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INRAD, INC.
181 Legrand Avenue
Northvale, New Jersey 07647
Notice of Annual Meeting of Shareholders
to be Held September 29, 1997
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 Monday, September 29, 1997 at 3:00 p.m.
for the following purposes:
1. To elect four 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 August
22, 1997, 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
James L. Greco, Secretary
Northvale, New Jersey
August 27, 1997
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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 Monday,
September 29, 1997 at 3:00 p.m. This Proxy Statement and the
enclosed form of proxy are first being sent to shareholders on or
about August 27, 1997.
Shareowners Entitled to Vote
Only shareowners of record at the close of business on August 22,
1997, 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 2,109,271
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 July 18, 1997. 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.
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Percent of
Name and Address Number of shares Common Stock (2)
- --------------------------------------------------------------------------------
Warren Ruderman (1) 1,106,400 52.5
c/o INRAD, Inc.
181 Legrand Avenue
Northvale, NJ 07647
Clarex, Ltd. 1,919,889(3) 50.9
c/o Bank of Nova Scotia
Trust Company Bahamas Ltd.
P.O. Box N1355
Nassau, Bahamas
Hoechst Celanese Corp. 300,000 14.2
Routes 202-206 North
Box 2500
Somerville, NJ 08876
William F. Nicklin 210,527(4) 9.6
33 Grand Avenue
Newburgh, NY 12550
Aaron Dean 61,675(5) 2.9
c/o INRAD, Inc.
William Maxson 3,162(6) 0.1
c/o INRAD, Inc.
Donald H. Gately 16,417(7) 0.8
c/o INRAD, Inc.
Directors and Executive 1,198,954(8) 54.7
Officers as a group
(8 persons)
(1) By virtue of his shareholdings, Warren Ruderman may be
deemed to be a "parent" of the Company as that term is
defined in the Rules and Regulations of the Securities
Act of 1933, as amended.
(2) Percentage calculated based on each person's actual
ownership plus the number of shares for that person
subject to options, warrants or convertible notes
exercisable or convertible within 60 days.
(3) Including 1,596,861 shares subject to options, warrants
or convertible notes exercisable or convertible within
60 days.
(4) Including 80,000 shares subject to convertible notes
convertible within 60 days.
(5) Including 51,675 shares subject to warrants within 60
days.
(6) Including 1,500 shares subject to options exercisable
within 60 days.
(7) Including 16,417 shares subject to warrants within 60
days.
(8) Including 80,842 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 $72,000, $72,000 and $74,000 in 1996, 1995 and
1994, respectively.
Repayment of the shareowner loan has been subordinated to the
prior repayment of the Company's indebtedness to Chase Manhattan
Bank and to other secured indebtedness of the Company. The
principal shareowner has guaranteed borrowings under the
Company's existing credit facility with Chase Manhattan Bank. By
mutual informal agreement, the Company has deferred certain
interest payments to its principal shareowner. During the year
ended December 31, 1996, the Company made three quarterly
interest payments representing nine months of interest past due
from 1995. Subject to adequate cash flow, the Company will
continue to make interest payments to its principal shareowner.
Although by its terms the indebtedness to the shareowner is due
on December 31, 1996, it cannot be repaid until the Chase
Manhattan Bank debt has been repaid in full. The shareowner loan
has been classified as noncurrent in the accompanying balance
sheet because the shareowner has agreed not to demand payment
prior to January 1, 1998.
During the years ended December 31, 1996, 1995 and 1994,
approximately 8%, 9% and 12%, respectively, of the Company's net
product sales were through a foreign agent, in which the
principal shareowner has an investment.
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PROPOSAL ONE
ELECTION OF DIRECTORS
Four 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
Name and Age Experience During Past Five Years Director Since
- --------------------------------------------------------------------------------
Warren Ruderman (77) Chairman of the Board of Directors, 1973
President and Chief Executive
Officer of the Company
(1973-Present)
Aaron Dean (36) Financial Analyst and Vice 1996
President (1996-Present)
of Prudential Securities
(investment banking firm);
Vice President (1995-1996)
of M.D. Sass Associates
(investment banking firm);
Vice President (1990-1995)
of Arnhold and S. Bleichroeder,
Inc. (investment banking firm)
William B. Maxson (66) Consultant (1989-Present); Vice 1988
President (1984 -(1989), Air
Force Programs, Cypress
International (marketing and
business development firm);
Officer,United States Air Force
(1952-1984), retiring with rank
of Major General in 1984
Donald H. Gately (78) Management Consultant (1990 - 1995
Present); Chief Operating Officer,
Datamax Corporation (1994-1996)
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During 1996, three meetings of the Board of Directors were held.
The Company pays a fee of $500 per meeting to non-employee
directors. In 1997, the Company will pay each nonemployee
director $250 for conference call meetings in which they
participate. During 1996, each director, with the exception of
Mr. Dean, attended at least 75% of the aggregate of (i) the total
number of meetings of the Board of Directors and (ii) the total
number of meetings held by all committees of the Board on which
he served.
The Board has established a Compensation Committee, consisting of
Warren Ruderman and Donald Gately, to administer the Company's
Key Employee Compensation Program. The Compensation Committee
did not meet during 1996.
The Board has a standing Audit Committee whose members presently
are William B. Maxson and Donald Gately. 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 met once during 1996.
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 Hoechst Celanese Corporation ("Hoechst"),
Hoechst 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, Hoechst 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. Mr. Dean has been selected by Clarex as one
representative; a second representative has not been designated
by Clarex at the present time.
Executive Officers
The executive officers of the Company are Warren Ruderman, Maria
Murray and James Greco.
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 Vice
President, Marketing and Sales in 1995. 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.
James Greco joined the Company as Secretary and Controller in
July 1996. Prior to joining INRAD, he held positions as
Controller of Divisions within National Cleaning Contractors from
1989-1996. He received a B.B.A. from Pace University and is a
certified public accountant.
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,
1996, 1995 and 1994, 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 $100,000, for services rendered in all
capacities as an executive officer during such period:
Name and Current Annual Compensation(A) Long-Term All Other
Principal Position Year Salary Bonus Compensation Compensation($)
- --------------------------------------------------------------------------------
Warren Ruderman, 1996 $130,000 none none none
President and Chief
Executive Officer 1995 $130,000 none none none
1994 $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 except as follows:
In July 1997, James Greco, an executive officer of the
Company, filed with the SEC Form 3 to report the granting of
stock options to him, as required by Section 16(a). At the
time of the filing of the Form 3 for the aforementioned
individual, the form was not filed on a timely basis.
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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,
1997. 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 judgement of the persons voting them.
NOTICE REGARDING FILING OF SHAREOWNER PROPOSALS
AT 1998 ANNUAL MEETING
As a result of regulations issued by the Securities and Exchange
Commission, all shareowner proposals for the 1998 Annual Meeting
must be received by the Company by February 22, 1998.
By Order of the Board of Directors
James Greco, Secretary
Dated: August 27, 1997
________________________________________________________________________________
A copy of the Company's annual report for the fiscal year ended
December 31, 1996, 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.
8
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INRAD, INC.
181 Legrand Avenue, Northvale, NJ 07647
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned appoints Warren Ruderman and William B. Maxson, and each of
them, as Proxies, each with the power to appoint his or her substitute, and
hereby authorizes them to represent and to vote, for and on behalf of the
undersigned, all the shares of common stock of Inrad, Inc. held of record by
the undersigned on August 22, 1997, at the Annual Meeting of Shareowners of the
Company to be held on September 29, 1997 or any adjournment thereof, upon
matters properly coming before the meeting, as set forth in the Notice of
Annual Meeting and Proxy Statement, both of which have been received by the
undersigned and upon all such other matters that may properly be brought before
the meeting, as to which the undersigned confers discretionary authority upon
said proxies. Without otherwise limiting the general authorization given
hereby, said proxies are instructed to vote as directed on the reverse side.
Dated: ______________________________________, 1997
__________________________________________________
THIS PROXY MUST BE SIGNED
EXACTLY AS NAME APPEARS HEREON.
Give full title if an Attorney, Executor,
Administrator, Trustee, Guardian, etc. For an
account in the name of two or more persons only
one signature is required unless the parties have
agreed otherwise.
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UNLESS OTHERWISE SPECIFIED IN THE SQUARES BELOW, THIS PROXY WILL BE VOTED FOR
ALL OF THE BOARD'S NOMINEE'S.
Election of the Board's nominees for Directors. (The Board of Directors
recommends a vote "FOR")
/ / FOR all nominees listed below (except as marked to the contrary below)
/ / WITHOUT AUTHORITY to vote for all nominees listed below
Nominees: Warren Ruderman, Aaron Dean, William B. Maxson and Donald H. Gately
INSTRUCTIONS: To withhold authority to vote for any individuals nominee, write
that nominee's name on the line provided below
________________________________________________________________________________
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY USING THE ENCLOSED ENVELOPE,
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING. YOU MAY NEVERTHELESS VOTE IN
PERSON IF YOU ATTEND.
