UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 14A
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED BY RULE
14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to ss.240.14a-12
ZONE 4 PLAY, INC.
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(Name of registrant as specified in its charter)
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(Name of person(s) filing proxy statement, if other than the registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
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0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
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PERSONS WHO ARE TO RESPOND TO THE COLLECTION OF INFORMATION CONTAINED
IN THIS FORM ARE NOT REQUIRED TO RESPOND UNLESS THE FORM DISPLAYS A
CURRENTLY VALID OMB CONTROL NUMBER.
ZONE 4 PLAY, INC.
Israel R&D Center
Kyriat Atidim, Bldg. 2
Tel Aviv 61580, Israel
April 15, 2008
To Our Stockholders:
You are cordially invited to attend a Stockholders Special Meeting in Lieu of an
Annual Meeting, to be held at 5:00 PM local time, on Thursday, April 29, 2008,
at our offices at Israel R&D Center, Kyriat Atidim, Bldg. 2, Tel Aviv 61580,
Israel.
The Notice of Meeting and Proxy Statement on the following pages describe the
matters to be presented at the meeting.
It is important that your shares be represented at this meeting to assure the
presence of a quorum. Whether or not you plan to attend the meeting, we hope
that you will have your stock represented by voting AS SOON AS POSSIBLE, by
signing, dating and returning your proxy card in the enclosed envelope. Your
stock will be voted in accordance with the instructions you have given in your
proxy.
Thank you for your continued support.
Sincerely,
/s/ Steve Baker
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CHIEF EXECUTIVE OFFICER AND CORPORATE SECRETARY
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ZONE 4 PLAY, INC.
Israel R&D Center
Kyriat Atidim, Bldg. 2
Tel Aviv 61580, Israel
NOTICE OF SPECIAL MEETING IN LIEU OF AN ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON APRIL 29, 2008
Special Meeting in Lieu of an Annual Meeting of Stockholders of Zone 4 Play,
Inc., a Nevada corporation, will be held at 5:00 PM, local time, on Monday,
April 29, 2008, at our offices at Israel R&D Center, Kyriat Atidim, Bldg. 2,
Tel Aviv 61580, Israel, for the following purposes:
(1) To re-elect the current members of the board of directors, comprised
of four (4) directors, to serve until the next annual meeting of
stockholders and until their respective successors shall have been
duly elected and qualified;
(2) To amend the articles of incorporation and change the name of the
Company from Zone 4 Play to Win Gaming Media, Inc.;
(3) To approve the Convertible Loan Agreement between the Company and Mr.
Shimon Citron, and related ancillary agreements, jointly referred to
as the Loan Agreement Documents; and
(4) To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
The holders of our common stock, $0.001 par value per share, or the Common
Stock, of record at the close of business on March 17, 2008, are entitled to
notice of and to vote at our special meeting in lieu of an annual meeting or any
adjournment or adjournments thereof. The meeting may be adjourned from time to
time without notice other than by announcement at the meeting; PROVIDED,
HOWEVER, that our board of directors must fix a new record date if the meeting
is adjourned to a date more than 60 days later than the date set for the
original meeting. If a new record date is fixed for the adjourned meeting,
notice of the adjourned meeting must be given to each stockholder of record as
of the new record date.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED REGARDLESS OF THE NUMBER OF
SHARES YOU MAY HOLD. WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON,
PLEASE COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD PROMPTLY IN THE
ENCLOSED RETURN ENVELOPE. THE PROMPT RETURN OF PROXIES WILL ENSURE A QUORUM AND
SAVE THE COMPANY THE EXPENSE OF FURTHER SOLICITATION. EACH PROXY GRANTED MAY BE
REVOKED BY THE STOCKHOLDER APPOINTING SUCH PROXY AT ANY TIME BEFORE IT IS VOTED.
IF YOU RECEIVE MORE THAN ONE PROXY CARD BECAUSE YOUR SHARES ARE REGISTERED IN
DIFFERENT NAMES OR ADDRESSES, EACH PROXY SHOULD BE SIGNED AND RETURNED TO ENSURE
THAT ALL OF YOUR SHARES WILL BE VOTED.
By Order of the Board of Directors
/s/ Steve Baker
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CHIEF EXECUTIVE OFFICER AND CORPORATE SECRETARY
Tel Aviv, Israel
April 15, 2008
ZONE 4 PLAY, INC.
Israel R&D Center
Kyriat Atidim, Bldg. 2
Tel Aviv 61580, Israel
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation by the
board of directors, or board, of Zone 4 Play, Inc., a Nevada corporation,
referred to herein as "Zone4Play", "the Company" "we", "us" or "our", of proxies
to be voted at special meeting in lieu of an annual meeting of our stockholders
to be held on Thursday, April 29, 2008, referred to herein as the Meeting, at
our offices at Israel R&D Center, Kyriat Atidim, Bldg. 2, Tel Aviv 61580,
Israel, and at any adjournment or adjournments thereof. The holders of record of
our Common Stock, as of the close of business on March 17, 2008, or the Record
Date, will be entitled to notice of and to vote at the Meeting and any
adjournment or adjournments thereof. As of the Record Date, there were
32,319,031 shares of our Common Stock issued and outstanding and entitled to
vote. Each share of our Common Stock is entitled to one vote on any matter
presented at the Meeting.
If proxies in the accompanying form are properly voted and received, the shares
of our Common Stock represented thereby will be voted in the manner specified
therein. If not otherwise specified, the shares of our Common Stock represented
by the proxies will be voted: (1) FOR the re-election of the four individuals
named below as directors; and (2) FOR the amendment of the Company's Articles of
Incorporation to effectuate a name change of the Company from Zone 4 Play, Inc.
to Win Gaming Media, Inc.; (3) FOR the approval of the transaction by and
between us and Mr. Citron; and (4) in the discretion of the persons named in the
enclosed form of proxy, on any other proposals which may properly come before
the Meeting or any adjournment or adjournments thereof. Any stockholder who has
submitted a proxy may revoke it at any time before it is voted, by written
notice addressed to and received by our Corporate Secretary, at the address
above, by submitting a duly executed proxy bearing a later date or by electing
to vote in person at the Meeting. The mere presence at the Meeting of the person
appointing a proxy does not, however, revoke the appointment.
The presence, in person or by proxy, of holders of shares of our Common Stock
having a majority of the votes entitled to be cast at the Meeting shall
constitute a quorum. Abstentions are included in the shares present at the
Meeting for purposes of determining whether a quorum is present. Broker
non-votes, or when shares are represented at the Meeting by a proxy specifically
conferring only limited authority to vote on certain matters and no authority to
vote on other matters, are included in the determination of the number of shares
represented at the Meeting for purposes of determining whether a quorum is
present but are not counted for purposes of determining whether a proposal has
been approved in matters where the proxy does not confer the authority to vote
on such proposal, and thus have no effect on its outcome for matters requiring a
plurality of votes or affirmative votes of a majority of shares present and
voting on the matter. Because the amendment to the articles of incorporation and
the election of directors are "routine" matters, brokers have discretion to vote
these matters provided the broker giving or authorizing the giving of the proxy
has no knowledge of any contest as to the action to be taken at the meeting and
provided such action is adequately disclosed to stockholders and does not
include authorization for a merger, consolidation or any other matter which may
affect substantially the rights or privileges of such stock.
On or about April 15, 2008, this proxy statement, together with the related
proxy card, is being mailed to our stockholders of record as of the Record Date.
Our annual report to our stockholders for the fiscal year ended December 31,
2007, or fiscal 2007, including our financial statements, will be mailed to all
of our stockholders of record as of the Record Date together with the proxy
statement. In addition, we will provided brokers, dealers, banks, voting
trustees and their nominees, at our expense, with additional copies of our
annual report so that our record holders could supply these materials to our
beneficial owners as of the Record Date.
PROPOSAL 1
RE-ELECTION OF ELECTED DIRECTORS
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
RE-ELECTION OF EACH OF THE NOMINEES FOR THE BOARD OF DIRECTORS.
At the Meeting, four presiding directors are to be re-elected. This number shall
constitute our entire board of directors, to hold office until the next annual
meeting of stockholders and until their successors shall have been duly elected
and qualified. The affirmative vote by the holders of a plurality of the shares
of our Common Stock represented at the Meeting is required for the election of
directors, provided a quorum is present in person or by proxy. Plurality means
that the four individuals who receive the largest number of votes cast "FOR"
will continue to serve as directors, even though such individuals may not
receive a majority of the votes cast.
Unless otherwise specified in the proxy, it is the intention of the persons
named in the enclosed form of proxy to vote the stock represented thereby for
re-election as directors, each of the individuals whose names and biographies
appear below. All of the individuals whose names and biographies appear below
are presently our directors. In the event any of the individuals should become
unavailable or unable to serve as a director, it is intended that votes will be
cast for a substitute individuals designated by our board of directors. Our
board has no reason to believe that the individuals named will be unable to
serve if elected. Each individual has consented to being named in this proxy
statement and to serve if affirmed.
The following are the nominees for election to our board, and all of these
nominees are current members of our board:
NAME AGE DIRECTOR SINCE POSITION WITH ZONE4PLAY
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Shimon Citron 52 2001 Director
Adiv Baruch 44 2006 Director
Niv Zilberstein 42 2007 Director
Steve Baker 55 2007 Director and Chief Executive Officer
The principal occupations and business experience of each director and nominee
for at least the past five years is as follows:
SHIMON CITRON. Mr. Citron founded Zone4Play in 2001 and he has held the
positions of Chief Executive Officer and director since Zone4Play's inception
and until May 8, 2007 when he ceased to be Chief Executive Officer. From 1999 to
2001, Mr. Citron was the founder and President of Gigi Media Ltd., a private
company based in Israel engaged in development of Internet search engines. From
1994 to 1999, he managed his own private investments in a number of startup
companies in Israel.
ADIV BARUCH. Mr. Baruch is the President and Chief Executive Officer of Pinpoint
Advance Corp. In addition, Mr. Baruch is actively involved as the Chairman of
the Israeli Export Institute Hi-Tech and Telecom Division. Prior to Joining
Pinpoint Mr. Baruch served as the President and Chief Executive Officer BOS
Better On-Line Solutions Ltd. Prior to joining BOS Mr. Baruch served as
Executive Vice President Business Development of Ness Technologies, the largest
IT firm in Israel, and is considered one of the founding members of that
company. Mr. Baruch is also a former partner and active director of IPEX,
acquired by Ness. Mr. Baruch has served in the capacity of founder, executive,
and director for several IT companies and Internet start-ups, and was
significantly involved in the M&A process for such companies and in
assisting them in their global expansion.
NIV ZILBERSTEIN. Mr. Zilberstein is the Chief Executive Officer of Palace
Industries (PI) Ltd. Between 2003 and 2007, Mr. Zilberstein was the Vice
President, Operations & Logistics for Pelephone Communication Ltd., one of
Israel's leading wireless communications companies. He is also a member of
Pelephone's executive board. Mr. Zilberstein holds a B.A. degree in behavioral
sciences and human resources management from the College of Management in Israel
and an MBA degree from Bar Ilan University.
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STEVE BAKER. Mr. Baker has been serving as our Chief executive Officer and
Corporate Secretary since March 10, 2008. Since March 2007 Mr. Baker has been
the Executive in Residence at RHO Canada, a venture capital firm dedicated to
backing leading, early-stage technology-based companies in Canada. Prior to
this, since 2001, he was CEO of CyberWorld Group, a leading marketing and back
office services provider to the internet-gaming industry. Mr. Baker is also the
CEO and Founder of Chrysalis-ITS Inc., a pioneer in internet security and
encryption systems and Founder and CEO of Emanation Control Limited, a leader in
the intelligence countermeasures sector. Mr. Baker attended Carleton University
in Ottawa, Canada.
PROPOSAL 2
AMENDMENT TO ARTICLES OF INCORPORATION TO EFFECTUATE A NAME CHANGE FROM
ZONE4PLAY, INC. TO WIN GAMING MEDIA, INC.
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
THE AMENDMENT OF THE ARTICLES OF INCORPORATION AND NAME CHANGE
At the Meeting, the shareholders will be asked to approve the filing of an
amendment to the Company's articles of incorporation to effectuate a name change
of the Company from Zone4Play, Inc. to Win Gaming Media, Inc.; In order to
approve such amendment the votes cast in the meeting favoring the action must
exceed the votes cast in the meeting opposing the action.
The filing of an amendment to the Company's articles of incorporation which is
required to effectuate the change of the Company's name from Zone 4 Play., Inc.
to Win Gaming Media, Inc. was recommended by a majority of the Board and
approved by a Board resolution dated March 10, 2008.
The management and the Board believe that the name change to Win Gaming Media,
Inc. would be in the best interest of the Company and better and more accurately
depict the Company's current activity and the transition from a
highly-fragmented organization to a more focused entity. It would also present
an improved and consistent brand-image and appeal.
PROPOSAL 3
APPROVE THE CONVERTIBLE DEBT TRANSACTION WITH SHIMON CITRON
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
THE APPROVAL OF THE CONVERTIBLE DEBT TRANSACTION
At the Meeting the shareholders will be asked to approve the Convertible Debt
transaction with Mr. Shimon Citron. The transaction is documented by a
Convertible Loan Agreement, a Convertible Promissory Note, a Security Agreement
and a Common Stock Purchase Warrant, all of which are dated as of March 6, 2008
and are collectively referred to as the Loan Agreement Documents. The
transaction was approved on March 10, 2008 by a majority of the Board (not
including the vote of Mr. Citron who is a director and an interested party in
the transaction). The Board recommended that the Shareholders approve the
transaction as being in the best interests of the Company. In order to approve
the Loan Agreement Documents, the votes cast in the meeting favoring the action
must exceed the votes cast in the meeting opposing the action.
Under the Loan Agreement Documents, Mr. Citron would provide the Company with a
loan in the aggregate principal amount of $500,000, which is to be advanced to
the Company in seven monthly installments of different amounts commencing
February 24, 2008 and ending July 9, 2008. As of the date hereof, payments in
the aggregate amount of $100,000 have been transferred to the Company. If the
transaction is not approved by the shareholders at the Meeting, Mr. Citron will
have the right to convert any amount already advanced to the Company into shares
of the Company's Common Stock and Warrants to purchase shares of Common Stock.
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In addition, the parties agreed to the following in the Loan Agreement
Documents:
o The Company would issue a Secured Promissory Note to Mr. Citron, which Note
shall be convertible into shares of the Company's Common Stock at a
per-share conversion price equal to the average closing price of the
Company's Common Stock for the five trading days preceding the date on
which the first monthly installment if advanced by Mr. Citron. The first
advance occurred on February 24, 2008. The conversion price per share,
based on the foregoing formula, is $0.0595 per share of Common Stock. The
Note will accrue interest at a rate of 15% per annum. Payment of principal
and interest by the Company will be payable in cash, or at the election of
Mr. Citron in shares of Common Stock valued at $0.0595. The Note also
contains customary events of default, including receivership or bankruptcy
proceedings, judgments in access of $100,000, and certain trading and SEC
suspensions. The Note Matures on February 24, 2009.
o The Company would issue to Mr. Citron a five-year Common Stock Purchase
Warrant to purchase up to $500,000 worth of shares of Common Stock of the
Company, calculated as $500,000 divided by the conversion price set forth
above. The Warrant would permit the purchase of 8,403,361 shares of Common
Stock at an price of $0.0595 per share.
o The Company would enter a Security Agreement to secure the performance by
the Company of its obligations under the Loan Agreement Documents. The
Company has agreed to grant to Mr. Citron a first ranking priority security
interest in substantially all of the assets of the Company.
o In addition, the Company would agree to file within 60 days of conversion
of the Notes a registration statement with the Securities and Exchange
Commission, or SEC, to register resales of the shares issued to Mr. Citron
under the Note and the Warrant. Mr. Citron will have the option for one
year from the effective date of such registration statement to purchase up
to an additional $500,000 worth of Common Stock and Warrants at a price of
$0.0595 per share.
Copies of the Loan Agreement Documents were furnished with our current report on
Form 8-K, furnished to the SEC on March 14, 2008.
CORPORATE GOVERNANCE GUIDELINES
Because we are not listed on any stock market, we technically are not subject to
a number of corporate governance guidelines. Nevertheless, our board recently
has reviewed our governance practices in light of the Sarbanes-Oxley Act of 2002
and the rules and regulations of the Securities and Exchange Commission, or the
SEC. We have voluntarily adopted a number of corporate governance guidelines and
practices. There are others, however, that we have not adopted because we feel
that they are impractical for a company of our size.
Our board of directors has adopted the following corporate governance guidelines
to assist it in the exercise of its duties and responsibilities and to serve the
best interests of Zone4Play and its stockholders. These guidelines, which
provide a framework for the conduct of our board's business, include that:
o the principal responsibility of the directors is to oversee the
management of Zone4Play;
o our outside directors will meet regularly in executive session; and
o our directors have full and free access to management and, as
necessary and appropriate, independent advisors.
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COMMITTEES AND MEETINGS OF OUR BOARD OF DIRECTORS
Our Board of Directors held 11 meetings during fiscal 2007. Throughout this
period, each member of our board who was a director in fiscal 2007 attended or
participated in at least 75% of the aggregate of the total number of regularly
scheduled meetings of our Board held during the period for which such person has
been a director, and the total number of meetings held by all committees of our
Board on which each the director served during the periods the director served.
Our Board of Directors has two standing committees: the Audit Committee and the
Compensation Committee.
COMPENSATION COMMITTEE. The members of our Compensation Committee are Messrs.
Shimon Citron and Niv Zilberstein. Our Compensation Committee held one meeting
during fiscal 2007. The Compensation Committee does not have a charter. Our
Compensation Committee will make recommendations concerning salaries and
incentive compensation for our management and our employees. The primary
responsibilities of our Compensation Committee include:
o annually reviewing and approving corporate goals and objectives
relevant to CEO compensation;
o reviewing and approving, or recommending for approval by our board,
the salaries and incentive compensation of our executive officers;
o administering our 2004 Global Share Option Plan; and
o reviewing and making recommendations to our board with respect to
director compensation.
AUDIT COMMITTEE. The sole member of our Audit Committee is Mr. Adiv Baruch. Our
Board has determined that Mr. Adiv Baruch satisfies the definition of an "audit
committee financial expert" as set forth in Item 407 of Regulation S-K
promulgated by the SEC due to his experience as described above. The Audit
Committee operates under a charter that has been approved by our Board. The
primary responsibilities of our Audit Committee include:
o appointing, approving the compensation of, and assessing the
independence of our independent registered public accounting firm;
o overseeing the work of our independent registered public accounting
firm, including through the receipt and consideration of certain
reports from our independent registered public accounting firm;
o reviewing and discussing with management and our independent
registered public accounting firm our annual and quarterly financial
statements and related disclosures;
o monitoring our internal control over financial reporting, disclosure
controls and procedures and code of business conduct and ethics;
o overseeing our internal audit function;
o discussing our risk management policies;
o establishing policies regarding hiring employees from our independent
registered public accounting firm and procedures for the receipt and
retention of accounting related complaints and concerns;
o meeting independently with our internal auditing staff, independent
registered public accounting firm and management; and
o preparing the audit committee report required by SEC rules, which is
included on page 6 of this proxy statement.
NOMINATING/CORPORATE GOVERNANCE COMMITTEE; DIRECTOR CANDIDATES. Zone4Play does
not have a Nominating Committee or Corporate Governance Committee or any
committees of a similar nature, nor any charter governing the nomination
process. Our Board does not believe that such committees are needed for a
company our size. However, our outside directors, Messrs. Baruch and
Zilberstein, will consider stockholder suggestions for additions to our board.
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In considering whether to recommend any particular candidate for inclusion in
the Board's slate of recommended director nominees, our outside directors will
apply criteria including the candidate's integrity, business acumen, knowledge
of our business and industry, age, experience, diligence, conflicts of interest
and the ability to act in the interests of all stockholders. No particular
criterion will be a prerequisite or will be assigned a specific weight. We
believe that the backgrounds and qualifications of our directors, considered as
a group, should provide a composite mix of experience, knowledge and abilities
that will allow the board to fulfill its responsibilities.
Stockholders may recommend individuals to any one of our outside directors by
submitting their names, together with appropriate biographical information and
background materials and a statement as to whether the stockholder or group of
stockholders making the recommendation has beneficially owned more than 5% of
our Common Stock for at least one year as of the date such recommendation is
made. Such requests should be addressed to any of our outside directors c/o
Zone4Play at the address on the first page of this proxy statement.
In fiscal 2007, we did not pay a fee to any third party to identify or evaluate,
or assist in identifying or evaluating, potential nominees for our board. We
have not received any recommendations from stockholders for Board nominees.
COMMUNICATING WITH OUR INDEPENDENT DIRECTORS
Our Board will give appropriate attention to written communications that are
submitted by stockholders, and will respond if and as appropriate. Mr. Steve
Baker as Acting President and CEO, with the assistance of our outside counsel,
is primarily responsible for monitoring communications from our stockholders and
for providing copies or summaries to the other directors as he considers
appropriate. Communications are forwarded to all directors if they relate to
substantive matters and include suggestions or comments that Mr. Steve Baker
considers to be important for the directors to know. In general, communications
relating to corporate governance and long-term corporate strategy are more
likely to be forwarded than communications relating to ordinary business
affairs, personal grievances and matters as to which we tend to receive
repetitive or duplicative communications.
Stockholders who wish to send communications on any topic to our board should
address such communications to: Board of Directors c/o Zone4Play at the address
on the first page of this proxy statement.
ATTENDANCE AT SPECIAL AND ANNUAL STOCKHOLDER MEETINGS
We encourage our directors to attend our special and annual stockholders
meetings. We did not have an annual meeting of stockholders in 2006 or 2007.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE FOR FISCAL 2007
The following Summary Compensation Table sets forth information concerning
compensation during fiscal 2007 for services in all capacities awarded to,
earned by or paid to Mr. Citron, and Mr. Levy who served as our Chief Executive
Officer and Chief Financial Officer, respectively throughout the period. No
other executive officers who were serving as our executive officers at the end
of fiscal 2007 received more than $100,000 in salary and bonus in fiscal 2007,
and there were no individuals for whom disclosure would have been provided but
for the fact that the individual was not serving as an executive officer at the
end of fiscal 2007.
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NAME AND PRINCIPAL
POSITION YEAR SALARY ($) BONUS ($) OPTION AWARDS ($)(1) TOTAL ($)
- -------- ---- ---------- --------- -------------------- ---------
Shimon Citron,
Chief Executive 2006 190,408 305,727 1,157,545 1,653,680
Officer (2) 2007 168,420 0 42,020 210,440
Uri Levy,
Chief Financial
Officer and Chief 2006 114,318 0 111,130 225,448
Executive Officer (3) 2007 109,559 50,258 159,817
(1) The dollar value recognized for the stock option awards was determined in
accordance with SFAS123(R).
(2) Mr. Citron served as our Chief Executive Officer until May 8, 2007.
(3) Mr. Levy served as our Acting Chief Executive Officer from May 10, 2007 and
until November 15, 2007.
OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2007
The following table presents the outstanding equity awards held as of December
31, 2007 by our Chief Executive Officer and Chief Financial Officer. All such
awards were stock options.
Number of Securities Underlying
Unexercised Options
-----------------------
NAME EXERCISABLE UNEXECISABLE EXERCISE PRICE EXPIRATION DATE
- ------------------------- --------- --------- --------- ----------------------
Shimon Citron 1,863,000 - $ 1.15 July 31, 2010
575,000 - $ 0.575 July 31, 2010
200,000 - $ 0.55 December 31, 2014
Uri Levy 125,000 275,000 $ 1.15 April 3, 2016
COMPENSATION OF DIRECTORS
We have agreements with each of our directors, pursuant to which we have agreed
to reimburse them for reasonable and necessary expenses incurred in connection
with attendance at meetings of the board of directors and other Zone4Play
business.
Upon his appointment as a director of our company in 2007, we also agreed to
grant Mr. Adiv Baruch an option to purchase up to 192,261 shares of our common
stock under the terms of our 2004 Global Share Option Plan ("Option") at an
exercise price per share of $1.00. The Option vests in three equal annual
installments, whereby Mr. Baruch has the right to purchase one third of the
shares subject to the Option at the expiration of the first, second and third
year respectively from the date of the agreement, provided that Mr. Baruch
remains a member of the Board of Directors at such time. In the event of a
termination of the agreement for cause at any time, the Option, to the extent
not exercised, shall terminate and be cancelled and non-exercisable.
In April of 2006, in recognition of his services as a director, we granted Mr.
Adiv Baruch an option to purchase up to an additional 200,000 shares of our
common stock at an exercise price of $0.725 per share for a period of 3 years.
The following table provides information regarding compensation earned by,
awarded or paid to each person for serving as a non-employee director during the
year ended December 31, 2007.
FEES EARNED OR OPTION
NAME PAID IN CASH AWARDS (1) TOTAL
---- ------------ ---------- -----
Adiv Baruch (2) $ 0 $20,925 $20,925
(1) The dollar value recognized for the stock option awards was determined in
accordance with SFAS123(R).
(2) Mr. Adiv Baruch had 392,261 options outstanding as of December 31, 2007.
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REPORT OF THE AUDIT COMMITTEE
Management is responsible for our financial reporting process, including its
system of internal controls and for the preparation of consolidated financial
statements in accordance with generally accepted accounting principles. Our
independent registered public accounting firm is responsible for auditing those
financial statements. The Audit Committee's responsibility is to monitor and
review these processes. As appropriate, the Audit Committee reviews and
evaluates, and discusses with our management and our independent registered
public accounting firm, the following:
o the plan for, and the independent registered public accounting firm's
report on, each audit of our financial statements;
o the independent registered public accounting firm's review of our
unaudited interim financial statements;
o our financial disclosure documents, including all financial statements
and reports filed with the Securities and Exchange Commission or sent
to stockholders;
o our management's selection, application and disclosure of critical
accounting policies;
o changes in our accounting practices, principles, controls or
methodologies;
o significant developments or changes in accounting rules applicable to
us; and
o the adequacy of our internal controls and accounting and financial
personnel.
The Audit Committee reviewed and discussed with our management our audited
financial statements for the year ended December 31, 2007. The Audit Committee
will also review and discuss the audited financial statements and the matters
required by Statement on Auditing Standards No. 61 titled Communication with
Audit Committees, with our independent registered public accounting firm. These
standards require our independent registered public accounting firm to discuss
with our Audit Committee, among other things, the following:
o methods used to account for significant unusual transactions;
o the effect of significant accounting policies in controversial or
emerging areas for which there is a lack of authoritative guidance or
consensus;
o the process used by management in formulating particularly sensitive
accounting estimates and the basis for the auditors' conclusions
regarding the reasonableness of those estimates; and
o disagreements with management over the application of accounting
principles, the basis for management's accounting estimates and the
disclosures in the financial statements.
Our independent registered public accounting firm also provided the Audit
Committee with the written disclosures and the letter required by Independence
Standards Board Standard No. 1, titled Independence Discussions with Audit
Committees. Independence Standards Board Standard No. 1 requires auditors
annually to disclose in writing all relationships that, in the auditor's
professional opinion, may reasonably be thought to bear on independence, confirm
their perceived independence and engage in a discussion of independence. In
addition, the Audit Committee discussed with our independent registered public
accounting firm their independence from Zone4Play. The Audit Committee also
considered whether our independent registered public accounting firm's provision
of certain other non-audit related services to Zone4Play is compatible with
maintaining our auditors' independence, and concluded that it was compatible.
Based on our discussions with management and our independent registered public
accounting firm, and our review of the representations and information provided
by our management and our independent registered public accounting firm, the
Audit Committee recommended to our board of directors that the audited financial
statements be included in our annual report on Form 10-KSB for the year ended
December 31, 2007.
By the Audit Committee of the Board of
Directors of Zone 4 Play, Inc.
/s/ Adiv Baruch
---------------
Adiv Baruch, Sole Member
- 8 -
EXECUTIVE OFFICERS
The following table identifies our current executive officer:
NAME AGE CAPACITIES IN WHICH SERVED IN CURRENT POSITION SINCE
- ----------- ------ ------------------------------------------------------ ----------------------------
Steve Baker 55 Acting Chief Executive Officer and Corporate Secretary November 2007
Mr. Baker's background is described above. Officers are elected annually by
the board of directors (subject to the terms of any employment agreement) at our
annual meeting, to hold such office until an officer's successor has been
appointed, unless an officer sooner dies, resigns or is removed by the board.
Some of our directors and our executive officer also serve in various capacities
with our subsidiaries. There are no family relationships among any of our
directors and executive officers.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, or the
Exchange Act, requires company's directors, officers and stockholders who
beneficially own more than 10% of any class of equity securities of Zone4Play
registered pursuant to Section 12 of the Exchange Act, collectively referred to
herein as the Reporting Persons, to file initial statements of beneficial
ownership of securities and statements of changes in beneficial ownership of
securities with respect to the company's equity securities with the SEC. All
Reporting Persons are required by SEC regulation to furnish us with copies of
all reports that such Reporting Persons file with the SEC pursuant to Section
16(a). Based solely on our review of the copies of such reports and upon written
representations of the Reporting Persons received by us, we believe that all
Section 16(a) filing requirements applicable to such Reporting Persons have been
met.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Only our stockholders of record as of the close of business on the Record Date
are entitled to receive notice of and to vote at the Meeting. As of the Record
Date, there were 69 registered holders of record of our common stock, and we had
outstanding 32,319,301 shares of our common stock and each outstanding share is
entitled to one vote at the Meeting. The following table sets forth certain
information, as of the Record Date, with respect to holdings of our common stock
by (1) each person known by us to be the beneficial owner of more than 5% of the
total number of shares of our common stock outstanding as of such date; (2) each
of our directors, which includes all nominees; and (3) all of our directors and
our current executive officer as a group.
AMOUNT AND NATURE OF PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER (1) BENEFICIAL OWNERSHIP(2) OF CLASS(3)
- ------------------------------------------------------- ------------------------------- ------------------------
5% BENEFICIAL OWNERS
Steve Baker 0 0%
Shimon Citron (4) 5,721,272 16.5%
Pini Gershon 2,706,950 8.4%
Orinda Capital (5)
11 El Sueno, Orinda, CA 94563 4,965,518 14.3%
Walham Investments Group Inc (6)
c/o Patton Moreno and Asvat (BVI) Ltd.
P.O. Box 3174, Road Town, Tortola,
British Virgin Islands 2,758,620 8.2%
Dave Games Invest Corporation Inc.(7)
c/o 24 Ramban Street, Jerusalem, Israel 2,758,620 8.2%
Smithfield Fiduciary LLC (8)
The Anchorage Centre, 2nd Floor
Harbor Drive, George Town
Grand Cayman, Cayman Islands, British West Indies 2,859,700 8.7%
OTHER DIRECTORS:
Adiv Baruch (9) 328,174 1.01%
All directors and current executive officers as a
group (4 persons) (4)(9) 6,049,446 17.3%
- 9 -
(1) Unless otherwise provided, all addresses are c/o Zone 4 Play, Inc. at the
address set forth on the cover page of this proxy statement.
(2) Except as otherwise indicated, all shares are beneficially owned and sole
investment and voting power is held by the persons named.
(3) Applicable percentage of ownership is based on 32,319,301 shares of our
common stock outstanding as of the Record Date, plus any common stock
equivalents and options or warrants held by such holder which are presently or
will become exercisable within 60 days after the Record Date.
(4) Includes an option to purchase 1,863,000 shares at an exercise price of
$1.15 per share and 500,000 shares at an exercise price of $0.575 per share.
Also includes 494,449 shares owned by Yariv Citron, son of Shimon Citron. Yariv
Citron has reached the age of 18 and Mr. Citron disclaims any beneficial
ownership of Yariv Citron's shares.
(5) Includes warrants to acquire 2,482,759 shares.
(6) Includes warrants to acquire 1,379,310 shares. The information is based
solely on a Schedule 13G filed with the SEC by the beneficial owner on August
14, 2006, describing the holdings of the beneficial owner as of December 31,
2006.
(7) Includes warrants to acquire 1,379,310 shares. The information is based
solely on a Schedule 13G filed with the SEC by the beneficial owner on January
22, 2007, describing the holdings of the beneficial owner as of March 20, 2006.
(8) Includes warrants to acquire 500,000 shares. Smithfield Fiduciary LLC with
an address at the Anchorage Centre, 2nd Floor Harbor Drive, George Town, is the
beneficial owner of and shares the voting and investment power with respect to
500,000 shares of our common stock and warrants to purchase an additional
500,000 shares of our common stock. Highbridge International LLC is the
beneficial owner of and shares the voting and investment power with respect to
1,859,700 shares of our common stock. In addition, each of Highbridge
International LLC, Highbridge Master L.P., Highbridge Capital Corporation,
Highbridge Capital L.P., Highbridge GP, Ltd., Highbridge GP, LLC, Highbridge
Capital Management, LLC, Glenn Dubin and Henry Swieca may be deemed the
beneficial owner of the 500,000 shares of our common stock and warrants to
purchase an additional 500,000 shares of our common stock owned by Smithfield
Fiduciary LLC and 1,564,200 shares of our common stock owned by Highbridge
International LLC. The information is based solely on a Schedule 13G/A filed
with the Securities and Exchange Commission by the beneficial owner on January
30, 2008, describing the holdings of the beneficial owners as of December 31,
2007.
(9) Includes warrants to acquire 200,000 shares of Common Stock and Options to
acquire 124,087 shares of Common Stock, which were exercisable within 60 days as
of the Record Date.
- 10 -
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On November 6, 2007, we and Two Way Media Limited, or TWM entered into a joint
venture agreement, or the Agreement, to develop both companies' gaming
activities. The activities of the joint venture will be conducted through Two
Way Gaming Limited, or TWG, a new entity established by the Company and TWM, and
owned by them in equal parts, which will operate from Alderney.
In addition, the Company and TWM entered into a shareholders agreement, or the
Shareholders Agreement, dated November 6, 2007, which defines the parties rights
and obligations in connection with the establishment, management, financial
matters, transfer of shares and other matters related to the conduct and
activities of TWG.
In connection with the entry of the Agreement, and as condition precedent to the
entry, of the Shareholders Agreement, on November 6, 2007, the Company, TWM and
Winner.com (UK) Ltd, or Winner, terminated the Interactive Fixed Odds Betting
Services Agreement, which was entered among them on February 22, 2005, or the
Old Agreement. In connection with the termination of the Old Agreement Winner
waived any and all rights granted to it under the Old Agreement and in
consideration of such waiver the Company granted to Winner an option, or the
Option, to purchase from the Company such number of shares of TWG representing
7.5% of the of TWG's total share capital on a fully diluted basis, which on the
date of the Agreement equaled 750 shares. The Option is evidenced by a grant
letter, or the Grant Letter of even date, and will become exercisable only upon
the occurrence of: (1) an initial public offering of TWG, (2) a merger,
acquisition or reorganization of TWG, or (3) a sale of substantially all of
TWG's assets. Winner is owned by our former Chief Executive Officer and current
director, Mr. Shimon Citron.
The Board approved and recommended to the Shareholders that the Company enter
into the Convertible Debt transaction with Mr. Shimon Citron. The transaction is
comprised of a Convertible Loan Agreement, a Convertible Promissory Note, a
Security Agreement and a Common Stock Purchase Warrant, as described under
Proposal 3 on Page 3 of this Proxy Statement.
INFORMATION CONCERNING OUR INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
Our Audit Committee has retained Ziv Haft, a member of the BDO Network, or BDO,
as our independent registered public accounting firm for the fiscal year ended
December 31, 2007. This appointment replaced Kost, Forer, Gabbay & Kassierer
a Member of Ernst & Young Global, or E&Y, which was dismissed by our
Audit Committee effective on June 23, 2006 as the independent accountant engaged
to audit our financial Statements. E&Y performed the audit of our financial
statements since inception. Neither BDO nor any of its directors has any direct
or indirect financial interest in or any connection with us in any capacity
other than as auditors.
One or more representatives of BDO is expected to attend the Meeting and have an
opportunity to make a statement and/or respond to appropriate questions from our
stockholders.
The following table summarizes the fees BDO billed for the last fiscal year for
audit services and other services since the engagement of BDO as the our
independent registered public accounting firm in June 2006:
FEE CATEGORY 2007 2006
- -------------- ------------ ------------
Audit Fees $ 75,000 $ 72,000(1)
Audit Related Fees - -
Tax Fees (2) $ 8,000 $ 8,000
All Other Fees - -
------------ ------------
Total Fees $ 83,000 80,000
============ ============
- 11 -
(1) Consists of fees for professional services rendered in connection with the
audit of our financial statements for the year ended on December 31, 2006, and
the reviews of the financial statements included in each of our Quarterly
Reports on Form 10-QSB during 2006 as of the beginning of the second quarter,
and fees for professional services rendered in connection with documents filed,
including the registration statement on Form 20-F for Gaming, with the SEC
during those quarters.
(2) Consists of fees relating to our tax compliance and tax planning.
PRE-APPROVAL POLICIES AND PROCEDURES
None of the audit-related fees billed in fiscal 2007 and 2006 related to
services provided under the de minimis exception to the SEC's audit committee
pre-approval requirements.
The Audit Committee has adopted policies and procedures relating to the approval
of all audit and non-audit services that are to be performed by our independent
registered public accounting firm. This policy generally provides that we will
not engage our independent registered public accounting firm to render audit or
non-audit services unless the service is specifically approved in advance by the
Audit Committee or the engagement is entered into pursuant to one of the
pre-approval procedures described below.
From time to time, the Audit Committee may pre-approve specified types of
services that are expected to be provided to us by our independent registered
public accounting firm during the next 12 months. Any such pre-approval is
detailed as to the particular service or type of services to be provided and is
also generally subject to a maximum dollar amount.
STOCKHOLDER PROPOSALS
Stockholders who wish to submit proposals for inclusion in our proxy statement
and form of proxy relating to our 2009 annual meeting of stockholders must
advise our Secretary of such proposals in writing by December 17, 2008.
Stockholders who wish to present a proposal at our 2009 annual meeting of
stockholders without inclusion of such proposal in our proxy materials must
advise our Secretary of such proposals in writing by March 1, 2009.
If we do not receive notice of a stockholder proposal within this timeframe, our
management will use its discretionary authority to vote the shares they
represent, as our board of directors may recommend. We reserve the right to
reject, rule out of order, or take other appropriate action with respect to any
proposal that does not comply with these requirements.
HOUSEHOLDING OF SPECIAL AND ANNUAL MEETING MATERIALS
Some banks, brokers and other nominee record holders may be participating in the
practice of "householding" proxy statements and annual reports. This means that
only one copy of our proxy statement or annual report may have been sent to
multiple stockholders in your household. We will promptly deliver a separate
copy of either document to you if you call or write us at the address shown on
the first page of this proxy statement. If you want to receive separate copies
of the annual report and any proxy statement in the future or if you are
receiving multiple copies and would like to receive only one copy for your
household, you should contact your bank, broker, or other nominee record
holders, or you may contact us at the address shown on the first page of this
proxy statement or by phone at (302) 691-6177.
OTHER MATTERS
Our board of directors is not aware of any matter to be presented for action at
the Meeting other than the matters referred to above and does not intend to
bring any other matters before the Meeting. However, if other matters should
come before the Meeting, it is intended that holders of the proxies will vote
thereon in their discretion.
- 12 -
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
Our financial statements for fiscal 2007 are incorporated into this proxy
statement by reference to our annual report to shareholders for the year ended
December 31, 2007, which was mailed to you with this proxy statement.
GENERAL
The accompanying proxy is solicited by and on behalf of our board of directors,
whose notice of meeting is attached to this proxy statement, and the entire cost
of such solicitation will be borne by us.
In addition to the use of the mails, proxies may be solicited by personal
interview, telephone and telegram by our directors, officers and other employees
who will not be specially compensated for these services. We will also request
that brokers, nominees, custodians and other fiduciaries forward soliciting
materials to the beneficial owners of shares held of record by such brokers,
nominees, custodians and other fiduciaries. We will reimburse such persons for
their reasonable expenses in connection therewith.
Certain information contained in this proxy statement relating to the
occupations and security holdings of our directors and officers is based upon
information received from the individual directors and officers.
PLEASE DATE, SIGN AND RETURN THE PROXY CARD AT YOUR EARLIEST CONVENIENCE IN THE
ENCLOSED RETURN ENVELOPE. A PROMPT RETURN OF YOUR PROXY CARD WILL BE APPRECIATED
AS IT WILL SAVE THE EXPENSE OF FURTHER MAILINGS.
By Order of the Board of Directors
/s/ Steve Baker
---------------
Steve Baker
CHIEF EXECUTIVE OFFICER AND CORPORATE SECRETARY
Tel Aviv, Israel
April 15, 2008
- 13 -
ZONE 4 PLAY, INC.
SPECIAL MEETING OF THE STOCKHOLDERS
APRIL 29, 2008
PROXY CARD
THE FOLLOWING PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF ZONE 4 PLAY, INC.
The undersigned stockholder of Zone 4 Play, Inc. (the "Company") hereby
appoints Steve Baker as proxy and attorney of the undersigned, for and in the
name(s) of the undersigned, to attend the special meeting in lieu of an annual
meeting of stockholders of the Company (the "Stockholders Meeting") to be held
at the Company's offices at Israel R&D Center, Kyriat Atidim, Bldg. 2, Tel
Aviv 61580, Israel on Thursday, April 29, 2008 at 5:00 P.M. local time, and any
adjournment thereof, to cast on behalf of the undersigned all the votes that the
undersigned is entitled to cast at such meeting and otherwise to represent the
undersigned at the Stockholders Meeting with all powers possessed by the
undersigned if personally present at the Stockholders Meeting, including,
without limitation, to vote and act in accordance with the instructions set
forth below. The undersigned hereby acknowledges receipt of the Notice of the
Stockholders Meeting and revokes any proxy heretofore given with respect to such
meeting.
The votes entitled to be cast by the undersigned will be cast as instructed
below. If this Proxy Card is executed but no instruction is given, the votes
entitled to be cast by the undersigned will be cast "FOR" each proposal.
PLEASE VOTE, DATE, AND SIGN AND RETURN PROMPTLY IN ENCLOSED ENVELOPE.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH OF THE
PRESIDING DIRECTORS LISTED BELOW.
1. Proposal 1 - Election of Directors: To elect the following nominees to the
Board to serve as directors of the Company until the next annual meeting of
the stockholders and until his successor is elected and qualified or his
earlier resignation or removal:
Shimon Citron For [_] Withhold [_]
Niv Zilberstein For [_] Withhold [_]
Steve Baker For [_] Withhold [_]
Adiv Baruch For [_] Withhold [_]
2. Proposal 2 - Amendment of Articles of Incorporation to change Company's
Name from Zone 4 Play, Inc. to Win Gaming Media, Inc.
For [_] Against [_] Abstain [_]
3. Proposal 3 - Approval of Convertible Loan Agreement: to approve the
Convertible Loan Agreement and the ancillary transaction documents.
For [_] Against [_] Abstain [_]
4. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
MARK HERE IF YOU PLAN TO ATTEND THE MEETING [_]
MARK HERE FOR ADDRESS CHANGE AND NOTE AT RIGHT [_] ___________________
___________________
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME APPEARS HEREON. JOINT OWNERS SHOULD EACH SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH. IF A CORPORATION, PLEASE SIGN IN FULL CORPORATE NAME BY AN AUTHORIZED OFFICER OR IF A PARTNERSHIP, PLEASE SIGN IN FULL PARTNERSHIP NAME BY AN AUTHORIZED PERSON. Signature: ____________________________________________ Date: _______________ Print Name of Stockholder: ____________________________ Print Name of Signer: _________________________________ Print Title of Signer: ________________________________ Number Common Shares: _________________________________ Signature: ____________________________________________ Date: _______________ Print Name of Stockholder: ____________________________ Print Name of Signer: _________________________________ Print Title of Signer: ________________________________ Number Common Shares: _________________________________