SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
INRAD, INC.
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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)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
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0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
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INRAD, INC.
181 Legrand Avenue
Northvale, New Jersey 07647
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD OCTOBER 26, 1999
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of INRAD, Inc.
(the "Company") will be held at the offices of Lowenstein, Sandler, Kohl, Fisher
& Boylan, 65 Livingston Avenue, Roseland, New Jersey on Tuesday, October 26,
1999 at 2:00 p.m. for the following purposes:
1. To elect three directors to serve until the next Annual Meeting of
Shareholders.
2. To consider and act upon other matters which may properly come before
the meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on July 31, 1999, as the
date for determining the shareholders of record entitled to receive notice of,
and to vote at, the Annual Meeting. Whether or not you expect to be present at
the Annual Meeting, you are requested to complete and sign the enclosed proxy
and return it in the enclosed envelope as promptly as possible. Shareholders who
are present at the meeting may revoke their proxies and vote in person. We hope
you will attend.
By Order of the Board of Directors
William S. Miraglia, Secretary
Northvale, New Jersey
September 20, 1999
INRAD, INC.
PROXY STATEMENT
The following statement is furnished in connection with the solicitation by the
Board of Directors of INRAD, Inc., a New Jersey corporation with its principal
offices at 181 Legrand Avenue, Northvale, New Jersey 07647 (the "Company"), of
proxies to be used at the Annual Meeting of Shareholders of the Company to be
held at the offices of Lowenstein, Sandler, Kohl, Fisher & Boylan, 65 Livingston
Avenue, Roseland, New Jersey on Tuesday, October 26, 1999 at 2:00 p.m. This
Proxy Statement and the enclosed form of proxy are first being sent to
shareholders on or about September 20, 1999.
SHAREOWNERS ENTITLED TO VOTE
Only shareowners of record at the close of business on July 31, 1999, the record
date fixed by the Board of Directors, will be entitled to notice of, and to vote
at, the Annual Meeting. At the close of business on the record date, there were
4,096,078 shares of the Company's Common Stock, par value $.01 per share (the
"Common Stock"), outstanding and entitled to vote at the meeting. Each share is
entitled to one vote.
The presence in person or by proxy of owners of a majority of the outstanding
shares of the Company's Common Stock will constitute a quorum for the
transaction of business at the Company's Annual Meeting. Assuming that a quorum
is present, the election of directors will require the affirmative vote of a
plurality of the shares of Common Stock represented and entitled to vote at the
Annual Meeting. For purposes of determining the votes cast with respect to any
matter presented for consideration at the Annual Meeting, only those cast "for"
are included. Abstentions and broker non-votes are counted only for the purpose
of determining whether a quorum is present at the Annual Meeting. Owners of
Common Stock are not entitled to cumulative voting in the election of directors.
VOTING: REVOCATION OF PROXIES
A form of proxy is enclosed for use at the Annual Meeting if a shareowner is
unable to attend in person. Each proxy may be revoked at any time before it is
exercised by giving written notice to the secretary of the Meeting. All shares
represented by valid proxies pursuant to this solicitation (and not revoked
before they are exercised) will be voted as specified in the form of proxy. If
no specification is given, the shares will be voted in favor of the Board's
nominees for directors described in this Proxy Statement.
COSTS OF SOLICITATION
The entire cost of soliciting these proxies will be borne by the Company. In
following up the original solicitation of the proxies by mail, the Company may
make arrangements with brokerage houses and other custodians, nominees and
fiduciaries to send proxies and proxy materials to the beneficial owners of the
stock and may reimburse them for their expenses in so doing. If necessary, the
Company may also use its officers and their assistants to solicit proxies from
the shareholders, either personally or by telephone or special letter.
PRINCIPAL SHAREHOLDERS
The following table presents certain information with respect to the security
ownership of the Directors of the Company and the security ownership of the only
individuals or entities known by the Company to be the beneficial owner of more
than 5% of the Company's Common Stock as of March 1, 1999. The Company has been
advised that all individuals listed have the sole power to vote and dispose of
the number of shares set opposite their names in the table.
2
Percent of
Name and Address Number of shares Common Stock (2)
- ---------------- ---------------- ----------------
Warren Ruderman (1) 1,791,946 43.7
c/o INRAD, Inc.
181 Legrand Avenue
Northvale, NJ 07647
Clarex, Ltd. 2,187,214(1) 46.9
c/o Bank of Nova Scotia
Trust Company Bahamas Ltd.
P.O. Box N1355
Nassau, Bahamas
CNA Holdings, Inc. 300,000 7.3
86 Morris Avenue
Summit, NJ 07901
William F. Nicklin 210,527(2) 5.0
33 Grand Avenue
Newburgh, NY 12550
Frank Wiedeman 51,500(3) 1.2
c/o INRAD, Inc.
Directors and Executive 1,883,146(4) 45.0
Officers as a group
(7 persons)
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(1) Including 570,000 shares subject to options, warrants or convertible notes
exercisable or convertible within 60 days.
(2) Including 80,000 shares subject to convertible notes convertible within 60
days.
(3) Including 50,000 shares subject to options exercisable within 60 days.
(4) Including 89,250 shares subject to options or warrants within 60 days.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In 1993, the principal shareowner and President of the Company exchanged an
unsecured demand note for a new promissory note maturing on December 31, 1996 in
the amount of $566,049 (including $154,049 of accrued interest) and 494,400
shares of common stock. The new note bears interest at 7% and is unsecured.
Interest expense related to the shareowner loan was approximately $57,000,
$57,000 and $72,000 in 1998, 1997 and 1996, respectively. On December 31, 1998
this note along with its accrued interest was converted into 684,921 shares of
the Company's Common Stock.
During the years ended December 31, 1998, 1997 and 1996 approximately 4%, 4% and
8%, respectively of the Company's net product sales were through a foreign agent
in which the principal shareholder has an investment. Terms of sales to this
foreign agent were substantially the same as to unrelated foreign agents.
On December 31,1998, a shareowner and debtholder converted $1,234,730 of notes
and $322,917 of accrued interest into 1,294,186 shares of the Company's Common
Stock.
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PROPOSAL ONE
ELECTION OF DIRECTORS
Three directors are to be elected to serve a term of one year and thereafter
until their respective successors shall have been elected and shall have
qualified. Unless a shareowner checks the box "withhold authority" on his proxy
or indicates that his shares should not be voted for certain nominees, it is
intended that the persons named in the proxy will vote for the persons listed in
the table below to serve as directors. Discretionary authority is solicited to
vote for the election of a substitute for any nominee who, for any reason,
presently unknown, cannot be a candidate for election.
NOMINEES
The following table sets forth the names and ages of the nominees for election
to the Board of Directors, the principal occupation or employment of each
nominee for the past five years, the principal business of the organization in
which said occupation is or was carried on, the name or any other public
corporation for which they served as Board members, and the period during which
each nominee has served as a director of the Company.
POSITION WITH COMPANY AND OTHER BUSINESS DIRECTOR
NAME AND AGE EXPERIENCE DURING PAST FIVE YEARS SINCE
------------ ----------------------------------------- --------
Warren Ruderman (79) Chairman of the Board of Directors, President 1973
and Chief Executive Officer of the Company
(1973-Present)
Thomas Lenagh (73) Management Consultant (1990-Present) 1998
Frank Wiedeman (84) Executive Director (1980-Present) 1998
American Capital Management, Inc.
During 1998, four meetings of the Board of Directors were held. Each
non-employee director is paid $500 for each Board Meeting they attend, and $250
for each conference call meeting they participate in. During 1998, each director
attended or participated in all the meeting held.
The Board has an Audit Committee whose members presently are Tom Lenagh and
Frank Wiedeman. The Audit Committee reviews the independence, qualifications and
activities of the Company's independent accountants. It meets privately with
them as well as with management. The Committee recommends to the Board the
appointment of the independent accountants. This Committee did not meet during
1997.
The Board has no separate Nominating Committee. The entire Board selects
management nominees for election as directors. While the Board will consider
nominees recommended by stockholders, it has not established formal procedures
for this purpose.
The directors serve one-year terms. Pursuant to agreements between the Company
and CNA Holdings, Inc. ("CNA"), CNA may designate a representative for
nomination to the Company's Board of Directors; the Company has agreed to use
its best efforts to have a designated representative elected to the Board of
Directors. At the present time, CNA has not designated a representative to the
Board.
Pursuant to an agreement between INRAD and Clarex, Ltd. ("Clarex"), the Company
has agreed to use its best efforts to have two individuals selected by Clarex
elected to the Board of Directors as long as any of the subordinated convertible
notes are outstanding. Messrs. Wiedeman and Lenagh have been selected by Clarex
as representatives.
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Executive Officers
The executive officers of the Company are Warren Ruderman, Maria Murray, William
S. Miraglia, Relinda C. Walker, Devaunshi Sampat and Ilya Zwieback.
Warren Ruderman has served as President and Chairman of the Board of Directors
of the Company since he founded it in 1973. Prior to 1973, he founded and served
as the President of Isomet Corporation, a manufacturer of acousto-optic devices
for the laser industry, and was a Teaching Fellow, Lecturer in Chemistry,
Research Scientist and Consultant at Columbia University. Dr. Ruderman was a
founder and served as a director of the Melex Corporation (a life sciences
company acquired by Revlon, Inc. in 1975). Dr. Ruderman holds a doctorate in
Chemical Physics from Columbia University, and is a Fellow of the New York
Academy of Sciences.
Maria Murray joined the Company in January 1989, became Vice President of R&D
Programs in 1993, and was appointed Sr. Vice President, Business Development in
1999. Prior to joining INRAD, she held positions in electronic design
engineering in the laser and communications industries. She holds a B.S. in
Electrical Engineering from the University of Central Florida.
William S. Miraglia joined the Company as Secretary and Chief Financial Officer
in June 1999. Previously, he held the position of Vice President of Finance for
a division of UNC, Inc., a largely publicly held aviation company. Prior to his
last position, Mr. Miraglia has held management positions in the aerospace
industry and in public accounting. He holds a B.B.A. from Pace University, and
an MBA from Long Island University.
Relinda C. Walker joined the Company as Vice President, Manufacturing in May
1999. Previously, Ms. Walker held the position of Vice President at Instruments,
SA where she directed a business unit. Ms. Walker holds a B.S. and M.S. in
Mathematics from Emory University.
Devaunshi Sampat joined the Company in 1998. In 1999 she was appointed Vice
President of Marketing and Sales. Prior to joining the company, Ms. Sampat held
sales management positions within the photonics industry with Princeton
Instruments and Oriel Instruments. Ms. Sampat holds a B.S. in Medical Technology
from the University of Bridgeport.
Ilya Zwieback joined the Company in 1992 as Senior Research Scientist and left
the Company in 1996 to join Lockheed Sanders as Senior Physicist. In 1997 Dr.
Zweiback rejoined the Company as Manager of Crystal Growth and in 1998 was
appointed Vice President, Crystal Growth. Dr. Zweiback holds a doctorate of
Physics in semiconductors from Moscow Institute of Steel and Alloys.
Each of the executive officers has been elected by the Board of Directors to
serve as an officer of the Company until the next election of officers, as
provided in the Company's by-laws.
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EXECUTIVE COMPENSATION
SUMMARY OF CASH AND OTHER COMPENSATION
The following table sets forth, for the years ended December 31, 1998, 1997 and
1996, the cash compensation paid by the Company and its subsidiaries, to or with
respect to the Company's Chief Executive Officer, the only executive officer
whose total annual salary and bonus exceeded $100,000, for services rendered in
all capacities as an executive officer during such period:
ANNUAL
NAME AND CURRENT COMPENSATION(A) LONG-TERM ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION COMPENSATION ($)
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Warren Ruderman, 1998 $130,000 none none none
President and Chief
Executive Officer 1997 $130,000 none none none
1996 $130,000 none none none
(A) During the periods covered, no Executive Officer received perquisites
(i.e., personal benefits) in excess of the lesser of $50,000 or 10% of such
individual's reported salary and bonus.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers and persons who own more than ten percent of a
registered class of the Company's equity securities to file with the SEC initial
reports of ownership and reports of changes in ownership of Common Stock and
other equity securities of the Company. Officers, directors and greater than ten
percent stockholders are required by SEC regulations to furnish the Company with
copies of all Section 16(a) forms they file.
To the Company's knowledge, based solely on the review of copies of reports and
other information furnished to the Company, all Section 16(a) filing
requirements applicable to the Company's officers, directors and greater than
ten percent shareowners were complied with.
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RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Grant Thornton LLP, independent accountants, has been selected by the Board of
Directors to examine and report on the financial statements of the Company for
the fiscal year ending December 31, 1999. A representative of that firm is
expected to be present at the Annual Meeting and will have an opportunity to
make a statement if he so desires. The representative is expected to be
available to respond to appropriate questions from shareholders.
OTHER MATTERS
At the time this Proxy Statement was mailed to shareholders, management was not
aware that any other matter will be presented for action at the Annual Meeting.
If other matters properly come before the Meeting, it is intended that the
shares represented by proxies will be voted with respect to those matters in
accordance with the best judgment of the persons voting them.
NOTICE REGARDING FILING OF SHAREOWNER PROPOSALS
AT 1999 ANNUAL MEETING
As a result of regulations issued by the Securities and Exchange Commission, all
shareowner proposals for the 2000 Annual Meeting must be received by the Company
by February 22, 2000.
By Order of the Board of Directors
William S. Miraglia, Secretary
Dated: September 20, 1999
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A COPY OF THE COMPANY'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31,
1998, INCLUDING CONSOLIDATED FINANCIAL STATEMENTS, ACCOMPANIES THIS PROXY
STATEMENT. THE ANNUAL REPORT IS NOT TO BE REGARDED AS PROXY SOLICITING MATERIAL
OR AS A COMMUNICATION BY MEANS OF WHICH ANY SOLICITATION IS TO BE MADE.
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