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 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[ ] Preliminary Proxy Statement [_] Soliciting Material Under Rule
[_] Confidential, For Use of the 14a-12
Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
SMARTPROS LTD.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
________________________________________________________________________________
2) Aggregate number of securities to which transaction applies:
________________________________________________________________________________
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
________________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
________________________________________________________________________________
5) Total fee paid:
________________________________________________________________________________
[_] 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:
________________________________________________________________________________
2) Form, Schedule or Registration Statement No.:
________________________________________________________________________________
3) Filing Party:
________________________________________________________________________________
4) Date Filed:
________________________________________________________________________________
SMARTPROS LTD.
-----------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 17, 2008 AT 11:00 A.M.
-----------------------------------
TO THE STOCKHOLDERS OF SMARTPROS LTD.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of SmartPros
Ltd. ("SmartPros") will be held at the Comfort Inn, 20 Saw Mill River Road,
Hawthorne, New York 10532, on Tuesday, June 17, 2008 at 11:00 A.M. Eastern Time
for the following purposes:
1. To elect two (2) Class I directors, each to serve for a term of
three years.
2. To obtain advisory approval of the appointment of Holtz
Rubenstein Reminick LLP as independent auditors for the year
ending December 31, 2008.
3. To transact such other business as may properly be brought
before the meeting or any adjournment or postponements thereof.
The Board of Directors has fixed the close of business on April 21, 2008, as
the record date for the determination of the stockholders entitled to notice of
and to vote at this meeting and at any adjournment or postponements thereof.
BY ORDER OF THE BOARD OF DIRECTORS
Karen S. Stolzar, Secretary
Dated: Hawthorne, New York
April 28, 2008
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IMPORTANT: Whether or not you expect to attend in person, please complete,
sign, date and return the enclosed Proxy at your earliest
convenience. This will ensure the presence of a quorum at the
meeting. PROMPTLY SIGNING, DATING AND RETURNING THE PROXY WILL
SAVE SMARTPROS THE EXPENSE AND EXTRA WORK OF ADDITIONAL
SOLICITATION. An addressed envelope for which no postage is
required has been enclosed for that purpose. Sending in your
Proxy will not prevent you from voting your stock at the meeting
if you desire to do so, as your Proxy is revocable at your
option. If your stock is held through a broker, bank or a
nominee and you wish to vote at the meeting you will need to
obtain a proxy form from your broker, bank or a nominee and
present it at the meeting.
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SMARTPROS LTD.
-----------------------------------
PROXY STATEMENT
-----------------------------------
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON TUESDAY, JUNE 17, 2008
This Proxy Statement is furnished to the stockholders of SmartPros Ltd.,
a Delaware corporation ("SmartPros"), in connection with the solicitation by the
Board of Directors (our "Board") of proxies to be used at the 2008 Annual
Meeting of Stockholders of SmartPros to be held at the Comfort Inn, 20 Saw Mill
River Road, Hawthorne, New York 10532, on Tuesday, June 17, 2008, at 11:00 A.M.
Eastern Time, and at any adjournments thereof (the "Annual Meeting"). The
approximate date on which this Statement and the accompanying proxy will be
mailed to stockholders is May 8, 2008.
THE VOTING & VOTE REQUIRED
Record Date and Quorum
----------------------
Only stockholders of record at the close of business on April 21, 2008
(the "Record Date"), are entitled to notice of and vote at the Annual Meeting.
On the Record Date, there were 4,978,050 outstanding shares of common stock, par
value $.0001 per share, ("Common Stock"). Each share of Common Stock is entitled
to one vote. Shares represented by each properly executed, unrevoked proxy
received in time for the meeting will be voted as specified. Shares of Common
Stock were the only voting securities of SmartPros outstanding on the Record
Date. A quorum will be present at the Annual Meeting if a majority of the shares
of Common Stock outstanding on the Record Date are present at the meeting in
person or by proxy.
Voting of Proxies
-----------------
The persons acting as proxies (the "Proxyholders") pursuant to the
enclosed proxy will vote the shares represented as directed in the signed proxy.
Unless otherwise directed in the proxy, the Proxyholders will vote the shares
represented by the proxy: (i) for the election of the two Class I director
nominees named in this Proxy Statement; (ii) for the appointment of the
independent auditors for the year ending December 31, 2008, on an advisory
basis; and (iii) in their discretion, on any other business that may come before
the meeting and any adjournments of the meeting.
All votes will be tabulated by the inspector of election appointed for
the Annual Meeting, who will separately tabulate affirmative and negative votes,
abstentions and broker non-votes. Under the SmartPros bylaws and Delaware law:
(1) shares represented by proxies that reflect abstentions or "broker non-votes"
(I.E., shares held by a broker or nominee that are represented at the meeting,
but with respect to which such broker or nominee is not empowered to vote on a
particular proposal) will be counted as shares that are present and entitled to
vote for purposes of determining the presence of a quorum; (2) there is no
cumulative voting, and the director nominees receiving the highest number of
votes, up to the number of directors to be elected, are elected and,
accordingly, abstentions, broker non-votes and withholding of authority to vote
will not affect the election of directors; and (3) proxies that reflect
abstentions or non-votes will be treated as unvoted for purposes of determining
approval of that proposal and will not be counted as votes for or against that
proposal.
1
Voting Requirements
-------------------
ELECTION OF DIRECTORS. The election of directors requires a plurality of
the votes cast for the election of directors. Accordingly, the directorships to
be filled at the Annual Meeting will be filled by the nominees receiving the
highest number of votes. In the election of directors, votes may be cast in
favor of or withheld with respect to any or all nominees. Votes that are
withheld will be excluded entirely from the vote and will have no effect on the
outcome of the vote.
PROPOSAL 1
ELECTION OF DIRECTORS AND MANAGEMENT INFORMATION
Our Board currently consists of five members and is divided into three
classes, with two Class I directors, one Class II director and two Class III
directors. Directors serve for three-year terms with one class of directors
being elected by our stockholders at each annual meeting.
At the Annual Meeting, two Class I directors will be elected to serve
until the annual meeting of stockholders in 2011 and until each director's
successor is elected and qualified. Our Board has nominated Martin H. Lager and
John J. Gorman for election as the Class I directors. The accompanying form of
proxy will be voted for the election of Messrs. Lager and Gorman as directors,
unless the proxy contains contrary instructions. Management has no reason to
believe that either Mr. Lager or Mr. Gorman will not be a candidate or will be
unable to serve. However, in the event that either is unable or unwilling to
serve as a director, the proxy will be voted for the election of such person or
persons as shall be designated by our Board.
OUR BOARD RECOMMENDS A VOTE FOR THE ELECTION OF THE FOREGOING NOMINEES
AND PROXIES THAT ARE SIGNED AND RETURNED WILL BE SO VOTED
UNLESS OTHERWISE INSTRUCTED.
* * * * *
Set forth below is a brief biography of each nominee for election as a
Class I director and all other members of our Board who will continue in office.
NOMINEES FOR ELECTION AS CLASS I DIRECTORS
TERM EXPIRING 2011
MARTIN H. LAGER, age 56. Mr. Lager has been serving as the Chairman of
our Audit Committee since October 2004 and was appointed a Class I director in
March 2006. From April 2004 through March 2006 he served on our Board as a Class
III director. Since January 1, 2004, Mr. Lager has been operating his own
accounting practice, Martin H. Lager, CPA. From January 1, 1996 through December
31, 2003 Mr. Lager was a partner in the accounting firm of Rubin & Katz LLP
where he was the manager of the tax department. Mr. Lager received a BS in
Accounting from Babson College in 1974, and an MBA in Taxation in 1980 from St.
John's University. He is a licensed Certified Public Accountant in the State of
New York.
JOHN J. GORMAN, age 53. Mr. Gorman joined our Board in January 2006 and
has been serving as the Chairman of our Compensation and Nominating Committee
since November 2007. Mr. Gorman has been a partner at Luse, Gorman, Pomerenk &
Schick, P.C., a Washington, DC law firm, since 1994. He specializes in providing
both transactional and general corporate and securities law advice to public and
private companies. Mr. Gorman is a faculty member of the National Association of
Corporate Directors (NACD), and served as a Commissioner on the 2004 NACD Blue
Ribbon Commission on Board Leadership. Mr. Gorman earned a BS degree from Brown
University in 1976, and a JD from Vanderbilt University School of Law in 1979.
2
INCUMBENT CLASS III DIRECTORS
-----------------------------
TERM EXPIRING 2010
------------------
ALLEN S. GREENE, age 61. Mr. Greene has been the Chairman of our Board
since January 1, 2006 and our Chief Executive Officer since April 2001. Prior to
his appointment as Chairman, he served as Vice Chairman of the Board. He is also
Chairman and Chief Executive Officer of our Working Values Ltd. and Skye
Multimedia Ltd. subsidiaries. From August 1997 until December 1999 he was the
Senior Executive Vice President, Chief Operating Officer, and Chief Lending
Officer of Medallion Financial Corporation, a Nasdaq-listed financial holding
company lending to small business. Since 1997, Mr. Greene has been President of
Veral & Co. LLC, a private consulting firm that provided general business,
financial and M&A advisory services. Veral is currently inactive. Mr. Greene
holds a BBA from The Baruch School of the City University of New York in Finance
and Investments, and an MBA from Baruch College of the City University of New
York.
LEONARD J. STANLEY, age 53. Mr. Stanley joined the Board in August 2007
and is currently a consultant to Stifel, Nicolaus & Company, Incorporated, a
regional broker-dealer. From November 1994 through February 2007, Mr. Stanley
was employed by Ryan Beck & Co., a middle market investment bank, where he was
Executive Vice President - Director of Administration. His prior positions at
Ryan Beck included Chief Administrative Officer, Chief Financial Officer and
Controller. Since May 1998, he has served as a Member of the Board of Directors
of Cenlar Capital Corporation and Cenlar Federal Savings Bank. Mr. Stanley
received a BS in Accounting in 1976 from the State University of New York,
Fredonia. He is a Certified Public Accountant in the State of New Jersey.
INCUMBENT CLASS II DIRECTORS
TERM EXPIRING 2009
------------------
JACK FINGERHUT, age 57. Mr. Fingerhut is one of our founders and has
been a director since 1981. He was appointed President, effective March 1, 2006.
From April 2004 until March 2006 he was Senior Executive Vice President and
during this period, from April 2004 through October 18, 2004, he also served as
our Treasurer. From 1998 through April 2004 he was President of the Accounting
Division and during this period, from July 2002 through October 19, 2004, he was
also our Chief Financial Officer. He served as both our Chief Operating Officer
and Chief Financial Officer from 1981 through 1998. In 1973, he received a BA
degree in History from the University of Maryland, and earned his MBA in
Accounting from Rutgers University in 1974. He is a Certified Public Accountant
in New Jersey. Mr. Fingerhut is a member of the American Institute of Certified
Public Accountants and the New Jersey Society of Certified Public Accountants.
All directors attended at least 75% of the aggregate number of meetings
of our Board and of all committees of our Board on which that director served
during the last full fiscal year.
EXECUTIVE OFFICERS
------------------
The following table sets forth the names, ages and principal positions
of our executive officers as of April 21, 2008:
NAME AGE POSITION
EXECUTIVE OFFICERS
Allen S. Greene 61 Chief Executive Officer, Chairman of the Board of
Directors, Chairman of Working Values, Ltd. and of
Skye Multimedia Ltd., subsidiaries of SmartPros
3
Jack Fingerhut 57 President, President of Accounting Division
and Director
Stanley P. Wirtheim 58 Chief Accounting and Financial Officer
and Treasurer
Joseph R. Fish 42 Chief Technology Officer
Joseph Higgins 56 Senior Vice President - Sales
Karen S. Stolzar 59 Vice-President and Secretary
SIGNIFICANT EMPLOYEES
Seth Oberman 44 President of Skye Multimedia, Inc.
Stephen Henn 44 President of Working Values, Ltd.
The principal occupation and business experience for at least the last
five years for each executive officer is set forth below (except for Messrs.
Greene and Fingerhut, each of whose business experience is discussed above).
EXECUTIVE OFFICERS
STANLEY P. WIRTHEIM. Mr. Wirtheim became our Chief Accounting and
Financial Officer and Treasurer on October 19, 2004, the day our initial public
offering was effective. Mr. Wirtheim is a Certified Public Accountant in New
York State. He works for us four full days per week so that he can maintain his
independent accounting practice, Stanley P. Wirtheim, CPA, which he founded in
1997. Prior to his becoming our Chief Accounting and Financial Officer and since
1981, he has performed accounting services for us. Mr. Wirtheim received a BBA
in accounting from Baruch College of the City University of New York.
JOSEPH R. FISH. Mr. Fish joined us in November 1998. From November 1,
1998 through December 31, 1999 his title was Vice President of New Media. Since
January 1, 2000 he has been our Chief Technology Officer. Mr. Fish attended
Embry-Riddle Aeronautical University in Katterbach, Germany.
JOSEPH HIGGINS. Mr. Higgins was hired in October 2005 as our Senior Vice
President of Sales. From January 2002 through October 2005 he was employed by
Imagistics Inc., an office equipment company as its Vice President of Sales. Mr.
Higgins received a BA degree in Business Management from East Michigan
University in 1974.
KAREN S. STOLZAR. Ms. Stolzar joined SmartPros in March 1990 and is a
vice-president of the Accounting Divison. She was appointed Secretary in March
2006. She oversees course compliancy and continuing education for SmartPros'
Accounting Division. Ms. Stolzar received a BA degree from Barnard College,
Columbia University.
SIGNIFICANT EMPLOYEES
SETH OBERMAN. Mr. Oberman is the founder and president of Skye
Multimedia, Inc., which we purchased in February 2006. He founded Skye in April
1995 and began working for us as of March 1, 2006. Mr.Oberman received a BS in
Business from Lehigh University in 1985.
4
STEPHEN HENN. Mr. Henn joined SmartPros in November 2006 and was
appointed President of Working Values, Ltd. effective April 1, 2008. From
September 2005 to November 2006, Mr. Henn was the Chief Executive Officer and
President of Cognistar Interactive Corporation. From September 2004 to August
2005, Mr. Henn served as Senior Vice President of Business Development for
Cognistar Holdings LLC. From February 1999 to August 2004, Mr. Henn was
President of Cognistar Corporation. Mr. Henn received a BA in Economics from the
University of Chicago in 1985 and his JD from University of Connecticut School
of Law in 1994.
AUDIT COMMITTEE FINANCIAL EXPERT
Our Board has determined that the Chairman of the Audit Committee, Mr.
Lager, is an "audit committee financial expert," as that term is defined in Item
407(d)(5) of Regulation S-K, and "independent" for purposes of the listing
standards of the American Stock Exchange ("AMEX"), where SmartPros' stock was
listed until April 21, 2008, the NASDAQ Capital Market ("NASDAQ"), where
SmartPros' stock is currently listed, and Section 10A(m)(3) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
COMMITTEES OF THE BOARD OF DIRECTORS
Our Board established an Audit Committee and a Compensation and
Nominating Committee. The members of both committees are independent for
purposes of the AMEX and NASDAQ listing standards.
The chairman of our Audit Committee is Mr. Lager and the other members
of the Committee are Messrs. Stanley and Gorman. All of the members qualify as
"independent" in accordance with the applicable rules under the SEC, AMEX and
NASDAQ. The Audit Committee meets with management and our independent public
accountants to determine the adequacy of internal controls and other financial
reporting matters and review related party transactions for potential
conflict-of-interest situations. The Audit Committee met four times in 2007.
AUDIT COMMITTEE REPORT
The Audit Committee was established to meet with management and our
independent accountants to determine the adequacy of internal controls and other
financial reporting matters. Our Board has adopted a written charter for the
Audit Committee. The Audit Committee reviewed our audited financial statements
for the year ended December 31, 2007, and met with our management to discuss
such audited financial statements. The Audit Committee has discussed with our
independent accountants, Holtz Rubenstein Reminick LLP, the matters required to
be discussed pursuant to Statement on Accounting Standards No. 61, as may be
modified or supplemented. The Audit Committee has received the written
disclosures and the letter from Holtz Rubenstein Reminick LLP required by the
Independence Standards Board Standard No. 1, as may be modified or supplemented.
The Audit Committee has discussed with Holtz Rubenstein Reminick LLP its
independence from SmartPros and its management. Holtz Rubenstein Reminick LLP
had full and free access to the Audit Committee. Based on its review and
discussions, the Audit Committee recommended to our Board that the audited
financial statements be included in the SmartPros Annual Report on Form 10-KSB.
AUDIT COMMITTEE:
Martin H. Lager
Leonard J. Stanley
John J. Gorman
5
The chairman of the Compensation and Nominating Committee is Mr. Gorman
and the other members of the committee are Messrs. Stanley and Lager. The
committee reviews and recommends the compensation and benefits payable to our
officers, reviews general policy matters relating to employee compensation and
benefits, and administers our various stock option plans and other incentive
compensation arrangements. The committee also identifies individuals qualified
to become members of our Board and makes recommendations to our Board of new
nominees to be elected by stockholders or to be appointed to fill vacancies on
our Board. The Compensation and Nominating Committee met two times in 2007. A
copy of the Compensation and Nominating Committee Charter has been posted on our
Web site at www.smartpros.com.
In identifying and recommending nominees for positions on our Board, the
Compensation and Nominating Committee places primary emphasis on (i) a
candidate's judgment, character, expertise, skills and knowledge useful to the
oversight of our business; (ii) a candidate's business or other relevant
experience; and (iii) the extent to which the interplay of the candidate's
expertise, skills, knowledge and experience with that of other members of our
Board will build a board of directors that is effective, collegial and
responsive to our needs.
The Compensation and Nominating Committee will consider director
candidates recommended by stockholders. In considering candidates submitted by
stockholders, the committee will take into consideration the needs of our Board
and the qualifications of the candidate. Under our bylaws to have a candidate
considered by the committee, a stockholder must timely notify our Secretary,
Karen Stolzar, by written notice delivered to, or mailed to and received at, our
principal executive offices not less than thirty (30) days and not more than
sixty (60) days prior to the scheduled annual meeting date, regardless of any
postponements, deferrals or adjournments of that meeting to a later date;
PROVIDED, HOWEVER, that if less than forty (40) days' notice or prior public
disclosure of the date of the scheduled annual meeting is given or made, notice
by the stockholder, to be timely, must be so delivered or received not later
than the close of business on the tenth (10th) day following the earlier of the
day on which such notice of the date of the scheduled annual meeting was mailed
or the day on which such public disclosure was made. A stockholder's notice to
the Secretary shall set forth (i) as to each person whom the stockholder
proposes to nominate for election to our Board, all information relating to such
person that is required to be disclosed in solicitations of proxies for election
of directors in an election contest, or is otherwise required, in each case
pursuant to the Exchange Act, including, without limitation, such person's
written consent to being named in the proxy statement as a nominee and to
serving as a director if elected; (ii) the name and address of the stockholder
making the nomination and any other stockholders known by such stockholder to be
supporting such nomination; (iii) the class and number of shares of stock owned
by the stockholder on the date of such stockholder's notice and by any other
stockholders known by such stockholder to be supporting such nomination on the
date of such stockholder's notice and (iv) any financial interest of the
stockholder in such nomination.
The Compensation and Nominating Committee believes that the minimum
qualifications for service as a director of SmartPros are that a nominee possess
an ability, as demonstrated by recognized success in his or her field, to make
meaningful contributions to our Board's oversight of our business and affairs
and an impeccable reputation of integrity and competence in his or her personal
or professional activities. The committee's evaluation of potential candidates
shall be consistent with our Board's criteria for selecting new directors. Such
criteria include an understanding of our business environment and the possession
of such knowledge, skills, expertise and diversity of experience so as to
enhance our Board's ability to manage and direct our affairs and business,
including when applicable, to enhance the ability of committees of our Board to
fulfill their duties and/or satisfy any independence requirements imposed by
law, regulation or listing requirements. The committee may also receive
suggestions from current members of our Board, executive officers or other
sources, which may be either unsolicited or in response to requests from the
committee for such candidates. In addition, the committee may also, from time to
time, engage firms that specialize in identifying director candidates.
6
Once a person has been identified by the committee as a potential
candidate, the committee may collect and review publicly available information
regarding the person to assess whether the person should be considered further.
If the committee determines that the candidate warrants further consideration,
the chairman or another member of the committee may contact the person.
Generally, if the person expresses a willingness to be considered and to serve
on our Board, the committee may request information from the candidate, review
the person's accomplishments and qualifications and may conduct one or more
interviews with the candidate. The committee will consider all such information
in light of information regarding any other candidates that the committee might
be evaluating for membership on our Board. In certain instances, the committee
members may contact one or more references provided by the candidate or may
contact other members of the business community or other persons that may have
greater first-hand knowledge of the candidate's accomplishments. The committee's
evaluation process does not vary based on whether or not a candidate is
recommended by a stockholder.
It is our policy that directors are invited and encouraged to attend the
Annual Meeting. Three of our then six directors attended the 2007 Annual
Meeting.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
The aggregate fees billed by our principal accounting firm, Holtz
Rubenstein Reminick LLP, for the fiscal years ended December 31, 2007 and 2006,
are as follows:
2007 2006
------- -------
Audit fees(1) $76,171 $59,620
Audit-related fees
------- -------
TOTAL AUDIT AND AUDIT-RELATED FEES 76,171 59,620
Tax fees -- --
All other fees(2) 4,450 250
------- -------
TOTAL FEES $80,621 $59,870
======= =======
AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES
The Audit Committee charter provides that the Audit Committee will
pre-approve audit services and non-audit services to be provided by our
independent auditors before the accountant is engaged to render these services.
The Audit Committee may consult with management in the decision-making process,
but may not delegate this authority to management. The Audit Committee may
delegate its authority to pre-approve services to one or more committee members,
provided that the designees present the pre-approvals to the full committee at
the next committee meeting.
COMMUNICATIONS WITH DIRECTORS
Our Board has established a process to receive communications from
stockholders. Stockholders and other interested parties may contact any member
(or all members) of our Board, or the non-management directors as a group, any
Board committee or any chair of any such committee by mail or electronically. To
communicate with our Board, any individual director or any group or committee of
directors, correspondence should be addressed to our Board or any such
individual directors or group or committee of directors by either name or title,
care of the Secretary. All such correspondence should be sent to our principal
executive offices or by e-mail to the Secretary at SECRETARY@SMARTPROS.COM. All
communications received as set forth in the preceding paragraph will be opened
by the Secretary for the sole purpose of determining whether the contents
represent a message to our directors. Any contents that are not in the nature of
----------
(1) Includes $11,361 and $10,920 of fees billed for services rendered in
connection with their review of our Form 10-QSBs for the quarters ended
March 31, June 30, and September 30, 2007 and 2006, respectively.
(2) Fees for accounting research and consulting in connection with acquisitions
made in 2007.
7
advertising, promotions of a product or service, patently offensive material or
matters deemed inappropriate for our Board will be forwarded promptly to the
addressee. In the case of communications to our Board or any group or committee
of directors, the Secretary will make sufficient copies of the contents to send
to each director who is a member of the group or committee to which the envelope
or e-mail is addressed.
PROPOSAL 2
ADVISORY APPROVAL OF THE APPOINTMENT OF INDEPENDENT AUDITORS
Holtz Rubenstein Reminick LLP has been our independent auditor since
November 2004. Their audit report appears in our annual report for the fiscal
year ended December 31, 2007. A representative of Holtz Rubenstein Reminick LLP
will be at the Annual Meeting and will have an opportunity to make a statement
if he or she desires to do so and will be available to respond to appropriate
questions.
Selection of the independent accountants is not required to be submitted to
a vote of our stockholders for ratification. In addition, the Sarbanes-Oxley Act
of 2002 requires the Audit Committee to be directly responsible for the
appointment, compensation and oversight of the audit work of the independent
auditors. The Audit Committee expects to appoint Holtz Rubenstein Reminick LLP
to serve as independent auditors to conduct an audit of SmartPros' accounts for
the 2008 fiscal year. However, our Board is submitting this matter to SmartPros
stockholders as a matter of good corporate practice. If the stockholders fail to
vote on an advisory basis in favor of the selection, the Audit Committee will
take that into consideration when deciding whether to retain Holtz Rubenstein
Reminick LLP, and may retain that firm or another without re-submitting the
matter to the stockholders. Even if stockholders vote on an advisory basis in
favor of the appointment, the Audit Committee may, in its discretion, direct the
appointment of different independent auditors at any time during the year if it
determines that such a change would be in the best interests of SmartPros and
the stockholders.
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL
AND PROXIES THAT ARE SIGNED AND RETURNED WILL BE SO VOTED
UNLESS OTHERWISE INSTRUCTED
* * * * *
EXECUTIVE COMPENSATION AND TRANSACTIONS WITH DIRECTORS, OFFICERS AND
PRINCIPAL HOLDERS
The following table sets forth information regarding compensation awarded
to, earned by, or paid to our principal executive officer and our two most
highly compensated executive officers, other than our principal executive
officer whose total compensation exceeded $100,000 in 2007 (collectively, the
"Named Executives"), for all services rendered to us in all capacities during
the last two completed fiscal years.
8
SUMMARY COMPENSATION TABLE
STOCK OPTION ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS AWARDS AWARDS COMP TOTAL
(a) (b) (c) (d)(1) (e)(1) (f) (i) (j)
------------------------------------ ---- -------- -------- ---------- -------- --------- --------
Allen S. Greene,
Chief Executive Officer 2007 $281,250 $25,000 $22,783(2) $1,616(3) $36,644(4) $367,293
(Principal Executive Officer) 2006 $267,147 $ 9,000 $ 7,070(5) -- $31,367(4) $314,584
Jack Fingerhut, 2007 $203,125 $20,000 $11,118(6) $ 808(7) $25,825(4) $260,876
President 2006 $190,272 $12,500 $ 4,208(8) $ 833(9) $21,590(4) $229,403
David M. Gebler
Senior Vice President and 2007 $207,304 $ 5,000 -- -- $20,635(4) $232,939
President Working Values, Ltd.(10) 2006 $197,834 $ 8,400 $ 1,212(11) -- $19,226(4) $226,672
----------
(1) Cash bonuses and stock awards in 2006 were paid in 2007. Cash bonuses and
stock awards in 2007 were paid in 2008.
(2) One-third of the shares vested on the date of grant, February 14, 2008. The
balance will vest ratably on February 14, 2009 and 2010.
(3) Reflects the amount reported as stock-based compensation expenses for 2007.
In September 2007, Mr. Greene received a grant of options covering 10,000
shares of common stock having an exercise price of $5.78. The options vest
on January 1, 2011.
(4) Car allowance (net of taxable portion), car payment, medical and long-term
disability insurance and/or 401(k) matching.
(5) One-third of the shares vested on the date of grant, January 29, 2007 and
one-third of the shares vested on January 29, 2008. The balance will vest on
January 29, 2009.
(6) One-third of the shares vested on the date of grant, February 14, 2008. The
balance will vest ratably on February 14, 2009 and 2010.
(7) Reflects the amount reported as stock-based compensation expenses for 2007.
In September 2007, Mr. Fingerhut received a grant of options covering 5,000
shares of common stock having an exercise price of $5.78. The options vest
on January 1, 2011.
(8) One-third of the shares vested on the date of grant, January 29, 2007 and
one-third of the shares vested on January 29, 2008. The balance will vest on
January 29, 2009.
(9) Reflects the amount reported as stock-based compensation expenses for 2006.
In October 2006, Mr. Fingerhut received a grant of options covering 10,000
shares of common stock having an exercise price of $2.75. The options vest
ratably over a three-year period beginning in October 2007.
(10) Resigned effective March 31, 2008.
(11) One-third of the shares vested on the date of grant, January 29, 2007 and
one-third of the shares vested on January 29, 2008. The balance will vest on
January 29, 2009. However, the shares were forfeited upon Mr. Gebler's
resignation.
9
EMPLOYMENT AGREEMENTS
We have employment agreements with each of the Named Executives.
The employment agreement with Allen S. Greene, dated as of February 1,
2007, is for a term of three years but renews automatically for a new three-year
term at the end of the first year of each three-year term unless either party
gives notice before the end of the first year of each three year term of its
intention not to renew the agreement. The contract calls for an annual base
salary of $275,000 subject to increases and bonuses awarded by the compensation
committee. Mr. Greene is also entitled to either a company car or a car
allowance and is also entitled to participate in all of our employee benefit
programs, including health and long-term disability insurance. In the event the
contract is terminated by us without cause (as defined) or there is a reduction
in his duties or responsibilities, Mr. Greene is entitled to the remainder of
his base salary and all fringe benefits and an average of the last two years
annual bonuses.
The employment agreement with Jack Fingerhut, dated as of October 1,
2005, is for a term of three years. Mr. Fingerhut's annual base salary for 2007
is $200,000 subject to increases and bonuses awarded by the compensation
committee. He is also entitled to participate in all of our employee benefit
programs, including health and long-term disability insurance. In addition, he
receives an annual car allowance. In the event his contract is terminated by us
without cause (as defined), he will be entitled to the remaining base salary and
fringe benefits under the contract and a bonus equal to the highest awarded in
the last five years multiplied by the remaining term of his contract.
David M. Gebler's employment agreement expired March 31, 2008. Mr.
Gebler's annual base salary was $180,000 subject to increases and bonuses
awarded by the compensation committee. In addition, Mr. Gebler was entitled to
similar fringe benefits as our other senior executive officers. Mr. Gebler had
rights similar to Mr. Fingerhut upon termination without cause.
In September 2007, Messers. Greene and Fingerhut were granted options
covering 10,000 and 5,000 shares of common stock with an exercise price of
$5.78, respectively, and 12,500 and 10,000 shares of restricted stock,
respectively. The options vest on January 1, 2011. The restricted stock grants
vest on January 1, 2009 for Mr. Greene and on January 1, 2011 for Mr. Fingerhut.
The stock was valued at $5.78 per share at the date of issuance.
In February 2008, the Compensation and Nominating Committee awarded
certain executive officers restricted stock under the 1999 Stock Option Plan.
The restricted stock awards were granted to those persons who the compensation
committee believed were primarily responsible for our improved operational
performance in 2007. The grants vest ratably over three years beginning with the
date of grant. Messers. Greene and Fingerhut received 4,902 and 3,922 shares,
respectively. The stock was valued at $5.10 per share at the date of issuance.
10
OUTSTANDING EQUITY AWARDS AT DECEMBER 31, 2007 (FISCAL YEAR-END)
Options Awards Stock Award
----------------------------------------------------------- -------------------------------------
Number of Number of
Securities Securities
Underlying Underlying
Unexercised Unexercised
Options Options Option Option Number of Shares Market Value of
(#) # Exercise Expiration of Stock That Have Shares That
Exercisable Unexercisable Price Date Have Not Vested Have Not Vested
Name (b) (c) (e) (f) (g) (h)(1)
--------------- ------------- ------------- -------- ---------- ------------------ ---------------
Allen S. Greene 103,339(2) -- $5.32 04/09/2011 3,500(3) $20,370
25,850(4) -- $2.42 01/29/2012 12,500(5) $72,750
-- 10,000(6) $5.78 09/23/2017 4,902(7) $28,530
Jack Fingerhut -- 10,000(8) $2.75 10/11/2015 2,083(3) $12,123
-- 5,000(6) $5.78 09/23/2017 10,000(5) $58,200
-- -- -- -- 3,922(7) $22,826
David Gebler(9) 5,170(10) -- $5.32 03/31/2013 300(3)(11) $ 1,746
(1) Market value as of December 31, 2007 at closing price of $5.82.
(2) Granted July 24, 2001.
(3) Stock issued on January 29, 2007, but expense recorded December 31, 2006.
(4) Granted January 26, 2002.
(5) Stock issued on September 24, 2007.
(6) Granted September 24, 2007.
(7) Stock issued on February 14, 2008, but expense recorded December 31, 2007.
None of these shares were vested on December 31, 2007. One-third of these
shares vested on the date of grant, February 14, 2008. The balance will
vest ratably on February 14, 2009 and 2010.
(8) Granted October 12, 2006.
(9) Resigned effective March 31, 2008.
(10) Granted March 31, 2003. The options will expire on June 30, 2008, 90 days
after Mr. Gebler's resignation.
(11) The shares were forfeited upon Mr. Gebler's resignation.
11
We maintain a 401(k) plan for our employees to which we made matching
contributions totaling approximately $24,000 in 2007. We do not provide for any
other retirement benefit for any of our employees, including executive officers.
In recognition of our performance in 2007, on February 14, 2008 the
Compensation and Nominating Committee granted certain key employees an aggregate
of 18,072 shares of restricted common stock. Since the grant related to services
performed in 2007, the value of the stock was recorded as a 2007 expense. Each
grantee is deemed to be the legal and beneficial owner of the shares included in
his or her grant and has the right to vote those shares and receive the
dividends on those shares. However, only one third of the shares vested
immediately. Of the remaining two-thirds, one half will vest on February 14,
2009 and one half will vest on February 14, 2010. Any unvested shares will be
forfeited if the grantee's employment is terminated, voluntarily or
involuntarily before the next vesting date.
COMPENSATION OF DIRECTORS
Our directors receive an annual fee of $5,000, payable in equal
quarterly installments, and $500 plus reimbursement for actual out-of-pocket
expenses in connection with each board meeting attended in person and $200 for
each board meeting attended telephonically. Effective April 1, 2008, the annual
fee for our directors increased to $8,000 per annum. The head of the Audit
Committee receives an annual fee of $1,000, payable in equal quarterly
installments. Each member of the audit, compensation and nominating committees
receives $500 for each committee meeting he attends in person and $200 for each
audit committee meeting attended telephonically unless the meeting immediately
precedes or follows a board meeting, in which case he will receive $200 for
attending in person or $100 if he attends by telephone. At the discretion of the
board of directors newly elected independent directors may be granted stock
options pursuant to the terms of our Stock Option Plan. John Gorman and Marty
Lager were granted options covering 9,000 and 10,000 shares, respectively, upon
their election to the Board. Mr. Gorman's options have an exercise price of
$3.05 and Mr. Lager's options have an exercise price of $4.00. Leonard Stanley
was granted options covering 9,000 shares upon his election to the Board. Mr.
Stanley's options have an exercise price of $5.94.
DIRECTOR COMPENSATION
Option
Fees Earned Awards Total
Name In Cash ($)(3) ($)
----------------------------- ----------- ------ -------
Joshua A. Weinreich(1) $6,600 -- $ 6,600
Bruce Judson(2) $3,100 -- $ 3,100
Marin H. Lager $9,000 $5,250 $14,250
John Gorman $6,900 $2,723 $ 9,623
Leonard J. Stanley $4,000 $3,341 $ 7,341
(1) Resigned as director effective November 9, 2007.
(2) Resigned as director effective June 14, 2007.
(3) Computed in accordance with FAS 123R.
12
LIMITATION OF DIRECTORS' LIABILITY AND INDEMNIFICATION
Our certificate of incorporation limits the liability of individual
directors for specified breaches of their fiduciary duty. The effect of this
provision is to eliminate the liability of directors for monetary damages
arising out of their failure, through negligent or grossly negligent conduct, to
satisfy their duty of care, which requires them to exercise informed business
judgment. The liability of directors under the federal securities laws is not
affected. A director may be liable for monetary damages only if a claimant can
show receipt of financial benefit to which the director is not entitled,
intentional infliction of harm on us or on our shareholders, a violation of
Section 174 of the Delaware General Corporation Law (dealing with unlawful
distributions to shareholders effected by vote of directors), and any amended or
successor provision thereto, or an intentional violation of criminal law.
Our certificate of incorporation also provides that we will indemnify
each of our directors or officers, and their heirs, administrators, successors
and assigns against any and all expenses, including amounts paid upon judgments,
counsel fees, and amounts paid or to be paid in settlement before or after suit
is commenced, actually and necessarily incurred by such persons in connection
with the defense or settlement of any claim, action, suit or proceeding, in
which they, or any of them are made parties, or which may be asserted against
them or any of them by reason of being, or having been, directors or officers of
the corporation, except in relation to such matters in which such director or
officer shall be adjudged to be liable for his own negligence or misconduct in
the performance of his duty.
There is no pending litigation or proceeding involving any of our
directors, officers, employees or agents in which we are required or permitted
to provide indemnification, except as set forth under Certain Relationships and
Related Party Transactions. We are also not aware of any threatened litigation
or proceedings that may result in a claim for indemnification.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or controlling persons under our
certificate of incorporation, we have been informed that, in the opinion of the
Securities and Exchange Commission, indemnification is against public policy as
expressed in the Securities Act and is unenforceable.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
STOCKHOLDER MATTERS
The following table sets forth information regarding the beneficial
ownership of our common shares as of April 21, 2008:
o each person, or group of affiliated persons, known by us to be the
beneficial owner of more than 5% of our outstanding common shares;
o each director;
o each Named Executive Officer; and
o all of our directors and executive officers as a group.
Except as otherwise indicated, the persons listed below have sole voting
and investment power with respect to all of the common shares owned by them. The
individual shareholders have furnished all information concerning their
respective beneficial ownership to us.
13
COMMON SHARES PERCENT OF COMMON
NAME AND ADDRESS BENEFICIALLY SHARES BENEFICIALLY
OF BENEFICIAL OWNER (1) OWNED (2) OWNED (3)
-------------------------------------- --------------- ---------------------
DIRECTORS AND NAMED EXECUTIVE OFFICERS
Allen S. Greene 338,380(4) 6.8%
Jack Fingerhut 178,239(5) 3.6%
David M. Gebler(6) 5,770(7) *
Martin H. Lager 13,000(8) *
John J. Gorman 34,000(9) *
Leonard J. Stanley 11,500(10) *
All directors and executive officers
as a group(8 persons) 655,406(11) 13.2%
5% OWNERS
Osmium Partners, LLC
388 Market Street
Suite 920
San Francisco, CA 94104 252,011 5.1%
----------
*Less than 1%
(1) Unless otherwise indicated all addresses are c/o SmartPros Ltd., 12 Skyline
Drive, Hawthorne, New York 10532.
(2) According to the rules and regulations of the SEC, common stock that a
person has a right to acquire within 60 days of the date of this Proxy
Statement are deemed to be beneficially owned by that person and
outstanding for the purpose of computing the percentage ownership of that
person, but are not deemed outstanding for the purpose of computing the
percentage ownership of any other person.
(3) Based on 4,978,050 shares outstanding as of April 21, 2008.
(4) Includes 139,249 shares underlying outstanding options and 17,518 shares of
common stock that are subject to a restricted stock agreement.
(5) Includes 5,000 shares underlying options and 13,656 shares of common stock
subject to a restricted stock agreement.
(6) Resigned effective March 31, 2008.
(7) Includes 5,170 shares underlying exercisable options that expire on June
30, 2008.
(8) Includes 10,000 shares underlying options.
(9) Includes 9,000 shares underlying outstanding options.
(10) Includes 9,000 shares underlying options.
(11) Includes David Gebler. Includes 237,316 shares underlying outstanding
options and 43,629 shares subject to restricted stock agreements.
SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
To attract and retain the personnel necessary for our success, our Board
and our stockholders adopted our 1999 Stock Option Plan. A total of 882,319
shares of common stock were reserved for issuance upon exercise of options or
shares of restricted common stock granted under the plan. As of April 21, 2008
14
options covering 410,924 shares are issued and outstanding. The compensation
committee of our Board administers the plan. The plan covers employees and
others who perform services for us, which would include directors and
consultants. The administrator of the plan, whether our Board or the
compensation committee, determines who is eligible to receive these incentive
stock options, how many options they will receive, the term of the options, the
exercise price and other conditions relating to the exercise of the options.
Stock options granted under the plan must be exercised within a maximum of 10
years from the date of grant at an exercise price that is not less than the fair
market value of the common shares on the date of the grant. Options granted to
stockholders owning more than 10% of our outstanding common shares must be
exercised within five years from the date of grant and the exercise price must
be at least 110% of the fair market value of the common shares on the date of
the grant.
The following table sets forth information as of December 31, 2007,
relating to all of our equity compensation arrangements.
NUMBER OF
NUMBER OF SECURITIES
SECURITIES TO BE REMAINING
ISSUED UPON WEIGHTED AVERAGE AVAILABLE FOR
EXERCISE OF EXERCISE PRICE FUTURE ISSUANCE
OUTSTANDING OF OUTSTANDING UNDER EQUITY
OPTIONS AND OPTIONS COMPENSATION
WARRANTS AND WARRANTS PLANS
---------------- ---------------- ---------------
Equity compensation
plans approved
by stockholders (1) 386,280 $4.62 308,032
(1) The 1999 Stock Option Plan.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None.
LEGAL PROCEEDINGS
None.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires SmartPros' officers and
directors, and persons who own more than 10% of a registered class of the
SmartPros' equity securities to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. Officers, directors and
greater than 10% stockholders are required by SEC regulations to furnish
SmartPros with copies of all Section 16(a) forms they file.
To the best of our knowledge, based solely on review of the copies of
such forms furnished to us, or written representations that no other forms were
required, we believe that all Section 16(a) filing requirements applicable to
our officers, directors and greater than 10% stockholders were complied with
during 2007. With respect to any former directors, officers, and 10%
stockholders, we do not have any knowledge of any known failures to comply with
the filing requirements of Section 16(a).
15
MISCELLANEOUS
OTHER MATTERS
The management knows of no other business which will be presented for
consideration at the Annual Meeting other than that stated in the notice of
meeting.
STOCKHOLDER PROPOSALS
Stockholders interested in presenting a proposal for consideration at
the annual meeting of stockholders in 2008 must follow the procedures found in
Rule 14a-8 under the Exchange Act and our bylaws. To be eligible for inclusion
in our 2009 proxy materials, all qualified proposals must be received by our
Secretary no later than December 29, 2008. Stockholder proposals submitted
thirty (30) or more, but less than sixty (60), days before the scheduled date
for the 2008 annual meeting may be presented at the annual meeting if such
proposal complies with our bylaws, but will not be included in our proxy
materials; PROVIDED, HOWEVER, that if less than forty (40) days' notice or prior
public disclosure of the date of the scheduled annual meeting is given or made,
notice by the stockholder, to be timely, must be so delivered or received not
later than the close of business on the tenth (10th) day following the earlier
of the day on which such notice of the date of the scheduled annual meeting was
mailed or the day on which such public disclosure was made. A stockholder's
notice to the Secretary shall set forth (i) as to each person whom the
stockholder proposes to nominate for election to our Board, all information
relating to such person that is required to be disclosed in solicitations of
proxies for election of Directors in an election contest, or is otherwise
required, in each case pursuant to the Exchange Act including, without
limitation, such person's written consent to being named in the proxy statement
as a nominee and to serving as a director if elected; (ii) a brief description
of the business desired to be brought before the annual meeting and the reasons
for conducting such business at the annual meeting and, if such business
includes a proposal or nomination to amend our bylaws, the language of the
proposed amendment; (iii) the name and address of the stockholder making the
proposal or nomination and any other stockholders known by such stockholder to
be supporting such proposal; (iv) the class and number of shares of stock owned
by the stockholder on the date of such stockholder's notice and by any other
stockholders known by such stockholder to be supporting such proposal or
nomination on the date of such stockholder's notice; and (v) any financial
interest of the stockholder in such proposal or nomination.
SOLICITATION OF PROXIES
The cost of this proxy solicitation and any additional material relating
to the meeting which may be furnished to the stockholders will be borne by us.
In addition, solicitation by telephone, telegraph or other means may be made
personally, without additional compensation, by our officers, directors and
regular employees. We also will request brokers, dealers, banks and voting
trustees and their nominees holding shares of record but not beneficially to
forward proxy soliciting material to beneficial owners of such shares, and upon
request, will reimburse them for their expenses in so doing.
HOUSEHOLDING
The SEC's rules permit companies and intermediaries such as brokers to
satisfy delivery requirements for proxy statements and annual reports with
respect to two or more stockholders sharing the same address by delivering a
single proxy statement and annual report addressed to those stockholders. This
process, which is commonly referred to as "householding," potentially provides
extra convenience for stockholders and cost savings for companies. Some brokers
household proxy materials and annual reports, delivering a single proxy
statement and annual report to multiple stockholders sharing
16
an address, although each stockholder will receive a separate proxy card. Once
you have received notice from your broker that they will be householding
materials to your address, householding will continue until you are notified
otherwise or until you revoke your consent. If at any time you no longer wish to
participate in householding and would prefer to receive a separate proxy
statement and annual report, please notify your broker. If you would like to
receive a separate copy of this year's Proxy Statement or Annual Report from us
directly, please contact us by writing to our Secretary, Karen Stolzar, at, our
principal executive offices or calling her at 914-345-2620.
AVAILABILITY OF ANNUAL REPORT
We will provide without charge to each person being solicited by this
Proxy Statement, on the written request of any such person, a copy of our Annual
Report on Form 10-KSB for the year ended December 31, 2007, including the
financial statements and financial statement schedules included therein. All
such requests should be directed to our Secretary, Karen Stolzar, at our
principal executive offices.
EVERY STOCKHOLDER, WHETHER OR NOT HE OR SHE EXPECTS TO ATTEND THE ANNUAL
MEETING IN PERSON, IS URGED TO EXECUTE THE PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED BUSINESS REPLY ENVELOPE.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Karen S. Stolzar
----------------------------------
Karen S. Stolzar, Secretary
Dated: Hawthorne, New York
April 28, 2008
17
SMARTPROS LTD.
P R O X Y
FOR ANNUAL MEETING OF THE STOCKHOLDERS
JUNE 17, 2008
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Allen S. Greene and Jack Fingerhut, and
each of them, with full power of substitution, as proxies to vote the shares
which the undersigned is entitled to vote at the Annual Meeting of the
Stockholders of SmartPros Ltd. ("SmartPros ") to be held at the Comfort Inn, 20
Saw Mill River Road, Hawthorne, New York 10532, on Tuesday, June 17, 2008 at
11:00 A.M. Eastern Time and at any adjournments thereof, hereby revoking any
proxies heretofore given, to vote all shares of common stock of SmartPros held
or owned by the undersigned as indicated on the proposals as more fully set
forth in the Proxy Statement, and in their discretion upon such other matters as
may come before the meeting.
Please mark "X" your votes as indicated:
1. ELECTION OF CLASS I DIRECTORS: Martin H. Lager and John J. Gorman
FOR election of all nominees [_]
WITHHOLD vote from all nominees [_]
FOR all nominees, [_]
EXCEPT for nominee(s) listed below from whom Vote is withheld.
---------------------------------------------------------------
2. Advisory approval of the appointment of Holtz Rubenstein Reminick LLP as
independent auditors for SmartPros for the year ending December 31, 2008.
FOR [_] AGAINST [_] ABSTAIN [_]
(CONTINUED, AND TO BE SIGNED, ON THE REVERSE SIDE)
--------------------------------------------------------------------------------
FOLD HERE
--------------------------------------------------------------------------------
THIS PROXY WHEN PROPERLY SIGNED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1 AND 2.
The undersigned hereby acknowledges receipt of the Notice of, and Proxy
Statement for, the aforesaid Annual Meeting.
Dated: , 2008
----------------------------------------
Signature of Stockholder
----------------------------------------
Signature of Stockholder
NOTE: When shares are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee, or guardian, please give full title
as such. If a corporation, please sign in full corporate name by President or
other authorized officer. If a partnership, please sign in partnership name by
an authorized person.
IMPORTANT - PLEASE FILL IN, SIGN AND RETURN PROMPTLY USING THE ENCLOSED
ENVELOPE.