SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, For Use of the
[X] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Pursuant to
Rule 14a-11(c) or Rule 14a-12
VITRIX, INC.
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(Name of Registrant as Specified In Its Charter)
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(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)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
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5) Total fee paid:
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[ ] 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:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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VITRIX, INC.
51 WEST THIRD STREET, SUITE 310
TEMPE, ARIZONA 85281
NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 18, 2002
To Our Stockholders:
The 2002 Annual Meeting of Stockholders (the "Annual Meeting") of Vitrix,
Inc. (the "Company") will be held at 9:00 a.m., local time, on June 18, 2002, at
the offices of Squire, Sanders & Dempsey L.L.P., 40 North Central Avenue, Suite
2700, Phoenix, AZ 85004, for the following purposes:
1. To elect four (4) directors to the Board of Directors to serve for one
year terms;
2. To ratify the appointment of Semple & Cooper, LLP as the independent
public accountants of the Company for the fiscal year ending June 30,
2002; and
3. To transact such other business as may properly come before the Annual
Meeting.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice. The Company is presently aware of no other
business to come before the Annual Meeting.
The Board of Directors has fixed the close of business on May 3, 2002, as
the record date for the determination of stockholders entitled to receive notice
of and to vote at the Annual Meeting or any postponement or adjournment thereof
(the "Record Date"). Shares of Common Stock can be voted at the meeting only if
the holder is present at the meeting in person or by valid proxy. A copy of the
Company's 2001 Annual Report to Stockholders, which includes certified financial
statements, was mailed with this Notice and Proxy Statement to all stockholders
of record on the Record Date.
Management cordially invites you to attend the Annual Meeting. Your
attention is directed to the attached Proxy Statement for a discussion of the
foregoing proposals and the reasons why the Board of Directors encourages you to
vote FOR approval of such proposals.
By Order of the Board of Directors
Todd P. Belfer
Chairman of the Board
Tempe, Arizona
May 10, 2002
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IMPORTANT: STOCKHOLDERS ARE ENCOURAGED TO COMPLETE, SIGN, DATE AND MAIL THE
ENCLOSED PROXY. A PRE-ADDRESSED ENVELOPE IS PROVIDED FOR THEIR CONVENIENCE.
STOCKHOLDERS ARE ENCOURAGED TO VOTE REGARDLESS OF WHETHER OR NOT THEY ATTEND THE
ANNUAL MEETING OF STOCKHOLDERS.
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VITRIX, INC.
51 WEST THIRD STREET, SUITE 310
TEMPE, ARIZONA 85281
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PROXY STATEMENT
2002 ANNUAL MEETING OF STOCKHOLDERS
JUNE 18, 2002
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This Proxy Statement is being furnished to the stockholders of Vitrix,
Inc., a Nevada corporation (the "Company"), in connection with the Annual
Meeting of Stockholders of the Company to be held on June 18, 2002, at 9:00
a.m., local time, and any adjournment or postponement thereof (the "Annual
Meeting"). The Annual Meeting will be held at the offices of Squire, Sanders &
Dempsey L.L.P., 40 North Central Avenue, Suite 2700, Phoenix, Arizona 85004. A
copy of the Notice of the Annual Meeting accompanies this Proxy Statement.
VOTING
The enclosed proxy is solicited by the Board of Directors of the Company.
The proxy materials relating to the Annual Meeting were mailed on or about May
10, 2002 to stockholders of record at the close of business on May 3, 2002 (the
"Record Date").
Only stockholders of record at the close of business on the Record Date are
entitled to notice of and to vote at the Annual Meeting or any adjournment or
postponement thereof. On the Record Date, 9,070,828 shares of Common Stock,
$.005 par value per share (the "Common Stock"), were issued and outstanding.
Stockholders are entitled to one vote, exercisable in person or by proxy, for
each share of the Company's Common Stock held of record on the Record Date.
The Company's Bylaws provide that a majority of all shares of stock
entitled to vote, whether present in person or represented by proxy, shall
constitute a quorum for the transaction of business at the meeting. Abstentions
and broker non-votes will be included in the determination of the number of
shares represented for a quorum. In order to vote their shares in person at the
meeting, stockholders who own their shares in "street name" must obtain a
special proxy card from their broker.
If a stockholder signs and returns a proxy card, but does not give voting
instructions and authority to vote is not specifically withheld, the shares
represented by that proxy will be voted as recommended by the Board of
Directors. If a stockholder has specified a choice with respect to any matter to
be acted upon, the shares will be voted in accordance with the specifications so
made.
The Board of Directors is not aware of any matters to be presented at the
Annual Meeting other than the election of directors and the ratification of the
appointment of Semple & Cooper, LLP as the independent public accountants of the
Company. However, if any other matters not described in the Proxy Statement are
properly presented at the meeting, the proxies will use their own judgment to
determine how to vote the shares represented by each proxy received by the
Company. If the meeting is adjourned the shares represented by each proxy
received by the Company may be voted by the proxies on the new meeting date as
well, unless such proxy instructions are revoked prior to that time.
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The Company will bear the cost of the solicitation of proxies, including
the charges and expenses of brokerage firms and others for forwarding
solicitation materials to the beneficial owners of the outstanding Common Stock.
In addition to soliciting proxies by mail, proxies may be solicited by personal
interview or telephone. A person giving the enclosed proxy has the power to
revoke it at anytime before it is exercised by: (i) attending the Annual Meeting
and voting in person; (ii) duly executing and delivering a proxy bearing a later
date; or (iii) sending a written notice of revocation to the Secretary of the
Company at its corporate offices. The corporate offices of the Company are
located at 51 West Third Street, Suite 310, Tempe, Arizona 85281 and its
telephone number at that address is (480) 967-5800.
ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
The Company's Board of Directors currently consists of four (4) members.
Each director elected will serve until his/her successor has been duly elected
and qualified, or until his/her earlier resignation or removal. The nominees
receiving the greatest number of votes cast at the Annual Meeting will be
elected to the Board of Directors. The Board of Directors recommends that Thomas
S. Bednarik, Todd P. Belfer, Lise M. Lambert, and Robert W. Zimmerman be elected
directors, to serve until the annual meeting of stockholders in 2003. All of the
nominees are currently serving as Directors of the Company.
If any nominee should become unavailable for any reason, which the Board of
Directors does not anticipate, the proxy will be voted for any substitute
nominee or nominees who may be selected by the Board of Directors prior to or at
the Annual Meeting, or, if no substitute is selected by the Board of Directors
prior to or at the Annual Meeting, for a motion to reduce the present membership
of the Board to the number of nominees available and to create an additional
vacancy to be filled by the Board of Directors. Following is certain
biographical information, as of April 15, 2002, with respect to the members of
and nominees to the Board of Directors. The information concerning the nominees
and their share holdings in the Company has been furnished by them to the
Company.
THOMAS S. BEDNARIK, age 51, has served as President, Chief Executive
Officer and a director of the Company since February 2000. From April 1998 to
February 2000, Mr. Bednarik served as Vice President of Sales and Support at
NetPro Computing, Inc. Mr. Bednarik has 28 years of executive and sales
management experience in the information technology industry and has served in
various executive management capacities, including Chief Executive Officer,
President and Executive Vice President, with firms such as Idea Corporation,
Decision Data, Alcatel Information Systems and ITT Corporation.
TODD P. BELFER, age 33, has served as a director of the Company since March
1999 and Chairman of the Board of Directors since November 1999. Mr. Belfer also
served as Chairman of the Board of Directors of Time America, Inc. (previously
Vitrix Incorporated) from April 1996 until March 1999. Mr. Belfer also is
currently serving as President and Chairman of the Board of M.D. Labs,
Incorporated, a private Arizona-based company, where he has been employed since
February 1994. Mr. Belfer also co-founded Employee Solutions, Inc. in May 1990,
and served as its Executive Vice-President and as a director from 1991 to 1996.
Mr. Belfer earned a Bachelor of Science in Finance and Economics from the
University of Arizona in 1989.
LISE M. LAMBERT, age 44, has served as a director of the Company since
April 1999 and as director of Time America, Inc. (previously Vitrix
Incorporated) from January 1998 to March 1999. Ms. Lambert is President of
Relevant, Inc., a consulting company that serves the computer software industry.
Ms. Lambert has been employed by Relevant, Inc. since 1996. In 1986, Ms. Lambert
co-founded Mastersoft, Inc., where she served as Vice-President of Marketing
from 1986 to 1990 and Senior Vice-President of Sales from 1990 to 1995. Ms.
Lambert has held various sales and management positions, including Product Line
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Manager at MicroAge, Inc. in Tempe Arizona, and currently serves as director for
OutBack Resource Group. Ms. Lambert earned a Bachelor of Arts degrees in
education and music, and a Masters degree in deafness and audiology from Smith
College.
ROBERT W. ZIMMERMAN, age 49, has served as a director of the Company since
March 2001. Mr. Zimmerman is a co-managing shareholder and attorney for Mallery
& Zimmerman, S.C., a general practice law firm based in Wisconsin. Mr. Zimmerman
graduated from Marquette University in 1974 with majors in Accounting and
Finance and from Marquette University Law School in 1977. After law school Mr.
Zimmerman worked in the Milwaukee office of Arthur Andersen & Co. in the tax
department and received his Wisconsin CPA certificate.
VOTE REQUIRED
Approval of the election of the director nominees will require the
affirmative vote of a plurality of the votes cast by the stockholders entitled
to vote. Your Directors recommend a vote FOR the election of the four nominees
under Proposal No. 1. The Board of Directors intends to vote its proxies for the
election of its nominees, for a term to expire at the next Annual Meeting.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During the fiscal year ended June 30, 2001, the Board of Directors of the
Company met or acted by written consent on thirteen occasions. Each of the
Company's Directors attended more than 75% of the meetings of the Board of
Directors.
The Audit Committee, which is currently comprised of Messrs. Belfer and
Zimmerman and Ms. Lambert, is responsible for reviewing and making
recommendations to the Board concerning the selection of outside auditors, the
annual audit of the Company's financial statements and the Company's internal
accounting controls, practices and policies. The Audit Committee met on one
occasion during the fiscal year ended June 30, 2001.
The Compensation Committee, which is currently comprised of Messrs. Belfer,
Zimmerman and Lambert, makes recommendations to the Board of Directors regarding
option grants and addresses matters relating to executive compensation. The
Compensation Committee met on three occasions during the fiscal year ended June
30, 2001.
The Company's Board of Directors does not maintain a standing nominating
committee or other committees performing similar functions.
DIRECTOR COMPENSATION AND EMPLOYMENT AGREEMENTS
During fiscal 2001, the Company's non-employee directors received no
compensation for their services to the Company, but were reimbursed for
reasonable expenses incurred in connection with attendance at each meeting of
the Board of Directors.
The Company granted options to purchase 25,000 shares of Common Stock to
each of Todd P. Belfer and Lise M. Lambert and options to purchase 15,000 shares
of Common Stock to Robert W. Zimmerman in connection with their service on the
Board of Directors. Each of these options were granted at the fair market value
of the Common Stock on the grant date.
Each of the executive officers of the Company serve at the discretion of
the Company's Board of Directors.
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As of February 15, 2000, the Board of Directors approved the terms of Mr.
Bednarik's at-will employment with the Company for services as its President and
Chief Executive Officer. Under the terms of a letter agreement, dated as of
February 17, 2000, Mr. Bednarik receives a base salary of $115,000, which was
adjusted to $130,000 effective April 2001. Mr. Bednarik is also entitled to
receive quarterly and annual bonus payments payable in cash based on the
Company's achievement of certain revenue targets for such periods. Mr. Bednarik
received cash bonuses in the amounts of $12,704 and $5,000 during the fiscal
years ended June 30, 2001 and 2000, respectively.
Mr. Bednarik is also entitled to participate in the Company's medical and
dental plans, with the Company paying 50% of the cost of the medical coverage
for Mr. Bednarik's family. Under the terms of the letter agreement, a portion of
Mr. Bednarik's unvested options become immediately vested in the event he is
terminated without cause (as defined in his Option Agreement with the Company).
In the event the Company is acquired or merged into another company, any
unvested options will become automatically vested.
OTHER EXECUTIVE OFFICERS
Following is biographical information regarding the Company's executive
officers who are not also directors:
CRAIG J. SMITH, CPA, age 32, has served as the Company's Vice President of
Finance and Administration and Chief Financial Officer since April 1999. From
1998 to 1999, Mr. Smith served as Controller of Pacific Numerix Corporation.
From 1993 to 1998, he served as an Audit Manager of Semple & Cooper LLP. Mr.
Smith earned his maters in business administration from Arizona State University
in 2000 and a Bachelor of Science degree in finance and accounting from
Minnesota State University-Mankato in 1992.
JAMES MARTIN, age 39, has served as Vice President of Sales for the Company
since March, 2001. Mr. Martin co-founded Time America, Inc. (merged with Vitrix
in March 2001) in 1988 and served as Vice President of Sales from October 1999
to March 2001. Mr. Martin graduated from DeVry Institute in 1985.
PROPOSAL NO. 2 --- RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors has selected Semple & Cooper, LLP ("Semple &
Cooper") as the Company's independent public accountants for the fiscal year
ending June 30, 2002, and recommends that the shareholders vote for ratification
of such appointment. Shareholder ratification of the selection of Semple &
Cooper as the Company's independent auditors is not required by the Company's
Bylaws or otherwise. However, the Board is submitting the selection of Semple &
Cooper for shareholder ratification as a matter of good corporate practice.
Semple & Cooper has audited the Company's financial statements since fiscal year
2001. Notwithstanding the selection, the Board, in its discretion, may direct
the appointment of a new independent accounting firm at any time during the year
if the Board feels that such a change would be in the best interests of the
Company and its stockholders. A representative of Semple & Cooper is expected to
be present at the Annual Meeting with the opportunity to make a statement if he
or she so desires and to be available to respond to appropriate questions.
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VOTE REQUIRED
Assuming a quorum is present, in person or by proxy, at the Annual Meeting,
the affirmative vote of the holders of a majority of the shares present, in
person or by proxy, at the Annual Meeting, is required to approve the proposed
ratification of the appointment of Semple & Cooper.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THIS PROPOSAL.
EXECUTIVE COMPENSATION
The following table summarizes all compensation to the Company's Chief
Executive Officer (the "Named Officer") for services rendered to the Company for
each of the fiscal years ended June 30, 2001, 2000 and 1999. The Company did not
have any other executive officers whose total annual salary and bonus exceeded
$100,000 for the periods presented.
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG TERM COMPENSATION
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AWARDS
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NAME AND OTHER ANNUAL SECURITIES UNDERLYING
PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($) OPTIONS/SARS (#)
------------------ ---- --------- -------- --------------- ---------------------
Thomas S. Bednarik(1) 2001 $118,750 $ 12,704 -0- 325,000(2)
President and 2000 $ 39,531 $ 5,000 -0- 100,000(2)
Chief Executive Officer 1999 N/A N/A N/A N/A
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(1) Mr. Bednarik was appointed President and Chief Executive Officer of the
Company effective February 17, 2000. Had Mr. Bednarik been with the Company
for the entire fiscal year 2000 his annual base salary would have been
$115,000. Pursuant to the terms of a letter agreement, dated February 17,
2000, between Mr. Bednarik and the Company, Mr. Bednarik was granted
options to purchase 100,000 shares of the Company's Common Stock at a per
share exercise price of $9.40. Pursuant to the terms of an Incentive Stock
Option Agreement dated August 22, 2000, Mr. Bednarik was granted options to
purchase 100,000 shares of the Company's Common Stock at a per share
exercise price of $3.40. Pursuant to the terms of a Nonstatutory Stock
Option Agreement dated April 17, 2001, Mr. Bednarik was granted options to
purchase 225,000 shares of the Company's Common Stock at a per share
exercise price of $0.40.
OPTION GRANTS
The following table sets forth information concerning individual grants of
stock options made to the Named Officer during the fiscal year ended June 30,
2001.
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OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
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POTENTIAL REALIZED VALUE
AT ASSUMED RATES OF
NUMBER OF % OF TOTAL ANNUAL STOCK PRICE
SECURITIES OPTIONS/SARS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OPTION TERM (2)
NAME AND OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION ----------------------
PRINCIPAL POSITION GRANTED(#)(1) FISCAL YEAR ($/SH) DATE 5%($) 10%($)
------------------ ------------- ----------- ------ ------- -------- --------
Thomas S. Bednarik, 100,000 16% $3.40 08/2010 $215,000 $540,000
President and Chief 225,000 36% $0.40 04/2011 $ 55,000 $145,000
Executive Officer
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(1) Pursuant to the terms of an Incentive Stock Option Agreement dated August
22, 2000, Mr. Bednarik was granted options to purchase 100,000 shares of
the Company's Common Stock at a per share exercise price of $3.40. Pursuant
to the terms of a Nonstatutory Stock Option Agreement dated April 17, 2001,
Mr. Bednarik was granted options to purchase 225,000 shares of the
Company's Common Stock at a per share exercise price of $0.40. The options
granted become exercisable as follows: 25% on the first anniversary of the
date of grant and 25% on each one year anniversary thereafter.
(2) Amounts represent hypothetical gains that could be achieved for the options
if exercised at the end of the option term. These gains are based on
assumed rates of stock appreciation of 5% or 10% compounded annually from
the date the options were granted to their expiration date and are not
presented to forecast possible future appreciation, if any, in the price of
the Common Stock. Actual gains, if any, on stock option exercises are
dependent on the future performance of the Common Stock, overall stock
market conditions, as well as the option holder's continued employment
through the vesting period. The amounts reflected in this table may not
necessarily be achieved.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers, as well as persons beneficially
owning more than 10% of the Company's outstanding Common Stock, to file reports
of ownership and changes in ownership with the Securities and Exchange
Commission (the "SEC") within specified time periods. Such officers, directors
and shareholders are also required to furnish the Company with copies of all
Section 16(a) forms they file.
Based solely on its review of such forms received by it, or written
representations from certain reporting persons, the Company believes that all
Section 16(a) filing requirements applicable to its officers, directors and 10%
shareholders were complied with during the fiscal year ended June 30, 2001.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information, as of April 15, 2002,
concerning the beneficial ownership of shares of Common Stock of the Company by
(i) each person known by the Company to beneficially own more than 5% of the
Company's Common Stock; (ii) each Director; (iii) the Named Officer; and (iv)
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all Directors and executive officers of the Company as a group. To the knowledge
of the Company, all persons listed in the table have sole voting and investment
power with respect to their shares, except to the extent that authority is
shared with their respective spouse under applicable law.
SHARES BENEFICIALLY OWNED (1)
NAME AND ADDRESS OF -----------------------------
BENEFICIAL OWNER(2) NUMBER PERCENT
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Thomas S. Bednarik 175,000(3) 1.9
Todd P. Belfer 796,823(4) 8.8
Lise M. Lambert 62,483(5) *
Robert W. Zimmerman 105,175 1.2
Craig J. Smith 36,994(6) *
All directors and Named
Officer as a group 1,176,475 13.0
Joseph L. Simek 3,860,627 43.1
Circle F Ventures 1,022,500(7) 11.1
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* Less than 1%.
(1) A person is deemed to be the beneficial owner of securities that can be
acquired within 60 days from the date set forth above through the exercise
of any option, warrant or right. Shares of Common Stock subject to options,
warrants or rights that are currently exercisable or exercisable within 60
days are deemed outstanding for computing the percentage of the person
holding such options, warrants or rights, but are not deemed outstanding
for computing the percentage of any other person. The amounts and
percentages are based upon 9,070,828 shares of Common Stock outstanding as
of April 15, 2002.
(2) The address of each of the beneficial owners is c/o Vitrix, Inc., 51 West
Third Street, Suite 310, Tempe, Arizona 85281
(3) Includes (i) 50,000 shares of Common Stock which are subject to unexercised
options that were exercisable on September 1, 2001, or within 60 days
thereafter, and (ii) 6,250 shares of Common Stock issuable upon exercise of
warrants issued in the Company's February 2000 private placement.
(4) Includes (i) 10,000 shares of Common Stock which are subject to unexercised
options that were exercisable on April 15, 2002, or within 60 days
thereafter, and (ii) 9,220 shares of Common Stock issuable upon exercise of
warrants issued in the Company's October 1999 and February 2000 private
placements.
(5) Includes (i) 25,969 shares of Common Stock which are subject to unexercised
options that were exercisable on April 15, 2002, or within 60 days
thereafter, and (ii) 2,320 shares of Common Stock issuable upon exercise of
warrants issued in the Company's October 1999 placement.
(6) Includes (i) 8,994 shares of Common Stock which are subject to unexercised
options that were exercisable on April 15, 2002, or within 60 days
thereafter, and (ii) 1,000 shares of Common Stock issuable upon exercise of
warrants issued in the Company's October 1999 private placement.
(7) Includes 147,500 shares of Common Stock issuable upon exercise of warrants
issued in the Company's October 1999 private placement.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Except as set forth below, the Company did not have any transactions during
fiscal 2001 with any director, director nominee, executive officer, security
holder known to the Company to own of record or beneficially more than 5% of the
Company's Common Stock, or any member of the immediate family of any of the
foregoing persons, in which the amount involved exceeded $60,000.
On March 31, 2001, the Company borrowed $400,000 from Joseph L. Simek, a
significant stockholder of the Company. The loan bears interest at an annual
rate of prime plus one percent (1%) and is secured by all of the Company's
assets. Principal and interest payments of approximately $8,500 are due monthly,
with the outstanding principal balance due on October 1, 2003. On November 2,
2001, Mr. Simek agreed to provide the Company with a $200,000 line of credit,
which is also secured by all of the Company's assets. Borrowings under the line
of credit bear interest at an annual rate of 10%. The line of credit has a
maturity date of December 31, 2002. At April 15, 2002, $372,828 was outstanding
under the $400,000 loan and no balance was outstanding under the line of credit.
On September 4, 2001, the Company borrowed $500,000 from Francis Simek, the
spouse of Mr. Simek. This loan bears interest at an annual rate of 10% and is
secured by all of the Company's assets. Principal and interest payments of
$6,600 are due and payable monthly over a 60-month period. At April 15, 2002,
$482,043 was outstanding under this loan.
In April 2001, the Company issued promissory notes in the aggregate
principal amount of $375,000 to certain third parties, including $25,000 from
Thomas S. Bednarik and $150,000 from Todd P. Belfer, who are each members of the
Company's Board of Directors, and $150,000 from Francis Simek, the spouse of Mr.
Simek. These notes accrued interest at an annual rate of 18%, with interest only
payable monthly until November 2001, followed by twelve monthly principal and
interest payments of $34,380 through October 2002. The notes were repaid on
September 4, 2001.
AUDIT COMMITTEE REPORT
The Audit Committee is responsible for reviewing and discussing the audited
financial statements with management, discussing with the Company's auditors
information relating to the auditors' judgments about the quality of the
Company's accounting principles, recommending to the Board of Directors that the
Company include the audited financials in its Annual Report on Form 10-KSB and
overseeing compliance with the Securities and Exchange Commission requirements
for disclosure of auditors' services and activities.
REVIEW OF AUDITED FINANCIAL STATEMENTS
The Audit Committee has reviewed the Company's audited financial statements
for the fiscal year ended June 30, 2001, as prepared by Semple & Cooper, LLP,
the Company's independent auditors, and has discussed these financial statements
with management. In addition, the Audit Committee has discussed with Semple &
Cooper the matters required to be discussed by Statement of Auditing Standard 61
regarding the codification of statements on auditing standards. Furthermore, the
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Audit Committee has received the written disclosures and the letter from Semple
& Cooper required by the Independence Standards Board Standard No. 1 and has
discussed with Semple & Cooper its independence.
RECOMMENDATION
Based upon the foregoing review and discussion, the Audit Committee
recommended to the Board of Directors that the audited financial statements for
the fiscal year ended June 30, 2001 be filed with the Company's annual report on
Form 10-KSB.
RESPECTFULLY SUBMITTED,
Todd P. Belfer
Robert W. Zimmerman
Lise M. Lambert
DISCLOSURE OF AUDIT AND NON-AUDIT FEES
AUDIT FEES
The aggregate fees billed by Semple & Cooper LLP and BDO Seidman, LLP for
professional services rendered for the audit of the Company's annual financial
statements for the fiscal year ended June 30, 2001 and for the review of the
financial statements included in the Company's Quarterly Reports on Form 10-QSB
for the fiscal year were approximately $22,000.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
During fiscal 2001, the Company did not engage its independent public
accountants to perform financial information systems design and implementation.
ALL OTHER FEES OF INDEPENDENT PUBLIC ACCOUNTANTS
During fiscal 2001, all other fees of the Company's independent public
accountants amounted to approximately $25,000, which primarily consisted of
audit related fees of $22,000 and other fees of $3,000. Audit related fees
generally include statutory audits of subsidiaries, benefit plan audits,
acquisition due diligence, accounting consultation, various attest services
under professional standards, assistance with registration statements, comfort
letters and consents. Other fees were primarily tax services.
The Audit Committee of the Board of Directors considered whether the
provision of non-audit services is consistent with maintaining the auditor's
independence.
OTHER MATTERS
ANNUAL REPORT
The Annual Report of the Company for the fiscal year ended June 30, 2001,
is enclosed herewith.
The 2001 Annual Report of the Company, which was mailed to shareholders
with this Proxy Statement, contains financial and other information about the
activities of the Company, but is not incorporated into this Proxy Statement and
is not to be considered part of these proxy soliciting materials.
The Company will provide upon written request, without charge to each
shareholder of record as of the Record Date, a copy of the Company's annual
report on Form 10-KSB for the fiscal year ended June 30, 2001, as filed with the
Commission. Any Exhibits listed in the Form 10-KSB also will be furnished upon
request at the Company's expense. Any such request should be directed to the
Company's Secretary at the Company's executive offices at 51 West Third Street,
Suite 310, Tempe, Arizona 85281.
VOTING BY PROXY
In order to ensure that your shares will be represented at the Annual
Meeting, please sign and return the enclosed Proxy in the envelope provided for
that purpose, whether or not you expect to attend. Any shareholder may, without
affecting any vote previously taken, revoke a written proxy by giving notice of
revocation to the Company in writing or by executing and delivering to the
Company a later dated proxy.
9
SHAREHOLDER PROPOSALS FOR ACTION AT THE COMPANY'S NEXT ANNUAL MEETING
Any shareholder who wishes to present any proposal for shareholder action
at the next Annual Meeting of Shareholders to be held in 2003, must be received
by the Company's Secretary, at the Company's offices, not later than January 10,
2003, in order to be included in the Company's proxy statement and form of proxy
for that meeting. Such proposals should be addressed to the Corporate Secretary,
Vitrix, Inc., 51 West Third Street, Suite 310, Tempe, Arizona 85281. If a
shareholder proposal is introduced at the 2003 Annual Meeting of Shareholders
without any discussion of the proposal in the Company's proxy statement, and the
shareholder does not notify the Company on or before March 26, 2003, as required
by SEC Rule 14(a)-4(c)(1), of the intent to raise such proposal at the Annual
Meeting of Shareholders, then proxies received by the Company for the 2003
Annual Meeting will be voted by the persons named in such proxies in their
discretion with respect to such proposal. Notice of such proposal is to be sent
to the above address.
By Order of the Board of Directors
Todd P. Belfer,
Chairman of the Board
Tempe, Arizona
May 10, 2002
10
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
VITRIX, INC. FOR THE ANNUAL MEETING OF STOCKHOLDERS
The undersigned stockholder of Vitrix, Inc., a Nevada corporation (the
"Company"), hereby acknowledges receipt of the Notice and Proxy Statement For
Annual Meeting of Stockholders dated May 10, 2002, and hereby appoints Thomas S.
Bednarik or Craig J. Smith, and each of them, proxies and attorneys-in-fact,
with full power of substitution, on behalf and in the name of the undersigned,
to represent the undersigned at the Annual Meeting of Stockholders of the
Company to be held at the offices of Squire, Sanders & Dempsey L.L.P., 40 North
Central Avenue, Suite 2700, Phoenix, Arizona 85004 on June 18, 2002 at 9:00
a.m., local time, and at any adjournment(s) or postponement(s) thereof, and to
vote all shares of Common Stock that the undersigned would be entitled to vote
if then and there personally present, on the matters set forth below.
1. ELECTION OF DIRECTORS: [ ] FOR all nominees listed below (except as marked
to the contrary below):
Thomas S. Bednarik Robert W. Zimmerman Todd P. Belfer Lise M. Lambert
[ ] WITHHOLD AUTHORITY to vote for all nominees listed above.
INSTRUCTIONS: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below:
___________________________________________________________________________
2. PROPOSAL NO. 2 - RATIFICATION OF THE SELECTION OF SEMPLE & COOPER, LLP AS
INDEPENDENT PUBLIC ACCOUNTANTS FOR THE COMPANY FOR ITS 2002 FISCAL YEAR.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE ELECTION OF THE NOMINEES NAMED ABOVE, FOR PROPOSAL NO. 2 AND AS
SAID PROXIES DEEM ADVISABLE ON SUCH MATTERS AS MAY PROPERLY COME BEFORE THE
MEETING.
Dated: _____________ ___, 2002 Please sign exactly as your name appears on
the front of this proxy card. When shares are
held in common or in joint tenancy, both
should sign. When signing as an attorney,
executor, administrator, trustee or guardian,
please give full title as such. If a
corporation, sign in full corporate name by
President or other authorized officer. If a
partnership, please sign in partnership name
by an authorized person.
SIGNATURES:
_____________________________________________
_____________________________________________