As filed with the Securities and Exchange Commission on May 5, 2006
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
---------------
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|X| Preliminary Proxy Statement
|_| Confidential, for the use of the Commission only (as permitted by Rule
14a-6(e)(2))
|_| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss.240.14a-12
---------------
ROBOCOM SYSTEMS INTERNATIONAL INC.
(Name of Registrant as Specified in Its Charter)
(Name(s) of Person Filing Proxy Statement, if Other than Registrant)
---------------
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[ROBOCOM LETTERHEAD]
NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD ON JUNE 28, 2006
May 19, 2006
To Our Shareholders:
Notice is hereby given that an annual meeting of shareholders of Robocom
Systems International Inc., a New York corporation (referred to herein as "we"
or "us"), will be held in the offices of Pryor Cashman Sherman & Flynn LLP,
located at 410 Park Avenue, 10th Floor, New York, New York 10022, on June 28,
2006, at 11:00 a.m., local time, for the following purposes:
1. To elect four directors to serve for the ensuing year and until
their successors are elected;
2. To approve an amendment of our Restated Certificate of Incorporation
increasing the total number of authorized shares of Common Stock,
par value $.01 per share, from 30 million shares to 125 million
shares;
3. To approve an amendment of our Restated Certificate of Incorporation
permitting our shareholders to act without a meeting by written
consent of the holders of less than all of the outstanding shares;
4. To approve an amendment of our Restated Certificate of Incorporation
prescribing a majority vote of the outstanding shares for the
adoption or approval of a plan of merger or consolidation, the sale,
lease, exchange or other disposition of all or substantially all of
the assets of our company, or a plan of binding share exchanges.
5. To ratify the selection of Eisner & Lubin LLP as our independent
accountants for the fiscal year ended May 31, 2006; and
6. To act upon such other matters as may properly come before the
meeting or any adjournments or postponements thereof.
The foregoing items of business are more fully described in the proxy
statement accompanying this notice.
Our board of directors has fixed May 12, 2006 as the record date for the
determination of our shareholders entitled to notice of, and to vote at, the
annual meeting. A list of such shareholders will be available for examination by
a shareholder for any purpose germane to the annual meeting during ordinary
business hours at our office located at 17 Fairbanks Boulevard, Woodbury, NY
11797, during the ten (10) business days prior to the annual meeting and during
the annual meeting.
Whether or not you plan to attend the annual meeting, you should complete,
sign, date and promptly return the enclosed proxy card, to ensure that your
shares will be represented at the meeting. If you attend the annual meeting and
wish to vote in person, you may withdraw your proxy and vote in person. You
should not send any certificates representing stock with your proxy card.
For the board of directors
/s/ Irwin Balaban
--------------------------------------
Irwin Balaban
Chairman of our Board of Directors
and Chief Executive Officer
TABLE OF CONTENTS
INFORMATION CONCERNING SOLICITATION AND VOTING.................................1
Record date and Voting Securities...........................................1
Revocability of Proxies.....................................................1
Purpose of the Annual Meeting...............................................1
Voting and Revocation of Proxies; Adjournment...............................2
Solicitation................................................................3
Quorum......................................................................3
No Dissenters' Rights.......................................................3
Dividend....................................................................3
PROPOSAL NO. 1.................................................................4
PROPOSAL NO. 2................................................................12
PROPOSAL NO. 3................................................................14
PROPOSAL NO. 4................................................................16
PROPOSAL NO. 5................................................................18
SHAREHOLDER PROPOSALS.........................................................20
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT................20
OTHER MATTERS.................................................................21
EXPERTS.......................................................................21
FINANCIAL AND OTHER INFORMATION...............................................21
INCORPORATION OF DOCUMENTS BY REFERENCE.......................................21
WHERE YOU CAN FIND MORE INFORMATION...........................................22
ANNEX A - FORM OF AMENDMENT TO INCREASE OUR AUTHORIZED COMMON STOCK.
ANNEX B - FORM OF AMENDMENT TO PERMIT SHAREHOLDER ACTION BY WRITTEN CONSENT.
ANNEX C - FORM OF AMENDMENT TO PRESCRIBE MAJORITY VOTE FOR CERTAIN
TRANSACTIONS.
APPENDIX A - AUDIT COMMITTEE CHARTER
i
ROBOCOM SYSTEMS INTERNATIONAL INC.
17 Fairbanks Boulevard
Woodbury, New York 11797
PROXY STATEMENT
FOR THE ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD ON JUNE 28, 2006
Proxies in the form enclosed with this proxy statement are solicited by
the board of directors of Robocom Systems International Inc. for use at our
annual meeting of shareholders (the "annual meeting") to be held on June 28,
2006 at 11:00 a.m., local time, or at any adjournments or postponements thereof,
for the purposes set forth in the accompanying Notice of Annual Meeting of
Shareholders. The annual meeting will be held in the offices of Pryor Cashman
Sherman & Flynn LLP, located at 410 Park Avenue, 10th Floor, New York, New York
10022.
This proxy statement and the enclosed proxy card are first being mailed on
or about May 19, 2006 to our shareholders entitled to vote at the meeting.
Accompanying this proxy statement is a copy of our Annual Report on Form 10-KSB
for the fiscal year ended May 31, 2005 and a copy of our Quarterly Report on
Form 10-QSB for the three and nine months ended February 28, 2006.
INFORMATION CONCERNING SOLICITATION AND VOTING
Record date and Voting Securities
Shareholders of record as of May 12, 2006 (the "record date") are entitled
to notice of and to vote at the annual meeting. As of the record date, 4,540,984
shares of our common stock were issued and outstanding.
Revocability of Proxies
Execution of a proxy will not in any way affect a shareholder's right to
attend the annual meeting and vote in person. Any shareholder giving a proxy has
the right to revoke it by written notice delivered to our Secretary at our
principal executive offices at any time before it is exercised, by completing
and submitting a new proxy, or by voting in person at the annual meeting.
Purpose of the Annual Meeting
At the annual meeting, you will be asked to consider and vote upon the
following matters:
1. To elect four directors to serve for the ensuing year and until
their successors are elected;
2. To approve an amendment of our Restated Certificate of Incorporation
increasing the total number of authorized shares of Common Stock,
par value $.01 per share, from 30 million shares to 125 million
shares;
3. To approve an amendment of our Restated Certificate of Incorporation
permitting our shareholders to act without a meeting by written
consent of the holders of less than all of the outstanding shares;
4. To approve an amendment of our Restated Certificate of Incorporation
prescribing a majority vote of the outstanding shares for the
adoption or approval of a plan of merger or consolidation, the sale,
lease, exchange or other disposition of all or substantially all of
the assets of our company, or a plan of binding share exchanges.
5. To ratify the selection of Eisner & Lubin LLP as our independent
accountants for the fiscal year ended
1
May 31, 2006; and
6. To act upon such other matters as may properly come before the
meeting or any adjournments or postponements thereof.
Voting and Revocation of Proxies; Adjournment
All of our voting securities represented by valid proxies, unless the
shareholder otherwise specifies therein or unless revoked, will be voted FOR
each of the director nominees set forth herein, FOR the approval of the adoption
of each of the amendments to our Restated Certificate of Incorporation, FOR the
ratification of Eisner & Lubin LLP. as our independent auditors 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 (i) the election of the four
(4) board members; (ii) the approval and adoption of each of the proposed
amendments to our Restated Certificate of Incorporation described herein; and
(iii) the ratification of Eisner & Lubin LLP as our independent auditors.
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 shareholder may revoke a
proxy by delivering a written statement to our corporate secretary stating that
the proxy is revoked, by submitting a subsequent proxy signed by the same person
who signed the prior proxy, 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, at
least two-thirds of all outstanding shares of our common stock is required to
approve the amendment to our Restated Certificate of Incorporation to prescribe
a majority vote for mergers, consolidations and certain other transactions, at
least a majority of all outstanding shares of our common stock is required to
approve the other two proposed amendments to our Restated Certificate of
Incorporation, and at least a majority of the votes cast by the shareholders
entitled to vote at the annual meeting is required to take any other action,
including the ratification of our independent auditors.
Although no formal agreement exists, we anticipate that the 2,559,100
shares (approximately 56.36% of the outstanding shares) in the aggregate of the
shares of our common stock beneficially owned by the members of our board of
directors and our executive officers (collectively, the "Majority Shareholders")
will be voted in favor of each of the proposals set forth herein. Accordingly,
our board of directors anticipates its nominees will be elected to serve as our
directors, the proposed ratification of Eisner & Lubin LLP as our independent
accountants and the two proposed amendments to our Restated Certificate of
Incorporation requiring only a majority vote will all be approved.
For purposes of determining whether a proposal has received the required
vote, abstentions will be included in the vote totals, with the result being
that an abstention will have the same effect as a negative vote. In instances
where brokers are prohibited from exercising discretionary authority for
beneficial holders who have not returned a proxy (so-called "broker non-votes"),
those shares will not be included in the vote totals and, therefore, will also
have the same effect as a negative vote. Shares that abstain or for which the
authority to vote is withheld on certain matters will, however, be treated as
present for quorum purposes on all matters.
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
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. Under New York law, shareholders will not have appraisal or
similar rights in connection with any proposal set forth in this proxy
statement.
2
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 for such services. We will bear the cost of the solicitation of
proxies related to the annual meeting.
Quorum
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.
No Dissenters' Rights
Under New York Business Corporations Law, shareholders are not entitled to
dissenters' rights with respect to any of the proposals set forth in this proxy
statement.
Dividend
On April 17, 2006, our board of directors declared a dividend in the
aggregate amount of $2,500,000 million, payable to our shareholders who are
record holders of the issued and outstanding shares of our common stock
immediately prior to the filing date of the proposed amendment to our Restated
Certificate of Incorporation described in proposal no. 4 of this proxy
statement. The dividend per share is expected to be within a range of $0.52 to
$0.55, less any applicable withholding tax. The exact per share amount of the
dividend will be determined based upon the total number of issued and
outstanding shares of our common stock immediately prior to the filing date of
the aforementioned proposed amendment. Payment of this dividend is expressly
conditioned on shareholder approval of the proposed amendment to our Restated
Certificate of Incorporation as set forth in proposal no. 4 of this proxy
statement and the filing of such amendment with the New York Department of
State.
3
PROPOSAL NO. 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 73 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 has 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.
Robert Friedman 66 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 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 74 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 71 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
Biographical information concerning our Mr. Irwin Balaban, our sole
executive officer, is set forth above under the caption "Proposal 1 - Election
of Directors".
Certain Relationships and Related Transactions
Pursuant to an indemnification agreement, dated August 17, 2005, by and
among our company and Messrs. Irwin Balaban, our Chairman of the Board,
President and Chief Executive Officer, Lawrence B. Klein and Herbert Goldman,
directors of our company, we agreed to indemnify such persons for any losses
they may incur resulting from their agreement to personally indemnify Avantce
RSI, LLC for certain losses it may incur in the event of our breach of our
representations, warranties and/or covenants set forth in that certain Asset
Purchase Agreement, dated August 17, 2005, between our company and Avantce RSI,
LLC.
From June 1989 until October 11, 2005, we leased approximately 10,000
square feet of office space, which functioned as our corporate headquarters, in
Massapequa, New York, pursuant to a lease between our company and Robocom
Properties Inc. ("Properties"). The shareholders of Properties are Messrs.
Balaban, Goldman, Klein and two former executive officers of our company. In
connection therewith, we incurred annual expenses of $168,000 in fiscal 2003,
2004 and 2005.
As of May 30, 2002, we converted debt incurred under a prior consulting
agreement with Mr. Balaban to a promissory note, 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. On October 6, 2005, the remaining
balance and the related interest of $10,567 was paid in full.
As of May 30, 2002, we converted debt incurred under a prior consulting
agreement with Mr. Goldman to a promissory note, 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. On October 6, 2005, the remaining
balance and the related interest of $2,861 was paid in full.
From September 19, 2001 until September 19, 2005, we had 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 of our
company. This line of credit provided for borrowings of up to $1,250,000. As of
September 24, 2004, we amended this line of credit to provide for borrowings of
up to $500,000 through September 19, 2005, at which time the line was
terminated.
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, there were
no delinquencies for our fiscal year ended May 31, 2005.
6
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 three times during the fiscal year ended May
31, 2005. Each director attended at least 75% of the meetings of our board of
directors. 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.
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 this proxy statement. The audit committee held one
meeting during the fiscal year ended May 31, 2005. 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, 2005 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 No.
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, 2005.
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
7
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 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, 2005. 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., 17 Fairbanks Boulevard, Woodbury, NY 11797.
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.
8
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 $100,000 in compensation for
the last fiscal year ended May 31, 2005 (collectively, the "Named Executives"):
SUMMARY COMPENSATION TABLE
Long-Term
Annual Compensation Compensation Awards
Securities
Other Annual Underlying All Other
Name and Principal Fiscal Salary Bonuses Compensation (1) Options/SARs Compensation (2)
Position Year ($) ($) ($) (#) ($)
Irwin Balaban (3)
President and Chief 2005 $ 0 $ 0 $ 0 0 $ 0
Executive Officer 2004 0 0 0 60,000 0
2003 0 0 0 0 0
Judy Frenkel (4) 2005 135,000 13,500 0 0 4,455
Chief Operating 2004 128,000 0 0 50,000 3,874
Officer 2003 121,000 5,000 0 0 3,417
- ------------------
(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.
(4) Ms. Frenkel left the employ of our company concurrently with the sale of
substantially all of our operating assets on October 11, 2005.
9
Stock Options
The following table sets forth information with respect to fiscal
year-ended May 31, 2005 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 50,000 21.74% $0.57 October 5, 2009
10,000 4.35% $0.65 December 7, 2009
The following table sets forth the number and value of options exercised
by each of the Named Executive Officers during the fiscal year ended May 31,
2005 and of unexercised options held by each of the Named Executive Officers on
May 31, 2005:
AGGREGATED OPTION EXERCISES FOR FISCAL 2005
AND OPTION YEAR END VALUES
Number of Securities Value of Unexercised
Shares Acquired Underlying Unexercised In-the-Money Options/SARs
on Exercise Value Realized Options/SARs at FY-End (#) at FY-End ($)
Name (#) ($) Exercisable/Unexercisable Exercisable/Unexercisable
Irwin Balaban -- -- 125,000 / 0 $28,500 / 0
Judy Frenkel -- -- 46,667 / 33,333 13,833 / 6,667
10
Employment Agreements
On July 28, 2003, we entered into an agreement with Judy Frenkel, our
former Chief Operating Officer that pertained to severance compensation payable
to Ms. Frankel upon the occurrence of certain employment termination events.
This agreement provided that Ms. Frenkel would be entitled to receive 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 included but were 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. Subsequent to the sale of our assets to Avantce RSI, LLC
("Avantce") on October 11, 2005, Ms. Frenkel was not offered employment with
Avantce. During second and third quarter of fiscal 2006, Ms. Frenkel was paid
approximately $67,500 under this agreement. No further obligation exists under
this agreement.
Compensation of Directors
Each non-employee director receives $1,500 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.
11
PROPOSAL NO. 2
AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION
TO INCREASE AUTHORIZED COMMON STOCK
General
On April 17, 2006, our board of directors authorized, subject to approval
by our shareholders, an amendment of our Restated Certificate of Incorporation
increasing the total number of authorized shares of Common Stock, par value
$.001 per share, from 30 million shares to 125 million shares. The form of the
proposed amendment to our Restated Certificate of Incorporation is included as
Annex A of this Proxy Statement. A Certificate of Amendment incorporating the
form of proposed amendment set forth on Annex A will be filed with the New York
Department of State promptly after the annual meeting if the proposed amendment
is adopted by our shareholders.
Our board of directors has determined that the adoption of the proposed
amendment will be in the best interests of our company.
Increase in Authorized Shares of Common Stock
Under our Restated Certificate of Amendment, we have 30,000,000 authorized
shares of capital stock, all of which are shares of common stock. Our board of
directors believes it is in the best interests of our company to increase the
number of authorized shares of capital stock to 125,000,000, all of which will
be shares of common stock. As of the record date, we had outstanding 4,540,984
shares of common stock and no shares of preferred stock. Further, at such date,
645,000 shares of common stock were reserved for issuance under our Stock Option
and Long-Term Incentive Plan in respect of outstanding options and 125,000
shares of common stock were issuable upon the exercise of outstanding warrants.
As a result of the increase, the number of authorized shares of our common
stock that are not issued or outstanding will increase, as reflected in the
following table:
Prior to Increase After Increase
Number of shares of Common Stock:
Authorized................................. 30,000,000 125,000,000
Outstanding................................ 4,540,984 4,540,984
Reserved for issuance(1)................... 745,000 745,000
Available for future issuance.............. 24,714,016 119,714,016
- ----------------
(1) Represents shares of common stock that are issuable upon the exercise of
outstanding options and warrants.
In approving the increase in the authorized shares of common stock, our
board of directors believes that the number of authorized shares of common stock
remaining available was not sufficient to enable us to respond to potential
business opportunities and pursue important objectives that may present
themselves. As a result of the sale of substantially all of our assets on
October 11, 2005, we are a "public shell" company and, since that date, our
board of directors has been evaluating the possibility of a transaction in which
we would merge our "public shell" company with a privately-held operating
business. Although we have no commitments or agreements with any other person or
entity regarding a proposed transaction, our board of directors believes that
the availability of additional authorized but unissued shares will provide us
with the flexibility to issue shares of common stock without further shareholder
action (subject to applicable laws) in the event that our board of directors
determines to enter into any such transaction. Accordingly, our board of
directors believes it is in our company's best interests to increase the number
of authorized shares of common stock as described above.
12
Our board of directors also believes the availability of such shares will
provide us with the flexibility to issue common stock for other proper corporate
purposes that may be identified by our board of directors from time to time,
such as stock dividends (including stock splits in the form of stock dividends),
financings, acquisitions, or strategic business relationships. Further, our
board of directors believes the availability of additional shares of common
stock will enable us to attract and retain talented employees through the grant
of additional stock options and other stock-based incentives following any such
merger of our "public shell" company. The issuance of additional shares of
common stock may have a dilutive effect on earnings per share and a person who
does not purchase additional shares will not be able to maintain his or her pro
rata interest of a shareholder's percentage voting power.
The authorized shares of our common stock in excess of those issued or
reserved for issuance, will be available for issuance at such times and for such
corporate purposes as our board of directors may deem advisable without further
action by our shareholders, except as may be required by applicable laws or the
rules of any stock exchange or national securities association trading system on
which the securities may be listed or traded. Upon issuance, such shares will
have the same rights as the outstanding shares of common stock. Holders of
common stock do not have preemptive rights. Our board of directors does not
intend to issue any common stock except on terms that our board of directors
deems to be in the best interest of our company and its then-existing
shareholders.
Our board of directors did not approve this proposed amendment with the
intent to use the ability to issue additional common stock to discourage tender
offers or takeover attempts. However, the availability of authorized common
stock for issuance could render more difficult or discourage a merger, tender
offer, proxy contest or other attempt to obtain control of our company. The
proposed amendment is not in response to any effort on the part of any party to
accumulate material amounts of our common stock or to acquire control of our
company by means of merger, tender offer, proxy contest or otherwise, or to
change our Company's management. In addition, the corporate action is not part
of any plan by management to recommend a series of similar amendments to our
board of directors and the shareholders.
Required Vote and Board Recommendation
The adoption of the above described amendment to our Restated Certificate
of Incorporation requires the affirmative vote of not less than a majority of
all outstanding shares of our common stock. All members of our board of
directors and each of our executive officers who beneficially hold as of the
record date an aggregate of approximately 2,559,100 outstanding shares of our
common stock (approximately 56.36% of the outstanding shares of common stock as
of the record date) have indicated that they will vote in favor of the proposal.
The Board of Directors believes that the above-described amendment to our
Restated Certificate of Incorporation is in the best interests of our company
and our shareholders and recommends a vote "FOR" this proposal. It is intended
that the shares represented by the enclosed form of proxy will be voted in favor
of this proposal unless otherwise specified in such proxy.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE AMENDMENT
OF OUR RESTATED CERTIFICATE OF INCORPORATION TO INCREASE OUR AUTHORIZED COMMON
STOCK.
13
PROPOSAL NO. 3
AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION
TO PERMIT SHAREHOLDER ACTION BY WRITTEN CONSENT
General
On April 17, 2006, our board of directors authorized, subject to approval
by our shareholders, an amendment of our Restated Certificate of Incorporation
permitting our shareholders to act without a meeting by written consent of the
holders of less than all of the outstanding shares. The form of the proposed
amendment to our Restated Certificate of Incorporation is included as Annex B of
this Proxy Statement. A Certificate of Amendment incorporating the form of
proposed amendment set forth on Annex B will be filed with the New York
Department of State promptly after the annual meeting if the proposed amendment
is adopted by our shareholders.
Our board of directors has determined that the adoption of the proposed
amendment will be in the best interests of our company.
Shareholder Action Without A Meeting
Prior to February 23, 1998, New York law permitted the shareholders of a
corporation to take action without a meeting only if all shareholders signed a
written consent to such action. Effective as of February 23, 1998, the New York
statute was amended to permit such action when the written consent is signed by
the holders of shares having at least the minimum number of votes that would be
necessary to take the action at a meeting of shareholders at which all shares
were present and voting. In order for the action to be effective, the minimum
number of signed written consents must be delivered to the relevant company
within 60 days of the earliest dated written consent in the manner required by
the New York Business Corporation Law. Moreover, prompt notice of the action
without a meeting by less than unanimous written consent must be given to any
shareholders who do not sign the written consent.
In order for our company to take advantage of this liberalization of New
York law, our Restated Certificate of Incorporation must be amended to so
provide. Our board of directors considers such an amendment to be in the best
interests of the our company and our shareholders, because it will obviate the
expense and the timing problems associated with the necessity of calling special
shareholders' meetings or deferring actions until the next annual meeting.
Although the amendment will permit the Majority Shareholders to take
action without a meeting on matters requiring a simple majority approval, the
Majority Shareholders already have the right to take such action at a
shareholders meeting. Thus, the meeting performs an essentially informational
function, which can be less expensively served by the circulation of written
notice of the action taken. As the vast majority of beneficial owners of our
common stock tend to forgo attendance at shareholders meetings, they will be
better served by eliminating the need for special meetings to the fullest extent
possible.
Required Vote and Board Recommendation
The adoption of the above described amendment to our Restated Certificate
of Incorporation requires the affirmative vote of not less than a majority of
all outstanding shares of our common stock. All members of our board of
directors and each of our executive officers who beneficially hold as of the
record date an aggregate of approximately 2,559,100 outstanding shares of our
common stock (approximately 56.36% of the outstanding shares of common stock as
of the record date) have indicated that they will vote in favor of the proposal.
14
Our board of directors believes the above-described amendment to our
Restated Certificate of Incorporation is in the best interests of our company
and our shareholders and recommends a vote "FOR" this proposal. It is intended
that the shares represented by the enclosed form of proxy will be voted in favor
of this proposal unless otherwise specified in such proxy.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE AMENDMENT
OF OUR RESTATED CERTIFICATE OF INCORPORATION TO PERMIT SHAREHOLDER ACTION BY
WRITTEN CONSENT.
15
PROPOSAL NO. 4
AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION
TO PRESCRIBE MAJORITY VOTE FOR CERTAIN TRANSACTIONS
General
On April 17, 2006, our board of directors authorized, subject to approval
by our shareholders, an amendment of our Restated Certificate of Incorporation
prescribing a majority vote of outstanding shares for the adoption or approval
of a plan of merger or consolidation, the sale, lease, exchange or other
disposition of all or substantially all of the assets of our company, or a plan
of binding share exchanges. The form of the proposed amendment to our Restated
Certificate of Incorporation is included as Annex C of this Proxy Statement. A
Certificate of Amendment incorporating the form of proposed amendment set forth
on Annex C will be filed with the New York Department of State promptly after
the annual meeting if the proposed amendment is adopted by our shareholders.
Our board of directors has determined that the adoption of the proposed
amendment will be in the best interests of our company.
Vote Required For Mergers And Certain Other Transactions
Prior to February 22, 1998, New York law provided that a merger or
consolidation or a sale, lease, exchange or other disposition of all or
substantially all of the assets of a New York corporation, such as our company,
would require the affirmative vote of the holders of at least two-thirds of the
shares entitled to vote thereon. A similar requirement applied to certain
exchanges of the shares of an acquired corporation for shares of an acquiring
corporation.
Effective as of February 22, 1998, New York law was amended to reduce the
two-thirds minimum vote requirement for the above described transactions to a
simple majority of the shares entitled to vote on the proposed transaction, but
only for New York corporations formed on or after February 22, 1998. For
corporations like ours that were formed prior to February 22, 1998, the required
approval for the above described transactions remained two-thirds of the shares
entitled to vote unless the certificate of incorporation of the relevant
corporation expressly provides for approval by a simple majority of the shares
entitled to vote on the proposed transaction. Our board of directors believes
that our company should take advantage of this modernization of New York law,
which was conformed the New York Business Corporation Law to the laws of popular
states of incorporation such as Delaware.
After the proposed amendment, the majority shareholders will have the
ability to control company decisions regarding such transactions. However, our
board of directors believes that our shareholders' opportunity to maximize the
value of their common stock will be enhanced if such a transaction cannot be
blocked by a minority of the shareholders. Moreover in many cases, New York law
provides a mechanism whereby shareholders who vote against such a transaction
can receive fair value for their shares.
Our board of directors has declared a dividend in the aggregate amount of
$2,500,000 million, payable to our shareholders who are record holders of the
issued and outstanding shares of our common stock immediately prior to the
filing date of this proposed amendment. The dividend per share is expected to be
within a range of $0.52 to $0.55, less any applicable withholding tax. The exact
per share amount of the dividend will be determined based upon the total number
of issued and outstanding shares of our common stock immediately prior to the
filing date of this proposed amendment. This payment of this dividend is
expressly conditioned on shareholder approval of this amendment and the filing
of such amendment with the New York Department of State. All members of our
board of directors and each of our executive officers are beneficial holders of
outstanding shares of our common stock and, thus, would be entitled to receive a
dividend on their shares in the event this proposal is approved by our
shareholders and the proposed amendment is filed with the New York Department of
State shares (assuming they are holders of shares of our common stock
immediately prior to the filing date of the proposed amendment).
16
Required Vote and Board Recommendation
The adoption of the above described amendment to our Restated Certificate
of Incorporation requires the affirmative vote of not less than two-thirds of
all outstanding shares of our common stock. All members of our board of
directors and each of our executive officers who beneficially hold as of the
record date an aggregate of approximately 2,559,100 outstanding shares of our
common stock (approximately 56.36% of the outstanding shares of common stock as
of the record date) have indicated that they will vote in favor of the proposal.
Our board of directors believes the above-described amendment of the
Restated Certificate of Incorporation is in the best interests of our company
and our shareholders and recommends a vote "FOR" this proposal. It is intended
that the shares represented by the enclosed form of proxy will be voted in favor
of this proposal unless otherwise specified in such proxy.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE "FOR" THE AMENDMENT
OF OUR RESTATED CERTIFICATE OF INCORPORATION TO PRESCRIBE MAJORITY VOTE FOR
CERTAIN TRANSACTIONS.
17
PROPOSAL NO. 5
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, 2006. 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, or to be available
telephonically to address, 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, 2006 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, 2005 and 2004 and for the
review of our financial statements included in our quarterly reports on Form
10-QSB during such fiscal years was $52,000 and $48,000, respectively.
Audit-Related Fees. There were no fees billed in the years ended May 31,
2005 and 2004 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, 2005
and 2004 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,
2005 and 2004 for professional services rendered by our independent auditors
except as disclosed above.
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.
18
Required Vote and Board Recommendation
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, 2006.
19
SHAREHOLDER PROPOSALS
Proposals of shareholders intended for presentation at our 2007 annual
meeting and intended to be included in our proxy statement and form of proxy
relating to that meeting must be received at our executive offices a reasonable
time before we print our proxy materials for the meeting and comply with the
requirements of Rule 14a-8(e) promulgated under the Securities Exchange Act of
1934. In addition, if we do not receive notice of a shareholder proposal within
a reasonable time before we mail our proxy materials to our shareholders, then
we may vote proxies in our discretion with respect to the proposal. Our board of
directors has not determined when the 2007 annual meeting will take place.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of April 30, 2006, the names, addresses
and number of shares of our common stock beneficially owned by (i) all persons
known to the our management to be beneficial owners of more than 5% of the
outstanding shares of our common stock, (ii) each director of our company, (iii)
each named executive officer and (iv) all executive officers and directors of
our company 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 Owned Percentage of Outstanding
Beneficial Owner (1) (2) Shares Beneficially Owned (2)
-------------------- --- -----------------------------
Irwin Balaban............................................... 1,106,100 (3) 23.73%
Herbert Goldman............................................. 999,000 (4) 21.46%
Lawrence B. Klein........................................... 749,000 (5) 16.12%
Steven N. Bronson........................................... 305,400 6.72%
Robert B. Friedman.......................................... 160,000 (6) 3.44%
All directors as a group (4 persons)........................ 3,319,100 (7) 66.44%
- ------------------
(1) The address of each Director is c/o Robocom Systems International Inc., 17
Fairbanks Boulevard, Woodbury, NY 11797. The address of Mr. Bronson is 100
Mill Plain Road, Danbury, CT 06811.
(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 shares of our 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 our
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 our
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 120,000 shares
subject to options that are presently exercisable.
(4) 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 115,000 shares subject to options that are
presently exercisable.
(5) Includes 105,000 shares subject to options that are presently exercisable.
(6) Includes 115,000 shares subject to options that are presently exercisable.
(7) Includes 455,000 shares subject to options that are presently exercisable.
20
OTHER MATTERS
Other than as described above, our board of directors knows of no matters
to be presented at the annual meeting, but it is intended that the persons named
in the proxy will vote your shares according to their best judgment if any
matters not included in this proxy statement do properly come before the meeting
or any adjournment thereof.
EXPERTS
Our audited financial statements for the fiscal years ended May 31, 2005
and 2004 incorporated by reference into this proxy statement have been included
in reliance on the report of Eisner and Lubin LLP, independent accountants,
given on the authority of said firm as experts in accounting and auditing.
FINANCIAL AND OTHER INFORMATION
The following information contained in our Annual Report on Form 10-KSB
for the fiscal year ended May 31, 2005, as filed with the Securities and
Exchange Commission on August 26, 2005 and our Quarterly Report on Form 10-QSB
for the quarter and nine months ended February 28, 2006, as filed with the
Securities and Exchange Commission on March 31, 2006, is incorporated herein by
reference and enclosed herewith: our financial statements included therein for
the periods then-ended and the section entitled "Management's Discussion and
Analysis of Financial Condition and Results of Operations" set forth therein.
If, for any reason, you wish to receive another copy of such Annual Report or
Quarterly Report, please contact Robocom Systems International Inc., 17
Fairbanks Boulevard, Woodbury, NY 11797, Attention: Shareholder Relations, and
another copy will be sent to you.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
This proxy statement incorporates by reference certain information
contained in (i) our Annual Report on Form 10-KSB for the fiscal year ended May
31, 2005 and (ii) our Quarterly Report on Form 10-QSB for the quarter and nine
months ended February 28, 2006, as filed with the Securities and Exchange
Commission on March 31, 2006.
INTEREST OF CERTAIN PERSONS IN OR OPPOSITION TO
MATTERS TO BE ACTED UPON
Except as disclosed above, none of the following persons has any
substantial interest, direct or indirect, by security holdings or otherwise, in
any matter to be acted upon:
(i) Any director or officer since the beginning of our last fiscal year;
(ii) Any proposed nominee for election as a director; or
(iii) Any associate or affiliate of any of the foregoing persons.
21
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements, and other
information with the United States Securities and Exchange Commission (the
"SEC"). You may read and copy any document filed by our company at the SEC's
public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please
call the SEC at 1-800-SEC-0330 for further information on the public reference
room. You can review our electronically filed reports, proxy statements and
other information on the SEC's website at http://www.sec.gov. Our common stock
is traded under the symbol "RIMS.OB."
By Order of the board of directors,
/s/ Irwin Balaban
----------------------------------
Irwin Balaban Chairman of our Board of Directors
and Chief Executive Officer
Dated: May 5, 2006
Woodbury, New York
22
ANNEX A
FORM OF AMENDMENT TO INCREASE OUR AUTHORIZED COMMON STOCK
Paragraph FOURTH of the Certificate of Incorporation, relating to the
number of authorized shares of the corporation is hereby amended to increase the
number of authorized shares of common stock from 30,000,000 shares to
125,000,000 shares and should read as follows:
"FOURTH. The aggregate number of shares of capital stock of the
corporation is 126,000,000, of which 125,000,000 shall be common stock,
par value $.01 per share (the "Common Stock"), and 1,000,000 shall be
preferred stock, par value $.01 per share (the "Preferred Stock"). The
Preferred Stock may be issued, from time to time, in one or more series
with such designations, preferences and relative participating, optional
or other special rights and qualifications, limitations or restrictions
thereof, as shall be stated in the resolutions adopted by the Board of
Directors providing for the issuance of such Preferred Stock or series
thereof, and the Board of Directors is hereby expressly vested with
authority to fix such designations, preferences and relative participating
options or other special rights or qualifications, limitations or
restrictions for each series, including, but not by way of limitation, the
power to determine the redemption and liquidation preferences, the rate of
dividends payable and the time for and the priority of payment thereof and
to determine whether such dividends shall be cumulative or not and to
provide for and determine the terms of conversion of such Preferred Stock
or any series thereof into Common Stock of the corporation and fix the
voting power, if any, of Preferred Stock or any series thereof."
23
ANNEX B
FORM OF AMENDMENT TO PERMIT SHAREHOLDER ACTION BY WRITTEN CONSENT
As permitted by Section 615 of the Business Corporation Law, Paragraph
TENTH, permitting the shareholders of the corporation under certain
circumstances to take action on the written consent of the holders of less than
all of the outstanding shares, is added to the certificate of incorporation to
read as follows:
"TENTH. Whenever the shareholders are required or permitted to take any
action by vote, such action may be taken without a meeting upon written
consent, setting forth the action so taken, signed by the holders of
outstanding shares having not less than the minimum number of votes that
would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted; provided that
no such written consent shall be effective unless written consents signed
by a sufficient number of holders to take action are delivered to the
corporation within the time, and in the manner, required by paragraph (b)
of Section 615 of the Business Corporation Law."
24
ANNEX C
FORM OF AMENDMENT TO PRESCRIBE MAJORITY VOTE FOR CERTAIN TRANSACTIONS
As permitted by Sections 903, 909 and 913 of the Business Corporation Law,
Paragraph NINTH, prescribing a majority of the votes of all outstanding shares
entitled to vote thereon as the required vote for adoption or approval of a plan
of merger or consolidation, a sale, lease, exchange or other disposition of all
or substantially all of the assets of the corporation or a plan for binding
share exchanges, is added to the Certificate of Incorporation to read as
follows:
"NINTH. By an affirmative vote of the holders of a majority of all
outstanding shares entitled to vote thereon, (i) a plan of merger or
consolidation in which the corporation would be a constituent corporation
may be adopted by the shareholders of the corporation as provided in
Section 903 of the Business Corporation Law, (ii) a sale, lease, exchange
or other disposition of all or substantially all of the assets of the
corporation may be approved by the shareholders of the corporation, and
the shareholders of the corporation may fix, or may authorize the board of
directors of the corporation to fix, any of the terms and conditions of
such sale, lease, exchange or other disposition and the consideration to
be received by the corporation therefor, as provided in Section 909 of the
Business Corporation Law, or (iii) a plan of exchange in which the
corporation would be the subject corporation, within the meaning of
Section 913 of the Business Corporation Law, may be adopted by the
shareholders of the corporation as provided in paragraph (c) of Section
913 of the Business Corporation Law."
25
APPENDIX A
Robocom Systems International Inc.
Audit Committee Charter
Organization
There shall be a committee of the Board of Directors to be known as the audit
committee. The audit committee shall be composed of directors who are
independent of the management of the corporation and are free of any
relationship that, in the opinion of the Board of Directors, would interfere
with their exercise of independent judgment as a committee member.
Statement of Policy
The audit committee shall provide assistance to the corporate directors in
fulfilling their responsibility to the shareholders, potential shareholders, and
investment community relating to corporate accounting, reporting practices of
the corporation, and the quality and integrity of the financial reports of the
corporation. In so doing, it is the responsibility of the audit committee to
maintain free and open means of communication between the directors, the
independent auditors, the internal auditors, and the financial management of the
corporation.
Responsibilities
In carrying out its responsibilities, the audit committee believes its policies
and procedures should remain flexible, in order to best react to changing
conditions and to ensure to the directors and shareholders that the corporate
accounting and reporting practices of the corporation are in accordance with all
requirements and are of the highest quality.
In carrying out these responsibilities, the audit committee will:
o Review and recommend to the directors the independent auditors to
be selected to audit the financial statements of the corporation
and its divisions and subsidiaries.
o Meet with the independent auditors and financial management of the
corporation to review the scope of the proposed audit for the
current year and the audit procedures to be utilized, and at the
conclusion thereof, review such audit, including any comments or
recommendation of the independent auditors.
o Review with the independent auditors, the Company's internal
auditor, and financial and accounting personnel, the adequacy and
effectiveness of the accounting and financial controls of the
corporation, and elicit any recommendation for the improvement of
such internal control procedures or particular areas where new or
more detailed controls or procedures are desirable. Particular
emphasis should be given to the adequacy of such internal controls
to expose any payments, transactions, or procedures that might be
deemed illegal or otherwise improper. Further, the committee
periodically should review Company policy statements to determine
their adherence to the code of conduct.
o Review the internal audit function of the corporation including the
independence and authority of its reporting obligations, the
proposed audit plans for the coming year, and the coordination of
such plans with the independent auditors.
o Receive prior to each meeting, a summary of findings from completed
internal audits and a progress report on the proposed internal
audit plan, with explanations for any deviations from the original
plan.
o Review the financial statements contained in the annual report to
shareholders with management and the independent auditors to
determine that the independent auditors are satisfied with the
disclosure and content of the financial statements to be presented
to the shareholders. Any changes in accounting principles should be
reviewed.
o Provide sufficient opportunity for the internal and independent
auditors to meet with the members of the audit committee without
members of management present. Among the items to be discussed in
the meetings are the independent auditors' evaluation of the
corporation's financial, accounting and
26
auditing personnel, and the cooperation that the independent
auditors received during the course of the audit.
o Review accounting and financial human resources and succession
planning within the Company.
o Submit the minutes of all meetings of the audit committee to, or
discuss the matters discussed at each committee meeting with, the
Board of Directors.
o Investigate any matter brought to its attention within the scope of
its duties, with the power to retain outside counsel for this
purpose if, in its judgment, that is appropriate.
27
REVOCABLE PROXY
ROBOCOM SYSTEMS INTERNATIONAL INC.
|_| X PLEASE MARK VOTES
AS IN THIS EXAMPLE For With- For all
hold Except
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS PROPOSAL 1: The Election of Directors.
|_| |_| |_|
The undersigned hereby appoint(s) Irwin Balaban and Irwin Balaban, Lawrence B. Klein, Herbert Goldman and Robert
Lawrence B. Klein or any of them, lawful attorneys and B. Friedman
proxies of the undersigned with full power of substitution,
for and in the name, place and stead of the undersigned to INSTRUCTION: To withhold authority to vote for any
attend the annual meeting of Shareholders of Robocom Systems individual nominee, mark "For All Except" and write that
International Inc. to be held in the offices of Pryor nominee's name in the space provided below.
Cashman Sherman & Flynn LLP, located at 410 Park Avenue,
10th Floor, New York, New York 10022 on June 28, 2006 at -------------------------------------------------
11:00 a.m., local time, and any adjournment(s) or
postponement(s) thereof, with all powers the undersigned PROPOSAL 2: Amendment to Restated Certificate of
would possess if personally present and to vote the number Incorporation.
of votes the undersigned would be entitled to vote if
personally present. For Against Abstain
|_| |_| |_|
The board of directors recommends a vote "FOR" the Proposal to approve the adoption of an amendment of the
proposal set forth herein. Restated Certificate of Incorporation of the Company to
increase the number of shares of Common Stock.
-------------------------------------------------
PROPOSAL 3: Amendment to Restated Certificate of
Incorporation.
For Against Abstain
|_| |_| |_|
Proposal to approve the adoption of an amendment of the
Restated Certificate of Incorporation of the Company to
permit shareholder action by written consent.
-------------------------------------------------
PROPOSAL 4: Amendment to Restated Certificate of
Incorporation.
For Against Abstain
|_| |_| |_|
Proposal to approve the adoption of an amendment of the
Restated Certificate of Incorporation of the Company to
prescribe a majority vote of the outstanding shares for
certain transactions.
-------------------------------------------------
-----------------------------
Please be sure to sign and date
this Proxy in the box below. PROPOSAL 5: Independent Auditors.
----------------------------- For Against Abstain
|_| |_| |_|
- ------------------------------------------------------------- Ratification of the appointment of Eisner & Lubin LLP as the
independent auditors of the Company for the fiscal year
ending May 31, 2006.
- ------------------------------------------------------------- ------------------------------------------------
Shareholder sign above Co-holder (if any) sign above 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 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
- ----------------------------------------------------------------------------------------------------------------------------------