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
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
Inmark Enterprises, Inc.
- --------------------------------------------------------------------------------
(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)(1) 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 fee 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>
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 September 16, 1997, 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 July 21, 1997 as
the record date for the Annual Meeting. Only stockholders of record of the
Company's Common Stock at the close of business on July 21, 1997 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.
By Order of the Board of Directors
Paul A. Amershadian
Secretary
July 25, 1997
<PAGE>
INMARK ENTERPRISES, INC.
1 Plaza Road
Greenvale, New York 11548
-------------------------------
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
SEPTEMBER 16, 1997
--------------------------------------
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 1997 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 September 16,
1997, 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 Annual Report on Form 10-K (including financial
statements) for the fiscal year ended March 31, 1997 ("Fiscal 1997"), are being
sent to stockholders on or about July 25, 1997.
VOTING SECURITIES
July 21, 1997 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 2,835,751 shares of Common Stock, $.001 par value (the "Common
Stock"), 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 on a particular matter at the Annual Meeting 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.
Directors will be elected by a plurality of the votes of the shares present
in person or represented by proxy at the Annual Meeting and entitled to vote on
the election of Directors. There is no cumulative voting in the election of
Directors. All actions other than the election of Directors will be authorized
by a majority of the votes cast at the Annual Meeting by the holders of shares
entitled to vote thereon.
1
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information as of July 14, 1997 with
respect to stock ownership of (i) those persons or groups known to the Company
to beneficially own more than 5% of the Company's outstanding Common Stock, (ii)
each of the directors and nominees of the Company and the Company's executive
officers named in the summary compensation table, and (iii) the Company's
directors and executive officers as a group. Unless otherwise indicated, the
named beneficial owner has sole voting and investment power with respect to the
shares.
<TABLE>
<CAPTION>
Name and Address Amount and Nature of Percent of
of Beneficial Owner Beneficial Ownership(1) Class(1)
- ------------------- ----------------------- --------
<S> <C> <C>
(i) Beneficial Owners of More Than
5% of the Common Stock
Courtlandt G. Miller 377,016(2) 13.1%
177 Clark Avenue
Palm Beach, FL 33480
Robert F. Hussey 366,101(3) 11.6%
c/o Metrovision of North America, Inc.
424 Madison Avenue
New York, NY 10017
D.H. Blair & Co. 133,460(4) 4.6%
44 Wall Street
New York, New York 10005
Kenton Wood 139,460(5) 4.8%
44 Wall Street
New York, New York 10005
Alan Stahler 147,980(6) 5.0%
44 Wall Street
New York, New York 10005
Kalman Renov 147,980(7) 5.0%
44 Wall Street
New York, New York 10005
(ii) Directors, Nominees and Executive Officers
John P. Benfield 359,265(8) 12.1%
c/o Inmark Enterprises, Inc.
One Plaza Road
Greenvale, NY 11548
Donald A. Bernard 358,665(9) 12.1%
c/o Inmark Enterprises, Inc.
One Plaza Road
Greenvale, NY 11548
2
<PAGE>
Name and Address Amount and Nature of Percent of
of Beneficial Owner Beneficial Ownership(1) Class(1)
- ------------------- ----------------------- --------
Paul A. Amershadian 349,665(10) 11.8%
c/o Inmark Enterprises, Inc.
One Plaza Road
Greenvale, NY 11548
Herbert M. Gardner 34,750(11) 1.2%
c/o Janney Montgomery Scott Inc.
26 Broadway
New York, NY 10004
Joseph S. Hellman 5,250(12) *
c/o Kronish, Lieb, Weiner
& Hellman LLP
1114 Avenue of the Americas
New York, NY 10036
(iii) All Executive Officers and
Directors as a Group (5 persons) 1,107,595(8)(9)(10)(11)(12) 37.2%
</TABLE>
- ----------
* Less than 1%.
(1) All information is as of July 14, 1997 and was determined in accordance
with Rule 13d-3 under the Securities Exchange Act of 1934, as amended,
based upon information furnished by the persons listed or contained in
filings made by them with the Securities and Exchange Commission.
(2) Includes 302,475 shares held by Mr. Miller jointly with his wife, 24,847
shares of Common Stock issuable upon exercise of immediately exercisable
Class A Warrants and 24,847 shares of Common Stock issuable upon exercise
of immediately exercisable Class B Warrants. Excludes 24,847 shares of
Common Stock issuable upon exercise of the Class B Warrants issuable upon
exercise of the Class A Warrants. During Fiscal 1997, Mr. Miller resigned
as an officer and director of the Company. See "CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS".
(3) Includes 230,000 shares of Common Stock issuable upon exercise of
immediately exercisable warrants and 42,653 shares of Common Stock issuable
upon exercise of immediately exercisable Class A Warrants and 42,653 shares
of Common Stock issuable upon exercise of immediately exercisable Class B
Warrants. Excludes 42,653 shares of Common Stock issuable upon exercise of
the Class B Warrants issuable upon exercise of the Class A Warrants. During
Fiscal 1997, Mr. Hussey resigned as a director of the Company. See "CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS."
(4) Represents the total number of shares of Common Stock which are
beneficially owned by a group comprising D.H. Blair & Co., Inc. ("Blair"),
Kenton Wood ("Wood"), Alan Stahler ("Stahler") and Kalman Renov ("Renov").
Includes 44,020 shares of Common Stock issuable upon exercise of
immediately exercisable Class A Warrants, 44,020 shares of Common Stock
issuable upon exercise of immediately exercisable Class B Warrants, and
1,400 shares held by Blair as a market-maker. Excludes 44,020 shares of
Common Stock issuable upon exercise of Class B Warrants issuable upon
exercise of the Class A Warrants.
(5) Represents 133,460 of shares of Common Stock which are beneficially owned
by a group comprising Blair, Wood, Stahler and Renov and 6,000 shares as to
which Wood has sole voting and dispositive power. Includes 46,020 shares of
Common Stock issuable upon exercise of immediately exercisable Class A
Warrants, 46,020 shares of Common Stock issuable upon exercise of
immediately exercisable Class B Warrants, and 1,400 shares held by Blair as
a market-maker. Excludes 46,020 shares of Common Stock issuable upon
exercise of Class B Warrants issuable upon exercise of the Class A
Warrants.
3
<PAGE>
(6) Represents 133,460 of shares of Common Stock which are beneficially owned
by a group comprising Blair, Wood, Stahler and Renov and 14,520 shares as
to which Stahler has sole voting and dispositive power. Includes 63,380
shares of Common Stock issuable upon exercise of immediately exercisable
Class A Warrants, 63,380 shares of Common Stock issuable upon exercise of
immediately exercisable Class B Warrants, and 1,400 shares held by Blair as
a market-maker. Excludes 63,380 shares of Common Stock issuable upon
exercise of Class B Warrants issuable upon exercise of the Class A
Warrants.
(7) Represents 133,460 of shares of Common Stock which are beneficially owned
by a group comprising Blair, Wood, Stahler and Renov and 14,520 shares as
to which Renov has sole voting and dispositive power. Includes 63,380
shares of Common Stock issuable upon exercise of immediately exercisable
Class A Warrants, 63,380 shares of Common Stock issuable upon exercise of
immediately exercisable Class B Warrants, and 1,400 shares held by Blair as
a market-maker. Excludes 63,380 shares of Common Stock issuable upon
exercise of Class B Warrants issuable upon exercise of the Class A
Warrants.
(8) Includes 96,666 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 3,200 shares
of Common Stock issuable upon exercise of the Class B Warrants issuable
upon exercise of the Class A Warrants.
(9) Includes 96,666 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. Also includes shares
held by Mr. Bernard's wife as to which Mr. Bernard disclaims beneficial
interest, which consist of 3,000 shares of Common Stock and 3,000 shares of
Common Stock issuable upon exercise of Class A Warrants, 3,000 shares of
Common Stock issuable upon exercise of Class B Warrants, but excludes 3,000
shares of Common Stock issuable upon exercise of the Class B Warrants
issuable upon exercise of the Class A Warrants.
(10) Includes 96,666 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. Also includes 112,851
shares of Common Stock pledged to the Company as security for loans from
the Company in the aggregate principal amount of $225,000. See "CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS."
(11) Includes 30,000 shares of Common Stock issuable upon exercise of
immediately exercisable warrants, 2,750 shares of Common Stock issuable
upon exercise of immediately exercisable options and 1,000 shares of Common
Stock held by Mr. Gardner's wife, as to which Mr. Gardner disclaims any
beneficial interest.
(12) Includes 2,750 shares of Common Stock issuable upon exercise of immediately
exercisable options, 500 shares of Common Stock issuable upon exercise of
immediately exercisable Class A Warrants and 500 shares of Common Stock
issuable upon exercise of immediately exercisable Class B Warrants, but
excludes 500 shares of Common Stock issuable upon exercise of the Class B
Warrants issuable upon exercise of the Class A Warrants.
4
<PAGE>
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 following table sets forth information with respect to each nominee for
Director of the Company, all of whom are currently serving as Directors of the
Company:
<TABLE>
<CAPTION>
Position with the Company and
Principal Occupation or
Employment Director
Name Age During the Past Five Years Since
- ---- --- -------------------------- -----
<S> <C> <C> <C>
Paul A. Amershadian 49 Executive Vice President-Marketing 1996
and Sales of the Company since
September 29, 1995 and of the
Company's respective predecessors,
SPAR Promotion & Marketing
Services, Inc. ("Spar") and R.G.
Meadows, Inc. ("Meadows"), from
1986 to September 29, 1995; Secretary
of the Company since October 16,
1996; Director of the Company since
May 1996.
John P. Benfield 46 Director, President and Chief Executive 1995
Officer of the Company since
September 29, 1995; Chairman of the
Board of the Company since October
16, 1996; Executive Vice President of
Operations of both Spar and Meadows
from 1988 to September 29, 1995.
Donald A. Bernard 64 Director, Executive Vice President and 1995
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.
Herbert M. Gardner 57 Director of the Company since May 1, 1997
1997; Senior Vice President of Janney
Montgomery Scott Inc., an investment
banking firm, since 1978; Presently
serves as Chairman of Board of
Directors of Supreme Industries, Inc.
and as a director of Shelter
Components Corporation; Nu Horizons
Electronics Corp.; Transmedia
Network, Inc., TGC Industries, Inc.;
The Western Systems Corp.; and
Hirsch International Corp.
Joseph S. Hellman 66 Director of the Company since May 1, 1997
1997; Partner in the law firm of
Kronish, Lieb, Weiner & Hellman LLP.
</TABLE>
5
<PAGE>
Meetings and Committees of the Board of Directors
The Board of Directors held five meetings during Fiscal 1997. The Board of
Directors had no standing audit, nominating or compensation committee or
committee performing similar functions during Fiscal 1997. As of May 1, 1997,
the Board of Directors has a standing audit committee and compensation
committee. Herbert M. Gardner and Joseph S. Hellman are the sole members of both
committees. The Company does not currently have a nominating committee.
The audit committee reviews and reports to the Board of Directors with
respect to various auditing and accounting matters, including recommendations to
the Board of Directors as to the selection of the Company's independent
auditors, the scope of audit procedures, general accounting policy matters and
the performance of the Company's independent auditors.
The compensation committee was formed to review and make recommendations to
the Board of Directors regarding all executive compensation matters.
Compensation of Directors
Prior to May 1, 1997, each non-employee Director was paid a Director fee of
$2,500 for each meeting of the Board of Directors attended and all Directors
were reimbursed for reasonable travel expenses incurred in connection with their
attending Board meetings.
As of May 1, 1997, each non-employee Director receives an annual stipend
equal to $6,000 per annum, a fee of $1,000 per Board meeting attended and a fee
of $500 per Committee meeting attended, and all Directors continue to be
reimbursed for reasonable travel expenses incurred in connection with their
attending Board meetings.
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.
EXECUTIVE OFFICERS
John P. Benfield, Donald A. Bernard and Paul A. Amershadian are the current
executive officers of the Company. Each of those individuals has an employment
contract with the Company for a term of office expiring on September 28, 2001.
Additional information regarding those individuals is provided above in
"Election of Directors" and below in "Executive Employment Contracts,
Termination of Employment and Change-in-Control Arrangements".
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 $100,000 during
Fiscal 1997.
6
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------- ----------------------
Other Value of Securities
Annual Restricted Underlying All Other
Name and Fiscal Compen- Stock Options/ Compen-
Principal Position Year Salary($) Bonus($) sation($) Awards($) SARs(#) sation($)
- ------------------ ---- --------- -------- --------- --------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
John P. Benfield 1997 $220,000(4) -- -- -- 100,000 3,950(5)
President and Chief 1996 $200,000(2) --(3) -- -- 87,297
Executive Officer and
Director(1)
Donald A. Bernard 1997 $220,000(4) -- -- -- 100,000 3,950(5)
Executive Vice 1996 $200,000(2) --(3) -- -- 87,297
President and Chief
Financial Officer and
Director(1)
Paul A. Amershadian 1997 $220,000(4) -- -- -- 100,000 3,950(5)
Executive Vice 1996 $200,000(2) --(3) -- -- 87,297
President - Marketing
and Sales and
Director(1)
Robert F. Hussey 1997 -- -- -- -- -- --
Chairman of the 1996 -- -- -- -- -- --
Board (Resigned) 1995 -- -- -- -- 350,000 --
Courtlandt G. Miller 1997 -- -- -- -- -- --
Secretary and 1996 -- -- -- -- -- --
Treasurer 1995 -- -- -- -- 300,000 --
and Director
(Resigned)
</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 the fiscal year ended March 31, 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) Represents annual base salary, adjusted in October 1996, under employment
contracts. Actual salary paid to the named individuals during Fiscal 1997
is as follows: Mr. Benfield - $210,000; Mr. Bernard - $210,000; Mr.
Amershadian - $210,000.
(5) Represents executive's share of Company's matching contribution to
Company's 401(k) Retirement Plan.
7
<PAGE>
Stock Options
The following tables set forth certain information concerning stock options
granted to and exercised by the individual named in the Summary Compensation
Table during Fiscal 1997 and unexercised stock options held by such individuals
at the end of Fiscal 1997.
Option Grants in Fiscal 1997
<TABLE>
<CAPTION>
% of Total
Number of Options/SARs Exercise
Securities Granted to or Base
Underlying Employees in Price Expiration
Name Options Fiscal Year ($/Shares) Date
- ---- ------- ----------- ---------- ----
<S> <C> <C> <C> <C>
John P. Benfield 100,000(l) 29.8% $1.50(2) 5/07/06
Donald A. Bernard 100,000(l) 29.8% $1.50(2) 5/07/06
Paul A. Amershadian 100,000(l) 29.8% $1.50(2) 5/07/06
Robert F. Hussey 0 0.0% -- --
Courtlandt G. Miller 0 0.0% -- --
</TABLE>
- ----------
(1) Includes 33,333 shares of common stock issuable upon the exercise of
immediately exercisable stock options. The remaining 66,667 shares are
issuable upon the exercise of stock options which become exercisable in
equal installments in May 1997 and May 1998.
(2) The exercise price per share is equal to the fair market of the shares on
the date of grant.
Aggregate Option Exercises in Fiscal 1997 and FY-End Options/SAR Values
<TABLE>
<CAPTION>
Number of Value of
Unexercised Unexercised
Options/ In-the-Money
SARs Options/SARs
at Fiscal at Fiscal
Year End (#) Year End ($)
Shares
Acquired on Value Exercisable/ Exercisable/
Name Exercise (#) Realized($) Unexercisable Unexercisable(l)
- ---- ------------ ----------- ------------- ----------------
<S> <C> <C> <C> <C>
John P. Benfield --- --- 90,630/96,667 288,951/305,080
Donald A. Bernard --- --- 90,630/96,667 288,951/305,080
Paul A. Amershadian --- --- 90,630/96,667 288,951/305,080
Robert F. Hussey --- --- 296,500/0(2) 930,875/0
Courtlandt G. Miller 275,000(3) 185,562(4) 32,500/0(5) 0/0
</TABLE>
- ----------
(1) The value has been determined based on an average of the closing bid and
ask price on March 27, 1997, the last trading day of Fiscal 1997.
(2) Excludes immediately exercisable warrants to purchase 125,000 shares of
Common Stock, which were surrendered to the Company. See "Certain
Relationships and Related Transactions".
(3) Includes 50,000 shares of Common Stock purchased by Mr. Miller upon
exercise of warrants, which the Company subsequently repurchased at the
exercise price. See "Certain Relationships and Related Transactions".
(4) Includes $30,875 related to the Company's repurchase of the above-mentioned
50,000 shares. See "Certain Relationships and Related Transactions".
(5) Excludes immediately exercisable warrants to purchase 75,000 shares of
Common Stock, which were surrendered to the Company. "See Certain
Relationships and Related Transactions".
8
<PAGE>
Executive Employment Contracts, Termination of Employment and
Change-in-Control Arrangements
Pursuant to employment agreements, dated September 29, 1995 and amended by
agreements dated as of May 2, 1997, the Company employed Messrs. Benfield,
Bernard and Amershadian as President, Executive Vice President and Chief
Financial Officer, and Executive Vice President - Marketing and Sales,
respectively. Each agreement, as amended, currently provides for a base salary
of $220,000 and payment of such bonuses or additional compensation as the Board
of Directors may determine in its sole discretion. The term of each agreement
expires on September 28, 2001 (unless sooner terminated for cause, disability or
incapacity) and automatically renews for additional one-year terms unless
terminated by either party thereto upon at least sixty days notice before the
expiration of the then current term.
Each agreement prohibits the executive officer that is a party thereto from
competing with the Company or inducing or attempting to influence any employee
of the Company or any subsidiary to terminate his employment with the Company or
any subsidiary during the term of the agreement and for a period of two years
after the termination of the officer's employment with the Company. Each
agreement also prohibits the executive officer from disclosing certain
confidential information of the Company. Finally, each agreement provides that
if the officer's employment is terminated due to (i) the sale or transfer of a
majority of the Company's outstanding capital stock, property or business
assets, (ii) the consolidation or merger or the Company into or with another
entity where the Company is not the surviving entity, or (iii) certain specified
changes in the identity of the Board of Directors, the Company must make a lump
sum cash payment to the executive officer in a maximum amount equal to two times
the executive officer's then annual base salary.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Concurrent with the respective resignations of Messrs. Hussey and Miller
from the Board of Directors of the Company, Mr. Hussey surrendered to the
Company warrants to purchase 125,000 shares of Common Stock, and Mr. Miller
surrendered to the Company warrants to purchase 75,000 shares of Common Stock
and sold to the Company 50,000 shares of Common Stock previously acquired on
exercise of then existing warrants at the exercise prices for which those shares
were acquired.
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 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. On April 7,
1997, the Company loaned an additional $25,000 to Mr. Amershadian. This
additional loan bears interest at an annual rate of 10% and is payable in full,
together with the principal sum, on April 7, 1999. On April 7, 1997, the Pledge
Agreement was amended to secure the additional $25,000 loan as well as the
original $200,000 loan to Mr. Amershadian.
Joseph S. Hellman, a director and nominee, is a member of Kronish, Lieb,
Weiner & Hellman LLP, a law firm that the Company retained as its general
counsel during Fiscal 1997.
Herbert M. Gardner, a director and nominee, is an officer of Janney
Montgomery Scott Inc., an investment banking firm that has been retained, other
than as participating underwriter in a syndicate, to perform services for the
Company during the current fiscal year.
9
<PAGE>
COMPLIANCE WITH SECTION 16(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), 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. To the Company's knowledge, as of July 15,
1997, the following officers, directors and holders of more than 10% of the
outstanding Common Shares had failed to file the following reports under Section
16(a) of the Exchange Act during Fiscal 1997: (i) Robert F. Hussey, a director
and Chairman of the Board of the Company until his resignation during Fiscal
1997, failed to file a Form 4 due April 10, 1997 or a Form 5 due May 15, 1997,
reporting the surrender to the Company of warrants to purchase 125,000 Common
Shares, and (ii) Courtlandt G. Miller, a director, secretary and treasurer of
the Company until his resignation during Fiscal 1997, failed to file a Form 4
due March 10, 1997 or a Form 5 due May 15, 1997, reporting the sale to the
Company of 50,000 Common Shares and the surrender to the Company of warrants to
purchase 75,000 shares. There are no known failures to file a required Form 3,
no other known failures to file a required Form 4 or Form 5 and no known late
filings of a required Form 3, 4 or 5 during Fiscal 1997 by any person required
to file such forms with respect to the Company pursuant to Section 16 of the
Exchange.
RELATIONSHIP WITH INDEPENDENT AUDITORS
KPMG Peat Marwick LLP was the Company's auditors for Fiscal 1997, and has
been selected to serve as the auditors for the fiscal year ending March 31,
1998. 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 on Form 10-K 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 Company has retained Morrow &
Co., Inc. to solicit proxies for a fee of approximately $3,000 plus reimbursable
expenses. 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.
10
<PAGE>
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the Annual Meeting of
Stockholders in 1998 and included in the Company's proxy statement and form of
proxy for such annual meeting must be received by the Company at its principal
executive office by no later than March 27, 1998.
By Order of the Board of Directors
Paul A. Amershadian
Secretary
Greenvale, New York
July 25, 1997
THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED MARCH 31,
1997, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (INCLUDING THE
FINANCIAL STATEMENTS AND THE SCHEDULES THERETO, BUT EXCLUDING EXHIBITS), IS
BEING MAILED WITH THIS PROXY STATEMENT. THE COMPANY WILL PROVIDE TO EACH PERSON
SOLICITED BY THIS PROXY STATEMENT, ON THE WRITTEN REQUEST OF ANY SUCH PERSON AND
UPON PAYMENT OF A FEE OF $3.00 PER EXHIBIT, A COPY OF ANY EXHIBIT TO THE
ENCLOSED ANNUAL REPORT ON FORM 10-K. A LIST OF EXHIBITS IS SET FORTH IN SECTION
IV OF THE ANNUAL REPORT ON FORM 10-K. REQUESTS FOR COPIES OF EXHIBITS SHOULD BE
DIRECTED TO DONALD A. BERNARD, EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL
OFFICER, INMARK ENTERPRISES, INC., 1 PLAZA ROAD, GREENVALE, NEW YORK 11548
(TELEPHONE: (516) 625-3500).
11
<PAGE>
PROXY
INMARK ENTERPRISES, INC.
1 Plaza Road, Greenvale, New York 11548
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS - SEPTEMBER 16, 1997
The undersigned hereby appoints John P. Benfield and Donald A. Bernard, 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 Inmark Enterprises, Inc. (the "Company") to be held on September
16, 1997, 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 this proxy
card. Any proxy heretofore given by the undersigned with respect to such stock
is hereby revoked.
1. ELECTION OF DIRECTORS.
NOMINEES: Paul A. Amershadian, John P. Benfield, Donald A. Bernard, Herbert
M. Gardner and Joseph S. Hellman.
[ ] FOR ALL nominees listed above.
[ ] FOR ALL nominees listed above EXCEPT: _______________________________.
(Instruction: To withhold authority to vote on any individual nominee,
write the name above.)
[ ] WITHHOLD AUTHORITY to vote for all nominees listed above.
PLEASE MARK, DATE AND SIGN THIS PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE
(Continued and to be signed on the other side)
<PAGE>
2. ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
If no specification is made, this proxy will be voted FOR Proposals 1 and 2
listed above.
Dated:____________________________, 1997
________________________________________
Signature of Stockholder
________________________________________
Signature of Stockholder
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 CHECK IF YOU PLAN TO
ATTEND THE MEETING
