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SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule
14a-12
APA OPTICS, INCORPORATED
(Name of Registrant as Specified in Its Charter)
RANDAL J. BECKER
(Name of Person(s) Filing Proxy Statement)
Payment of filing fees (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii),
14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
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(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 0-11:1
(4) Proposed maximum aggregate value of transaction:
1Set forth the amount on which the filing fee is
calculated and state how it was determined.
[ ] 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 filing.
(1) Amount previously paid:
(2) Form schedule or registration statement no:
(3) Filing party:
(4) Date filed:
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APA OPTICS, INC.
2950 N.E. 84th Lane
Blaine, Minnesota 55449
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD AUGUST 16, 1995
SOLICITATION AND REVOCATION OF PROXIES
The accompanying Proxy is solicited by the Board of Directors of APA
Optics, Inc. (the "Company") in connection with the 1995 Annual Meeting of the
Shareholders of the Company, to be held on August 16, 1995, at 3:30 p.m.
Minneapolis time, at the Sheraton Minneapolis Metrodome, 1300 Industrial
Boulevard, Minneapolis, Minnesota 55431 and any adjournments thereof. This
Proxy Statement is first being mailed to shareholders on or about July 21,
1995.
A person giving the enclosed Proxy has the power to revoke it at any time
before the convening of the Annual Meeting. Revocations of proxy will be
honored if received at the offices of the Company, addressed to the attention
of Anil K. Jain, on or before August 15, 1995. In addition, on the day of the
meeting, prior to the convening thereof, revocations may be delivered to the
tellers who will be seated at the door of the meeting hall.
Unless revoked in the manner set forth above, all properly executed
Proxies will be voted as specified. Proxies that are signed but that lack any
specification will, subject to the following, be voted FOR all nominees for
director as listed herein. If any other matters properly come before the
Annual Meeting, or if any of the persons named to serve as directors should
decline or be unable to serve, the persons named in the Proxy will vote the
same in accordance with their discretion. If a shareholder abstains from
voting as to any matter, then the shares held by such shareholder shall be
deemed present at the meeting for purposes of determining a quorum and for
purposes of calculating the vote with respect to such matter, but shall not be
deemed to have been voted in favor of such matter. Abstentions, therefore, as
to any proposal will have the same effect as votes against such proposal. If
a broker turns in a "non-vote" Proxy, indicating a lack of voting instruction
by the beneficial holder of the shares and a lack of discretionary authority
on the part of the broker to vote on a particular matter, then the shares
covered by such non-vote Proxy shall be deemed present at the meeting for
purposes of determining a quorum but shall not be deemed to be represented at
the meeting for purposes of calculating the vote required for approval of such
matter.
Expenses in connection with the solicitation of proxies will be paid by
the Company. Proxies are being solicited primarily by mail, but officers,
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directors, and other employees of the Company may also solicit proxies by
telephone, telegraph, or personal calls. No extra compensation win be paid by
the Company for such solicitation. The Company may reimburse brokers, banks,
and other nominees holding shares for others for the cost of forwarding proxy
materials to, and obtaining proxies from, their principals.
VOTING RIGHTS
Only shareholders of record at the close of business on June 30, 1995,
are entitled to notice of and to vote at the meeting or any adjournment
thereof. As of that date, there were issued and outstanding 7,385,007 shares
of Common Stock of the Company, the only class of securities of the Company
entitled to vote at the meeting. Each shareholder of record is entitled to
one vote for each share registered in the shareholder's name as of the record
date. The Articles of Incorporation of the Company do not grant the
shareholders the right to vote cumulatively for the election of directors. No
shareholder will have appraisal rights or similar dissenter's rights as a
result of any matters expected to be voted on at the meeting. The presence in
person or by proxy of holders of a majority of the shares of Common Stock
entitled to vote at the Annual Meeting will constitute a quorum for the
transaction of business.
OWNERSHIP OF COMMON STOCK
The following table sets forth certain information as of June 30, 1995,
with respect to the stock ownership of all persons known by the Company to be
beneficial owners of more than five percent of its outstanding shares of
Common Stock, each director, the Named Executive Officer, and all officers and
directors of the Company as a group:
Name and Address of Number of Shares Percent of
Beneficial Owner Beneficially Owned Outstanding Shares
Anil K. Jain 1,664,002(l) 22.5%
2950 N.E. 84th Lane
Blaine, Minnesota 55434
Kenneth A. Olsen 839,332(2) 11.4%
2950 N.E. 84th Lane
Blaine, Minnesota 55434
Lincoln Hudson 36,000(3) .5%
All officers and directors
as a group (5 persons) 2,569,048(l)(2)(3) 34.7%
(1) Includes 5,250 shares held by Dr. Jain as custodian for minor relatives.
Dr. Jain disclaims beneficial ownership of such shares.
(Footnotes continued on next page.)
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(2) Includes 19,332 shares held in trusts for Anil K. Jain's children, of
which Mr. Olsen serves as trustee. Mr. Olsen disclaims beneficial
ownership of such shares.
(3) Includes 20,000 shares Mr. Hudson may acquire upon exercise of currently
exercisable options.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Management has nominated the individuals listed below for election as
directors, each to serve until the next Annual Meeting of the Shareholders and
until his successor is elected and qualified or until his earlier resignation
or removal.
Unless instructed not to vote for the election of directors or not to
vote for any specific nominee, the proxies will vote to elect the listed
nominees. If any of the nominees are not candidates for election at the
meeting, which is not currently anticipated, the proxies may vote for such
other persons as they, in their discretion, may determine.
In connection with the Company's receipt of funding from the Aberdeen
Development Corporation for the construction of a manufacturing facility in
Aberdeen, South Dakota, the Company has agreed that a representative of the
Aberdeen community serve as a member of the Company's Board of Directors.
This individual will likely be appointed after the 1995 Annual Meeting.
The following information is provided with respect to the nominees for
directors:
Name Age Director Since
Anil K. Jain 49 1979
Kenneth A. Olsen 51 1980
Lincoln Hudson 71 1988
Anil K. Jain has been president and treasurer of the Company since 1979,
Chairman of the Board since 1987, and chief executive officer since 1988. Dr.
Jain is also a past director and former chairman of Minnesota Project
Innovation, Inc., a nonprofit corporation.
Kenneth A. Olsen has been secretary of the Company since 1983 and vice
president since July 1, 1992. Mr. Olsen manages the Company's optics
fabrication operations. Prior to joining the Company in 1979, Mr. Olsen
had been employed at 3M since 1966.
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Lincoln Hudson currently provides management consultant services. He
served as a consultant to the Company for planning, engineering, and marketing
from June 1987 to July 1992. Prior to his retirement in 1987, Mr. Hudson had
served in several management positions for various divisions of Honeywell,
Inc., Minneapolis, Minnesota.
Board Meetings. The Board of Directors held five meetings during fiscal
1995. All current directors attended at least 75% of the meetings held.
Committees. The Company has no audit or nominating committee. Those
functions are performed by the Board with certain directors abstaining where a
potential conflict of interest exists. The compensation committee, which
consists of Messrs. Hudson and Olsen, met once during fiscal 1995 to consider
the compensation of the chief executive officer.
Compensation of Directors. Each of the directors who is not also an
employee of the Company is paid a quarterly director's fee of $400 and
reasonable expenses for attending Board meetings. The Company paid a total of
$1,600 in directors' fees for services rendered during fiscal 1995. Lincoln
Hudson has also served as a consultant to the Company and during fiscal 1994
Mr. Hudson received $4,357 (plus interest of $823) in deferred fees for
services rendered in fiscal 1992.
Under the terms of the Company's Stock Option Plan for Nonemployee
Directors, each director who is not otherwise an employee of the Company
receives annually on the first business day following the annual shareholders'
meeting or, if earlier, on September 1, an option to purchase 5,000 shares of
Common Stock. The exercise price for such option is based on the fair market
value of the stock on the date of grant. Each option becomes exercisable on
the earlier of the date of the next annual shareholders' meeting or one year
from the date of grant and is exercisable for a period of four years
thereafter. During fiscal 1995, one option to purchase 5,000 shares at $3.50
per share was awarded pursuant to the plan. During fiscal 1995, the director
exercised an option to purchase 4,500 shares, realizing aggregate net value
(market value less exercise price) of approximately $6,750.
EXECUTIVE COMPENSATION
Summary Compensation Table. The following table sets forth certain
information regarding compensation paid during each of the Company's last
three fiscal years to the Company's chief executive officer, the only officer
whose total annual compensation in fiscal 1995 (based on salary and bonus)
exceeded $100,000 (the "Named Executive Officer").
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Name and Fiscal Annual Compensation All Other
Principal Positions Year Salary Compensation (1)
Anil K. Jain 1995 $116,023 $30,690
President and Chief 1994 $110,565 $21,779
Executive Officer 1993 $102,480 $30,690
(1) Payment of the premiums on a split dollar insurance policy. See "Certain
Relationships and Related Transactions - Split Dollar Insurance."
Stock Options. No options have been granted to the Named Executive
Officer. Accordingly, no options were exercised during or outstanding at the
close of fiscal 1995.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Sublease for Company Facility. Effective December 1, 1984, the Company
entered into a sublease for its office and manufacturing space with Jain-Olsen
Properties, a partnership consisting of Anil K. Jain and Kenneth A. Olsen, who
are officers, directors, and principal shareholders of the Company. The
sublease expired in fiscal 1995, and the Company exercised the option to
extend the sublease for an additional five years. Certain terms of this lease
are set forth in Note 9 of Notes to Financial Statements included in the 1995
Annual Report, which is being distributed with this Proxy Statement. The
Company made lease payments of $117,041 and $120,874 to Jain-Olsen Properties
during fiscal 1995 and 1994, respectively, and is obligated to make payments
in fiscal 1996 of $116,000. The Company believes the lease terms to be at
least as favorable to the Company as could have been received from an
unrelated third party.
Key Man Insurance. The Company maintains key man insurance in the amount
of $1,000,000 on the life of Anil K. Jain and in the amount of $500,000 on the
life of Kenneth A. Olsen, both of whom are directors and officers of the
Company. Up to $500,000 of the proceeds of each policy is intended to be used
to purchase shares of the Company's Common Stock owned by the insured at the
request of the personal representative of the insured's estate. The per share
price for the repurchase of the Company's Common Stock will be the fair market
value of the Common Stock, based on the average of the bid and ask prices as
of the date of the event triggering the repurchase.
Split Dollar Insurance. In November 1989, the Company adopted a split
dollar life insurance plan (the "1989 Plan") for the benefit of its president,
Anil K. Jain. Under the terms of the 1989 Plan the Company pays the annual
premiums on a $5 million insurance policy (the "Policy") on the lives
of Dr. Jain and his spouse. The Policy is a whole life, joint and survivor
policy, on which all premiums are paid by the Company and income is imputed to
Dr. Jain in an amount equal to the term rate for his insurance as established
by the insurer.
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The Policy is owned by the Jain Children's Irrevocable Trust dated
November 28, 1989 (the "Trust"). The 1989 Plan is designed so that the
Company will recover all premium payments and advances made by it on account
of the Policy held by the Trust. The Company's interest in the premium
payments and advances made with respect to the Policy is secured by a
collateral assignment of the Policy. Upon the death of the last to die of Dr. J
ain and his spouse, the Company will be reimbursed from the insurance proceeds
paid to the Trust in an amount equal to the total premiums and advances made
by the Company with respect to the Policy. In the event the trustee of the
Trust surrenders the Policy for its cash surrender value at some date in the
future, the Company will be reimbursed for the premiums it has paid on the
Policy.
COMPLIANCE WITH EXCHANGE ACT FILING REQUIREMENTS
Based solely upon a review of Forms 4 and amendments thereto furnished to
the Company during its most recent fiscal year and written representations
that no Forms 5 were required, the Company believes that all reports required
to be filed by its officers, directors, and greater than 10% beneficial
shareholders under Section 16(a) of the Securities Exchange Act of 1934 were
timely filed.
MISCELLANEOUS
The Board of Directors is not aware that any matter, other than those
described in the Notice, will be presented for action at the Meeting. If,
however, other matters do properly come before the Meeting, it is the
intention of the persons named in the Proxy to vote the proxied shares in
accordance with their best judgment on such matters.
RELATIONSHIP WITH INDEPENDENT AUDITORS
Ernst & Young LLP, independent auditors, audited the financial statements
of the Company for the fiscal year ended March 31, 1995. The Company
anticipates that Ernst & Young LLP will be retained as the Company's
independent auditors for fiscal 1996. Representatives of Ernst & Young LLP
are expected to be present at the Annual Meeting and will have the opportunity
to make a statement, if they desire to do so, and would be available to
respond to appropriate questions.
SHAREHOLDER PROPOSALS FOR 1996 ANNUAL MEETING
All shareholder proposals intended to be presented at the 1996 Annual
Shareholders' Meeting must be received by the Company at its offices on or
before March 23, 1996.
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ADDITIONAL INFORMATION
A copy of the Company's Report to Shareholders for the fiscal year ended
March 31, 1995, accompanies this Notice of Annual Meeting and Proxy Statement.
THE COMPANY WILL FURNISH WITHOUT CHARGE A COPY OF ITS ANNUAL REPORT ON
FORM 10-KSB (EXCLUSIVE OF EXHIBITS) FOR THE FISCAL YEAR ENDED MARCH 31, 1995,
TO EACH PERSON WHO IS A SHAREHOLDER OF THE COMPANY AS OF JUNE 30, 1995, UPON
RECEIPT OF A WRITTEN REQUEST FOR SUCH REPORT. SUCH REQUESTS SHOULD BE SENT TO:
APA OPTICS, INC.
Attention: Secretary
2950 N.E. 84th Lane
Blaine, Minnesota 55449
By Order of the Board of Directors
Signature: Kenneth A. Olsen
Kenneth A. Olsen
Secretary
July 10, 1995
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APA OPTICS, INC.
PROXY
ANNUAL MEETING OF SHAREHOLDERS - AUGUST 16, 1995
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Anil K. Jain and Kenneth A. Olsen, or either
of them, proxies or proxy, with full power of substitution, to vote all shares
of Common Stock of APA Optics, Inc. (the "Company") which the undersigned is
entitled to vote at the 1995 Annual Meeting of Shareholders to be held at
Sheraton Minneapolis Metrodome, 1300 Industrial Boulevard, Minneapolis,
Minnesota 55431, August 16, 1995, at 3:30 p.m., Central Daylight Time, and at
any adjournment thereof, as directed below with respect to the proposals set
forth below, all as more fully described in the Proxy Statement, and upon any
other matter that may properly come before the meeting or any adjournment
thereof.
1. ELECTION OF DIRECTORS:
FOR all nominees listed WITHHOLD AUTHORITY to vote for
below (except as marked all nominees listed below
the contrary below)
Anil K. Jain, Kenneth A. Olsen, and Lincoln Hudson
(INSTRUCTION: To withhold authority for any individual nominee,
write that nominee's name in the space provided below.)
2. Upon such other matters as may properly come before the meeting.
The power to vote granted by this Proxy may be exercised by Anil K. Jain and
Kenneth A. Olsen, jointly or singly, or their substitute(s), who are present
and acting at said Annual Meeting or any adjournment of said Annual Meeting.
The undersigned hereby revokes any and all prior proxies given by the
undersigned to vote at this Annual Meeting.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE SHAREHOLDERS' INSTRUCTIONS.
IF THE SHAREHOLDER(S) WHO EXECUTE THIS PROXY DO NOT WITHHOLD THEIR VOTES FOR
THE ELECTION OF DIRECTORS, THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE
PROPOSED DIRECTORS.
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It is urgent that each shareholder complete, date, sign, and mail this Proxy
as soon as possible. Your vote is important!
Dated and Signed , 1995
Signature of Shareholder(s)
S
ignature of Shareholder(s)
When signing as attorney, executor, administrator, trustee, or guardian,
please give your title as such. If signer is a corporation, please sign
full corporation name by authorized officer.
PLEASE DO NOT FORGET TO DATE THIS PROXY.
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APA OPTICS, INC.
2950 N.E. 84th Lane
Blaine, Minnesota 55449
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO OUR SHAREHOLDERS:
Please take notice that the 1995 Annual Meeting of the Shareholders of
APA Optics, Inc., a Minnesota corporation (the "Company"), will be held in
Salons A and B, Sheraton Minneapolis Metrodome, 1300 Industrial Boulevard,
Minneapolis, Minnesota 55431, on August 16, 1995, at 3:30 p.m., Central
Daylight Time, to consider and vote upon the following matters:
1. Election of directors of the Company.
3. Such other business as may properly come before the meeting or any
adjournment or adjournments thereof.
The Board of Directors of the Company has fixed the close of business on
June 30, 1995, as the record date for the determination of shareholders
entitled to notice of and to vote at the Annual Meeting. The transfer books
of the Company will not be closed.
Shareholders who do not expect to be present personally at the Annual
Meeting are urged to fill in, date, sign, and return the accompanying Proxy in
the enclosed, self-addressed envelope. The Board of Directors of the Company
sincerely hopes, however, that all shareholders who can attend the Annual
Meeting will do so.
It is important that your shares be represented and voted at the Annual
Meeting. You should, therefore, return your Proxy at your earliest
convenience.
BY ORDER OF THE BOARD OF DIRECTORS
Signature: Kenneth A. Olsen
Kenneth A. Olsen
Secretary
July 10, 1995
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