SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
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Firetector Inc. (File No. 0-17580)
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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)
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1
Firetector Inc.
262 Duffy Avenue
Hicksville, New York 11801
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of the
Stockholders of Firetector Inc., a Delaware corporation ("Firetector") to be
held at the offices of Dolgenos Newman & Cronin LLP, 96 Spring Street, 8th
Floor, New York, New York 10012, on March 23, 2000 at 11:00 a.m.
At the meeting you will be asked to consider and vote upon (a) the
election of five (5) Directors to Firetector's Board of Directors; (b)
appointment of Moore Stephens, P.C. as Firetector's Auditors for the fiscal year
ending September 30, 2000; and (c) any other business that properly comes before
the meeting or any adjournments or postponements thereof.
Your vote is important. We urge you to complete, sign, date and return
the enclosed proxy card promptly in the accompanying prepaid envelope. You may,
of course, attend the Meeting and vote in person, even if you have previously
returned your proxy card.
Sincerely yours,
Joseph Vitale,
President and Chief
Operating Officer
2
Firetector Inc.
262 Duffy Avenue
Hicksville, New York 11801
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held on March 23, 2000
To the Stockholders of
Firetector Inc.
Notice is hereby given that the Annual Meeting of Stockholders of
Firetector Inc., a Delaware corporation ("Firetector") will be held at 11:00
a.m., local time, on March 23, 2000 at the offices of Dolgenos Newman & Cronin
LLP, 96 Spring Street, 8th Floor, New York, New York, for the following
purposes:
(a) To consider and vote upon the election of the Board of
Directors consisting of five (5) persons to serve until the next annual meeting
of the stockholders;
(b) To consider and vote upon a proposal to ratify the selection of Moore
Stephens, P.C. as Firetector's independent auditors for the fiscal year ending
September 30, 2000;
(c) To conduct such other business as may properly come before the Annual
Meeting or any adjournments or postponements thereof.
Only record holders of Common Stock at the close of business on January 24,
2000 are entitled to notice of and to vote at the Annual Meeting and any
adjournments or postponements thereof.
To ensure that your vote will be counted, please complete, sign, date and
return the Proxy in the enclosed prepaid envelope whether or not you plan to
attend the Annual Meeting. You may revoke your proxy by notifying the secretary
of the company in writing at any time before it has been voted at the Annual
Meeting.
By Order of the Board of Directors
John A. Poserina
Secretary, Firetector Inc.
January 27, 2000
Hicksville, New York
YOUR VOTE IS IMPORTANT. PLEASE COMPLETE, SIGN, DATE AND
RETURN THE ENCLOSED PROXY CARD PROMPTLY WHETHER OR NOT YOU PLAN
TO BE PRESENT AT THE ANNUAL MEETING.
1
FIRETECTOR INC.
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD March 23, 2000
THE ACCOMPANYING PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF FIRETECTOR INC.
If properly signed and returned and not revoked, the proxy will be
voted in accordance with the instructions it contains. The persons named in the
accompanying proxy will vote the proxy for the Board of Director's slate of
directors and for the other matters listed on the proxy as recommended by the
Board of Directors unless contrary instructions are given. At any time before it
is voted, each proxy granted may be revoked by the stockholder by a later dated
proxy, by written revocation addressed to the Secretary of Firetector Inc. at
the address below or by voting by ballot at the Annual Meeting.
The Company's principal executive offices are located at 262 Duffy
Avenue, Hicksville, New York 11801. This proxy statement and the accompanying
proxy are being sent to stockholders on or about January 24, 2000. ANY PROXY MAY
BE REVOKED IN PERSON AT THE ANNUAL MEETING, BY SUBMITTING A PROXY DATED LATER
THAN THE PROXY TO BE REVOKED OR BY NOTIFYING THE SECRETARY OF THE COMPANY IN
WRITING AT ANY TIME PRIOR TO THE TIME THE PROXY IS VOTED.
VOTING SECURITIES
The Board has fixed the close of business on January 24, 2000 as the
record date (the "Record Date") for determination of stockholders entitled to
receive notice of and to vote at the Annual Meeting or any adjournment thereof.
Only stockholders of record at the close of business on the Record Date will be
entitled to notice of and to vote at the Annual Meeting. At the close of
business on the Record Date, the Company had outstanding 1,704,000 shares of
Common Stock. The Common Stock is entitled to vote on the election of members of
the Board of Directors, ratification of the appointment of independent auditors
and other business as may properly come before the meeting or any adjournment
thereof. The holders of a majority of the Common Stock constitute a quorum for
those portions of the Annual Meeting where action is required of holders of
Common Stock.
1
ACTION TO BE TAKEN UNDER PROXY
All proxies for holders of Common Stock in the accompanying form that
are properly executed and returned will be voted at the Annual Meeting and any
adjournments thereof in accordance with any specifications thereon or, if no
specifications are made, will be voted for the election of the five nominees
described herein and for ratification of the appointment of independent
auditors.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Five (5) directors will be elected to hold office duly until the next
Annual Meeting of Stockholders and until their successors have been elected and
duly qualified. The persons named on the accompanying proxy will vote all shares
for which they have received proxies for the election of the nominees named
below unless contrary instructions are given. In the event that any nominee
should become unavailable, shares will be voted for a substitute nominee unless
the number of directors constituting a full board is reduced. Directors are
elected by plurality vote.
There were six meetings of the Board of Directors of the Company (or
actions taken by unanimous consent of the Board in lieu of meetings) during the
fiscal year ended September 30, 1999. All directors attended 75% or more
meetings of the Board of Directors. Directors are not compensated for their
service.
NOMINEES
The name, age and position with the Company of each nominee for
director of the Company is listed below, followed by summaries of the background
and principal occupations.
DATE SERVICE
NAME AGE OFFICE COMMENCED
Daniel S. Tamkin 40 Chairman, Chief October 1990
Executive Officer,
General Counsel and
Director, Audit
Committee
Joseph Vitale 53 President, Chief May 1994
Operating Officer
and Director
John A. Poserina 59 Treasurer, Vice January 1997
President, Chief
Financial Officer,
and Director
Dennis P. McConnell 46 Director and January 1997
Audit Committee
Henry Schnurbach 47 Director and October 1988
Audit Committee
2
The Company's Bylaws allow the Board to fix the number of Board members
between one and seven. The number has been fixed, at present, at five, but the
Board can increase the number to seven at anytime without stockholder approval.
Information Concerning Current Directors and Nominees for Director
Mr. Tamkin has a J.D. degree from New York University School of Law and an
A.B. degree from Columbia University. Mr. Tamkin has been Chief Executive
Officer since March 15, 1996, prior to which Mr. Tamkin was Vice President and
General Counsel of the Company from October 1990. Also since October 1990, Mr.
Tamkin has been a Vice President of Mirtronics and Executive Vice President of
Forum Financial Corporation, a Toronto based merchant banking organization
controlled by a Director of Mirtronics. Since November 1992, Mr. Tamkin has been
a director of Unicap Commercial Corporation, an Ontario corporation which is
registered under the Securities Exchange Act of 1934 (the "Exchange Act"). Since
November 1998, Mr. Tamkin has been a Director and Chief Operating Officer of
Ntex Incorporated, a manufacturer of textile products. Mr. Tamkin is presently
Counsel to Dolgenos Newman & Cronin LLP, counsel to the Company.
Mr. Vitale has been President of the Company since March 15, 1996. Mr.
Vitale has been active in the fire/communications industry with Casey Systems
Inc. since 1982. Mr. Vitale has been President of Casey since 1993 and has held
the positions of Director of Engineering, Vice President - Engineering and
Executive Vice President. Mr. Vitale holds a Bachelor of Science degree in
Engineering from C.W. Post College and a Master of Science degree in Electrical
Engineering from New York University.
Mr. Poserina joined the Company as Treasurer, Vice President, Chief
Financial Officer and Director as of January 1, 1997. From December 1995 until
he joined the Company, Mr. Poserina was an independent financial consultant.
Also, from July 1996 to September 1996, Mr. Poserina was Chief Financial Officer
of Happiness Express Inc. Mr. Poserina was Chief Financial Officer of Dorne and
Margolin Inc. from November 1994 to December 1995. Prior to that, Mr. Poserina
spent 15 years as Vice President, Treasurer and Chief Financial Officer of
Chryon Corporation, a NYSE listed company registered under the Exchange Act. Mr.
Poserina holds a Bachelor of Science in accounting from the University of Rhode
Island and is a Certified Public Accountant.
Mr. McConnell is a partner in the firm of Dolgenos Newman & Cronin LLP,
counsel to the Company. Prior to being associated with Dolgenos Newman & Cronin
LLP, he was associated with Varet & Fink P.C. from 1989 to March 1993. Mr.
McConnell holds a J.D. degree from New York Law School.
Mr. Schnurbach has a Bachelor of Commerce degree from Sir George Williams
University and is a Certified Management Accountant in Ontario. Since October
1991, Mr. Schnurbach has been Chief Executive Officer of Cantar/Polyair
Corporation ("CPC"). Since February 1996, Mr. Schnurbach has also served as
President of Polyair Inter Pack Inc., an Ontario corporation traded on the
Toronto Stock Exchange, and the holding company of CPC.
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There are no family relationships between any Director or Executive Officer
of Firetector and any other Director or Executive Officer of Firetector.
Directors hold office for a period of one year from the Annual Meeting of
Stockholders at which they are elected or until their successors are duly
elected and qualified. Officers are appointed by the Board of Directors and hold
office at the will of the Board. There is no nominating or compensation
committee of the Board of Directors nor is there any committee performing
similar functions. Messrs. Tamkin, Schnurbach and McConnell comprise the audit
committee of the Board of Directors.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
During the fiscal year ended September 30, 1999, Joseph Vitale, an Officer
and Director of the Company, failed to file with the Securities and Exchange
Commission on a timely basis one required report relating to one transaction
involving Common Stock owned by him. During the fiscal year ended September 30,
1999, Daniel S. Tamkin, an Officer and Director of the Company, failed to file
with the Securities and Exchange Commission on a timely basis one required
report relating to one transaction involving Common Stock owned by him. During
the fiscal year ended September 30, 1999, John A. Poserina, an Officer and
Director of the Company, failed to file with the Securities and Exchange
Commission on a timely basis one required report relating to one transaction
involving Common Stock owned by him. During the fiscal year ended September 30,
1999, Dennis P. McConnell, an Officer and Director of the Company, failed to
file with the Securities and Exchange Commission on a timely basis one required
report relating to one transaction involving Common Stock owned by him. During
the fiscal year ended September 30, 1999, Henry Schnurbach, a Director of the
Company, failed to file with the Securities and Exchange Commission on a timely
basis one required report relating to one transaction involving Common Stock
owned by him. In making these statements, the Company has relied on the written
representations of its directors, officers and 10% holders and copies of the
reports that they have filed with the Commission.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information known to the Company
regarding beneficial ownership of the Company's outstanding Common Stock at
January 21, 2000 of (i) each beneficial owner of more than five percent of the
Common Stock, (ii) each of the Company's Directors, and (iii) all Officers and
Directors of the Company as a group.
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Common Stock Beneficially Owned At January 21, 2000
Number of Shares Percent of Shares
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Mirtronics Inc.(1) 993,211 46.6%
Genterra Capital Corporation 166,667 7.8%
Daniel S. Tamkin (2) 127,733 7.8%
Joseph Vitale (3, 4) 17,125 nil
Henry Schnurbach (4) 5,167 nil
John A. Poserina (3, 5) 21,667 nil
Dennis P. McConnell (4, 6) 4,167 nil
All Executive Officers and
Directors as a Group (6 Persons) 175,859 7.0%
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(1) Includes 310,000 shares of Common Stock issuable upon conversion of debt
owed to Mirtronics and convertible into shares of Common Stock. See
"CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS". Address is 106 Avenue
Road, Toronto, Ontario.
(2) Includes 10,833 shares of Common Stock issuable upon exercise of presently
exercisable options and 96,900 options on shares held by Mirtronics.
Address is 96 Spring Street, New York, NY.
(3) Address is 262 Duffy Avenue, Hicksville, NY.
(4) Issuable upon exercise of presently exercisable options.
(5) Includes 14,167 shares of Common Stock issuable upon exercise of presently
exercisable options.
(6) Address is 96 Spring Street, New York, NY.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In consideration of collateral support for a previous credit facility for
the Company and various loans over several years, the Company had granted to
Mirtronics options to purchase the Company's Common Stock. Mirtronics had the
right to acquire up to an aggregate of 613,333 shares of common stock at an
exercise price of $.90 per share, a portion of which were held for the benefit
of the Company's Chairman. These options were to expire on December 31, 1998. In
addition, the Company had previously entered into a Debt/Equity Agreement with
Mirtronics, that provided for the retirement of debt and the issuance to
Mirtronics of 225,000 shares of Preferred Stock, which could also be converted
into 450,000 shares of common stock.
In February 1998, the Company and Mirtronics reached an agreement to
reorganize the options, convertible debt and preferred stock held by Mirtronics
so as to reduce the potential dilution of these securities by 366,667 shares of
common stock. Under this agreement, Firetector redeemed the $675,000 of
Convertible Preferred Stock and $170,000 of convertible debt for an aggregate
price of $845,000. These securities were convertible into 563,333 shares of
common stock. In satisfaction thereof, Firetector issued a $620,000 Convertible
Note with interest at 10% (payable upon demand and convertible into 413,333
shares of common stock at a conversion price of $1.50 per share until December
31, 2002), and a $225,000 Note (without a convertible
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feature), with interest at 10%, payable upon demand. The foregoing notes are
limited as to repayment based upon covenant requirements and borrowing
availability under the terms of the Company's Credit Facility. Also in
connection with this reorganization, Mirtronics exercised 613,333 options for
common stock for an aggregate consideration of $552,000 and Firetector
simultaneously repurchased and retired 216,667 of the newly issued shares for
$552,000.
In September 1998, the Company entered into a Debt Matching Agreement with
Mirtronics whereby an aggregate of $508,619 due by Mirtronics to Firetector was
applied to reduce the notes payable and interest due by Firetector to
Mirtronics. As a consequence of this debt matching agreement, the $225,000
Non-Convertible note with interest of $13,870 was satisfied in full and the
$620,000 Convertible Note with interest of $38,219 was reduced to a new balance
of $392,973. In addition, the right to convert this note into 413,333 shares of
common stock was surrendered in consideration for a new warrant to purchase
310,000 shares of common stock (the "1998 warrants"). These 1998 warrants are
exercisable at anytime until December 31, 2003 at an exercise price of $1.02 per
share.
In consideration of collateral support for the Company's Credit Facility in
1994, the Company granted Genterra Capital Corporation, an Ontario Corporation,
("GCC", formerly known as First Corporate Capital Inc.) options for 166,667
unregistered shares of the Company's common stock at $.90 per share through
December 31, 1999. In July 1996, GCC exercised 33,334 of these options and in
December 1999 exercised the balance of these options. An officer of GCC is also
a director of Mirtronics.
In 1985, Casey entered into a royalty agreement with Joseph Vitale, prior
to his becoming the President and Chief Operating Officer of the Company. The
agreement pays Mr. Vitale a royalty on certain systems marketed and serviced by
Casey. In fiscal year ended September 30, 1999, Casey paid $75,186 pursuant to
the terms of the agreement.
Management believes each of the foregoing transactions was entered into on
terms at least as favorable as could be obtained from unrelated parties
negotiating at arms-length.
Daniel S. Tamkin, Chairman, Chief Executive Officer and General Counsel of
Firetector, is also an officer of Mirtronics, Firetector's largest stockholder.
Mr. Schnurbach, a Director of the Company, is a Director of Mirtronics.
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MANAGEMENT
The following table sets forth certain information with respect to the
Executive Officers of the Company:
DATE SERVICE
NAME AGE OFFICE COMMENCED
Daniel S. Tamkin 40 Chairman, Chief October 1990
Executive Officer,
General Counsel and
Director
Joseph Vitale 53 President, Chief May 1994
Operating Officer
and Director
John A. Poserina 59 Treasurer, Vice January 1997
President, Secretary,
Chief Financial Officer,
and Director
Mr. Tamkin biographical information is included under "Information
Concerning Current Directors and Nominees for Directors" in this Proxy
Statement.
Mr. Vitale biographical information is included under "Information
Concerning Current Directors and Nominees for Directors" in this Proxy
Statement.
Mr. Poserina biographical information is included under "Information
Concerning Current Directors and Nominees for Directors" in this Proxy
Statement.
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EXECUTIVE COMPENSATION
The following table sets forth certain information with respect to
compensation paid or accrued by the Company for services rendered to it for each
of the three fiscal years ended September 30, 1999, as to Daniel S. Tamkin, the
Company's present Chief Executive Officer and Joseph Vitale, the Company's
President and Chief Operating Officer; none of the Company's other Executive
Officers had aggregate remuneration in excess of $100,000.
SUMMARY COMPENSATION TABLE
LONG
ANNUAL COMPENSATION TERM COMPENSATION
All Other
Year Salary ($) Bonus($) Other($) Option/SAR Compensation
- - -----------------------------------------------------------------------------
Daniel S. Tamkin
1999 $73,500 10,000 6,600 (1) --
1998 $70,000 -- 6,600 --
1997 $65,000 -- 6,300 --
Joseph Vitale
1999 $105,000 15,000 6,200 (2) --
1998 $98,000 - 6,200 --
1997 $90,000 15,000 6,000 --
John A. Poserina
1999 $115,000 15,000 6,600 (3) --
1998 $113,000 - 6,600 --
1997 $ 92,000 15,000 6,300 --
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(1) Options to purchase 5,000 shares of Common Stock, at a price of $1.125 per
share, and options to purchase 1,667 shares of Common Stock, at a price of $1.00
per share, were issued to Mr. Tamkin in April, 1999 and August, 1997
respectively.
(2) Options to purchase 5,000 shares of Common Stock, at a price of $1.125 per
share, and options to purchase 4,167 shares of Common Stock, at a price of $1.00
per share, were issued to Mr. Vitale in April, 1999 and August, 1997
respectively.
(3) Options to purchase 5,000 shares of Common Stock, at a price of $1.125 per
share, and options to purchase 9,167 shares of Common Stock, at a price of $1.00
per share, were issued to Mr. Poserina in April, 1999 and 1997 respectively.
The above stock option information reflects the effect of a one for three (1:3)
reverse split of the Common Stock effected in September 1998 and the repricing
of the exercise price of the 1997 Options to $1.00 per share.
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8
In December 1995, the Board of Directors voted to institute a 401(k) plan
for nonunion employees to be effective January 1, 1996. The plan includes a
profit sharing provision at the discretion of the Board of Directors. During
1999, the Board of Directors approved a payment totaling $28,000 for
participants of the non-union and union 401(k) plans and during 1997, approved
payments totaling $22,500 for participants of these plans.
Directors do not receive any compensation for their service. Out-of-pocket
expenses for travel, meals and miscellaneous expenses incurred in the course of
the Director's activities on behalf of the Company are reimbursed at cost.
On April 30, 1997, the Company and its shareholders adopted a nonqualified
stock option plan ("1997 Plan"), which expires September 30, 2002, except as to
options then outstanding under the 1997 Plan. Under the 1997 Plan, the Board of
Directors may grant options to eligible employees at exercise prices not less
than 100% of the fair market value of the common shares at the time the option
is granted. The number of shares of Common Stock that may be issued shall not
exceed an aggregate of up to 10% of its issued and outstanding shares from time
to time. Options vest at a rate of 20% per year commencing one year after date
of grant. Issuances under the 1997 Plan are to be reduced by options outstanding
under a 1990 nonqualified stock option plan (replaced by the 1997 Plan).
Effective September 30, 1998, all outstanding employee stock options were reset
to an exercise price of $1.00 per share.
The Company currently has issued and outstanding options to purchase
204,858 shares of its Common Stock, at various exercise prices ranging between
$1.00 and $1.125 per share, to certain of its officers, Directors and employees.
See "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT."
Daniel S. Tamkin, Chairman, Chief Executive Officer and General Counsel of
Firetector, is also an officer of a company controlled by a Director of
Mirtronics, Firetector's largest stockholder. Mr. Schnurbach, a Director of the
Company, is a Director of Mirtronics.
9
PROPOSAL NO. 2
RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors of Firetector selected Moore Stephens, P.C. as
auditors for the fiscal year ending September 30, 2000, subject to stockholder
approval by ratification. Moore Stephens has been since fiscal 1995, the
independent auditors for Firetector. A representative of Moore Stephens is
expected to be present at the Annual Meeting, at which time he or she will be
afforded an opportunity to make a statement, and will be available to respond to
questions.
The Board of Directors of Firetector may, in its discretion, direct
appointment of new independent auditors at any time during the fiscal year if
the Board believes such change would be in the best interests of Firetector and
its stockholders. No such change is anticipated.
The Board of Directors of Firetector recommends a vote FOR the ratification
of Moore Stephens for the fiscal year ending September 30, 2000.
OTHER BUSINESS
The proxy confers discretionary authority on the proxies with respect to
any other business which may come before the Annual Meeting. The Board of
Directors of Firetector knows of no other matters to be presented at the Annual
Meeting. The persons named in the proxy will vote the shares for which they hold
proxies according to their best judgment if any matters not included in this
Proxy properly come before the meeting, unless the contrary is indicated.
STOCKHOLDER PROPOSALS
Any stockholder proposal to be included in the proxy statement and form of
proxy relating to the 2001 Annual Meeting of Firetector Stockholders must be
received by the close of business on November 18, 2000 and must comply in all
other respects with the rules and regulations of the Securities and Exchange
Commission. Proposals should be addressed to: Corporate Secretary, Firetector
Inc., 262 Duffy Avenue, Hicksville, New York 11801.
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