                                               
| |  | b. |  | any fraud, whether or not material, that involves
management or other employees who have a significant role in the
registrants internal controls; and                                                                                                                                        

|   |  |                                                                                                                                                                                                                                                                                                                                                                                      
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|6. |  | The registrants other certifying officer and I have indicated in
this annual report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.

|                     |  |                                                                                      
|-------------------- |  | -------------------------------------------------------------------------------------
|Date: April 30, 2003 |  | By: Phillip A. Kagel                                                                 
|                     |  |                                                                                      
|                     |  | Phillip A. Kagel
Senior Vice President, Finance
Chief Financial Officer and Treasurer

11



---



##### Table of Contents






EXHIBIT INDEX

|        |  |                                                                                                                                                                                                                                                                                                                  
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                                                                                                  
|Number  |  | Description                                                                                                                                                                                                                                                                                                      
|        |  |                                                                                                                                                                                                                                                                                                                  
|2.1     |  | Agreement and Plan of Reorganization dated October 21, 1999
by and among the Company, Calogic, CAT Acquisition
Corporation I and the other signatories thereto (previously
filed as Exhibit 2.1 to the Companys Form 8-K filed on
December 8, 1999 and incorporated herein by reference)                        
|        |  |                                                                                                                                                                                                                                                                                                                  
|2.2     |  | Amendment No. 1 to the Agreement and Plan of Reorganization
dated November 23, 1999 by and among the Company, Calogic,
CAT Acquisition Corporation I and the other signatories
thereto (previously filed as Exhibit 2.2 to the Companys
Form 8-K filed on December 8, 1999 and incorporated herein
by reference)
|        |  |                                                                                                                                                                                                                                                                                                                  
|3.1     |  | Restated Articles of Organization of the Company, as
amended (filed as Exhibit 3.1 to the Companys Registration
Statement on Form S-1 (File No. 333-1328, and incorporated
herein by reference)                                                                                                                 
|        |  |                                                                                                                                                                                                                                                                                                                  
|3.2     |  | Restated By-Laws of the Company, as amended (filed as
Exhibit 3.2 to the Companys Registration Statement on Form
S-1, File No. 333-1328, and incorporated herein by
reference)                                                                                                                                  
|        |  |                                                                                                                                                                                                                                                                                                                  
|4.2     |  | Form of Indemnification Agreement for directors and
officers (filed as Exhibit 4.2 to the Companys
Registration Statement on Form S-1, File No. 333-1328, and
incorporated herein by reference)                                                                                                                 
|        |  |                                                                                                                                                                                                                                                                                                                  
|10.1**  |  | 1988 Non-Statutory Stock Option Plan (filed as Exhibit 10.1
to the Companys Registration Statement on Form S-1, File
No. 333-1328, and incorporated herein by reference)                                                                                                                                        
|        |  |                                                                                                                                                                                                                                                                                                                  
|10.2**  |  | 1991 Non-Statutory Stock Option Plan (filed as Exhibit 10.2
to the Companys Registration Statement on Form S-1, File
No. 333-1328, and incorporated herein by reference)                                                                                                                                        
|        |  |                                                                                                                                                                                                                                                                                                                  
|10.3**  |  | 1993 Stock Option and Incentive Plan (filed as Exhibit 10.3
to the Companys Registration Statement on Form S-1, File
No. 333-1328, and incorporated herein by reference)                                                                                                                                        
|        |  |                                                                                                                                                                                                                                                                                                                  
|10.4**  |  | 1994 Stock Option and Incentive Plan (filed as Exhibit 10.4
to the Companys Registration Statement on Form S-1, File
No. 333-1328, and incorporated herein by reference)                                                                                                                                        
|        |  |                                                                                                                                                                                                                                                                                                                  
|10.5**  |  | 1996 Incentive Stock Option Plan (filed as Exhibit 10.5 to
the Companys Registration Statement on Form S-1, File No.
333-1328, and incorporated herein by reference)                                                                                                                                            
|        |  |                                                                                                                                                                                                                                                                                                                  
|10.6    |  | 1996 Non-Employee Director Stock Option Plan (filed as
Exhibit 10.6 to the Companys Registration Statement on
Form S-1, File No. 333-1328, and incorporated herein by
reference)                                                                                                                                
|        |  |                                                                                                                                                                                                                                                                                                                  
|10.7**  |  | 1996 Employee Stock Purchase Plan (filed as Exhibit 10.7 to
the Companys Registration Statement on Form S-1, File No.
333-1328, and incorporated herein by reference)                                                                                                                                           
|        |  |                                                                                                                                                                                                                                                                                                                  
|10.8**  |  | Employment Agreement dated August 19, 2002 by and between
the Company and Walid Maghribi (filed as Exhibit 99.1 to
the Companys 8K filed on August 23, 2002, and incorporated
herein by reference)                                                                                                              
|        |  |                                                                                                                                                                                                                                                                                                                  
|10.9**  |  | Employment Agreement, as of the 14th day of May, 1999,
between the Company and James E. Donegan (filed as Exhibit
10.2 to the Companys Quarterly Report on Form 10-Q for the
quarter ended July 3, 1999, and incorporated herein by
reference)                                                                  
|        |  |                                                                                                                                                                                                                                                                                                                  
|10.10** |  | Employment Agreement, as of the 14th day of May, 1999,
between the Company and Raymond W.B. Chow (filed as Exhibit
10.4 to the Companys Quarterly Report on Form 10-Q for the
quarter ended July 3, 1999, and incorporated herein by
reference)                                                                 
|        |  |                                                                                                                                                                                                                                                                                                                  
|10.11   |  | Form of Sales Representative Agreement (filed as Exhibit
10.15 to the Companys Registration Statement on Form S-1,
File No. 333-1328, and incorporated herein by reference)                                                                                                                                     
|        |  |                                                                                                                                                                                                                                                                                                                  
|10.12   |  | Form of Sales Representative Agreement (previously filed
as an exhibit to the Companys Annual Report on Form 10-K
for the year ended December 31, 1998 and incorporated
herein by reference)                                                                                                                    
|        |  |                                                                                                                                                                                                                                                                                                                  
|10.13** |  | 1997 Incentive Stock Option Plan (filed as Appendix A to
the Companys definitive Proxy Statement for the Special
Meeting In Lieu Of Annual Meeting Of Shareholders held May
30, 1997 and incorporated herein by reference)                                                                                      
|        |  |                                                                                                                                                                                                                                                                                                                  
|10.14** |  | Sipex Corporation 1999 Stock Plan (filed as Appendix A to
the Companys Definitive Proxy Statement on Schedule 14A,
No. 1000-27897, and incorporated herein by reference)                                                                                                                                        





---



##### Table of Contents



|        |  |                                                                                                                                                                                                                                                                          
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.15*  |  | License Agreement between Timex Corporation and Sipex
Corporation dated July 1, 1997 (previously filed as an
Exhibit to the Companys Annual Report on Form 10-K for the
year ended December 31, 1997, and incorporated herein by
reference)                             
|        |  |                                                                                                                                                                                                                                                                          
|10.16** |  | Employment Agreement, dated as of the 9th day of August,
1999 between the Company and Stephen E. Parks (filed as
Exhibit 10.1 to the Companys Quarterly Report on Form 10-Q
for the quarter ended July 3, 1999, and incorporated herein
by reference)                   
|        |  |                                                                                                                                                                                                                                                                          
|10.17** |  | 2000 Non-Qualified Stock Option Plan (previously filed as
an exhibit to the Companys Annual Report on Form 10-K for
the year ended December 31, 2000, and incorporated herein
by reference)                                                                             
|        |  |                                                                                                                                                                                                                                                                          
|10.18** |  | 2002 Nonstatutory Stock Option Plan (filed as Exhibit 4.3
to the Companys Registration Statement on Form S-8, File
No. 73880, and incorporated herein by reference)                                                                                                     
|        |  |                                                                                                                                                                                                                                                                          
|10.19   |  | Deed of Reconveyance and Termination of Lease (filed as
Exhibit 10.2 to the Companys Quarterly Report on Form 10-Q
for the quarter ended June 30, 2001, and incorporated
herein by reference)                                                                           
|        |  |                                                                                                                                                                                                                                                                          
|10.20** |  | Employment Agreement dated February 2, 2003 by and between
the Company and Phillip A. Kagel (previously filed).                                                                                                                                                          
|        |  |                                                                                                                                                                                                                                                                          
|10.21** |  | Employment Agreement dated September 11, 2002 by and
between the Company and Joseph T. Rauschmayer (previously filed).                                                                                                                                                   
|        |  |                                                                                                                                                                                                                                                                          
|10.22** |  | Employment Agreement dated August 23, 2002 by and between
the Company and Kevin Plouse (previously filed).                                                                                                                                                               
|        |  |                                                                                                                                                                                                                                                                          
|10.23   |  | Securities Purchase Agreement dated as of September 27,
2002, by and between the Company and S&F Financial
Holdings, Inc. (filed as Exhibit 99.2 to the Companys 8-K
filed on October 1, 2002, and incorporated herein by
reference).                                   
|        |  |                                                                                                                                                                                                                                                                          
|10.24   |  | Sipex Corporation 5.75% Convertible Secured Note due 2007
(filed as Exhibit 99.3 to the Companys 8-K filed on
October 1, 2002, and incorporated herein by reference).                                                                                                   
|        |  |                                                                                                                                                                                                                                                                          
|10.25   |  | Warrant to purchase 900,000 shares of common stock issued
to S&F Financial Holdings, Inc. (filed as Exhibit 99.4 to
the Companys 8-K on October 1, 2002, and incorporated
herein by reference).                                                                         
|        |  |                                                                                                                                                                                                                                                                          
|10.26   |  | Deed of Trust with Assignment of Rents dated as of
September 27, 2002, between the Company, First America
Title Insurance Company and S&F Financial Holdings, Inc.
(filed as Exhibit 99.5 to the Companys 8-K on October 1,
2002, and incorporated herein by reference).
|        |  |                                                                                                                                                                                                                                                                          
|10.27   |  | Worldwide Authorized Distributor Market Price Agreement
dated July 22, 1993, by and between the Company and Future
Electronics Incorporated (previously filed).                                                                                                          
|        |  |                                                                                                                                                                                                                                                                          
|10.28   |  | Addendum A dated February 7, 2003 to Worldwide Authorized
Distributor Market Price Agreement dated July 22, 1993, by
and between the Company and Future Electronics Incorporated
(previously filed).                                                                   
|        |  |                                                                                                                                                                                                                                                                          
|21.1    |  | Subsidiaries of the Company (previously filed as an exhibit
to the Companys Annual Report on Form 10-K for the year
ended December 31, 2000, and incorporated herein by
reference)                                                                                      
|        |  |                                                                                                                                                                                                                                                                          
|23.1    |  | Consent of KPMG LLP, independent auditors (previously filed)                                                                                                                                                                                                             
|        |  |                                                                                                                                                                                                                                                                          
|99.1    |  | Certification of Chief Executive Officer (previously filed)                                                                                                                                                                                                              
|        |  |                                                                                                                                                                                                                                                                          
|99.2    |  | Certification of Chief Financial Officer (previously filed)                                                                                                                                                                                                              
|        |  |                                                                                                                                                                                                                                                                          
|99.3    |  | Certification of Chief Executive Officer                                                                                                                                                                                                                                 
|        |  |                                                                                                                                                                                                                                                                          
|99.4    |  | Certification of Chief Financial Officer                                                                                                                                                                                                                                 



|*  |  | Confidential treatment as to certain portions has been requested pursuant
to Rule 24b-2 promulgated under the Securities Exchange Act of 1934, as
amended.
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|** |  | The Exhibits identified above with an asterisk (*) are management contracts
or compensatory plans or arrangements.