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)) |
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x |
Definitive Proxy Statement |
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¨ |
Definitive Additional Materials |
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¨ |
Soliciting Material under §240.14a-12 |
INRAD OPTICS, 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 all boxes that apply):
| |
¨ |
Fee paid previously with preliminary materials |
| |
¨ |
Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11 |
SCHEDULE 14A INFORMATION
INRAD OPTICS, INC.
181 Legrand Avenue
Northvale, New Jersey 07647
Notice of Annual Meeting of Shareholders
To be held on Thursday, June 9, 2022
To The Shareholders of Inrad Optics, Inc.:
NOTICE
IS HEREBY GIVEN that the Annual Meeting of Shareholders (the “Annual Meeting”) of INRAD OPTICS, INC. (the "Company")
will be held on Thursday, June 9, 2022 at 10:00 a.m. This year’s Annual Meeting will be held via the internet. Shareholders
will be able to listen, vote and ask questions regardless of location via the internet at http://viewproxy.com/InradOptics/2022/vm. You
will not be able to attend the Annual Meeting in person.
The Annual Meeting is being held for the following
purposes:
| 1. | To elect two directors, named herein, to hold office for a term of three years; |
| 2. | To ratify the appointment of PKF O’Connor Davies, LLP as the Company’s independent registered
public accounting firm for the fiscal year ending December 31, 2022; |
| 3. | To approve, as a non-binding advisory vote, our named executive officer compensation; |
| 4. | To transact such other business as may properly come before the meeting or any adjournment thereof. |
The Board of Directors has fixed the close of
business on April 28, 2022, as the date for determining the shareholders of record entitled to receive notice of, and to vote at,
the Annual Meeting.
Please
complete, sign and return the proxy card whether or not you plan to attend the Annual Meeting. Alternatively, you may vote online at
www.proxyvote.com. Your vote is important regardless of the number of shares you own. Voting by proxy will not prevent
you from voting at the virtual Annual Meeting (provided you follow the revocation procedures described in the accompanying proxy statement)
but will assure that your vote is counted if you cannot attend.
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By Order of the Board of Directors |
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|
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/s/ Theresa A. Balog |
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Theresa A. Balog, Secretary |
Northvale, New Jersey
April 29, 2022
We
urge you to vote your shares over the Internet, via telephone or through the mail at your earliest convenience.
INRAD OPTICS, INC.
181 Legrand Avenue
Northvale, NJ 07647
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
Thursday, June 9, 2022
This
Proxy Statement is being furnished in connection with the solicitation of proxies by the Board of Directors (the “Board”)
of INRAD OPTICS, INC., a New Jersey corporation with its principal offices at 181 Legrand Avenue, Northvale, New Jersey 07647 (the
"Company"), to be used at the Annual Meeting of Shareholders of the Company (the “Annual Meeting”) to be held on
Thursday, June 9, 2022, at 10:00 a.m. local time. This year’s Annual Meeting will be held via the internet. Shareholders
will be able to listen, vote and ask questions regardless of location via the internet at http://viewproxy.com/InradOptics/2022/vm. You
will receive a meeting invitation by e-mail with your unique join link, along with a password prior to the meeting date. You will
not be able to attend the Annual Meeting in person.
The enclosed proxy is solicited by the Board.
This Proxy Statement and the enclosed form of proxy are first being sent to shareholders on or about May 10, 2022.
In
order to participate in the Annual Meeting live via the Internet, you must register at http://viewproxy.com/InradOptics/2022/vm
by 11:59 p.m. Eastern Time by June 6, 2022. If you are a registered holder, you must register using the virtual control number
included on your proxy card. If you hold your shares beneficially through a bank or broker, you must provide a legal proxy from your
bank or broker during registration and you will be assigned a virtual control number in order to vote your shares during the Annual Meeting.
If you are unable to obtain a legal proxy to vote your shares, you will still be able to attend the 2022 Annual Meeting (but will not
be able to vote your shares) so long as you demonstrate proof of stock ownership. Instructions on how to connect and participate via
the Internet, including how to demonstrate proof of stock ownership, are posted at http://viewproxy.com/InradOptics/2022.
On the day of the Annual Meeting, if
you have properly registered, you may enter the Annual Meeting by logging in with your unique join link using the event password you
received via email in your registration confirmation at http://viewproxy.com/InradOptics/2022/vm.
You may submit questions in writing during the Annual Meeting. You
will need your virtual control number. As part of the Annual Meeting, we will hold a live question and answer session, during which we
intend to answer questions submitted in writing during the meeting in accordance with the Annual Meeting procedures which are pertinent
to the Company and the meeting matters, as time permits. Answers to any questions that are not addressed during the meeting will be published
following the meeting on our website. Questions and answers will be grouped by topic and substantially similar questions will be grouped
and answered once.
Both stockholders of record and street name stockholders
will be able to attend the Annual Meeting via live audio webcast, submit their questions during the meeting and vote their shares electronically
at the Annual Meeting.
There
will be technicians ready to assist you with any technical difficulties you may have accessing the annual meeting live audio webcast.
Please be sure to check in by 9:45 am ET on June 9, 2022, (15 minutes prior to the start of the meeting is recommended) the day
of the meeting, so that any technical difficulties may be addressed before the annual meeting live audio webcast begins. If you encounter
any difficulties accessing the webcast during the check-in or meeting time, please email VirtualMeeting@viewproxy.com or
call 866-612-8937.
Even if you plan to attend the live webcast of
the Annual Meeting, we encourage you to vote in advance by internet, telephone or mail so that your vote will be counted even if you
later decide not to attend the virtual Annual Meeting.
Shareholders Entitled to Vote
Only shareholders of record at the close of business
on April 28, 2022, the record date fixed by the Board of Directors, will be entitled to notice of, and to vote at, the Annual Meeting.
At the close of business on the record date, there were 14,022,320 shares of the Company's Common Stock, par value $0.01 per share (the
"Common Stock"), outstanding and entitled to vote at the meeting. Each share is entitled to one vote. The presence in person
or by proxy of owners of a majority of the outstanding shares of the Company's Common Stock will constitute a quorum for the transaction
of business at the Company's Annual Meeting.
For purposes of determining the votes cast with
respect to any matter presented for consideration at the Annual Meeting, only those cast "for" are included. Abstentions and
broker non-votes are counted only for the purpose of determining whether a quorum is present at the Annual Meeting. Owners of Common Stock
are not entitled to cumulative voting in the election of directors. Owners of Common Stock will not have any dissenters’ rights
of appraisal in connection with any of the matters to be voted on at the Company’s Annual Meeting.
If you hold your shares in “street name”
through a broker or other nominee, you should instruct your broker or nominee how to vote. A “broker non-vote” occurs when
a nominee holding shares for a beneficial owner returns a duly executed proxy that does not include any vote with respect to a particular
proposal because the nominee did not have discretionary voting power with respect to the matter being considered and did not receive
voting instructions from the beneficial owner. If that happens, the nominees may vote those shares only on matters deemed “routine,”
such as the ratification of auditors. Only Proposal No. 2 for the ratification of the appointment of PKF O’Connor Davies,
LLP as our independent registered public accounting firm is considered a “routine” matter. Thus, if you do not give your
broker or nominee specific voting instructions, your shares may only be voted for Proposal No. 2 and not voted for the other matters.
If your shares are not voted, they will not be counted in determining the number of votes cast. However, shares represented by such “broker
non-votes” will be counted for determining whether there is a quorum.
You may vote your shares at the Annual Meeting
via live webcast, over the internet, by telephone or by mail. If you wish to vote your shares at the Annual Meeting, there will be a
live link provided during the Annual Meeting. (You will need the virtual control number assigned to you.)
To
vote over the Internet, you must go to www.proxyvote.com. To vote by mail, complete, sign and return the proxy card in
the enclosed postage-paid envelope. If you properly complete your proxy card and send it to us in time to vote, your “proxy”
(one of the individuals named on your proxy card) will vote your shares as you have directed.
If you hold your shares through a bank, brokerage
firm or other nominee, you should vote your shares in accordance with the steps required by such bank, brokerage firm or other nominee.
Votes Required to Approve Each Proposal
With respect to the first proposal (election of
directors), directors are elected by affirmative vote by a plurality of the Common Stock entitled to vote at the Annual Meeting.
With respect to the second proposal (ratification
of the auditors), the affirmative vote of a majority of the votes cast at the Annual Meeting by the holders of shares of Common Stock
entitled to vote is required to approve this proposal
With respect to the third proposal (approval of
executive compensation), the affirmative vote of a majority of the votes cast at the Annual Meeting by the holders of shares of Common
Stock entitled to vote is required to approve this non-binding advisory resolution.
Voting: Revocation of Proxies
A form of proxy is enclosed for use at the Annual
Meeting if a shareholder is unable to attend the virtual Annual Meeting. Each proxy may be revoked at any time before it is exercised
by giving written notice of revocation to the Secretary of the Company, by filing a later dated proxy with the Secretary at any time prior
to its exercise or by attending the Annual Meeting and voting online, provided you file a written revocation with the Secretary of the
Annual Meeting prior to the voting of such proxy. The presence at the meeting of a stockholder who has given a proxy does not revoke the
proxy unless the stockholder files a notice of revocation or votes online. All shares represented by valid proxies pursuant to this solicitation
(and not revoked before they are exercised) will be voted as specified in the form of proxy. If no specification is given, the shares
will be voted in favor of the Board's nominees "for" director and "for" the other proposals described in this Proxy
Statement.
IMPORTANT NOTICE REGARDING THE AVAILABILITY
OF PROXY MATERIALS FOR THE ANNUAL MEETING OF SHAREHOLDERS OF INRAD OPTICS, INC. TO BE HELD ON JUNE 9, 2022. THIS PROXY STATEMENT,
THE ACCOMPANYING FORM OF PROXY CARD AND OUR ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2021, INCLUDING
FINANCIAL STATEMENTS, ARE AVAILABLE AT www.proxyvote.com. Under rules issued by the Securities and Exchange Commission (the
“SEC”), we are providing access to our proxy materials both by sending you this full set of proxy materials and by notifying
you of the availability of our proxy materials on the internet.
Costs of Solicitation
The entire cost of soliciting these proxies will
be borne by the Company. In following up the original solicitation of proxies by mail, the Company may make arrangements with brokerage
houses and other custodians, nominees and fiduciaries to send proxies and proxy materials to the beneficial owners of the stock and may
reimburse them for their expenses in so doing. If necessary, the Company may also use its officers and their assistants to solicit proxies
from the shareholders, either personally or by telephone or special letter.
PRINCIPAL SHAREHOLDERS
The following table presents certain information
available to the Company at the date hereof with respect to the security ownership of the Company’s Common Stock by (i) each
of the Company’s directors and nominees, (ii) each named executive officer of the Company, (iii) all executive officers
and directors as group, and (iv) each person known by the Company to beneficially own more than five percent (5%) of the Company's
common stock outstanding as of April 28, 2022. Percentages that include ownership of options or convertible securities are calculated
assuming exercise or conversion by each individual or entity of the options (including “out-of-the-money options”), or convertible
securities owned by each individual or entity separately without considering the dilutive effect of option exercises and security conversions
by any other individual or entity. Accordingly, the percentages may add to more than 100%. The address of each principal shareholder,
unless otherwise indicated, is c/o Inrad Optics, Inc., 181 Legrand Avenue, Northvale, NJ 07647.
| Beneficial Ownership of Common Stock |
| | |
| |
| |
| |
| Name and Address of Beneficial Owner | |
| Amount and
Nature of
Beneficial
Ownership | |
| |
| Percent of
Common
Stock | |
| William J. Foote | |
| 159,327 | |
(1) | |
| 0.8 | % |
| Luke P. LaValle, Jr. | |
| 80,000 | |
(2) | |
| 0.4 | % |
| Dennis G. Romano | |
| 80,000 | |
(3) | |
| 0.4 | % |
| N.E. Rick Strandlund | |
| 80,000 | |
(4) | |
| 0.4 | % |
| Jan M. Winston | |
| 80,000 | |
(5) | |
| 0.4 | % |
| Amy Eskilson | |
| 464,391 | |
(6) (11) | |
| 2.4 | % |
| George Murray | |
| 263,292 | |
(7) | |
| 1.3 | % |
| | |
| | |
| |
| | |
| All Directors and Executive | |
| 1,347,157 | |
(8) | |
| 6.9 | % |
| Officers as a group (9 persons) | |
| | |
| |
| | |
| | |
| | |
| |
| | |
| Clarex Ltd. & Welland Ltd. | |
| 7,782,839 | |
(9) | |
| 39.9 | % |
| Bay Street and Rawson Square | |
| | |
| |
| | |
| P.O. Box N 3016 | |
| | |
| |
| | |
| Nassau, Bahamas | |
| | |
| |
| | |
| | |
| | |
| |
| | |
| Emancipation Management LLC | |
| 3,790,937 | |
(10) | |
| 19.4 | % |
| 825 Third Avenue | |
| | |
| |
| | |
| New York, NY 10022 | |
| | |
| |
| | |
| | |
| | |
| |
| | |
| Inrad Optics, Inc. Employees 401(k) Plan | |
| 1,076,744 | |
(11) | |
| 5.5 | % |
| Amy Eskilson, as Trustee | |
| | |
| |
| | |
| 181 Legrand Avenue | |
| | |
| |
| | |
| Northvale, NJ 07647 | |
| | |
| |
| | |
| | |
| | |
| |
| | |
| Minerva Advisors LLC | |
| 1,116,203 | |
(12) | |
| 5.7 | % |
| 50 Monument Road, Suite 201 | |
| | |
| |
| | |
| Bala Cynwyd, PA 19004 | |
| | |
| |
| | |
| (1) | Including 108,333 shares issuable upon exercise of options exercisable within 60 days of April 28, 2022, 2,162 shares held, and
32,165 shares allocated to Mr. Foote in the Inrad Optics, Inc. 401(k) Plan over which he has voting and dispositive power. |
| (2) | Including 63,333 shares issuable upon exercise of options exercisable within 60 days of April 28, 2022. |
| (3) | Including 63,333 shares issuable upon exercise of options exercisable within 60 days of April 28, 2022. |
| (4) | Including 63,333 shares issuable upon exercise of options exercisable within 60 days of April 28, 2022. |
| (5) | Including 63,333 shares issuable upon exercise of options exercisable within 60 days of April 28, 2022. |
| (6) | Including 251,667 shares issuable upon exercise of options exercisable within 60 days of April 28,
2022, 15,000 shares held, and 114,391 shares allocated to Ms. Eskilson in the Inrad Optics, Inc. 401(k) Plan over which
she has voting and dispositive power. |
| (7) | Including 117,666 shares issuable upon exercise of options exercisable within 60 days of April 28,
2022, and 102,292 shares allocated to Mr. Murray in the Inrad Optics, Inc. 401(k) Plan over which he has voting and dispositive
power. |
| (8) | Including 1,057,667 shares issuable upon exercise of options exercisable within 60 days of April 28,
2022. |
| (9) | Including 2,500,000 shares and warrants to purchase an additional 1,875,000 shares at $1.35 per share
which are issuable upon conversion of convertible promissory notes and shares issuable upon conversion of accrued interest on convertible
promissory notes. |
| (10) | These figures are based upon information set forth in Schedule 13G filed January 27, 2022, on behalf
of the following reporting persons: |
Emancipation Management LLC
(a)
Circle N Advisors, LLC (a)
Charles Frumberg (a)
| (a) | Each of these reporting persons is deemed a beneficial owner of 3,790,937 shares of Inrad Optics, Inc.
held by Emancipation with shared investment power but no voting power with respect to these 3,790,937 shares. |
| (11) | These figures are based upon information provided by Amy Eskilson, Trustee of the 401(k) Plan. Ms. Eskilson,
as Trustee of the 401(k) Plan, shares voting power with respect to the shares held by the 401(k) Plan, but does not have dispositive
power over such shares. Ms. Eskilson disclaims beneficial ownership of the shares held by the 401(k) Plan, except to the extent
of the shares allocated to her in the 401(k) Plan in her individual capacity, and such shares are not reflected in the amounts of
shares listed as being beneficially held in her individual capacities in this table. |
| (12) | These figures are based upon information set forth in Schedule 13G filed February 9, 2021, on behalf
of the following reporting persons: |
Minerva Advisors LLC (a)
Minerva Group, LP (a)
Minerva GP, LP (a)
Minerva GP, Inc. (a)
David P. Cohen (a)
| (a) | Each of these reporting persons is deemed a beneficial owner of 1,116,203 shares of Inrad Optics, Inc.
held by Minerva Group, L.P., with both investment power and voting power with respect to these 1,116,203 shares. |
OTHER MATTERS
At the time this Proxy Statement was mailed to
shareholders, management was not aware that any other matter will be presented for action at the Annual Meeting. If other matters properly
come before the Meeting, it is intended that the shares represented by proxies will be voted with respect to those matters in accordance
with the best judgment of the persons voting them.
PROPOSAL ONE
ELECTION OF DIRECTORS
The Board is divided into three classes (Class I,
Class II and Class III) with directors of the Board (collectively, “Directors”) in each class serving staggered
three-year terms. At each annual meeting of shareholders, the terms of Directors in one of these three classes expire. At that annual
meeting of shareholders, Directors are elected to a Class to succeed the Directors whose terms are then expiring, with the terms
of that Class of Directors so elected to expire at the third annual meeting of shareholders, thereafter. There are currently six
members of the Board: two Class I Directors whose terms will expire at the 2023 Annual Meeting of Shareholders, two Class II
Directors whose term will expire at the 2024 Annual Meeting of Shareholders, and two Class III Directors whose terms expire at the
2022 Annual Meeting of Shareholders.
The following table sets forth the name and age
of the Class III nominees for election to the Board of Directors, the principal occupation or employment of the nominees for the
past five or more years, the principal business of the organization in which said occupation is or was carried on, the name or any other
public corporation for which the nominees serve or served during the past five years as a Board member, and the period during which the
nominees have served as a director of the Company.
Nominated to the Board of Directors:
| Name |
|
Age |
|
Since |
|
Positions; Business Experience |
| |
|
|
|
|
|
|
| Class III Directors — Term Expires in 2025 |
| Amy Eskilson |
|
61 |
|
2012 |
|
Director of the Company (October 2012 - present) |
| |
|
|
|
|
|
President and Chief Executive Officer of the Company (October 2012 - present) |
| |
|
|
|
|
|
Vice President of Sales and Marketing of the Company (February 2011-September 2012) |
| |
|
|
|
|
|
Director of Business Development, Thorlabs Inc. (2001-2011) |
| |
|
|
|
|
|
Sales, Technical Support and Marketing roles, Thor Labs Inc. (1992-2000) |
| |
|
|
|
|
|
|
| Jan M. Winston |
|
85 |
|
2000 |
|
Chairman of the Board of Directors of the Company (2009 - present) |
| |
|
|
|
|
|
Director of the Company (2000 - present) |
| |
|
|
|
|
|
Management Consultant (1997 - present) |
| |
|
|
|
|
|
Division Director/General Manager IBM Corporation (1981 - 1997) |
| |
|
|
|
|
|
Executive positions held in Development, Finance and Marketing |
Other
Continuing Directors:
| Name |
|
Age |
|
Since |
|
Positions; Business Experience |
| |
|
|
|
|
|
|
| Class I Directors — Term to Expire in 2023 |
| Dennis G. Romano |
|
79 |
|
2009 |
|
Director of the Company (September 2009 - present) |
| |
|
|
|
|
|
Consultant - Defense and Engineering/Construction Industry (2007 - 2009) |
| |
|
|
|
|
|
Senior Vice President of Business Development, Defense Business Unit, Washington Group International, a provider of engineering, construction and technical services (2002 – 2007) |
| |
|
|
|
|
|
Vice President, Business Strategy and Development, Northrop Grumman Corporation (1999 - 2001) |
| |
|
|
|
|
|
Various Senior and Executive Level Positions, Marketing, Business Development and Strategy, Northrop Grumman Corporation (1995 - 1999) |
| |
|
|
|
|
|
Vice President of Business Development, Grumman Aircraft Engineering Corporation (1993 - 1995) |
| |
|
|
|
|
|
Marketing and Business Development, Grumman Aircraft Engineering Corporation (1974 - 1993) |
| |
|
|
|
|
|
Aircrew member, flight test organization, Grumman Aircraft Engineering Corporation (1968 - 1974) |
| |
|
|
|
|
|
Avionics Technician, Grumman Aircraft Engineering Corporation (1964 - 1968) |
| |
|
|
|
|
|
|
| N.E. Rick Strandlund |
|
78 |
|
2009 |
|
Director of the Company (January 2009 - present) |
| |
|
|
|
|
|
Chairman, President and CEO, Nanoproducts Corporation, a producer and developer of nanoproduct materials and technologies (2005-2013) |
| |
|
|
|
|
|
President and CEO, Research Electro-Optics, Inc., a manufacturer of thin-film coatings and components (2002 - 2004) |
| |
|
|
|
|
|
President and COO, Research Electro-Optics, Inc. (1997 - 2002) |
| |
|
|
|
|
|
Vice-President/General Manager, Santa Rosa Division, Optical Coating Laboratory, Inc. (1993 - 1996) |
| |
|
|
|
|
|
Vice President/General Manager, Commercial Products Division, Optical Coating Laboratory, Inc. (1986 - 1993) |
| |
|
|
|
|
|
|
| Class II Directors — Term to Expire in 2024 |
| |
|
|
|
|
|
|
| William J. Foote |
|
71 |
|
2017 |
|
Director of the Company (October 2017 - present) |
| |
|
|
|
|
|
VP and Chief Accounting Officer, Inrad Optics Inc. (2018- 02/08/2019) |
| |
|
|
|
|
|
Chief Financial Officer, Inrad Optics, Inc. (2006 - 2018) |
| |
|
|
|
|
|
Secretary and Treasurer, Inrad Optics, Inc. (2009 – 2018) |
| |
|
|
|
|
|
Chief Financial Officer, INSL-X Products Corporation (2002 - 2005) |
| |
|
|
|
|
|
Chief Financial Officer, ASD Group (2000 – 2002) |
| |
|
|
|
|
|
Vice President Finance, Controller, Director, Benjamin Moore & Co. (1990 -1999) |
| |
|
|
|
|
|
|
| Luke P. LaValle, Jr., |
|
80 |
|
2005 |
|
Director of the Company (2005 - present) |
| |
|
|
|
|
|
President and Chief Executive Officer, American Capital Management Inc. (1980 - present) |
| |
|
|
|
|
|
Senior Investment Officer, United States Trust Company of NY (1967 - 1980) |
| |
|
|
|
|
|
Lt. Colonel, US Army Reserve (Retired) |
| |
|
|
|
|
|
|
The Board believes that the above-mentioned experience, along with the other experience, qualifications, attributes and skills of the Board members described in the summary below, provide the Company with the perspectives and judgment necessary to guide the Company’s strategies and monitor their execution.
Other Experience, Qualification, Attributes and Skills of Board Members
The Board considered the following experience,
qualifications, attributes and skills of its nominees and the other continuing elected directors in determining that each should serve
as a director of the Company:
Amy Eskilson
| • | More than 20 years of experience in operations, senior management and executive level positions in the
photonics industry in both domestic and global manufacturing environment |
| • | Broad and deep experience in acquisitions; facilitated 8 transactions in the photonics sector over a 9-year
period prior to joining Inrad Optics, Inc. |
| • | Founding team member experience involving privately funded high technology start-ups and R &
D institutional spin-off companies |
| • | Extensive experience working with government and university research facilities; defense, aerospace, and
technology corporations, small businesses and start-ups |
| • | Expertise in corporate and public relations, technology licensing, contracts, marketing and export control/ITAR,
corporate real estate and facilities management |
| • | Proven leadership and business building skills including strategic planning, manufacturing management,
corporate culture building and change management |
William J. Foote
| • | Financial and accounting professional with experience gained in a number of senior financial roles with
small and mid-cap manufacturing companies both public and private |
| • | Certified Public Accountant and Certified Professional Accountant in Canada |
| • | Membership in Illinois Society of CPAs and AICPA |
| • | Prior Board experience with Benjamin Moore & Co, Ltd. |
| • | Over 12 years as Chief Financial Officer of Inrad Optics, Inc. |
Luke P. LaValle, Jr.
| • | Investment professional with over 40 years of experience in analyzing, researching and investing in smaller
public growth companies with U.S. Trust Co. of New York and American Capital Management, Inc. Senior analyst and membership in the
NY Society of Security Analysts |
| • | Extensive board experience with V Band Corporation, a public company, from 1992 to 1995 and several private
companies including Benmarl Wine Company, Ltd. (1982-1992) and Westhampton Yacht Squadron, Ltd. (1985-1995) |
| • | Military experience with rank of Lieutenant Colonel, Military Intelligence, USAR (retired) and previous
assignments to Army Staff, Office of Operations, Plans and Strategy, The Pentagon and Intelligence Officer, 101st Airborne Division |
| • | Business and military experience includes analysis of tactical and strategic issues, the formation of
operational plans based upon situational experience and the development and assessment of alternative courses of action with practical
application to planning, direction, guidance and control of the operations of smaller sized organizations like Inrad Optics, Inc. |
| • | Chairman of the Company’s Audit Committee |
Denis G. Romano
| • | Global business experience in business development as Chief Business Development Officer of a business
unit of Washington Group International |
| • | Over 20 years of experience in business and strategy development for U.S. and International government
clients |
| • | Senior executive leadership for multiple business development organizations with a large international
presence |
| • | Operational management experience and joint leadership, in a $700 million business unit in the defense
sector with Washington Group International |
| • | Extensive background in business development, marketing and strategic development and implementation |
| • | Chairman of the Company’s Nominating Committee |
N.E. Rick Strandlund
| • | Global business experience as President and CEO of NanoProducts Corporation and as President and CEO of
Research Electro-Optics, Inc. |
| • | Thin-film optical coating experience as VP and General Manager of Optical Coating Laboratory, Inc. |
| • | Board experience as Chairman of the Board of NanoProducts and as a former director of Research Electro-Optics, Inc. |
| • | Strategic and business development leadership of two global high-tech, photonics related manufacturing
organizations |
| • | Prior leadership experience in new product and new technology development |
| • | MBA in Management and Bachelor of Science in Aerospace Engineering |
| • | Chairman of the Company’s Compensation Committee |
Jan M. Winston
| • | Extensive background in high technology sector and over 35 years with IBM in a variety of managerial and
executive positions primarily in the development of new computer systems and new software products such as the personal computer and speech
recognition software |
| • | Diverse experience gained through senior level roles in the areas of product development, marketing, finance,
planning and strategy, including general management and profit and loss responsibilities in both the domestic and international area |
| • | AB degree from Princeton University and attendance at the Columbia Graduate School of Business Administration |
| • | Experience as a management consultant serving clients such as IBM, as well as smaller manufacturing organizations,
covering various projects such as product management, strategic and financial planning, and management systems |
| • | Served as Chairman of the Audit Committee, Chairman of the Compensation Committee and is the current Chairman
of the Board |
The
Board of Directors unanimously recommends that you vote FOR the election of the Board’s nominees for Class III director:
Amy Eskilson and Jan M. Winston
PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
PKF O’Connor Davies, LLP served as the Company’s
independent registered public accounting firm since December 13, 2017, and has been appointed by the Company’s Audit Committee
to serve as the Company’s independent registered public accountants for the current fiscal year ending December 31, 2022.
The Company’s Audit Committee has the responsibility
to select, retain and oversee the work of outside auditors and, when appropriate, to replace the outside auditors. Stockholder ratification
of the appointment of PKF O’Connor Davies, LLP as the Company’s independent registered public accounting firm for the fiscal
year ending December 31, 2022, is not required by law or by the Company’s Certificate of Incorporation or by-laws. However,
the Board of Directors is submitting the selection of PKF O’Connor Davies, LLP to the Company’s stockholders for ratification
as a matter of good corporate governance and practice. If the stockholders fail to ratify the appointment, the Company will reconsider
whether or not to retain that firm. Even if the selection is ratified, the Company may appoint a different independent registered public
accounting firm during the year if the Audit Committee of the Board of Directors determines that such a change would be in the best interests
of the Company and its stockholders.
The Board of Directors unanimously recommends
that you vote FOR the proposal to ratify the appointment of PKF O’Connor Davies, LLP as the Company’s independent registered
public accounting firm for the fiscal year ending December 31, 2022.
PROPOSAL THREE
ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION
The Board of Directors is asking shareholders
to approve an advisory resolution on our named executive officer compensation as disclosed in this Proxy Statement. Our Compensation Committee
has structured our executive compensation program to attract, motivate and retain highly qualified employees, to align our executives’
interests with those of our shareholders and to provide our executives with certain additional compensation when superior financial results
are achieved. The Compensation Committee and the Board of Directors believe that our compensation policies and procedures are effective
in achieving our goals.
The Board of Directors is urging shareholders
to read the “Executive Compensation” section of this Proxy Statement beginning on page 19 of this Proxy Statement, which
includes the “Summary Compensation Table” and other related compensation tables, notes and narrative related to the compensation
of our named executive officers.
In accordance with the Dodd-Frank Wall Street
Reform and Consumer Protection Act, or the Dodd-Frank Act and Section 14A of the Exchange Act, as amended, and as a matter of good
corporate governance, the Board of Directors is asking shareholders to approve the following resolution at the 2022 Annual Meeting of
Shareholders:
RESOLVED, that the shareholders of Inrad Optics, Inc.
(the “Company”) approve the compensation of the Company’s named executive officers as disclosed in the Proxy Statement
for the Company’s 2022 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the SEC (which includes
the Executive Compensation section, the Summary Compensation Table and related narrative discussion).
Although this proposal, commonly referred to as
a “say-on-pay” vote, is an advisory vote that will not be binding on the Board of Directors or the Compensation Committee,
the Board of Directors and the Compensation Committee will consider the results of this advisory vote when making future decisions regarding
our named executive compensation program. The next such advisory vote on named executive officer compensation will occur at the Company’s
2023 Annual Meeting of Shareholders.
The Board of Directors unanimously recommends
that you vote FOR the approval, on an advisory basis, of the compensation of our named executive officers.
COMPENSATION OF DIRECTORS
Compensation for non-employee directors consists
of two components: cash (i.e., meeting attendance fees, retainer and cash bonuses) and awards under the Company’s 2020 Equity Compensation
Program (the “Program”). Under the Program, stock option grants and restricted stock unit grants may be made by the Compensation
Committee which serves as the Program Administrator. Equity-based grants are intended to align the interests of the Company’s directors
with that of other shareholders. The Company does not require its directors to own stock.
Fees paid to non-employee directors were $250
during fiscal year 2021 for each board or committee meeting attended from January through September and $500 for each meeting
attended from October through December. All Board meetings held during 2021 were held virtually.
In addition, each non-employee director is paid
an annual retainer fee, in quarterly installments. For 2021, the annual retainer was $15,500 for the Chairman, and $10,500 for each of
the other outside directors.
The Company provides for reimbursement of expenses
for all directors in the performance of their duties, including reasonable travel expenses incurred attending meetings.
Directors, who are also employees of the Company,
do not receive any additional fees for such services.
The table that follows provides information on
components of non-employee director compensation in 2021.
Director
Compensation Earned in Fiscal Year 2021
| | |
Fees earned or
paid in cash | | |
Option
Awards (1)(2) | | |
Total | |
| Name | |
$ | | |
$ | | |
$ | |
| William Foote | |
| 14,250 | | |
| 5,650 | | |
| 19,900 | |
| Luke P. LaValle, Jr. | |
| 14,250 | | |
| 5,650 | | |
| 19,900 | |
| N.E. Rick Strandlund | |
| 14,250 | | |
| 5,650 | | |
| 19,900 | |
| Luke P. LaValle, Jr. | |
| 14,250 | | |
| 5,650 | | |
| 19,900 | |
| Dennis Romano | |
| 14,250 | | |
| 5,650 | | |
| 19,900 | |
| Jan M. Winston | |
| 19,250 | | |
| 5,650 | | |
| 24,900 | |
| (1) | The value of stock option awards is computed in accordance with FASB ASC Topic 718. The Option Awards
reflect the aggregate grand date fair value of the awards. The Company granted 10,000 stock options with an exercise price of $0.62 to
each of the directors on March 24, 2021. The Company did not grant stock options to any of the non-employee directors during 2020. |
| (2) | The number of stock options which vested in 2021 to each non-employee director was as follows: William
J. Foote, 11,667; Luke P. LaValle, Jr., 6,667; Dennis G. Romano, 6,667; N.E. Rick Strandlund, 6,667; and Jan M. Winston, 6,667. As
of December 31, 2021, the aggregate number of option awards outstanding for each non-employee director then serving as a director
was as follows: William J. Foote, 115,000; Luke P. LaValle, Jr., 70,000; Dennis G. Romano, 70,000; N.E. Rick Strandlund, 70,000;
and Jan M. Winston, 70,000. |
THE BOARD OF DIRECTORS AND ITS COMMITTEES
Board of Directors
Composition of the Board
The Board of Directors in 2021 consisted of four
independent directors, the Company’s President and CEO, Amy Eskilson and William J. Foote, former Chief Financial Officer, Chief
Accounting Officer and Secretary who was unanimously elected to the Board on October 18, 2017. Mr. Foote retired as Chief Financial
Officer as of October 1, 2018, and Chief Accounting Officer as of February 8, 2019.
The Board of Directors has determined that each
of its four outside directors, Mr. Luke P. LaValle, Jr., Mr. Dennis G. Romano, Mr. N.E. Rick Strandlund and Mr. Jan
M. Winston has no material relationship with the Company (other than as director) and is therefore “independent” within the
meaning of the current listing standards of the Nasdaq Stock Market and applicable SEC rules. In its annual review of director independence,
the Board of Directors considers all commercial, banking, consulting, legal, accounting or other business relationships any director may
have with the Company. The Board of Directors considers a “material relationship” to be one that impairs or inhibits, or has
the potential to impair or inhibit, a director’s exercise of critical and disinterested judgment on behalf of the Company and its
shareholders. When assessing the “materiality” of a director’s relationship with the Company, the Board of Directors
considers all relevant facts and circumstances not only from the standpoint of the director in his or her individual capacity, but also
from the standpoint of the persons to whom the director is related and organizations with which the director is affiliated. Although
Mr. Foote is no longer employed by the Company, he continues to serve on the Board and is therefore not independent.
Ms. Eskilson does not serve on any Committees
of the Board. Mr. Jan M. Winston served as Chairman of the Board during the year. The Board met 12 times during fiscal year 2021,
and all meetings were held electronically. Board members are encouraged, but not required by any specific Board policy, to attend the
Company’s Annual Meeting.
All six Board members, then in office, were in
attendance at the 2021 Annual Meeting. Each Board member attended at least 75% of the aggregate of (i) the total number of meetings
of our Board (held during the period for which such directors served on the Board) and (ii) the total number of meetings of all committees
of our Board on which the director served (during the periods for which the director served on such committee or committees).
The by-laws of the Company provide for a range
of no less than four and no more than six directors.
The Board does not have a policy on whether or
not the roles of Chief Executive Officer and Chairman of the Board should be separate and, if they are to be separate, whether the Chairman
of the Board should be selected from the non-employee directors or be an employee. The Board believes that it should be free to make a
choice from time to time in any manner that is in the best interests of the Company and its shareholders.
Currently, Mr. Winston serves as the Chairman
of the Board and Ms. Eskilson serves as a director and Chief Executive Officer. The Board of Directors believes this is the most
appropriate structure for the Company at this time because it makes the best use of Mr. Winston’s skills and experience, including
more than 20 years as a director of the Company.
Board’s Role in the Oversight of Risk
Management
Companies face a variety of risks, including credit
risk, liquidity risk, and operational risk. In fulfilling its risk oversight role, the Board focuses on the adequacy of the Company’s
risk management process and overall risk management system. The Board believes an effective risk management system will (1) adequately
identify the material risks that the Company faces in a timely manner, (2) implement appropriate risk management strategies that
are responsive to the Company’s risk profile and specific material risk exposures, (3) integrate consideration of risk and
risk management into business decision-making throughout the Company, and (4) include policies and procedures that adequately transmit
necessary information with respect to material risks to senior executives and, as appropriate, to the Board or relevant committee.
The Audit Committee has been designated to take
the lead in overseeing risk management at the Board level. Accordingly, the Audit Committee schedules time for periodic review of risk
management, in addition to its other duties. In this role, the Audit Committee receives reports from management and other advisors, and
strives to generate serious and thoughtful attention to the Company’s risk management process and system, the nature of the material
risks the Company faces, and the adequacy of the Company’s policies and procedures designed to respond to and mitigate these risks.
Although the Board’s primary risk oversight
has been assigned to the Audit Committee, the full Board also periodically receives information about the Company’s risk management
system and the most significant risks that the Company faces. This is principally accomplished through Audit Committee reports to the
Board and summary versions of the briefings provided by management and advisors to the Committee.
In addition, the Board and the Audit Committee
encourage management to promote a corporate culture that understands risk management and incorporates it into the overall corporate strategy
and day-to-day business operations. The Company’s risk management structure also includes an ongoing effort to assess and analyze
the most likely areas of future risk for the Company. As a result, the Board and Audit Committee periodically ask the Company’s
executives to discuss the most likely sources of material future risks and how the Company is addressing any significant potential vulnerability.
Audit Committee
The Company has a separately designated standing
Audit Committee. Luke P. LaValle, Jr. has served as the Audit Committee Chairman since assuming the role in December 2006. The
three other members of the Audit Committee are Messrs. Romano, Strandlund and Winston. The Board of Directors has determined that
the members of the Audit Committee each satisfy the requirements for independence under applicable SEC rules, as well as the independence
standards of the NASDAQ Stock Market. In 2021, the Audit Committee was comprised of all independent outside directors throughout the year.
The Audit Committee is empowered by the Board of Directors to, among other things, serve as an independent and objective party to monitor
the Company’s financial reporting process, internal control system and disclosure control system, review and appraise the audit
efforts of the Company’s independent accountants, assume direct responsibility for the appointment, compensation, retention and
oversight of the work of the outside auditors and for the resolution of disputes between the outside auditors and the Company’s
management regarding financial reporting issues, and provide an open avenue of communication among the independent accountants, financial
and senior management, and the Company’s Board of Directors. The Audit Committee has adopted a written charter approved by the Board,
a copy of which is available on our website at www.inradoptics.com.
The Audit Committee met four times during 2021,
with all members in attendance at all of the meetings.
Audit Committee Financial Expert
The Board of Directors of the Company has determined
that Mr. LaValle is an “audit committee financial expert” as such term is defined under applicable SEC rules.
Compensation Committee
The Compensation Committee is comprised of all
outside directors, and is responsible for establishing appropriate salaries and bonuses for all executive officers and senior management
of the Company. N.E. Rick Strandlund has served as the Chairman of the Compensation Committee since his appointment in May 2009.
Messrs. Foote, LaValle, Romano, and Winston are also members of the Compensation Committee.
The Compensation Committee has the responsibility
of granting equity-based incentive compensation (i.e., stock options and grants of restricted stock units) to eligible employees including
the executive officers, and to its directors. The Compensation Committee duties also include administering and interpreting the Company’s
2020 Equity Compensation Program (“the Stock Compensation Plan”). The duties relating to the Company’s Stock Compensation
Plan include selecting from eligible employees those persons to whom awards will be granted and determining the type of award, the number
of shares to be included in each award, any restrictions for some or all of the shares subject to the award and the award price. The Compensation
Committee reviews and approves all matters regarding the compensation of the executive officers and other executives of the Company. The
Compensation Committee has no charter.
The Compensation Committee has the authority to
hire independent advisors to help fulfill its duties. No independent advisors were hired in 2021.
The Compensation Committee held two meetings during
2021 to review and establish compensation policy for the year with all members in attendance at both of the meetings.
Nominating Committee
During 2021, the Nominating Committee was comprised
of all outside directors. The Nominating Committee met once during the year with all members in attendance. The Committee strives to compose
the Board of Directors with a collection of individuals who bring a variety of complementary skills which, as a group, will possess the
appropriate skills and experience to oversee the Company’s business. Accordingly, although diversity may be a consideration in the
Committee’s process, the Committee and the Board of Directors do not have a formal policy with regard to the consideration of diversity
in identifying director nominees. The Nominating Committee has adopted a written charter approved by the Board, a copy of which is available
on our website at www.inradoptics.com.
Mr. Dennis Romano has served as Chairman
of the Nominating Committee since his appointment by the Board of Directors on January 18, 2012. The other four members of the Nominating
Committee are Messrs. Foote, LaValle, Strandlund, and Winston.
Procedures for Considering Nominations Made
by Stockholders
The
Nominating Committee’s charter describes procedures for nominations to be submitted by shareholders and other third-parties, other
than candidates who have previously served on the Board or who are recommended by the Board. The charter states that a nomination must
be delivered to the Secretary of the Company at the principal executive offices of the Company not later than the close of business on
the ninetieth (90th) day nor earlier than the close of business on the one hundred
twentieth (120th) day prior to the first anniversary of the preceding year's annual meeting;
provided, however, that if the date of the annual meeting is more than thirty days before or more than sixty days after such anniversary
date, notice to be timely must be so delivered not earlier than the close of business on the one hundred twentieth day prior to such annual
meeting and not later than the close of business on the later of the ninetieth day prior to such annual meeting or the close of business
on the tenth day following the day on which public announcement of the date of such meeting is first made by the Company. The public announcement
of an adjournment or postponement of an annual meeting will not commence a new time period (or extend any time period) for the giving
of a notice as described above. The charter requires a nomination notice to set forth as to each person whom the proponent proposes to
nominate for election as a director: (a) all information relating to such person that is required to be disclosed in solicitations
of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended (including such person's written consent to being named in the proxy statement as a nominee
and to serving as a director if elected), and (b) information that will enable the Nominating Committee to determine whether the
candidate satisfies the criteria established by the Nominating Committee, as described below:
Qualifications
The charter describes the minimum qualifications
for nominees and the qualities or skills that are necessary for directors to possess. Each nominee:
| • | must satisfy any legal requirements applicable to members of the Board; |
| • | must have business or professional experience that will enable such nominee to provide useful input to
the Board in its deliberations; |
| • | must have a reputation in the Company’s industry, for honesty and ethical conduct; |
| • | must have a working knowledge of the types of responsibilities expected of members of a board of directors
of a public corporation; and |
| • | must have experience, either as a member of the board of directors of another public or private company
or in another capacity that demonstrates the nominee’s capacity to serve in a fiduciary position |
Identification and Evaluation of Candidates
for the Board
Candidates to serve on the Board will be identified
from all available sources, including recommendations made by shareholders. The Nominating Committee’s charter provides that there
will be no differences in the manner in which the Nominating Committee evaluates nominees recommended by shareholders and nominees recommended
by the Committee or management, except that no specific process shall be mandated with respect to the nomination of any individuals who
have previously served on the Board. The evaluation process for individuals other than existing Board members will include:
| • | a review of the information provided to the Nominating Committee by the proponent; |
| • | a review of reference letters from at least two sources determined to be reputable by the Nominating Committee;
and |
| • | a personal interview of the candidate; and |
| • | a review of such other information as the Nominating Committee shall determine to be relevant. |
Third Party Recommendations
In connection with the 2022 Annual Meeting of
Shareholders, the Nominating Committee did not receive any nominations from any shareholder or group of shareholders which owned more
than 5% of the Company’s Common Stock for at least one year.
Communication with the Board
The Board has established a procedure that enables
shareholders to communicate in writing with members of the Board. Any such communication should be addressed to the Company’s Secretary
and should be sent to such individual c/o the Company at its principal place of business at 181 Legrand Ave, Northvale, NJ 07647. Any
such communication must state, in a conspicuous manner, that it is intended for distribution to the entire Board. Under the procedures
established by the Board, upon the Secretary’s receipt of such communication, the Company’s Secretary will send a copy of
such communication to each member of the Board, identifying it as a communication received from a shareholder. Absent unusual circumstances,
at the next regularly scheduled meeting of the Board held more than two days after such communication has been distributed, the Board
will consider the substance of any such communication.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Executive Officers of the Registrant
The following table sets forth the name and age
of each executive officer of the Company, the period during which each such person has served as an executive officer and the current
position with the Company held by each such person:
Executives Officers of the Registrant
| Name | |
Age | |
Since | |
Position with the Company |
| Amy Eskilson | |
61 | |
| 2012 | |
President and Chief Executive Officer |
| Theresa A. Balog | |
60 | |
| 2019 | |
Chief Financial Officer, Corporate Secretary and Treasuer |
| Thomas A. Caughey | |
73 | |
| 2011 | |
Vice President of Product Development |
| George Murray | |
58 | |
| 2013 | |
Vice President of Sales and Marketing |
Amy Eskilson joined the Company on February 2011,
as Vice President of Sales and Marketing and was appointed an officer on March 2011. She has held the position of President and CEO
since October 2012. From 2001 to 2011, she served as Director of Business Development for Thorlabs, Inc., a photonic tool catalog
company. In this role Ms. Eskilson coordinated a team responsible for eight acquisitions. She fostered the development
of multiple partner companies and executed both technology transfers and IP license agreements. Prior to that, she was the inside sales
and technical support manager for Thorlabs and served in various marketing roles beginning in 1992. Ms. Eskilson was involved as
a founding member in several private photonic companies including Nova Phase, Inc., Menlo Systems, Inc. and Idesta Quantum Electronics
where she also served on the Board of Directors. She received her BA in Communications in 1985 from Montclair State University.
Theresa A. Balog joined Inrad Optics in May 2019,
and was elected Chief Financial Officer, Corporate Secretary and Treasurer in June 2019. Ms. Balog has previously served as
Chief Financial Officer for Clear Align, LLC and MakerBot Industries, Vice President and Global Controller and Chief Accounting Officer
for VWR International, Executive Director for MSCI, Inc., and Vice President and Controller for KeySpan Energy. She has also held
a number of positions with Columbia Energy Group and served as on the board of SBLI USA. Ms. Balog is a Certified Public Accountant
and holds masters’ degrees from Wilmington University (HR Management) and the University of Delaware (Accounting), and a BBA from
St. Mary’s College.
Thomas A. Caughey has been with the Company since
1978. He was appointed an officer in March 2011 and serves as Vice-President of Product Development, a position he has held for more
than 16 years. His current role has focused on development of systems involving non-linear crystals, and advances in the development of
individual crystal components that the company manufactures. Previously, he was a research associate at Texas Tech University, working
in the area of picosecond spectroscopy of chemical reactions. Mr. Caughey holds a Doctorate in physical chemistry from the University
of Wisconsin – Madison and an undergraduate degree in chemistry from the University of Michigan – Ann Arbor.
George Murray assumed the role of Vice President
of Sales and Marketing in January 2013 and was appointed an officer at that time. He joined the Company as Sales Manager, West Region
in March 2010. Previously, he spent a number of years with Axsys Technologies Imaging Systems, a developer, manufacturer and distributor
of optical systems for the aerospace, defense, semiconductor, medical and graphic arts industries. In addition, he held increasingly responsible
roles in applications engineering, product marketing and sales management, including international sales, with Photon Dynamics, a provider
of inspection systems to the automotive, electronics and semiconductor industries. He also held sales engineer, product marketing manager
and system engineer roles with the Gerber group of Companies, a provider of inspection and imaging systems and CAD CAM software. Mr. Murray
holds an MBA from Rensselaer Polytechnic Institute and a B.S., Mechanical Engineering from the University of Connecticut.
Each of the executive officers has been elected
by the Board of Directors to serve as an officer of the Company until the next election of officers, as provided by the Company’s
by-laws.
Executive Compensation
The following Summary Compensation Table sets
forth, for the years ended December 31, 2021 and 2020, the compensation paid by the Company and its Subsidiaries, with respect to
the Company’s Chief Executive Officer and two other highest paid executives.
Summary Compensation Table
| | |
| | |
Salary | | |
Bonus | | |
Option
Awards | | |
Stock
Awards | | |
All Other
Compensation | | |
Total | |
| Name & Principal Position | |
Year | | |
$ | | |
$ | | |
$(1)(2) | | |
$ | | |
($3) | | |
$ | |
| Amy Eskilson | |
| 2021 | | |
| 198,763 | | |
| - | | |
| 31,000 | | |
| - | | |
| 9,484 | | |
| 239,247 | |
| President & CEO | |
| 2020 | | |
| 210,761 | | |
| - | | |
| - | | |
| - | | |
| 8,827 | | |
| 219,588 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Theresa Balog | |
| 2021 | | |
| 169,229 | | |
| - | | |
| 18,600 | | |
| - | | |
| 8,062 | | |
| 195,891 | |
| Chief Financial Officer | |
| 2020 | | |
| 179,152 | | |
| - | | |
| 21,150 | | |
| - | | |
| 1,765 | | |
| 202,067 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| George Murray | |
| 2021 | | |
| 148,931 | | |
| - | | |
| 12,400 | | |
| - | | |
| 7,114 | | |
| 168,445 | |
| Vice President, Sales & Marketing | |
| 2020 | | |
| 158,087 | | |
| - | | |
| - | | |
| - | | |
| 6,665 | | |
| 164,752 | |
| (1) | The aggregate grant date fair value of option awards and stock awards are computed in accordance with FASB ASC Topic 718, in accordance
with SEC rules. The valuation is based on the assumptions set forth in Note 10 to our Consolidated Financial Statements filed on March 30,
2022, with the Securities and Exchange Commission in our annual report on Form 10-K. |
| (2) | On March 24, 2021, 50,000, 30,000, and 20,000 stock options were awarded to Ms. Eskilson, Ms. Balog, and Mr. Murray,
respectively. The options have an exercise price of $0.62 per share and a fair value of $0.57 per share. On February 12, 2020, 15,000
stock options were awarded to Ms. Balog with an exercise price of $1.48 and a fair value of $1.41. All stock options granted in 2021
and 2020 have a ten-year term and vest over three years, one-third each year upon the anniversary of the grant. The amounts reflect the
aggregate grant date fair value of each award. |
| (3) | All Other Compensation includes the fair value of Company stock and cash contributed in 2021 and 2020,
as a match to the Company’s Section 401(k) Plan for individual executive contributions to the Plan in the 2021 and 2020
Plan years, respectively. This amounted to $9,484 for Ms. Eskilson, $8,062 for Ms. Balog, and $7,114 for Mr. Murray, respectively. |
Employment Agreements
The Company has not entered into any employment
agreement with any of Ms. Eskilson, Ms. Balog, or Mr. Murray.
Outstanding Equity-Based Awards at Fiscal
Year-End
The following table provides information pertaining
to vested and non-vested stock options held by each of the executive officers named in the Summary Compensation Table as of December 31,
2021.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
| | |
Option Awards (1) |
| Name & Principal Position | |
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable | | |
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable | | |
Option
Exercise
Price
$ | | |
Option
Expiration
Date |
| Amy Eskilson | |
| - | | |
| 50,000 | | |
| 1.20 | | |
02/24/32 |
| President & CEO | |
| 16,667 | | |
| 33,333 | | |
| 0.62 | | |
02/24/31 |
| | |
| 40,000 | | |
| | | |
| 0.71 | | |
02/27/29 |
| | |
| 40,000 | | |
| | | |
| 1.00 | | |
07/03/28 |
| | |
| 40,000 | | |
| | | |
| 0.57 | | |
01/18/27 |
| | |
| 40,000 | | |
| | | |
| 0.35 | | |
02/22/26 |
| | |
| 25,000 | | |
| | | |
| 0.19 | | |
01/13/25 |
| | |
| 20,000 | | |
| | | |
| 0.27 | | |
01/21/24 |
| | |
| 30,000 | | |
| | | |
| 0.50 | | |
09/12/22 |
| Total | |
| 251,667 | | |
| 83,333 | | |
| | | |
|
| | |
| | | |
| | | |
| | | |
|
| Theresa Balog | |
| - | | |
| 30,000 | | |
| 1.20 | | |
02/24/32 |
| Chief Financial Officer | |
| 10,000 | | |
| 20,000 | | |
| 0.62 | | |
02/24/31 |
| | |
| 10,000 | | |
| 5,000 | | |
| 1.48 | | |
02/12/30 |
| | |
| 10,000 | | |
| 5,000 | | |
| 1.80 | | |
05/16/29 |
| Total | |
| 30,000 | | |
| 60,000 | | |
| | | |
|
| | |
| | | |
| | | |
| | | |
|
| George Murray | |
| - | | |
| 30,000 | | |
| 1.20 | | |
02/24/32 |
| Vice President, Sales & Marketing | |
| 6,667 | | |
| 13,334 | | |
| 0.62 | | |
02/24/31 |
| | |
| 20,000 | | |
| - | | |
| 0.71 | | |
02/27/29 |
| | |
| 20,000 | | |
| - | | |
| 1.00 | | |
07/03/28 |
| | |
| 15,000 | | |
| - | | |
| 0.57 | | |
01/18/27 |
| | |
| 15,000 | | |
| - | | |
| 0.35 | | |
02/22/26 |
| | |
| 20,000 | | |
| - | | |
| 0.19 | | |
01/13/25 |
| | |
| 6,000 | | |
| - | | |
| 0.27 | | |
01/21/24 |
| | |
| 15,000 | | |
| - | | |
| 0.50 | | |
09/12/22 |
| Total | |
| 117,667 | | |
| 43,334 | | |
| | | |
|
| | |
| | | |
| | | |
| | | |
|
| | |
| | | |
| | | |
| | | |
|
| Thomas Caughey | |
| 15,000 | | |
| - | | |
| 0.71 | | |
02/27/29 |
| Vice President, Research & Development | |
| 10,000 | | |
| - | | |
| 1.00 | | |
07/03/28 |
| | |
| 1,667 | | |
| - | | |
| 0.35 | | |
02/22/26 |
| Total | |
| 26,667 | | |
| - | | |
| | | |
|
| (1) | Options have a ten-year term and vest over three years, one third each year upon each anniversary of the grant. |
Equity Compensation Plan Information
The following table give the information about
the Company’s Common Stock that may be issued upon the exercise of options, warrants, and rights under the Company’s 2010
Equity Compensation Program and the 2020 Equity Compensation Plan, as of December 31, 2021. These Plans were the Company’s
only equity compensation Plans in existence as of December 31, 2021.
| Plan Category | |
Number of Securities to
be Issued Upon Exercise
of Outstanding Options,
Warrants, and Rights | | |
Weighted-Average
Exercise Price of
Outstanding Options,
Warrants, and Rights | | |
Number of Securities
Remaining Available for
Future Issance Under
Equity Compensation
Plans (Excluding
Securities Reflected in
Column (a) | |
| Equity Compensation Plans Approved by Shareholders (1) | |
| 1,352,667 | | |
$ | 0.69 | | |
| 3,600,000 | |
| Equity Compensation Plans Not Approved by Shareholders | |
| - | | |
$ | - | | |
| - | |
| Total | |
| 1,352,667 | | |
$ | 0.69 | | |
| 3,600,000 | |
| (1) | The 2020 Equity Compensation Program was adopted by the Company’s shareholders at the Annual Meeting
held on June 23, 2020. Under this Program, an aggregate of up to 4,000,000 shares of common stock may be granted. The 2010 Equity
Compensation Program expired on June 2, 2020, and each outstanding option, warrant and right granted under the Program expired on
the date determined under the terms of the original award, which in no event, exceeded 10 years. As of December 31, 2021, there was
a total of 1,150,867 options outstanding under the 2010 Plan. In 2021, 198,200 stock options expired or were forfeited under the 2010
Plan. Under the 2020 Equity Compensation Plan, a total of 200,000 stock options were awarded to employees during 2021. No stock options
were exercised under the 2010 Equity Compensation Plan or the 2020 Equity Compensation Plan in 2021. |
Certain Relationships and Related Party Transactions
The documented ethics policies of the Company
restrict certain types of related party transactions between the Company and its directors, officers, and employees of the Company. Specifically,
compensation for services provided by directors, officers, and employees to the Company may not be through any source but the Company.
The Company’s policies do permit related parties to participate in financial transactions, limited to financing via debt or equity.
In such instances, the Company has an informal policy of requiring that the terms of such financing, including but not limited to interest
rates and fees, are at least equal to or better than the terms obtainable via financing from other sources. The Audit Committee is responsible
for the review and approval of all related party transactions.
On July 22, 2020, the maturity dates of a
$1,500,000 Subordinated Convertible Promissory Note to Clarex Limited (“Clarex”) and a $1,000,000 Subordinated Convertible
Promissory Note to an affiliate of Clarex were each extended to April 1, 2024, from April 1, 2021. The notes bear interest at
6%. Interest accrues yearly and is payable on maturity. Unpaid interest, along with principal, may be converted into securities of
the Company as follows: the notes are convertible in the aggregate into 1,500,000 units and 1,000,000 units, respectively, with each unit
consisting of one share of common stock and one warrant. Each warrant allows the holder to acquire 0.75 shares of common stock at a price
of $1.35 per share. As part of the agreement to extend the maturity date of the notes, the expiration dates of the warrants were extended
from April 1, 2024 to April 1, 2027.
No payments against the total principal of $2,500,000
have been made. In 2021, the Company paid a total of $150,000 in interest on the outstanding Subordinated Convertible Notes described
above. Accrued interest on the notes amounted to $37,500 as of December 31, 2021.
Code of Ethics
The Company has adopted a Code of Ethics that
applies to the Company’s principal executive officer, principal financial officer, principal accounting officer or controller (or
persons performing similar functions). A copy of such Code of Ethics is available on the Company website at www.inradoptics.com
and will be made available without charge and upon written request addressed to the attention of the Secretary of the Company and mailed
to the Company’s principal executive offices, 181 Legrand Avenue, Northvale, NJ 07647. If the Company makes any substantive amendments
to the Code of Ethics or grants any waiver, including any implicit waiver from a provision of the Code of Ethics to its directors or executive
officers, the Company will disclose the nature of such amendments or waiver in its website or in a current report on Form 8-K.
Relationship with Independent Public Accountants
PKF O’Connor Davies LLP, (the “Auditors”)
independent registered public accountants, has been selected by the Audit Committee to examine and report on the financial statements
of the Company for the fiscal year ending December 31, 2022.
Householding of Annual Meeting Materials
Some banks, brokers and other nominee record holders
may be participating in the practice of “householding” proxy statements. This means that only one copy of this Proxy Statement
may have been sent to multiple stockholders in the same household. We will promptly deliver a separate copy of this Proxy Statement to
any stockholder upon written or oral request to: Inrad Optics, Inc., 181 Legrand Avenue, Northvale, New Jersey 07647, Attn.: Secretary,
or by phone at (201) 767-1910. Any stockholder who wants to receive a separate copy of this Proxy Statement, or of our proxy statements
or annual reports in the future, or any stockholder who is receiving multiple copies and would like to receive only one copy per household,
should contact the stockholder’s bank, broker, or other nominee record holder, or the stockholder may contact us at the address
and phone number above.
Principal Accounting Fees and Services
In accordance with the requirements of the Sarbanes-Oxley
Act of 2002 and the Audit Committee’s charter, all audit and audit-related work and all non-audit work performed by the Company’s
independent accountants is approved in advance by the Audit Committee, including the proposed fees for such work. The Audit Committee
is informed of each service actually rendered.
Audit Fees.
Audit fees billed or expected to be billed by
the Company’s principal accountant, PKF O’Connor Davies, LLP for the audit of the financial statements included in the Company’s
Annual Reports on Form 10-K for the year ended December 31, 2021, were $72,500. Audit fees billed or expected to be billed by
PFK for the audit of the financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31,
2020, were $69,500.
Audit-Related Fees
The Company was billed $0 by the Company’s
principal accountants for each of the fiscal years ended December 31, 2021 and 2020, for assurance and related services that are
reasonably related to the performance of the audit or review of the Company’s financial statements and are not reported under the
caption “Audit Fees” above.
Tax Fees
The Company was billed or is expected to be billed
an aggregate of $16,500 by the Company’s principal accountants for each of the fiscal year ended December 31, 2021 for tax
services, principally the preparation of income tax returns. The Company was billed or is expected to be billed an aggregate of $15,000
for tax services, principally the preparation of income tax returns for the fiscal year ended December 31, 2020.
All Other Fees
The Applicable law and regulations provide an
exemption that permits certain services to be provided by the Company’s outside auditors even if they are not pre-approved. The
Company has not relied on this exemption at any time since the Sarbanes-Oxley Act was enacted. The Company did not have any other fees
in 2021 and 2020.
Audit Committee Report
In connection with the preparation and filing
of the Company’s Annual Report on Form 10-K for the year ended December 31, 2021:
| (1) | the Audit Committee reviewed and discussed the audited financial statements with the Company’s management; |
| (2) | the Audit Committee discussed with the Company’s independent auditors the matters required to be discussed by the applicable
requirements of the Public Company Accounting Oversight Board and the SEC; |
| (3) | the Audit Committee received and reviewed the written disclosures and the letter from the Company’s independent auditors required
by the Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees) and discussed with the Company’s
independent auditors any relationships that may impact their objectivity and independence and satisfied itself as to the auditor’s
independence; and |
based on the review and discussions referred to
above, the Audit Committee recommended to the Board that the audited financial statements be included in the 2021 Annual Report on Form 10-K,
as filed with the SEC on March 30, 2022.
This report shall not be deemed incorporated by
reference by any general statement incorporating this Proxy Statement by reference to any filing under the Securities Act of 1933, as
amended, or under the Securities Exchange Act of 1934, as amended, and shall not be deemed filed under either of such acts except to the
extent that the Company specifically incorporates this information by reference.
This report is furnished by the Audit Committee
of the Board of Directors.
Luke P. LaValle, Jr., Audit Committee Chairman
Dennis Romano
N.E. Rick Strandlund
Jan M. Winston
NOTICE REGARDING FILING OF SHAREHOLDERS PROPOSALS
AT 2022 ANNUAL MEETING
Any proposal intended to be presented by a shareholder
at the 2022 Annual Meeting of Shareholders must be received by the Company at the Company’s principal executive offices, 181 Legrand
Avenue, Northvale, NJ 07647, no later than the close of business on December 30, 2022, to be considered for inclusion in the Proxy
Statement for the 2023 Annual Meeting and by March 31, 2023, in order for the proposal to be considered timely for consideration
at next year’s Annual Meeting (but not included in the Proxy Statement for such meeting).
The Annual Meeting of Shareholders is called for
the purposes set forth in the Notice. The Board does not know of any matter for action by shareholders at such meeting other than the
matters described in the Notice. However, the enclosed proxy will confer discretionary authority with respect to matters which are not
known at the date of printing hereof which may properly come before the meeting. It is the intention of the person named in the proxy
to vote in accordance with their judgment on any such matter.
You are cordially invited to attend the Annual
Meeting. Your participation in discussion of the Company’s affairs will be welcome.
| |
/s/ Theresa A. Balog |
| |
Theresa A. Balog, Secretary |
Dated: April 29, 2022
A copy of the Company's annual report on Form 10-K
for the fiscal year ended December 31, 2021, filed with the Securities and Exchange Commission containing consolidated financial
statements of the Company as of December 31, 2021, is available (excluding exhibits) without cost to shareholders upon written request
to Theresa A. Balog, Secretary, Inrad Optics, Inc., 181 Legrand Avenue, Northvale, NJ 07647. The annual report is not to be
regarded as proxy soliciting material or as a communication by means of which any solicitation is to be made.
| THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
Signature (Joint Owners) Signature [PLEASE SIGN WITHIN BOX] Date Date
SCAN TO
VIEW MATERIALS & VOTE
To withhold authority to vote for any
individual nominee(s), mark “For All
Except” and write the number(s) of the
nominee(s) on the line below.
0 0 0
0 0 0
0 0 0
0000569774_1 R1.0.0.24
For Withhold For All
All All Except
The Board of Directors recommends you vote FOR
the following:
1. Election of Directors
Nominees
01) Amy Eskilson 02) Jan M. Winston
INRAD OPTICS, INC.
ATTN:THERESA A. BALOG
181 LEGRAND AVENUE
NORTHVALE, NJ 07647
VOTE BY INTERNET - www.proxyvote.com or scan the QR Barcode above
Use the Internet to transmit your voting instructions and for electronic delivery of
information up until 11:59 P.M. Eastern Time the day before the cut-off date or
meeting date. Have your proxy card in hand when you access the web site and
follow the instructions to obtain your records and to create an electronic voting
instruction form.
VOTE BY INTERNET AT THE MEETING - http://viewproxy.com/InradOptics/2022/vm
Attend the meeting via the Internet and vote during the meeting provided certain
requirements are met. In order to participate in the Annual Meeting live via the Internet,
you must register at http://viewproxy.com/InradOptics/2022 by 11:59 P.M. Eastern Time
by June 6, 2022.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M.
Eastern Time the day before the cut-off date or meeting date. Have your proxy card in
hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have
provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood,
NY 11717.
The Board of Directors recommends you vote FOR proposals 2 and 3: For Against Abstain
2. Ratify PKF O'Connor Davies, LLP as the independent registered public accounting firm for the fiscal year
ending December 31, 2022.
3. Approve, as a non-binding advisory vote, our named executive officer compensation.
NOTE: Transact such other business as may properly come before the meeting or any adjournment thereof. UNLESS
OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED AS RECOMMENDED BY THE BOARD OF DIRECTORS.
Please sign exactly as your name(s) appear(s) hereon. When signing as
attorney, executor, administrator, or other fiduciary, please give full
title as such. Joint owners should each sign personally. All holders must
sign. If a corporation or partnership, please sign in full corporate or
partnership name by authorized officer. |
| 0000569774_2 R1.0.0.24
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:
The Notice and Proxy Statement and 10K Wrap are available at
www.proxyvote.com
INRAD OPTICS, INC.
Annual Meeting of Shareholders
Thursday, June 9, 2022 at 10:00 AM
This proxy is solicited by the Board of Directors
The
undersigned
appoints
Amy
Eskilson
and
Jan
M.
Winston,
or
either
of
them,
as
Proxies,
each
with
the
power
to
appoint
his
or
her
substitute,
and
hereby
authorizes
them
to
represent
and
to
vote,
for
and
on
behalf
of
the
undersigned,
all
the
shares
of
common
stock
of
Inrad
Optics,
Inc.
held
of
record
by
the
undersigned
on
April
28,
2022,
at
the
Annual
Meeting
of
Shareholders
of
the
Company
to
be
held
via
the
internet
at
http://viewproxy.com/
InradOptics/
2022/
vm,
on
Thursday,
June
9,
2022,
at
10:00
AM
Eastern
Daylight
Time
or
any
adjournment
there
of
upon
matters
properly
coming
before
the
meeting,
as
set
forth
in
the
Notice
of
Annual
Meeting
and
Proxy
Statement,
both
of
which
have
been
received
by
the
undersigned
and
upon
all
such
other
matters
that
may
properly
be
brought
before
the
meeting,
as
to
which
the
undersigned
confers
discretionary
authority
upon
said
proxies.
Without
otherwise
limiting
the
general
authorization
given
hereby,
said
proxies
are
instructed to vote as directed on the reverse side. In
order
to
participate
in
the
Annual
Meeting
live
via
the
Internet,
you
must
register
at
http://viewproxy.com/
InradOptics/
2022
by 11:59 PM Eastern Time by June 6, 2022.
Continued and to be signed on reverse side |
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