SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities and 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
RESEARCH FRONTIERS INCORPORATED
(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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (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 fees 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:
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
June 8, 2006
To the Stockholders of Research Frontiers Incorporated:
Notice is hereby given that the Annual Meeting of Stockholders
of Research Frontiers Incorporated (the "Company") will be held at the
Fox Hollow Inn, 7725 Jericho Turnpike, Woodbury, New York 11797,
on June 8, 2006 at 11:00 A.M., local time, for the following purposes:
1. To elect one Class I director;
2. To ratify the selection of BDO Seidman, LLP as the
independent accountants of the Company for the fiscal year ending
December 31, 2006;
3. To adopt an amendment to the Research Frontiers Incorporated
1998 Stock Option Plan which has been approved by the Board of
Directors of the Company to increase the number of shares which may
be issued upon the exercise of options and other awards granted under
the 1998 Stock Option Plan by 675,000 shares of Common Stock of
the Company; and
4. To transact such other business as may properly come before
the meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on April
18, 2006 as the record date for the determination of stockholders
entitled to notice of, and to vote at, the meeting or any adjournments
thereof.
Management requests all stockholders to sign and date the
enclosed form of proxy and return it in the postage paid, self-addressed
envelope provided for your convenience. Please do this whether or not
you plan to attend the meeting. Should you attend, you may, if you
wish, withdraw your proxy and vote your shares in person.
By Order of the Board of Directors,
VICTOR F. KEEN, Secretary
Woodbury, New York
April 30, 2006
RESEARCH FRONTIERS INCORPORATED
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
To be held Thursday, June 8, 2006
This Proxy Statement is furnished by the Board of Directors
of Research Frontiers Incorporated (the "Company") in connection
with the solicitation by the Company of proxies to be voted at the
Annual Meeting of Stockholders which will be held at the Fox
Hollow Inn, 7725 Jericho Turnpike, Woodbury, New York 11797,
on June 8, 2006, at 11:00 A.M., local time, and all adjournments
thereof.
Any stockholder giving a proxy will have the right to revoke
it at any time prior to the time it is voted. A proxy may be revoked
by written notice to the Company, Attention: Secretary, by
execution of a subsequent proxy or by attendance and voting in
person at the Annual Meeting of Stockholders. Attendance at the
meeting will not automatically revoke the proxy. All shares
represented by effective proxies will be voted at the Annual
Meeting of Stockholders, or at any adjournment thereof. Unless
otherwise specified in the proxy, shares represented by proxies will
be voted (i) for the election of the nominees for director listed
below, (ii) for the ratification of the selection of the independent
accountants, and (iii) for adoption of the proposed amendment to
the Company's 1998 Stock Option Plan. The cost of proxy
solicitations will be borne by the Company. In addition to
solicitations of proxies by use of the mails, some officers or
employees of the Company, without additional remuneration, may
solicit proxies personally or by telephone. The Company will also
request brokers, dealers, banks and their nominees to solicit
proxies from their clients, where appropriate, and will reimburse
them for reasonable expenses related thereto.
The Company's executive offices are located at 240
Crossways Park Drive, Woodbury, New York 11797-2033.
Research Frontiers encourages you to communicate with your
Company. If you are interested in communicating directly with the
entire board of directors of the Company, you may do so by
sending an email to Directors@SmartGlass.com and your email
will be sent directly to each member of the Company's Board of
Directors automatically. On or about April 30, 2006 this Proxy
Statement and the accompanying form of proxy together with a
copy of the Annual Report of the Company for the year ended
December 31, 2005, including financial statements, are to be
mailed to each stockholder of record at the close of business on
April 18, 2006.
VOTING SECURITIES
Only stockholders of record at the close of business on April
18, 2006 are entitled to vote at the meeting. As of April 18, 2006,
the Company had issued and outstanding and entitled to vote
13,812,559 shares of common stock, par value $0.0001 per share
(the "Common Stock"), the Company's only class of voting
securities outstanding. Each share of Common Stock entitles the
holder thereof to one vote. The majority of all the outstanding
shares of Common Stock will constitute a quorum at the meeting.
A shareholder voting either in person or through a proxy who
abstains with respect to a matter being voted upon is considered to
be present and entitled to vote on such matter at the meeting, and
is in effect a negative vote upon such matter, but a shareholder
(including a broker) who does not give authority to a proxy to
vote, or withholds authority to vote, on a matter shall not be
considered present and entitled to vote on the matter.
The following table sets forth certain information with respect
to those persons or groups known to the Company who
beneficially own more than 5% of the Company's Common Stock,
and for all directors and executive officers of the Company
individually and as a group.
Total Exercisable Percent
Beneficial Warrants of
Name of Beneficial Owner Ownership(1) and Options Class
Robert L. Saxe . . . . . . . . . . . . 1,539,984(2) 1,122,293 10.31
c/o Research Frontiers Incorporated
240 Crossways Park Drive
Woodbury, NY 11797
Joseph M. Harary . . . . . . . . . . . 625,274(3) 512,100 4.36
Robert M. Budin. . . . . . . . . . . . 272,877 240,000 1.94
Victor F. Keen . . . . . . . . . . . . 375,399 150,000 2.69
Albert P. Malvino. . . . . . . . . . . 195,700 102,500 1.41
Michael R. LaPointe. . . . . . . . . . 119,009(4) 114,500 0.85
All directors and officers
as a group (6 persons). . . . . . . . 2,986,394(5) 2,241,393 18.60
---------------------------------------
(1) All information is as of April 18, 2006 and was determined in
accordance with Rule 13d-3 under the Securities Exchange
Act of 1934 based upon information furnished by the persons
listed or contained in filings made by them with the Securities
and Exchange Commission or otherwise known to the
Company. Unless otherwise indicated, beneficial ownership
disclosed consists of sole voting and dispositive power.
Shares of Common Stock of the Company acquired by
officers, directors and employees through the exercise of
stock options or otherwise are subject to restrictions on their
transfer, including restrictions imposed by applicable
securities laws, as well as additional restrictions imposed by
the Company in accordance with written agreements and
policy statements.
(2) Includes (i) 2,687 shares of Common Stock owned by Mr.
Saxe's wife, Marie Saxe; (ii) 66,954 shares owned by a trust
u/w Leonard S. Saxe for which Mr. Saxe serves as a co-
trustee, and has a beneficial interest in one-half of the income
from such trust; and (iii) 11,250 shares of Common Stock
owned by a trust for the children of the late George Backer
and certain others for which Mr. Saxe serves as sole trustee.
Mr. Saxe disclaims beneficial ownership to all securities
described in items (i) and (iii) above.
(3) Includes 11,400 shares of Common Stock owned by Mr.
Harary's minor children, as to which shares Mr. Harary
disclaims beneficial ownership.
(4) Includes 898 shares of Common Stock owned by Mr.
LaPointe's wife, as to which shares Mr. LaPointe disclaims
beneficial ownership.
(5) Includes the securities described above in footnotes (2)
through (4).
ELECTION OF DIRECTORS
(Item 1)
Pursuant to the Company's By-Laws, five Directors constitute
the entire Board of Directors of the Company. A majority of the
Board of Directors of the Company are independent directors. The
Board of Directors is divided into three classes, as nearly equal in
number as possible. Each class serves three years, with the terms
of office of the respective classes expiring in successive years. The
term of office of the director in Class I expires at the 2006 Annual
Meeting of Stockholders. The Board of Directors proposes that the
nominee described below be elected to hold office for a three-year
term expiring at the 2009 Annual Meeting of Stockholders, and
until the election and qualification of his respective successor. If
no other choice is specified in the accompanying proxy, the
persons named therein have advised management that it is their
present intention to vote the proxy for the election of the nominee
set forth below. Each of the members of the Board of Directors of
the Company, including the nominee listed below, is presently a
director of the Company, and was elected to such office by the
stockholders of the Company. Should the nominee become unable
to accept nomination or election, it is intended that the persons
named in the accompanying proxy will vote for the election of
such other person as management may recommend in the place of
such nominee. There is no indication at present that the nominee
will be unable to accept nomination.
The following biographical information is provided with
respect to each director:
Director Standing for Election
Joseph M. Harary
Mr. Harary, age 45, became Vice President and General Counsel
to the Company in April 1992 and has been a director of the
Company since February 1993. In December 1999, Mr. Harary
was promoted to the position of Executive Vice President and
General Counsel, and in February 2002 was promoted to the
position of President and Chief Operating Officer of the Company.
Mr. Harary has also been the Treasurer and Chief Financial Officer
of the Company since 2005. Mr. Harary has been counsel to the
law firms of Eiseman, Levine, Lehrhaupt & Kakoyiannis, and
Kronish, Lieb, Weiner & Hellman LLP, both located in New York,
New York, since 1992. Mr. Harary was associated with the law
firm of Howard, Darby & Levin from 1990 to 1992, and with the
law firm of Kronish, Lieb, Weiner & Hellman from 1986 to 1990.
Mr. Harary graduated Summa Cum Laude from Columbia College
in 1983 with an A.B. degree in economics, and received a Juris
Doctor degree from Columbia Law School in 1986. Prior to
attending law school, Mr. Harary was an economist with the
Federal Reserve Bank of New York.
Directors Continuing in Office
Class II - Term Expires at the 2007 Annual Meeting of Stockholders
Victor F. Keen
Victor F. Keen, age 65, has been a director of the Company since
June 2001, and has served as the Company's corporate Secretary
since 1987. Mr. Keen is a partner and chairman of the tax
department of the law firm of Duane Morris LLP, a law firm with
over 500 attorneys and offices in 19 cities throughout the U.S. and
Europe. Mr. Keen is a graduate of Trinity College (1963) and
Harvard Law School (1966). Mr. Keen serves as Chairman of the
Company's Compensation Committee.
Albert P. Malvino
Albert P. Malvino, age 75, has been a director of the Company
since August 2002 and has also been a member of the Company's
Advisory Board since June 2002. Dr. Malvino serves as Chairman
of the Company's Nominating Committee. Dr. Malvino trained at
the Naval Electronics Technician School and graduated from the
University of Santa Clara Summa Cum Laude in 1959 with a B.S.
degree in Electrical Engineering. For the next five years, he
worked as an electronics engineer at Microwave Laboratories and
at Hewlett-Packard while earning his MSEE from San Jose State
University in 1964. He then taught at Foothill College for the next
four years, wrote five textbooks, and was awarded a National
Science Foundation Fellowship in 1968. After receiving a Ph.D.
in Electrical Engineering from Stanford University in 1970, Dr.
Malvino embarked on a full-time writing career, creating and
revising electronics-technology textbooks now used throughout the
world. In 1984, he founded Malvino Inc. to publish animated
textbooks and other educational software for electronics. He has
written 10 textbooks that are used at universities, technical
institutes and corporations worldwide and which have been
translated into 20 foreign languages with over 108 editions, and
which have sold over 2 million copies.
Class III - Term Expires at the 2008Annual Meeting of Stockholders
Robert L. Saxe
Mr. Saxe, age 70, is a founder of the Company and has been
Chairman of the Board of Directors of the Company since its
inception in 1965, was its President from 1966 to February 2002,
and Treasurer from 1966 to 2005. He graduated from Harvard
College in 1956 with an A.B. degree, Cum Laude in General
Studies (with a major in physics). Mr. Saxe also received an
M.B.A. degree from Harvard Business School in 1960.
Robert M. Budin
Mr. Budin, age 73, has been a director of the Company since 1987.
Mr. Budin was a Senior Vice President of Harold C. Brown & Co.,
Inc. until his retirement in 1990. Mr. Budin was a stockbroker and
had been employed at Harold C. Brown & Co., Inc. since 1963.
Mr. Budin serves as Chairman of the Company's Audit Committee.
The Board of Directors has an Executive Committee
composed of Robert L. Saxe, Joseph M. Harary and Robert M.
Budin. The Board of Directors also has an Audit Committee, a
Compensation Committee, and a Nominating Committee. The
members of each of these three latter committees, Robert M.
Budin, Victor F. Keen, and Albert P. Malvino, consists solely of
the three non-management directors, each of whom the Board has
determined meets the independence requirements under the
applicable listing standards of the NASDAQ National Market
governing the independence of directors. During fiscal 2000, the
Audit Committee of the Board of Directors developed a written
charter for the Committee that was approved by the Board of
Directors which was updated in 2004 and attached as an exhibit to
the Company's 2004 Proxy Statement. The Compensation
Committee and Nominating Committee, are not required to, and do
not have, written charters.
The Audit Committee reviews and reports to the Board of
Directors with respect to various auditing and accounting matters,
including the nomination of the Company's independent public
accountants, the scope of audit procedures, general accounting
policy matters, and the performance of the Company's independent
public accountants.
The Compensation Committee reviews and reports to the
Board of Directors its recommendations for compensation of all
employees and sets the compensation of the management of the
Company.
The Nominating Committee identifies individuals qualified to
become Board members and recommends to the Board the director
nominees for the next annual meeting of stockholders and
candidates to fill vacancies on the Board. Additionally, the
committee recommends to the Board the directors to be appointed
to Board committees. Because the Board of Directors of the
Company has a majority of independent directors, these
independent directors control the Board of Directors' selection of
nominees for director.
The Nominating Committee considers candidates for Board
membership suggested by its members and by other Board
members. Additionally, in selecting nominees for directors, the
Nominating Committee will review candidates recommended by
stockholders in the same manner and using the same general
criteria as candidates recruited by the committee and/or
recommended by the Board. The Nominating Committee will also
consider whether to nominate any person nominated by a
shareholder on a timely basis and in accordance with the
provisions of the Company's by-laws relating to shareholder
nominations and as described in "2007 Stockholder Proposals and
Director Nominations" below.
Once the Nominating Committee has identified a prospective
nominee, it or a subcommittee of the Nominating Committee
makes an initial determination as to whether to conduct a full
evaluation of the candidate. This initial determination is based on
the information provided to the subcommittee with the
recommendation of the prospective candidate, as well as the
subcommittee's own knowledge of the prospective candidate,
which may be supplemented by inquiries of the person making the
recommendation or others. The preliminary determination is based
primarily on the need for additional Board members to fill
vacancies or expand the size of the Board and the likelihood that
the prospective nominee can satisfy the evaluation factors
described below. Based on the recommendation of the
subcommittee, the full committee then evaluates the prospective
nominee and his or her qualifications, as well as other factors
which may include such things as whether the prospective nominee
meets the independence requirements and other qualifications or
criteria set forth under applicable listing standards of the
NASDAQ National Market, or other requirements defined under
applicable Securities and Exchange Commission rules and
regulations; the extent to which the prospective nominee's skills,
experience and perspective add to the range of talent appropriate
for the Board and whether such attributes are relevant to the
Company's industry; the prospective nominee's ability to dedicate
the time and resources sufficient for the diligent performance of
Board duties; and the extent to which the prospective nominee
holds any position that would conflict with responsibilities to the
Company.
If the Nominating Committee's internal evaluation is positive,
the subcommittee and possibly others will interview the candidate.
Upon completion of this evaluation and interview process, the
Nominating Committee makes a recommendation and report to the
full Board as to whether the candidate should be nominated by the
Board and the Board determines whether to approve the nominee
after considering this recommendation and report.
During 2005, the Company's Board of Directors had nine
formal meetings and also met fifteen additional times informally as
a Board, the Board's Audit Committee met seven times, and the
Board's Compensation Committee met fourteen times. The
Company's Nominating Committee met once in 2005. No
incumbent director failed to attend any meetings of the Board of
Directors during 2005. The Company encourages and expects all
of its directors to attend its Annual Meeting of Stockholders, and
all directors attended last year's Annual Meeting of Stockholders.
In addition to Robert L. Saxe and Joseph M. Harary, whose
biographical information is provided above, the only other
executive officer of the Company is Michael R. LaPointe, age 47,
who is the Company's Vice President - Marketing since March
2002, joined the Company as its Director of Marketing for
Architectural Windows and Displays in March 2000. Mr.
LaPointe, a graduate of Brown University with a B.A. in
Organizational Behavior & Management and a B.A. in
Psychology, worked in a marketing capacity for IBM Corporation
in the early 1980s. He subsequently founded and developed several
companies involved in the application and licensing of new
technologies for various consumer products. During that period
Mr. LaPointe also worked as a management consultant, where in
1994 he began his relationship with Research Frontiers, assisting
the Company with its marketing strategy.
The Board of Directors recommends a vote FOR election
of the nominee listed above and it is intended that proxies not
marked to the contrary will be so voted. Election of such
nominee requires the affirmative vote of the holders of a
plurality of the shares of the Company's Common Stock
present, or represented, and entitled to vote at the Annual
Meeting.
INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
(Item 2)
The Audit Committee has selected the firm of BDO Seidman,
LLP to serve as our independent accountants for the fiscal year
ending December 31, 2006. BDO Seidman, LLP is considered by
management to be well-qualified to serve as the Company's
independent accountants. We expect that representatives of BDO
Seidman, LLP will attend the meeting, have the opportunity to
make a statement if they so desire, and be available to respond to
appropriate questions.
Audit and Other Fees
BDO Seidman was engaged to be the Company's independent
accountants for 2005. The following table presents fees paid or
accrued for professional audit services rendered by BDO Seidman,
LLP for the audit of our annual financial statements for the year
ended December 31, 2005, and fees billed to us for other services
rendered by BDO Seidman, LLP during that period:
2005
Audit fees (1) $ 78,000
Audit related fees 0
Tax fees (2) 13,500
All other fees 0
Total $91,500
------------------
(1) Audit fees includes the audit of Research Frontiers
Incorporated annual financial statements, review of financial
statements included in Research Frontiers Incorporated's
Form 10-Q Quarterly Reports and services that are normally
provided by the independent accountants in connection with
regulatory filings for those fiscal years.
(2) Tax fees include fees for all services performed by the
independent accountants' tax personnel except those services
specifically related to the audit of the financial statements,
and includes fees for tax compliance and tax advice.
The Audit Committee has approved the above-listed fees, has
considered whether the provision of the non-audit services
described above is compatible with maintaining such accounting
firms' independence, and has determined that the provision of such
services is compatible with maintaining such accounting firms'
independence.
The Board of Directors unanimously recommends a vote FOR
ratification of the selection of the accounting firm of BDO
Seidman, LLP as independent accountants of the Company for
the fiscal year ending December 31, 2006. The ratification
requires a majority vote of those shares of Common Stock
represented and eligible to vote at the 2006 Annual Meeting of
Stockholders.
Audit Committee Report
The following Audit Committee Report does not constitute
soliciting material and should not be deemed filed or incorporated
by reference into any other Company filing under the Securities
Act of 1933 or the Securities Exchange Act of 1934, except to the
extent the Company specifically incorporates this Report by
reference therein.
During fiscal 2000, the Audit Committee of the Board of
Directors developed a written charter for the Committee that was
approved by the Board of Directors which was updated in 2004.
The complete text of the current charter is reproduced in the
appendix to the Company's 2004 Proxy Statement.
The Audit Committee of the Board is responsible for
providing independent, objective oversight of the Company's
accounting functions and internal controls. The Audit Committee
is comprised of the independent directors of the Company: Robert
M. Budin, who serves as the Audit Committee's Chairman, Victor
F. Keen and Albert P. Malvino. The Company is not required to
have a "financial expert" (as such term is defined by applicable
rules) on its Audit Committee, and does not have one because of
the simple nature of accounting for the Company's operations as
a licensing company. The Company believes that all of the
members of its Audit Committee, due to their background and
business experience, have a sufficient understanding of generally
accepted accounting principles and financial statements, the ability
to assess the general application of such principles, an
understanding of internal controls over financial reporting, and of
audit committee functions to perform their duties as an Audit
Committee. Part of the Audit Committee's duties specifically
include the appointment, compensation and supervision of the
Company's accountants, as well as pre-approval of all auditing and
non-auditing services provided by the Company's accounting firm.
Management is responsible for the Company's internal controls
and financial reporting process. The independent accountants are
responsible for performing an independent audit of the Company's
financial statements in accordance with auditing standards of the
PCAOB and to issue a report thereon. As set forth in more detail
in the charter, the Audit Committee's responsibility is to monitor
and oversee the processes.
In connection with these responsibilities, the Audit
Committee met with management and the Company's independent
accountants, to review and discuss all financial statements included
in the Company's quarterly and annual reports for the fiscal year
ended December 31, 2005 (the "Financial Statements") prior to
their issuance and to discuss significant accounting issues.
Management has advised us that the Financial Statements were
prepared in accordance with generally accepted accounting
principles, and the Committee discussed the Financial Statements
with both management and the independent accountants. Our
review included discussions with the independent accountants of
matters required to be discussed by the Statement on Auditing
Standards No. 61 (communication with Audit Committees).
The Audit Committee also received written disclosures from
the independent accountants required by Independence Standards
Board Standard No. 1 (Independence Discussions with Audit
Committees), and the Audit Committee discussed with the
independent accountants that firm's independence.
Finally, the Audit Committee continued to monitor the
integrity of the Company's financial reporting processes and its
internal procedures and controls.
Based upon the Audit Committee's discussions with
management and the independent accountants and the Audit
Committee's review of the representations of management and the
independent accountants, the Audit Committee recommended to
the Board of Directors that the Company's audited financial
statements be included in the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 2005, for filing with
the Securities and Exchange Commission.
Members of the Audit Committee
Robert M. Budin (Chairman)
Victor F. Keen
Albert P. Malvino
ADOPTION OF AMENDMENT TO 1998 STOCK OPTION PLAN
(Item 3)
On June 11, 1998, the stockholders of the Company adopted
a stock option plan entitled the "1998 Stock Option Plan" (the
"1998 Plan") which provides for the granting of both incentive
stock options at the fair market value at the date of grant and
nonqualified stock options at or below the fair market value at the
date of grant to employees or non-employees who, in the
determination of the Board of Directors, have made or may make
significant contributions to the Company in the future. The terms
of these options are specified in more detail in the "Report on
Executive Compensation" included later on in this Proxy
Statement. To date, only options with an exercise price at or above
the market price of the Company's common stock on the date of
grant have been awarded. The Company may also award stock
appreciation rights or restricted stock under this plan. The purpose
of the 1998 Plan is to afford an incentive to executive officers,
other employees and non-employee directors and consultants of
the Company to acquire a proprietary interest in the Company, to
continue as employees or non-employee directors (as the case may
be), to increase their efforts on behalf of the Company and to
promote the success of the Company's business. To further such
purposes, stock options, stock appreciation rights and restricted
stock may be granted pursuant to the 1998 Plan. The Board of
Directors believes that the granting of stock options under the
1998 Plan will promote continuity of management, help attract
new employees, and encourage employees, directors and officers,
to increase their stock ownership in the Company and give an
increased incentive and personal interest in the welfare of the
Company by those who are or may become primarily responsible
for shaping and carrying out the long range plans of the Company
and securing its continued growth, development and financial
success. Currently the Company's 11 full-time employees, three
non-employee independent directors, as well as part-time
employees and consultants are eligible to receive grants under the
1998 Plan. Awards under the 1998 Plan are made by the
Company's Stock Option Committee consisting of the Company's
three independent non-employee directors, and amounts to be
awarded in the future under the 1998 Plan are discretionary and
not determinable at this time.
Currently awards for only 60,879 shares of common stock
(having an underlying market value of $336,965 as of April 18,
2006) were available for issuance under the Company's stock
option plans. Additional shares of Common Stock must be
available for issuance under the 1998 Plan if the 1998 Plan is
going to continue to be a meaningful way to attract and retain key
personnel of the Company and accomplish the other purposes set
forth above. The proposed amendment to the 1998 Plan would add
an additional 675,000 shares of common stock (having an
underlying market value of $3,736,125 as of April 18, 2006) to the
1998 Plan, which represents less than 5% of the outstanding
common stock as of the record date. Promptly after stockholder
approval of this amendment to the 1998 Stock Option Plan, the
Company intends to file an amendment to its current registration
statement on Form S-8 covering awards issued under the 1998
Stock Option Plan to cover these additional shares.
FEDERAL INCOME TAX ASPECTS OF AWARDS UNDER THE 1998 PLAN
The following is a brief summary of the federal income tax
consequences of awards made under the 1998 Plan based upon the
federal income tax laws in effect on the date hereof. This summary
is not intended to be exhaustive, and does not describe state or
local tax consequences.
Incentive Stock Options. No regular taxable income is realized by
the participant upon the grant or exercise of an incentive stock
option ("ISO"). However, a tax preference item under the
Alternative Minimum Tax would be generated upon exercise of the
ISO. If a participant does not sell the stock received upon the
exercise of an ISO ("ISO Shares") for at least two years from the
date of grant and within one year from the date of exercise, when
the shares are sold any gain (loss) realized will be long term or
short term capital gain (loss) depending upon the actual holding
period. In such circumstances, no deduction will be allowed to the
Company for federal income tax purposes. If ISO Shares are
disposed of prior to the expiration of either of the holding periods
described above, the participant generally will realize ordinary
income at that time equal to the excess, if any, of the fair market
value of the shares at exercise (or, if less, the amount realized on
the disposition of the shares) over the price paid for such ISO
Shares. The Company will be entitled to deduct any such
recognized amount. Any further gain or loss realized by the
participant will be taxed as short term or long term capital gain or
loss. Subject to certain exceptions for disability or death, if an ISO
is exercised more than three months following the termination of
the participant's employment, the option will generally be taxed as
a non-qualified stock option.
Non-Qualified Stock Options. No income is realized by the
participant at the time a non-qualified stock option is granted.
Generally upon exercise of a non-qualified stock option, the
participant will realize ordinary income in an amount equal to the
difference between the price paid for the shares and the fair market
value of the shares on the date of exercise. The Company will be
entitled to a tax deduction in the same amount. Any appreciation
(or depreciation) after the date of exercise will be either short term
or long term capital gain (or loss), depending upon the length of
time that the participant has held the shares.
Stock Appreciation Rights. No income will be realized by a
participant in connection with the grant of an SAR. When the SAR
is exercised, the participant will generally be required to include
as taxable ordinary income in the year of exercise an amount equal
to the amount of cash and/or the fair market value of any shares
received. The Company will be entitled to a deduction at the time
and in the amount included in the participant's income by reason
of the exercise. If the participant receives common stock upon
exercise of an SAR, the post-exercise appreciation or depreciation
will be treated in the same manner discussed above under
Non-Qualified Stock Options.
Restricted Stock. A participant receiving restricted stock generally
will recognize ordinary income in the amount of the fair market
value of the restricted stock at the time the stock is no longer
subject to restriction or forfeiture, less any consideration paid for
the stock. The Company will be entitled to a deduction at the same
time and in the same amount. The holding period to determine
whether the participant has long term or short term capital gain or
loss on a subsequent sale generally begins when the stock is no
longer subject to forfeiture, and the participant's tax basis for such
shares will generally equal the fair market value of such shares on
such date. However, a participant may elect, under Section 83(b)
of the Internal Revenue Code, within 30 days of the grant of the
stock, to recognize taxable ordinary income on the date of grant
equal to the excess of the fair market value of the shares of
restricted stock (determined without regard to the restrictions) over
the purchase price of the restricted stock. By reason of such an
election, the participant's holding period will commence on the
date of grant and the participant's tax basis will be equal to the fair
market value of the shares on that date (determined without regard
to restrictions). Likewise, the Company generally will be entitled
to a deduction at that time in the amount that is taxable as ordinary
income to the participant. If shares are forfeited after making such
an election, the participant will be entitled to a deduction, refund,
or loss for tax purposes only in an amount equal to the purchase
price of the forfeited shares regardless of whether he made a
Section 83(b) election.
The Board of Directors recommends a vote FOR approval
of the amendment to the 1998 Plan and it is intended that
proxies not marked to the contrary will be so voted. Approval
of the amendment to the 1998 Plan requires the affirmative
vote of the holders of a majority of the shares of the Company's
Common Stock present, or represented, and entitled to vote at
the Annual Meeting.
EXECUTIVE COMPENSATION
The following table sets forth information regarding all cash
compensation paid by the Company and stock options granted
during the fiscal years indicated to Robert L. Saxe, the Company's
chief executive officer, and to each of the Company's executive
officers during the past fiscal year.
Other Number of
Name of Executive and Annual Stock Options
Principal Positions Year Salary Compensation(1) Awarded
Robert L. Saxe, 2005 $400,274 $ 36,974 116,293
Director, Chairman of 2004 $436,968 $ 34,664 0
the Board 2003 $424,200 $ 10,000 0
Joseph M. Harary, 2005 $364,140 $ 78,011 40,000
Director, President, General 2004 $364,140 $ 72,465 15,000
Counsel, Treasurer, Ass't Secretary 2003 $353,500 $ 36,923 0
Michael R. LaPointe 2005 $129,892 $ 17,158 21,000
Vice-President Marketing 2004 $ 83,602 $ 19,802 10,000
2003 $101,776 $ 18,354 7,000
-------------------------------
(1) Consists of the payment of accrued but unused vacation, and
performance bonuses where applicable.
Report on Executive Compensation
The compensation of executive officers of the Company,
including the Company's chief executive officer, is determined by
the Compensation Committee of the Company's Board of
Directors, whose names are listed below at the end of this report.
The salaries of all executive officers are reviewed at least twice
annually by the Board. Numerous factors are reviewed in
determining compensation levels. These factors include: the
compensation levels of executive officers with comparable
experience and qualifications, compensation levels at comparable
companies, individual and Company performance, past
compensation levels, years of service, performance of the
Company's stock, and other relevant considerations. The
Company's goal is to set salary levels somewhat below those
received by executives at other companies with comparable
experience and qualifications, and to supplement such
compensation with the grant of stock options and performance-
based bonuses. This approach is designed to more closely align
total executive compensation with the long-term performance of
the Company and enable all employees of the Company to
participate in the Company's growth. Through ownership of stock
options, the executive is rewarded if the Company's stockholders
receive the benefit of appreciation of the price of the Company's
Common Stock. Because the Company believes that its success is
dependent upon the coordinated efforts of all of its employees, and
that teamwork is essential in further developing the Company's
technology and meeting the expectations of the Company's
licensees and stockholders, all employees of the Company last year
were granted stock options.
The Board of Directors and the stockholders have adopted a
stock option plan which remains in effect. The purpose of this
stock option plan is to attract key employees, officers and directors
and to encourage their continued employment and services and
their increased stock ownership in the Company. The Board of
Directors believes that the granting of stock options under this
stock option plan will promote continuity of management, and will
result in the increased incentive and personal interest in the welfare
of the Company by those who are or may become primarily
responsible for shaping and carrying out the long range plans of
the Company and securing its continued growth, development and
financial success. Currently awards for 60,879 shares of common
stock are available for issuance under the Company's stock option
plan. If any options expire or terminate for any reason without
having been exercised in full, the unpurchased shares subject
thereto will again be available for issuance under this stock option plan.
The Company's stock option plan is administered by a
committee of at least two directors who are not officers and
employees of the Company (the "Administrators"). Currently the
Administrators consist of Mr. Budin, Mr. Keen and Dr. Malvino,
who serve as members of the Company's Stock Option Committee.
Options which qualify as Incentive Stock Options ("ISO's") under
the Internal Revenue Code of 1986, as amended (the "Code"), and
non-qualifying options ("NQSO's") may be issued under the
Company's 1998 Stock Option Plan. Also stock appreciation rights
and restricted stock may be awarded under the Company's 1998
Stock Option Plan, although there have been no awards of stock
appreciation rights and restricted stock under such plan to date.
The number of options to be granted under these stock option
plans are determined by the Administrators in their discretion.
The purchase price of Common Stock subject to each option
issued under this stock option plan will be determined by the
Board of Directors or the Administrators, as the case may be, but
in the case of an ISO may not be less than (i) the fair market value
of the Common Stock subject to the option on the date of grant or
(ii) in the case of an option granted to an employee who, at the
time the option is granted, owns (within the meaning of the Code)
more than 10% of the total combined voting power of all classes
of stock of the Company, 110% of the fair market value of the
Common Stock subject to the option on the date of grant. Options
under this stock option plan may be exercised in the manner and
at such times fixed by the Board of Directors, but may not be
exercised for a term of more than 10 years, or for a term of five
years in the case of an employee who, at the time an ISO is
granted, owns (within the meaning of the Code) more than 10% of
the total combined voting power of all classes of stock of the
Company. In no event may ISO's exercisable for stock having an
aggregate fair market value determined on the date of grant of
$100,000 (together with all ISO's granted under any other stock
option) be granted which first become exercisable in any one
calendar year. Options are not transferable except by will or
intestacy on the death of the optionee. In general, ISOs terminate
when an optionee ceases to be employed by the Company or
within a specified period after the termination of such employment
depending upon the reason for such termination.
BOARD OF DIRECTORS:
Robert M. Budin*
Joseph M. Harary
Victor F. Keen*
Albert P. Malvino*
Robert L. Saxe
* Indicates member of Compensation Committee of the Board of Directors.
Employment Arrangements
The Company entered into an employment agreement with
Mr. Robert L. Saxe which automatically renews itself for
successive one-year terms unless either the Company or Mr. Saxe
gives the other at least 10 days prior written notice of the intention
not to renew the employment agreement. Pursuant to that
agreement, Mr. Saxe received an annual base salary from the
Company of $400,274 during 2005 and will receive an annual base
salary of $379,798 through December 31, 2006. The
Compensation Committee of the Board of Directors may, in its
discretion, authorize a higher salary for Mr. Saxe. Pursuant to his
employment agreement, Mr. Saxe has agreed not to compete with
the Company for a period of two years following the termination
of his employment thereunder. The Company maintains key-man
life insurance on the life of Mr. Saxe in the amount of $500,000.
Stock Options Granted in 2005
The following table sets forth information regarding all grants
of options to the individuals named in the executive compensation
table appearing on page 11 during the fiscal year ended December
31, 2005, and the potential realizable value of such options using
a 5% and 10% assumed annual rate of appreciation in the price of
the Company's Common Stock. The particular assumed annual
rates of stock price appreciation used in this table are specified
under the rules and regulations of the Securities and Exchange
Commission and are not necessarily indicative of future stock price
performance or the Company's projections thereof. Over a ten-year
option term, the corresponding increase in the Company's market
capitalization over the same period would be (a) $44,432,185 with
an assumed 5% annual rate of stock appreciation, and (b)
$112,599,880 with an assumed 10% annual rate of stock appreciation.
Percent Potential Realizable
of Total Value at Assumed
Options Annual Rates of
Granted Stock Price
Number of to Exercise Appreciation for
Options Employees Price Expiration Term of Option
Name Granted in 2005 Per Share Date 5% ($) 10% ($)
Robert L. Saxe 27,733 11.1% $ 6.00 June 30, 2015 $ 0 $ 51,916
Robert L. Saxe 88,560 35.5% $11.20 December 5,2015 $ 0 $293,310
Joseph M. Harary 40,000 16.0% $11.20 December 5,2015 $ 0 $132,480
Michael R. LaPointe 11,000 4.4% $ 6.00 June 30, 2015 $ 0 $ 20,592
Michael R. LaPointe 10,000 4.0% $ 5.60 December 5,2015 $97,444 $247,156
Stock Options Exercised in 2005 and Year-End Option Values
The following table sets forth information regarding all
exercises of options by the individuals named in the executive
compensation table appearing on page 11 during the fiscal year
ended December 31, 2005 and the value of options realized upon
exercise, and of unexercised options held by such persons on
December 31, 2005, measured in terms of the average trading price
of the Company's Common Stock on the date of exercise and on
the last trading day of the year, respectively. A total of 2,685,993
stock options issued by the Company were exercisable at year-end.
Value of Exercisable
Number of Value of Exerci-
Exercisable sable In-the-Money
Number of Options which Options which
Shares Acquired Value Remain Unexercised Remain Unexercised
Name on Exercise Realized at Dec. 31,2005 at Dec. 31, 2005
Robert Saxe -- $ -- 1,122,293 $ 0
Joseph Harary -- $ -- 512,100 $ 0
Michael R. LaPointe -- $ -- 114,500 $ 0
Equity Compensation Plan Information
The following table sets forth information as of December 31, 2005 with
respect to shares of the Company's Common Stock that may be issued
under the Company's existing Stock Option Plan, and any other equity
that may be issued to officers or directors of, or consultants to, the
Company.
Number of Securities Weighted Average Number of Securities
to be Issued Upon Exercise Price Remaining Available
Exercise of Outstanding of Outstanding for
Plan Category Options and Warrants Options and Warrants Future Issuance
Equity compensation plans
approved by security holders 2,690,933 $11.46 60,879
Equity compensation plans not
approved by security holders (see
Notes 8(b)(ii) and (c) to the
Company's 12-31-05
financial statements) 445,100 $ 7.73 0
Total 2,628,400 $11.85 410,072
Stock Price Performance
The following table sets forth the range of the high and low selling
prices (as provided by the National Association of Securities Dealers) of
the Company's common stock for each quarterly period within the past
two fiscal years:
Quarter Ended Low High
March 31, 2004 8.28 13.98
June 30, 2004 6.94 11.55
September 30, 2004 5.13 7.60
December 31, 2004 5.65 7.96
March 31, 2005 5.00 6.59
June 30, 2005 2.76 5.75
September 30, 2005 2.55 3.50
December 31, 2005 3.18 7.00
These quotations may reflect inter-dealer prices, without retail
mark-up, mark-down, or commission, and may not necessarily
represent actual transactions.
The following graph compares the total returns (assuming
reinvestment of dividends) on $100 invested on December 31, 2000
in the Company's Common Stock (REFR), the NASDAQ Composite
(U.S.) Stock Index, and the NASDAQ Electronic Component Stock
Index. The stock price performance shown on the graph below reflects
historical data provided by the National Association of Securities
Dealers, Inc. and is not necessarily indicative of future price
performance.
[graph with the following data points]
Date Index Index Index
U.S. NASDAQ Electronics REFR Ask
12/29/00 $100.00 $100.00 $100.00
01/31/01 $112.11 $114.99 $118.23
02/28/01 $ 86.78 $ 75.42 $ 91.43
03/30/01 $ 74.58 $ 61.01 $104.29
04/30/01 $ 85.70 $ 73.43 $135.14
05/31/01 $ 85.61 $ 69.32 $158.57
06/29/01 $ 87.95 $ 70.50 $154.29
07/31/01 $ 82.36 $ 69.97 $148.57
08/31/01 $ 73.39 $ 62.90 $111.43
09/28/01 $ 61.02 $ 45.43 $ 92.86
10/31/01 $ 68.86 $ 57.72 $101.77
11/30/01 $ 78.66 $ 71.71 $ 96.69
12/31/01 $ 79.32 $ 68.32 $ 95.77
01/31/02 $ 78.72 $ 72.42 $104.63
02/28/02 $ 70.53 $ 56.95 $ 91.43
03/28/02 $ 75.16 $ 64.75 $101.03
04/30/02 $ 68.91 $ 58.49 $ 93.09
05/31/02 $ 65.87 $ 56.85 $ 78.91
06/28/02 $ 59.91 $ 42.66 $ 84.91
07/31/02 $ 54.44 $ 40.18 $ 50.23
08/30/02 $ 53.86 $ 38.22 $ 53.71
09/30/02 $ 48.07 $ 30.31 $ 51.20
10/31/02 $ 54.63 $ 35.91 $ 56.97
11/29/02 $ 60.72 $ 45.93 $ 60.29
12/31/02 $ 54.84 $ 36.58 $ 47.66
01/31/03 $ 54.24 $ 36.49 $ 41.94
02/28/03 $ 55.00 $ 39.18 $ 38.29
03/31/03 $ 55.16 $ 37.35 $ 41.14
04/30/03 $ 60.18 $ 42.55 $ 40.51
05/30/03 $ 65.46 $ 48.52 $ 65.42
06/30/03 $ 66.51 $ 48.15 $ 79.89
07/31/03 $ 71.09 $ 54.95 $ 77.65
08/29/03 $ 74.19 $ 60.36 $ 66.17
09/30/03 $ 73.23 $ 58.51 $ 65.54
10/31/03 $ 79.12 $ 67.18 $ 60.34
11/28/03 $ 80.30 $ 71.03 $ 53.77
12/31/03 $ 81.99 $ 70.40 $ 53.09
01/30/04 $ 84.42 $ 72.03 $ 72.46
02/27/04 $ 82.83 $ 68.23 $ 68.40
03/31/04 $ 81.42 $ 65.13 $ 54.97
04/30/04 $ 78.72 $ 58.91 $ 59.60
05/28/04 $ 81.34 $ 64.45 $ 51.43
06/30/04 $ 83.84 $ 64.43 $ 40.63
07/30/04 $ 77.44 $ 55.97 $ 40.11
08/31/04 $ 75.54 $ 50.23 $ 34.06
09/30/04 $ 77.80 $ 49.36 $ 36.34
10/29/04 $ 80.95 $ 53.16 $ 41.37
11/30/04 $ 85.94 $ 53.97 $ 35.83
12/31/04 $ 89.23 $ 55.68 $ 36.46
01/31/05 $ 84.58 $ 51.87 $ 34.29
02/28/05 $ 84.10 $ 53.34 $ 29.37
03/31/05 $ 81.96 $ 52.10 $ 29.71
04/29/05 $ 78.98 $ 50.19 $ 26.00
05/31/05 $ 85.09 $ 56.66 $ 24.91
06/30/05 $ 84.74 $ 55.23 $ 18.11
07/29/05 $ 90.15 $ 57.73 $ 16.74
08/31/05 $ 88.72 $ 55.58 $ 16.40
09/30/05 $ 88.79 $ 55.02 $ 17.71
10/31/05 $ 87.65 $ 52.00 $ 26.97
11/30/05 $ 92.43 $ 56.99 $ 32.34
12/30/05 $ 91.12 $ 55.17 $ 29.54
2007 STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS
Any stockholder who intends to present a proposal for action,
including the nomination of a candidate for Director, at the
Company's 2007 Annual Meeting of Stockholders, must comply with
and meet the requirements of the Company's By-Laws and of Rule
14a-8 of the Securities and Exchange Commission. Rule 14a-8
requires, among other things, that any proposal be received by the
Company at its principal executive office, 240 Crossways Park Drive,
Woodbury, New York 11797, Attention: General Counsel, by
December 31, 2006. Section 2.12 of the Company's By-Laws (a copy
of which is available upon request) set forth the procedures that must
be followed with respect to stockholder nominations, which include
a requirement that the person making the nomination be a stockholder
of record at the time of giving notice for such stockholders meeting
and who shall be entitled to vote for the election of directors at the
meeting, and that such nomination be made pursuant to timely notice
in proper written form to the Secretary of the Company. To be in
proper written form, such notice shall set forth (a) as to each person
whom the stockholder proposes to nominate for election or re-election
as a director, (i) the name, age, business address and residence address
of such person, (ii) the principal occupation or employment of such
person, (iii) the class and number of shares of the Company which are
owned beneficially and of record by such person, (iv) any other
information relating to such person that is required to be disclosed in
solicitations of proxies for election of directors, or is otherwise
required, in each case pursuant to Regulation 14A promulgated under
the Securities Exchange Act of 1934, as amended (including, without
limitation, such person's written consent to being named in the proxy
statement as a nominee and to serving as a director if elected), and (v)
any other information that is or would be required to be disclosed in
a Schedule 13D promulgated under the Securities Exchange Act of
1934 regardless of whether such person would otherwise be required
to file a Schedule 13D, and (b) as to the stockholder giving the notice
(i) the name and address, as they appear on the Company's books, as
such stockholder, (ii) the class and number of shares of the Company
which are owned beneficially and of record by such stockholder, and
(iii) a description of all arrangements or understandings between such
stockholder and the person nominated by such stockholder, and any
interest by such stockholder in the election of the person nominated
by such stockholder, and any relationship between such stockholder
and the person so nominated. In addition, a person providing notice
under this Section shall supplementally and promptly provide such
other information as the Company otherwise requests. At the request
of the Board, any person nominated by the Board for election as a
director shall furnish to the Secretary of the Company that
information required to be set forth in a stockholder's notice of
nomination which pertains to the nominee.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under the securities laws of the United States, the Company's
directors, its executive officers, and any persons holding more than
ten percent of the Company's Common Stock are required to report
their initial ownership of the Company's Common Stock and any
subsequent changes in that ownership to the Securities and Exchange
Commission. Specific due dates for these reports have been
established, and the Company is required to disclose in this Proxy
Statement any failure to file by these dates. All of these filing
requirements were satisfied on a timely basis. In making these
disclosures, the Company has relied solely on written representations
of its directors and executive officers and copies of the reports that
they have filed with the Commission.
GENERAL AND OTHER MATTERS
Management knows of no matter other than the matters described
above which will be presented to the meeting. However, if any other
matters properly come before the meeting, or any of its adjournments,
the person or persons voting the proxies will vote them in accordance
with his, her or their best judgment on such matters.
By Order of the Board of Directors
VICTOR F. KEEN
Secretary
Woodbury, New York
April 30, 2006
THE COMPANY WILL PROVIDE WITHOUT CHARGE A COPY OF THE COMPANY'S ANNUAL
REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2005 INCLUDING
FINANCIAL STATEMENTS AND ANY SCHEDULES THERETO (EXCEPT EXHIBITS), TO EACH OF
THE COMPANY'S STOCKHOLDERS, UPON RECEIPT OF A WRITTEN REQUEST THEREFOR MAILED
TO THE COMPANY'S OFFICES, ATTENTION: ASSISTANT SECRETARY. REQUESTS FROM
BENEFICIAL STOCKHOLDERS MUST SET FORTH A REPRESENTATION AS TO SUCH OWNERSHIP
ON APRIL 18, 2006.
[PROXY CARD - FRONT]
PROXY RESEARCH FRONTIERS INCORPORATED
240 Crossways Park Drive, Woodbury, New York 11797-2033
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS - June 8, 2006
The undersigned hereby appoints Robert L. Saxe and Joseph M. Harary,
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 Research Frontiers Incorporated to be held on June 8,
2006, 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 the reverse
side hereof. Any proxy heretofore given by the undersigned with respect to
such stock is hereby revoked.
Dated:___________________________________________________, 2006
___________________________________________________________
___________________________________________________________
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 MARK, DATE AND SIGN THIS PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE
[PROXY CARD - BACK]
1. ELECTION OF CLASS I DIRECTOR
NOMINEE: Joseph M. Harary.
[ ] FOR the nominee listed above.
[ ] WITHHOLD AUTHORITY to vote for the nominee listed above.
2. RATIFICATION OF THE SELECTION OF BDO SEIDMAN, LLP
AS INDEPENDENT ACCOUNTANTS OF THE COMPANY FOR
THE FISCAL YEAR ENDING DECEMBER 31, 2006.
[ ] FOR RATIFICATION [ ] AGAINST RATIFICATION [ ] ABSTAIN
3. ADOPTION OF AMENDMENT TO THE COMPANY'S 1998 STOCK OPTION PLAN.
[ ] FOR ADOPTION [ ] AGAINST ADOPTION [ ] ABSTAIN
4. In their discretion, upon such other matters as may properly come
before the meeting. If no specification is made, this proxy will be
voted FOR the nominee listed above and FOR APPROVAL of Proposals 2 and 3.
Please indicate whether or not you plan to attend the
Annual Meeting on Thursday, June 8, 2006.
Yes [ ] No [ ]