SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities and Exchange Act of 1934
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 Rule 14a-11(c) or Rule 14a-12
RESEARCH FRONTIERS INCORPORATED
(Name of Registrant as Specified in its Charter)
(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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on
which the filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fees paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date of
its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:<PAGE>
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
June 10, 1999
To the Stockholders of Research Frontiers Incorporated:
Notice is hereby given that the Annual Meeting of Stockholders of
Research Frontiers Incorporated (the "Company") will be held at the Fox
Hollow Inn, 7725 Jericho Turnpike, Woodbury, New York 11797, on June 10,
1999 at 11:00 A.M., local time, for the following purposes:
1. To elect two Class III directors;
2. To ratify the selection of KPMG LLP as independent auditors of the
Company for the fiscal year ending December 31, 1999;
3. To adopt an amendment to the Research Frontiers Incorporated 1998
Stock Option Plan which has been approved by the Board of Directors of the
Company to increase the number of shares which may be issued upon the
exercise of options and other awards granted under the 1998 Stock Option Plan
by 545,000 shares of Common Stock of the Company; and
4. To transact such other business as may properly come before the
meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on April 19, 1999
as the record date for the determination of stockholders entitled to notice of,
and to vote at, the meeting or any adjournments thereof.
Management requests all stockholders to sign and date the enclosed form
of proxy and return it in the postage paid, self-addressed envelope provided for
your convenience. Please do this whether or not you plan to attend the meeting.
Should you attend, you may, if you wish, withdraw your proxy and vote your
shares in person.
By Order of the Board of Directors,
VICTOR F. KEEN, Secretary
Woodbury, New York
April 30, 1999<PAGE>
RESEARCH FRONTIERS INCORPORATED
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
To be held Thursday, June 10, 1999
This Proxy Statement is furnished by the Board of Directors of
Research Frontiers Incorporated (the "Company") in connection with the
solicitation of proxies to be voted at the Annual Meeting of Stockholders
which will be held at the Fox Hollow Inn, 7725 Jericho Turnpike,
Woodbury, New York 11797, on June 10, 1999, at 11:00 A.M., local time,
and all adjournments thereof.
Any stockholder giving a proxy will have the right to revoke it at any
time prior to the time it is voted. A proxy may be revoked by written notice
to the Company, Attention: Secretary, by execution of a subsequent proxy
or by attendance and voting in person at the Annual Meeting of
Stockholders. Attendance at the meeting will not automatically revoke the
proxy. All shares represented by effective proxies will be voted at the
Annual Meeting of Stockholders, or at any adjournment thereof. Unless
otherwise specified in the proxy, shares represented by proxies will be
voted (i) for the election of the nominee for director listed below, (ii) for
the ratification of the selection of the independent auditors, and (iii) for
adoption of the proposed amendment to the Company's 1998 Stock Option
Plan. The cost of proxy solicitations will be borne by the Company. In
addition to solicitations of proxies by use of the mails, some officers or
employees of the Company, without additional remuneration, may solicit
proxies personally or by telephone. The Company will also request
brokers, dealers, banks and their nominees to solicit proxies from their
clients, where appropriate, and will reimburse them for reasonable
expenses related thereto.
The Company's executive offices are located at 240 Crossways Park
Drive, Woodbury, New York 11797-2033. On or about April 30, 1999 this
Proxy Statement and the accompanying form of proxy together with a copy
of the Annual Report of the Company for the year ended December 31,
1998, including financial statements, are to be mailed to each stockholder
of record at the close of business on April 19, 1999.
VOTING SECURITIES
Only stockholders of record at the close of business on April 19,
1999 are entitled to vote at the meeting. As of April 19, 1999, the
Company had issued and outstanding and entitled to vote 10,955,780
shares of common stock, par value $0.0001 per share (the "Common
Stock"), the Company's only class of voting securities outstanding. Each
share of Common Stock entitles the holder thereof to one vote. The
majority of all the outstanding shares of Common Stock will constitute a
quorum at the meeting. A shareholder voting either in person or through
a proxy who abstains with respect to a matter being voted upon is
considered to be present and entitled to vote on such matter at the meeting,
and is in effect a negative vote upon such matter, but a shareholder
(including a broker) who does not give authority to a proxy to vote, or
withholds authority to vote, on a matter shall not be considered present and
entitled to vote on the matter.
The following table sets forth certain information with respect to
those persons or groups known to the Company who beneficially own
more than 5% of the Company's Common Stock, and for all directors and
executive officers of the Company individually and as a group.
Total Exercisable
Beneficial Warrants Percent
Name of Beneficial Owner Ownership(1) and Options of Class
Robert L. Saxe . . . . . . . . . . . . . . . . 1,168,507(2) 610,425 10.10
19 East 80th Street
New York, NY 10021
Bernard D. Gold. . . . . . . . . . . . . . . . 461,766(3) 123,625 4.17
Joseph M. Harary . . . . . . . . . . . . . . . 356,574 354,887 3.15
Robert M. Budin. . . . . . . . . . . . . . . . 153,982(4) 116,875 1.39
All directors and officers as a group (4 persons) 2,140,829(5) 1,205,812 17.60
(1) All information is as of April 19, 1999 and was determined in
accordance with Rule 13d-3 under the Securities Exchange Act of
1934 based upon information furnished by the persons listed or
contained in filings made by them with the Securities and Exchange
Commission or otherwise known to the Company. Unless otherwise
indicated, beneficial ownership disclosed consists of sole voting and
dispositive power. Shares of Common Stock of the Company
acquired by officers, directors and employees through the exercise of
stock options or otherwise are subject to restrictions on their transfer,
including restrictions imposed by applicable securities laws, as well
as additional restrictions imposed by the Company in accordance
with written agreements and policy statements.
(2) Includes (i) 1,687 shares of Common Stock owned by Mr. Saxe's
wife, Marie Saxe; (ii) 70,612 shares owned by a trust u/w Leonard S.
Saxe for which Mr. Saxe serves as a co-trustee, and has a beneficial
interest in one-half of the income from such trust; and (iii) 11,250
shares of Common Stock owned by a trust for the children of the late
George Backer and certain others for which Mr. Saxe serves as sole
trustee. Mr. Saxe disclaims beneficial ownership to all securities
described in items (i) and (iii) above.
(3) Includes (i) 49,217 shares of Common Stock owned by Denise Gold,
Dr. Gold's wife; and (ii) 6,187 shares of Common Stock which Dr.
Gold owns jointly with his wife. Dr. Gold disclaims beneficial
ownership to all securities owned by his wife.
(4) Includes 712 shares of Common Stock owned by McLafs Jr.
Investment Club over which Mr. Budin has the sole dispositive
power.
(5) Includes the securities described above in footnotes (2) through (4).
ELECTION OF DIRECTORS
(Item 1)
Pursuant to the Company's By-Laws, four Directors constitute the
entire Board of Directors of the Company. The Board of Directors is
divided into three classes, as nearly equal in number as possible. Each
class serves three years, with the terms of office of the respective classes
expiring in successive years. The term of office of the directors in Class
III expires at the 1999 Annual Meeting of Stockholders. The Board of
Directors proposes that the nominees described below be elected to hold
office for a three-year term expiring at the 2002 Annual Meeting of
Stockholders, and until the election and qualification of his respective
successors. If no other choice is specified in the accompanying proxy, the
persons named therein have advised management that it is their present
intention to vote the proxy for the election of the nominees set forth below.
Each of the members of the Board of Directors of the Company, including
the nominees listed below, is presently a director of the Company, and was
elected to such office by the stockholders of the Company. Should any
nominee become unable to accept nomination or election, it is intended that
the persons named in the accompanying proxy will vote for the election of
such other person as management may recommend in the place of such
nominee. There is no indication at present that the nominees will be unable
to accept nomination.
The following biographical information is provided with respect to
each director:
Directors Standing for Election
Robert L. Saxe
Mr. Saxe, age 63, is a founder of the Company and has been Chairman of
the Board of Directors of the Company since its inception in 1965, and
President and Treasurer since October 1966. He graduated from Harvard
College in 1956 with an A.B. degree, Cum Laude in General Studies (with
a major in physics). Mr. Saxe also received an M.B.A. degree from
Harvard Business School in 1960.
Robert M. Budin
Mr. Budin, age 66, has been a director of the Company since 1987. Mr.
Budin was a Senior Vice President of Harold C. Brown & Co., Inc. until
his retirement in 1990. Mr. Budin was a stockbroker and had been
employed at Harold C. Brown & Co., Inc. since 1963.
Directors Continuing In Office
Class I - Term to Expire at the 2000 Annual Meeting of
Stockholders
Joseph M. Harary
Mr. Harary, age 38, became Vice President and General Counsel to the
Company in April 1992 and has been a director of the Company since
February 1993. Mr. Harary has been counsel to the law firm of Solovay
Edlin & Eiseman, New York, New York, since 1992. Mr. Harary was
associated with the law firm of Howard, Darby & Levin from 1990 to
1992, and with the law firm of Kronish, Lieb, Weiner & Hellman from
1986 to 1990. Mr. Harary graduated Summa Cum Laude from Columbia
College in 1983 with an A.B. degree in economics, and received a Juris
Doctor degree from Columbia Law School in 1986. Prior to attending law
school, Mr. Harary was an economist with the Federal Reserve Bank of
New York.
Class II - Term Expires at the 2001 Annual Meeting of Stockholders
Bernard D. Gold
Dr. Gold, age 67, has been a director of the Company since June 1991. Dr.
Gold has been an oral and maxillofacial surgeon in private practice since
1960, and retired from his practice in 1994. He is also an assistant
professor of oral surgery at Columbia University School of Dental and
Oral Surgery in New York, New York, and retired in 1993 as the director
of oral and maxillofacial surgery at Kings County Hospital Center in
Brooklyn, New York.
The Board of Directors has an Audit Committee and Executive
Committee, but does not have a nominating or compensation committee.
The Board of Directors' Executive Committee is composed of Robert L.
Saxe, Joseph M. Harary and Robert M. Budin. Robert M. Budin and
Bernard D. Gold served on the Audit Committee in 1998. The Audit
Committee reviews and reports to the Board of Directors with respect to
various auditing and accounting matters, including the nomination of the
Company's independent public accountants, the scope of audit procedures,
general accounting policy matters, and the performance of the Company's
independent public accountants. During 1998, the Company's Board of
Directors met four times and acted by written consent once, and the
Board's Audit Committee met four times. No incumbent director failed to
attend any meetings of the Board of Directors during 1998. Biographical
information for the Company's executive officers, Robert L. Saxe and
Joseph M. Harary, is provided above.
The Board of Directors recommends a vote FOR election of the
nominees listed above and it is intended that proxies not marked to the
contrary will be so voted. Election of such nominees requires the
affirmative vote of the holders of a plurality of the shares of the
Company's Common Stock present, or represented, and entitled to
vote at the Annual Meeting.
INDEPENDENT PUBLIC ACCOUNTANTS
(Item 2)
The Board of Directors unanimously recommends a vote FOR
ratification of the selection of the accounting firm of KPMG LLP as
independent auditors of the Company for the fiscal year ending
December 31, 1999. The ratification requires a majority vote of those
shares of Common Stock represented and eligible to vote at the 1999
Annual Meeting of Stockholders. Representatives of KPMG LLP are
expected to attend the meeting, will have the opportunity to make a
statement should they desire to do so, and are expected to be available to
respond to appropriate questions.
ADOPTION OF AMENDMENT TO 1998 STOCK OPTION PLAN
(Item 3)
On June 11, 1998, the stockholders of the Company adopted a stock
option plan entitled the "1998 Stock Option Plan" (the "1998 Plan") which
provides for the granting of both incentive stock options at the fair market
value at the date of grant and nonqualified stock options at or below the
fair market value at the date of grant to employees or non-employees who,
in the determination of the Board of Directors, have made or may make
significant contributions to the Company in the future. The Company may
also award stock appreciation rights or restricted stock under this plan. The
Company has reserved 540,000 shares of its common stock for issuance
under the 1998 Plan. The purpose of the 1998 Plan is to afford an
incentive to executive officers, other employees and non-employee
directors and consultants of the Company to acquire a proprietary interest
in the Company, to continue as employees or non-employee directors (as
the case may be), to increase their efforts on behalf of the Company and to
promote the success of the Company's business. To further such purposes,
stock options, stock appreciation rights and restricted stock may be granted
pursuant to the 1998 Plan. The Board of Directors believes that the
granting of stock options under the 1998 Plan will promote continuity of
management, help attract new employees, and encourage employees,
directors and officers, to increase their stock ownership in the Company
and give an increased incentive and personal interest in the welfare of the
Company by those who are or may become primarily responsible for
shaping and carrying out the long range plans of the Company and
securing its continued growth, development and financial success.
Currently awards for only 86,873 shares of common stock were
available for issuance under the Company's stock option plans. Additional
shares of Common Stock must be available for issuance under the 1998
Plan if the 1998 Plan is going to continue to be a meaningful way to attract
and retain key personnel of the Company and accomplish the other
purposes set forth above. The proposed amendment to the 1998 Plan would
add an additional 545,000 shares to the 1998 Plan, which represents less
than 5% of the outstanding common stock as of the record date.
FEDERAL INCOME TAX ASPECTS OF AWARDS UNDER THE 1998 PLAN
The following is a brief summary of the federal income tax
consequences of awards made under the 1998 Plan based upon the federal
income tax laws in effect on the date hereof. This summary is not intended
to be exhaustive, and does not describe state or local tax consequences.
Incentive Stock Options. No regular taxable income is realized by the
participant upon the grant or exercise of an incentive stock option ("ISO").
However, a tax preference item under the Alternative Minimum Tax would
be generated upon exercise of the ISO. If a participant does not sell the
stock received upon the exercise of an ISO ("ISO Shares") for at least two
years from the date of grant and within one year from the date of exercise,
when the shares are sold any gain (loss) realized will be long term or short
term capital gain (loss) depending upon the actual holding period. In such
circumstances, no deduction will be allowed to the Company for federal
income tax purposes. If ISO Shares are disposed of prior to the expiration
of either of the holding periods described above, the participant generally
will realize ordinary income at that time equal to the excess, if any, of the
fair market value of the shares at exercise (or, if less, the amount realized
on the disposition of the shares) over the price paid for such ISO Shares.
The Company will be entitled to deduct any such recognized amount. Any
further gain or loss realized by the participant will be taxed as short term
or long term capital gain or loss. Subject to certain exceptions for disability
or death, if an ISO is exercised more than three months following the
termination of the participant's employment, the option will generally be
taxed as a non-qualified stock option.
Non-Qualified Stock Options. No income is realized by the participant at
the time a non-qualified stock option is granted. Generally upon exercise
of a non-qualified stock option, the participant will realize ordinary income
in an amount equal to the difference between the price paid for the shares
and the fair market value of the shares on the date of exercise. The
Company will be entitled to a tax deduction in the same amount. Any
appreciation (or depreciation) after the date of exercise will be either short
term or long term capital gain (or loss), depending upon the length of time
that the participant has held the shares.
Stock Appreciation Rights. No income will be realized by a participant in
connection with the grant of an SAR. When the SAR is exercised, the
participant will generally be required to include as taxable ordinary income
in the year of exercise an amount equal to the amount of cash and/or the
fair market value of any shares received. The Company will be entitled to
a deduction at the time and in the amount included in the participant's
income by reason of the exercise. If the participant receives common stock
upon exercise of an SAR, the post-exercise appreciation or depreciation
will be treated in the same manner discussed above under Non-Qualified
Stock Options.
Restricted Stock. A participant receiving restricted stock generally will
recognize ordinary income in the amount of the fair market value of the
restricted stock at the time the stock is no longer subject to forfeiture, less
any consideration paid for the stock. The Company will be entitled to a
deduction at the same time and in the same amount. The holding period to
determine whether the participant has long term or short term capital gain
or loss on a subsequent sale generally begins when the stock is no longer
subject to forfeiture, and the participant's tax basis for such shares will
generally equal the fair market value of such shares on such date.
However, a participant may elect, under Section 83(b) of the Internal
Revenue Code, within 30 days of the grant of the stock, to recognize
taxable ordinary income on the date of grant equal to the excess of the fair
market value of the shares of restricted stock (determined without regard
to the restrictions) over the purchase price of the restricted stock. By reason
of such an election, the participant's holding period will commence on the
date of grant and the participant's tax basis will be equal to the fair market
value of the shares on that date (determined without regard to restrictions).
Likewise, the Company generally will be entitled to a deduction at that
time in the amount that is taxable as ordinary income to the participant. If
shares are forfeited after making such an election, the participant will be
entitled to a deduction, refund, or loss for tax purposes only in an amount
equal to the purchase price of the forfeited shares regardless of whether he
made a Section 83(b) election.
The Board of Directors recommends a vote FOR approval of the
amendment to the 1998 Plan and it is intended that proxies not
marked to the contrary will be so voted. Approval of the amendment
to the 1998 Plan requires the affirmative vote of the holders of a
majority of the shares of the Company's Common Stock present, or
represented, and entitled to vote at the Annual Meeting.
EXECUTIVE COMPENSATION
The following table sets forth information regarding all cash
compensation paid by the Company and stock options granted during the
fiscal years indicated to Robert L. Saxe, the Company's chief executive
officer, and to each of the Company's executive officers during the past
fiscal year.
Name of Executive and Other Annual Number of Stock
Principal Positions Year Salary Compensation(1) Options Awarded
Robert L. Saxe, 1998 $322,911 $101,006 240,000
Director, Chairman of 1997 $297,589 $ 4,428 70,000
the Board, President 1996 $268,419 $ 36,150 120,000
and Treasurer
Joseph M. Harary, 1998 $230,319 $109,905 166,500
Director, Vice President 1997 $211,473 $ 15,769 35,000
and General Counsel, 1996 $177,435 $ 38,381 60,000
and Assistant Secretary
(1) Consists of the payment of accrued but unused vacation, and a
performance bonus which was paid during 1996 and 1998.
Report on Executive Compensation
The compensation of executive officers of the Company, including
the Company's chief executive officer, is determined by the Company's
entire Board of Directors whose names are listed below at the end of this
report. The salaries of all executive officers are reviewed at least twice
annually by the Board. Numerous factors are reviewed in determining
compensation levels. These factors include: the compensation levels of
executive officers with comparable experience and qualifications,
compensation levels at comparable companies, individual and Company
performance, past compensation levels, years of service, performance of
the Company's stock, and other relevant considerations. The Company's
goal is to set salary levels somewhat below those of comparable
companies, and to supplement such compensation with the grant of stock
options and bonuses. This approach is designed to more closely align total
executive compensation with the long-term performance of the Company
and enable all employees of the Company to participate in the Company's
growth. Through ownership of stock options, the executive is rewarded if
the Company's stockholders receive the benefit of appreciation of the price
of the Company's Common Stock. Because the Company believes that its
success is dependent upon the coordinated efforts of all of its employees,
and that teamwork is essential in further developing the Company's
technology and meeting the expectations of the Company's licensees and
stockholders, all current employees of the Company were granted stock
options during the past fiscal year.
The Board of Directors and the stockholders have adopted two stock
option plans which remain in effect. The purpose of these stock option
plans is to attract key employees, officers and directors and to encourage
their continued employment and services and their increased stock
ownership in the Company. The Board of Directors believes that the
granting of stock options under these stock option plans will promote
continuity of management, and will result in the increased incentive and
personal interest in the welfare of the Company by those who are or may
become primarily responsible for shaping and carrying out the long range
plans of the Company and securing its continued growth, development and
financial success. Currently awards for only 86,873 shares of common
stock were available for issuance under the Company's stock option plans.
If any options expire or terminate for any reason without having been
exercised in full, the unpurchased shares subject thereto will again be
available for issuance under these stock option plans.
The Company's stock option plans are administered by a committee
of at least two directors who are not officers and employees of the
Company (the "Administrators"). Currently the Administrators consist of
Mr. Budin and Dr. Gold, who serve as members of the Company's Stock
Option Committee. Options which qualify as Incentive Stock Options
("ISO's") under the Internal Revenue Code of 1986, as amended (the
"Code"), and non-qualifying options ("NQSO's") may be issued under the
1992 Plan. Also stock appreciation rights and restricted stock may be
awarded under the Company's 1998 Stock Option Plan. The number of
options to be granted under these stock option plans are determined by the
Administrators in their discretion.
The purchase price of Common Stock subject to each option issued
under these stock option plans will be determined by the Board of
Directors or the Administrators, as the case may be, but in the case of an
ISO may not be less than (i) the fair market value of the Common Stock
subject to the option on the date of grant or (ii) in the case of an option
granted to an employee who, at the time the option is granted, owns (within
the meaning of the Code) more than 10% of the total combined voting
power of all classes of stock of the Company, 110% of the fair market
value of the Common Stock subject to the option on the date of grant.
Options under these stock option plans may be exercised in the manner and
at such times fixed by the Board of Directors, but may not be exercised for
a term of more than 10 years, or for a term of five years in the case of an
employee who, at the time an ISO is granted, owns (within the meaning of
the Code) more than 10% of the total combined voting power of all classes
of stock of the Company. In no event may ISO's exercisable for stock
having an aggregate fair market value of $100,000 (together with all ISO's
granted under any other stock option) be granted which first become
exercisable in any one calendar year. Options are not transferable except
by will or intestacy on the death of the optionee. In general, ISOs
terminate when an optionee ceases to be employed by the Company or
within a specified period after the termination of such employment
depending upon the reason for such termination.
BOARD OF DIRECTORS:
Robert M. Budin
Bernard D. Gold
Joseph M. Harary
Robert L. Saxe
Employment Arrangements
The Company entered into an employment agreement with Mr.
Robert L. Saxe which automatically renews itself for successive one-year
terms unless either the Company or Mr. Saxe gives the other at least 90
days prior written notice of the intention not to renew the employment
agreement. Pursuant to that agreement, Mr. Saxe received an annual base
salary from the Company of $322,911 during 1998 and will receive an
annual base salary of $345,515 through December 31, 1999. The Board of
Directors may, in its discretion, authorize a higher salary for Mr. Saxe.
Pursuant to his employment agreement, Mr. Saxe has agreed not to
compete with the Company for a period of two years following the
termination of his employment thereunder. The Company maintains key-
man life insurance on the life of Mr. Saxe in the amount of $500,000.
Stock Options Granted in 1998
The following table sets forth information regarding all grants of
options to the individuals named in the executive compensation table
appearing on page 7 during the fiscal year ended December 31, 1998, and
the potential realizable value of such options using a 5% and 10% assumed
annual rate of appreciation in the price of the Company's Common Stock.
The particular assumed annual rates of stock price appreciation used in this
table are specified under the rules and regulations of the Securities and
Exchange Commission and are not necessarily indicative of future stock
price performance or the Company's projections thereof. Over a ten-year
option term, the corresponding increase in the Company's market
capitalization over the same period would be (a) $73,457,487 with an
assumed 5% annual rate of stock appreciation, and (b) $186,155,695 with
an assumed 10% annual rate of stock appreciation. Of the options listed
below for each of Mr. Saxe and Mr. Harary, 13,900 options exercisable at
$7.15625 per share did not become exercisable until January 1, 1999.
Percent Potential Realizable
of Total Value at Assumed
Options Annual Rates of
Granted Stock Price
Number of to Exercise Appreciation for
Options Employees Price Expira- Term of Option
Name Granted in 1998 Per Share tion Date 5% ($) 10% ($)
Robert L. Saxe 120,000 22.80% $7.15625 June 10, 2008 $477,506 $1,210,094
Robert L. Saxe 120,000 22.80% $7.375 December 8, 2008 $556,572 $1,410,462
Joseph M. Harary 60,000 11.40% $7.15625 June 10, 2008 $207,474 $ 525,781
Joseph M. Harary 36,500 6.94% $6.75 August 25, 2008 $154,944 $ 392,658
Joseph M. Harary 70,000 13.30% $7.375 December 8, 2008 $324,667 $ 822,770
Stock Options Exercised in 1998 and Year-End Option Values
The following table sets forth information regarding all exercises of
options by the individuals named in the executive compensation table
appearing on page 7 during the fiscal year ended December 31, 1998 and
the value of options realized upon exercise, and of unexercised options
held by such persons on December 31, 1998, measured in terms of the
average trading price of the Company's Common Stock on the date of
exercise and on the last trading day of the year, respectively. A total of
1,467,359 stock options issued by the Company were exercisable at year-end.
Number of Value of Exerci-
Exercisable sable In-the-Money
Number of Options which Options which
Shares Acquired Value Remain Unexercised Remain Unexercised
Name on Exercise Realized at Dec. 31,1998 at Dec. 31, 1998
Robert Saxe -- $ -- 607,150 $ 1,857,347
Joseph Harary -- -- 340,987 $ 1,074,080
Stock Price Performance
The following table sets forth the range of the high and low selling
prices (as provided by the National Association of Securities Dealers) of
the Company's common stock for each quarterly period within the past two
fiscal years:
Quarter Ended Low High
March 31, 1997 5.6250 9.8750
June 30, 1997 4.8750 7.8750
September 30, 1997 5.8750 11.6250
December 31, 1997 7.0625 10.1250
March 31, 1998 6.5000 9.7500
June 30, 1998 5.6250 8.3750
September 30, 1998 5.4375 7.6250
December 31, 1998 5.7500 11.1250
These quotations may reflect inter-dealer prices, without retail mark-up,
mark-down, or commission, and may not necessarily represent actual transactions.
The following graph compares the total returns (assuming
reinvestment of dividends) on $100 invested on December 31, 1993 in the
Company's Common Stock (REFR), the NASDAQ Composite (U.S.)
Stock Index, and the NASDAQ Electronic Component Stock Index. The
stock price performance shown on the graph below reflects historical data
provided by the National Association of Securities Dealers, Inc. and is not
necessarily indicative of future price performance.
[graph with the following data points]
Date Index Index Index
U.S. NASDAQ Electronics REFR Ask
12/31/93 $100.00 $100.00 $100.00
01/31/94 $103.03 $105.29 $107.00
02/28/94 $102.07 $110.43 $106.25
03/31/94 $95.80 $105.67 $82.50
04/29/94 $94.55 $101.18 $83.75
05/31/94 $94.79 $101.00 $93.75
06/30/94 $91.32 $95.34 $76.25
07/29/94 $93.19 $95.58 $86.25
08/31/94 $99.13 $106.65 $77.50
09/30/94 $98.88 $106.21 $71.25
10/31/94 $100.82 $110.33 $73.75
11/30/94 $97.48 $109.39 $67.50
12/30/94 $97.75 $110.49 $65.00
01/31/95 $98.31 $114.61 $62.50
02/28/95 $103.51 $129.64 $75.00
03/31/95 $106.58 $138.28 $72.19
04/28/95 $109.94 $159.72 $68.75
05/31/95 $112.77 $172.65 $71.25
06/30/95 $121.91 $196.53 $82.50
07/31/95 $130.87 $216.93 $80.00
08/31/95 $133.53 $212.64 $125.00
09/29/95 $136.60 $211.75 $142.50
10/31/95 $135.81 $221.76 $125.00
11/30/95 $139.00 $201.71 $131.25
12/29/95 $138.26 $182.99 $102.50
01/31/96 $138.94 $182.94 $106.25
02/29/96 $144.22 $190.82 $97.50
03/29/96 $144.70 $181.85 $93.75
04/30/96 $156.70 $212.96 $102.50
05/31/96 $163.90 $226.12 $102.50
06/28/96 $156.51 $207.74 $78.75
07/31/96 $142.55 $201.23 $77.50
08/30/96 $150.54 $215.83 $86.25
09/30/96 $162.05 $251.81 $95.00
10/31/96 $160.26 $270.40 $76.25
11/29/96 $170.17 $313.60 $78.75
12/31/96 $170.01 $316.46 $77.50
01/31/97 $182.10 $376.63 $86.25
02/28/97 $172.03 $333.06 $71.25
03/31/97 $160.79 $318.92 $62.50
04/30/97 $165.82 $345.56 $68.75
05/30/97 $184.61 $357.10 $62.50
06/30/97 $190.27 $340.89 $63.75
07/31/97 $210.35 $427.90 $91.25
08/29/97 $210.03 $438.06 $107.50
09/30/97 $222.44 $442.68 $100.63
10/31/97 $210.92 $370.23 $96.25
11/28/97 $211.98 $368.49 $85.63
12/31/97 $208.58 $331.74 $77.50
01/30/98 $215.16 $369.04 $71.25
02/27/98 $235.36 $410.49 $94.38
03/31/98 $244.05 $364.80 $80.63
04/30/98 $248.20 $383.52 $75.63
05/29/98 $234.57 $334.10 $73.75
06/30/98 $251.12 $339.36 $63.13
07/31/98 $248.47 $367.28 $61.25
08/31/98 $199.75 $302.03 $65.00
09/30/98 $227.34 $352.87 $70.00
10/30/98 $236.63 $382.64 $68.75
11/30/98 $259.94 $457.10 $77.50
12/31/98 $293.21 $512.87 $110.00
CERTAIN TRANSACTIONS
The following is a description of any transactions involving
indebtedness of management to the Company which exceeded $60,000
during 1998. Robert L. Saxe, the President and Chairman of the Company,
borrowed $200,000 from the Company during 1996 and $925,000 during
1997. Robert I.. Thompson, the Company's former Executive Vice
President and a Director borrowed $50,000 from the Company in 1993,
$167,000 in 1994, 55,000 in 1996, and $460,000 in 1997. The Company
loaned its Vice President, Joseph M. Harary, $32,500 in 1994, $95,000 in
1996, and $5,000 in 1997. During 1997, officers repaid several loans and
made aggregate principal payments of $592,353 of which $39,810 was paid
in cash and $552,543 was paid through the surrender of shares of the
Company's common stock. During 1998, officers made aggregate principal
payments of $542,186 against such loans of which $40,000 was paid in
cash and $502,186 was paid through the surrender of the Company's
common stock. Each of the aforementioned loans relate to the purchase of
Common Stock of the Company, are collateralized by the pledge of shares
of Common Stock of the Company, may be prepaid in part or in full
without notice or penalty, are represented by a promissory note which bears
interest at a rate per annum equal to the broker call rate in effect on the
first day of each calendar quarter, and permit repayment of the loan in cash or
by delivery of securities of the Company having a fair market value equal
to the balance of the loan outstanding.
2000 STOCKHOLDER PROPOSALS
Any stockholder who intends to present a proposal for action at the
Company's 2000 Annual Meeting of Stockholders, must comply with and
meet the requirements of the Company's By-Laws and of Rule 14a-8 of the
Securities and Exchange Commission. Rule 14a-8 requires, among other
things, that any proposal be received by the Company at its principal
executive office, 240 Crossways Park Drive, Woodbury, New York 11797,
Attention: General Counsel, by December 31, 1999.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the securities laws of the United States, the Company's
directors, its executive officers, and any persons holding more than ten
percent of the Company's Common Stock are required to report their initial
ownership of the Company's Common Stock and any subsequent changes
in that ownership to the Securities and Exchange Commission. Specific due
dates for these reports have been established, and the Company is required
to disclose in this Proxy Statement any failure to file by these dates. All of
these filing requirements were satisfied on a timely basis. In making these
disclosures, the Company has relied solely on written representations of its
directors and executive officers and copies of the reports that they have
filed with the Commission.
GENERAL AND OTHER MATTERS
Management knows of no matter other than the matters described
above which will be presented to the meeting. However, if any other
matters properly come before the meeting, or any of its adjournments, the
person or persons voting the proxies will vote them in accordance with his,
her or their best judgment on such matters.
By Order of the Board of Directors
VICTOR F. KEEN
Secretary
Woodbury, New York
April 30, 1999
THE COMPANY WILL PROVIDE WITHOUT CHARGE A COPY OF THE COMPANY'S
ANNUAL REPORT ON
FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1998, INCLUDING FINANCIAL
STATEMENTS
AND ANY SCHEDULES THERETO (EXCEPT EXHIBITS), TO EACH OF THE
COMPANY'S
STOCKHOLDERS, UPON RECEIPT OF A WRITTEN REQUEST THEREFOR MAILED TO
THE COMPANY'S
OFFICES, ATTENTION: ASSISTANT SECRETARY. REQUESTS FROM BENEFICIAL
STOCKHOLDERS
MUST SET FORTH A REPRESENTATION AS TO SUCH OWNERSHIP ON APRIL 19,
1999.<PAGE>
[PROXY CARD - FRONT]
PROXY RESEARCH FRONTIERS INCORPORATED
240 Crossways Park Drive, Woodbury, New York 11797-2033
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS - June 10, 1999
The undersigned hereby appoints Robert L. Saxe and Joseph
M. Harary, or either of them, as Proxy or Proxies of the undersigned
with full power of substitution to attend and to represent the
undersigned at the Annual Meeting of Stockholders of Research
Frontiers Incorporated to be held on June 10, 1999, and at any
adjournments thereof, and to vote thereat the number of shares of
stock of the Company the undersigned would be entitled to vote if
personally present, in accordance with the instructions set forth on
the reverse side hereof. Any proxy heretofore given by the
undersigned with respect to such stock is hereby revoked.
Dated:_______________________________________________ _____, 1999
____________________________________________________________
____________________________________________________________
Please sign exactly as name appears above. For joint
accounts, each joint owner must sign. Please give full title
if signing in a representative capacity.
PLEASE MARK, DATE AND SIGN THIS PROXY AND RETURN IT IN THE ENCLOSED
ENVELOPE<PAGE>
[PROXY CARD - BACK]
1. ELECTION OF CLASS III DIRECTORS
NOMINEES: Robert M. Budin and Robert L. Saxe.
[ ] FOR ALL nominees listed above.
[ ] FOR ALL nominees listed above EXCEPT:_____________________________
(Instruction: To withhold authority to vote on any individual
nominee, write the name in the space at the right.)
[ ] WITHHOLD AUTHORITY to vote for all nominees listed above.
2. RATIFICATION OF THE SELECTION OF KPMG LLP AS INDEPENDENT
AUDITORS OF THE
COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31, 1999.
[ ] FOR RATIFICATION [ ] AGAINST RATIFICATION [ ] ABSTAIN
3. ADOPTION OF AMENDMENT TO THE COMPANY'S 1998 STOCK OPTION PLAN.
[ ] FOR ADOPTION [ ] AGAINST ADOPTION [ ] ABSTAIN
4. In their discretion, upon such other matters as may
properly come before the meeting. If no specification is
made, this proxy will be voted FOR ALL the nominees
listed above and FOR APPROVAL of Proposals 2 and 3.
Please indicate whether or not you plan to attend the Annual Meeting on
Thursday, June 10, 1999.
Yes [ ] No [ ]
