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SCHEDULE 14C
(RULE 14c-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(c) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Check the appropriate box:
[ ] Preliminary Information Statement [ ] Confidential,
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(as permitted by Rule 14c-5(d)(2))
[X] Definitive Information Statement
OSMIC, INC.
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(Name of Registrant as Specified in Its Charter)
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<PAGE> 2
OSMIC, INC.
1788 NORTHWOOD DRIVE
TROY, MI 48084
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD NOVEMBER 20, 1996
__________________
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Osmic, Inc. (the "Company") will be held at the Company's facility located at
1788 Northwood Drive, Troy, Michigan 48084, on Wednesday, November 20, 1996, at
11:00 a.m. local time, for the purposes of:
1. Electing directors to serve until the 1997 Annual Meeting of
Shareholders;
You are invited to attend this meeting. You should be aware that
shares cannot be voted unless the holder is present at the meeting or
represented by proxy. The Company is not soliciting a proxy.
Wes L. Hardenburg, Secretary
Troy, Michigan
October 28, 1996
<PAGE> 3
OSMIC, INC.
1788 NORTHWOOD DRIVE
TROY, MI 48084
INFORMATION STATEMENT
MEETING TO BE HELD ON NOVEMBER 20, 1996
_________________
This Information Statement is furnished in connection with the Annual
Meeting of Shareholders of Osmic, Inc., a Delaware corporation (the "Company"
or "Osmic"), to be held on Wednesday, November 20, 1996, or at any adjournments
or postponements thereof, for the purposes set forth in the accompanying Notice
of Annual Meeting of Shareholders and in this Information Statement.
The Annual Report on Form 10-K for the year ending June 30, 1996, is
enclosed herewith.
Only shareholders of record at the close of business on October 25,
1996 will be entitled to vote at the meeting or any adjournment thereof. Each
holder of the 1,970,894 issued and outstanding shares of the Company's common
stock, $0.01 par value (the "Common Stock"), is entitled to one vote per share.
Shares cannot be voted at the meeting unless the holder is present in person or
represented by proxy. A majority in interest of all the issued and outstanding
shares of Common Stock must be represented in person or by proxy in order to
have a quorum.
MATTERS TO COME BEFORE THE MEETING
ELECTION OF DIRECTORS
Directors are to be elected at the Annual Meeting of Shareholders,
each to hold office until the next Annual Meeting of Shareholders and until his
successor has been elected and qualified. All of the nominees have been
selected by the Board of Directors of the Company (the "Board"). The directors
shall be elected by a plurality of votes of the shares of Common Stock present
in person or represented by proxy at the Annual Meeting of Shareholders
entitled to vote on the election of directors.
There are no family relationships by blood, marriage or adoption
between any of the directors or executive officers of the Company.
<PAGE> 4
INFORMATION RELATING TO PRESENT DIRECTORS OF THE COMPANY
Joel C. Domino was elected a Director in July 1994. Mr. Domino was
Corporate Controller of Madera Glass Company from 1988 to 1991; Director of
Strategic Planning, Price Administration, and Credit of Ball-Incon Glass
Packaging Company from 1991 through August 1993; and since August 1993 serves
as Vice President and CFO of Kent Displays, Inc. ("Kent Displays"). Kent
Displays is in the business of commercialization and manufacture of liquid
crystal displays utilizing proprietary technology under certain exclusive
licenses granted by Kent State University. Mr. Domino is the son-in-law of
William Manning ("Manning"), the President of Manning & Napier Advisors, Inc.
("M&N"). Kent Displays is majority-owned by Manning Ventures, Inc. ("MVI"), a
venture capital company, which in turn is owned by Manning. Manning and M&N
have the right to direct 96% and 88% of the Company's Common Stock,
respectively (see "Further Information").
Joseph Ben-Gal was elected a Director and appointed Chairman in
December 1995. Mr. Ben-Gal was Executive Vice President and CFO of OIS Optical
Imaging Systems, Inc. (NASDAQ:OVON), a flat panel display company, from April
1987 to March 1992; Vice President and CFO of Perceptron, Inc. (NASDAQ:PRCP), a
machine vision company, from March 1992 to February 1994; Vice President and
CFO of Cimage Corp. and a successor company, a software company, from February
1994 to October 1995; and since November 1995 serves as President and COO of
MVI. Mr. Ben-Gal was appointed interim CEO of the Company in September 1996.
Mr. Ben-Gal serves as a Director of MVI and Kent Displays.
Emil Strumban was elected a Director in December 1995. Dr. Strumban
was a Chief Scientist with the Russian Academy of Sciences, from February 1980
to May 1992; Engineering Manager of Impact Technologies, Inc., a coatings
company, from July 1992 to June 1993; and since July 1993 serves as General
Manager of Synmatix Corp. ("Synmatix"), a manufacturer and developer of
advanced materials, particularily ultrafine powder materials. Synmatix is
majority owned by MVI.
Since the last special shareholders' meeting, December 21, 1995, the
Board has met a total of ten times. Each director attended all meetings of the
Board.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board is responsible for the overall affairs of the Company. To
assist it in carrying out its duties, the Board has delegated certain authority
to standing patent, audit and compensation committees. Members of each
standing committee are appointed by the Board of Directors at its first meeting
following each annual meeting of shareholders. Currently, the entire Board
serves as the Company's nominating committee and as members of each standing
committee.
The Patent Committee is to review the patent book of the Company and
all new patent applications. It is also to analyze the technology covered by
all patents and recommend to the Board those actions necessary to preserve or
enhance the value of technologies important to the Company's ongoing business.
The Patent Committee is also charged with the duty to recommend
<PAGE> 5
which patents are not being utilized and which may be sold or assigned. The
Patent Committee met once since the last shareholders meeting.
The Audit Committee is to consider the audit and non-audit services to
be performed by the independent auditors, make arrangements for the internal
and independent audits, and recommends the selection of independent auditors.
The Audit Committee will also review the results of the internal and
independent audits, considers and approves certain of the Company's accounting
principles and practices, and reviews various stockholder reports and other
reports and filings. The Audit Committee has met once since the last
shareholders meeting.
Members of the Board who are not officers or employees of the Company
serve as the Company's Compensation and Stock Option Committee (the
"Compensation Committee"). The Compensation Committee is to annually review
the contributions of officers and employees of the Company, review management
proposals for year-end supplemental compensation and levels of compensation for
the ensuing year, and make recommendations on matters of compensation to the
Board. The Compensation Committee will also decide in accordance with the 1994
Employees' Incentive Stock Plan, the officers and key employees who are to
receive grants of stock options and their number. The Compensation Committee
has met three times since the last shareholders meeting.
STOCK OWNERSHIP OF PRESENT DIRECTORS AND MANAGEMENT
The following table sets forth the name, age, principal occupation,
term of service and beneficial ownership of Common Stock with respect to the
three individuals who are present Directors, as well as Directors and Officers
as a group.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED AS OF
SEPTEMBER 30, 1996
-----------------------
DIRECTOR NUMBER PERCENT
NAME AND AGE PRINCIPAL OCCUPATION SINCE OF SHARES (1) OF CLASS
- ------------ -------------------- -------- ------------- --------
<S> <C> <C> <C> <C>
Joel C. Domino, 36 CFO, Kent Displays 1994 1,250 0.1%
Joseph Ben-Gal, 45 President, MVI 1995 8,585 (2) 0.4%
Emil Strumban, 46 GM, Synmatix 1995 - (2) -
Directors and Officers
as a group (5 persons) 24,327 (3) 1.2%
</TABLE>
(1) This is based on information furnished by each director. Unless
otherwise indicated in a following footnote, the person has sole
voting and investment power of the shares shown opposite his or her
name.
(2) This does not include 45,278.87 shares of Common Stock owned by
Synmatix, a majority
<PAGE> 6
owned subsidiary of MVI.
(3) Includes 13,250 shares of Common Stock which Company Executive
Officers have the right to acquire within 60 days pursuant to the
exercise of stock options granted by the Company.
DIRECTORS COMPENSATION
In 1994, the Company's shareholders approved a Non-Employee Directors'
Stock Plan whereby each non-employee director is entitled to receive annually
that number of shares of Common Stock as equal a fair market value of $10,000,
if the board member has served at least twelve months as a Director. Directors
serving less than twelve months are entitled to receive a pro-rata number of
shares. During the last two fiscal years, the Directors have elected to
receive cash in lieu of Common Stock.
EXECUTIVE OFFICERS AND COMPENSATION
Wes L. Hardenburg, age 37, has been affiliated with the Company since
December 1991 and has been the Company's Secretary, Treasurer and Chief
Financial Officer since September 1993. Prior to this appointment by the Board
of Directors, he was the Company's corporate controller. From 1984 to 1991,
Mr. Hardenburg held various financial positions with Durakon Industries, Inc.
("Durakon"- NASDAQ: DRKN), an automotive aftermarket manufacturer and supplier.
The last two years of his tenure at Durakon he served as principal financial
officer.
George Gutman, PhD, age 56, has been affiliated with the Company since
November 1990 and has been the Company's Vice President - Chief Technical
Officer since February 1996. Prior to his appointment by the Board of
Directors, he was General Manager of the X-Ray and Neutron Optics Group, from
October 1994 to February 1996. Dr. Gutman has held various technical
research, scientific and operational positions with the Company during his
tenure.
The Securities and Exchange Commission requires disclosure for the
Company's last three fiscal years with respect to the Company's Chief Executive
Officer, each of the four other most highly compensated executive officers of
the Company and its subsidiaries during the most recent fiscal year whose
salary and bonus exceeded $100,000 and other individuals who would have been
among the most highly compensated executive officers of the Company and its
subsidiaries during the most recent fiscal year but for the fact that the
individuals were no longer serving as executive officers on June 30, 1996.
The Company is discussing employment agreements with certain key
employees and at the date hereof has no executive compensation plan in effect.
All Executive Officers of the Company serve at the will of the Board.
<PAGE> 7
The following table sets forth certain information as to annual
compensation of executive officers of the Company.
<TABLE>
<CAPTION>
NAME AND OTHER ANNUAL
PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($)
------------------ ---- --------- -------- ---------------
<S> <C> <C> <C> <C>
(4)
CEO (1) 1996 - - -
1995 79,250 9,080 883
1994 80,000 - 800
Wes L. Hardenburg,
Secretary, Treasurer
and CFO (2) 1996 73,542 35,332 -
1995 66,250 36,563 -
1994 65,833 - -
George Gutman,
Vice President - Chief
Technical Officer (3) 1996 84,167 43,806 2,559
1995 63,750 33,750 1,950
1994 56,250 - 1,125
</TABLE>
(1) Former CEO's term of office was from September 20, 1993 until May
21, 1995. The Company had no CEO during fiscal year 1996.
(2) Became an executive officer effective September 20, 1993.
(3) Became an executive officer effective February 1, 1996.
(4) Primarily retirement plan contributions.
EMPLOYEES' RETIREMENT SAVINGS PLAN
The Company's employees are eligible to participate in the Company's
Tax Savings 401(k) Plan (the " Savings Plan") which was established in August
1993. Under the Savings Plan, employees, who are at least 18 years of age and
who have completed six months of service, may elect to defer from one to twenty
percent of their compensation to accumulate funds for their retirement. The
Company makes matching contributions equal to 50% of the amount the employee
contributes, the matching contribution is not to exceed two percent of the
employee's compensation.
EMPLOYEES' INCENTIVE STOCK PLAN
The 1994 Employee's Incentive Stock Plan (the "Incentive Stock Plan")
was approved by the shareholders of the Company at the 1994 Annual Meeting of
Shareholders. The Incentive Stock Plan provides for the granting of stock
options, stock appreciation rights and/or limited stock appreciation rights,
restricted shares of the Company's Common Stock, and stock purchase rights to
key employees of the Company over a ten year period ending March 14, 2004.
There are 200,000 shares of the Company's Common Stock subject to the Incentive
Stock Plan. The purpose of the Incentive Stock Plan is to provide key
employees with an added incentive to direct
<PAGE> 8
the Company's future affairs in the long-term best interests and for the
long-term benefit of the Company's shareholders.
The exercise price for options granted under the Incentive Stock Plan
may not be less than 100% of the fair market value of the Common Stock on the
date of grant. Options may be exercised during the optionee's lifetime only by
the optionee and may not be transferred other than by will or laws of descent
and distribution. Options may be exercised only for cash.
The Incentive Stock Plan is administered by the Compensation
Committee, which determines who shall be granted options, the number of
options to be granted and the terms of the option awards. Options granted
under the Incentive Stock Plan are exercisable at such time as the Compensation
Committee may determine, and will expire, if unexercised, ten years from the
date of grant. No options under the Incentive Stock Plan were exercised by any
of the executive officers of the Company during the year ended June 30, 1996.
The following table sets forth certain information relative to stock
option grants under the Company's 1994 Employees' Incentive Stock Plan granted
to Executive Officers during the fiscal year ended June 30, 1996, and for the
two prior years.
<TABLE>
<CAPTION>
POTENTIAL REALIZED
VALUE AT ASSUMED
ANNUAL RATES OF
STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
--------------------------------------------------------- ---------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE 5% ($) 10% ($)
---- ----------- ----------- ------ ---- ------ -------
<S> <C> <C> <C> <C> <C>
CEO (1)
Wes L. Hardenburg
1996 9,000 21.1% $1.42 02/10/06 $8,039 $20,371
1995 10,000 25.0% $1.42 12/19/04 $8,931 $22,634
1994 -
George Gutman
1996 14,000 32.7% $1.42 02/10/06 $12,505 $31,689
1995 5,000 12.5% $1.42 12/19/04 $4,465 $11,317
1994 -
</TABLE>
(1) Stock option grants to former CEO were cancelled at date of
employment termination, May 21, 1995.
<PAGE> 9
FURTHER INFORMATION
PRINCIPAL SHAREHOLDERS
The following table sets forth certain information, as of September
30, 1996, concerning those persons who are known by management of the Company
to be beneficial owners of more than 5% of the Company's outstanding Common
Stock (as provided to the Company by such persons).
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
------------------- -------------------- --------
<S> <C> <C>
Manning & Napier Advisors,Inc.
1100 Chase Square
Rochester, NY 14604 1,733,745.35 (1) 88.0%
William Manning
1100 Chase Square
Rochester, NY 14604 1,895,416.84 (2) 96.2%
</TABLE>
(1) Includes 1,669,331.17 shares of Common Stock which M&N via
investor agreements has sole dispositive and voting power
over. M&N has sole dispositive and shared voting power over
64,414.18 shares of Common Stock.
(2) William Manning, as President of M&N, is deemed to be the
beneficial owner of the shares beneficially owned by M&N.
William Manning owns directly 161,671.49 shares of
Common Stock.
NON-EMPLOYEE DIRECTORS' STOCK PLAN
The 1994 Non-Employee Directors' Stock Plan (the "Stock Plan") was
approved by the shareholders of the Company at the 1994 Annual Meeting of
Shareholders. The Stock Plan sets aside and reserves 150,000 shares of Common
Stock to be issued. Each non-employee director is entitled to an annual award
grant of such number of shares of Common Stock as equal a fair market value of
$10,000. A person who becomes a non-employee director during the period will
receive a pro-rated grant. The Board has elected to receive cash in lieu of
stock awards for the two most recently completed fiscal years, as such the
Company has issued 19,955 shares of Common Stock under the Stock Plan. The
Stock Plan terminates upon the conclusion of this annual meeting of
shareholders.
COMPENSATION COMMITTEE REPORT
The Compensation Committee has formulated a compensation philosophy
and has adopted a performance based bonus program which has been implemented at
all levels of the Company.
<PAGE> 10
The Compensation Committee has implemented equity-based incentives through
grants of stock options under the Company's 1994 Employees' Incentive Stock
Plan.
PERFORMANCE GRAPH
The SEC requires that companies include in their Information Statement
a line-graph presentation comparing cumulative, five-year stockholder returns
on an indexed basis with both the Standard & Poors 500 Stock Index and other
publicly-traded companies in the Company's so-called "peer group;" i.e., those
in similar lines of business, or as similar as possible.
The Company's Common Stock has not been quoted for trading in the
over-the-counter market or elsewhere. The Company's stock is not listed on any
exchange or through the National Association of Securities Dealers quotation
system. The Company's stock has not been included in the so-called "pink
sheets," a quotation service for many public companies whose stocks are not
listed or quoted elsewhere.
Consequently, the Company is unable to present a performance graph.
Furthermore, effective September 30, 1996, the Company filed a Form 15
which terminates the Company's Registration under Section 12(g) of the
Securities and Exchange Act of 1934.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Since September 1996, Mr. Ben-Gal serves as the Company's Interim CEO.
As Mr. Ben-Gal is employed by MVI, the Company reimburses MVI for actual costs
associated with the time Mr. Ben-Gal devotes to the Company. To date the
accumulated amount of these reimbursements is negligible.
AUDITORS
Effective July 11, 1996, the Board of Directors dismissed its
independent accountants, Coopers & Lybrand L.L.P., and approved a change to
Arthur Andersen LLP. The reports of Coopers & Lybrand L.L.P. on the financial
statements of the Registrant for the last two years did not contain an adverse
opinion, a disclaimer of opinion, modification, or qualification of any kind.
During the two most recent fiscal years preceding the change of accountants,
the Registrant had no disagreements with Coopers & Lybrand L.L.P. that would
have caused Coopers & Lybrand L.L.P. to disclose in its reports any such
disagreements, in the absence of resolution thereof.
The Board has selected Arthur Andersen LLP as the Company's
independent auditors for the fiscal year ended June 30, 1997. Arthur Andersen
LLP audited the Company's financial statements for the fiscal year ended June
30, 1996, and as part of their work reaudited fiscal years 1995 and 1994
without any adjustment to the previously issued reports. Representatives from
Arthur Andersen LLP will be present at the Annual Meeting of Shareholders, will
have the
<PAGE> 11
opportunity to make a statement if they wish, and will be available to respond
to appropriate questions.
SHAREHOLDER PROPOSALS FOR FISCAL YEAR 1997 ANNUAL MEETING
Shareholder proposals intended to be presented at the Fiscal Year 1997
Annual Meeting which are eligible for inclusion in the Company's proxy
statement for that meeting under the applicable rules of the Security and
Exchange Commission must be received by the Company not later than August 3,
1997. Such proposals should be addressed to the Secretary at the Company's
corporate headquarters.
OTHER MATTERS
At the date of this Information Statement, management is not aware of
any matters to be presented for action at the meeting other than those
described above.
Wes L. Hardenburg, Secretary
Troy, Michigan
October 28, 1996
