Edgar Filing: Rim Semiconductor CO

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934

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RIM SEMICONDUCTOR COMPANY
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(Name of Registrant as Specified In Its Charter)

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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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RIM SEMICONDUCTOR COMPANY
305 NE 102nd Avenue, Suite 105
Portland, Oregon 97220

March __, 2006

Dear Shareholder:

I am pleased to invite you to Rim Semiconductor Company's 2006 Annual
Meeting of Shareholders. The meeting will be held at 10:00 a.m. on Tuesday,
April 11, 2006 at the Hotel Vintage Plaza in Portland, Oregon.

At the meeting, you and the other shareholders will be asked to (1) elect
directors; (2) ratify the appointment of Marcum & Kliegman, LLP as our
independent public accountants for the current fiscal year; (3) approve
amendments to Article IV of our Articles of Incorporation to increase our
authorized common stock, amend Section B(2) of Article IV relating to our
preferred stock, and delete Paragraph (C) of Article IV (regarding the reverse
stock split effected by the Company in 2000); and (4) amend our Articles of
Incorporation to cancel the designations of our Series A through G preferred
stock.

You will also have the opportunity to hear what has happened in our
business in the past year and to ask questions. You will find other detailed
information about our operations, including our audited financial statements, in
the enclosed annual report.

Your vote is very important. We encourage you to read this proxy statement
and vote your shares as soon as possible. A return envelope for your proxy card
is enclosed for convenience. You also may have the option of voting by using a
toll-free telephone number. Instructions for using this service is included on
the proxy card.

Thank you for your continued support of Rim Semiconductor Company. We look
forward to seeing you on April 11th.

Very truly yours,

Brad Ketch
President and Chief Executive Officer

RIM SEMICONDUCTOR COMPANY
305 NE 102nd Avenue, Suite 105
Portland, Oregon 97220

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 11, 2006

Notice is hereby given that Rim Semiconductor Company ("Rim Semiconductor")
will hold its 2006 Annual Meeting of Shareholders at 10:00 a.m. on Tuesday,
April 11, 2006 at the Hotel Vintage Plaza, 422 SW Broadway, Portland, Oregon
97205.

We are holding this meeting:

o To elect four directors to serve until the 2007 Annual Meeting of
Shareholders and their successors are elected and qualified;

o To ratify the appointment of Marcum & Kliegman, LLP as our independent
public accountants;

o To approve an amendment to Article IV of our Articles of Incorporation
to increase our authorized common stock from 500 million shares to 900
million shares;

o To approve an amendment to Section B(2) of Article IV of our Articles
of Incorporation relating to our preferred stock;

o To approve an amendment to Article IV of our Articles of Incorporation
to delete Paragraph (C) of Article IV (regarding the reverse stock
split effected by the Corporation in 2000);

o To amend our Articles of Incorporation to cancel the designations of
our Series A through G preferred stock; and

o To transact any other business that properly comes before the meeting.

Your Board of Directors recommends that you vote in favor of each of the
proposals outlined in this proxy statement.

Your Board of Directors has selected February 27, 2006 as the record date
for determining shareholders entitled to vote at the meeting. A list of
shareholders on that date will be available for inspection at our corporate
headquarters, 305 NE 102nd Avenue, Suite 105, Portland, Oregon 97220, for at
least ten days before the meeting. The list also will be available for
inspection at the meeting.

This notice of annual meeting, proxy statement, proxy and our 2005 Annual
Report to Shareholders are being mailed to shareholders on or about March ___,
2006.

Brad Ketch
President and Chief Executive Officer

TABLE OF CONTENTS

QUESTIONS & ANSWERS ...........................................................1

INFORMATION CONCERNING OUR BOARD OF DIRECTORS..................................4
Committees of the Board of Directors..................................4
Compensation Committee Interlocks and Insider Participation...........5
Compensation of Directors.............................................5
Shareholder Communications with the Board of Directors................5

STOCK PERFORMANCE GRAPH .......................................................6

BENEFICIAL OWNERSHIP OF CERTAIN SHAREHOLDERS, DIRECTORS AND EXECUTIVE
OFFICERS.......................................................................7

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE........................7

EQUITY COMPENSATION PLAN INFORMATION...........................................8
Non-Shareholder Approved Plans.......................................8

INFORMATION CONCERNING OUR MANAGEMENT.........................................10
Executive Compensation...............................................10
Option Grants in the Last Fiscal Year ...............................11
Aggregate Options Exercised in 2005 and Year-End Option Values.......11
Employment Agreements with Executive Officers .......................11
Certain Relationships and Related Transactions.......................12

AUDIT COMMITTEE MATTERS.......................................................12
Audit Committee Report..............................................12
Independent Auditor Fee Information.................................13

COMPENSATION COMMITTEE REPORT.................................................14
2005 Compensation for the Chief Executive Officer....................15

ANNUAL MEETING ADVANCE NOTICE REQUIREMENTS ...................................15
Shareholder Proposals...............................................15
Board Nominations...................................................16

WHERE YOU CAN FIND MORE INFORMATION ..........................................16

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PROPOSALS FOR CONSIDERATION AT THE ANNUAL MEETING
-------------------------------------------------

ITEM 1. ELECTION OF DIRECTORS.................................................17

ITEM 2. RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS........................18

ITEM 3. AMENDMENT TO ARTICLE IV OF OUR ARTICLES OF INCORPORATION TO
INCREASE OUR AUTHORIZED COMMON STOCK..................................19
Reasons for the Amendment.............................................19
Proposed Amendment....................................................20
Required Vote; Board Recommendation...................................20

ITEM 4. AMENDMENT TO SECTION B(2) OFARTICLE IV OF OUR ARTICLES OF
INCORPORATION RELATING TO OUR PREFERRED STOCK.........................20
Proposed Amendment....................................................21
Required Vote; Board Recommendation...................................22

ITEM 5. AMENDMENT TO ARTICLE IV OF OUR ARTICLES OF INCORPORATION TO
DELETE PARAGRAPH (C) OF ARTICLE IV....................................22
Required Vote; Board Recommendation...................................22

ITEM 6. AMENDMENT TO OUR ARTICLES OF INCORPORATION TO CANCEL THE
DESIGNATIONS OF OUR SERIES A THROUGH G PREFERRED STOCK................22
Required Vote; Board Recommendation...................................23

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QUESTIONS & ANSWERS
-------------------

1. WHAT IS A PROXY?

It is your legal designation of another person to vote the stock you own.
That other person is called a proxy. If you designate someone as your proxy
in a written document, that document also is called a proxy or a proxy
card. Brad Ketch and Ray Willenberg, Jr. have been designated as proxies
for the 2006 Annual Meeting of Shareholders.

2. WHAT IS THE RECORD DATE AND WHAT DOES IT MEAN?

The record date for the 2006 Annual Meeting of Shareholders is February 27,
2006. The record date is established by the Board of Directors.
Shareholders of record (registered shareholders and street name holders) at
the close of business on the record date are entitled to:

(a) receive notice of the meeting; and
(b) vote at the meeting and any adjournments or postponements of the
meeting.

3. WHAT IS THE DIFFERENCE BETWEEN A REGISTERED SHAREHOLDER AND A SHAREHOLDER
WHO HOLDS STOCK IN STREET NAME?

If your shares of stock are registered in your name on the books and
records of our transfer agent, you are a registered shareholder. If your
shares of stock are held for you in the name of your broker or bank, your
shares are held in street name. The answer to Question 10 describes
brokers' discretionary voting authority and when your bank or broker is
permitted to vote your shares of stock without instructions from you.

4. WHAT ARE THE DIFFERENT METHODS THAT I CAN USE TO VOTE MY SHARES?

(a) In Writing: All shareholders of record can vote by mailing in their
completed proxy card (in the case of registered shareholders) or their
completed vote instruction form (in the case of street name holders).

(b) By Telephone and Internet Proxy: All registered shareholders of record
also can vote their shares of common stock by touchtone telephone from
the United States and Canada, using the toll-free telephone number on
the proxy card, or by the Internet, using the procedures and
instructions described on the proxy card and other enclosures. Street
name holders of record may vote by telephone or the Internet if their
banks or brokers make those methods available. If that is the case,
each bank or broker will enclose instructions with the proxy
statement. The telephone and Internet voting procedures, including the
use of control numbers, are designed to authenticate shareholders'
identities, to allow shareholders to vote their shares, and to confirm
that their instructions have been properly recorded. If you vote by
telephone, your vote must be received by 11:59 p.m., Eastern Time on
April 10, 2006, the day before the meeting. Your shares will be voted
as you indicate.

(c) In Person: All shareholders may vote in person at the meeting (unless
they are street name holders without a legal proxy).

5. WHO IS ENTITLED TO VOTE?

Only those who owned Rim Semiconductor's common stock at the close of
business on February 27, 2006 (the record date for the Annual Meeting) can
vote. If you owned common stock on the record date, you have one vote per
share for each matter presented at the Annual Meeting.

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6. WHAT AM I VOTING ON?

Six items: (1) the election of Brad Ketch, Ray Willenberg, Jr., Thomas J.
Cooper and Jack L. Peckham to our Board of Directors; (2) the ratification
of Marcum & Kliegman, LLP as our independent public accountants for the
current fiscal year; (3) approval of an amendment to Article IV of our
Articles of Incorporation to increase our authorized common stock from 500
million shares to 900 million shares; (4) approval of an amendment to
Section B(2) of Article IV of our Articles of Incorporation relating to our
preferred stock; (5) approval of an amendment to Article IV of our Articles
of Incorporation to delete Paragraph (C) of Article IV (regarding the
reverse stock split effected by the Corporation in 2000); and (6) approval
of an amendment to our Articles of Incorporation to cancel the designations
of our Series A through G preferred stock.

7. WHO IS SOLICITING MY PROXY?

We, the Board of Directors of Rim Semiconductor, are sending you this proxy
statement in connection with our solicitation of proxies for use at the
Annual Meeting. Certain directors, officers and employees of Rim
Semiconductor also may solicit proxies on our behalf by mail, phone, fax or
in person.

8. WHO IS PAYING FOR THIS SOLICITATION?

Rim Semiconductor will pay for this solicitation of proxies. Rim
Semiconductor also will reimburse banks, brokers, custodians, nominees and
fiduciaries for their reasonable charges and expenses in forwarding our
proxy materials to the beneficial owners of Rim Semiconductor Common stock.

9. HOW CAN I REVOKE A PROXY?

Giving a proxy will not affect your right to vote your shares if you attend
the Annual Meeting and want to vote in person -- by voting you
automatically revoke your proxy. You also may revoke your proxy at any time
before the voting by giving the Secretary of Rim Semiconductor written
notice of your revocation or by submitting a later-dated proxy.

10. WILL MY SHARES BE VOTED IF I DO NOT PROVIDE MY PROXY?

Your shares may be voted if they are held in the name of a brokerage firm,
even if you do not provide the brokerage firm with voting instructions.
Brokerage firms have the authority under New York Stock Exchange rules to
vote shares for which their customers do not provide voting instructions on
certain "routine" matters.

The election of directors and the ratification of the selection of Marcum &
Kliegman, LLP as independent auditors of the Company are considered routine
matters for which brokerage firms may vote unvoted shares. The other
proposals to be voted on at our meeting are not considered "routine" under
New York Stock Exchange rules. When a proposal is not a routine matter and
the brokerage firm has not received voting instructions from the beneficial
owner of the shares with respect to that proposal, the brokerage firm
cannot vote the shares on that proposal. This is called a broker non-vote.

11. HOW WILL MY PROXY BE VOTED IF I DO NOT SPECIFY A CHOICE FOR A MATTER WHEN
RETURNING A PROXY?

If you return your proxy card but do not mark your voting preference, the
individuals named as proxies will vote your shares FOR the election of the
four nominees for director named in this proxy statement, FOR ratification
of Marcum & Kliegman, LLP as our independent public accountants, and FOR
the amendments to our Articles of Incorporation.

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12. WHAT CONSTITUTES A QUORUM?

Voting can take place at the Annual Meeting only if shareholders owning
shares representing a majority of the total number of votes entitled to be
cast are present in person or represented by effective proxies. On the
record date, there were _____________ shares of our Common stock
outstanding. Both abstentions and broker non-votes are counted as present
for purposes of establishing the quorum necessary for the meeting to
proceed.

13. WHAT VOTE OF THE SHAREHOLDERS WILL RESULT IN THE MATTERS BEING PASSED?

ELECTION OF DIRECTORS. Director nominees need the affirmative vote of
holders of a plurality of the shares represented in person or by proxy at
the Meeting to be elected. The four nominees receiving the greatest number
of votes at the Meeting will be deemed to have received a plurality of the
voting power present. Neither abstentions nor broker non-votes will have
any effect on the election of directors.

RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS. To ratify the appointment
of Marcum & Kliegman, LLP as our independent public accountants for the
current fiscal year, shareholders holding a majority of the shares
represented in person or by proxy at the Meeting must affirmatively vote to
approve the matter. Abstentions have the same effect as votes "against" the
proposal, while broker non-votes have no effect.

APPROVAL OF THE AMENDMENTS TO OUR ARTICLES OF INCORPORATION. To approve
these items, shareholders holding a majority of the total voting power of
the common stock must affirmatively vote to approve the matter. Abstentions
and broker non-votes have the same effect as votes "against" the proposal.

14. HOW DOES THE BOARD RECOMMEND THAT I VOTE ON THE MATTERS PROPOSED?

The Board of Directors of Rim Semiconductor unanimously recommends that
shareholders vote FOR each of the proposals submitted at this year's Annual
Meeting.

15. WILL THERE BE OTHER MATTERS PROPOSED AT THE ANNUAL MEETING?

Rim Semiconductor's bylaws limit the matters presented at the Annual
Meeting to those in the notice of the meeting (or any supplement), those
otherwise properly presented by the Board of Directors and those presented
by shareholders so long as the shareholder complies with certain advance
notice requirements. Please refer to the section of this proxy statement
captioned "Annual Meeting Advance Notice Requirements" for a description of
these requirements. We do not expect any other matter to come before the
Annual Meeting. However, if any other matter is presented, your signed
proxy gives the individuals named as proxies authority to vote your shares
in their discretion.

Page 3

INFORMATION CONCERNING OUR BOARD OF DIRECTORS
---------------------------------------------

The primary responsibility of the Board of Directors is to foster the
long-term success of the Company, consistent with its fiduciary duty to the
shareholders. The Board has responsibility for establishing broad corporate
policies, setting strategic direction and overseeing management, which is
responsible for the day-to-day operations of the Company. In fulfilling this
role, each director must exercise his good faith business judgment of the best
interests of the Company.

The Board holds an annual organizational meeting immediately following the
Annual Meeting of Shareholders. All Board members are expected to attend our
Annual Meeting, unless an emergency prevents them from doing so. At our 2005
Annual Meeting, all members of the Board were present.

The Board of Directors met one time during the fiscal year ended October
31, 2005. No director who served during the 2005 fiscal year attended fewer than
75% of the meetings of the Board and of committees of the Board of which he was
a member. A number of actions were taken by unanimous consent in lieu of a
meeting during the fiscal year ended October 31, 2005. In addition to regularly
scheduled meetings, a number of directors were involved in numerous informal
meetings with management, offering valuable advice and suggestions on a broad
range of corporate matters.

Each director holds office until the next annual meeting of shareholders
and until his successor is duly elected and qualified. Any vacancy occurring in
the Board of Directors may be filled by the shareholders, the Board of
Directors, or if the Directors remaining in office constitute less than a quorum
of the Board of Directors, they may fill the vacancy by the affirmative vote of
a majority of the Directors remaining in office. A director elected to fill a
vacancy is elected for the unexpired term of his predecessor in office. Any
directorship filled by reason of an increase in the number of directors shall
expire at the next shareholders' meeting in which directors are elected, unless
the vacancy is filled by the shareholders, in which case the term shall expire
on the later of (i) the next meeting of the shareholders or (ii) the term
designated for the director at the time of creation of the position being
filled.

COMMITTEES OF THE BOARD OF DIRECTORS
------------------------------------

Our Board of Directors operates with the assistance of the Audit Committee
and the Compensation Committee. Due to the small size of our Board, we do not
presently maintain a formal nominating committee. The entire Board participates
in the process of nominating candidates for the Board of Directors.

The function of the Audit Committee is to:

o make recommendations to the full Board of Directors with respect to
appointment of the Company's independent public accountants; and

o meet periodically with our independent public accountants to review
the general scope of audit coverage, including consideration of our
accounting practices and procedures, our system of internal accounting
controls and financial reporting.

The Audit Committee held four meetings in fiscal 2005. Ivan Berkowitz
resigned from the Audit Committee in March 2005 upon his resignation as a
director of the Company. Jack L. Peckham was appointed to the Audit Committee in
2005, and is presently the sole member of the committee. The Board of directors
has determined that Mr. Peckham is an "Audit Committee Financial Expert" for
purposes of the SEC's rules. The Board believes that Mr. Peckham meets the
independence criteria set out in Rule 4200(a)(14) of the Marketplace Rules of
the National Association of Securities Dealers and the rules and other
requirements of the SEC. For additional information regarding the Audit
Committee, see the section of this Proxy Statement entitled "Audit Committee
Report."

Page 4

The Compensation Committee sets compensation policy and administers Rim
Semiconductor's cash and equity incentive programs for the purpose of attracting
and retaining skilled executives who will promote Rim Semiconductor's business
goals and build shareholder value. The Committee is also responsible for
reviewing and making recommendations to the Board regarding all forms of
compensation to be provided to the Company's named executive officers, including
stock compensation and bonuses. The Compensation Committee met one time during
the 2005 fiscal year. For additional information regarding the Compensation
Committee, see the section of this Proxy Statement entitled "Compensation
Committee Report."

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
-----------------------------------------------------------

There are no compensation committee interlocks between the members of our
Compensation Committee and any other entity. Jack L. Peckham and Thomas J.
Cooper are the members of the Compensation Committee. Neither of the current
members of the Compensation Committee is an officer or employee of ours, nor of
any of our subsidiaries. Mr. Cooper served as our Chief Executive Officer from
June to December, 2002.

COMPENSATION OF DIRECTORS
-------------------------

It is our policy to pay each outside director $2,000 for each meeting of
our Board of Directors attended and for each committee meeting attended. We also
reimburse our directors for reasonable expenses incurred in traveling to and
from board or committee meetings. Upon his resignation as a director of the
Company in March 2005, Ivan Berkowitz was paid $57,251, representing deferred
meeting fees, expense reimbursements and fees for service as Vice Chairman of
the Board of Directors accrued and unpaid though the date of his resignation.

In addition, we have granted stock and stock options to the directors to
compensate them for their services. During the fiscal year ended October 31,
2005 we issued 200,000 and 300,000 shares of common stock valued at $30,000 and
$45,000 to Mr. Cooper and Mr. Peckham, respectively, to compensate them for
their services as directors. Our directors are eligible to receive stock option
grants under our 2000 Omnibus Securities Plan. We did not grant options to our
directors in 2005.

SHAREHOLDER COMMUNICATIONS WITH THE BOARD OF DIRECTORS
------------------------------------------------------

Shareholders and other interested parties who wish to communicate with the
Board may do so by writing to the Chairman of the Board, Board of Directors of
Rim Semiconductor Company, 305 NE 102nd Avenue, Suite 105, Portland, Oregon
97220. All communications that relate to matters that are within the scope of
the responsibilities of the Board and its Committees are to be forwarded to the
Chairman of the Board of Directors. Communications that relate to matters that
are within the responsibility of one of the Board Committees will be forwarded
to the Chair of the appropriate Committee. Communications that relate to
ordinary business matters that are not within the scope of the Board's
responsibilities should be sent to the Chief Executive Officer at the above
address. Solicitations, junk mail and obviously frivolous or inappropriate
communications will not be forwarded, but will be made available to any
non-management director who wishes to review them.

Page 5

STOCK PERFORMANCE GRAPH
-----------------------

The graph below compares the cumulative total shareholder return on Rim
Semiconductor Company's common stock for the period from October 31, 2000
through October 31, 2005 with the cumulative total return over the same period
of the Russell 2000 Index and the line-of-business index for semiconductors and
related devices (SIC Code 3674) published by Hemscott, Inc.

Assuming the value of the investment in our common stock and each index was
$100 on October 31, 2000, and that all dividends were reinvested, the graph
compares our cumulative total return with each of these referent indices plotted
on an annual basis.

[GRAPHIC OMITTED]

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2000 2001 2002 2003 2004 2005
---- ---- ---- ---- ---- ----
RIM SEMICONDUCTOR CO. 100.00 7.10 6.26 4.59 1.46 0.38
SIC CODE INDEX 100.00 46.49 28.62 54.90 38.26 39.95
RUSSELL 2000 INDEX 100.00 86.03 75.05 106.13 117.79 130.46
--------------------------------------------------------------------------------

Page 6

BENEFICIAL OWNERSHIP OF CERTAIN SHAREHOLDERS, DIRECTORS AND EXECUTIVE OFFICERS
------------------------------------------------------------------------------

The following table sets forth information as of February 1, 2006,
concerning shares of our common stock beneficially owned by each director and
named executive officer and by all directors and executive officers as a group.
We are not aware of any persons beneficially owning more than 5% of our common
stock.

In accordance with the rules of the SEC, the table gives effect to the
shares of common stock that could be issued upon the exercise of outstanding
options and warrants within 60 days of February 1, 2006. Unless otherwise noted
in the footnotes to the table and subject to community property laws where
applicable, the following individuals have sole voting and investment control
with respect to the shares beneficially owned by them. We have calculated the
percentages of shares beneficially owned based on 265,663,656 shares of common
stock outstanding at February 1, 2006.

SHARES BENEFICIALLY OWNED
-------------------------
PERSON OR GROUP NUMBER PERCENT (1)
--------------- ------ -----------

Brad Ketch 7,333,333 (2) 2.70%
Ray Willenberg, Jr. 8,981,613 (3) 3.31%
Jack L. Peckham 300,000 *
Thomas J. Cooper 832,258 (4) *

All executive officers and directors as
a group (4 persons) 17,447,204 (5) 6.29%

* LESS THAN 1%.

(1) Percentage of beneficial ownership as to any person as of a particular date
is calculated by dividing the number of shares beneficially owned by such
person by the sum of the number of shares outstanding as of such date and
the number of unissued shares as to which such person has the right to
acquire voting and/or investment power within 60 days.

(2) Includes options to purchase 5,900,000 shares of Common stock.

(3) Includes options to purchase 5,300,000 shares of Common stock.

(4) Includes options to purchase 500,000 shares of Common stock.

(5) Includes options to purchase an aggregate 11,700,000 shares of Common
stock.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
-------------------------------------------------------

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
each of our officers and directors and each person who owns more than 10% of a
registered class of our equity securities to file with the SEC an initial report
of ownership and subsequent reports of changes in such ownership. Such persons
are further required by SEC regulation to furnish us with copies of all Section
16(a) forms (including Forms 3, 4 and 5) that they file. Based solely on our
review of the copies of such forms received by us with respect to fiscal year
2005, or written representations from certain reporting persons, we believe all
of our directors and executive officers met all applicable filing requirements,
except as described in this paragraph. Ray Willenberg, Jr. and Brad Ketch each
filed late Form 5's for fiscal year 2005. Each Form 5 reported five

Page 7

transactions. Brad Ketch also filed a late Form 4 during fiscal year 2005
reporting four transactions, three of which should have been reported earlier.
Thomas J. Cooper filed a late Form 4 during fiscal year 2005 reporting two
transactions. Ray Willenberg, Jr. filed a late Form 4 during fiscal year 2005
reporting two transactions, and another late Form 4 reporting two transactions,
one of which should have been reported earlier. Finally, Jack L. Peckham, who
joined us as a Director in March of 2005, filed a late Form 3 in February 2006.
Mr. Peckham also filed a late Form 4 for fiscal year 2005 in February 2006,
reporting one transaction.

EQUITY COMPENSATION PLAN INFORMATION
------------------------------------

We have three compensation plans (excluding individual stock option grants
outside of such plans) under which our equity securities are authorized for
issuance to employees, directors and consultants in exchange for services - the
2000 Omnibus Securities Plan (the "2000 Plan"), the 2001 Stock Incentive Plan
(the "2001 Plan"), and the 2003 Consultant Stock Plan (the "Consultant Plan")
(collectively, the "Plans"). Our shareholders approved the 2000 Plan and 2001
Plan, and the Consultant Plan has not yet been submitted to the shareholders for
approval.

The following table presents information as of October 31, 2005 with
respect to compensation plans under which equity securities were authorized for
issuance, including the 2000 Plan, the 2001 Plan, the Consultant Stock Plan and
agreements granting options or warrants outside of these plans.

NUMBER OF SECURITIES
TO BE ISSUED UPON WEIGHTED-AVERAGE NUMBER OF SECURITIES
EXERCISE OF EXERCISE PRICE OF REMAINING AVAILABLE FOR
OUTSTANDING OPTIONS, OUTSTANDING OPTIONS, FUTURE ISSUANCE UNDER EQUITY
WARRANTS OR RIGHTS WARRANTS OR RIGHTS COMPENSATION PLANS
------------------ ------------------ ------------------

Equity compensation plans
approved by security holders 993,750 $ 0.97 1,506,250

Equity compensation plans not
approved by security holders 66,712,757 $ 0.26 --
---------- ------------ ------------

Total 67,706,507 $ 0.27 1,506,250
========== ============ ============

NON-SHAREHOLDER APPROVED PLANS
------------------------------

The following is a description of outstanding options and warrants granted
to employees, directors, advisory directors, consultants and investors outside
of the Plans.

As of October 31, 2005, we have outstanding options and warrants to
purchase an aggregate of 66,712,757 shares of our common stock that were granted
outside of the Plans.

We have outstanding options to purchase 375,000 shares of common stock that
were granted during fiscal 2001 outside of the Plans. These options, which
expire ten years from their grant date, were granted to five advisory directors
at exercise prices ranging from $1.07 to $4.00. All of these options have
vested.

We have outstanding options to purchase an aggregate of 525,000 shares of
common stock that were granted during fiscal 2002 outside of the Plans to a
director and a consultant. These options expire ten years from their grant date.
500,000 of the options have an exercise price of $0.39, and the remaining
options have an exercise price of $1.02. All of these options have vested.

Page 8

We have outstanding options to purchase 15,000,000 shares of common stock
that were granted in fiscal 2005 outside of the Plans. 1,000,000 options were
granted to a consultant at an exercise price per share of $0.15, and expire four
years from their grant date. 7,000,000 options were granted to each of Brad
Ketch and Ray Willenberg, Jr. at an exercise price per share of $0.17, and were
to expire ten years from their grant date. All of these options have vested, but
the options granted to Mr. Ketch and Mr. Willenberg were canceled by agreement
effective January 1, 2006.

There are outstanding warrants to purchase an aggregate of 100,000 shares
of common stock that were granted during fiscal 2001 to a consultant. These
warrants have a five year term and an exercise price of $2.50 with respect to
50,000; $5.00 with respect to 25,000 and $10.00 with respect to 25,000.

There are outstanding warrants that were granted during fiscal 2002 to two
consultants to purchase an aggregate of 200,000 shares of common stock outside
of the Plans. These warrants have an exercise price of $0.51 and expired in
November 2005.

There are outstanding warrants that we granted during fiscal 2003 to a
consultant to purchase 600,000 shares of common stock outside of the Plans.
These warrants have a 35-month term (under certain circumstances the Company may
accelerate the expiration date) and an exercise price of $0.15.

There are outstanding warrants to purchase an aggregate of 9,899,999 shares
of common stock that we granted during fiscal 2004 to placement agents. These
warrants have terms of five years and an exercise price of $0.15 with respect to
233,334 and $0.25 with respect to 9,666,665.

There are outstanding warrants to purchase an aggregate of 120,000 shares
of common stock that we granted during fiscal 2004 to four convertible note
holders. These warrants have a three year term and an exercise price of $0.25.

There are outstanding warrants to purchase an aggregate of 39,592,758
shares of common stock that we granted during fiscal 2005 to placement agents.
These warrants have terms of 15 months with respect to 12,443,442; 36 months
with respect to 2,262,443 and 39 months with respect to 24,886,873. These
warrants have an exercise price of $0.1547 with respect to 12,443,442 and
$0.3094 with respect to 27,149,316.

There are outstanding warrants to purchase 200,000 shares of common stock
that we granted during fiscal 2005 to a consultant. These warrants have a term
of three years and an exercise price of $0.12.

The Consultant Plan was adopted in January 2003 and authorizes the issuance
of up to 6,000,000 non-qualified stock options or stock awards to consultants to
the Company. Directors, officers and employees are not eligible to participate
in the Consultant Plan. To date, we have issued a total of 3,200,000 shares of
common stock under the Consultant Plan to four consultants.

Page 9

INFORMATION CONCERNING OUR MANAGEMENT
-------------------------------------

Our executive officers are elected by and serve at the pleasure of our
Board of Directors. For biographical information about our executive officers,
see the section of this Proxy Statement entitled "Item 1, Election of
Directors."

EXECUTIVE COMPENSATION
----------------------

The following table sets forth all compensation for each of the last three
fiscal years awarded to, or earned by, our Chief Executive Officer and all other
executive officers serving as such at the end of 2005 whose salary and bonus
exceeded $100,000 for the year ended October 31, 2005 or who, as of October 31,
2005, was being paid a salary at a rate of $100,000 per year.

SUMMARY COMPENSATION TABLE
--------------------------

Securities
Name and Principal Other Annual Underlying
Position(s) Year Salary Bonus Compensation Options
----------- ---- ------ ----- ------------ -------

BRAD KETCH 2005 $ 250,000 $ 70,000 $ 170,000(1) 7,000,000
President and 2004 $ 250,000(2) -- $ 86,667(3) --
Chief Executive 2003 $ 244,167(4) -- -- 1,500,000
Officer (and Principal
Financial Officer)

RAY WILLENBERG, JR. 2005 $ 84,896 $ 212,450(5) $ 170,000(6) 7,000,000
Chairman of the Board, 2004 $ 175,000(7) $ 152,176 $ 176,667(8) --
Executive Vice President 2003 $ 175,000(9) $ 154,677 -- --

(1) Represents the issuance to Mr. Ketch in April 2005 of 1,000,000 shares of
common stock.

(2) Includes $45,380 paid in 2005.

(3) Represents the issuance to Mr. Ketch in December 2003 of 40,000 shares of
common stock in lieu of $10,000 of deferred payroll, and the issuance to
Mr. Ketch in March 2004 of 333,333 shares of common stock valued at
$76,333.

(4) Includes $43,000 paid in 2005.

(5) These amounts are accrued but unpaid.

(6) Represents the issuance to Mr. Willenberg in April 2005 of 1,000,000 shares
of common stock.

(7) Includes $46,250 paid in 2005.

(8) Represents the issuance to Mr. Willenberg in December 2003 of 400,000
shares of common stock in lieu of $100,000 of unpaid bonuses, and the
issuance to Mr. Willenberg in March 2004 of 333,333 shares of common stock
valued at $76,667.

(9) Includes $9,269 paid in 2005.

Page 10

In accordance with the rules of the SEC, other compensation in the form of
perquisites and other personal benefits has been omitted for the named executive
officers because the aggregate amount of these perquisites and other personal
benefits was less than the lesser of $50,000 or 10% of annual salary and bonuses
for the named executive officers.

OPTION GRANTS IN THE LAST FISCAL YEAR
-------------------------------------

The following table sets forth information concerning individual grants of
stock options made during the year ended October 31, 2005 to each of the named
executive officers:

NUMBER OF SECURITIES % OF TOTAL OPTIONS
UNDERLYING OPTIONS GRANTED TO EMPLOYEES EXERCISE EXPIRATION
GRANTED IN FISCAL YEAR PRICE DATE
------- -------------- ----- ----

Brad Ketch 1,000,000(1) 7.1% $ 0.17 April 5, 2015
6,000,000(1) 42.9% $ 0.17 April 5, 2015

Ray Willenberg, Jr. 1,000,000(1) 7.1% $ 0.17 April 5, 2015
6,000,000(1) 42.9% $ 0.17 April 5, 2015

(1) These options were canceled by agreement effective January 1, 2006.

AGGREGATE OPTIONS EXERCISED IN 2005 AND YEAR-END OPTION VALUES
--------------------------------------------------------------

The named executive officers did not exercise any stock options during the
year ended October 31, 2005. The following table sets forth information as of
October 31, 2005 concerning options held by the named executive officers. None
of these options were in-the-money as of October 31, 2005, and all such options
were canceled by agreement effective January 1, 2006.

NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED OPTIONS IN-THE-MONEY
AT FISCAL YEAR END OPTIONS AT FISCAL YEAR END
------------------ --------------------------
SHARES VALUE
ACQUIRED ON REALIZED
EXERCISE (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
------------ --- ----------- ------------- ----------- -------------

Brad Ketch -- -- 1,000,000 6,000,000 $ -- $ --
Ray Willenberg, Jr. -- -- 1,000,000 6,000,000 -- --

EMPLOYMENT AGREEMENTS WITH EXECUTIVE OFFICERS
---------------------------------------------

BRAD KETCH. On December 2, 2002, we entered into an employment agreement
with Brad Ketch pursuant to which Mr. Ketch was retained as our Chief Executive
Officer. The agreement had a three-year initial term and provided for Mr. Ketch
to receive an initial base salary of $250,000, with an annual bonus to be paid
at the discretion of the Board of Directors in either cash or stock. In December
2005, this agreement was automatically renewed for an additional one year term.
If Mr. Ketch is terminated without "cause" or leaves Rim Semiconductor for "good
reason," each as defined in his agreement, he will receive a severance payment
equal to two years of his base salary on the date of termination. If he is
terminated without cause or with good reason within one year after a "change of
control," as defined in his agreement, he will receive a severance payment equal
to two years of his base salary and an amount equal to two times the amount of
his last bonus received.

Page 11

RAY WILLENBERG, JR. On March 3, 2005, we entered into an employment
agreement with Mr. Willenberg pursuant to which he continues to serve as our
Executive Vice President for a term of three years commencing on March 23, 2005,
subject to the earlier of (i) his death or Disability (as defined in the
agreement); (ii) the termination of the agreement by either party without cause
on written notice; or (iii) termination of the agreement by us for Cause (as
defined in the agreement).

Under this agreement, Mr. Willenberg is entitled to receive a payment based
upon any equity or long-term debt financing we obtain during the term of the
agreement or the twelve month period after the termination thereof from any
source introduced to us by Mr. Willenberg or as a result of Mr. Willenberg's
personal efforts. These payments will equal 6% of the aggregate annual proceeds
of such financings up to $2 million; 5% of the aggregate annual proceeds of such
financings in excess of $2 million and up to $5 million; and 4% of the aggregate
annual proceeds of such financings in excess of $5 million. Mr. Willenberg is
also entitled to be paid a bonus equal to the amount, if any, paid as a bonus to
our Chief Executive Officer in connection with the successful commercialization
of our technologies. Mr. Willenberg is not paid a fixed salary for his services
under his employment agreement.

Under his employment agreement, we also granted Mr. Willenberg a right of
first refusal to purchase our equity interest in Top Secret Productions, LLC in
the case of a bona fide third-party offer to purchase that interest or our
determination to offer that interest for sale at a specified price.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
----------------------------------------------

On July 21, 2004, the Company entered into a one-year $100,000 revolving
line of credit with a bank. Ray Willenberg, Jr., Executive Vice President and
Chairman of the Company, guaranteed the repayment of the line of credit, and the
Company agreed to indemnify Mr. Willenberg for any losses or expenses he may
incur as a result of providing such security. The line of credit expired on
August 10, 2005.

On March 23, 2005, we issued in favor of Mr. Willenberg a non-interest
bearing convertible promissory note ("Note") in the principal amount of
$383,910.72. The Note was issued in evidence of our obligation for deferred
compensation. The terms of the Note provide that, beginning April 1, 2005, Mr.
Willenberg is to be paid a monthly amount not less than the monthly base salary
paid to the Company's Chief Executive Officer. However, if the Company
determines in its sole discretion that it has the financial resources available,
it shall pay up to $20,833 per month. As of February 28, 2006, the balance on
the Note was $89,539.47.

AUDIT COMMITTEE MATTERS
-----------------------

AUDIT COMMITTEE REPORT
----------------------

Management has the primary responsibility for the financial statements and
the reporting process, including the systems of internal accounting control. The
Audit Committee monitors the Company's financial reporting processes and the
systems of internal accounting control, the independence and the performance of
the independent auditors, and the performance of the internal auditors. The
Audit Committee adopted a written charter governing its actions on June 26,
2000.

In fulfilling its oversight responsibilities, the Audit Committee reviewed
the audited financial statements with management, including a discussion of the
acceptability as well as the appropriateness of significant accounting
principles. The Audit Committee also reviewed with management the reasonableness
of significant estimates and judgments made in preparing the financial
statements as well as the clarity of the disclosures in the financial
statements.

Page 12

The Audit Committee reviewed with our independent accountants, Marcum &
Kliegman, LLP ("Marcum"), its judgments as to the acceptability as well as
appropriateness of the Company's application of accounting principles. Marcum
has the responsibility for expressing an opinion on the conformity of the
Company's audited financial statements with U.S. generally accepted accounting
principles. The Audit Committee also discussed with Marcum matters required to
be discussed under Statement on Auditing Standards No. 61 (Communicating with
Audit Committees).

In addition, the Audit Committee discussed with Marcum its independence
from management and the Company, the matters included in the written disclosures
required by the Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees), and the impact on auditor independence of
non-audit related services provided to us by Marcum during the 2005 fiscal year.
The Committee concluded that Marcum is independent from the Company and its
management.

The Audit Committee discussed with Marcum the overall scope and plans for
its audit. The Audit Committee meets with Marcum with and without management
present to discuss the results of its audits, its opinions of the Company's
system of internal controls, and the overall quality of the Company's financial
reporting.

In reliance on the reviews and discussions noted above, the Audit Committee
recommended to the full Board of Directors that the audited financial statements
be included in the Annual Report on Form 10-KSB for the year ended October 31,
2005 for filing with the SEC.

THE AUDIT COMMITTEE:

Jack L. Peckham

THE INFORMATION CONTAINED IN THE REPORT SHALL NOT BE DEEMED TO BE "SOLICITING
MATERIAL" OR TO BE "FILED" WITH THE SECURITIES AND EXCHANGE COMMISSION, NOR
SHALL SUCH INFORMATION BE INCORPORATED BY REFERENCED INTO ANY FUTURE FILING
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, EXCEPT TO THE EXTENT THAT THE COMPANY SPECIFICALLY
INCORPORATES IT BY REFERENCE IN SUCH FILING.

INDEPENDENT AUDITOR FEE INFORMATION
-----------------------------------

Aggregate fees for professional services rendered for the Company by Marcum
for the fiscal years ended October 31, 2004 and 2005 are set forth below.

Fiscal Year Ended Fiscal Year Ended
October 31, 2005 October 31, 2004
--------------------------------------------------------------------
Audit Fees $237,347 $146,906
--------------------------------------------------------------------
Audit Related Fees $0 $77,108
--------------------------------------------------------------------
Tax Fees $11,510 $13,784
--------------------------------------------------------------------
All Other Fees $12,509 $0
--------------------------------------------------------------------
Total $261,366 $237,799
--------------------------------------------------------------------

AUDIT FEES were for professional services rendered for the audits of the
consolidated financial statements of the Company, quarterly review of the
financial statements included in Quarterly Reports on Form 10-QSB, consents, and
other assistance required to complete the year-end audit of the consolidated
financial statements. AUDIT-RELATED FEES were for assurance and related services

Page 13

reasonably related to the performance of the audit or review of financial
statements and not reported under the caption Audit Fees. TAX FEES were for
professional services related to tax compliance, tax authority audit support and
tax planning. All Other Fees include any other fees charged by the Company's
auditors that are not otherwise specified.

COMPENSATION COMMITTEE REPORT
-----------------------------

The policy of the Compensation Committee is to attract and retain key
personnel through the payment of competitive base salaries and to encourage and
reward performance through bonuses and stock ownership. The Committee's
objectives are to ensure that:

o there is an appropriate relationship between executive
o compensation and the creation of shareholder value;
o the total compensation program will motivate, retain and attract
quality executives; and
o current cash and equity incentives are competitive with comparable
companies.

ELEMENTS OF COMPENSATION
------------------------

Compensation for officers and key executives includes:

o Annual cash compensation in the form of base salary;
o Discretionary or contractual bonuses;
o Equity elements through the issuance of stock and stock options; and
o Employee benefits, such as health insurance.

SALARY AND BONUS
----------------

Cash compensation consists of base salary, which is determined based upon
the level of responsibility, expertise and experience of the executive and the
competitive conditions of the industry.

EQUITY ELEMENTS
---------------

Ownership of Rim Semiconductor's common stock is a key element of executive
compensation. The Committee believes that a significant portion of executive
compensation should be dependent upon the value created for the shareholders.
Officers and other employees of Rim Semiconductor are eligible to participate in
the Company's 2000 Omnibus Securities Plan. This plan allows the Board or the
Committee to grant stock options to employees on such terms as the Board or the
Committee may determine. In addition, employees may be granted stock awards or
stock options outside of these plans.

BENEFITS
--------

Executive officers also receive benefits generally available to all
employees of the Company (such as health insurance). Our executive officers
receive only the benefits that are available to all of Rim Semiconductor's
employees.

Page 14

2005 COMPENSATION FOR THE CHIEF EXECUTIVE OFFICER
-------------------------------------------------

During the 2005 fiscal year, the Company's Chief Executive Officer was Brad
Ketch, a position he has held since 2002. On December 2, 2002, we entered into
an employment agreement with Mr. Ketch. Mr. Ketch receives a base salary of
$250,000, with an annual bonus to be paid at the discretion of the Board of
Directors in either cash or stock. During fiscal 2005, Mr. Ketch received a
$70,000 bonus. He also was issued 1,000,000 shares of our common stock (valued
at $170,000 when granted) in exchange for the cancellation of 1,955,000 options
that had previously been issued to him. Finally, Mr. Ketch received options to
purchase 7,000,000 shares of common stock at an exercise price of $0.17 per
share. Of these options, 1,000,000 vested upon the closing of the Company's $3.5
million financing in May 2005 and the remainder vested in December 2005 upon the
Company's release of the EmbarqTM E30 digital signal processor (Release 1.3).
These options were canceled by agreement effective January 1, 2006.

THE COMPENSATION COMMITTEE:

Thomas J. Cooper, Chairman
Jack L. Peckham

ANNUAL MEETING ADVANCE NOTICE REQUIREMENTS
------------------------------------------

Our annual meetings are held each year at a time and place designated by
our Board of Directors in the notice of the meeting. Copies of our bylaws are
available upon written request made to the Secretary of Rim Semiconductor at the
address below. The requirements described below do not supersede the
requirements or conditions established by the SEC for shareholder proposals to
be included in our proxy materials for a meeting of shareholders. The chairman
of the meeting may refuse to bring before a meeting any business not brought in
compliance with applicable law and our bylaws.

SHAREHOLDER PROPOSALS
---------------------

Our bylaws provide that shareholder proposals and director nominations by
shareholders may be made in compliance with certain advance notice,
informational and other applicable requirements. With respect to shareholder
proposals (concerning matters other than the nomination of directors), the
individual submitting the proposal must file a written notice with the Secretary
of Rim Semiconductor at 305 NE 102nd Avenue, Suite 105, Portland, Oregon 97220
setting forth certain information, including the following:

o a brief description of the business desired to be bought before the
meeting and the reasons for conducting that business at the meeting;
o the name and address of the proposing shareholder;
o the number of shares of Common stock beneficially owned by the
proposing shareholder; and
o any material interest of the proposing shareholder in such business.

The notice must be delivered to the Secretary (1) at least 30, but no more
than 60, days before any scheduled meeting or (2) if less than 40 days notice or
prior public disclosure of the meeting is given, by the close of business on the
10th day following the giving of notice or the date public disclosure was made,
whichever is earlier.

Page 15

BOARD NOMINATIONS
-----------------

A shareholder may recommend a nominee to become a director of Rim
Semiconductor by giving the Secretary of Rim Semiconductor (at the address set
forth above) a written notice setting forth the following information concerning
each person the shareholder proposes to nominate:

o the name, age, business address and residence of the person;
o the principal occupation or employment of the person;
o the number of shares of Common stock beneficially owned by the person;
and
o any other information relating to the person that is required to be
disclosed in solicitations for proxies for election of directors
pursuant to the rules of the SEC.

The shareholder's notice must also contain the following information
concerning the proposing shareholder:

o the name and record address of the proposing shareholder; and
o the number of shares of Common stock beneficially owned by the
proposing shareholder.

Such nominations must be made pursuant to the same advance notice
requirements for shareholder proposals set forth in the preceding section.

WHERE YOU CAN FIND MORE INFORMATION
-----------------------------------

We file annual, quarterly and current reports, proxy statements and other
information with the SEC. You can read and copy any materials we file with the
SEC at the SEC's public reference room at 450 Fifth Street, N.W., Washington,
D.C. 20549. You can obtain information about the operation of the SEC's public
reference room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a
web site that contains information we file electronically with the SEC, which
you can access over the Internet at www.sec.gov. Statements contained in this
proxy statement regarding the contents of any contract or other document are not
necessarily complete and each such statement is qualified in its entirety by
reference to such contract or other document filed as an exhibit with the SEC.

Page 16

PROPOSALS FOR CONSIDERATION AT THE ANNUAL MEETING
-------------------------------------------------

ITEM 1. ELECTION OF DIRECTORS
---------------------

The Board of Directors of Rim Semiconductor has currently set the number of
directors constituting the whole board at four. At the Annual Meeting, you and
the other shareholders will elect four individuals to serve as directors until
the 2007 Annual Meeting of Shareholders and their successors are elected and
qualified. All nominees are currently serving as directors of Rim Semiconductor.

Directors need the affirmative vote of holders of a plurality of the shares
represented in person or by proxy at the Meeting to be elected. Neither
abstentions nor broker non-votes will have any effect on the election of
directors.

The persons designated as proxies will vote the enclosed proxy for the
election of all of the nominees unless you direct them to withhold your vote for
any one or more of the nominees. If any nominee becomes unable to serve as a
director before the meeting (or decides not to serve), the individuals named as
proxies may vote for a substitute or we may reduce the number of members of the
board. We recommend a vote FOR each of the nominees.

The names, ages and positions of our directors, executive officers and key
employees are as follows:

NAME AGE POSITION
---- --- --------
Brad Ketch 43 President, Chief Executive Officer, Secretary,
Principal Financial Officer and Director
Ray Willenberg, Jr. 54 Chairman of the Board and Executive Vice
President
Jack L. Peckham 56 Director(1)
Thomas J. Cooper 56 Director(2)

--------------------
(1) Audit Committee and Compensation Committee Member
(2) Compensation Committee Member

The business experience, principal occupations and employment, as well as
the periods of service, of each of our directors and executive officers during
at least the last five years are set forth below.

BRAD KETCH has served the Company in various roles since March 2002. In
March 2002, Mr. Ketch became a consultant with us on our broadband technology
and served in that capacity until July 2002, when he became our Chief Marketing
Officer. He has served as our President and Chief Executive Officer, as well as
a director, since December 2002. With over 19 years experience creating
shareholder value through broadband telecommunications products and services,
Mr. Ketch, from October 2001 to March 2002, served as CEO of Kentrox LLC, a
manufacturer and marketer of data networking equipment. At Kentrox, Mr. Ketch
was responsible for a company with 260 employees and $90 million in annual
revenues. From January 2001 to October 2001 Mr. Ketch implemented strategic
plans for telecom service providers and equipment manufacturers through his
telecommunications consulting company, Brad Ketch & Associates, of which he was

Page 17

founder and President. From February 1999 to January 2001 he was Senior Vice
President of Sales and Marketing for HyperEdge Corporation, a company he
co-founded. HyperEdge acquired and integrated broadband access equipment
manufacturers to further enable service providers to deliver broadband access to
the "Last Mile." From August 1997 through February 1999, Mr. Ketch implemented
strategic business and technical plans for competitive local exchange carrier
network access and created products targeted at the incumbent local exchange
carrier market as a consultant to various telecommunications companies as a
consultant with Brad Ketch & Associates. Prior to August 1997 he served in
various capacities at Nortel, Advanced Fibre Communications and Cincinnati Bell.
Mr. Ketch has a Bachelor of Arts degree in Economics from Wheaton College and a
MBA from Northwestern University.

RAY WILLENBERG, JR. served as our President, Chief Executive Officer and
Chairman of the Board from April 1997 to March 2002, and was elected a director
in October 1996. Mr. Willenberg joined us as Vice President and corporate
Secretary in 1996. He currently serves as our Executive Vice President and
Chairman of the Board of Directors. From 1972 to 1995, Mr. Willenberg was Chief
Executive Officer of Mesa Mortgage Company in San Diego, California.

JACK L. PECKHAM is a founder and director of Heritage Bank of Commerce in
San Jose, California, and serves on its audit and compensation committees. He is
currently the Chairman and CEO of Broadband Graphics, a company which owns and
licenses intellectual property in the areas of video and desktop computing. From
1985 through 1998, Mr. Peckham held various positions at ATMEL Corporation
(www.atmel.com), retiring as its General Manager. He received an MA and a BA in
Finance and marketing from Burdette College, Boston.

THOMAS J. COOPER has served as a member of our Board of Directors since
March 2002. From June 1 to December 2, 2002, Mr. Cooper served as our President
and Chief Executive Officer. Mr. Cooper has been engaged in the development,
creation and management of global sales and marketing platforms for businesses
operating in the areas of high technology, real estate, office automation, and
telecommunications for the past 30 years. Mr. Cooper is currently the Senior
Vice President of Sales and Marketing of Artimi, Inc. (www.artimi.com) a fabless
semiconductor firm based in Santa Clara, California serving new markets with
Ultra Wideband wireless technology and products. From 1994 to 2002, Mr. Cooper
served in various high-ranking positions at Conexant (formerly Virata), most
recently as Senior Vice President, Corporate Development (from July 1999 to
February 2002), where he was responsible for the development and implementation
of long range growth strategies, including defining global partnership
initiatives; identifying potential acquisition and joint venture candidates; and
directing strategic investment of corporate capital into select ventures in
which the company acquired minority stakes. From 1994 until 1999, Mr. Cooper
served as Virata's Senior Vice President, Worldwide Sales and Marketing, where
he oversaw all aspects of the company's product sales and marketing, corporate
marketing/communications and public relations. Mr. Cooper has a Bachelor of Arts
degree in English Literature from Hamilton College and an MBA from the
University of Toledo, Ohio.

ITEM 2. RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------------

The Audit Committee and the Board of Directors have appointed Marcum &
Kliegman, LLP ("Marcum") to serve as our independent public accountants for the
fiscal year ending October 31, 2006 and is soliciting your ratification of that
appointment.

Marcum has served as our independent public accountants since September
2002. In their role as independent public accountants, Marcum reports on our
financial statements. They also provide general accounting and tax consulting.
We do not anticipate that a representative of Marcum will be present at the
Meeting.

Page 18

Your ratification of the Board's selection of Marcum is not necessary
because the Audit Committee and Board of Directors have responsibility for
selection of our independent public accountants. However, the Board of Directors
and the Audit Committee will take your vote on this proposal into consideration
when selecting our independent public accountants in the future.

To ratify the appointment of Marcum as our independent public accountants
for the current fiscal year, shareholders holding a majority of the shares
represented in person or by proxy at the Meeting must affirmatively vote to
approve the matter. Abstentions have the same effect as votes "against" the
proposal, while broker non-votes have no effect.

We recommend a vote FOR the ratification of Marcum as our independent
public accountants for the current fiscal year.

ITEM 3. AMENDMENT TO ARTICLE IV OF OUR ARTICLES OF INCORPORATION TO INCREASE
--------------------------------------------------------------------
OUR AUTHORIZED COMMON STOCK
---------------------------

Our Board of Directors recommends that the shareholders approve an
amendment to Article IV of our Articles of Incorporation to increase the number
of authorized shares of our common stock from 500 million to 900 million shares.

Each share of newly authorized common stock will have the same rights and
privileges as each share of existing common stock. Until an authorized share of
common stock is issued, it is not counted in the number of shares that are
outstanding, does not have a vote, and does not decrease our earnings or loss
per share. The amendment will not affect the number of shares of preferred stock
currently authorized.

REASONS FOR THE AMENDMENT
-------------------------

As of February 27, 2006, we had ___________ shares of common stock
outstanding. We also had approximately ____________ shares of common stock
reserved for possible future issuance in connection with outstanding options,
warrants and convertible notes and debentures. Some of these shares may never
actually be issued. For example, some of our outstanding options may not vest,
and some of our outstanding options and warrants have exercise prices well in
excess of our current market price per share, making their exercise unlikely.
Nevertheless, we intend to keep reserved for future issuance a sufficient number
of shares of our authorized common stock to honor our commitment to issue common
stock in the event these options or warrants are exercised or convertible
securities are converted.

In addition, we believe it will be necessary for us to issue additional
common stock or debt convertible into our common stock in order to generate
funds to pay current liabilities as they come due, as well as to meet our
operating requirements, prior to the receipt of revenues from our semiconductor
business. In January 2006, we entered into a bridge loan agreement with a third
party pursuant to which we borrowed $750,000 from the lender. An amount equal to
108% of the principal amount of the loan is due and payable on the earlier of
May 25, 2006 or the date we effect a financing transaction or series of
transactions resulting in gross proceeds to us of at least $2,000,000. We will
require additional funds to repay the bridge loan upon maturity, continue to
meet our other liquidity needs and satisfy our current business plan.

The Board of Directors believes that the proposed increase in authorized
common stock is advisable to satisfy our current and potential future
commitments to reserve shares, notwithstanding the fact that many of these
reserved shares of common stock may never be issued. The Board of Directors also
believes that having additional shares of common stock available for issuance,
without the delay necessitated by a shareholders meeting, will benefit us under
many circumstances by providing us with the flexibility required to consider and
respond to future business opportunities and financial needs as they arise.

Page 19

To the extent that shares of common stock are authorized but not issued in
connection with the above transactions, such shares will be available for our
issuance in the future. Shareholder approval will not be required for any such
future issuance, except as may be required by applicable law or the rules of any
stock exchange on which our securities may then be listed. The Board of
Directors believes that the availability of additional authorized shares may
allow Rim Semiconductor to redeem, convert or restructure indebtedness, issue
stock dividends or distributions, take prompt advantage of market and other
conditions in connection with possible financings, and issue common stock for
other proper corporate purposes when such action is deemed advisable or
desirable by the Board of Directors. Although we are generally exploring
possible future financings, we have no current plans or arrangements regarding
the issuance of these additional authorized shares in connection with any of the
foregoing matters. The issuance of any of these additional authorized shares
will dilute the ownership interest of existing shareholders in the company. Any
additional issuance of common stock also could have the effect of impeding or
discouraging the acquisition of control of us by means of a merger, tender
offer, proxy contest or otherwise.

None of the authorized shares of Rim Semiconductor Company are currently
subject to any preemptive rights.

PROPOSED AMENDMENT
------------------

In order to increase the number of authorized shares of our common stock,
we will need to amend the first paragraph of Article Four of our Articles of
Incorporation. Currently, our Articles of Incorporation provide for the issuance
of up to 500 million shares of common stock. The Board of Directors unanimously
adopted a resolution proposing and declaring advisable that Article Four of our
Articles of Incorporation be amended in order to increase the number of
authorized shares of common stock to 900 million shares and recommending the
adoption of the proposed amendment by our shareholders. If the shareholders
approve this proposal, it will become effective upon filing of an amendment to
the Articles of Incorporation with the Secretary of State of the State of Utah.

REQUIRED VOTE; BOARD RECOMMENDATION
-----------------------------------

Approval of the proposed amendment requires the affirmative vote of
shareholders holding a majority of the total voting power of the common stock.
Abstentions and broker non-votes have the same effect as votes "against" the
proposal.

We recommend a vote FOR the proposal to amend Article IV of our Articles of
Incorporation to increase our authorized common stock to 900 million shares.

ITEM 4. AMENDMENT TO SECTION B(2) OF ARTICLE IV OF OUR ARTICLES OF
----------------------------------------------------------
INCORPORATION RELATING TO OUR PREFERRED STOCK
---------------------------------------------

Our Board of Directors recommends that the shareholders approve an
amendment to Section B(2) of Article IV of our Articles of Incorporation. That
section relates to our preferred stock, and the Board's ability without
shareholder approval to designate series of preferred stock and determine the
rights, preferences and limitations of preferred stock.

Page 20

Utah law permits a board of directors to take the following additional
action with respect to preferred stock, provided the Articles of Incorporation
permit such action:

o Alter or revoke the preferences, limitations, and relative rights
granted to or imposed upon any wholly unissued class or series of
preferred stock, and

o Increase or decrease the number of shares constituting any series, the
number of shares of which was originally fixed by the board of
directors, either before or after the issuance of shares of the
series, provided that the number may not be decreased below the number
of shares of the series then outstanding, or increased above the total
number of authorized shares of the applicable class of shares
available for designation as a part of the series.

The Board believes it would be in the best interest of the Corporation and
its shareholders for it to have the right to take the above actions with respect
to the Company's preferred stock, without shareholder approval. This authority
is consistent with the authority the Board presently has to issue, designate and
fix the rights, preferences and limitations of the preferred stock. Providing
this authority to the Board would not impact the common stock or any issued and
outstanding preferred stock. Rather, it merely provides the Board the authority
to modify designations of preferred stock that it previously created without
shareholder approval.

PROPOSED AMENDMENT
------------------

If approved, the text of Paragraph (B)(2) of Article IV would read as
follows:

"(2) Preferred Stock. The Board of Directors, without shareholder
action but subject to any limitations and restrictions stated in these
Articles of Incorporation, may from time to time issue Preferred Stock
in one or more series, each of such shares to have such terms as
stated in the resolution or resolutions providing for the
establishment of such series adopted by the Board of Directors of the
Corporation as hereinafter provided, and may alter or revoke the
preferences, limitations, and relative rights granted to or imposed
upon any wholly unissued Preferred Stock or any wholly unissued series
of Preferred Stock. Except as otherwise expressly stated in the
resolution or resolutions providing for the establishment of a series
of Preferred Stock, any shares of Preferred Stock that may be
redeemed, purchased or acquired by the Corporation may be reissued
except as otherwise expressly provided by law. Different series of
Preferred Stock shall not be construed to constitute different classes
of stock for the purpose of voting by classes unless expressly
provided in the resolution or resolutions providing for the
establishment thereof. The Board of Directors of the Corporation are
hereby expressly authorized by resolution to issue, from time to time,
shares of Preferred Stock in one or more series, to increase or
decrease the number of shares constituting any series, the number of
shares of which was originally fixed by the board of directors, either
before or after the issuance of shares of the series, provided that
the number may not be decreased below the number of shares of the
series then outstanding, or increased above the total number of
authorized shares of the applicable class of shares available for
designation as a part of the series and, in connection with the
establishment of any such series by resolution or resolutions, to
determine and fix the number of shares constituting that series and
the distinctive designation of that series and to determine and fix
such voting powers, full or limited, or no voting powers, and such
other powers, designations, preferences and relative, participating,

Page 21

optional and other rights, and the qualifications, limitations and
restrictions thereof, including, without limitation, dividend rights,
conversion rights, redemption privileges and liquidation preferences,
as shall be stated in such resolution or resolutions, all to the
fullest extent permitted by the Utah Revised Business Corporation Act.
Without limiting the generality of the foregoing, the resolution or
resolutions providing for the establishment of any series of Preferred
Stock may, to the extent permitted by law, provide that such series
shall be superior to, rank equally with or be junior to the Preferred
Stock of any other series. Except as otherwise expressly provided in
the resolution or resolutions providing for the establishment of any
series of Preferred Stock, no vote of the holders of shares of
Preferred Stock or Common Stock shall be a prerequisite to the
issuance of any shares of any series of the Preferred Stock authorized
by and complying with the conditions of these Articles of
Incorporation."

If the shareholders approve this proposal, it will become effective upon
filing of an amendment to the Articles of Incorporation with the Secretary of
State of the State of Utah.

REQUIRED VOTE; BOARD RECOMMENDATION
-----------------------------------

We recommend a vote FOR the proposal to amend Section (B)(2) of Article IV
of our Articles of Incorporation.

ITEM 5. AMENDMENT TO ARTICLE IV OF OUR ARTICLES OF INCORPORATION TO DELETE
------------------------------------------------------------------
PARAGRAPH (C) OF ARTICLE IV
---------------------------

Our Board of Directors recommends that the shareholders approve an
amendment to Article IV of our Articles of Incorporation to authorize the Board
of Directors to eliminate Paragraph (C) of Article IV.

Paragraph 2(C) of Article IV contains the language necessary to implement
the 1-for-4 reverse stock split that was effected in 2000. The text of paragraph
(C) of Article IV ceased to have any effect after the reverse stock split was
completed. As a result, the Board believes it is in the best interest of the
Company and its shareholders to delete this unnecessary text from the Articles
of Incorporation.

The Board of Directors unanimously adopted a resolution proposing and
declaring advisable that Article Four of our Articles of Incorporation be
amended in order to authorize the Board of Directors to eliminate Paragraph (C)
and recommending the adoption of the proposed amendment by our shareholders. If
approved, the text of Paragraph (C) of Article Four would be deleted. If the
shareholders approve this proposal, it will become effective upon filing of an
amendment to the Articles of Incorporation with the Secretary of State of the
State of Utah.

REQUIRED VOTE; BOARD RECOMMENDATION
-----------------------------------

Page 22

We recommend a vote FOR the proposal to amend Article IV of our Articles of
Incorporation to delete Paragraph (C) of Article IV.

ITEM 6. AMENDMENT TO OUR ARTICLES OF INCORPORATION TO CANCEL THE DESIGNATIONS
---------------------------------------------------------------------
OF OUR SERIES A THROUGH G PREFERRED STOCK
-----------------------------------------

Our Board of Directors recommends that the shareholders approve an
amendment to our Articles of Incorporation to cancel the designations for all
seven of our previously designated series of preferred stock, none of which is
outstanding.

Over the past six years, and pursuant to the authority granted to and
vested in the Board of Directors of the Company in accordance with the
provisions of the Articles of Incorporation, the Board of Directors designated
seven series of preferred stock. The Certificates of Designation for each series
of preferred stock stated the designation and number of shares, and fixed the
relative rights, preferences and limitations of each series of shares.

The following is a list of the seven series of preferred stock that have
been designated by the Board:

Series A Junior Participating Preferred Stock
Redeemable Series B Preferred Stock
Series C Convertible Preferred Stock
Series D Convertible Preferred Stock
Series E Convertible Preferred Stock
Series F Convertible Preferred Stock
Series G Convertible Preferred Stock

The Series A preferred stock was issued in connection with the Company's
adoption of a shareholder rights plan, commonly known as a "poison pill," which
has subsequently expired. As a result, no shares of Series A preferred stock
have been or would be issued in the future.

The Series B preferred stock was issued to Zaiq Technologies, Inc. ("Zaiq")
in April 2002. The Company had assumed certain obligations of Adaptive Networks,
Inc. to Zaiq as part of its payment to Adaptive for a worldwide, perpetual
license to Adaptive's Powerstream (TM) technology, intellectual property, and
patent portfolio for use in products relating to all applications in the field
of the copper telephone wire telecommunications network. The Series B preferred
stock was issued to Zaiq in partial satisfaction of those obligations. These
shares were subsequently canceled pursuant to an Exchange Agreement between the
Company and Zaiq in April 2005. As a result no shares of Series B preferred
stock are outstanding, and because the rights and preferences of those shares
were specifically negotiated between the Company and Zaiq, the Company does not
intend to issue additional shares of the existing Series B preferred stock.

The Series C, Series D, Series E, Series F and Series G preferred stock was
designated in 2003 in anticipation of loans that were to be made to the Company
by a lender. None of the proposed loans was ever made to the Company. The
Company has canceled all of these shares for lack of consideration. As a result
no shares of Series C through G preferred stock are outstanding. Because the
rights and preferences of those shares were specifically negotiated between the
Company and the proposed lender, the Company does not intend to issue additional
shares of these series.

Page 23

Because no shares of these designated series of preferred stock are
outstanding, and because the Board does not deem it necessary and in the best
interests of the Company to retain the designations for these seven series, it
has proposed that the Articles of Incorporation be amended to cancel the
designations for seven previously designated series of preferred stock. If the
shareholders approve this proposal, it will become effective upon filing of an
amendment to the Articles of Incorporation with the Secretary of State of the
State of Utah.

REQUIRED VOTE; BOARD RECOMMENDATION
-----------------------------------

We recommend a vote FOR the proposal to amend our Articles of Incorporation
to cancel the designations of our Series A through G preferred stock.

Page 24

ANNUAL REPORT
-------------

Enclosed is our Annual Report on Form 10-KSB for the fiscal year ended
October 31, 2005, including audited financial statements. Such report does not
form any part of the material for the solicitation of proxies.

PLEASE TAKE A MOMENT NOW TO VOTE.

PLEASE SIGN AND RETURN YOUR PROXY CARD OR FOLLOW
THE PROCEDURES ON THE PROXY CARD FOR VOTING BY TELEPHONE OR VIA THE INTERNET.

THANK YOU.

Page 25

RIM SEMICONDUCTOR COMPANY

PROXY SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF THE COMPANY
FOR THE
ANNUAL MEETING OF SHAREHOLDERS
APRIL 11, 2006

The undersigned hereby constitutes and appoints BRAD KETCH and RAY
WILLENBERG, JR. with full power of substitution, attorney and proxy to represent
and to vote all the shares of common stock, par value $.001 per share, of RIM
SEMICONDUCTOR COMPANY (the "Company") that the undersigned would be entitled to
vote, with all powers the undersigned would possess if personally present, at
the Annual Meeting of Shareholders of the Company to be held on April 11, 2006,
and at any adjournment thereof, on the matters set forth on the reverse side and
such other matters as may properly come before the meeting.

MARK ONLY ONE OF THE FOLLOWING BOXES FOR EACH ITEM:
---------------------------------------------------

ITEM 1. ELECTION OF DIRECTORS
---------------------

Nominees: BRAD KETCH RAY WILLENBERG, JR.
THOMAS J. COOPER JACK L. PECKHAM

|_| VOTE FOR ALL NOMINEES LISTED ABOVE, EXCEPT VOTE WITHHELD AS TO THE
FOLLOWING NOMINEES (IF ANY): ___________________________________.

|_| VOTE WITHHELD FROM ALL NOMINEES.

ITEM 2. RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
----------------------------------------------