UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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 toss.240.14a-11(c) orss.240.14a-12
WI-TRON, INC.
(Name of Registrant as Specified In Its Charter)
N/A
(Name of Person(s) Filing Proxy Statement if other than Registrant)
PAYMENT FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies: N/A
(2) Aggregate number of securities to which transaction applies: N/A
(3) Per unit price or other underlying value of transaction computed pursuant to
Act Rule 0-11 (Set forth the amount on which the filing fee is calculated and
state how it was determined): N/A
(4) Proposed maximum aggregate value of transaction: N/A
(5) Total fee paid: N/A
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing:
(1) Amount Previously Paid: N/A
(2) Form, Schedule or Registration Statement No.: N/A
(3) Filing Party: N/A
(4) Date Filed: N/A
[WI-TRON LETTERHEAD]
June 23, 2006
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
Wi-Tron, Inc. (the "Company") to be held at 11:00 a.m., August 1, 2006 at our
corporate offices, which are located at 59 LaGrange Street, Raritan, New Jersey
08869
At this meeting, you will be asked to consider and vote, in person or by proxy,
on the following matters:
o Election of five directors to the board of directors for the following
year and until their successors are elected. The board of directors
unanimously recommends a vote FOR election of the nominees on the
enclosed proxy card.
o Ratification of the appointment of KBL, LLP as our independent
auditors. The board of directors unanimously recommends a vote FOR
this proposal.
o Transaction of such other business as may properly come before the
meeting or any adjournment.
The official notice of meeting, proxy statement, and proxy card are included
with this letter. The matters listed in the notice of meeting are described in
detail in the accompanying proxy statement. We are also providing you with a
copy of our annual report on Form 10-KSB for our fiscal year ended December 31,
2005.
Whether or not you expect to attend, the board of directors urges you to vote
your shares by signing, dating, and returning the enclosed proxy card in the
envelope provided, which is postage-paid if mailed in the United States.
Thank you for your continued interest in the Company.
Very truly yours,
/s/ Joseph Nordgaard
Joseph Nordgaard,
Chief Executive Officer
2
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
OF
WI-TRON, INC.
To the Shareholders of Wi-Tron, Inc.
We hereby notify you that the annual meeting of shareholders of Wi-Tron, Inc., a
Delaware corporation, will be held on August 1, 2006 at 11:00 a.m. at our
corporate offices, located at 59 LaGrange Street, Raritan, New Jersey 08869.
This meeting is being held for the following purposes:
o to elect five directors to the board of directors to hold office for
the following year and until their successors are elected;
o to ratify the appointment of KBL, LLP as our independent auditors; and
o to transact such other business as may properly come before the
meeting or any adjournments.
The matters listed in this notice of meeting are described in detail in the
accompanying proxy statement. The board of directors has fixed the close of
business on June 9, 2006, as the record date for determining those shareholders
who will be entitled to notice of and to vote at the meeting and any
adjournment. You may examine a list of the shareholders of record as of the
close of business on June 9, 2006, for any purpose germane to the meeting during
the ten-day period preceding the date of the meeting at our corporate offices,
located at 59 LaGrange Street, Raritan, New Jersey 08869.
YOUR VOTE IS IMPORTANT
Even if you plan to attend the meeting, please sign, date and return the
enclosed proxy card in the envelope provided so that your vote will be counted
if you later decide not to attend the meeting. No postage is required if the
proxy card is mailed in the United States.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Joseph Nordgaard, Chief Executive Officer
Raritan, New Jersey
June 23, 2006
3
WI-TRON, INC.
59 LAGRANGE STREET
RARITAN, NEW JERSEY 08869
PROXY STATEMENT
GENERAL INFORMATION
INFORMATION ABOUT PROXY SOLICITATION
This proxy statement is being furnished to holders of shares of common stock,
$.0001 par value per share, of Wi-Tron, Inc., a Delaware corporation (the
"Company"), in connection with solicitation of proxies on behalf of our board of
directors for use at the annual meeting of shareholders to be held at 11:00 a.m.
Eastern Daylight Time on August 1, 2006, at our corporate offices, 59 LaGrange
Street, Raritan, New Jersey 08869, and at any adjournment. The purpose of the
meeting and the matters to be acted on are stated in the accompanying notice of
annual meeting of shareholders. The board of directors currently knows of no
other business that will come before the meeting.
The notice of annual meeting, proxy statement, and proxy card are being mailed
to shareholders on or about June 23, 2006. We will bear the cost of its
solicitation of proxies. The original solicitation of proxies by mail may be
supplemented by personal interview, telephone, and facsimile by our directors,
officers, and employees. Arrangements will also be made with brokerage houses
and other custodians, nominees, and fiduciaries for the forwarding of
solicitation material to the beneficial owners of stock held by any such
persons, and we may reimburse those custodians, nominees and fiduciaries for
reasonable out-of-pocket expenses incurred by them in doing so.
The board of directors is soliciting votes FOR our slate of nominees for
election to the board of directors and FOR ratification of the appointment of
the firm of KBL, LLP as our independent auditors.
INFORMATION ABOUT VOTING
Q: WHY AM I RECEIVING THESE MATERIALS?
A: The board of directors is providing these proxy materials for you in
connection with our annual meeting of shareholders, which will take place on
August 1, 2006. As a shareholder, you are invited to attend the annual meeting
and to vote on the items of business described in this proxy statement.
Q: WHAT INFORMATION IS CONTAINED IN THESE MATERIALS?
A: The information included in this proxy statement relates to the
proposals to be voted on at the annual meeting, the voting process, the
compensation of directors and the most highly paid executive officers, and
certain other required information. A copy of our annual report on Form 10-KSB
is also enclosed.
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Q: WHAT ITEMS OF BUSINESS WILL BE VOTED ON AT THE ANNUAL MEETING?
A: The two items of business scheduled to be voted on at the annual
meeting are (1) election of directors and (2) ratification of the independent
auditors. We will also consider any other business that properly comes before
the annual meeting.
Q: HOW DOES THE BOARD OF DIRECTORS RECOMMEND THAT I VOTE?
A: The board of directors recommends that you vote your shares FOR each
of the nominees to the board on the proxy card included with this proxy
statement and FOR ratification of the independent auditors.
Q: WHAT SHARES CAN I VOTE?
A: You may vote all shares owned by you as of the close of business on
June 9, 2006, the record date. These shares include (1) shares held directly in
your name as a shareholder of record and (2) shares held for you, as the
beneficial owner, through a broker or other nominee, such as a bank.
Q: WHAT IS THE DIFFERENCE BETWEEN HOLDING SHARES AS A SHAREHOLDER OF
RECORD AND AS A BENEFICIAL OWNER?
A: Many of our shareholders hold their shares through a broker or other
nominee rather than directly in their own name. As summarized below, there are
some distinctions between shares held of record and those owned beneficially.
If your shares are registered directly in your name with our
transfer agent, Corporate Stock Transfer, you are considered, with respect to
those shares, the shareholder of record and these proxy materials are being sent
directly to you by us. As the shareholder of record, you have the right to grant
your voting proxy directly to the board of directors or to vote in person at the
meeting. The board of directors has enclosed or sent a proxy card for you to
use.
If your shares are held in a brokerage account or by another
nominee, you are considered the beneficial owner of shares held in "street
name," and these proxy materials are being forwarded to you by your broker or
nominee together with a voting instruction card. As the beneficial owner, you
have the right to direct your broker or nominee how to vote and are also invited
to attend the annual meeting. However, since you are not the shareholder of
record, you may not vote these shares in person at the meeting unless you obtain
a "legal proxy" from the broker or nominee that holds your shares, giving you
the right to vote the shares. Your broker or nominee has enclosed or provided
voting instructions for you to use in directing the broker or nominee how to
vote your shares.
Q: HOW CAN I ATTEND THE ANNUAL MEETING?
A: You are entitled to attend the annual meeting only if you were a
shareholder of our company or joint holder as of the close of business on June
9, 2006, or you hold a valid proxy for the annual meeting. You should be
prepared to present photo identification for admittance. If you are not a record
holder but hold shares through a broker or nominee (that is, in "street name"),
you should provide proof of beneficial ownership on the record date, such as
your most recent account statement prior to June 9, 2006, a copy of the voting
instruction card provided by your broker or nominee, or other similar evidence
of ownership. If you do not provide photo identification or comply with the
other procedures outlined above upon request, you will not be admitted to the
annual meeting. The annual
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meeting will begin promptly at 11:00 a.m. Eastern Daylight Time. Check-in will
begin at 10:30 a.m., and you should allow ample time for the check-in
procedures.
Q: HOW CAN I VOTE MY SHARES IN PERSON AT THE ANNUAL MEETING?
A: You may vote in person at the annual meeting any shares that you
hold as the shareholder of record. You may only vote in person shares held in
street name if you obtain from the broker or nominee that holds your shares a
"legal proxy" giving you the right to vote the shares.
Q: HOW CAN I VOTE MY SHARES WITHOUT ATTENDING THE ANNUAL MEETING?
A: Whether you hold shares directly as the shareholder of record or
beneficially in street name, you may without attending the meeting direct how
your shares are to be voted. If you are a shareholder of record, you may vote by
granting a proxy. If you hold shares in street name, you may vote by submitting
voting instructions to your broker or nominee. Each record holder of Company
common stock may submit a proxy by completing, signing, and dating a proxy card
and mailing it in the accompanying pre-addressed envelope. Each shareholder who
holds shares in street name may vote by mail by completing, signing, and dating
a voting instruction card provided by the broker or nominee and mailing it in
the accompanying pre-addressed envelope.
Q: CAN I CHANGE MY VOTE?
A: You may change your vote at any time prior to the vote at the annual
meeting. For shares held directly in your name, you may accomplish this by
granting a new proxy bearing a later date (which automatically revokes the
earlier proxy) or by attending the annual meeting and voting in person.
Attendance at the meeting will not cause your previously granted proxy to be
revoked unless you specifically so request. For shares you hold beneficially,
you may change your vote by submitting new voting instructions to your broker or
nominee or, if you have obtained a "legal proxy" from your broker, or nominee
giving you the right to vote your shares, by attending the meeting and voting in
person. You may also change your vote by sending a written notice of revocation
to Joe Nordgaard, Chief Executive Officer, Wi-Tron, Inc., 59 LaGrange Street,
Raritan, New Jersey 08869.
Q: WHO CAN HELP ANSWER MY QUESTIONS?
A: If you have any questions about the annual meeting or how to vote or
revoke your proxy, you should contact Joe Nordgaard at Wi-Tron, Inc., 59
LaGrange Street, Raritan, New Jersey 08869, tel. (908) 253-6870, email
joe.nordgaard@wi-tron.com.
If you need additional copies of this proxy statement or voting
materials, you should contact Joe Nordgaard as described above.
Q: HOW ARE VOTES COUNTED?
A: In the election of directors, you may vote FOR all of the five
nominees or you may direct your vote to be WITHHELD with respect to one or more
of the five nominees. With respect to ratification of the independent auditors,
you may vote FOR, AGAINST or ABSTAIN. If you vote ABSTAIN, it has the same
effect as a vote AGAINST. If you provide specific instructions, your shares will
be voted as you instruct. If you sign your proxy card or voting instruction card
with no further instructions, your shares will be voted in accordance with the
recommendations of the board of
6
directors (FOR all of our nominees and FOR ratification of the independent
auditors and, in the discretion of the proxy holders, on any other matters that
properly come before the meeting). If any other matters properly arise at the
meeting, your proxy, together with the other proxies received, will be voted at
the discretion of the proxy holders.
Q: WHAT IS A QUORUM AND WHY IS IT NECESSARY?
A: Conducting business at the meeting requires a quorum. The presence,
either in person or by proxy, of the holders of a majority of our capital stock
outstanding on June 9, 2006 is necessary to constitute a quorum. Under the
Delaware General Corporation Law and our articles of incorporation and by-laws,
abstentions and broker non-votes (when your shares are held in "street name" and
you do not tell the nominee how to vote your shares) are treated as present for
purposes of determining whether a quorum exists.
Q: WHAT IS THE VOTING REQUIREMENT TO APPROVE EACH OF THE PROPOSALS?
A: In the election of directors, the three persons receiving the
highest number of FOR votes at the annual meeting will be elected. Accordingly,
abstentions and broker non-votes do not have the effect of a vote for or against
the election of any nominee. You do not have the right to cumulate your votes.
All other proposals require the affirmative FOR vote of a majority
of those shares present in person or represented by proxy and entitled to vote
on that proposal at the annual meeting. Accordingly, abstentions on other
proposals will have the same effect as a vote against the proposal. Broker
non-votes will not have the effect of a vote for or against other proposals.
Q: WHAT SHOULD I DO IF I RECEIVE MORE THAN ONE SET OF VOTING MATERIALS?
A: You may receive more than one set of voting materials, including
multiple copies of this proxy statement and multiple proxy cards or voting
instruction cards. For example, if you hold your shares in more than one
brokerage account, you will receive a separate voting instruction card for each
brokerage account in which you hold shares. If you are a shareholder of record
and your shares are registered in more than one name, you will receive more than
one proxy card. Please complete, sign, date, and return each proxy card and
voting instruction card that you receive.
Q: WHERE CAN I FIND THE VOTING RESULTS OF THE ANNUAL MEETING?
A: We intend to announce preliminary voting results at the annual
meeting and publish final results in our quarterly report on Form 10-QSB for the
fiscal quarter ending September 30, 2006.
Q: WHAT HAPPENS IF ADDITIONAL MATTERS ARE PRESENTED AT THE ANNUAL
MEETING?
A: Other than the two items of business described in this proxy
statement, we are not aware of any other business to be acted upon at the annual
meeting. However, if you grant a proxy, the persons named as proxy holders,
Joseph Nordgaard, our Chief Executive Officer, and John Chase Lee, our
president, will have the discretion to vote your shares on any additional
matters properly presented for a vote at the meeting. If for any unforeseen
reason any of our nominees is not available as a candidate for director, the
persons named as proxy holders will vote your proxy for any one or more other
candidates nominated by the board of directors.
7
Q: WHAT SHARES ARE ENTITLED TO BE VOTED?
A: Each share of our common stock and each share of our Series C
Convertible preferred stock issued and outstanding as of the close of business
on June 9, 2006, the record date, is entitled to be voted on all items being
voted at the annual meeting, with each share being entitled to one vote. On the
record date, 45,678,267 shares of voting stock issued and outstanding, including
32,078,267 shares of common stock and 13,600,000 shares of Series C Convertible
preferred stock.
Q: WHO WILL COUNT THE VOTES?
A: ADP will present us with a list of votes.
Q: IS MY VOTE CONFIDENTIAL?
A: Proxy instructions, ballots, and voting tabulations that identify
individual shareholders are handled in a manner that protects your voting
privacy. Your vote will not be disclosed, either within our company or to anyone
else, except (1) as necessary to meet applicable legal requirements, (2) to
allow for the tabulation of votes and certification of the vote, or (3) to
facilitate a successful proxy solicitation.
Q: WHO WILL BEAR THE COST OF SOLICITING VOTES FOR THE ANNUAL MEETING?
A: The board of directors is making this solicitation and will pay the
entire cost of preparing, assembling, printing, mailing and distributing these
proxy materials. Certain of our directors, officers and employees, without any
additional compensation, may also solicit your vote in person, by telephone or
by electronic communication. On request, we will also reimburse brokerage houses
and other custodians, nominees and fiduciaries for their reasonable
out-of-pocket expenses for forwarding proxy and solicitation materials to
shareholders.
Q: MAY I PROPOSE ACTIONS FOR CONSIDERATION AT NEXT YEAR'S ANNUAL
MEETING OF SHAREHOLDERS?
A: You may submit proposals for consideration at future shareholder
meetings. However, in order for a shareholder proposal to be considered for
inclusion in our proxy statement for the annual meeting next year, the written
proposal must be received by us no later than February 23, 2007. Such proposals
also will need to comply with Securities and Exchange Commission regulations
under Rule 14a-8 regarding the inclusion of shareholder proposals in
company-sponsored proxy materials.
8
PROPOSALS TO BE VOTED ON
PROPOSAL ONE:
ELECTION OF DIRECTORS
The board of directors is proposing a slate of directors consisting of five
incumbent directors. THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE YOUR SHARES
FOR EACH OF THESE NOMINEES.
THE NOMINEES
The nominees are listed below:
NAME AGE DIRECTOR SINCE
---- --- --------------
Joseph Nordgaard 49 2006
John Chase Lee 76 2005
Tarlochan Bains 56 1995
Jessica Hye Lee 44 2005
Mikio Tajima 72 2005
John Chase Lee is not related to Jessica Hye Lee.
It is the intention of the persons named in the accompanying proxy card to vote
all shares of common stock for which they have been granted a proxy for the
election of Mark S. Elliott, Kevin J. Hasenfus, and Robert N. Yearwood, each to
serve as a director until the next annual meeting of shareholders and until his
successor has been duly elected and qualified. All the nominees have consented
to being named in this proxy statement and to serve as a director if elected. At
the time of the annual meeting, if any of the nominees named above is not
available to serve as director (an event that the board of directors does not
currently have any reason to anticipate), all proxies will be voted for any one
or more other persons that the board of directors designates. The board of
directors believes that it is in the best interests of our company to elect the
above-described slate of directors.
INFORMATION ABOUT THE NOMINEES
Joseph Nordgaard was appointed Chief Executive Officer and Director on June 1,
2006. From October 2005 to June 1, 2006, he served as a consultant to the
Company. Since 2002, Mr. Nordgaard has served as president and a member of
Spectral Advantage LLC, a wireless consulting firm. From 1999 to 2002, he helped
create the cdma450 industry, which utilizes a version of cdma2000 technology
designed to operate in the 450 MHz band. He served as head of Lucent
Technologies Worldwide Business Development and Strategy for cdma450. During
this period, Mr. Nordgaard and his family moved to London, England for two years
to help serve as a seconded technical and marketing advisor to Inquam Ltd. a
wireless investment company for 450 MHz spectrum licenses. Mr. Nordgaard
currently serves on the Board of the IA450 Association, which supports and
promotes the use of cdma450 technology around the world. He has also been a
member or participant in the following international industry bodies:
9
ETSI, CEPT, ECITA, CDG, CITEL, ITU-D, ITU-8F, and PCIA. Mr. Nordgaard has over
20 years of experience in the wireless technology field, and, among other
achievements, has provided wireless technology advice to the U.S. in connection
with post-War spectrum planning in Iraq. Mr. Nordgaard was also recently awarded
a "Gold Medal of Honor" from Huawei Technologies, of Shanghai, China for his
efforts in introducing Huawei to the cdma450 industry. This was the first time
this award was given to a non-Huawei employee. In 1983, Mr. Nordgaard received
an M.S. in Computer Science from Monmouth University, in 1981 he received an
A.S. in Computer Science from College of Staten Island, State University of New
York ("SUNY"), and in 1979 Mr. Nordgaard received a B.S. from Syracuse
University, SUNY. He has also been awarded two patents in the field of
telecommunications. He is an Eagle Scout and has served as an Assistant Scout
Master in London and in New Jersey. He currently lives in New Jersey has been
married for 25 years and has two children.
John Chase Lee has served as President, and a Director since June 2005. From
June 2005 to June 1, 2006, he also served as Chief Executive Officer. From
November 2004 to June 2005, he served solely as a director. From January 2000 to
the present, he has served as President of Tek Ltd., a distribution company
doing most of its business in South Korea. Mr. Lee has had many and diverse
executive positions and business ownership experiences, including Executive
Director, Prospect Park - Bay Ridge YMCA, New York; Vice President - Sales, Tae
Han Television, New York City, and President, ABCD Corporation, New Jersey
(modular home buildings). Mr. Lee has three Masters (M. Div from Princeton
Seminary, M.A. from U of Oregon, and MCRP from Rutgers University).
Tarlochan Bains has served as Vice President - Amp Division since June 2005. He
has served as a Director since 1995. From November 2004 to June 2005, Mr. Bains
served as Chief Executive Officer and Treasurer. From March 2000 to November
2004, he served as Vice President of Operations. From 1991 through March 2000,
he was the Company's Vice President of Sales and Marketing. Previously, Mr.
Bains was Technical Manager at Land Rover in Solihull, England. He has a Higher
National Diploma in Mechanical Engineering from Hatfield Polytechnic, England
and a Masters Degree in Automotive Engineering from Cranfield Institute of
Technology, England. Mr. Bains is the brother of Devendar S. Bains and the
brother-in-law of Nirmal Bains.
Jessica Hye Lee has served as Chief Financial Officer, Secretary, and a Director
since June 2005. From November 2004 to June 2005, she served as Secretary and
director. Since 1997, Ms. Lee has been managing and operating her own accounting
firm in Princeton, NJ, and has assisted with accounting and finance for number
of companies in New Jersey. Ms. Lee received a BA from Yonsei University in
Seoul, Korea, and an MBA from Rutgers University.
Mikio Tajima has served as a Director since November 2005. From 1961 to 1994,
Mr. Tajima held several positions with the United Nations, mostly in economic
development. His last position held was Director of Economic Policy and Social
Development at U.N headquarters. He received a B.A. in Economics and
International Relations both in Japan and U.C. in Berkeley, CA, and a M.A. from
Columbia University in International Administration and Organization.
COMMUNICATIONS FOR OUR SHAREHOLDERS TO THE BOARD OF DIRECTORS
Our board of directors recommends that shareholders direct to our corporate
secretary any communications intended for the board of directors. Shareholders
can send communications by e-mail to info@wi-tron.com, or by mail to Board of
Directors, Wi-Tron, Inc., 59 LaGrange Street, Raritan, New Jersey 08869.
10
This centralized process will assist the board in reviewing and responding to
shareholder communications in an appropriate manner. If a shareholder wishes to
direct any communication to a specific board member, the name of that board
member should be noted in the communication. The board of directors has
instructed the assistant corporate secretary to forward shareholder
correspondence only to the intended recipients, but the board has also
instructed Joe Nordgaard, our Chief Executive Officer, to review all shareholder
correspondence and, in his discretion, not forward any items that he deems to be
of a commercial or frivolous nature or otherwise inappropriate for the board's
consideration.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act")
requires the Company's directors and executive officers, and persons who own
more than ten percent (10%) of a registered class of the Company's equity
securities, to file with the Securities and Exchange Commission (the "SEC")
initial reports of ownership and reports of changes in ownership of common stock
and other equity securities of the Company. Officers, directors and greater than
ten percent stockholders are required by SEC regulation to furnish the Company
with copies of all Section 16(a) forms they file.
To the Company's knowledge, John Chase Lee, Jessica Hye Lee, Tarlochan Bains,
Devendar S. Bains, and Joseph Nordgaard did not timely file reports under
Section 16(a). Except for Joesph Nordgaard, all required reports have since been
filed.
CODE OF ETHICS
We have adopted a code of ethics relating to financial management (for its
principal executive officer and its senior financial officers). A copy of the
code of ethics is available on our website, www.wi-tron.com. Violations of our
code of ethics may be reported to the board of directors.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the aggregate compensation paid by the
Company for the years ended December 31, 2005, 2004 and 2003 for its Chief
Executive Officer and Vice President, respectively. Each non-employee director
of the Company is entitled to receive reasonable out-of-pocket expenses incurred
in attending meetings of the Board of Directors of the Company.
LONG-TERM
COMPENSATION
AWARDS PAYOUTS
-------------------- --------------
ANNUAL COMPENSATION SECURITIES
------------------------------------------ RESTRICTED UNDERLYING ALL
NAME AND PRINCIPAL POSITION OTHER ANNUAL STOCK OPTIONS/ LTIP OTHER
--------------------------- YEAR SALARY ($) BONUS ($) COMPENSATION AWARDS SARS (#) PAYOUT COMP
---- ---------- --------- ------------ ------ -------- ------ ----
John C. Lee 2005 $24,000 --
Chief Executive Officer
And Director
11
Devendar S. Bains, 2005 $ 121,000(6) -- $20,000 (1)
Chief Technology Officer 2004 $140,250(5) -- $20,000 (1)
2003 $162,000(2) -- $20,000 (1)
Tarlochan Bains, 2005 $90,000(7) --
Vice President 2004 $100,000(4) --
and Director 2003 $100,000(3) --
(1) Represents payment for health insurance and automobile insurance/lease
payments on behalf of such individual but does not include deferred
compensation.
(2) Of the salary, $22,293 was paid and $139,707 was accrued but not paid in
the year ended December 31, 2003. Does not include $50,000 paid to Nirmal
Bains, the wife of Devendar Bains.
(3) Of the salary, $55,719 was paid and $44,281 was accrued but not paid in the
year ended December 31, 2003.
(4) Of the salary, $9,331 was accrued but unpaid at December 31, 2004.
(5) Of the salary, $58,000 was accrued but unpaid at December 31, 2004. Does
not include $50,000 paid to Nirmal Bains, the wife of Devendar Bains.
(6) Of the salary, $46,000 was accrued but unpaid at December 31, 2005. Does
not include $50,000 paid to Nirmal Bains, the wife of Devendar Bains.
(7) Of the salary, $10,000 was accrued but unpaid at December 31, 2005.
COMPENSATION OF DIRECTORS
We do not currently compensate our directors. Furthermore, whereas we may in the
future compensate non-employee directors, we anticipate that we will not
compensate for their services as director those of our directors who are
employees.
EMPLOYMENT AGREEMENTS
On May 26, 2006, the Company entered into an employment agreement with Joseph
Nordgaard appointing Mr. Nordgaard as our Chief Executive Officer for a term of
three years commencing on June 1, 2006. The employment agreement also provides
that Mr. Nordgaard serve as a director. Pursuant to the agreement, John Chase
Lee, the Registrant's current Chief Executive Officer resigned simultaneously
with Mr. Nordgaard's appointment. Mr. Lee shall remain as President and Chairman
of the Board of Directors. The terms of the employment agreement provide for a
$130,000 annual base salary. The Company will issue to Mr. Nordgaard 900,000
incentive stock options exercisable at a price to be determined by the
Registrant's Board of Directors and the 2005 Stock Option Plan, and 1,100,000
five-year warrants to purchase the Registrant's common stock, exercisable at
$.20 per share. Additional options may be issued upon certain milestones and as
determined by the Registrant's Board of Directors.
The Company is currently negotiating employment agreements for Devendar S. Bains
(Vice President - Product Development), and Tarlochan Bains (Vice President -
Business Development).
STOCK OPTION PLANS AND AGREEMENTS
Option Plan - In May 1996, the Directors of the Company adopted and the
stockholders of the Company approved the adoption of the Company's 1996 Stock
Option Plan (the "1996 Option Plan"). The 1996 Option Plan provided for the
issuance of 2,225,000 options. The purpose of the 1996 Option Plan was to enable
the Company to encourage key employees and Directors to contribute to the
success of the Company by granting such employees and Directors incentive stock
options ("ISOs") or non-qualified stock options ("NQOs").
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On October 19, 2005, the Company's stockholders and Directors amended
and renewed the 1996 Option Plan, designated the 2005 Stock Option Plan (the
"2005 Option Plan"), which provided for the issuance of up to 5,000,000 options.
The 2005 Option Plan will be administered by the Board of Directors or a
committee appointed by the Board of Directors (the "Committee") which will
determine, in its discretion, among other things, the recipients of grants,
whether a grant will consist of ISOs, NQOs or a combination thereof, and the
number of shares to be subject to such options.
The 2005 Option Plan provides for the granting of ISOs or NQOs to
purchase Common Stock at an exercise price to be determined by the Board of
Directors or the Committee not less than the fair market value of the Common
Stock on the date the option is granted.
The total number of shares with respect to which options may be granted
under the Option Plan is currently 5,000,000. Options may not be granted to an
individual to the extent that in the calendar year in which such options first
become exercisable the shares subject to such options have a fair market value
on the date of grant in excess of $100,000. No option may be granted under the
Option Plan after October 2015 and no option may be outstanding for more than
ten years after its grant. Additionally, no option can be granted for more than
five (5) years to a stockholder owning 10% or more of the Company's outstanding
Common Stock and such options must have an exercise price of not less than 110%
of the fair market value on the date of grant.
Upon the exercise of an option, the holder must make payment of the
full exercise price. Such payment may be made in cash or in shares of Common
Stock, or in a combination of both. The Company may lend to the holder of an
option funds sufficient to pay the exercise price, subject to certain
limitations.
The Option Plan may be terminated or amended at any time by the Board
of Directors, except that, without stockholder approval, the Option Plan may not
be amended to increase the number of shares subject to the Option Plan, change
the class of persons eligible to receive options under the Option Plan or
materially increase the benefits of participants.
As of December 31, 2005, 1,400,000 options to purchase Common Stock
under the 1996 Option Plan were granted and/or reserved to certain employees,
and no options were issued under the 2005 Option Plan. The options are
exercisable at between $.15 and $0.20 and expire on at various dates through
2009. No determinations have been made regarding the persons to whom options
will be granted in the future, the number of shares which will be subject to
such options or the exercise prices to be fixed with respect to any option.
Other Options
On January 13, 2006, the Company issued an option to purchase 1,000,000
shares of common stock at an exercise price of $.20 per share for legal services
rendered.
LIMITS ON LIABILITY AND INDEMNIFICATION
Our articles of incorporation eliminate the personal liability of our directors
to the fullest extent permitted by law. The articles of incorporation further
provide that the Company will indemnify its officers and directors to the
fullest extent permitted by law. We believe that this indemnification covers at
least negligence and gross negligence on the part of the indemnified parties.
Insofar as indemnification for liabilities under the Securities Act may be
permitted to our directors, officers, and
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controlling persons under the foregoing provisions or otherwise, we have been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act of
1933 and is therefore unenforceable.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of June 9, 2006, the beneficial ownership of
our common stock (i) by the only persons who are known by us to own beneficially
more than 5% of our common stock; (ii) by each director and executive officer;
and (iii) by all directors and officers as a group. Percentage ownership assumes
all vested warrants and options are fully exercised, and all preferred stock is
converted, and is based on 32,078,267 shares of common stock issued and
outstanding as of March 31, 2006.
Name and Address of Shares of Common Percentage
Beneficial Owner* Stock Owned (1) Ownership
---------------- ------------ ---------
Joseph Nordgaard 500,000 1.6%
John Chase Lee 14,180,632 (2) 32.6%
Jessica Hye Lee (3) 800,000 (3) 2.5%
Tarlochan Bains 1,726 <1%
Devendar S. Bains 3,012,985 (4) 9.1%
Joong Bin Lee (5) --- ---
Mikio Tajima --- ---
Harris Freedman 2,309,525 (6) 7.2%
1241 Gulf of Mexico Dr.
Longboat Key, FL 34228
Jerome Belson 2,240,000 7.0%
495 Broadway
New York, NY
GRQ Consultants, Inc. 1,700,000 (7) 5.3%
595 S. Federal Highway
Boca Raton, FL 33432
James Davidson 1,525,000 4.7%
321 South Saint Asaph St.
Alexandria, VA 22314
Craig Bird 3,205,549 9.98%
c/o Segue Ventures, LLC
261 Old York Road, Suite 218
Jenkintown, PA 19046
14
All Officers and Directors 18,670,343 45.8%
as a Group (7 persons)
* Unless otherwise indicated, the address of all persons listed in this
section is c/o Wi-Tron, Inc., 59 LaGrange Street, Raritan, NJ 08869
(1) Beneficial ownership is determined in accordance with Rule 13d-3 of
the Securities and Exchange Commission. Percentages are based on the total
number of shares outstanding at June 9, 2006, plus the total number of shares
underlying outstanding options, warrants and preferred stock held by each person
that are exercisable or convertible within 60 days of such date. Shares issuable
upon exercise of outstanding options and warrants, however, are not deemed
outstanding for purposes of computing the percentage ownership of any other
person.
(2) Represents (a) 109,400 shares of common stock held jointly with Mr.
Lee's spouse, (b) 625,000 shares of common stock held by Mr. Lee's spouse, of
which Mr. Lee disclaims beneficial ownership, (c) 646,232 shares of common stock
held by Axxon Corporation, a company wholly owned by Mr. Lee, and (d) 128,000
shares of Series C Convertible Preferred Stock, which is convertible into
12,800,000 shares of common stock at any time. John Chase Lee is not related to
Jessica Hye Lee.
(3) Represents 8,000 shares of Series C Convertible Preferred Stock, which
is convertible into 800,000 shares of common stock at any time. Jessica Hye Lee
is the wife of Joong Bin Lee, and is not related to John Chase Lee.
(4) Includes (a) options to purchase 1,000,000 shares of common stock held
by Mr. Bains, and (b) options to purchase 50,000 shares of common stock within
60 days, and 28,173 shares of common stock held by Mr. Bains' spouse.
(5) Represents (a) 1,173,901 shares held by Bridge Ventures, Inc., of
which Mr. Freedman is an officer, (b) 927,124 shares held by Annelies Freedman
IRA, Mr. Freedman's spouse, and of which Mr. Freedman disclaims beneficial
ownership, (c) 86,600 shares held by Harris Freedman, IRA, (c) 69,900 shares
held by SMACS Holding Corp., of which Mr. Freedman is an officer, and (d) 52,000
shares held by Mr. Freedman individually.
(7) Represents shares of common stock held by GRQ Consultants, Inc. 401K
Plan, of which Mr. Honig is sole trustee.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Devendar S. Bains, Vice President - Product Development and former Chief
Executive Officer agreed to defer $46,000 (2005) and $58,000 (2004) of salaries
to help the Company with its cash flow. Tarlochan Basins, current VP- Business
Development also agreed to defer $10,000 of salaries. In 2004, Devendar S. Bains
loaned the Company an additional $37,991 and was repaid $4,500. As of December
31, 2005, the Company owed $345,842 to the Devendar S. Bains for loans ($97,501)
and accrued salaries ($248,341) and owed other officers an aggregate of $77,358
for accrued salaries. The total due to all officers combined at December 31,
2005 was $416,200.
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Transactions between the Company and its officers, directors, employees and
affiliates will be on terms no less favorable to the Company than can be
obtained from unaffiliated parties. Any such transactions will be subject to the
approval of a majority of the disinterested members of the Board of Directors.
PROPOSAL TWO:
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
INDEPENDENT AUDITORS
KBL, LLP has been our principal accounting firm since 2002. THE BOARD OF
DIRECTORS RECOMMENDS THAT YOU VOTE YOUR SHARES FOR RATIFICATION OF SELECTION OF
KBL, LLP AS OUR INDEPENDENT AUDITORS FOR THE 2006 FISCAL YEAR.
We do not anticipate that representatives of KBL, LLP will attend the annual
meeting.
AUDIT COMMITTEE
We do not have a formal audit committee. The board, in lieu of a formal audit
committee, reviews, among other matters, the professional services provided by
the Company's independent auditors, the independence of such auditors from
management of the Company, the annual financial statements of the Company and
the Company's system of internal accounting controls. The audit committee also
reviews such other matters with respect to the accounting, auditing and
financial reporting practices and procedures of the Company as it may find
appropriate or as may be brought to its attention. The audit committee adopted
an audit committee charter in 2002 and intends to adopt a new charter, which
conforms to the requirements of the Sarbanes-Oxley Act of 2002.
The financial expert on the board of directors is Jessica Hye Lee, a certified
public accountant with over 20 years of experience.
The board, in lieu of a formal audit committee has reviewed and discussed the
audited financial statements included in the Company's Annual Report on Form
10-KSB for the fiscal year ended December 31, 2005.
For the year ended December 31, 2005, the Company incurred professional fees to
its auditors in the amount of $41,092, all of which related to auditing and
quarterly review services. No non-audit services have been provided to the
Company by its current auditor.
Each non-employee director of the Company is entitled to receive reasonable
out-of-pocket expenses incurred in attending meetings of the Board of Directors
of the Company. Directors who are employees of the Company are not paid any fees
or other remuneration for service on the Board or any of the committees. Each
non-employee director may receive options to purchase Common Stock or other
remuneration. The members of the Board of Directors intend to meet at least
quarterly during the Company's fiscal year, and at such other times duly called.
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OTHER MATTERS
We are not aware of any matters to be presented at the Annual Meeting other than
those described in this proxy statement. However, if other matters which are not
known a reasonable time before the solicitation should come before the Annual
Meeting, it is intended that the holders of proxies solicited hereby will vote
on such matters in their discretion.
A COPY OF THE COMPANY'S ANNUAL REPORT TO STOCKHOLDERS FOR THE FISCAL YEAR ENDED
DECEMBER 31, 2006, INCLUDING FINANCIAL STATEMENTS, ACCOMPANIES THIS PROXY
STATEMENT. THE ANNUAL REPORT IS NOT TO BE REGARDED AS PROXY SOLICITING MATERIAL
OR AS A COMMUNICATION BY MEANS OF WHICH ANY SOLICITATION IS TO BE MADE.
***
By Order of the Board of Directors
/s/ Joseph Nordgaard, Chief Executive Officer
Dated: June 23, 2006
17
WI-TRON, INC.
PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
AUGUST 1, 2006
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Joseph Nordgaard and John Chase Lee, and each of
them, with full power of substitution, to vote, as a holder of the common stock,
par value $0.0001 per share ("Common Stock"), of Wi-Tron, Inc., a Delaware
corporation (the "Company"), all the shares of Common Stock which the
undersigned is entitled to vote, through the execution of a proxy with respect
to the 2006 Annual Meeting of Shareholders of the Company (the "Annual
Meeting"), to be held at the Company's corporate offices at 59 LaGrange Street,
Raritan, New Jersey 08869, on August 1, 2006 at 11:00 a.m. EDT, and any and all
adjournments or postponements thereof, and authorizes and instructs said proxies
to vote in the manner directed below.
THE BOARD OF DIRECTORS RECOMMENDS THE VOTE FOR THE ELECTION OF THE
NOMINEES FOR DIRECTORS NAMED BELOW AND PROPOSAL 2.
1. Election of Directors: Joseph Nordgaard, John Chase Lee, Tarlochan Bains,
Jessica Hye Lee, and Mikio Tajima.
FOR ALL NOMINEES [_] WITHHOLD FOR ALL NOMINEES [_]
If you do not wish your shares voted FOR a nominee, draw a line through that
person's name above.
2. Proposal to ratify the appointment of the independent auditors.
FOR [_] AGAINST [_] ABSTAIN [_]
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before such meeting or adjournment or postponement
thereof.
THIS PROXY IS CONTINUED ON THE REVERSE SIDE, PLEASE VOTE,
SIGN AND DATE ON REVERSE SIDE AND RETURN PROMPTLY.
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BACK OF CARD
PROPERLY EXECUTED AND RETURNED PROXY CARDS WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO INSTRUCTIONS TO THE CONTRARY ARE
MADE, THIS PROXY WILL BE VOTED FOR THE ELECTION OF EACH OF THE NAMED NOMINEES AS
DIRECTORS AND PROPOSAL 2 AS DESCRIBED ON THE REVERSE SIDE OF THIS CARD.
You may revoke this proxy at any time before it is voted by (i) filing a
revocation with the Secretary of the Company, (ii) submitting a duly executed
proxy bearing a later date or time than the date or time of the proxy being
revoked; or (iii) attending the Annual Meeting and voting in person. A
stockholder's attendance at the Annual Meeting will not by itself revoke a proxy
given by the stockholder.
(Please sign exactly as the name appears below. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such. If a corporation, please sign with full corporate name
by president or other authorized officer. If a partnership, please sign in the
partnership name by authorized person.)
Dated:
---------------------------- ---------------------------
Signature
-----------------------------------
PLEASE COMPLETE, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
------------------------------------------
Signature, if held by joint owners
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