WILTEK, INC.
542 WESTPORT AVENUE
NORWALK, CONNECTICUT 06851
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The annual meeting of Shareholders of Wiltek, Inc. will be held at the
Company's sales office, 101 Merritt 7, 2nd Floor, Norwalk, Connecticut on
Friday, March 21, 1997, at 3:00 P.M., for the following purposes:
1. The election of four directors to serve until the next Annual Meeting of
Shareholders and until their successors are elected and have qualified.
2. The transaction of such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
The date fixed by the Board of Directors as the record date for the
determination of the shareholders entitled to notice of and to vote at said
Annual Meeting or any adjournment or adjournments thereof is the close of
business on January 31, 1997.
By Order of the Board of Directors,
BORIS FRENKIEL
Secretary
Dated: February 1, 1997
SHAREHOLDERS, WHETHER OR NOT THEY EXPECT TO ATTEND THE MEETING
PERSONALLY, ARE REQUESTED TO DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE
ACCOMPANYING ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES. SHAREHOLDERS WHO HAVE RETURNED THEIR PROXIES, BUT WHO ATTEND THE
MEETING IN PERSON MAY VOTE AT THE MEETING, IF THEY WISH.
WILTEK, INC.
542 WESTPORT AVENUE
NORWALK, CONNECTICUT 06851
PROXY STATEMENT
Annual Meeting of Shareholders
March 21, 1997
SOLICITATION AND REVOCATION OF PROXIES
This proxy statement is furnished in connection with the solicitation of
proxies by the Directors of Wiltek, Inc. (the "Corporation") for use at its
Annual Meeting of Shareholders, to be held on Friday, March 21, 1997, and will
be mailed to shareholders on or about February 1, 1997.
The Annual Meeting is called for the purposes of electing directors and
conducting such other business as may properly come before the meeting. Any
proxy given pursuant to this solicitation may be revoked by the person
executing the same by written instruction given to the Secretary of the
Corporation at any time prior to its exercise; by filing a later dated proxy
with the Secretary; or by revoking same, orally, in open meeting, but mere
attendance at the meeting will not effect such a revocation.
Solicitation of proxies by management will be made by mail and may also be
made by telephone and personal solicitation by the Corporation's officers,
Directors or regular employees, who will receive no remuneration therefor.
The cost of such solicitation will be borne by the Corporation. In addition,
the Corporation will request banks, brokers or other persons holding shares in
their names or the names of their nominees to distribute proxies, proxy
material and annual reports to the beneficial owners of such shares, and will
reimburse such persons for their reasonable out-of-pocket expenses incurred in
making such distribution.
A copy of the Corporation's Annual Report to Shareholders, including its
report on Form 10-KSB containing certified financial statements for the fiscal
year ended October 31, 1996, and management's discussion and analysis, is
included herewith, but is not to be considered as a part of the proxy
soliciting materials except for the financial statements and management's
discussion and analysis contained therein, which are hereby incorporated
herein by reference.
VOTING RIGHTS
Only holders of shares of Common Stock of record at the close of business on
January 31, 1997, are entitled to vote at the meeting. On that date, there
were 3,640,458 shares of Common Stock outstanding and entitled to vote, each
such share having one vote. There are no cumulative voting rights. All
properly executed proxies received at or prior to the meeting will be voted
pursuant to the instructions set forth therein, and, if no instructions are
given, will be VOTED FOR ALL management proposals.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of January 31, 1997, the shares of Common
Stock beneficially owned by (a) each beneficial owner of 5% or more of the
Common Stock of the Corporation and (b) Management, including: each director
and nominee for director; each executive officer named in the Executive
Compensation Section and all officers and directors as a group.
TITLE OF CLASS NAME AND ADDRESS OF BENEFICIAL OWNER AMOUNT AND
NATURE OF BENEFICIAL OWNERSHIP % OF CLASS
COMMON STOCK JAY W.FITZPATRICK
365,493 (1)(2)(3)(6) 9.8
99 FIELD POINT RD. FAIRFIELD CT.
06430
COMMON STOCK F. SPENCER POOLEY
330,704 (1)(2)(3)(6) 8.9
66 GLEN RIVER RD, WILTON, CT
06897
COMMON STOCK BORIS FRENKIEL
300,753 (1)(2)(4)(6) 8.2
241 CATALPA ROAD, WILTON, CT
06897
COMMON STOCK GRAEME MACLETCHIE
303,439 (1)(5)(6)(7) 8.3
1 DUNHAM PLACE, IRVINGTON, NY
10533
COMMON STOCK DAVID S. TEITELMAN
199,100 (2)(4)(8) 5.3
14 CLINTON STREET, FAIRFIELD, CT
06430
COMMON STOCK ALL OFFICERS AND DIRECTORS
1,155,489 (6) 37.6
(5 PERSONS)
<FN>
(1) Director and Nominee for Director of the Corporation.
(2) Officer of the Corporation
(3) Includes 75,000 shares issuable within 60 days upon exercise of
employee stock options.
(4) Includes 50,000 shares issuable within 60 days upon exercise of
employee stock options.
(5) Includes 5,000 shares owned by his wife, as to which beneficial
ownership is disclaimed.
(6) The nature of beneficial ownership of all shares is the sole voting and
investment power unless otherwise indicated.
(7) Includes 35,000 shares issuable within 60 days upon exercise of non-
employee stock options.
(8) Includes 50,900 shares issuable within 60 days upon exercise of
employee stock options.
INFORMATION WITH RESPECT TO NOMINEES FOR ELECTION AS DIRECTORS
The following table sets forth the slate of nominees proposed for election as
Directors; the present principal occupation, including position, if any, with
the Corporation, of each nominee; his age and his business experience during
the past five years. The table below is based in part on information received
from the respective nominees and in part from the records of the Corporation.
Each of the persons named is an incumbent director previously elected by the
shareholders.
Jay W. Fitzpatrick, 55, has served in the positions as President,
Treasurer and Director of the Corporation since 1983 and Chairman of the Board
since 1994. On March 6, 1995, due to medical reasons he resigned as President
and Treasurer.
F. Spencer Pooley, 56, has served as Vice President of the Corporation
since 1970. Mr. Pooley retired as Vice President on April 30, 1996. He was
appointed to Wilteks Board of Directors in 1994.
Boris Frenkiel, 57, has served as Vice President of the Corporation
since 1983. He was appointed to Wilteks Board of Directors in 1994.
Graeme MacLetchie, 59, has been Senior Vice President of C. J. Lawrence
Deutsche Bank Securities Corporation from 1970 to 1995, and presently he is a
Vice President of Alex Brown & Sons, Inc., an investment securities company.
He was appointed to Wilteks Board of Directors in 1994.
The persons named in the accompanying proxy will, unless proxies are marked
otherwise, vote for the election as directors of the four nominees named
above. Such nominees, if elected, will hold office until the next Annual
Meeting of Shareholders and until their respective successors shall have been
duly elected and qualified. It is not anticipated that any of the nominees
will be unavailable to serve as a Director of the Corporation, but if that
contingency should arise prior to the election, the persons name in the
accompanying proxy, when voting at the meeting, are authorized to substitute
another person chosen by the Corporation's Board of Directors.
INFORMATION REGARDING THE BOARD AND ITS COMMITTEES
There are currently two committees of the Board of Directors, an Audit
Committee and a Compensation committee. The Board of Directors does not have
a Nominating Committee. The Audit Committee, of which Graeme MacLetchie is
the sole member, recommends to the Board of Directors the engagement of the
independent accountants and reviews with the independent accountants the scope
and results of the audit, the Corporation's internal accounting system and the
recommendations of the independent accountants with respect to accounting
matters. The Committee met once during fiscal 1996, and again on December 20,
1996. The Compensation Committee, of which Graeme MacLetchie is the sole
member, determines executive salary and bonuses. The Committee met once
during fiscal 1996.
During the 1996 fiscal year the Board of Directors held four meetings. All of
the directors attended 75% or more of the total meetings of the Board of
Directors and all Committees of which he or she was a member.
Directors of the Corporation who are not full-time employees receive a fee of
$500 per quarter for their services as director, payable in advance, and are
entitled to reimbursement of expenses for attendance at meetings. There are
no fees payable for attendance at meetings of the Board or its Committees.
EXECUTIVE COMPENSATION
The following table sets forth information with respect to cash compensation,
paid or accrued by the Corporation for its last three fiscal years each ended
October 31, to its executive officers whose aggregate cash and cash equivalent
forms of remuneration in fiscal 1996 exceeded $100,000, and for all executive
officers as a group.
Annual Compensation
Name and Principal YEAR SALARY(IN DOLLARS)
TOTAL STOCK HOLDINGS
Position
AS OF 10/31/96
DAVID S. TEITELMAN 1996 129,100
90,100
PRESIDENT
ALL OFFICERS (4 PERSONS) 1996 299,200
887,050
ALL OFFICERS (4 PERSONS) 1995 525,700
862,050
ALL OFFICERS (4 PERSONS) 1994 396,000
834,850
50,000 shares of common stock was granted from the 1994 Employees Stock
Option Plan to one of the Executive Officers of the Corporation during the
Fiscal Year ended October 31, 1995, and no Executive Officer of the
Corporation had any in the money options at the end of said Fiscal Year.
There are in effect employment agreements with Messrs. Teitelman and Frenkiel
providing for employment for one year from December 31, 1996, at an annual
base compensation of $120,000 for Mr. Teitelman, and $69,000 for Mr. Frenkiel.
These agreements are terminable, but, except for certain circumstances, upon
such termination the officer will be entitled to severance payments equal to
one-half his last pertaining annual base compensation rate. The employment
agreements as in effect during fiscal 1996 did not preclude the payment of
bonuses in addition to the specified base compensation. A bonus was awarded
to David Teitelman of $10,000 in cash and $13,320 in the companys common
stock.
EMPLOYEE BENEFIT PLANS
401(k) Pension Plan
The Wiltek, Inc. 401 (k) Pension Plan, adopted as of November 1, 1985, is
available to all employees who have been in the Corporation's employ for six
months. Each participant in the plan may elect to contribute up to 15% of his
or her compensation pursuant to a Salary Reduction Agreement. Contributions
by the one-third most highly compensated participants may be limited to less
than 15% in accordance with statutory restrictions of 401 (k) plans. The
Corporation may, in its sole discretion, elect to make a matching contribution
of up to two-thirds of each participant's contribution. Effective January 1,
1996, The Company made a 10% matching contribution to the 401 (k) Plan for the
calendar year. At the Board of Directors meeting held on December 20, 1996,
a 15% matching contribution was approved effective January 1, 1997. Each
participant directs the investment of the contributions for his or her account
in shares of one or more of four Phoenix Series funds. Upon retirement or
termination of employment, the full value of the shares in such participants'
account is paid in cash to the participant in a single lump sum. In the event
of the death of a participant, the payment is made to his or her designated
beneficiary, if any, who may elect payment to be made in the form of an
annuity.
Stock Option Plans
1983 and 1988 Stock Options
An aggregate of 52,000 shares of the Common Stock of the Corporation is
reserved for issuance pursuant to the 1983 Stock Option Plan, (the "1983
Plan"), which expired June 8, 1988, and an aggregate of 176,500 shares of the
Common Stock of the Corporation is reserved for issuance pursuant to the 1988
Stock Option Plan, (the 1988 Plan), which expired June 6, 1993. Since both
of these plans had expired prior to the commencement of Fiscal 1996, no
options were available for grant during the Fiscal Year ending October 31,
1996.
Under both the 1983 and 1988 Plans, the Board of Directors, acting upon the
recommendation of the Compensation Committee, composed of Directors not
eligible to receive options, granted options for the purchase of shares at an
option price not less than the fair market value at date of grant. Upon
exercise under either Plan, the full purchase price is to be paid in cash
except that, if so authorized in writing in advance by the Committee, payment
may also be made in outstanding shares of Wiltek common stock, or a
combination of shares and cash.
Options issued under both Plans are either incentive stock options (ISO's) or
nonqualified stock options (NQSO's); have option terms of 10 years, or less;
and are non-transferable, except by testamentary disposition or the laws of
descent and distribution. While NQSO's may be exercised in full or in part at
any time, ISO's may not be exercised for a period of one year after the date
of grant and expire unless exercised within three months (or in the case of
death or disability, one year) following termination of employment. NQSOs
expire ten days later than ISOs. Under the 1988 Plan, grants of options to
any one employee which first become exercisable in any given calendar year
were limited to stock having a fair market value, at the date of grant, of no
more than $100,000.00.
No Stock Options Exercised Under 83 and 88 Plans
No options were exercised by any officers and/or employees during the three
year period ending October 31, 1996. As of October 31, 1996, there were no
options outstanding at an exercise price lower than the fair market value of
the stock and no options granted by the Corporation have been repriced during
the last completed fiscal year.
1994 Stock Options
The 1994 Employees Stock Option Plan authorizing 750,000 shares and 1994 Non-
Employee Directors/Officers Stock Option Plan authorizing 100,000 shares was
approved by the shareholders at the annual meeting held on March 28, 1995.
An aggregate of 488,800 shares and 35,000 shares of common stock of the
corporation are reserved for issuance pursuant to the 1994 Stock Option Plan
(the 1994 Plan) respectively, which will expire on August 23, 1999.
Both Plans were created to give a proprietary interest in the company to those
key employees, present and future Directors/Officers who are not employees but
whose performance strongly influences the companys success; to stimulate
their efforts on behalf of the stockholders and the company; to retain their
services; and to attract to the company other individuals of outstanding
ability.
The Plan authorizes the Compensation Committee, composed of Directors
ineligible to receive options, to grant options, through August 23, ,1999, to
eligible employees and non-employees (the D/O) at a purchase price not less
than the fair market value at the date of the grant. Options granted under
the Plan may be in the form of "Incentive Stock Options", ("ISO's"), or
options which do not qualify as ISO's, ("NQSO's"). Grants of options to any
one employee which, under the terms of the Plan, first become exercisable in
any given calendar year may not be made with respect to stock having a fair
market value of more than $100,000.
Upon exercise of the option, the full purchase price is to be paid in cash,
except that, if so authorized in advance by the Committee, payment may be made
in outstanding shares of Wiltek, Inc. stock, or in a combination of such
shares and cash.
The option term may not exceed a period of 10 years. While NQSO's may be
exercised in full or in part at any time, ISO's may not be exercised for a
period of one year after the date of grant and no employee may exercise in any
one calendar year, ISO's exercisable for the first time, with respect to stock
having a fair market value of more than $100,000. ISO's terminate unless
exercised within three months following termination of employment, except that
if the termination is for disability or death the period is one year. NQSO's
terminate ten days later than ISO's. Options are non-transferable, except by
testamentary disposition or the laws of descent and distribution. Upon the
expiration or termination of an option, the shares which were set aside for
the exercise of such option again become available for the grant of new
options thereon.
Stock Options Exercised Under the 1994 Plan
3,200 shares of common stocks were exercised during fiscal year 1996. As of
October 31, 1996, 488,800 shares of employees and 35,000 shares of non-
employee options were outstanding at an exercise price lower than the fair
market value of the stock. No options granted by the Corporation have been
repriced during the last completed fiscal year.
INDEPENDENT ACCOUNTANTS
Grant Thornton LLP acted as the Corporation's independent accountants in the
audit of its books and accounts for the fiscal year which ended October 31,
1996, and has been retained to act as such independent accountants for the
current fiscal year ending October 31, 1997. Representatives of Grant
Thornton LLP are expected to be present at the meeting and will have the
opportunity to make a statement if they desire to do so and will also be
available to respond to appropriate questions.
SHAREHOLDER PROPOSALS
Proposals of shareholders submitted for consideration at the 1998 Annual
Meeting of Shareholders must be received by the Corporation no later than
October 17, 1997, in order to be included in the proxy statement and proxy
card for that meeting.
OTHER MATTERS
As of the date of this Proxy Statement, the management has no knowledge of any
other business to be presented to the meeting, but if other business is
properly brought before the meeting the persons named in the Proxy will vote
according to their discretion.
By Order of the Board of Directors,
BORIS FRENKIEL
Secretary
Dated: February 1, 1997