[ COZEN AND O'CONNOR LETTERHEAD ]
September 10, 1996
VIA EDGAR
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Inmark Enterprises, Inc. - Definitive Proxy
Statement 1996 Annual Meeting of Stockholders
Ladies and Gentlemen:
On behalf of Inmark Enterprises, Inc. ("Inmark"), being transmitted for
filing pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), is the definitive proxy statement and form of proxy of Inmark
for its 1996 Annual Meeting of Stockholders. The $125.00 filing fee has been
deposited in Inmark's lock box account in accordance with the rules of the
Commission.
Inmark anticipates mailing the proxy statement and proxy on or about this
date. Please contact the undersigned at 215-665-4171 should there be any
questions relating to the filing.
Sincerely,
COZEN AND O'CONNOR
BY: STEVEN N. HAAS
<PAGE>
<PAGE>
INMARK ENTERPRISES, INC.
1 Plaza Road
Greenvale, New York, 11548
NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS
The Annual Meeting of the Stockholders (the "Annual Meeting") of Inmark
Enterprises, Inc. (the "Company") will be held at the Company's principal
offices, 1 Plaza Road, Greenvale, New York 11548, at 10:00 a.m., local New York
time, on October 16, 1996, to consider the following matters:
(1) The election of five Directors to hold office until the next Annual
Meeting of Stockholders and until their respective successors are duly elected
and qualified.
(2) The transaction of such other business as may properly come before the
Annual Meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on September 10,
1996 as the record date for the Annual Meeting. Only stockholders of record of
the Company's Common Stock at the close of business on September 10, 1996 will
be entitled to notice of and to vote at the Annual Meeting or any adjournments
or postponements thereof. Shares can be voted at the Annual Meeting only if the
holder is present or represented by proxy.
The accompanying form of proxy is solicited by the Board of Directors of
the Company. Reference is made to the attached Proxy Statement for further
information with respect to the business to be transacted at the Annual Meeting.
A complete list of stockholders entitled to vote at the Annual Meeting
shall be open to the examination of any stockholder, for any purpose germane to
the Annual Meeting, during ordinary business hours, for a period of at least ten
days prior to the Annual Meeting, at the Company's principal offices, 1 Plaza
Road, Greenvale, New York 11548.
Stockholders are cordially invited to attend the Annual Meeting. Whether or
not you expect to attend the Annual Meeting in person, please complete, date and
sign the accompanying proxy card and return it without delay in the enclosed
postage prepaid envelope. Your proxy will not be used if you are present and
prefer to vote in person or if you revoke the proxy.
September 11, 1996 By Order of the Board of Directors
Courtlandt G. Miller
Secretary
<PAGE>
INMARK ENTERPRISES, INC.
1 Plaza Road
Greenvale, New York 11548
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 16, 1996
This proxy statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Inmark Enterprises, Inc., a Delaware
corporation (the "Company"), for use at the 1996 Annual Meeting of Stockholders
of the Company and for any adjournments or postponements thereof (the "Annual
Meeting") to be held at the Company's principal offices, 1 Plaza Road,
Greenvale, New York 11548, at 10:00 a.m., local New York time, on October 16,
1996, for the purposes set forth in the accompanying Notice of Annual Meeting of
Stockholders. A Board of Directors' proxy (the "Proxy") for the Annual Meeting
is enclosed, by means of which you may vote as to the proposals described in
this Proxy Statement.
All Proxies which are properly completed, signed and returned to the
Company prior to the Annual Meeting, and which have not been revoked, will be
voted in accordance with the stockholder's instructions contained in such Proxy.
In the absence of instructions, shares represented by such Proxy will be voted
FOR the election of the nominees of the Board of Directors for Director. The
Board of Directors is not aware of any business to be presented at the Annual
Meeting except the matters set forth in the Notice and described in this Proxy
Statement. If any other matters properly come before the Annual Meeting, the
persons named in the accompanying Proxy will vote on those matters in accordance
with their best judgment. A stockholder may revoke his or her Proxy at any time
before it is exercised by filing with the Secretary of the Company at its
offices at 1 Plaza Road, Greenvale, New York 11548, either a written notice of
revocation or a duly executed Proxy bearing a later date, or by attending in
person at the Annual Meeting and expressing a desire to vote his or her shares
in person.
This Proxy Statement and the accompanying Notice of Annual Meeting of
Stockholders, Proxy and 1996 Annual Report to Stockholders are being sent to
stockholders on or about September 11, 1996.
VOTING SECURITIES
September 10, 1996 has been fixed as the record date for the determination
of stockholders entitled to notice of and to vote at the Annual Meeting or any
adjournment or postponement thereof. As of that date, the Company had
outstanding 2,880,751 shares of Common Stock, $.001 par value, excluding
treasury shares. The presence, in person or by proxy, of stockholders entitled
to cast a majority of votes which stockholders are entitled to cast in the
election of Directors will constitute a quorum for the Annual Meeting. Holders
of Common Stock are entitled to one vote for each share owned upon all matters
to be considered at the Annual Meeting. Proxies marked "Abstain" are included in
determining a quorum, but broker proxies which have not voted in the election of
Directors are not included in determining a quorum for such matter. There is no
cumulative voting in the election of Directors.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of September 10, 1996
with respect to the stock ownership of each person known by the Company to be
the beneficial owner of more than five percent of the Company's outstanding
Common Stock, by each Director, by each nominee for Director and by all
Directors and executive officers of the Company as a group. Unless otherwise
indicated, the named beneficial owner has sole voting and investment power with
respect to the shares.
Name and Address Number of
of Beneficial Owner Shares Percent of Class
- ------------------- ------ ----------------
John P. Benfield 325,932(1) 10.9%
c/o Inmark Enterprises, Inc.
One Plaza Road
Greenvale, NY 11548
Donald A. Bernard 316,332(2) 10.7%
c/o Inmark Enterprises, Inc.
One Plaza Road
Greenvale, NY 11548
Paul A. Amershadian 316,332(3) 10.7%
c/o Inmark Enterprises, Inc.
One Plaza Road
Greenvale, NY 11548
Courtlandt G. Miller 459,516(4) 15.5%
c/o Inmark Enterprises, Inc.
One Plaza Road
Greenvale, NY 11548
Robert F. Hussey 482,601(5) 14.6%
Metrovision of North America, Inc.
424 Madison Avenue
New York, NY 10017
All Executive Officers and 1,900,513(1)(2)(3)(4)(5) 62.4%
Directors as a Group
(5 persons)
- ------------------------
* Less than 1%.
(1) Includes 63,333 shares of Common Stock issuable upon exercise of
immediately exercisable options, 27,297 shares of Common Stock issuable
upon exercise of immediately exercisable warrants, 3,200 shares of Common
Stock issuable upon exercise of Class A Warrants and 3,200 shares of Common
Stock issuable upon exercise of Class B Warrants, but excludes shares of
Common Stock issuable upon exercise of the Class B Warrants issuable upon
exercise of the Class A Warrants.
(2) Includes 63,333 shares of Common Stock issuable upon exercise of
immediately exercisable options and 27,297 shares of Common Stock issuable
upon exercise of immediately exercisable warrants.
(3) Includes 63,333 shares of Common Stock issuable upon exercise of
immediately exercisable options and 27,297 shares of Common Stock issuable
upon exercise of immediately exercisable warrants. See "CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS."
(4) Includes 377,322 shares of Common Stock held by Mr. Miller jointly with his
wife. Also includes 22,000 shares of Common Stock issuable upon exercise of
immediately exercisable options, 49,694 shares of Common Stock issuable
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<PAGE>
upon exercise of immediately exercisable warrants, 10,500 shares of Common
Stock issuable upon exercise of the Director Warrants granted in connection
with the Company's public offering, 24,847 shares of Common Stock issuable
upon exercise of the Class A Warrants and 24,847 shares of Common Stock
issuable upon exercise of the Class B Warrants underlying the Units, but
excludes shares of Common Stock issuable upon exercise of the Class B
Warrants issuable upon exercise of the Director Warrants and upon exercise
of other Class B Warrants issuable upon exercise of the Class A Warrants.
See "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS."
(5) Includes 61,000 shares of Common Stock issuable upon exercise of
immediately exercisable options, 360,306 shares of Common Stock issuable
upon exercise of immediately exercisable warrants, 10,500 shares of Common
Stock issuable upon exercise of the Director Warrants granted in connection
with the Company's public offering, 42,643 shares of Common Stock issuable
upon exercise of the Class A Warrants and 42,643 shares of Common Stock
issuable upon exercise of the Class B Warrants underlying the Units, but
excludes shares of Common Stock issuable upon exercise of the Class B
Warrants issuable upon exercise of the Director Warrants and upon exercise
of other Class B Warrants issuable upon exercise of the Class A Warrants.
See "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS."
ELECTION OF DIRECTORS
A Board of five Directors of the Company is to be elected at the Annual
Meeting, each to serve, subject to the provisions of the Company's By-Laws,
until the next Annual Meeting of Stockholders and until his successor is duly
elected and qualified. It is management's recommendation that the accompanying
form of Proxy be voted FOR the election as Director of the five persons named
below, all of whom are currently Directors of the Company. The Board of
Directors believes that the nominees named below are willing to serve as
Directors. However, in the event that any of the nominees should become unable
or unwilling to serve as a Director, the Proxy will be voted for the election of
such person or persons as shall be designated by the Directors. The Board of
Directors does not have a nominating committee.
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<PAGE>
Information regarding the Directors and nominees for Director of the
Company is listed in the following table:
<TABLE>
<CAPTION>
=============================================================================================================================
Name Age Positions with the Company and Director Since
Principal Occupation or Employment
during the past Five Years
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Paul A. Amershadian 49 Executive Vice President- 1996
Marketing and Sales of the Company
since September 29, 1995 and that
of the Company's respective
predecessors, SPAR Promotion &
Marketing Services, Inc. ("Spar")
and R.G. Meadows, Inc.
("Meadows"), from 1986 to
September 29, 1995.
- -----------------------------------------------------------------------------------------------------------------------------
John P. Benfield 45 President and Chief 1995
Executive Officer of the
Company since September 29,
1995; Executive Vice
President of Operations of
both Spar and Meadows from
1988 to September 29, 1995.
- -----------------------------------------------------------------------------------------------------------------------------
Donald A. Bernard 64 Executive Vice President 1995
and Chief Financial Officer of the
Company since September 29, 1995;
Executive Vice President of
Finance of both Spar and Meadows
from 1990 to September 29, 1995.
- -----------------------------------------------------------------------------------------------------------------------------
Robert F. Hussey 47 Chairman of the Board of the Company 1992
since May 1994; President and Chief
Executive Officer of the
Company from June 1993 until
September 29, 1995; Director
and President of Metrovision
of North America, Inc., a
niche cable television
network, since 1991.
- -----------------------------------------------------------------------------------------------------------------------------
Courtlandt G. Miller 44 Secretary of the Company since 1992
March 1992; Treasurer of the Company
since June 1993; Director of Diagnostek,
Inc., a mail service pharmacy
contractor, from 1985 until July,
1995, General Counsel and
Secretary from 1987 until July
1995, and Executive Vice President
from 1988 until July 1995.
=============================================================================================================================
</TABLE>
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<PAGE>
Meetings and Compensation of the Board of Directors
The Board of Directors held four meetings during the fiscal year ended
March 31, 1996. The Board of Directors currently has no standing committees.
Compensation of Directors
Non-employee Directors are paid a Director fee of $2,500 for each meeting
of the Board of Directors attended and all Directors are reimbursed for
reasonable travel expenses incurred in connection with their attending Board
meetings. Robert F. Hussey and Courtlandt G. Miller were paid Director fees of
$10,000 and $7,500, respectively, in connection with their serving as Directors
during fiscal year 1996. Additionally, under a "formula plan" provided for in
the Company's 1992 Stock Option Plan, each of the Company's non-employee
Directors is granted stock options to purchase up to 5,500 shares of Common
Stock upon his election to the Board of Directors and stock options to purchase
up to 5,500 shares of Common Stock on each calendar anniversary of his election
as long as they remain on the Board.
COMPLIANCE WITH SECTION 16(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers and directors and persons who own more than 10% of a
registered class of the Company's equity securities (collectively, the
"Reporting Persons") to file reports of ownership and changes in ownership with
the Securities and Exchange Commission and to furnish the Company with copies of
these reports. Based on the Company's review of the copies of these reports
received by it, the Company believes that all filings required to be made by the
Reporting Persons with respect to transactions during the Company's last fiscal
year were made on a timely basis.
EXECUTIVE COMPENSATION
Until the merger of Inmark Services, Inc. with and into the Company's
wholly-owned subsidiary on September 29, 1995 (the "Merger"), the Company's
affairs were directed by an executive committee comprising Robert F. Hussey and
Courtlandt G. Miller, then the only directors and officers of the Company, who
received no salary for their services as such. From and after the Merger, the
executive officers of Inmark Services, Inc. became the executive management of
the Company. The following table sets forth the total compensation paid to the
Company's chief executive officer (and in the case of the executive committee
prior to the Merger, of Messrs. Hussey and Miller), and each of the other
executive officers of the Company whose compensation exceeded $100,000 during
the fiscal year ended March 31, 1996.
-5-
<PAGE>
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------- ----------------------
Value of Securities
Name and Restricted Underlying
Principal Fiscal Other Annual Stock Options/ All Other
Position Year Salary ($) Bonus ($) Compensation ($) Awards($) SAR's(#) Compensation($)
- -------- ---- ---------- --------- ---------------- --------- -------- ---------------
<S> <C> <C> <C> <C>
John P. Benfield 1996 $200,000(2) -(3) - - 87,297 -
President and
Chief Executive
Officer and
Director(1)
Donald A. Bernard 1996 $200,000(2) -(3) - - 87,297
Executive Vice
President and Chief
Financial Officer
and Director(1)
Paul A. Amershadian 1996 $200,000(2) -(3) - - 87,297
Executive Vice
President - Marketing
and Sales and Director(1)(4)
Robert F. Hussey 1996 - - - - - -
Chairman of the 1995 - - - - 350,000 -
Board 1994 - - - - 5,500 -
Courtlandt G. Miller 1996 - - - - - -
Secretary and 1995 - - - - 300,000 -
Treasurer and Director 1994 - - - - - -
</TABLE>
- --------------------
(1) Messrs. Benfield, Bernard and Amershadian commenced employment with the
Company on September 29, 1995 upon consummation of the Merger.
(2) Represents annual base salary under employment contracts executed in
connection with the Merger. Actual salary paid to the named individuals
during fiscal year 1996 is as follows: Mr. Benfield - $100,000; Mr. Bernard
- $100,000; Mr. Amershadian - $100,000.
(3) Does not include a cash bonus ($55,000 to Mr. Benfield; $40,000 to Mr.
Bernard and $55,000 to Mr. Amershadian) paid by the Company as an
obligation assumed in the Merger representing a bonus earned by these
persons for services performed on behalf of Spar.
(4) Mr. Amershadian was appointed a Director in May 1996.
-6-
<PAGE>
Stock Options
The following tables set forth certain information concerning stock options
granted to and exercised by the named individuals in the Summary Compensation
Table during the last fiscal year and unexercised stock options held by such
individuals at the end of such fiscal year.
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
% of Total
Number of Options/SARs Exercise
Securities Granted to or Base
Underlying Employees in Price Expiration
Name Options Fiscal Year ($/Shares) Date
- ---- ------- ----------- ---------- ----
<S> <C> <C> <C> <C>
John P. Benfield 87,297(1) 20.9% $1.40(2) 9/29/05
Donald A. Bernard 87,297(1) 20.9% $1.40(2) 9/29/05
Paul A. Amershadian 87,297(1) 20.9% $1.40(2) 9/29/05
Robert F. Hussey 50,000 12.0% $1.07(2) 4/25/05
Courtlandt G. Miller 50,000 12.0% $1.07(2) 4/25/05
</TABLE>
- --------------------
(1) Includes immediately exercisable common stock purchase warrants to purchase
27,297 shares. The remaining 60,000 shares are issuable upon the exercise
of stock options as to which options to purchase 30,000 shares are
immediately exercisable and the balance first become exercisable in
September 1997.
(2) The exercise price per share was equal to the fair market of the shares on
the date of grant.
Aggregate Option Exercises in Last
Fiscal Year and FY End Options/SAR Values
<TABLE>
<CAPTION>
Number of Value of
Unexercised Unexercised
Options/SARs In-the-Money
at Fiscal Options/SARs
Year End(#) at Fiscal
Year End($)
Shares Acquired Exercisable/ Exercisable/
Name on Exercise(#) Value Realized ($) Unexercisable Unexercisable(1)
- ---- --------------- ------------------ ------------- ----------------
<S> <C> <C> <C> <C>
John P. Benfield - - 57,297/30,000 98,837/51,750
Donald A. Bernard - - 57,297/30,000 98,837/51,750
Paul A. Amershadian - - 57,297/30,000 98,837/51,750
Robert F. Hussey - - 346,500/75,000 624,625/159,375
Courtlandt G. Miller - - 307,500/75,000 580,875/159,375
</TABLE>
(1) The value has been determined based on an average of the closing bid and
ask price on March 29, 1996, the last trading day of the fiscal year.
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<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As a condition to the Company's accounts receivable factor entering into
and performing under a Factoring Agreement for the benefit of Inmark Services,
Inc. both prior to and following the Merger, the factor required that the
obligations of those parties which executed certain performance agreements in
connection with the Factoring Agreement be secured by cash or cash equivalent
collateral with a value of not less than $1.0 million. To avoid encumbering all
of the Company's cash and cash equivalents, each of Messrs. Robert Hussey and
Courtlandt Miller agreed to personally pledge $250,000 to the factor as
collateral to secure their obligations under their respective performance
agreements. In light of Messrs. Hussey and Miller pledge of their personal
assets, the Company was obligated to pledge only $500,000 of its cash resources,
leaving $500,000 of its cash resources unencumbered and available for other
uses. In consideration of the agreement of the Company and Messrs. Hussey and
Miller to provide such cash collateral, Inmark Services, Inc. paid $50,000 to
the Company and $25,000 to each of Messrs. Hussey and Miller concurrently upon
consummation of the Spar acquisition (which preceded the Merger). Additionally,
the Company granted to each of Messrs. Hussey and Miller warrants to purchase up
to 50,000 shares of Common Stock at an exercise price of $1.07 per share.
On January 10, 1996, the Company loaned $200,000 to Paul A. Amershadian,
the Company's Executive Vice President-Marketing and Sales and a Director. The
loan bears interest at an annual rate of 10% and is payable in full, together
with the principal sum, on January 10, 1998. Pursuant to a Pledge Agreement, Mr.
Amershadian has pledged to the Company 112,851 shares of the Company's Common
Stock owned by him to secure his obligation in connection with the loan.
RELATIONSHIP WITH INDEPENDENT AUDITORS
KPMG Peat Marwick LLP was the Company's auditors for the fiscal year ended
March 31, 1996, and has been selected to serve as the auditors for the fiscal
year ending March 31, 1997. A representative of KPMG Peat Marwick LLP is
expected to be present at the Annual Meeting to respond to appropriate questions
from stockholders and to make a statement if he desires to do so.
EXPENSES
The entire cost of preparing, assembling, printing and mailing this Proxy
Statement, the enclosed Proxy, Annual Report and other materials, and the cost
of soliciting Proxies with respect to the Annual Meeting, will be borne by the
Company. The Company will request banks and brokers to solicit their customers
who beneficially own shares listed of record in names of nominees, and will
reimburse those banks and brokers for the reasonable out-of-pocket expenses of
such solicitations. The solicitation of Proxies by mail may be supplemented by
telephone and telegram by officers and other regular employees of the Company,
but no additional compensation will be paid to such individuals.
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<PAGE>
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the Annual Meeting of
Stockholders in 1997 must be received by the Company at its principal executive
office by no later than May 11, 1997.
By Order of the Board of Directors
Courtlandt G. Miller
Secretary
Greenvale, New York
September 11, 1996
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON SOLICITED BY THIS PROXY
STATEMENT, ON THE WRITTEN REQUEST OF ANY SUCH PERSON, A COPY OF THE COMPANY'S
ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED MARCH 31, 1996 AS FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION (INCLUDING THE FINANCIAL STATEMENTS
AND THE SCHEDULES THERETO, BUT EXCLUDING EXHIBITS). SUCH REQUESTS SHOULD BE
DIRECTED TO THE SECRETARY, 1 PLAZA ROAD, GREENVALE NEW YORK 11548.
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<PAGE>
INMARK ENTERPRISES, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 16, 1996
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints John Benfield and Donald
Bernard or either one of them, as proxies, with full power of substitution, to
vote all shares of stock of Inmark Enterprises, Inc. (the "Company") which the
undersigned would be entitled to vote if personally present at the Annual
Meeting of stockholders of the Company to be held at 1 Plaza Road, Greenvale, NY
11548, at 10:00 o'clock a.m., local New York time, on October 16, 1996, or at
any adjournments or postponements thereof:
Proposal 1 -- Election of Directors
Paul Amershadian FOR |_| WITHHOLD AUTHORITY |_|
John Benfield [To withhold authority for any one nominee,
Donald Bernard strike a line through such nominee's name.]
Robert Hussey
Courtlandt Miller
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS SPECIFIED, OR IF NO
SPECIFICATIONS ARE MADE, WILL BE VOTED FOR THE NOMINEES FOR ELECTION AS
DIRECTOR.
(Continued and to be signed on other side)
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF ANNUAL MEETING
AND PROXY STATEMENT FURNISHED HEREWITH, AND HEREBY CONFIRMS THAT THIS PROXY
SHALL BE VALID AND MAY BE VOTED WHETHER OR NOT THE STOCKHOLDER'S NAME IS SET
FORTH BELOW OR A SEAL IS AFFIXED OR THE DESCRIPTION, AUTHORITY OR CAPACITY OF
THE PERSON SIGNING IS GIVEN OR OTHER DEFECT OF SIGNATURE EXISTS.
Dated:______________________________________, 1996
__________________________________________________
Signature of Stockholder
__________________________________________________
Signature of Stockholder
Note: When signing as attorney-in-fact,
executor, administrator, trustee or
guardian, please add your title as such,
and if signer is a corporation, please sign
with full corporate name by duly authorized
officer or officers and affix the corporate
seal. Where stock is issued in the name of
two or more persons, all such persons
should sign.
