SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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 Section 240.14a-11(c)
or Section 240.14a-12
INFINITE MACHINES CORP.
-----------------------
(Name of Registrant as Specified In Its Charter)
INFINITE MACHINES CORP.
-----------------------
(Name of Person(s) Filing Proxy Statement)
|X| No fee required.
|_| $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.
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:
4) Proposed maximum aggregate value of transaction:
|_| 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>
INFINITE MACHINES CORP.
300 Metro Center Boulevard
Warwick, Rhode Island 02886
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 12, 1997
-------------------------
To the Stockholders of
Infinite Machines Corp.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Infinite
Machines Corp. (the "Company") will be held on December 12, 1997 at 10:00 a.m.
at the Holiday Inn at the Cross Roads, 801 Greenwich Avenue, Warwick, Rhode
Island 02886, for the following purposes:
1. To elect a board of four directors.
2. To consider and act upon a proposal to amend the Company's
Certificate of Incorporation to change the Corporation's name to
Infinite Group, Inc.
3. To consider and act upon a proposal to approve the Company's 1997
Stock Option Plan.
4. To ratify the appointment of independent auditors for 1997.
5. To consider and take action upon such other matters as may properly
come before the meeting or any adjournments thereof.
The close of business on November 11, 1997 has been fixed as the record
date for the determination of stockholders entitled to notice of and to vote at
the Annual Meeting and any adjournment thereof.
All stockholders are cordially invited to attend the meeting. Whether or
not you expect to attend, you are requested to sign, date and return the
enclosed proxy promptly. Stockholders who execute proxies retain the right to
revoke them at any time prior to the voting thereof. A return envelope which
requires no postage if mailed in the United States is enclosed for your
convenience.
By Order of the Board of Directors
Daniel T. Landi, Secretary
Dated: November 13, 1997
<PAGE>
INFINITE MACHINES CORP.
300 Metro Center Boulevard
Warwick, Rhode Island 02886
-------------------------
PROXY STATEMENT
-------------------------
ANNUAL MEETING OF STOCKHOLDERS
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Infinite Machines Corp. (the "Company") of proxies in
the form enclosed for the Annual Meeting of Stockholders to be held at the
Warwick, Rhode Island 02886, on December 12, 1997, at 10:00 a.m. and for any
adjournment or adjournments thereof, for the purposes set forth in the
accompanying Notice of Annual Meeting of Stockholders. The Board of Directors
knows of no other business which will come before the meeting.
All shares represented by each properly executed unrevoked proxy received
in time for the meeting will be voted as specified. In the absence of any
specification, proxies will be voted (a) for the election of the four persons
listed herein as nominees as directors, (b) in favor of the proposal to change
the Corporation's name to Infinite Group, Inc., (c) in favor of the adoption of
the Company's 1997 Stock Option Plan, (d) for the ratification of auditors, and
(e) in the judgment of the Board of Directors on any other matters which may
properly come before the meeting. Any stockholder giving a proxy has the power
to revoke the same at any time before it is voted.
The approximate date on which this Proxy Statement and the accompanying
form of proxy along with the Company's 1996 Annual Report will be mailed to the
Company's stockholders is November 13, 1997. The principal executive offices of
the Company are located at 300 Metro Center Boulevard, Warwick, Rhode Island
02886.
VOTING SECURITIES
Only stockholders of record at the close of business on November 11, 1997
are entitled to notice of and to vote at the Annual Meeting or any adjournment
thereof. On the record date there were issued and outstanding 12,497,581 Common
Shares. Each outstanding Common Share is entitled to one vote upon all matters
to be acted upon at the meeting.
<PAGE>
BENEFICIAL OWNERSHIP OF COMMON STOCK
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
("SEC"). Officers, directors and greater than ten-percent shareholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file. Based solely on review of the copies of such forms
furnished to the Company, or written representations that no Forms 5 were
required, the Company believes that all Section 16(a) filing requirements
applicable to its officers and directors were complied with.
The following table, together with the accompanying footnotes, sets forth
information, as of October 15, 1997, regarding stock ownership of all persons
known by the Company to own beneficially 5% or more of the Company's outstanding
Common Stock, all directors and nominees, and all directors and executive
officers of the Company as a group.
Name of Shares of Common Stock Percentage
Beneficial Owner(1) Beneficially Owned(2) of Class(3)
------------------- --------------------- -----------
Directors and Director Nominees
Carle C. Conway 2,197,701(4) 16.8%(5)
Clifford G. Brockmyre 620,329(6) 4.9%(5)
Robert J. Sherwood 58,334(7) * (5)
Michael S. Smith 833(8) * (5)
All executive officers,
and directors as a
group (6 persons) 2,952,005(9) 21.3%(10)
5% Stockholders
Clearwater Fund IV LLC(1) 1,923,077 15.4%
- ----------
* less than 1%
(1) The mailing address for Carle C. Conway and Clifford G. Brockmyre is P.O.
Box 8219, Incline Village, Nevada 89452 and 300 Metro Center Boulevard,
Warwick, Rhode Island 02886, respectively. The mailing address for
Clearwater Fund IV LLC is 611 Druid Road East, Suite 200, Clearwater,
Florida 34616.
(2) Unless otherwise indicated below, each director, executive officer and
each 5% stockholder has sole voting and investment power with respect to
all shares beneficially owned.
(3) Pursuant to the rules of the Securities and Exchange Commission, shares of
Common Stock which an individual or group has a right to acquire within 60
days pursuant to the exercise of options or warrants or upon the
conversion of securities are deemed to be outstanding for the purpose of
computing the percentage ownership of such individual or group, but are
not deemed to be outstanding for the purpose of computing the percentage
ownership of any other person shown in the table.
(4) Includes (i) 53,719 shares issuable upon exercise of a currently
exercisable outstanding warrant, (ii) 104,258 shares owned by Mr. Conway's
daughter, as to which he disclaims beneficial
2
<PAGE>
ownership, (iii) 501,383 shares issuable upon conversion of outstanding
promissory notes of the Company held by Mr. Conway, (iv) 66,489 owned by a
trust established for Mr. Conway's daughter of which Mr. Cotter Conway is
the trustee, which shares Mr. Conway disclaims beneficial ownership of and
(v) 750,000 shares held in escrow pursuant to the terms of an Escrow
Agreement between Mr. Conway and H.J. Meyers & Co., Inc.
(5) Assumes that all currently exercisable options or warrants or convertible
notes owned by this individual have been exercised.
(6) Includes 57,143 shares issuable upon conversion of an outstanding
promissory note of the Company held by Mr. Brockmyre's wife as to which
shares Mr. Brockmyre disclaims beneficial ownership and 80,031 shares
subject to currently exercisable options.
(7) Includes 8,334 shares subject to currently exercisable options or
warrants.
(8) Includes 833 shares subject to currently exercisable options or warrants
(9) Includes 776,251 shares subject to currently exercisable options, warrants
or convertible notes.
(10) Assumes that all currently exercisable options or warrants owned by
members of the group have been exercised.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
The Summary Compensation Table below includes, for each of the fiscal
years ended December 31, 1996, 1995 and 1994, individual compensation for
services to the Company and its subsidiaries paid to: (1) the Chief Executive
Officer; and (2) the other most highly paid executive officers of the Company in
Fiscal 1996 whose salary and bonus exceeded $100,000 (together, the "Named
Executives").
<TABLE>
<CAPTION>
Long-Term All
Annual Compensation Compensation Other
Name and Principal Position Year Actual Deferred Options Compensation
- --------------------------- ---- ------ -------- ------- ------------
<S> <C> <C> <C> <C> <C>
Carle C. Conway 1996 $150,000 -- 8,654 --
Chairman of the Board 1995 $150,000 -- 75,099 --
and Chief Executive Officer 1994 $150,000 -- -- --
Clifford J. Brockmyre 1996 $157,500 75,000 310,096 --
President and Chief Operating 1995 $140,000 -- 115,000 --
Officer 1994 $ 70,000* -- -- --
</TABLE>
- ----------
* Mr. Brockmyre joined the Company in July 1994.
3
<PAGE>
Employment Agreements
The Company has an employment agreement with Carle C. Conway, its
President and Chief Executive Officer, for a term expiring on May 31, 1998 which
provides for an annual base salary of $150,000 and various benefits. The
agreement also provides, among other things, that, if Mr. Conway is terminated
other than for cause (which is defined to include conviction of a crime
involving moral turpitude, engaging in activities competitive with the Company,
divulging confidential information, dishonesty or misconduct detrimental to the
Company or breach of a material term of the agreement), the Company will pay to
him a lump sum amount equal to the greater of $150,000 or the salary payable
over the unexpired term of the employment agreement.
The Company has an employment agreement with Clifford G. Brockmyre, its
President and Chief Operating Officer, for a term expiring on June 30, 2000,
which provides for an annual base salary of $175,000 and various benefits. In
addition to the compensation provided under the agreement, Mr. Brockmyre is
eligible to participate in the Company's bonus plan and is eligible for other
bonuses as determined in the sole discretion of the Board of Directors. The
agreement also provides, among other things, that, if Mr. Brockmyre is
terminated other than for cause (which is defined to include conviction of a
crime involving moral turpitude, engaging in activities competitive with the
Company, divulging confidential information, dishonesty or misconduct
detrimental to the Company or breach of a material term of the agreement), the
Company will pay to him a lump sum payment equal to the product of the sum of
(i) the highest annual rate of salary paid to Mr. Brockmyre, and (ii) the
highest annual bonus paid to or accrued to the benefit of Mr. Brockmyre during
the Employment Term (as defined in the agreement) multiplied by 2.99. The
agreement also provides for payments to Mr. Brockmyre in the event of his death
or permanent disability. The Company owns a key-man life insurance policy in the
amount of $1.6 million on the life of Mr. Brockmyre.
4
<PAGE>
Stock Options
The following tables show certain information with respect to stock
options granted in 1996 to Named Executives and the aggregate value at December
31, 1996 of all stock options granted to such executives. No Options granted to
Named Executives were exercised in 1996.
Option Grants in 1996
Individual Grants of Options
<TABLE>
<CAPTION>
Number of Percent of Total
Securities
Underlying Options/Granted to
Name Options/Granted Employees in Fiscal Exercise Price Expiration
---------------- --------------- ------------------- -------------- ----------
(#) 1996 ($/Sh) Date
--- ---- ------ ----
<S> <C> <C> <C> <C>
Carle C. Conway 8,654(1) 2.6% $1.56 12/02/06
Clifford G. Brockmyre 300,000(2) 91.04% $1.375 10/28/06
10,096(1) 3.06% $1.56 12/02/06
</TABLE>
- ----------
(1) The Options vest in three equal annual installments beginning December 31,
1996.
(2) One third of such options will vest on or after April 28, 1997 if the
average closing price of the Company's Common Stock on Nasdaq over any
thirty consecutive day period, prior to December 31, 1999, exceeds $7.00
per share. An additional one third of such options will vest on or after
April 28, 1997 if the average closing price of the Company's Common Stock
on Nasdaq over any thirty consecutive day period, prior to December 31,
1999, exceeds $10.00 per share. An additional one third of such options
will vest on or after April 28, 1997 if the average closing price of the
Company's Common Stock on Nasdaq over any thirty consecutive day period,
prior to December 31, 1999, exceeds $13.00 per share. Notwithstanding the
foregoing, all such options will vest on August 14, 2005.
Aggregate 1996 Year End Option Values
<TABLE>
<CAPTION>
Number of Shares of Common Stock Value of Unexercised
Underlying Unexercised Options In-The-Money Options at
At 12/31/96 (#) 12/31/96 (1) ($)
Name Exercisable/Unexercisable Exercisable/Unexercisable
- ---- ------------------------- -------------------------
<S> <C> <C>
Carle C. Conway 52,885/30,770 $875/$552
Clifford G. Brockmyre 80,031/345,064 $28,225/$42,214
</TABLE>
- ----------
(1) Based on closing price on Nasdaq of $1.5625.
5
<PAGE>
Stock Option Plans
In December 1991, the Board of Directors and stockholders of the Company
adopted a stock option plan, which was amended in April 1993 (the "1993 Stock
Option Plan"). In April 1994, the Board of Directors adopted the 1994 Stock
Option Plan which was approved and adopted by the Company's stockholders at the
1994 Annual Meeting of Stockholders. In June 1995 the Board of Directors adopted
the 1995 Stock Option Plan which was approved by the Company's stockholders at
the 1995 Annual Meeting of Stockholders. In December 1996 the Board of Directors
adopted the 1996 Stock Option Plan which was approved and adopted by the
Company's stockholders at the 1996 Annual Meeting of Stockholders. The 1993,
1994, 1995 and 1996 Stock Option Plans are collectively referred to herein as
the "Option Plans". The 1993, 1994, 1995 and 1996 Option Plans provide for the
grant to employees, officers and consultants of options to purchase up to
250,000, 225,000, 255,000 and 400,000 shares of Common Stock, respectively,
consisting of both "incentive stock options" within the meaning of Section 422
of the United States Internal Revenue Code of 1986 (the "Code") and
non-qualified options. The Option Plans are intended to qualify under Rule 16b-3
of the Securities Exchange Act of 1934. Incentive stock options are issuable
only to employees of the Company, while non-qualified options may be issued to
non-employees, consultants, and others, as well as to employees of the Company.
The Option Plans are administered by the Compensation Committee of the
Board of Directors, which determines those individuals who shall receive
options, the time period during which the options may be partially or fully
exercised, the number of shares of Common Stock that may be purchased under each
option, and the option price. The members of this committee are ineligible to
receive options under the Option Plans.
The per share exercise price of an incentive or non-qualified stock option
may not be less than the fair market value of the Common Stock on the date the
option is granted. The aggregate fair market value (determined as of the date
the option is granted) of the shares of Common Stock for which incentive stock
options are first exercisable by any individual during any calendar year may not
exceed $100,000. No person who owns, directly or indirectly, at the time of the
granting of an incentive stock option to him, more than 10% of the total
combined voting power of all classes of stock of the Company shall be eligible
to receive any incentive stock options under the Option Plans unless the option
price is at least 110% of the fair market value of the Common Stock subject to
the option, determined on the date of grant. Non-qualified options are not
subject to this limitation.
No incentive stock option may be transferred by an optionee other than by
will or the laws of descent and distribution, and during the lifetime of an
optionee, the option will be exercisable only by him or her. In the event of
termination of employment other than by death or disability, the optionee will
have three months after such termination during which to exercise the option.
Upon termination of employment of an optionee by reason of death or permanent
total disability, the option remains exercisable for one year thereafter to the
extent it was exercisable on the date of such termination. No similar limitation
applies to non-qualified options.
6
<PAGE>
In April 1993, the Board of Directors and stockholders of the Company
adopted a non-discretionary non-employee directors' stock option plan (the
"Directors' Plan") that provides for the grant to non-employee directors of
non-qualified options to purchase up to 50,000 shares of Common Stock. Pursuant
to the Directors' Plan, each new non-employee director of the Company is
automatically granted, upon becoming a director, an option to purchase 2,500
shares of Common Stock at the fair market value of such shares on the grant
date. Each option vests one year from the date of grant. In addition, each
non-employee director shall automatically be granted an option to purchase 2,500
shares at the fair market value of such shares on the date of grant, on the last
day of each fiscal year during which he serves as a director of the Company.
Such options shall vest one year from the date of grant.
Options under the Option Plan and Directors' Plan must be granted within
10 years from the effective date of each respective plan. Incentive stock
options granted under the plans cannot be exercised more than 10 years from the
date of grant, except that incentive stock options issued to greater than 10%
stockholders are limited to four year terms. All options granted under the plans
provide for the payment of the exercise price in cash or by delivery to the
Company of shares of Common Stock already owned by the optionee having a fair
market value equal to the exercise price of the options being exercised, or by a
combination of such methods of payment. Therefore, an optionee may be able to
tender shares of Common Stock to purchase additional shares of Common Stock and
may theoretically exercise all of his stock options without making any
additional cash investment.
Any unexercised options that expire or that terminate upon an optionee's
ceasing to be affiliated with the Company become available once again for
issuance. As of April 27, 1997, the Company had outstanding incentive stock
options to purchase 892,344 shares of Common Stock to four individuals under the
Option Plan and non-qualified options to purchase an aggregate of 12,500 shares
of Common Stock to Robert J. Sherwood and 2,500 shares of Common Stock to
Michael S. Smith under the Directors' Plan. These options are exercisable at
prices ranging from $1.88 to $2.75 per share.
Director Compensation
Directors receive 2,500 Stock Options at the end of each year of service
as a director. The Company does not pay a fee to directors for services rendered
as directors. Each director is reimbursed for travel expenses incurred in
connection with attendance at meetings of the Board of Directors and its
committees.
7
<PAGE>
CERTAIN TRANSACTIONS
In April 1997, the Company issued to Carle C. Conway, a stockholder,
officer and director of the Company, an aggregate of 161,943 shares of Common
Stock in consideration for Mr. Conway's payment to Moller International, Inc. of
a $250,000 portion of the settlement of a judgment against the Company. The
shares, which are unregistered, were valued at $1.544, the fair market value of
the Company's Common Stock on the date the judgment was entered.
Between December 1994 and January 1997, the Company borrowed an aggregate
of $898,671 for working capital from Carle C. Conway, a stockholder, officer and
director of the Company. The loans are evidenced by three-year promissory notes
which mature from December 1997 through January 1999, and bear interest at the
rate of 10% per annum. The notes are convertible at the discretion of the holder
into shares of Common Stock at a conversion price ranging from $1.13 to $2.00
per share.
In April 1995, the Company borrowed $100,000 for working, capital from
Sheelagh M. Brockmyre, the wife of Clifford G. Brockmyre an officer director and
principal stockholder of the Company. The loan is evidenced by a three-year
promissory note which matures in April 1998 and bears interest at the rate of
10% per annum. The note is convertible at the discretion of the holder into
shares of Common Stock at the conversion price of $1.75 per share, subject to
adjustment.
In March 1995, the Company borrowed $125,000 for working capital from a
trust established for Mr. Conway's daughter, of which Mr. Conway's wife is the
trustee. The loan was evidenced by a three-year promissory note which matures in
March 1998 and bears interest at the rate of 10% per annum. The note was
converted into 66,489 shares of Common Stock on March 27, 1996.
The Company believes the foregoing transactions which involved affiliates
were on terms no less favorable to the Company than could have been obtained
from unaffiliated third parties. As a matter of policy, in order to reduce the
risks of self-dealing or a breach of the duty of loyalty to the Company, all
transactions between the Company and any of its officers, directors or principal
stockholders are for bona fide purposes and are approved by a majority of the
disinterested members of the Board of Directors.
8
<PAGE>
ELECTION OF DIRECTORS
At the meeting, four Directors will be elected by the stockholders to
serve until the next annual meeting or until their successors are elected and
qualified. The accompanying form of proxy will be voted for the election as
Directors of the four persons named below, unless the proxy contains contrary
instructions. Proxies cannot be voted for a greater number of persons than the
number of nominees named herein. Management has no reason to believe that any of
the nominees will not be a candidate or will be unable to serve. However, in the
event that any of the nominees should become unable or unwilling to serve as
Director, the proxy will be voted for the election of such person or persons as
shall be designated by the Board of Directors.
Carle C. Conway. Mr. Conway, age 67, the founder of the Company, has been
its Chief Executive Officer and a Director since its inception in 1986. From
1977 to mid 1992, Mr. Conway was the President of Eastern Molding International,
a plastic molding company which he founded in 1977 and sold in 1992. Prior to
founding the Company, Mr. Conway served in various capacities with GTE from 1971
to 1977, including Vice President of GTE Information Systems, where he was
responsible for nationwide data transmission services, and Vice President of
Ultronic Systems Company, a subsidiary of GTE, where he managed a worldwide data
network that provided real-time stock and commodity quotations to investment and
stock brokerage firms. From 1964 to 1971, Mr. Conway held several positions with
Aerojet-General Corporation, a manufacturer of rocket engines. Mr. Conway
received a Bachelor of Science Degree in Mechanical Engineering from the
Massachusetts Institute of Technology and holds approximately ten patents in the
fields of rocket controls, hydraulic devices and plastic fabrication processes.
He is a recipient of the Air Force Award of Excellence for Outstanding
Management and the Air Force Ballistic Systems Division Award for Management.
Clifford G. Brockmyre. Mr. Brockmyre, age 56, has been a director of the
Company since October 1994 and its President since October 1995. He has been
involved with manufacturing since 1966. He was a majority stockholder in Quabbin
Industries, which he purchased in 1973. He took Quabbin from a nearly bankrupt
job shop to an extremely profitable manufacturer with revenues of over $30
million in 1990. Mr. Brockmyre sold Quabbin in 1990 for $24 million to a Fortune
500 Company. For over 27 years, he has been involved in the tooling, machining
and manufacturing industries throughout the country. He is a member of the
Licensing Executive Society, a member of the faculty of Mohawk Research's
Commercialization Programs of the Department of Energy and Los Alamos National
Laboratory and was the 1992 Chairman of the 3000+ corporation member National
Tooling and Machining Association. He developed the laser manufacturing liaison
to the National Laboratories at Los Alamos, Sandia and Oak Ridge for Laser Fare.
The Department of Energy has set up Laser Fare as a model for technology
transfer under its Small Business Initiative. Mr. Brockmyre was recently
appointed by the Governor of Rhode Island to the State Economic Advisory
Council.
9
<PAGE>
Robert J. Sherwood. Mr. Sherwood, age 53, has been a Director of the
Company since April 1993. Mr. Sherwood is the President and Chief Executive
Officer of Teneron Corporation, an internet based technology company. From 1991
through mid-1997, Mr. Sherwood was the President of the Center for Business
Innovation, an organization which provides business services for high growth
technology-related companies. Mr. Sherwood received Bachelors and Masters
degrees in environmental engineering from the University of Kansas and a Master
degree in business from California State University. Mr. Sherwood is currently a
member of the Advisory Board of Directors of the Bloch School of Business and
Public Administration at the University of Missouri-Kansas City; an Adjunct
Professor at the Bloch School of Business and Public Administration at the
University of Missouri-Kansas City teaching courses on Venture Capital and Small
Business Management and Entrepreneurship; a Price-Babson SEE-10 Fellow at Babson
College in 1994; and the University of Missouri Presidents Technology appointee
to the Mid-America Universities Association; was recently appointed a
Distinguished Executive Lecturer at the University of Kansas; a member of the
Advisory Board of The Capital Resource Network, an organization matching
investors with early stage technology companies; a member of the Board of the
Grant Thornton Business Council.
Michael Smith. Mr. Smith, age 43, was elected to the Board of Directors in
1995 and is a member of the Audit and Compensation committees. Mr. Smith is the
President and CEO of Micropub Systems International, Inc., a brewery system
manufacturer, and is a principal of International Capital & Management Inc., a
merchant banking and venture capital firm. From October 1992 through January
1997, Mr. Smith was the Managing Director of Corporate Finance of H.J. Meyers &
Co. (formerly known as Thomas James Associates, Inc.) an investment banking firm
and was general counsel of such firm from May 1991 through May 1995. Mr. Smith
serves on the Board of Directors of The Village Green Bookstore, Inc. and CSL
Lighting Manufacturing, Inc. Mr. Smith was associated with the law firm of
Harter, Secrest & Emery from 1987 until 1991. Mr. Smith received a B.A. from
Cornell University and a J.D. from Cornell University School of Law.
During the year ended December 31, 1996, the Board of Directors held four
meetings. Each director standing for re-election attended at least 75% of such
meetings. The Board maintains an Audit Committee and Compensation Committee both
of which are comprised of Messrs. Smith, Sherwood and Rowe. The Audit Committee
approves the selection of the Company's auditors and meets and interacts with
the auditors to discuss questions in regard to the Company's financial
reporting. The Compensation Committee evaluates the performance of the Company's
executive employees and determines the salaries and other compensations payable
to such persons. Each such Committee met twice during the fiscal year with all
members present.
The affirmative vote of holders of a plurality of the shares of Common
Stock present or represented at the Annual Meeting is required for the
election of directors.
Management Recommends a Vote FOR the Election of the Foregoing Nominees.
10
<PAGE>
PROPOSAL TO CHANGE THE CORPORATION'S NAME
TO INFINITE GROUP, INC.
The Board of Directors believes it would be advantageous to amend Article
FIRST of the Company's Certificate of Incorporation to change the Corporation's
name from Infinite Machines Corp. to Infinite Group, Inc. The proposed change is
primarily to eliminate the reference to "engines" in the Corporation's name to
eliminate market and industry confusion since the Corporation is no longer
engaged in the engine development business.
The proposed amendment would amend Article "FIRST" of the Company's
Certificate of Incorporation to read as follows:
"FIRST: The name of the corporation (hereinafter the "corporation")
is Infinite Group, Inc."
If approved, this name change will become effective upon filing of a
Certificate of Amendment to the Certificate of Incorporation of the Corporation
with the Secretary of state of Delaware which is expected to follow shortly
after the meeting.
The affirmative vote a majority of the outstanding shares of Common
Stock entitled to vote is required for the adoption of this proposed
amendment.
The Board of Directors unanimously recommends a vote FOR this amendment.
APPROVAL OF 1997 STOCK OPTION PLAN
On October 16, 1997, the Board of Directors approved the 1997 Stock Option
Plan (the "Plan"). The Plan will become effective upon the ratification by the
affirmative vote of the holders of a majority of the Company's outstanding
shares of Common Stock. It provides, among other matters, for incentive and/or
non-incentive stock options.
The purpose of the Plan is to provide incentives to key employees whose
performance will contribute to the long-term success and growth of the Company,
to strengthen the ability of the Company to attract and retain employees of high
competence, to increase the identity of interests of such key employees with
those of the Company's stockholders and to help build loyalty to the Company
through recognition and the opportunity for stock ownership. All owners and key
employees of the Company who are in positions which enable them to make
significant contributions to the long-term performance and growth of the Company
are eligible to receive awards under the Plan. The Plan is administered by a
disinterested committee of the Board of Directors, the members of which are
ineligible to receive grants under the Plan.
The maximum aggregate number of shares as to which awards or options may
at any time be granted under the Plan is 600,000 shares.
11
<PAGE>
The Option Plan is administered by the Compensation Committee of the Board
of Directors, which determines those individuals who shall receive options, the
time period during which the options may be partially or fully exercised, the
number of shares of Common Stock that may be purchased under each option, and
the option price. The members of this committee are ineligible to receive
options under the Plan.
Terms of Options
The Plan permits the granting of both incentive stock options and
non-qualified stock options. The option price of both incentive stock options
and non-qualified stock options must be at least equal to 100% of the fair
market value of the shares on the date of grant. The maximum term of each option
is ten years. For any participant who owns shares possessing more than 10% of
the voting rights of the Company's outstanding Common Stock, the exercise price
of any incentive stock option must be at least equal to 110% of the fair market
value of the shares subject to such option on the date of grant and the term of
the option may not be longer than four years. Options become exercisable at such
time or times as the Compensation Committee may determine at the time it grants
options.
No incentive stock option may be transferred by an optionee other than by
will or the laws of descent and distribution, and during the lifetime of an
optionee, the option will be exercisable only by him or her. In the event of
termination of employment other than by death or disability, the optionee will
have three months after such termination during which to exercise the option.
Upon termination of employment of an optionee by reason of death or permanent
total disability, the option remains exercisable for one year thereafter to the
extent it was exercisable on the date of such termination. No similar limitation
applies to non-qualified options.
Under certain circumstances involving a change in the number of
outstanding shares of Common Stock without the receipt by the Company of any
consideration therefor, such as a stock split, stock consolidation or payment of
a stock dividend, the class and aggregate number of shares of Common Stock in
respect of which Options may be granted under the Plan, the number of shares
subject to each option and the option price per share shall be proportionately
adjusted.
The Plan will terminate on October 15, 2007 and may be terminated by the
Board of Directors of the Company prior to that date.
The Company believes that the Plan should be approved because of the need
to have the ability to issue stock options to the key employees upon whose
performance and contribution the long-term success and growth of the Company is
dependent.
The affirmative vote of the holders of a majority of the issued and
outstanding shares of Common Stock of the Company is required for the
approval of the 1997 Stock Option Plan.
12
<PAGE>
The Board of Directors deems the adoption of the 1997 Option Plan to be in
the best interest of the Company and recommends a vote FOR its approval.
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The directors propose that the stockholders ratify the appointment of
Freed Maxick Sachs & Murphy, P.C. as the Company's independent auditors for
1997. Freed Maxick Sachs & Murphy, P.C. were the Company's independent auditors
for its last fiscal year. The report of Freed Maxick Sachs & Murphy, P.C. with
respect to the Company's financial statements appears in the Company's annual
report on Form 10-KSB for such year. A representative of Freed Maxick Sachs &
Murphy, P.C. will be at the annual meeting and will have an opportunity to make
a statement if he desires to do so and will be available to respond to
appropriate questions. In the event the stockholders fail to ratify the
appointment, the directors will consider it a directive to consider other
auditors for a subsequent year.
The affirmative vote of holders of a plurality of the shares of Common
Stock present or represented at the Annual Meeting is required for the
ratification of appointment of independent auditors.
The Board of Directors recommends a vote FOR the ratification of
appointment of independent auditors.
13
<PAGE>
GENERAL
The management of the Company does not know of any matters other than
those stated in this Proxy Statement which are to be presented for action at the
meeting. If any other matters should properly come before the meeting, it is
intended that proxies in the accompanying form will be voted on any such other
matters in accordance with the judgment of the persons voting such proxies.
Discretionary authority to vote on such other matters is conferred by such
proxies upon the persons voting them.
The Company expects representatives of Freed Maxick Sachs & Murphy, P.C.,
the Company's independent auditors, to be present at the Annual Meeting and to
respond to pertinent questions of stockholders.
The Company will bear the cost of preparing, assembling and mailing the
Proxy, Proxy Statement and other material which may be sent to the stockholders
in connection with this solicitation. In addition to the solicitation of proxies
by use of the mail, officers and regular employees may solicit the return of
proxies. The Company may reimburse persons holding stock in their names or in
the names of other nominees for their expenses in sending proxies and proxy
material to principals. Proxies may be solicited by mail, personal interview,
telephone and telegraph.
The Company will provide without charge to each person being solicited by
this Proxy Statement, upon the written request of any such person, a copy of the
Annual Report of the Company on Form 10-K for the year ended December 31 1996
(as filed with the Securities and Exchange Commission) including the financial
statements thereto. All such requests should be directed to Infinite Machines
Corp., 300 Metro Center Boulevard Warwick, Rhode Island 02886, Att: Secretary.
All proposals of stockholders intended to be included in the proxy
statement to be presented at the 1997 Annual Meeting of Stockholders must be
received at the Company's executive offices no later than March 31, 1998 and
should be directed to the Secretary of the Company.
By Order of the Board of Directors
Daniel T. Landi, Secretary
Dated: November 13, 1997
<PAGE>
PROXY
INFINITE MACHINES CORP.
This Proxy is solicited by the Board of Directors for
Annual Meeting on December 12, 1997
The undersigned hereby appoints Carle C. Conway and Clifford G. Brockmyre
and each of them, with full power of substitution, the attorneys and proxies of
the undersigned to attend the Annual Meeting of Stockholders of Infinite
Machines Corp. to be held on December 12, 1997 at 10:00 a.m., and at any
adjournment thereof, hereby revoking any proxies heretofore given, to vote all
shares of Common Stock of the Company held or owned by the undersigned as
indicated on the proposals as more fully set forth in the Proxy Statement, and
in their discretion upon such other matters as may come before the meeting.
1. ELECTION OF DIRECTORS -- Carle C. Conway, Clifford G. Brockmyre, Robert J.
Sherwood and Michael S. Smith.
|_| FOR all nominees,
|_| WITHHOLD authority to vote for all nominees,
|_| FOR all nominees, EXCEPT nominee(s) written in below.
_________________________________________
2. The Approval of the change of the Corporation's name to Infinite Group,
Inc. |_| FOR |_| AGAINST |_| ABSTAIN
3. THE APPROVAL OF THE 1997
STOCK OPTION PLAN. |_| FOR |_| AGAINST |_| ABSTAIN
4. TO RATIFY THE APPOINTMENT OF
AUDITORS FOR 1997. |_| FOR |_| AGAINST |_| ABSTAIN
The Board of Directors recommends a vote for each
of the foregoing proposals.
(Continued, and to be Signed, on Reverse Side)
<PAGE>
The shares represented by this proxy will be voted as directed or if no
direction is indicated, will be voted FOR each of the proposals.
The undersigned hereby acknowledges receipt of the Notice of, and Proxy
Statement for, the aforesaid Annual Meeting.
Dated: ____________________, 1997
_______________________________
Signature of Stockholder
_______________________________
Signature of Stockholder
DATE AND SIGN EXACTLY AS NAME
APPEARS HEREON. EACH JOINT TENANT
MUST SIGN. WHEN SIGNING AS
ATTORNEY, EXECUTOR, TRUSTEE, ETC.
GIVE FULL TITLE, IF SIGNER IS
CORPORATION, SIGN IN FULL CORPORATE
NAME BY AUTHORIZED OFFICER
