HYDROMER, INC.
35 Industrial Parkway
Branchburg, NJ 08876-3424
NOTICE OF 2012 ANNUAL MEETING
OF SHAREHOLDERS
To be held December 20,
2012
The
Annual Meeting of the Shareholders of Hydromer, Inc. (“we,” “our,” “Hydromer” or the
“Company”) will be held on Thursday ,December 20 2012, at 35 Industrial Parkway, Branchburg, New Jersey at 10
a.m., for the following purposes, as more fully described in the accompanying Proxy Statement:
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1.
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To
elect eight directors of the Company for the ensuing year.
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2.
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To
ratify the selection by the Board of Directors of Rosenberg Rich
Baker Berman & Company as the Company's independent public
accountants for the fiscal year ending June 30, 2013.
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3.
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To
transact such other business as may properly come before the meeting
or any adjournment thereof.
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The
Board of Directors has fixed the close of business on September 18, 2012 as the record date for the determination of shareholders
entitled to notice of and to vote at the Annual Meeting.
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Date: November 6,
2012
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By
Order of the Board of Directors
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/s/
Kent E. Hansen, Secretary
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Kent
E. Hansen, Secretary
Branchburg,
New Jersey
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WHETHER
OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND PROMPTLY MAIL IT IN THE ENCLOSED
ENVELOPE IN ORDER TO ASSURE REPRESENTATION OF YOUR SHARES AT THE MEETING. NO POSTAGE NEED BE AFFIXED IF THE PROXY CARD IS MAILED
IN THE UNITED STATES.
NOTICE
OF AVAILABILITY
This
Notice, the Proxy Statement, financial information, and Annual Report can be found at: www.hydromer.com/sec
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TABLE
OF CONTENTS
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Questions
and Answers
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3
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Proxy
Statement
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5
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I
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Election
of Directors
(Proposal I)
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5
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Name of
Nominee and Certain Biographical Information
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5
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Security
Ownership of Management
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6
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Nominating
Committee
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7
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Board
Governance
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7
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Compensation
Discussion, Analysis and Risk
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7
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Meetings
and Directors’ Compensation
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7
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Audit
Committee
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8
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Audit
Committee Report
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8
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Corporate
Policy on Business Practices
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9
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Code of
Ethics for the CEO and CFO
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9
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Shareholder
Communications
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9
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Executive
Officers
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9
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Executive
Compensation/Risk Profile
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10
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Stock
Options
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10
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Certain
Arrangements with Directors and Executive Officers
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11
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Information
Concerning Certain Shareholders
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Other
Information Concerning Directors, Officers and Shareholders
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11
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II
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Ratification
of Selection of Independent Public Accountants
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(Proposal
II)
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11
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III
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Other
Matters
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IV
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Miscellaneous
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12
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V
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Exchange
Act Compliance
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12
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VI
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Shareholder
Nominations/Proposals
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12
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VII
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Internet
Web Site
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2
HYDROMER,
INC.
35
Industrial Parkway
Branchburg,
NJ 08876
QUESTIONS
AND ANSWERS
ABOUT
HYDROMER'S ANNUAL MEETING AND VOTING
What
is the purpose of the Annual Meeting?
At
the Annual Meeting, the shareholders will elect eight directors, ratify the Company's selection of independent public accountants,
and act upon anything else that properly comes before the meeting. In addition, management will give a report on the Company’s
performance during the fiscal year ended
June
30, 2012.
Why
Did I Receive This Proxy Statement?
We
sent you this proxy statement and the enclosed proxy card because Hydromer's Board of Directors is soliciting your proxy
to be used at the Annual Meeting of Shareholders on December 20, 2012, at 10:00 a.m., at 35 Industrial Parkway, Branchburg,
NJ 08876, or at any adjournment of the meeting. This proxy statement discloses the information you need to know to vote on
an informed basis. We are first mailing this proxy statement and the enclosed proxy card to shareholders on or about November
6, 2012.
Who
Can Vote?
You
are entitled to vote if you owned Hydromer common stock on the record date, which is the close of business on September 18, 2012.
Each share of Hydromer common stock that you own entitles you to one vote.
Who
Can Attend the Meeting?
Only
shareholders of record at the close of business on the record date, or their duly appointed proxies, may attend the meeting. Registration
at the meeting begins at 9:30 a.m.
How
Many Shares of Common Stock Are Outstanding?
On
the record date, there were 4,772,318 shares of Hydromer common stock outstanding and entitled to vote. Hydromer common stock
is our only class of voting stock.
What
Constitutes a Quorum?
A
quorum is a majority of the outstanding shares entitled to vote, equal to 2,386,160 shares, which are present or represented by
proxy at the meeting. There must be a quorum for the transaction of business at the Annual Meeting. If you submit a properly executed
proxy card, even if you abstain from voting, your shares will be considered part of the quorum. Broker non-votes (shares held
by a broker or nominee that are represented at the meeting, but with respect to which the broker or nominee is not empowered to
vote on a particular type of proposal) are also included in determining the presence of a quorum.
What
Am I Voting On?
You
are voting on:
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1.
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The
election of eight individuals
to serve on our Board of Directors:
Manfred F. Dyck,
Ursula M. Dyck, Dieter Heinemann,
Robert H. Bea, Dr. Maxwell
Borow, Dr. Frederick L. Perl,
Michael F. Ryan, Ph.D. and
George A. Ziets; and
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2.
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The
ratification of the selection
of Rosenberg Rich Baker Berman
& Company as our independent
public accountants for the
fiscal year ending June 30,
2013.
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How
Does the Board of Directors Recommend I Vote on the Proposals?
The
Board of Directors recommends a vote
FOR
each of the Board's nominees, and
FOR
ratification of the appointment of
Rosenberg Rich Baker Berman & Company as our independent public accountants for the fiscal year ending June 30, 2013.
How
Do I Vote?
To
vote by proxy, you should complete, sign and date the enclosed proxy card and return it promptly in the prepaid envelope provided
with this proxy statement.
To
vote in person, you may attend the meeting and cast your vote in person.
May
I Revoke My Proxy?
You
may revoke your proxy at any time before it is voted in either of the following ways:
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You may submit another proxy
card with a later date.
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2.
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You may notify Hydromer's Secretary
in writing before your proxy is voted that you have revoked your proxy.
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3
If
I Plan to Attend the Meeting, Should I Still Vote by Proxy?
Whether
you plan to attend the meeting or not, we urge you to vote by proxy. Returning the proxy card will not affect your right to attend
the meeting, and your proxy will not be used if you are personally present at the meeting and inform the Secretary in writing
prior to the voting that you wish to vote your shares in person. The Secretary will have proxy revocation forms at the meeting
in case you want to revoke your proxy and vote in person.
How
Will My Proxy Be Voted?
If
you properly fill in your proxy card and send it to us, your proxy holder (one of the individuals named on your proxy card) will
vote your shares as you have directed.
If you hold shares in “street name” we urge you to instruct your broker
how to vote your shares, as shares held in “street name” cannot be voted directly by a shareholder.
If you
sign the proxy card but do not make specific choices, the proxy holder will vote your shares as recommended by the Board of Directors
as follows:
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"FOR" the election
of all nominees for Director.
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"FOR" ratification
of the selection of independent public accountants for the fiscal year ending June 30, 2013.
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What
Vote Is Required to Approve Proposals?
Directors
are elected by a plurality of the shares voting at the meeting. If you do not vote for a particular nominee, or you indicate "withhold
authority to vote" for a particular nominee on your proxy, your vote will not count either "for" or "against"
the nominee. A "broker non-vote" will also have no effect on the outcome. The ratification of the appointment of independent
public accountants requires a majority of the votes cast.
How
Will Voting on Any Other Business Be Conducted?
Although
we do not know of any business to be considered at the meeting other than the proposals described in this proxy statement, if
any other business is presented at the meeting, your returned proxy gives authority to proxy holders to vote on these matters
in their discretion.
Are
copies of this Proxy Statement and the Annual Report available on the Internet?
Yes,
at www.hydromer.com/sec. However, you must vote directly by paper ballot
(or by instructing your broker how to vote if your
shares are held in “street name”).
PROXY
STATEMENT
This
Proxy Statement, which will be mailed commencing on or about November 6, 2012 to the persons entitled to receive
the accompanying Notice of Annual Meeting of Shareholders, is provided in connection with the solicitation of proxies on
behalf of the Board of Directors of Hydromer, Inc. (the “Company”), for use at the Annual Meeting of Shareholders
to be held at the Company’s executive office at 35 Industrial Parkway, Branchburg, New Jersey 08876-3424 at 10 a.m.
on December 20, 2012 and at any adjournment thereof, for the purposes set forth in the Notice of Annual Meeting and this
Proxy Statement.
At
the close of business on September 18, 2012, the record date stated in the accompanying Notice of Annual Meeting, the Company
had 4,772,318 outstanding shares of Common Stock ("Common Stock"), each of which is entitled to one vote with respect
to each matter to come before the meeting. The Company has no class or series of stock outstanding other than the Common Stock.
As
of September 18, 2012, Manfred F. Dyck, Chairman of the Board, a Director, CEO and President of the Company, beneficially owned
approximately 33.9% of the outstanding Common Stock of the Company, and his wife Ursula M. Dyck, a Director of the Company, beneficially
owned 4.5% of the outstanding Common Stock. In addition, Mr. Dieter Heinemann, a Director of the Company, owned 17.1% of the outstanding
Common Stock of the Company. Such ownership, totaling 55.5% of the outstanding Common Stock, enables these three shareholders
to control the outcome of any election or proposal regarding the Company's affairs.
4
I.
ELECTION OF DIRECTORS (Proposal I)
Eight
directors will be elected at the Annual Meeting of Shareholders, each to serve for one year and until a successor shall have been
duly chosen and qualified. Each director is elected by a plurality of votes cast. It is the intention of each of the persons named
in the accompanying form of proxy to vote the shares represented thereby in favor of the eight nominees listed in the following
table, unless otherwise instructed in the proxy. In case any of the nominees is unable or declines to serve, the proxy holders
reserve the right to vote the shares represented by such proxy for another person duly nominated by the Board of Directors in
his or her stead or, if no other person is so nominated, to vote such shares only for the remaining nominees. The Board of Directors
has no reason to believe that any person named will be unable or will decline to serve. Certain information concerning the nominees
for election as directors is set forth below. They furnished such information to the Company. The Company believes that all of
the nominees for election as directors are independent, as defined by the listing standards of the NASDAQ Stock Market, except
Manfred F. Dyck and Ursula M. Dyck.
Name
of Nominee and Certain Biographical Information
MANFRED
F. DYCK, age 77: Chairman of the Board of the Company since June 1983 and Chief Executive Officer of the Company since August
1989; Director of Biosearch Medical Products, Inc. from 1975 until 2000 when it was acquired by the Company; Director of the Company
since 1980. Manfred and Ursula Dyck are husband and wife. Mr. Dyck, as founder of the Company and a chemical engineer, is qualified
to serve in the capacity of Director. He has not served as a director of another public company during the past five years.
URSULA
M. DYCK, age 78: Director of the Company since 1980. Ursula and Manfred Dyck are wife and husband. Mrs. Dyck served as Director
and Vice President of Sales of Biosearch Medical Products, Inc. from 1991 to 1996. Mrs. Dyck has experience in marketing medical
devices which are utilized by the Company’s clients. She has not served as a director of another public company during the
past five years.
DIETER
HEINEMANN, age 74: Specialist, Frankfurt [Germany] Stock Exchange until October 31, 2003; Director of the Company since 1991.
Mr. Heinemann brings over 30 years of experience in financial markets to his position as Director of the Company. He has not served
as a director of another public company during the past five years.
MAXWELL
BOROW, M.D., age 86: Medical doctor, retired; Chief of Surgery at Somerset Medical Center (hospital) from 1985-1994; Chief of
Vascular Surgery at Somerset Medical Center from 1978-1985; Director of the Company since 1990. Dr. Borow has many years of experience
in medical coatings that may be used in vascular applications. He has not served as a director of another public company during
the past five years.
ROBERT
H. BEA, age 59: Senior Vice President, Regulatory Affairs/Quality Management and Chief Compliance Officer for ViewRay, Inc.; former
Corporate Vice President, Regulatory and Quality Assurance, Siemens Medical Solutions USA, Inc. from 1994-2009; Vice President
of Quality Assurance and Regulatory Affairs of Biosearch Medical Products, Inc. from 1992-1994. He previously worked at
Johnson & Johnson where he held positions of increasing responsibility in Quality/Regulatory affairs from 1973-1991.
Director of the Company since 1996. Mr. Bea possesses over twenty years of experience in directing the quality systems of
corporations serving markets which are similar to the markets served by the Company. He has not served as a director of
another public company during the past five years.
FREDERICK
L. PERL, M.D., age 84: Attending staff, Somerset Medical Center since 1957; Consulting staff Obstetrics and Gynecology, Carrier
Clinic since 1959; affiliated with St. Peter's Medical Center, active staff since 1994; Director of Biosearch Medical Products
from December 1996 until February 2000 when he was appointed to the Board of the Company. Dr. Perl has many years of experience
in areas concerning contraceptive hydrogel delivery mechanisms. He has not served as a director of another public company during
the past five years.
MICHAEL
F. RYAN, Ph.D., age 69: President, e-Clinical Mentor since 2000 and Consultant for Medical/Marketing Decisions since 2000; Vice
President, Internal Medicine, Quintiles Americas 1997-1999. Member of the Company's Board of Directors since August 2003. Dr.
Ryan has many years of experience in marketing and new product introductions in markets served by the Company. He has not served
as a director of another public company during the past five years.
GEORGE
A. ZIETS, age 66: Vice President of R&D/Product Development, HK Insights from 2002 to present; former Executive Director of
Johnson & Johnson from 1983-1990; Vice President of Research and Development at Maybelline from 1990-1996; Executive Vice
President, Bath and Body Works from 1996-2002. Appointed to the Board August 2009 and then elected in November 2009. Mr. Ziets
has more than fifteen years of experience in the area of cosmetic products, serving markets in which the Company is marketing
certain of its products. He has not served as a director of another public company during the past five years.
5
Security
Ownership of Management
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Stock
Owned
(1)
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Name
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On
Record Date
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%
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MANFRED
F. DYCK
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1,618,376
(2)
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33.90%
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URSULA
M. DYCK
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215,205
(3)
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4.50%
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DIETER
HEINEMANN
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814,000
(4)
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17.10%
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MAXWELL
BOROW, M.D.
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35,000
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Less
than 1%
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ROBERT
H. BEA
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10,000
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Less
than 1%
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FREDERICK
L. PERL, M.D.
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10,000
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Less
than 1%
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MICHAEL
F. RYAN, Ph.D.
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-
0 -
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GEORGE
A. ZIETS
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-
0 -
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-
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MARTIN
C. DYCK
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-
0 -
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ROBERT
Y. LEE
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-
0 -
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-
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All
directors and officers as a group
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(11
persons)
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2,732,703
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56.60%
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(1)
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As of September 18, 2012. Except
as otherwise indicated below, each nominee has sole voting and investment power with respect to all shares shown in the table
as beneficially owned by such person.
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(2)
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Includes an aggregate of 60,000
shares held by Mr. Dyck as custodian/trustee for certain of his children and grandchildren and does not include 83,004 shares
held with sole voting investment power by Mr. Dyck's children or shares held by Ursula M. Dyck, his wife, as to which Mr. Dyck
disclaims beneficial ownership.
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(3)
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Does not include 83,004 shares
held with sole voting and investment power by Mrs. Dyck's children, as to which Mrs.
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Dyck
disclaims beneficial ownership, or shares held by Manfred F. Dyck, her husband, individually or as custodian.
Includes
60,000 shares held by Mrs. Dyck as custodian for her grandchildren.
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(4)
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Does not include 135,000 shares
held by the wife and children of Mr. Heinemann as to which he disclaims beneficial ownership.
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Nominating
Committee
The
Company does not have a Nominating Committee nor does it have a policy with respect to consideration of candidates recommended
by shareholders. The Company’s Board of Directors believes that its current practice of networking to seek out potential
candidates results in Board of Director candidates who have the scientific or business background that can adequately represent
the interests of the shareholders. All Directors participate in the consideration of director nominees. All Directors have been
re-nominated to stand for election. All candidates have accepted the nomination.
Board
Governance
The
Bylaws of the Company provide that the Chairman of the Board is also the Chief Executive Officer of the Company. That provision
of the Bylaws has been in effect since the inception of the Company in 1980. The Company is of the opinion that a change to this
provision of the Bylaws would not have any positive effect on the Company and would increase costs to the Company with no benefit.
The Company does not have a lead independent director, as the majority of the Board members are independent directors.
Compensation
Discussion, Analysis and Risk
The
Company does not have a Compensation Committee. Since the majority of the Board is comprised of independent directors
(six
of eight),
the Company is of the opinion that the full Board can perform this function. The salary of the President and
CEO is reviewed each year by the full Board and the CEO approves the salary of each officer (see Compensation of Executive Officers).
The Company maintains a 401(k) Retirement Plan, which is open to all full-time employees. No stock of the Company is maintained
in this plan. The Company is of the opinion that the salaries and other compensation of its employees accurately reflect the market
requirement to attract and retain talented individuals and such compensation is not related to any risk or risk profiles that
the Company may experience.
6
Meetings
and Directors’ Compensation
During
the past fiscal year, the Board of Directors of the Company met four times. All Directors attended at least 75% of the meetings.
The Company does not have a policy with respect to attendance of Directors at the Annual Meeting. While the Company expects all
Directors to attend the Annual Meeting, the Company recognizes that occasionally factors beyond a Director’s control can
impact his or her ability to attend the meeting. Seven Directors attended last year’s Annual Meeting.
The
compensation for attendance at regular or special meetings either in person or on a video link is $1,000 per meeting. Attendance
via telephone is $200 per meeting. The compensation for operational meetings is $500 per meeting.
Directors
are awarded stock options pursuant to the Stock Option Plan approved on January 22, 1998, as amended (see Stock Options). Directors
who waive their stock options are given $300 for every 2,000 stock options waived. This avoids the Company having to take an expense
for the options at market value under current accounting rules. For the fiscal year ended June 30, 2012, all Directors waived
the awarding of their stock options.
The
following table sets forth information with respect to fees paid to Directors during the fiscal year ended June 30, 2012:
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Cash
Paid in lieu of Stock Options
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Meeting
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Director
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Fees
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Total
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Robert
H. Bea
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$3,000
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$1,200
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$4,200
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Maxwell
Borow, M.D.
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3,000
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1,200
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4,200
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Ursula
M. Dyck
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4,000
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600
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4,600
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Dieter
Heinemann
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4,000
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900
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4,900
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Frederick
L. Perl, M.D.
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4,000
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900
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4,900
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Michael
F. Ryan, Ph.D.
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4,000
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900
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4,900
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George
A. Ziets
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3,200
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1,200
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4,400
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Directors
fees paid to Manfred F. Dyck are shown in the Executive Compensation Table.
Audit
Committee
On
December 1, 2010, the Board appointed the members of the Audit Committee, consisting of only independent directors: Robert Bea
(Chairman), Dr. Frederick Perl, Dr. Maxwell Borow and Dr. Michael F. Ryan. None of these members are "financial experts"
as the Company is of the opinion that the financial affairs of the Company are not complex and are within the scope of the collective
experience of the members of the Audit Committee. In the event any financially complex issues arise, the Audit Committee is empowered
by its charter to retain or hire such independent expertise as it deems necessary. The Audit Committee charter is posted on the
Company's web site at http://www.hydromer.com/company.html . The Audit Committee met once to review the financial statements and
related matters for the fiscal year ended June 30, 2012. It issued the following report:
Audit
Committee Report
The
following is the audit committee's report submitted to the Board of Directors for the fiscal year ended June 30, 2012.
The
Audit Committee of the Board of Directors has:
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a.
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Reviewed
the Audit Committee charter
and determined that the current
text is not in need of amendment.
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b.
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Reviewed
the Company’s Policy
on Business Practices and
found it to accurately reflect
the policies of the Board
of Directors.
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c.
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Reviewed
the Code of Ethics for the
CEO and CFO and found it to
be acceptable and not in need
of revision.
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d.
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Reviewed
and discussed the report on
the assessment of the effectiveness
of the financial control system
submitted by management.
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e.
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Reviewed
and discussed the Company's audited financial statements for the
year ended June 30, 2012 with the Company's management.
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f.
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Discussed
with Rosenberg Rich Baker Berman & Company ("RRBB"),
the Company's independent accountants, the materials required to
be discussed by the Auditor’s Communication With Those Charged
With Governance (AU Section 380).
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g.
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Reviewed
the written disclosures and the letter from RRBB required by Ethics
and Independence Rule 3526, and discussed with RRBB its independence.
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Based
on the foregoing review and discussion, the Audit Committee recommends to the Board of Directors that the audited financial statements
be included in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2012.
THE AUDIT COMMITTEE
Robert
H. Bea, Frederick L. Perl,
Maxwell
Borow, Michael F. Ryan
7
Corporate
Policy on Business Practices
On
June 22, 2000, the Board adopted a set of policies applicable to directors, officers and employees of the Company covering the
following subjects: 1. Loyalty to Corporation; 2. Conflict of Interest; 3. Anti-Trust Compliance; 4. Inside Information and Trading
in Company's Securities; 5. Prohibition on Political Contributions; 6. Equal Opportunity Employment; 7. Environmental Health;
and 8. Legal Compliance. The current policies are posted on the Company's web site at http://www.hydromer.com/company.html. The
Company conducts training sessions for all management and supervisory personnel on topics related to these business practices.
New management or supervisory employees attend a course on corporate ethics.
Code
of Ethics for the CEO and CFO
On
May 12, 2004, the Company adopted a Code of Ethics for the CEO and CFO. This Code is posted on the Company’s web site at
http://www.hydromer.com/company.html . The Code includes the procedure to be used to report a violation of this Code. No reports
were received during the fiscal year ended June 30, 2012.
Shareholder
Communications
The
Company has a practice of bringing all reasonable communications from shareholders to the attention of the Directors at regular
Board meetings, which are usually held four times per year. The volume of such communications has been minimal. Address all communications
via mail to: Corporate Secretary, Hydromer, Inc., 35 Industrial Parkway, Branchburg, NJ 08876.
Executive
Officers
Manfred
F. Dyck,
Chairman of the Board of the Company since June 1983 and a Director of the Company since its inception. Mr. Dyck
served as Chief Executive Officer of the Company from its inception until October 1986, and as of August 1989, reassumed the duties
of Chief Executive Officer. Mr. Dyck has been Chief Executive Officer and a Director of Biosearch Medical Products Inc. from 1975
to 2000 (when Biosearch became a wholly owned subsidiary). He holds a B.S. in Chemical Engineering.
Robert
Y. Lee, CPA, MBA
, Vice President of Finance, Chief Financial Officer and Treasurer since June 2001. Mr. Lee earned a MBA in
Finance and International Business, and a Bachelor of Science in Accounting and Information Systems, both from New York University's
Stern School of Business. His professional experience includes tenure with the New York office of Coopers and Lybrand (currently
PricewaterhouseCoopers) in its Emerging Business Group; the Bristol Myers Squibb Internal Auditing group; ASARCO's Southern Peru
Copper Corporation, now Southern Copper Corporation part of Grupo Mexico; and Citigroup.
Martin
C. Dyck,
Executive Vice President of Operations
since 2001 and, prior thereto, Vice President of Operations of the
Company from February 2000. Mr. Dyck also serves as President of the Company's wholly owned subsidiary, Biosearch Medical Products,
Inc. since 1998. Prior to that he served as Vice President of Operations. Martin C. Dyck is the son of Mr. Manfred F. Dyck and
Mrs. Ursula M. Dyck. He holds a B.S. in Finance with a minor in Mechanical Engineering.
John
Konar,
Vice President of Quality Assurance since February 2004 and Director of Human Resources since 1996 (with Biosearch
Medical Products, Inc. before its acquisition by the Company in 2000, and with both companies thereafter). Since joining Biosearch
in 1986, Mr. Konar has been Director of Sales from 1996 until 2000, Director of Quality Assurance from 1998 to 2004, until promoted
to Vice President of Quality Assurance, and Director of Manufacturing of Biosearch from 2000-2001.
8
Executive
Compensation/Risk Profile
The
following table sets forth information concerning cash compensation paid or accrued by the Company during the fiscal years ended
June 30, 2012 and June 30, 2011 to the CEO and each of the two highest paid executive officers of the Company.
|
SUMMARY COMPENSATION TABLE
|
|
|
|
Name
and principal position
|
|
Year
|
|
Salary
($)
|
|
Bonus
($)
|
|
Stock
Awards ($)
|
|
Option
Awards ($)(a)
|
|
Non-Equity
Inc Plan Comp. ($)
|
|
Nonqual
Deferred Comp. Earnings ($)
|
|
All
Other Comp. ($)(b)
|
|
Total
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Manfred F. Dyck,
|
|
|
2012
|
|
|
$
|
269,100
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
$
|
7,785
|
|
|
$
|
276,885
|
|
|
CEO/President
|
|
|
2011
|
|
|
$
|
269,100
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
$
|
9,900
|
|
|
$
|
279,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Martin C. Dyck
|
|
|
2012
|
|
|
$
|
162,000
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
$
|
2,885
|
|
|
$
|
164,885
|
|
|
Executive
|
|
|
2011
|
|
|
$
|
162,000
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
$
|
5,000
|
|
|
$
|
167,000
|
|
|
Vice President
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert Y. Lee
|
|
|
2012
|
|
|
$
|
147,000
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
$
|
2,885
|
|
|
$
|
149,885
|
|
|
VP, Finance
|
|
|
2011
|
|
|
$
|
147,000
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
$
|
5,000
|
|
|
$
|
152,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The
Company does not base any compensation policies on any risk or risk profiles. Compensation is based on conditions in the employment
market and set at levels to hire and retain competent executive and non-executive employees. The Company does not have any compensation
plans which are or could be considered “golden parachutes”.
|
(a)
|
|
Option awards for active directors
were waived for a payment of $300 for each 2000 options waived. Such payments are included in (b) All Other Comp. for Mr. Manfred
F. Dyck.
|
|
(b)
|
|
Amount of automobile allowance,
which was earned and accrued in the year shown. In the case of Mr. Manfred F. Dyck, this amount also includes Director’s
fees and option waiver payments.
|
The
aggregate value of Common Stock of the Company held by Manfred F. Dyck individually and in trust, as of June 30, 2012 was approximately
$2,427,564 (based on a market price of $1.50).
9
Stock
Options
On
January 22, 1998, the Board of Directors approved an option plan for directors of the Company who attend all the Board meetings
that provided for the grant of 5,000 options at a strike price equal to the market price of the stock on September 1, 1998 and
for each subsequent year on the record date for the Annual Meeting. On February 22, 2000, the option plan was amended to grant
each director 2,000 options for each meeting attended with a strike price at market rate, defined as the prior five-day-weighted
high/low average, set just prior to the Annual Meeting date. The options are dated on the date of grant. Beginning in 2007, the
Directors can receive $300 for each 2,000 options waived in lieu of being awarded stock options. All Directors have waived the
options; therefore, no options have been issued in the fiscal year ended June 30, 2012 pursuant to this plan.
On
November 14, 2007, the shareholders approved Employee Stock Option Plan 2007-1, pursuant to which employees may be awarded options
at the weighted average market price for the five days preceding the grant, upon the recommendation of the CEO and approval of
all independent Directors. The options would have a term of five years and 1/3 of the options would vest at the end of each of
the succeeding three years after the date of the grant. No options were awarded under this plan in the fiscal year ended June
30, 2012.
There
are currently no options outstanding under the Company’s option plans.
Certain
Arrangements with Directors and Executive Officers
There
are no loans, credit arrangements or other similar arrangements with Directors or Officers of the Company.
The
daughter of Mr. Manfred F. Dyck and Mrs. Ursula M. Dyck is employed by the Company as a Product Manager.
Information
Concerning Certain Shareholders
The
shareholders (including any "group" as that term is used in Section 13(d) (3) of the Securities Exchange Act of 1934)
who, to the knowledge of the Board of Directors of the Company, owned beneficially more than 5% of the outstanding Common Stock
as of September 18, 2012 are set forth in the following table.
|
|
|
Shares of
Common
|
|
|
|
|
|
Stock Owned
|
|
Percent
|
|
Name
and Address
|
|
Beneficially
(1)
|
|
of
Class
|
|
|
|
|
|
|
|
Manfred F. Dyck
|
|
1,618,376
(2)(3)
|
|
|
33.90
|
%
|
|
255 Holland Road
|
|
|
|
|
|
|
|
Far Hills, NJ 07931
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dieter Heinemann
|
|
814,000
(4)
|
|
|
17.10
|
%
|
|
Goldbergweg 6460599
|
|
|
|
|
|
|
|
Frankfurt AM
|
|
|
|
|
|
|
|
Federal Republic of Germany
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes:
|
(1)
|
|
As of September 18, 2012, except
as otherwise indicated below, each nominee had sole voting and investment power with respect to all shares shown in the table
as beneficially owned by such nominee.
|
|
(2)
|
|
Includes an aggregate of 60,000
shares held by Mr. Dyck as custodian/trustee for certain of his children and grandchildren and does not include 83,004 shares
held with sole voting and investment power by Mr. Dyck's children, as to which Mr. Dyck disclaims beneficial ownership.
|
|
(3)
|
|
Does not include 215,205 shares
held by Ursula M. Dyck, Mr. Dyck's wife, individually and as custodian.
|
|
(4)
|
|
Does not include 135,000 shares
held by the wife and children of Mr. Heinemann as to which he disclaims beneficial ownership.
|
Other
Information Concerning Directors, Officers and Shareholders
There
is no other information regarding
Directors,
Officers and shareholders.
10
II.
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS (Proposal II)
Subject
to ratification by the shareholders, the Board of Directors has selected the firm of Rosenberg Rich Baker Berman & Company
("RRBB") as the Company's independent public accountants for the fiscal year ending June 30, 2013. Payments to RRBB
for the previous fiscal years ended June 30, 2012 and June 30, 2011 were $44,000 and $36,000, respectively, for audit fees. There
were no other payments for other services such as audit related fees, tax fees or other fees. The Audit Committee approved 100%
of the fees paid to RRBB.
Representatives
of RRBB are expected to be present at the Annual Meeting. They will have an opportunity to make a statement and will also be available
to respond to appropriate questions from shareholders.
III.
OTHER MATTERS
The
Board of Directors of the Company does not know of any other matters that may be brought before the Annual Meeting. However, if
any such other matters are properly presented for action, it is the intention of the persons named in the accompanying form of
proxy to vote the shares represented thereby in accordance with their judgment on such matters.
IV.
MISCELLANEOUS
If
the accompanying form of proxy is executed and returned, the shares represented thereby will be voted in accordance with the terms
of the proxy, unless the proxy is revoked by written notice addressed to and received by the Secretary of the Annual Meeting.
If no directions are indicated in such proxy, the shares represented thereby will be voted in the election of Directors
in
favor of the nominees proposed by the Board of Directors and in favor of ratification of the independent public accountants; therefore,
it is important to provide your broker with voting instructions.
The
casting of a ballot at the Annual Meeting by a shareholder who may previously have given a proxy will not have the effect of revoking
the proxy unless the shareholder so notifies the Secretary of the meeting in writing at any time prior to the voting of the shares
represented by the proxy. A form for revoking your proxy will be available at the meeting. Votes that are withheld and broker
non-votes will be treated as shares that are present for purposes of determining a quorum. Withheld votes will be excluded in
determining whether a nominee for Director has received a plurality of the votes cast. All costs relating to the solicitation
of proxies will be borne by the Company. It is important that proxies be returned promptly. Shareholders who do not expect to
attend the Annual Meeting in person are urged to mark their vote, sign and date the accompanying form of proxy, and mail it in
the enclosed return envelope, which requires no postage if mailed in the United States, so that their vote can be recorded.
V.
EXCHANGE ACT COMPLIANCE
Section
16(a) of the Securities Exchange Act of 1934, as amended, requires that certain of the Company's Officers and Directors and persons
who own more than ten percent of a registered class of the Company's securities, file reports of ownership and changes in ownership
of the Company's securities with the Securities and Exchange Commission (“SEC”). Officers, Directors and greater than
ten percent shareholders are required to provide the Company with copies of the forms they file. Based solely upon its review
of copies of such forms received by the Company, and upon representations by the Company's Officers and Directors regarding compliance
with the filing requirements, the Company believes that in the fiscal year ended June 30, 2012, all filing requirements applicable
to its Officers, Directors and ten percent shareholders were complied with in a timely manner.
VI.
SHAREHOLDER NOMINATIONS/PROPOSALS
The
Company must receive shareholder proposals submitted in accordance with Rule 14a-8 of the SEC that are intended to be presented
at the 2013 Annual Meeting of Shareholders of the Company by June 3, 2013 in order for the proposal to be considered for inclusion
in the Company's Proxy Statement relating to such meeting. The Company must receive any shareholder proposal that is not submitted
by the shareholder for inclusion in next year’s Proxy Statement under SEC Rule 14a-8, but that the shareholder instead intends
to present directly at the 2013 Annual Meeting, by August 17, 2013. SEC rules permit management to vote proxies in its discretion
in certain cases if the shareholder does not comply with this deadline.
VII.
INTERNET WEB SITE
The
Company maintains a Web site on the Internet with an address of http://www.hydromer.com, which describes the products and services
sold by the Company and contains product brochures, which can be downloaded. The Web site contains links to the Company’s
financial statements, Proxy Statement, Policy on Business Conduct, the Audit Committee Charter, and the Code of Ethics for the
CEO and CFO, which any person can use to obtain copies of these documents and other documents filed with SEC. Also provided are
links to various financial services sites, which post the current stock price and current press releases. Shareholders are invited
to browse this information.
11
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