To JSI and ALL: Well, the conference call is over. Lasted nearly 1 1/2 hours and I believe was thorough. I put my notes in an email to myself and am going to copy them below.
Attendees:
TAVA:
John Jenkins,CEO
Kevin Fallon, COO
Doug Kelso , CFO
Donna Dinkle, Secretary
SI Members:
JDN
fma
Hardrocker
I addressed Proxy Matters which were as follows:
Q. Robert C. Pearson, Director appears to have a conflict of interest in that he represents Renassaince Capital. Noted that he failed to file required forms while selling shares in the market at or near stocks high, Comments?
A. Mr. Pearson was initially required to be on the Board as a Condition of the Loan from Renassaince. Without that loan company may not have survived. With the loan Company has enjoyed a significant turnaround in success. Mr. Pearson has been kept on the board for purposes of continuity. Mr. Pearson DID NOT sell any of his own shares. Actually it was a fund under the Renassaince Capital Umbrella which sold and it is only a technicality that he even has to file the forms. It is their understanding that Mr. Pearson did not even know the shares were being sold.
Q. It is noted that individuals failed to file forms timely. First off this seems like a breakdown in Internal Control, Secondly what ramifications does this have.
A. Company regularly informs all pertaining individuals about their responsability to notify the Company of stock trades and the Company has no way of knowing if they did or did not have trades. Company has reminded all that they MUST make timely filings. Also, as to Mr. Pearson, company reiterates that it was not HIS shares that were sold and believes that he was totally unaware of the transactions personally at the time.
Q. Stock option plan:
a. How is it that Board can authorize and additional 1,000,000 shares of stock options over and above that given by shareholder approval. What about the options granted over and above the original approval? (256,000)
A. The additional authorization is CONDITIONAL upon shareholder approval. Company is allowed 12 months to obtain such approval. Those options granted become qualified stock options (unfavorable tax treatment) if shareholder approval not obtained.
b. It appears options were granted in the money (meaning below market).
A. No options have ever been granted in the money. Option price appears low as they were granted at the initiation of the employees contract, which for the top officers was before they had fully developed their Y2KONE plan and stock price was very low then. However, at least in Jenkins case his were issued at he believes 2 1/2 when stock was trading at 1 1/2.
c. Why is the company issuing so many non qualified options which dont require the exercisor to hold the stock for favorable tax treatment. Appears this does not meet the usual objective of a stock option plan which is to encourage employees to work to raise the price of the stock over the long term.
A. TAVA did not originally HAVE a stock incentive (Qualified) plan. They do now and ALL options issued now and in the future to employees are Incentive (Qualified Options)
This represents the section of the CC that I was responsible for. Frankly, I was quite impressed with the Companies concern that people misunderstood much of the Proxy statement and their desire to get the word out. They certainly changed my mind as to how I felt after reading the Proxy Statement. I now intend to vote YES for the matters listed in the Proxy.
I informed them that it appeared to me that many people had already voted and that they may wish to change their vote after hearing about our call. I asked them how that could be accomplished. Donna was sure you could but not sure how to go about it if not attending the meeting. She suggested that those of you who voted via Instanet go to the site and perhaps there would be instructions there to change your proxy vote. If you sent it in to your broker you can call them and request a new proxy form.
This conversation last nearly 1 1/2 hours and much of it centered around Proxy Material I cant possibly report every word but I believe the above is the major points. If you have questions you can email me at Nicewong@aol.com or post it on the thread and I will try and answer those that I can by posting there.
OTHER MATTERS
Investor Relations, Public Relations and the like were handled by Hardrocker and fma. I took some notes there but prefer they make their report on SI and I will copy it to Motley Fool if they dont. If I see something left out I will add as they may do to my report.
Final Comment:
fma asked what can we take back to the investors on our threads on a positive note about TAVA. Reply was:
WATCH PERFORMANCE!! I think that says it all. |
