NEW YORK, Nov. 16, 2012 (GLOBE NEWSWIRE) -- Jerry Ivy, the second largest shareholder of On Track Innovations, released the following letter:
Dear Fellow On Track Innovations Shareholders,
I would like to express my sincere gratitude to you, the shareholders, for taking action and VOTING AGAINST the incumbent board's hand-picked directors at the shareholder meeting held on November 9, 2012. We were successful in our collective effort.
Now we have a new challenge. The board of OTIV has announced another shareholders meeting for December 13. In a stunning move in defiance of shareholders, the board refused to permit a vote for our director nominees at that meeting. Instead, only some of my proposals will be submitted to the shareholders.
My legal counsel has demanded that OTIV comply with my valid request to convene a shareholders meeting to consider the election of directors and to replace three existing directors. We believe the board has no legitimate basis for denying my request. Instead of respecting the shareholder vote at the Nov. 9th meeting, the board's actions reek of "entrenchment."
A quick review of OTIV's performance under the current board's watch will convince shareholders that the board needs a majority of qualified nominees who will truly represent the interests of all stockholders:
- Share price has declined by 93% from a high of $17 in 2006 to its current level of $1.28 [Nov 14, 2012].
- Massive share dilution: From 19.6M shares in Jan 2008 to 31.1M in FY2011. In 4 fiscal years [FY2008 to FY2011], 6.2M shares options were exercised causing this massive dilution.
- Compensation: For FY2011, the company's executives were paid $2.75M. This represents 10.4% of gross profit while the company had operating losses consecutively for the last 5 years.
- Mounting Losses: OTIV has suffered a cumulative operating loss of $90.4M in the last 6 fiscal years [FY2006-FY2011]
Recently, Institutional Shareholder Services (ISS) recommended a vote against three nominees chosen by the incumbent board. ISS concluded in the report that, "The current board has not shown the ability to turn the company around, and shareholders are justified in their disappointment. Given the compelling argument presented by the dissidents that boardroom change is needed, and the failure of the board to present a convincing counter argument, a vote against the proposed slate of directors is warranted." We encourage all OTIV shareholders who are ISS Clients to obtain the full report from ISS.
I want OTIV shareholders to know that we have attempted to discuss an amicable settlement with OTIV but our efforts were rebuffed with last week's surprise announcement that OTIV refused to allow shareholders to vote on eight new board nominees at the December 13 shareholder meeting. The most fundamental principal of shareholder governance is that shareholders have the right to elect the directors that represent them. This incumbent board is clearly violating the basic rights of shareholders.
The proposals currently to be considered at the December 13 shareholder meeting, which mean little if not coupled with a change in the actual membership of the board, are intended to open up the board to other qualified directors. More importantly, our proposal to require a shareholder meeting in the U.S. is needed to make the board and management more accountable to shareholders in the U.S. (who own approximately 96% of all OTIV shares). We urge all shareholders to vote for our proposals as soon as they receive their proxies.
The tactics of the incumbent board may cause delay, but they will not deter our efforts to continue fighting for change. I am committed to allowing shareholders the opportunity to vote on our nominees.
Thank you for your support – together, we can effect change at On Track Innovations!
P.S. I have posted a new video discussing the results of last week's shareholders meeting http://www.youtube.com/watch?v=KynFRybYrmI, as well as a video discussing the path forward http://www.youtube.com/watch?v=4dEfOEP_mkY. These videos are also available at www.otivinfo.com.
We do not have access to shareholder contact information. Consequently, we are unable to directly reach out to you. If you want us to contact you, please email your name and contact information to email@example.com or call 877-777-4270.
Your support is very important, regardless of how many shares you own. If you have any questions, please call our proxy solicitors, Alliance Advisors at 877-777-4270, or go to www.otivinfo.com. Please rest assured that all communication with us and Alliance Advisors will not be shared with any party and will be held in strict confidentiality.
CONTACT: firstname.lastname@example.org Alliance Advisors at 877-777-4270Source:Jerry Ivy