As filed with the Securities and Exchange Commission on November 8, 2004
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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 Rule 14a-11(c) or Rule 14a-12
ROBOCOM SYSTEMS INTERNATIONAL INC.
(Name of Registrant as Specified in Its Charter)
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(Name of Person Filing Proxy Statement, 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.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
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Rule 0-1l(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
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(1) Amount Previously Paid: $
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[Robocom Letterhead]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be held on December 8, 2004
November 8, 2004
To the Shareholders of Robocom Systems International Inc.:
Notice is hereby given that the annual meeting of shareholders of Robocom
Systems International Inc., a New York corporation, will be held in the
Executive Conference Room of Robocom Systems International Inc., 511 Ocean Ave.,
Massapequa, NY 11758, on December 8, 2004 at 10:00 A.M., local time, for the
following purposes:
1. the election of four (4) directors to our board of directors to hold
office until the 2005 annual meeting of shareholders or until their
successors shall have been duly elected and qualified;
2. a proposal to ratify the selection of our company's independent
auditors for the current fiscal year; and
3. such other business as may properly come before the annual meeting.
Only shareholders of record at the close of business on Monday, November
5, 2004 will be entitled to vote at the annual meeting.
Whether or not you expect to attend the annual meeting, please mark, sign
and promptly return the enclosed proxy in the postpaid envelope provided. If you
receive more than one proxy because your shares are registered in different
names or addresses, each such proxy should be signed and returned so that all
your shares will be represented at the meeting.
Sincerely,
Irwin Balaban
Chairman of the Board
and Chief Executive Officer
ROBOCOM SYSTEMS INTERNATIONAL INC.
511 Ocean Avenue
Massapequa, New York 11758
PROXY STATEMENT
GENERAL
This proxy statement is furnished to shareholders of Robocom Systems
International Inc., a New York corporation, in connection with the solicitation,
by order of our board of directors, of proxies to be voted at the annual meeting
of shareholders, to be held on December 8, 2004, at 10:00 A.M., local time, in
the Executive Conference Room of Robocom Systems International Inc., 511 Ocean
Avenue, Massapequa, NY 11758, and at any adjournment or adjournments thereof.
The accompanying proxy is being solicited on behalf of our board of directors.
This proxy statement and the enclosed proxy card are first being mailed to our
shareholders on or about November 8, 2004, accompanied by our annual report on
Form 10-KSB for the fiscal year ended May 31, 2004.
At the annual meeting, the following matters will be considered and voted
upon:
(1) the election of four (4) directors to our board of directors to hold
office until the 2005 annual meeting of shareholders or until their
successors shall have been duly elected and qualified;
(2) a proposal to ratify the selection of our company's independent
auditors for the current fiscal year; and
(3) such other business as may properly come before the annual meeting.
Voting and Revocation of Proxies; Adjournment
All of the voting securities of our company represented by valid proxies,
unless the shareholder otherwise specifies therein or unless revoked, will be
voted FOR the election of the director nominees set forth herein and FOR the
ratification of the selection of Eisner & Lubin, LLP as our independent auditors
for the current fiscal year, and at the discretion of the proxy holders, on any
other matters that may properly come before the annual meeting. Our board of
directors does not know of any matters to be considered at the annual meeting
other than the election of directors and the ratification of the selection of
independent auditors for our current fiscal year.
If a shareholder has appropriately specified how a proxy is to be voted,
it will be voted accordingly. Any shareholder has the power to revoke such
shareholder's proxy at any time before it is voted. A proxy may be revoked by
delivery of a written statement to our Secretary stating that the proxy is
revoked, by a subsequent proxy executed by the person executing the prior proxy
and presented to the annual meeting, or by voting in person at the annual
meeting.
A plurality of the votes cast at the annual meeting by the shareholders
entitled to vote in the election is required to elect the director nominees and
a majority of the votes cast at the annual meeting by the shareholders entitled
to vote is required to take any other action. Although no formal agreement
exists, we anticipate that approximately 2,559,100 shares (approximately 56.36%
of the outstanding shares) of our common stock, beneficially owned in the
aggregate by Mr. Irwin Balaban, the Chairman of our board of directors and our
President and Chief Executive Officer, Mr. Robert Friedman, one of our
directors, Mr. Herbert Goldman, one of our directors, and Mr. Lawrence B. Klein,
our Secretary and one of our directors, will be voted as recommended for the
director nominees set forth herein and for the ratification of the selection of
our independent auditors named herein. Accordingly, our board of directors
anticipates that its nominees will be elected to serve as our directors and the
selection of the independent auditors named herein for the current fiscal year
will be ratified. In the event that sufficient votes in favor of any of the
matters to come before the meeting are not received by the date of the annual
meeting, the persons named as proxies may propose one or more adjournments of
the annual meeting to permit further solicitation of proxies. Any such
adjournment will require the affirmative vote of the holders of a majority of
the shares of our common stock present in person or by proxy at the annual
meeting. The persons named as proxies will vote in favor of any such proposed
adjournment or adjournments.
Abstentions and broker non-votes are counted in determining the existence
of a quorum but are not counted as votes cast for the proposals as to which the
shareholder abstained or the broker withheld authority. Abstentions and broker
non-votes have the effect of reducing the number of affirmative votes required
to achieve a majority of the votes cast.
Solicitation
The solicitation of proxies pursuant to this proxy statement will be
primarily by mail. In addition, certain of our directors, officers or other
employees may solicit proxies by telephone, telegraph, mail or personal
interviews, and arrangements may be made with banks, brokerage firms and others
to forward solicitation material to the beneficial owners of shares held by them
of record. No additional compensation will be paid to our directors, officers or
other employees of our company for such services. The total cost of any such
solicitation will be borne by us and will include reimbursement of brokerage
firms and other nominees.
Quorum and Voting Rights
Our board of directors has fixed November 5, 2004 as the record date for
the determination of shareholders entitled to notice of and to vote at the
annual meeting. Holders of record of shares of common stock at the close of
business on the record date will be entitled to one vote for each share held.
The presence, in person or by proxy, of the holders of a majority of the
outstanding voting securities entitled to vote at the annual meeting is
necessary to constitute a quorum at the annual meeting.
Voting Securities and Principal Holders Thereof
Our board of directors has set November 5, 2004 as the record date for
determining shareholders entitled to vote at the annual meeting. Persons who
were not shareholders on such date will not be allowed to vote at the annual
meeting. At the close of business on November 5, 2004, there were 4,540,984
shares of our common stock issued and outstanding and no shares of preferred
stock issued and outstanding. Each share of our common stock is entitled to one
vote at the annual meeting.
2
The following table sets forth, as of October 1, 2004, the names,
addresses and number of shares of our common stock beneficially owned by (i) all
persons known to our management to be beneficial owners of more than 5% of the
outstanding shares of our common stock, (ii) each director, (iii) each named
executive officer and (iv) all executive officers and directors as a group
(except as indicated, each beneficial owner listed exercises sole voting power
and sole dispositive power over the shares beneficially owned):
Number of Shares
Name and Address of Beneficially Percentage of Outstanding
Beneficial Owner (1) Owned (2) Shares Beneficially Owned (2)
-------------------- --------- -----------------------------
Irwin ..................................................... 1,051,100(3) 23.05%
Balaban
Judy Frenkel .............................................. 118,200(4) 2.58
Robert B. Friedman ........................................ 102,500(5) 2.23
Herbert ................................................... 946,500(6) 20.76
Goldman
Lawrence B. Klein ......................................... 704,000(7) 15.45
All executive officers and directors as a group
(5 persons) ........................................... 2,922,300(8) 65.00%
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(1) The address of each beneficial owner of more than 5% of the outstanding
shares of our common stock is c/o Robocom Systems International Inc., 511
Ocean Avenue, Massapequa, New York 11758.
(2) Except as indicated in the footnotes to this table, we believe that all
persons named in the table have sole voting and investment power with
respect to all common stock shown as beneficially owned by them. In
accordance with the rules of the Securities and Exchange Commission, a
person or entity is deemed to be the beneficial owner of common stock that
can be acquired by such person or entity within 60 days upon the exercise
of options or warrants or other rights to acquire common stock. Each
beneficial owner's percentage ownership is determined by assuming that
options and warrants that are held by such person (but not those held by
any other person) and which are exercisable within 60 days have been
exercised. The inclusion herein of such shares listed as beneficially
owned does not constitute an admission of beneficial ownership.
(3) Includes 564,000 shares held by I&T Balaban L.P. and 65,000 shares subject
to options that are presently exercisable.
(4) Includes 40,000 shares subject to options that are presently exercisable.
(5) Includes 102,500 shares subject to options that are presently exercisable.
(6) Includes 564,000 shares held by H & N Goldman L.P., 160,000 shares held by
the Herbert Goldman Revocable Trust, 160,000 shares held by the Naomi J.
Goldman Revocable Trust and 62,500 shares subject to options that are
presently exercisable.
(7) Includes 60,000 shares subject to options that are presently exercisable.
(8) Includes 330,000 shares subject to options that are presently exercisable.
3
PROPOSAL 1 - Election of Directors
The Amended and Restated Bylaws of our company provide that the number of
directors shall be at least three and not more than seven, except that where all
the shares are owned beneficially and of record by fewer than three
shareholders, the number of directors may be less than three, but not less than
the number of shareholders. Subject to the foregoing limitation, such number may
be fixed from time to time by action of our board or of the shareholders. Our
board of directors currently consists of four directors. The term of office of
the directors is one year, expiring on the date of the next annual meeting, or
when their respective successors shall have been elected and shall qualify, or
upon their prior death, resignation or removal.
Except where the authority to do so has been withheld, it is intended that
the persons named in the enclosed proxy will vote for the election of the
director nominees listed below to serve until the date of the next annual
meeting of our shareholders and until their successors are duly elected and
qualified. Although our directors have no reason to believe that the nominees
will be unable or decline to serve, in the event that such a contingency should
arise, the accompanying proxy will be voted for a substitute (or substitutes)
designated by our board of directors.
The following table sets forth certain information regarding the director
nominees. All of the following individuals currently serve as members of our
board of directors:
Principal Occupation for Past Five Years and
Name Age Current Public Directorships or Trusteeships
---- --- --------------------------------------------
Irwin Balaban 72 Mr. Balaban, one of our co-founders, has been Chairman of our board of
directors since 1983. From 1983 until his retirement in March 1999, he was
our President and Chief Executive Officer. Since March 1999, he had been
providing consulting services to us. In his capacity as a consultant, in
July 2001, Mr. Balaban assumed the offices of our President and Chief
Executive Officer.
Mr. Robert Friedman 65 Mr. Friedman has been a director of our company since March 2003. Mr.
Friedman is currently the principal owner and managing partner of several
business ventures, including the Norwich (CT) Comfort Suites Hotel, the
Norwich (CT) Navigators (the Class AA affiliate of the San Francisco
Giants), the Nathan Hale Inn & Conference Center at the University of
Connecticut and the Middletown Inn & Conference Center. From 1969 to 1989,
Mr. Friedman, a graduate of The Wharton School of the University of
Pennsylvania, was President and a Director of the Middex Development
Corporation, a national real estate development company involved in the
development, ownership and management of hotels and office buildings.
4
Principal Occupation for Past Five Years and
Name Age Current Public Directorships or Trusteeships
---- --- --------------------------------------------
Herbert Goldman 73 Mr. Goldman, one of our co-founders, has been a director since 1983. Since
his retirement in 1996 until May 2000, he provided consulting services to
us. From 1991 until his retirement in 1996, Mr. Goldman was our Executive
Vice President - Operations.
Lawrence B. Klein 70 Mr. Klein, one of our co-founders, has been a director since 1991. From
May 2000 to May 2001, he provided consulting services to us. From May 1999
until his retirement in May 2000, Mr. Klein was our Executive Vice
President - Worldwide and from 1991 until May 1999, Mr. Klein was our
Executive Vice President, Marketing and Sales.
Vote Required
A plurality of the votes cast at the annual meeting by the shareholders
entitled to vote in the election, either in person or by proxy, is required to
elect the director nominees.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE
DIRECTOR NOMINEES OF THE BOARD OF DIRECTORS.
5
DIRECTORS AND EXECUTIVE OFFICERS
Directors
Biographical information concerning our Directors is set forth above under
the caption "Proposal 1 - Election of Directors".
Executive Officers
In addition to the nominee for director listed above who is also one of
our executive officers, set forth below is a brief description of our remaining
executive officers:
Richard Adamo has been Vice President - Project Management since September
2000. From September 1997 to February 2000, Mr. Adamo was our Manager of the
Project Management Group.
Judy Frenkel has been our Chief Operating Officer since July 2001. From
September 2000 to July 2001, Ms. Frenkel was our Senior Vice-President - Systems
Development. From September 1999 to September 2000, she was our Vice President -
Systems Development. From September 1992 to September 1999, she was our manager
of Systems Analysis.
Susan Loeser has been Vice President - Customer Support since September
2000. From October 1992 to September 2000, Ms. Loeser was our Manager of the
Documentation and Training Group.
Certain Relationships and Related Transactions
We lease approximately 10,000 square feet of office space, which functions
as our corporate headquarters, in Massapequa, New York, pursuant to a lease with
Robocom Properties Inc. ("Properties") that expires on December 31, 2010. The
shareholders of Properties are Messrs. Balaban, Goldman, Klein, who are
directors of our company, and two other former executive officers of our
company. In connection therewith, we incurred expenses of $177,991 in fiscal
2001 and $168,000 in both fiscal 2003 and 2004. In fiscal 2002, $161,872 was
converted to long-term debt as of May 30, 2002, bearing interest at 3% per annum
and maturing on May 30, 2004. On May 27, 2003, this long-term debt, plus the
related accrued interest of $4,856, was exchanged for warrants to purchase
100,000 shares of Common Stock, at an exercise price of $.50 per share. These
stock purchase warrants can be exercised at any time and will expire on May 31,
2008.
Since January 1, 1998, the annual base rental of $168,000 payable under
the lease has been adjusted and thereafter will be adjusted each year by the
ratio of the prime rate as published in the Wall Street Journal on January 2 of
such year to the prime rate as published in the Wall Street Journal on January
2, 1997, which was 8.25%. The prime rate on January 2, 2004 was 4.00%. However,
the parties have agreed that rent will not be less than $14,000 per month. We
believe that these rental terms are at least as favorable to us as could be
obtained from an unaffiliated third party.
On April 1, 1999, we entered into a consulting agreement with Irwin
Balaban, Chairman of our board of directors, and our President and Chief
Executive Officer, pursuant to which Mr. Balaban was to receive $12,000 per year
for providing consulting services on an as-needed basis. During fiscal 2001 and
2002, consulting fees of approximately $28,000 were incurred under this
agreement. At May 31, 2002, $37,196 was unpaid relating to such services. This
amount was converted to a promissory note as of May 30, 2002, bearing interest
at 3% per annum and maturing on May 30, 2004. As of May 30, 2003, this note was
extended until June 30, 2005, under the existing terms. At May 31, 2004, $16,621
remained unpaid under this note.
6
On May 16, 2000, we entered into a one-year agreement with Lawrence Klein,
one of our directors, pursuant to which Mr. Klein was to receive $18,000 per
year for providing consulting services to us on an as-needed basis. This
agreement was not renewed in fiscal 2001. At May 31, 2002, $9,661 remained
unpaid under this agreement. This amount was converted to a promissory note as
of May 30, 2002, bearing interest at 3% per annum and maturing on May 30, 2004.
As of May 30, 2003, this note was extended until June 30, 2005, under the
existing terms. At May 31, 2004, no balance remained unpaid under this note.
On May 15, 1997, we entered into a three-year agreement with Herbert
Goldman, one of our directors, pursuant to which Mr. Goldman was to receive
$12,000 per year for providing consulting services to us on an as-needed basis.
At May 31, 2002, $5,853 remained unpaid under this agreement. This amount was
converted to a promissory note as of May 30, 2002, bearing interest at 3% per
annum and maturing on May 30, 2004. As of May 30, 2003, this note was extended
until June 30, 2005, under the existing terms. At May 31, 2004, $3,677 remained
unpaid under this note.
During fiscal 2001, we secured a line of credit of $1,050,000 from our
three principal shareholders, all of who are directors of our company, including
Irwin Balaban, our President and Chief Executive Officer. As of May 31, 2001,
$550,000 had been drawn down from this line of credit. The line of credit
expired on September 19, 2001 and has been replaced with a line of credit from
Baseboard Investments, LLC, a limited liability company, the members of which
consist of the same three principal shareholders and directors. This line of
credit provides for borrowings of up to $1,250,000, and was to expire in
September 2002. As of November 21, 2003, this line of credit was extended until
September 19, 2005, under the existing terms. As of May 31, 2004, no borrowings
were outstanding under the line of credit.
In connection with a $500,000 line of credit that we obtained from North
Fork Bank on September 27, 2004, our three principal shareholders, all of whom
are directors of our company, executed joint and several guaranties of our
obligations under the line of credit.
Compliance with Section 16(A) Of the Exchange Act
Section 16(a) of the Securities Exchange Act of 1934 requires our
directors and executive officers, and persons who own more than ten percent
(10%) of a registered class of our equity securities, to file with the
Securities and Exchange Commission initial reports of ownership and reports of
changes in ownership of our common stock and other equity securities. Such
persons are required by Commission regulation to furnish us with copies of all
Section 16(a) forms they file.
Based solely upon a review of Forms 3, 4 and 5 furnished to us, we note
the following delinquencies for our fiscal year ended May 31, 2004:
Ms. Frenkel did not timely file a Form 4 upon her acquisition of options
to purchase 50,000 shares of our common stock on December 8, 2003. Ms. Frenkel
reported this transaction on a Form 4 filed on December 19, 2003. None of
Messrs. Balaban, Friedman, Goldman and Klein or Ms. Frenkel has filed Forms 5,
if required. We are not aware of the requirement or exemption of any of such
individuals to file a Form 5, but note the absence of any written representation
identified in paragraph (b)(2)(i) of Item 405 of Regulation S-B.
Board of Directors Meetings and Committees
Our board of directors met twice during the fiscal year ended May 31,
2004. Each director attended at least 75% of the meetings of our board of
directors [and of the meetings of any committee of which he was a member] during
such time as he served as a director. From time to time, the members of our
board of directors act by unanimous written consent pursuant to the Business
Corporation Law of the State of New York, as amended.
7
Audit Committee
Our board of directors has an audit committee in accordance with Section
3(a)(58)(A) of the Securities Exchange Act of 1934. This committee currently
consists of Messrs. Balaban and Friedman. Mr. Friedman has been appointed to sit
on the audit committee to serve as the audit committee financial expert. Mr.
Friedman is considered independent within the meaning of Rule 4200(a)(15) of the
National Association of Securities Dealers listing standards, as amended. The
audit committee is directly responsible for the appointment, compensation and
oversight of our independent auditors. The audit committee oversees the
financial reporting process on behalf of our board of directors by reviewing
with the independent auditors the scope and results of the audit engagement,
monitoring our financial policies and internal control procedures, and reviewing
and monitoring the provisions of non-audit services performed by our independent
auditors. Management is responsible for our internal controls and establishing
and reviewing the financial reporting process. The audit committee acts under a
written charter adopted and approved in September 1997, a copy of which was
included as Appendix A to our proxy statement on Schedule 14A for our fiscal
year ended May 31, 2003. The audit committee held one meeting during the fiscal
year ended May 31, 2004. Both committee members were present at the meeting.
Report of Audit Committee
The audit committee reviewed our audited financial statements for the
fiscal year ended May 31, 2004 and discussed these financial statements with our
management. The audit committee also reviewed and discussed the audited
financial statements and matters required by Statement on Auditing Standards 61
(Communication with Audit Committees) with Eisner & Lubin, LLP, our independent
auditors.
With respect to our independent auditors, the audit committee discussed
with Eisner & Lubin, LLP, among other things, matters relating to its
independence, including the disclosures made to the audit committee as required
by the Independence Standards Board Standard No. 1 (Independence Discussions
with Audit Committees).
Based on these reviews and discussions, the audit committee recommended to
our board of directors that our audited financial statements be included in our
Annual Report on Form 10-KSB for the fiscal year ended May 31, 2004.
AUDIT COMMITTEE,
Irwin Balaban
Robert B. Friedman
Nominating Committee
Our board of directors does not have a standing nominating committee. Our
entire board of directors is responsible for this function. Due to the
relatively small size of our company and the resulting efficiency of a board of
directors that is also limited in size, our board of directors has determined
that it is not necessary or appropriate at this time to establish a separate
nominating committee. Our board of directors intends to review periodically
whether such a nominating committee should be established.
Our board of directors uses a variety of methods for identifying and
evaluating nominees for director. It regularly assesses the appropriate size of
the board of directors, and whether any vacancies exist or are expected due to
retirement or otherwise. If vacancies exist, are anticipated or otherwise arise,
our board of directors considers various potential candidates for director.
Candidates may come to their attention through current members of our board of
directors, shareholders or other persons. These candidates are evaluated at
regular or special meetings of our board of directors, and may be considered at
any point during the year. Our board of directors will consider candidates for
director that are nominated by shareholders in accordance with the procedures
regarding the inclusion of shareholder proposals in proxy materials set forth in
the section entitled "Shareholder Proposals" in this proxy
8
statement. In evaluating such recommendations, our board of directors uses the
qualifications and standards discussed below and seeks to achieve a balance of
knowledge, experience and capability on our board of directors.
Qualifications for consideration as a director nominee may vary according
to the particular areas of expertise that may be desired in order to complement
the qualifications that already exist among our board of directors. Among the
factors that our directors consider when evaluating proposed nominees are their
independence, financial literacy, business experience, character, judgment and
strategic vision. Other considerations would be their knowledge of issues
affecting our business, their leadership experience and their time available for
meetings and consultation on company matters. Our directors seek a diverse group
of candidates who possess the background skills and expertise to make a
significant contribution to our board of directors, our company and our
shareholders.
Compensation Committee
Our board of directors has a compensation committee, which currently
consists of Messrs. Balaban and Goldman. The compensation committee is
responsible for reviewing and recommending salaries, bonuses and other
compensation for our officers. The compensation committee is also responsible
for administering our stock option plan and for establishing terms and
conditions of all stock options granted under the plan. The compensation
committee met once during the fiscal year ended May 31, 2004. Both committee
members were present at the meeting.
Communications with Directors
Our board of directors maintains a process for shareholders to communicate
with the board of directors or any board member. Shareholders who desire to
communicate with the board should send any communication to Attn: Secretary, c/o
Robocom Systems International Inc., 511 Ocean Avenue, Massapequa, New York
11758. Any communication must state the number of shares of common stock
beneficially owned by the shareholder making the communication. The Secretary
will forward such communication to the full board of directors or to any
individual director or directors to whom the communication is directed, unless
the communication is threatening or illegal, uses inappropriate expletive
language or is similarly inappropriate, in which case the Secretary has the
authority to discard the communication or take appropriate legal action
regarding the communication.
9
EXECUTIVE COMPENSATION
Summary of Cash and Certain Other Compensation
The following table sets forth all compensation awarded to, earned by or
paid to our chief executive officer and our four most highly compensated
executive officers, whose salary and bonus exceeded $100,000 in compensation for
the last fiscal year (collectively, the "Named Executives"):
SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation Compensation Awards
Securities
Other Annual Underlying All Other
Name and Principal Fiscal Salary Bonuses Compensation (1) Options/SARs Compensation (2)
Position Year ($) ($) ($) (#) ($)
Irwin Balaban (3) 2004 0 0 0 60,000 0
President and Chief 2003 0 0 0 0 0
Executive Officer 2002 0 0 28,180 0 0
Judy Frenkel 2004 128,000 0 0 50,000 3,874
Chief Operating 2003 121,000 5,000 0 0 3,417
Officer 2002 110,000 0 20,000 0 2,600
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(1) Represents amounts paid for automobile expenses, consulting fees and
commissions.
(2) Represents matching contributions made by us pursuant to our 401(k) Plan.
(3) Since 1983, Mr. Balaban has been Chairman of our board of directors and
since his retirement in March 1999, has been providing consulting services
to us under a consulting agreement. In his capacity as a consultant to us,
Mr. Balaban assumed the offices of President and Chief Executive Officer
in July 2001.
10
Stock Options
The following table sets forth information with respect to fiscal
year-ended May 31, 2004 option values.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
(Individual Grants)
Number of % of Total
Securities Options/SARs
Underlying Granted to
Options/SARs Employees in Exercise or Base Price
Name Granted (#) Fiscal Year ($/sh) Expiration Date
Irwin Balaban 60,000 17.14% $0.65 December 6, 2008
Judy Frenkel 50,000 14.29% $0.65 December 6, 2008
The following table sets forth the number and value of options exercised
by each of the Named Executive Officers during the fiscal year ended May 31,
2004 and of unexercised options held by each of the Named Executive Officers on
May 31, 2004:
AGGREGATED OPTION EXERCISES FOR FISCAL 2004
AND OPTION YEAR END VALUES
Number of Securities Value of Unexercised
Shares Acquired Underlying Unexercised In-the-Money Options/SARs
on Exercise Value Realized Options/SARs at FY-End (#) at FY-End ($)
Name (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable
Irwin Balaban -- -- 65,000 / 0 $3,000 / 0
Judy Frenkel -- -- 40,000 / 50,000 6,000 / 2,500
11
Employment Agreements
On July 28, 2003, we entered into an agreement with Judy Frenkel, our
Chief Operating Officer that pertains to severance compensation payable to Ms.
Frankel upon the occurrence of certain employment termination events. This
agreement provides Ms. Frenkel with three equal lump sum payments, aggregating
fifty percent of her then current rate of annual base salary, upon termination
resulting from certain qualifying events, as defined in the agreement. Such
qualifying events include but are not limited to, the failure by the surviving
corporation to offer employment to Ms. Frenkel following a change of control and
the termination of employment of Ms. Frenkel without cause prior to the first
anniversary of the change in control of our company.
Compensation of Directors
Each non-employee director receives $500 for each board meeting attended
and is reimbursed for all out-of-pocket expenses incurred, in connection with
attendance at meetings of the board, or any committee thereof. Upon election to
our board of directors, each non-employee director is granted five-year options
to purchase 5,000 shares of our common stock at an exercise price equal to fair
market value of our common stock at the date of grant. In addition, directors
serving on either the audit committee or the compensation committee are granted
additional five-year options to purchase 2,500 shares of our common stock at an
exercise price equal to the fair market value of our common stock at the date of
grant. These options vest immediately. Upon his election to our board of
directors, on March 24, 2003, Mr. Friedman received five-year options to
purchase 45,000 shares of our common stock at an exercise price of $0.09 per
share.
12
PROPOSAL 2 - Ratification of Appointment of Independent Auditors
Eisner & Lubin, LLP ("E&L"), an independent registered public accounting
firm, has served as our independent auditors since August 17, 2001 and has been
appointed by the audit committee to audit our financial statements for the
fiscal year ending May 31, 2005. In the event that ratification of this
selection of auditors is not approved by a majority of the shares of common
stock voting at the annual meeting in person or by proxy, the audit committee
will reconsider its selection of auditors. E&L has no interest, financial or
otherwise, in our company.
A representative from E&L is expected to attend the annual meeting and
such representative will have the opportunity to make a statement, if he so
desires, and will be available to respond to appropriate questions from
shareholders.
Shareholder ratification of the appointment of E&L as our independent
auditors for the fiscal year ending May 31, 2005 does not preclude the audit
committee from terminating its engagement of E&L and retaining new independent
auditors, if it determines that such an action would be in our best interest.
Audit and Related Fees
Audit Fees. The aggregate fees billed by E&L for professional services
rendered for the audit of our annual financial statements included in our annual
reports on Form 10-KSB for the years ended May 31, 2004 and 2003 and for the
review of our financial statements included in our quarterly reports on Form
10-QSB during such fiscal years was $48,000 and $40,000, respectively.
Audit-Related Fees. There were no fees billed in the years ended May 31,
2004 and 2003 for assurance and related services by E&L that were reasonably
related to the audit or review of our financial statements and that were not
covered in the Audit Fees above.
Tax Fees. There were no fees billed during the years ended May 31, 2004
and 2003 for professional services rendered by E&L for tax compliance, tax
advice or tax planning.
All Other Fees. There were no fees billed during the years ended May 31,
2004 and 2003 for professional services rendered by our independent auditors
except as disclosed above.
13
Pre-Approval Policies and Procedures
The audit committee is directly responsible for the appointment,
compensation and oversight of our independent auditors. The audit committee
oversees the financial reporting process on behalf of our board of directors by
reviewing with the independent auditors the scope and results of the audit
engagement, monitoring our financial policies and internal control procedures,
and reviewing and monitoring the provisions of non-audit services performed by
our independent auditors. The audit committee has established a policy regarding
pre-approval of all services provided by our independent auditors.
All requests for services by our independent auditors must be presented to
the audit committee in writing for consideration. Requests must be specific as
to the type of services to be provided and may be approved at a meeting of the
audit committee or by a designated member of the audit committee. All of the
services described above under the caption "Audit and Audit-Related Fees" were
approved by the audit committee in accordance with its policies and procedures.
Vote Required
A majority of the votes cast at the annual meeting by the shareholders
entitled to vote at the annual meeting, either in person or by proxy, is
required to ratify the appointment of independent auditors.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR"
RATIFICATION OF THE APPOINTMENT OF EISNER & LUBIN, LLP AS INDEPENDENT AUDITORS
FOR THE FISCAL YEAR ENDING MAY 31, 2005.
14
SHAREHOLDER PROPOSALS
Proposals of shareholders intended for presentation at the 2005 annual
meeting of shareholders and intended to be included in our proxy statement and
form of proxy relating to that meeting in accordance with Rule 14a-8(e)
promulgated under the Exchange Act, must be received at the address appearing on
the first page of this proxy statement by May 27, 2005. The proxy rules of the
Securities and Exchange Commission limit the circumstances under which the proxy
card distributed by registered companies to their shareholders may permit those
companies to cast the votes represented by the proxy voting cards in their sole
discretion. As applied to our company, the most important limitation is that for
proposals made by a shareholder at the 2005 annual meeting that are not properly
submitted by the shareholder for inclusion in our proxy materials, we may vote
proxies in our discretion with respect to those proposals only if we have not
received notice from the shareholder by May 27, 2005 at the latest that the
shareholder intends to make those proposals at the annual meeting.
OTHER BUSINESS
Other than as described above, our board knows of no matters to be
presented at the annual meeting, but it is intended that the persons named in
the proxy will vote all proxies according to their best judgment if any matters
not included in this proxy statement do properly come before the meeting or any
adjournment thereof.
EXPENSES
The expenses of printing and mailing proxy material, including expenses
involved in forwarding materials to beneficial owners of stock, will be borne by
us. No solicitation other than by mail is contemplated, except that officers or
employees of our company may solicit the return of proxies from certain
shareholders by telephone, personal solicitation or facsimile.
ANNUAL REPORT
Our annual report on Form 10-KSB for the year ended May 31, 2004,
including financial statements, is being mailed herewith. If, for any reason,
you do not receive your copy of the annual report, please contact Robocom
Systems International Inc., 511 Ocean Avenue, Massapequa, New York 11758,
Attention: Shareholder Relations, and another copy will be sent to you.
By Order of the Board of Directors,
Irwin Balaban
Chairman of the Board
and Chief Executive Officer
Dated: November 8, 2004
Massapequa, New York
15
REVOCABLE PROXY
ROBOCOM SYSTEMS INTERNATIONAL INC.
|X| PLEASE MARK VOTES
AS IN THIS EXAMPLE
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoint(s) Lawrence B. Klein, lawful attorney and
proxy of the undersigned with full power of substitution, for and in the name,
place and stead of the undersigned to attend the annual meeting of shareholders
of Robocom Systems International Inc. to be held in the Executive Conference
Room of Robocom Systems International Inc., 511 Ocean Avenue, Massapequa, New
York 11758 on December 8, 2004 at 10:00 a.m., local time, and any adjournment(s)
or postponement(s) thereof, with all powers the undersigned would possess if
personally present and to vote the number of votes the undersigned would be
entitled to vote if personally present.
Our Board of Directors recommends a vote "FOR" the proposals set forth
below.
Please be sure to sign and date
this Proxy in the boxes below.
------------------------------
Date
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Shareholder sign above Co-holder (if any) sign above
With- For All
For hold Except
PROPOSAL 1: |_| |_| |_|
The Election of Directors:
Irwin Balaban, Robert Friedman, Herbert Goldman, Lawrence B. Klein,.
INSTRUCTION: To withhold authority to vote for any individual nominee, mark "For
All Except" and write that nominee's name in the space provided below.
- ----------------------------------------------------
For Against Abstain
PROPOSAL 2: |_| |_| |_|
Ratification of the appointment of
Eisner & Lubin, LLP as
independent auditors of our
company for the fiscal year ending
May 31, 2005.
In accordance with their discretion, said Attorneys and Proxies are
authorized to vote upon such other matters or proposals not known at the time of
solicitation of this proxy which may properly come before the meeting.
This proxy when properly executed will be voted in the manner described
herein by the undersigned shareholder. If no direction is made, this proxy will
be voted for each director nominee of the Board of Directors and for each of the
Proposals set forth herein. Any prior proxy is hereby revoked.
- --------------------------------------------------------------------------------
ROBOCOM SYSTEMS INTERNATIONAL INC.
Please sign exactly as your name appears on this proxy card. When shares are
held by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or corporation, please sign in full corporate name by
president or other authorized person. If a partnership, please sign in
partnership name by authorized person.
PLEASE ACT PROMPTLY
SIGN, DATE & MAIL YOUR PROXY CARD TODAY
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