SCHEDULE
14A
Information
Required in Proxy Statement
Proxy
Statement Pursuant to Section 14(a) of the Securities
Exchange
Act of 1934
Filed
by
the Registrant
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by
a Party other than the Registrant
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Check
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appropriate box:
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Preliminary
Proxy Statement
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Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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Definitive
Proxy Statement
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Definitive
Additional Materials
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Soliciting
Material Under Rule 14a-12
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Z
TRIM HOLDINGS, INC.
(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):
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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(1)
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Title
of each class of securities to which transaction
applies:
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(2)
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Aggregate
number of securities to which transaction applies:
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(3)
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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):
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(4)
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Proposed
maximum aggregate value of transaction:
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(5)
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previously. Identify the previous filing by registration statement
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Z
TRIM HOLDINGS, INC.
1011
CAMPUS DRIVE
MUNDELEIN,
ILLINOIS 60060
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
TO
BE HELD ON DECEMBER 19, 2007
To
the
Stockholders of Z Trim Holdings, Inc.:
You
are cordially invited to attend the
Annual Meeting of Stockholders of Z Trim Holdings, Inc. (the "Company"), to
be
held at 11:00 a.m. Central Standard Time on December 19, 2007 at the Crowne
Plaza Hotel, 510 E. RT. 83, Mundelein, Illinois, for the following
purposes:
1.
To elect a Board of Directors of the Company to serve for the ensuing year
and
until their successors are elected and qualify;
2. To
ratify the appointment of Blackman Kallick Bartelstein LLP, as the Company's
independent public accountants for the fiscal year ending December 31, 2007;
and
3. To
transact such other business as may properly come before the meeting or any
adjournments or postponements thereof.
Only
holders of the Company's common
stock at the close of business on November 2, 2007 are entitled to notice of,
and to vote at, the Annual Meeting and any adjournment or postponement of the
Annual Meeting. Such stockholders may vote in person or by proxy. The stock
transfer books of the Company will not be closed. The accompanying form of
proxy
is solicited by the Board of Directors of the Company.
Your
vote is important. Even if you
plan to attend the Annual Meeting, you are urged to complete, sign and return
the enclosed proxy card in the enclosed postage-paid envelope in order to be
certain your shares are represented at the meeting. If you decide to attend
the
meeting and wish to vote in person, you may revoke your proxy by written notice
at that time.
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By
Order of the Board of
Directors
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Brian
Chaiken
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Secretary
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Mundelein,
Illinois
November
20, 2007
Z
TRIM HOLDINGS, INC.
1011
CAMPUS DRIVE
MUNDELEIN,
ILLINOIS 60060
PROXY
STATEMENT
ANNUAL
MEETING OF STOCKHOLDERS
December
19, 2007
The
Board of Directors of Z Trim
Holdings, Inc., an Illinois corporation (the "Company"), is soliciting the
enclosed proxy for use at the 2007 Annual Meeting of the Stockholders of the
Company to be held at 11:00 a.m., Central Standard Time, on December 19, 2007
and at any meetings held upon adjournment thereof, for the purposes set forth
herein and in the accompanying Notice of Annual Meeting. The Annual Meeting
will
be held at the Crowne Plaza Hotel, 510 E. RT. 83, Mundelein,
Illinois.
If
the enclosed form of proxy is
properly executed and returned, the shares represented will be voted in
accordance with the instructions specified by the stockholder. If no
instructions are given with respect to any matter specified in the Notice of
Annual Meeting, those shares will be voted (i) FOR the nominees for director
set
forth below under Proposal No. 1 (with discretionary authority of the proxy
holders to cumulate votes); (ii) FOR the ratification of the appointment of
Blackman Kallick Bartelstein LLP as the Company's independent public accountants
for the fiscal year ending December 31, 2007 under Proposal No. 2; and (iii)
in
the discretion of the proxy holders upon such other business as may properly
come before the Annual Meeting. Proxies may be revoked at any time prior to
being voted by delivery of written notice to the Company's Secretary, by
submission of a later dated proxy, or by revoking the proxy and voting in person
at the Annual Meeting.
This
proxy statement, the Company's
Annual Report on Form 10-KSB for the fiscal year ended December 31, 2006 and
the
enclosed form of proxy are being mailed or hand delivered to the Company's
stockholders on or about November 20, 2007.
VOTING
RIGHTS
Only
stockholders of record at the
close of business on November 2, 2007 (the "Record Date") will be entitled
to
notice of and to vote at the meeting. On that date there were 72,056,375.00
shares outstanding of the Company's class of common stock, par value $.00005
per
share ("Common Stock"). No other voting securities were outstanding at the
Record Date. Each share of Common Stock is entitled to one vote on all matters,
except that cumulative voting rights currently are in effect for the election
of
directors. To conduct the business of the meeting, a quorum of stockholders
must
be present. This means the holders of at least a majority of the issued and
outstanding shares of Common Stock entitled to vote on the matters submitted
to
the stockholders must be represented in person or by proxy at the meeting.
With
respect to Proposal No. 1 (the "Election of Directors Proposal"), and the
election of directors generally, each stockholder has cumulative voting rights,
in which he may cast as many votes as there are directors to be elected for
each
share of Common Stock held by him, and may cast his total number of votes for
one nominee or divide the total among any number of nominees. The
seven candidates receiving the greatest number of votes cast will be
elected as directors of the Company. With respect to Proposal No. 2 (the
"Ratification of the Appointment of Independent Public Accountants Proposal"),
each stockholder may cast one vote for each share of Common Stock held by him
and the affirmative vote of the holders of a majority of the outstanding shares
of Common Stock represented at the Annual Meeting and entitled to vote on such
proposal is required to approve the proposal. The affirmative vote of the
holders of a majority of the outstanding shares of Common Stock represented
at
the Annual Meeting and entitled to vote is required to approve any other
proposals which may properly come before the Annual Meeting or any adjournments
thereof. Abstentions will be counted for purposes of determining a quorum but
will not be counted otherwise, and broker non-votes on specific matters will
not
be counted for any purpose. Broker non-votes occur as to any particular proposal
when a broker returns a proxy but does not have authority to vote on such
proposal.
The
Company will bear the cost of
preparing, assembling, printing and mailing this proxy statement and the
accompanying form of proxy, and the cost of soliciting proxies relating to
the
Annual Meeting. The Company may request banks and brokers to solicit their
customers who beneficially own Common Stock listed of record in names of
nominees, and will reimburse such banks and brokers for their reasonable
out-of-pocket expenses for such solicitations.
PROPOSAL
NO. 1: ELECTION OF DIRECTORS
In
accordance with the Company's
Articles of Incorporation and its Bylaws, the Board of Directors by resolution
has fixed the total number of directors at seven. Steven J. Cohen, Triveni
Shukla, Brian S. Israel, Michael Donahue, Mark Hershhorn, Harvey Rosenfield
and
Randal Hoff have been designated by the Board of Directors as its nominees
for
election as directors at the Annual Meeting. Each director elected shall serve
until the next Annual Meeting or until his or her successor has been elected
and
duly qualified. Since only seven nominees are to be elected, proxies cannot
be
voted for more than seven individuals.
Each
stockholder may cast as many votes
as there are directors to be elected for each share held by him, and may cast
his total number of votes for one nominee or divide the total among any number
of nominees. The seven candidates receiving the greatest number of votes cast
will be elected as directors of the Company. Unless otherwise specified in
the
accompanying proxy, the shares voted pursuant thereto will be cast for nominees.
If any one or more of such nominees should for any reason become unavailable
for
election, the Board of Directors may provide for a lesser number of directors
or
designate a substitute nominee. In such event, shares represented by proxies
may
be voted for a substitute director.
THE
BOARD OF DIRECTORS RECOMMENDS A
VOTE "FOR" PROPOSAL NO. 1 TO ELECT ALL NOMINEES TO THE BOARD OF DIRECTORS FOR
A
TERM EXPIRING AT THE 2008 ANNUAL MEETING.
The
following sets forth brief
biographical information for each director nominee. All directors and officers
of the Company hold office for their respective terms and until their successors
have been elected and qualified.
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NAME
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AGE
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POSITION
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Steven
J. Cohen
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53
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President
and Director
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Triveni
Shukla
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64
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Executive
V.P., Marketing & Technology and Director Nominee
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Brian
S.Israel
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50
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Director
and Audit Committee Chairman
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Michael
Donahue
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50
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Director
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Mark
Hershhorn
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58
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Director
Nominee
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Harvey
Rosenfeld
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50
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Director
Nominee
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Randal
Hoff
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55
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Director
Nominee
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STEVE
J. COHEN, the Company's President
has been employed by Z Trim since 2002 when he was hired as its director of
investor relations. He was promoted to Vice President of Corporate
Development in 2003 and to President in 2006 when he also began serving on
the
Board of Directors. In August of 2007 Mr. Cohen assumed the role of
chief executive officer. Prior to joining Z Trim, Mr. Cohen had 25 years'
experience at the Chicago Mercantile Exchange where he worked in various
brokerage house positions as well as a trader. Mr. Cohen attended college at
the
University of Illinois and Oakton Community College. Mr. Cohen, was a
member of the U.S. Olympic team at the 1988 Olympics in Seoul and was a coach
for the U.S. Olympic Team at the 2000 Olympics Coach in Sydney
Australia.
TRIVENI
P. SHUKLA, Ph.D. is the
Executive Vice President, Marketing & Technology for Z Trim Holdings, Inc.
Prior to joining Z Trim, Dr. Shukla was the President of F.R.I. Enterprises
LLC
from 1985 through 2003. Dr. Shukla served as Corporate Manager,
R&D, Technical Service, and Engineering for the Krause Milling Company,
which became part of ADM in 1985, from 1973 through 1984. Dr. Shukla
served as Associate Director, Research and Planning, for Phelco-Land O’Lake from
1969 through 1973. He was Quality Control Incharge for the National Dairy
Research Institute, India and was the youngest gazetted Officer
approved by Union Public Service Commission, India. Dr. Shukla was a
third party expert for International Finance Corporation/Word Bank
from 1991 through 2001. Dr. Shukla has provided advisory services to
the following companies around the globe: US Feed Grains Council, Indian Council
of Agricultural Research, Winrock International, Labbat Anderson
Group, Anheuser-Busch, A.E. Staley, American Maize Co.,
Bimbo (Mexico), Cedarburg Dairy/Kemp, Cargill, ConAgra, Experience Inc., Frigo
Cheese Co./Unigated Ltd., Grupo Minsa s.a. de c.v. (Mexico), Heinz Co./Ore-Ida
Foods, Heinz Co./Foodways Natl., Hershey Foods Corporation, Illinois Cereal
Mills, Kraft-General Foods, Mexican Accent Inc., Monsanto Company,
Nabisco Brands, National Honey Board, Oscar Meyer Foods/Philip Morris, Procter
& Gamble, Quaker Oats, Sigma Alimentos/Grupo Alpha (Mexico), Group Minsa of
Mexico and Matrix Group of Malaysia. Dr. Shukla’s advisory services
have been of the nature of privatization, business planning, innovation and
R&D, plant start-up, and management of intangible assets. Dr.
Shukla has designed turnkey facilities in Colombia, India, Malaysia, and
Taiwan. Some of Dr. Shukla’s accomplishments include
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Congressional
Liaison, Institute of Food Technology’s research
Committee
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Chairman,
Technical Board, American Corn Miller’s Federation, Washington,
D.C.(1977-1984)
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Industry
Member USDA’s NC-51 (1980-84)
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Panelist
at Harvard’s Agriculture and Biotechnology
Program
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Member,
Advisory Panel, American Association of Cereal
Chemists(1999-Present)
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Cornerstone
Member, Council of Agricultural Science and
Technology
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Member,
Board of Directors, Matrix Specialties, K.L.,
Malaysia
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Business
Planning Advisor to Universal Food’s, Milwaukee, WI and Pinahs Co.,
Waukesha, WI
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Dr.
Shukla received his B.Sc. (Agricultural Engineering) from the University of
Gorakhpur, India, First in the University, and his M.Sc. (Food/ Engineering)
from Agra University, India, First in the Faculty of Agriculture, and his Ph.D.
(Food/Dairy Technology) from University of Illinois,
Urbana-Champaign.
BRIAN
S. ISRAEL was appointed in 2007
to fill a vacancy in the Company’s Board of Directors and serves as the Chairman
of the Audit Committee. He currently provides strategic planning,
training and project management services to businesses and non-profit entities
as an independent consultant. He also serves as President of North Shore Custom
Homes, Ltd. Mr. Israel has spent more than 20 years in the real
estate finance industry, during which he managed teams responsible for
production, operations, risk management, product and policy development,
technology and project management functions for a major national lender and
a
large regional commercial bank.
MICHAEL
DONAHUE is recognized around
the world for his ability to change the fundamental way companies project their
“story” under ever-evolving global business and market
dynamics. During his twenty plus year career Mr. Donahue has been a
trusted advisor to boards and CEOs of Fortune 500 companies requiring the need
to build credibility and trust among a diverse group of constituents, employees,
customers, shareholders, the media, and the public. In 2006, Mr. Donahue
established a multidimensional communications, marketing and issue management
firm. From 1987 to 2006, Mr. Donahue worked for McDonald’s
Corporation. During the first ten years of his career with
McDonald’s, Mr. Donahue served in increasingly responsible positions to become
an officer and senior executive as Vice President of
Communications. Mr. Donahue brought clear vision to the office of the
President and CEO and aligned cross-functional disciplines from the executive
suite to the field. His actions were critical to establishing new
brand relevance and consumer loyalty, which resulted in one of the most
significant turnarounds in recent corporate history, i.e. from the first
quarterly loss in thirty years to record breaking sales. Before joining
McDonald’s, Mr. Donahue spent five years as a Manager/Director with the Illinois
Retail Merchants Association, National Federation of Independent Business and
3M
Corporation where he created favorable environments for small businesses to
conduct business with minimal regulatory restriction. He then transitioned
into
public office to assist the incumbent Governor to address small business
concerns as Deputy Director for the State of Illinois Commerce
Department.
MARK
HERSHHORN has a background in the
marketing and operations of nutrition systems, food industry marketing and
transactional television. Mark currently serves as President and
co-owner of CKS & Associates Management LLC; President and CEO of CKS &
Associates; CEO of Midwest Real Estate Investment LLC; General Partner of New
Horizons West LLP, and CEO of New Horizons Real Estate Holdings
LLC. During much of the 1990’s, Mark served as President,
CEO and director of National Media Corporation (NYSE-NMC) and as Chairman of
the
company’s international subsidiary, Quantum International Ltd. Prior
to that, Mark served as Senior Vice President of food operations and joint
ventures for Nutri/System, Inc. During the 1980’s, Mark was Chief
Financial Officer, Treasurer, Vice President and director of the Franklin
Mint. Mark has also held positions with companies such as
Price-Waterhouse, Pfizer Diagnostics, and Wallace and Wampole
Laboratories. Mark received his BS Degree in Economics from Rutgers
University and an MBA from the Wharton School of Finance, University of
Pennsylvania.
RANDAL
HOFF is a senior executive with
over thirty years of diverse general management, sales, financial, and
administrative experience with the industrial group of a $2.5 billion
multinational food company. Mr. Hoff has been Vice-President and
General Manager of McCormick and Co, Inc.’s McCormick Flavor Division since
2000, where he managed the Ingredient, Seasoning and Flavor
sub-divisions
for their industrial business in the United
States. He was additionally responsible for McCormick Canada and
McCormick Pesa, the industrial divisions of McCormick in Canada and Mexico,
with
total sales of approximately $400 million with over 1100 employees and 6
manufacturing plants. From 1998 to 2000, Mr. Hoff was the Vice
President – Sales and Marketing for McCormick Flavor Division, managing a direct
sales force of over 20 Account Managers, 3 Regional Directors and sales
organization to cover all major multi-national consumer product food companies
in the United States. From 1997 to 1998, Mr. Hoff served as Vice
President Business Development – Flavors for McCormick Flavor Division, creating
a strong organizational and sales/marketing emphasis on the development and
sale
of Flavors by McCormick, where he achieved market credibility and double digit
sales growth. Mr. Hoff served as President of McCormick & Wild,
Inc. from 1994 through 1997, a $13 million joint venture specializing in the
development, sale and manufacture of natural fruit flavors in North
America. From 1982 through 1994, Mr. Hoff held various management
positions in McCormick Flavor Group and McCormick & Wild, Inc. including
Director of Finance and Administration, Account Manager, Director – MIS,
Director – Quality Management, and Controller & CFO. Mr. Hoff has
a B.A. in Accounting and Economics from Augustana College, an MBA in Finance
and
MIS from Northwestern University, J.L. Kellogg Graduate School of
Management, and is a Certified Public Accountant.
HARVEY
ROSENFELD has been the Chairman
and CEO of U.S.A. Group, Inc. since July of 1987. He founded the
third party administration company to provide plan services to wholesale and
retail sectors of the employee benefits marketplace. Mr. Rosenfeld
served as Vice President and Group Manager of Continental Illinois Bank from
1979 to 1987. At Continental, he was the Senior Manager with bottom
line responsibility for one internationally-based and six domestic Trust
businesses as well as the bank’s Safekeeping Division. From 1975 to
1979, Harvey served as Vice President and Manager of Southeast Banks, and from
1967 to 1975 he served as Vice President of Maryland National
Bank. Mr. Rosenfeld established a global network covering financial
institutions in twenty-three countries to facilitate trading of international
securities and currencies, he has taught graduate level courses offered by
the
Wharton School of Business to industry executives, as well as the CEBS program
to benefits professionals, and he is a frequent speaker at industry seminars
and
conventions and has authored articles on benefits issues for various
publications.
INFORMATION
CONCERNING THE BOARD OF DIRECTORS, EXECUTIVE OFFICERS,
AND
PRINCIPAL SHAREHOLDERS
Meetings
and Compensation of the Board of Directors
During
the fiscal year ended December
31, 2006, the Board of Directors of the Company held 12 meetings. Each incumbent
director attended at least 75% of the total number of meetings of the Board
of
Directors. The Company expects all of its directors to attend the annual
meetings of stockholders. All of the directors attended last year's
meeting. Directors are not compensated other than with stock options
are disclosed in this proxy statement.
Committees
of the Board of Directors
Audit
Committee
The
Board of Directors has an Audit
Committee composed of three directors, Brian S. Israel, Steve H. Salgan, and
Stanford J. Levin, each whom is considered an "independent director" under
the
rules of the American Stock Exchange and the Securities and Exchange Commission
("SEC"). The Board of Directors has determined that Brian Israel qualifies
as an
"audit committee financial expert" under SEC rules and that Alan G. Orlowky
(the
previous audit committee chairman) was so qualified during the last fiscal
year.
Twelve meetings of the Audit Committee were held during the last fiscal year.
The function of the Audit Committee is to assist the Board of Directors in
preserving the integrity of the financial information published by the Company
through the review of financial and accounting controls and policies, financial
reporting systems, alternative accounting principles that could be applied
and
the quality and effectiveness of the independent public
accountants.
Audit
Committee Report
The
Audit Committee of the Board of
Directors has:
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Reviewed
and discussed the Company's audited consolidated financial statements
with
management and the Company's independent public
accountants;
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Discussed
with the Company's independent public accountants the matters required
to
be discussed by Statement on Auditing Standards No. 61 (Codification
of
Statements on Auditing Standards), which includes, among other items,
matters related to the conduct of the audit of the Company's financial
statements; and
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Received
the written disclosures and the letter from the Company's independent
public accountants required by Independence Standards Board Standard
No. 1
(which relates to the auditors' independence from the Company) and
has
discussed with the Company's independent public accountants that
firm's
independence.
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Based
upon the review and discussions
referred to above, the Audit Committee recommended to the Company's Board of
Directors that the audited consolidated financial statements be included in
the
Company's Annual Report on Form 10-KSB for the fiscal year ended December 31,
2006 for filing with the Securities and Exchange Commission.
Auditor
Fees and Services
The
following is a summary of the fees
billed to the Company by Spector & Wong LLP for professional services
rendered for the fiscal year ended December 31, 2006, and for the fiscal year
ended December 31, 2005:
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FEE
CATEGORY
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2006
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2005
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Audit
Fees(1)
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$
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40,000
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$
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37,000
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Audit-Related
Fees(2)
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$
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45,500
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$
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45,500
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Tax
Fees(3)
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-------
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-------
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All
Other Fees(4)
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-------
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-------
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Total
Fees
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$
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85,500
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$
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82,500
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(1) Audit
Fees consist of fees billed for professional services rendered for the audit
of
the Company's financial statements and for reviews of the interim financial
statements included in the Company's quarterly reports on Form
10-QSB.
(2) Audit-Related
Fees consist of fees billed for professional services rendered for audit-related
services, including consultation on SEC filings and the issuance of consents,
audit of the business or assets acquired or considered as candidates and
consultations on other financial accounting and reporting related
matters.
(3) Tax
Fees consists of fees billed for professional services relating to tax
compliance and other tax advice.
(4) All
Other Fees consist of fees billed for all other services.
The
Audit Committee pre-approved all
audit and non-audit services described above rendered to the Company by Spector
& Wong during fiscal 2006, and has pre-approved similar services to be
rendered during fiscal 2007 pursuant to the Pre-Approval Policy and Procedures
attached. The Audit Committee believes the rendering of these services is not
incompatible with the independent auditors maintaining their
independence.
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THE
AUDIT
COMMITTEE
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Alan
G. Orlowsky
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Steve
H. Salgan
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Stanford
J. Levin
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Compensation
Committee
The
Board of Directors has a Compensation Committee composed of three directors,
Brian S. Israel, Steve H. Salgan, and Stanford J. Levin, each whom is considered
an "independent director" under the rules of the American Stock Exchange and
the
Securities and Exchange Commission ("SEC").
Compensation
Committee Interlocks and Insider Participation
None
of our executive officers has
served:
• as
a member of the compensation committee of another entity which has had an
executive officer who has served on our compensation committee;
• as
a director of another entity which has had an executive officer who has served
on our compensation committee; or
• as
a member of the compensation committee of another entity which has had an
executive officer who has served as one of our directors.
There
are
no arrangements with any director or officer regarding any election or
appointment to any office of the Company. There is no family relationship
between any director or executive officer of the Company.
Nominations
to the Board of Directors
The
independent directors of the
Company identify candidates for director nominees through recommendations
solicited from other directors, the Company’s executive officers, search firms
or other advisors, shareholders pursuant to the procedures set forth below,
and
through such other methods as the independent directors deem to be
helpful. Based upon an evaluation of the candidates by the
independent directors, they recommend to the full board candidates they have
determined to be qualified for serving on the board. Shareholders, in
submitting recommendations to the independent directors for consideration,
shall
adhere to the following procedures:
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Recommendations
for nomination must be received by a date not later than the close
of
business on the 120th calendar day prior to the calendar date the
Company’s proxy statement was filed with the Securities and Exchange
Commission in connection with the previous year’s annual meeting of
shareholders or special meeting in lieu of annual meeting of shareholders;
provided, however, that with respect to the Company’s 2007 annual meeting
of shareholders, the independent directors must receive any such
recommendation for nomination by a date not later than the close
of
business on the 20th calendar day prior to the date of the annual
meeting
of shareholders, and with respect to the Company’s 2008 annual meeting of
shareholders, the independent directors must receive any such
recommendation for nomination by April 30,
2008.
|
|
·
|
Such
recommendation for nomination shall be made in writing and shall
include
the following information: (A) name of the shareholder making the
recommendation; (B) a written statement disclosing such shareholder’s
beneficial ownership of the Company’s securities; (C) name of the
individual recommended for consideration as a director nominee; (D)
a
written statement as to why such recommended candidate would be able
to
fulfill the duties of a director; (E) a written statement describing
how
the recommended candidate meets the independence requirements established
by the exchange upon which the securities of the Company are traded,
currently the American Stock Exchange; (F) a written statement disclosing
the recommended candidate’s beneficial ownership of the Company’s
securities; (G) a written statement disclosing relationships between
the
recommended candidate and the Company which may constitute a conflict
of
interest; and (H) a written statement by the recommended candidate
that
the candidate is willing and able to serve on the
board.
|
The
composition of the board shall meet the independence requirements promulgated
by
the exchange upon which the securities of the Company are traded, currently
the
American Stock Exchange. The Company requires its directors to
possess certain minimum qualifications, including adequate experience, the
absence of any conflicts of interest and the absence of any prior bad
acts. Among the further considerations of the Company in its
selection of director are a candidate’s knowledge of the Company’s business and
industry, prior education, demonstrated ability to exercise sound business
judgment, reputation for integrity and high moral and ethical character,
potential to contribute to the diversity of viewpoints, backgrounds, or
experiences of the board as a whole and diligence and dedication to the success
of the Company. Additional specific director qualification criteria
are set forth in the Company's bylaws.
INDEMNIFICATION
OF DIRECTORS AND OFFICERS
Pursuant
to the Bylaws, the Company has the power to indemnify any person who was or
is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or
investigative (other than an action by or in the right of the corporation)
by
reason of the fact that he or she is or was a director, officer, employee or
agent of the corporation, or who is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys’ fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit
or
proceeding if such person acted in good faith and in a manner he or
she reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful. The
termination of any action, suit or proceeding by judgment or settlement,
conviction, or upon a plea of nolo contendre or its equivalent, shall not,
of
itself, create a presumption that the person did not act in good faith and
in a
manner which he or she reasonably believed to be in or not opposed to the best
interest of the corporation or, with respect to any criminal action or
proceeding, that the person had reasonable cause to believe that his or her
conduct was unlawful.
EXECUTIVE
OFFICERS AND DIRECTORS
The
following table and narrative sets
forth certain information with respect to our executive officers and directors
(but the narrative below does not repeat the biographical information of the
director nominees set forth above).
|
NAME
|
|
AGE
|
|
POSITION
|
|
|
|
|
|
|
|
|
|
|
|
Steven
J. Cohen
|
|
53
|
|
President
and Director
|
|
|
|
|
|
|
|
|
|
|
|
Alan
G. Orlowsky*
|
|
58
|
|
Chief
Financial Officer and Director
|
|
|
|
|
|
|
|
|
|
|
|
Michael
J. Theriault
|
|
55
|
|
Chief
Operating Officer
|
|
|
|
|
|
|
|
|
|
|
|
Triveni
Shukla
|
|
64
|
|
Executive
V.P., Marketing & Technology and Director
|
|
Nominee
|
|
|
|
|
|
|
|
|
|
Brian
S. Israel
|
|
50
|
|
Director
and Audit Committee Chairman
|
|
|
|
|
|
|
|
|
|
|
|
Michael
Donahue
|
|
50
|
|
Director
|
|
|
|
|
|
|
|
|
|
|
|
Dana
L. Dabney*
|
|
57
|
|
Vice
President and Director
|
|
|
|
|
|
|
|
|
|
|
|
Steve
H. Salgan, M.D.*
|
|
55
|
|
Director
|
|
|
|
|
|
|
|
|
|
|
|
Stanford
J. Levin*
|
|
55
|
|
Director
|
|
|
_______________________
*
Not
standing for reelection to the Board of Directors
ALAN
G. ORLOWSKY, J.D., C.P.A. has
served as our Chief Financial Officer since May 1, 2007 and has been a member
of
our Board of Directors since 2004 (serving as the Chairman of the Audit
Committee from 2004 until 2007). Until 2007, he was the President of A.G.
Orlowsky, Ltd, a law firm established in 1980, specializing in tax, financial,
and estate planning services. Mr. Orlowsky worked for the I.R.S. and Deloitte
& Touche as a tax professional and he taught Accounting, Taxation, and
Business Law at Northeastern Illinois University School of Business and Loyola
University of Chicago School of Business.
MICHAEL
J. THERIAULT has served as our Chief Operating Officer since June 1999. His
professional experience includes progressive operations, programming, design,
support, consulting, project management, and department management experience
in
manufacturing, insurance, medical, consulting, and mortgage banking industries
on both mainframe and personal computer equipment. From September 1989 until
May
1999, Mr. Theriault was employed by Recon Optical, Inc., for whom he served
as
Supervisor of Business Systems from June 1997 until May 1999, and Senior Systems
and Programming Specialist and Senior Project Leader of Manufacturing from
September 1989 until June 1997.
DANA
L. DABNEY. Mr. Dabney has been a
member of the board of directors of the Company and has held various offices,
including CFO, vice president of sales and marketing and secretary, since
January 1997. Currently Mr. Dabney serves as the Company's Vice President.
During the first two years of development of the Company, Mr. Dabney was also
employed as a mortgage broker. From 1994 until December 1997, Mr. Dabney was
employed by State Financial Bank in Richmond, Illinois, and from January 1998
until December 1998 he was employed by Mortgage Market Corporation in
Illinois.
STEVE
H. SALGAN, M.D. Dr. Salgan has
been a director since March 2000. Since January 1998, Dr. Salgan has been
president of Steven H. Salgan, M.D., Ltd., a practice specializing in primary
care internal medicine and general/family medicine. He has been a member of
the
American Association of Professional Ringside Physicians since 1997 and a member
of the Internal Medicine Subcommittee for Quality Assurance of Saint Margaret
Mercy Hospital in Hammond, Indiana since 1996.
STANFORD
J. LEVIN. Mr. Levin has been
a director since March 2000. Since 1988, Mr. Levin has been the proprietor
of
Levin Enterprises, an auto brokerage company located in Indiana. From January
1986 until June 1988, Mr. Levin was a public school teacher. From May 1981
until
May 1985, he was employed by Hohman Professional Corp., a real estate
development and management company where his duties included commercial real
estate management and overseeing renovations. From June 1975 until May 1981,
he
was employed by Yale Corporation of Hammond, a real estate management company,
where his responsibilities included commercial real estate
management.
OWNERSHIP
OF COMMON STOCK BY DIRECTORS AND EXECUTIVE OFFICERS
The
following table sets forth, as of November 15, 2007, the beneficial ownership
of
our common stock by each of our current directors, each executive officer named
in the Summary Compensation Table, and by all directors and named executive
officers as a group.
|
Name
and Address
|
|
Number
|
|
Percent
of Total
|
|
Steven
J. Cohen
|
|
1,309,900
|
(1)
|
1.8%
|
|
1011
Campus Drive.
|
|
|
|
|
|
Mundelein,
IL 60060
|
|
|
|
|
|
|
|
|
|
|
|
|
Alan
G. Orlowsky
|
|
1,274,750
|
(2)
|
1.8%
|
|
1011
Campus Drive.
|
|
|
|
|
|
Mundelein,
IL 60060
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael
J. Theriault
|
|
1,934,000
|
(3)
|
2.7%
|
|
1011
Campus Drive.
|
|
|
|
|
|
Mundelein,
IL 60060
|
|
|
|
|
|
|
|
|
|
|
|
|
Dana
L. Dabney
|
|
3,343,000
|
(4)
|
4.6%
|
|
1011
Campus Drive.
|
|
|
|
|
|
Mundelein,
IL 60060
|
|
|
|
|
|
|
|
|
|
|
|
|
Triveni
Shukla
1011
Campus Drive.
Mundelein,
IL 60060
|
|
840,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brian
Israel
|
|
201,000
|
(6)
|
*
|
|
1011
Campus Drive.
|
|
|
|
|
|
Mundelein,
IL 60060
|
|
|
|
|
|
|
|
|
|
|
|
|
Stanford
J. Levin
|
|
703,300
|
(7)
|
1.0%
|
|
1011
Campus Drive.
|
|
|
|
|
|
Mundelein,
IL 60060
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven
H. Salgan
|
|
1,276,915
|
(8)
|
1.8%
|
|
1011
Campus Drive.
|
|
|
|
|
|
Mundelein,
IL 60060
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael
A. Donahue
|
|
100,000
|
(9)
|
*
|
|
1011
Campus Drive.
|
|
|
|
|
|
Mundelein,
IL 60060
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
of all Officers and Directors
|
|
10,792,865
|
|
15.0%
|
|
*
|
Less
than 1%.
|
|
|
|
|
|
(1)
|
Includes
options to acquire 1,299,309 shares.
|
|
|
|
|
(2)
|
Includes
options to acquire 1,220,000 shares. Does not include
non-vested options to acquire 250,000 shares.
|
|
(3)
|
Includes
options to acquire 1,755,000 shares.
|
|
|
|
|
(4)
|
Includes
options to acquire 1,685,000 shares.
|
|
|
|
|
|
Includes
options to acquire 840,000 shares.
|
|
|
|
|
|
(6)
|
Includes
options to acquire 200,000 shares.
|
|
|
|
|
|
(7)
|
Includes
options to acquire 575,000 shares.
|
|
|
|
|
|
(8)
|
Includes
options to acquire 475,000 shares.
|
|
|
|
|
|
(9)
|
Includes
options to acquire 100,000 shares.
|
|
|
|
|
|
(10)
|
Includes
options to acquire 1,685,000 shares.
|
|
|
|
|
|
|
|
|
|
|
OWNERSHIP
OF COMMON STOCK BY PRINCIPAL SHAREHOLDERS
The
following table sets forth, as of November 15, 2007, the beneficial ownership
of
our common stock by each person known to us to beneficially own more than 5%
of
our outstanding shares of common stock.
|
Name
and Address
|
|
Number
|
|
|
Percent
of Total
|
|
|
Gregory
J. Halpern
|
|
|
14,716,100
|
|
|
|
20.4%
|
|
|
1713
North Player Ct.
|
|
|
|
|
|
|
|
|
|
Vernon
Hills, IL 60061
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
of all Principal Shareholders
|
|
|
14,716,100
|
|
|
|
20.4%
|
|
|
|
|
|
|
|
|
|
|
|
EXECUTIVE
COMPENSATION
The
following summary compensation table sets forth information regarding
compensation paid during 2005 and 2006 to our Principal Executive Officer and
our two most highly compensated officers other than the principal executive
officer.
|
|
|
SUMMARY
COMPENSATION TABLE
|
|
|
Name
and Principal Position
|
Year
|
|
Salary
|
|
|
Option
awards
|
|
|
|
|
|
Total
|
|
|
Gregory
J. Halpern,
|
2005
|
|
$
|
119,711
|
|
|
$
|
1,000,000
|
|
|
|
|
|
$
|
1,119,711
|
|
Chairman
and Chief Executive Officer
1
|
2006
|
|
$
|
142,537
|
|
|
$
|
1,225,000
|
|
|
|
|
(1)
|
|
$
|
1,367,537
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven
J. Cohen
|
2005
|
|
$
|
65,300
|
|
|
$
|
625,000
|
|
|
|
|
|
|
$
|
690,300
|
|
|
Director
and President
|
2006
|
|
$
|
132,176
|
|
|
$
|
775,000
|
|
|
|
|
(2)
|
|
$
|
907,176
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dana
L. Dabney
|
2005
|
|
$
|
51,400
|
|
|
$
|
602,000
|
|
|
|
|
|
|
$
|
653,400
|
|
|
Director
and Chief Financial Officer
|
2006
|
|
$
|
161,287
|
|
|
$
|
875,000
|
|
|
|
|
(3)
|
|
$
|
1,036,287
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Triveni
Shukla
|
2005
|
|
$
|
105,417
|
|
|
$
|
375,000
|
|
|
|
|
|
|
$
|
480,417
|
|
|
Executive
VP of Marketing & Technology
|
2006
|
|
$
|
127,267
|
|
|
$
|
590,000
|
|
|
|
|
(4)
|
|
$
|
717,267
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Includes
425,000 modified options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
Includes
75,000 modified options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3)
|
Includes
275,000 modified options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4)
|
Includes
550,000 modified options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employment
Agreements
The
Employment Agreements between the Officers and Company are as follows: Michael
J. Theriault Employment Agreement, dated January 2, 2004; Dana L. Dabney
Employment Agreement, dated January 2, 2004; Steve J. Cohen Employment Agreement
dated March 28, 2006; Alan G. Orlowsky Employment Agreement dated May 1,
2007.
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END
The
following table sets forth information as to outstanding equity awards as of
December 31, 2006 held by our named executive officers and
directors.
|
|
Original
Stock Options Granted
|
|
|
|
|
|
|
|
|
Number
of
|
|
|
|
|
|
|
|
|
|
|
Date
of
|
Date
of
|
Options
|
Total
|
Exercise
|
|
|
Expiration
|
|
Outstanding
|
|
|
Optionee
|
Grant
|
Vesting
|
Granted
|
Options
|
Price
|
|
|
Date
|
|
12/31/2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steve
Cohen
|
11/17/04
|
11/17/04
|
145,000
|
|
$0.75
|
|
|
11/17/08
|
|
130,000
|
|
|
|
05/16/05
|
05/16/05
|
125,000
|
|
$0.50
|
|
|
05/16/09
|
|
24,309
|
|
|
|
05/16/05
|
05/16/05
|
85,000
|
|
$2.00
|
|
|
05/16/09
|
|
85,000
|
|
|
|
05/16/05
|
05/16/05
|
65,000
|
|
$3.00
|
|
|
05/16/09
|
|
65,000
|
|
|
|
11/17/04
|
11/17/04
|
5,000
|
|
$0.75
|
|
|
11/17/08
|
|
5,000
|
2
|
|
|
10/25/05
|
10/25/05
|
250,000
|
|
$1.00
|
|
|
10/25/09
|
|
250,000
|
|
|
|
03/22/06
|
03/22/06
|
100,000
|
|
$0.85
|
|
|
03/22/10
|
|
100,000
|
|
|
|
08/14/06
|
08/14/06
|
600,000
|
|
$1.06
|
|
|
08/14/10
|
|
600,000
|
|
|
|
08/14/06
|
08/14/06
|
75,000
|
1,450,000
|
$1.06
|
|
|
01/02/10
|
|
75,000
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
1,334,309
|
|
|
Dana
L. Dabney
|
11/17/04
|
11/17/04
|
5,000
|
|
$0.75
|
|
|
11/17/08
|
|
5,000
|
|
|
|
11/17/04
|
11/17/04
|
5,000
|
|
$0.75
|
|
|
11/17/08
|
|
5,000
|
|
|
|
11/17/04
|
11/17/04
|
200,000
|
|
$0.75
|
|
|
11/17/08
|
|
200,000
|
|
|
|
11/17/04
|
11/17/04
|
200,000
|
|
$0.75
|
|
|
11/17/08
|
|
200,000
|
|
|
|
05/16/05
|
05/16/05
|
250,000
|
|
$0.50
|
|
|
05/16/09
|
|
150,000
|
|
|
|
10/25/05
|
10/25/05
|
250,000
|
|
$1.00
|
|
|
10/25/09
|
|
250,000
|
|
|
|
08/14/06
|
08/14/06
|
600,000
|
|
$1.06
|
|
|
08/14/10
|
|
600,000
|
|
|
|
08/14/06
|
08/14/06
|
250,000
|
|
$1.06
|
|
|
01/02/10
|
|
250,000
|
|
|
|
08/14/06
|
08/14/06
|
25,000
|
1,785,000
|
$1.06
|
|
|
03/01/10
|
|
25,000
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
1,685,000
|
|
|
Gregory
Halpern
|
11/17/04
|
11/17/04
|
5,000
|
|
$0.75
|
|
|
|
|
5,000
|
|
|
|
11/17/04
|
11/17/04
|
400,000
|
|
$0.75
|
|
|
|
|
400,000
|
|
|
|
11/17/04
|
11/17/04
|
400,000
|
|
$0.75
|
|
|
|
|
400,000
|
|
|
|
05/16/05
|
05/16/05
|
500,000
|
|
$0.55
|
|
|
|
|
318,182
|
|
|
|
10/25/05
|
10/25/05
|
500,000
|
|
$1.10
|
|
|
|
|
500,000
|
|
|
|
08/14/06
|
08/14/06
|
800,000
|
|
$1.06
|
|
|
|
|
800,000
|
|
|
|
08/14/06
|
08/14/06
|
400,000
|
|
$1.06
|
|
|
|
|
400,000
|
|
|
|
08/14/06
|
08/14/06
|
25,000
|
3,030,000
|
$1.06
|
|
|
|
|
25,000
|
|
|
|
11/17/04
|
11/17/04
|
5,000
|
|
$0.75
|
|
|
|
|
5,000
|
3
|
|
|
11/17/04
|
11/17/04
|
100,000
|
|
$0.75
|
|
|
|
|
100,000
|
(3)
|
|
|
05/16/05
|
05/16/05
|
100,000
|
|
$0.50
|
|
|
|
|
100,000
|
(3)
|
|
|
10/25/05
|
10/25/05
|
75,000
|
|
$1.00
|
|
|
|
|
75,000
|
(3)
|
|
|
08/14/06
|
08/14/06
|
200,000
|
|
$1.06
|
|
|
|
|
200,000
|
(3)
|
|
|
08/14/06
|
08/14/06
|
100,000
|
580,000
|
$1.06
|
|
|
|
|
100,000
|
(3)
|
|
|
11/17/04
|
11/17/04
|
1,500
|
|
$0.75
|
|
|
|
|
1,500
|
(3)
|
|
|
01/21/07
|
01/21/07
|
10,000
|
11,500
|
$1.18
|
|
|
|
|
-
|
|
|
|
11/17/04
|
11/17/04
|
1,500
|
|
$0.75
|
|
|
|
|
1,500
|
(3)
|
|
|
01/21/07
|
01/21/07
|
10,000
|
11,500
|
$1.18
|
|
|
|
|
-
|
|
|
|
11/17/04
|
11/17/04
|
1,500
|
|
$0.75
|
|
|
|
|
1,500
|
(3)
|
|
|
01/21/07
|
01/21/07
|
10,000
|
11,500
|
$1.18
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
3,432,682
|
|
|
Triveni
Shukla
|
11/17/04
|
11/17/04
|
175,000
|
|
$0.75
|
|
|
11/17/08
|
|
161,608
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10/25/05
|
10/25/05
|
250,000
|
|
$1.00
|
|
|
10/25/09
|
|
250,000
|
|
|
|
02/01/06
|
02/01/06
|
40,000
|
|
$1.00
|
|
|
02/01/10
|
|
40,000
|
|
|
|
08/14/06
|
08/14/06
|
350,000
|
|
$1.06
|
|
|
08/14/10
|
|
350,000
|
|
|
|
08/14/06
|
08/14/06
|
200,000
|
1,015,000
|
$1.06
|
|
|
01/02/10
|
|
200,000
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
1,001,608
|
|
|
Alan
Orlowsky
|
01/08/04
|
01/08/04
|
45,000
|
|
$2.30
|
01/08/07
|
|
01/08/08
|
|
45,000
|
|
|
|
11/17/04
|
11/17/04
|
100,000
|
|
$0.75
|
11/17/07
|
|
11/17/08
|
|
100,000
|
|
|
|
05/16/05
|
05/16/05
|
125,000
|
|
$0.50
|
05/16/08
|
|
05/16/09
|
|
125,000
|
|
|
|
10/25/05
|
10/25/05
|
125,000
|
|
$1.00
|
10/25/08
|
|
10/25/09
|
|
125,000
|
|
|
|
08/14/06
|
08/14/06
|
300,000
|
|
$1.06
|
08/14/09
|
|
08/14/10
|
|
300,000
|
|
|
|
08/14/06
|
08/14/06
|
25,000
|
|
$1.06
|
03/01/09
|
|
03/01/10
|
|
25,000
|
|
|
|
01/08/07
|
01/08/07
|
45,000
|
|
$2.30
|
01/08/09
|
|
01/08/10
|
|
|
|
|
|
05/01/07
|
05/01/07
|
500,000
|
|
$1.36
|
05/01/10
|
|
08/20/10
|
|
|
|
|
|
05/01/07
|
05/01/08
|
250,000
|
|
$1.36
|
05/01/11
|
|
|
|
|
|
|
|
09/17/07
|
01/21/04
|
45,000
|
1,560,000
|
$5.00
|
01/21/09
|
|
01/21/10
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
720,000
|
|
|
Steve
Salgan
|
11/17/04
|
11/17/04
|
100,000
|
|
$0.75
|
11/17/07
|
|
11/17/08
|
|
100,000
|
|
|
|
10/25/05
|
10/25/05
|
100,000
|
|
$1.00
|
10/25/08
|
|
10/25/09
|
|
100,000
|
|
|
|
08/14/06
|
08/14/06
|
250,000
|
|
$1.06
|
08/14/09
|
|
08/14/10
|
|
250,000
|
|
|
|
08/14/06
|
08/14/06
|
25,000
|
475,000
|
$1.06
|
03/01/09
|
|
03/01/10
|
|
25,000
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
475,000
|
|
|
Stan
Levin
|
11/17/04
|
11/17/04
|
100,000
|
|
$0.75
|
11/17/07
|
|
11/17/08
|
|
100,000
|
|
|
|
05/16/05
|
05/16/05
|
100,000
|
|
$0.50
|
05/16/08
|
|
05/16/09
|
|
100,000
|
|
|
|
10/25/05
|
10/25/05
|
100,000
|
|
$1.00
|
10/25/08
|
|
10/25/09
|
|
100,000
|
|
|
|
08/14/06
|
08/14/06
|
250,000
|
|
$1.06
|
08/14/09
|
|
08/14/10
|
|
250,000
|
|
|
|
08/14/06
|
08/14/06
|
25,000
|
575,000
|
$1.06
|
03/01/09
|
|
03/01/10
|
|
25,000
|
|
|
|
|
|
|
|
|
|
|
TOTAL
|
|
575,000
|
|
1
Mr.
Halpern resigned as Chairman and CEO as of August 20, 2007.
2
Beneficial
ownership attributed to Steve Cohen by virtue of grant to family
member.
3
Beneficial
ownership attributed to Greg Halpern by virtue of grant to family
member.
EQUITY
COMPENSATION PLAN INFORMATION
The
following table sets forth information as of the year ended December 31, 2006
with respect to compensation plans under which the Company is authorized to
issue shares.
|
|
|
|
NUMBER
OF SHARES
|
|
|
|
|
|
|
|
|
REMAINING
AVAILABLE
|
|
|
|
|
|
WEIGHTED-AVERAGE
|
|
|
FOR
FUTURE ISSUANCE
|
|
|
|
|
|
EXERCISE
PRICE OF
|
|
|
UNDER
EQUITY
|
|
|
|
|
|
OUTSTANDING
|
|
|
COMPENSATION
PLANS
|
|
|
NUMBER
OF SHARES TO BE
|
|
|
OPTIONS,
|
|
|
(EXCLUDING
SECURITIES
|
|
|
ISSUED
UPON EXERCISE OF
|
|
|
WARRANTS
AND
|
|
|
REFLECTED
IN 1ST
|
|
|
OUTSTANDING
OPTIONS,
|
|
|
RIGHTS
|
|
|
PLAN
CATEGORY
|
|
|
WARRANTS
AND RIGHTS
|
|
|
|
|
|
COLUMN)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
compensation plans approved by security holders (1)
|
|
|
|
|
|
|
|
|
$
|
0.99
|
|
|
|
84,913
|
|
|
|
19,915,087
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
compensation plans not approved by security holders (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
$
|
0.99
|
|
|
|
84,913
|
|
|
|
19,915,087
|
|
|
(1)
|
These
plans consist of the 1999, 2002 Stock Incentive Plan and the 2004
Equity
Incentive
Plan.
|
|
(2)
|
The
Company does not maintain any equity compensation plans that have
not
been
approved by the stockholders.
|
Plan
Benefits
As
of November 15, 2007 option grants
to our current executive officers and directors to purchase the following number
of shares of common stock have been made under our 1999 Stock Option Plan Stock,
2002 Stock Incentive Plan and our 2004 Equity Incentive Plan: 16,011,523 total;
current executive officers as a group---6,619,809; current non-employee
directors as a group---1,350,000; and all other current employees and
consultants as a group---8,041,714.
The
benefits and amounts that may be
received in the future by persons eligible to participate in the 2004 Equity
Incentive Plan are not currently determinable, except as to those future
automatic grants to be awarded to non-employee directors as automatic option
grants.
CODE
OF ETHICS
The
Company has adopted a "Code of Ethics and Business Conduct," which is applicable
to all Company directors, executive officers and employees, including the
principal executive officer and the principal financial and accounting officer.
The "Code of Ethics and Business Conduct" is available on the Company's website
at http://www.ztrim.com. The Company will post amendments to or waivers under
this Code on its website.
PROPOSAL
NO. 2: RATIFICATION OF THE APPOINTMENT OF BLACKMAN KALLICK BARTELSTEIN LLP
AS
THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS.
The
Board of Directors has appointed the firm of Blackman Kallick Bartelstein LLP
as
the Company's Independent public accountants for the fiscal year ending December
31, 2007 and recommends that the stockholders ratify such selection. Each
stockholder may cast one vote for each share of Common Stock outstanding shares
of Common Stock represented and entitled to vote at the Annual Meeting on such
proposal is required to approve the proposal.
Blackman
Kallick Bartelstein LLP will have representatives present at the Annual
Meeting.
THE
BOARD OF DIRECTORS RECOMMENDS A
VOTE "FOR" PROPOSAL NO. 2 TO RATIFY THE APPOINTMENT OF BLACKMAN KALLICK
BARTELSTEIN LLP AS THE COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS FOR THE FISCAL
YEAR ENDING DECEMBER 31, 2007.
OTHER
BUSINESS
The
Board of Directors knows of no
matters other than those listed in the attached Notice of the Annual Meeting
that are likely to be brought before the Annual Meeting. If any other matters
should properly come before the Annual Meeting or any adjournment thereof,
however, the persons named in the enclosed form of proxy will vote all proxies
given to them in accordance with their best judgment of such
matters.
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant
to Section 16(a) of the
Exchange Act and the rules promulgated thereunder, officers and directors of
the
company and persons who beneficially own more than 10% of our common shares
are
required to file with the SEC and furnish to the company reports of ownership
and change in ownership with respect to all equity securities of the company.
Based solely on our review of the copies of such reports received by us during
or with respect to the fiscal year ended December 31, 2006 and all prior years,
and written representations from such reporting persons, we believe that our
officers, directors and 10% shareholders complied with all Section 16(a) filing
requirements applicable to such individuals with the exception of the following
late filings: (a) Mr. Gregory Halpern was late filing 3 Form 4s with respect
to
6 transactions; (b) Mr. Michael Theriault was late filing 4 Form 4s with respect
to 6 transactions; (c) Mr. Alan Orlowsky was late filing 3 Form 4s with respect
to 5 transactions; (d) Mr. Stanford Levin was late filing 3 Form 4s with respect
to 4 transactions; (e) Mr. Dana Dabney was late filing 5 Form 4s with respect
to
7 transactions; (f) Mr. Steve Salgan was late filing 4 Form 4s with respect
to 5
transactions; and (g) Mr. Steve Cohen was late filing a Form 3 and 2 Form 4s
with respect to 3 transactions.
CURRENT
FINANCIAL INFORMATION
Financial
information for the Company's
most recent fiscal year-end is included in the accompanying Annual Report on
Form-10KSB for the fiscal year ended December 31, 2006.
THE
COMPANY WILL PROVIDE WITHOUT CHARGE
TO ANY PERSON RECEIVING THIS PROXY STATEMENT AN ADDITIONAL COPY OF THE COMPANY'S
ANNUAL REPORT ON FORM 10-KSB, INCLUDING FINANCIAL STATEMENT SCHEDULES, FOR
THE
COMPANY'S MOST RECENT FISCAL YEAR. SUCH REQUEST MUST BE IN WRITING AND DIRECTED
TO DANA L. DABNEY, THE COMPANY'S SECRETARY AT THE COMPANY'S PRINCIPAL
OFFICE.
DOCUMENTS
INCORPORATED BY REFERENCE
The
Pre-Approval Policy and Procedures
established by the Audit Committee Charter is hereby incorporated by reference.
A copy may be obtained by writing to the Company's office, Attention: BRIAN
CHAIKEN, Secretary
STOCKHOLDER
COMMUNICATIONS
Stockholders
may contact the Board of
Directors by writing them c/o Z Trim Holdings, Inc., 1011 Campus Drive,
Mundelein, Illinois 60060. All communications directed to the Board will be
delivered to the Board of Directors.
STOCKHOLDER
PROPOSALS
Any
proposal intended to be presented
by a stockholder at the Company's 2008 Annual Meeting of Stockholders must
be
received in writing at the Company's principal executive offices by February
28,
2008 so that it may be considered by the Company for inclusion in the proxy
statement and form of proxy or in the information statement relating to that
meeting. In addition, in the event that the Company receives notice of a
stockholder proposal intended for inclusion at the 2008 Annual Meeting but
not
intended for inclusion in the Company's proxy statement for such meeting at
the
Company's principal executive offices no later than April 1, 2008, then so
long
as the Company includes in its proxy statement for such meeting the advice
on
the nature of the proposal and how the named proxy holders intend to vote the
shares for which they have received discretionary authority, such proxy holders
may exercise discretionary authority with respect to such proposal, except
to
the extent limited by SEC rules governing stockholder proposals.
|
|
By
Order of the Board of
Directors
|
|
|
|
|
|
|
|
|
Brian
Chaiken
|
|
|
|
Secretary
|
|
Mundelein,
Illinois
November
20, 2007
Z
TRIM HOLDINGS, INC.
PROXY
FOR THE ANNUAL MEETING OF STOCKHOLDERS
December
19, 2007
Solicited
on behalf of the Board of Directors
Revoking
any such prior appointment,
the undersigned hereby appoints Steven J Cohen and Triveni Shukla, and each
of
them, as proxies with full power of substitution, to vote all shares of common
stock which the undersigned has power to vote at the Annual Meeting of
Stockholders of Z Trim Holdings, Inc., to be held at 11:00 a.m. Central Standard
Time on November 19, 2007 at the Crowne Plaza Hotel, 510 E. RT. 83, Mundelein,
Illinois, and at any adjournment or postponement thereof, in accordance with
the
instructions set forth herein and with the same effect as though the undersigned
were present in person and voting such shares.
This
Proxy when properly executed will
be voted in the manner directed on the reverse side. IF NO DIRECTION IS MADE,
THIS PROXY WILL BE VOTED IN FAVOR OF THE NOMINEES FOR THE ELECTION OF DIRECTORS
(WITH DISCRETIONARY AUTHORITY OF THE PROXY HOLDERS TO CUMULATE VOTES), AND
FOR
THE RATIFICATION OF THE APPOINTMENT OF AUDITORS. This Proxy will be voted,
in
the discretion of the proxy holders, upon such other business as may properly
come before the Annual Meeting of Stockholders or any adjournments
thereof.
(PLEASE
VOTE AND SIGN ON THE OTHER SIDE)
This
proxy is solicited by the Board of Directors. The Board of Directors recommends
a vote "FOR" the Directors nominated and "FOR" the ratification of the
appointment of Blackman Kallick Bartelstein LLP.
1. Election
of Directors.
Nominees:
Steven J. Cohen, Triveni P. Shukla, Brian S. Israel, Michael Donahue, Mark
Hershhorn, Harvey Rosenfeld, Randal Hoff
[__]
Vote for all (except as marked to the contrary below).
[__]
Withhold authority to vote for all.
(INSTRUCTION:
TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, PRINT THAT NOMINEE'S
NAME ON THE LINE BELOW.)
____________________________________________
2. Ratification
of the appointment of Blackman Kallick Bartelstein LLP as independent public
accountants for the fiscal year ending December 31, 2007.
|
[_]
For
|
[_]
Against
|
[_]
Abstain
|
|
3. In
their discretion, the proxy holders are authorized to vote upon such other
matters as may properly come before the meeting or at any adjournments
thereof.
Please
indicate whether you will attend the Annual Meeting of Stockholders on December
19, 2007.
|
I |__|
plan
|
|__|
do not plan to attend the Annual Meeting.
|
|
PLEASE
MARK, SIGN, DATE, AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
|
SIGNATURE
|
|
|
|
Date
|
|
|
|
|
|
|
|
|
|
SIGNATURE
|
|
|
|
Date
|
|
|
|
|
Signature
if held jointly
|
|
|
|
NOTE:
Please sign exactly as name appears hereon. Joint owners should each sign.
When
signing as attorney, executor, administrator, trustee, or guardian, please
provide full title and capacity.
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