UNITED
STATES
SECURITIES
AND EXCHANGE
COMMISSION
Washington,
DC
20549
SCHEDULE
14A
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:
[X]
Preliminary Proxy Statement
[_] CONFIDENTIAL,
FOR USE OF THE COMMISSION ONLY
(AS PERMITTED BY RULE 14a-6(e)(2))
[_] Definitive
Proxy Statement
[_] Definitive
Additional Materials
[_] Soliciting
Material Pursuant toss. 240.14a-12
Track
Data Corporation
(Name
of Registrant as Specified In Its Charter)
(Name
of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
[X] No
fee required.
[_] Fee
computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title
of each class of securities to which transaction applies:
2) Aggregate
number of securities to which transaction applies:
|
|
3
|
Per
unit price or
other underlying value of transaction computed pursuant
to
|
Exchange
Act Rule 0-11 (set forth the
amount on which
the
filing fee is calculated and state
how it was determined):
4 Proposed
maximum aggregate value of transaction:
5 Total
fee paid:
[_] Fee
paid previously with preliminary materials.
[_] Check
box if any part of the fee is offset as provided by Exchange Act
Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
paid
previously. Identify the previous filing by registration
statement
number,
or the Form or Schedule and the date of its filing.
1) Amount
Previously Paid:
2) Form,
Schedule or Registration Statement No.:
3) Filing
Party
4) Date
Filed:
95
Rockwell
Place
Brooklyn,
NY 11217
NOTICE
OF ANNUAL
MEETING OF STOCKHOLDERS
TO
BE HELD
DECEMBER 6, 2007
To
the
Stockholders of Track Data Corporation:
The
Annual Meeting of Stockholders of Track Data Corporation (the
"Company") will be held at 95 Rockwell Place, Brooklyn, New York 11217, Fifth
Floor Conference Room, at 10:00 A.M. on Thursday, December 6, 2007, for the
following purposes:
|
(1)
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To
elect seven
Directors of the Company to hold office until the next Annual Meeting
of
Stockholders and until their successors have been duly elected and
qualified;
|
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(2)
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To
ratify the
selection and appointment by the Company's Board of Directors of
Marcum
& Kliegman LLP, independent auditors, as auditors for the Company for
the year ending December 31, 2007;
and
|
|
(3)
|
To
consider and
transact such other business as may properly come before the meeting
or
any adjournments thereof.
|
A
Proxy Statement, form of Proxy and the Annual Report to
Stockholders of the Company for the year ended December 31, 2006 are enclosed
herewith. Only holders of record of Common Stock at the close of
business on October 19, 2007 will be entitled to notice of and to vote at the
Annual Meeting and any adjournments thereof. A complete list of the
stockholders entitled to vote will be available for inspection by any
stockholder during the meeting; in addition, the list will be open for
examination by any stockholder, for any purpose germane to the meeting, during
ordinary business hours, for a period of at least ten days prior to the meeting
at the office of the Secretary of the Company, located at 95 Rockwell Place,
Brooklyn, New York 11217.
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Brooklyn,
New
York
October
25,
2007
|
By
Order of the
Board of Directors
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|
|
Martin
Kaye,
Secretary
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||
All
stockholders
are cordially invited to attend the Meeting. If you do not expect to
be present, please sign and date the enclosed form of Proxy and return it
promptly using the enclosed envelope. No postage is required if
mailed in the United States. Any person giving a Proxy has the power
to revoke it at any time prior to its exercise and if present at the Meeting
may
withdraw it and vote in person. Attendance at the Meeting is limited
to stockholders, their proxies and invited guests of the
Company.
TRACK
DATA
CORPORATION
95
ROCKWELL
PLACE
BROOKLYN,
NEW YORK
11217
PROXY
STATEMENT
This
Proxy Statement is furnished in
connection with the solicitation by the Board of Directors of Track Data
Corporation (the "Company") of proxies in the form enclosed. Such
Proxies will be voted at the Annual Meeting of Stockholders of the Company
to be
held at 95 Rockwell Place, Brooklyn, New York, 11217, Fifth Floor Conference
Room, at 10:00 A.M. on Thursday, December 6, 2007 (the "Meeting") and at any
adjournments thereof for the purposes set forth in the accompanying Notice
of
Annual Meeting of Stockholders.
This
Proxy Statement and accompanying Proxy are being mailed on or
about October 25, 2007 to all stockholders of record on October 19, 2007 (the
"Record Date").
Any
stockholder giving a Proxy has the power to revoke the same at
any time before it is voted. The cost of soliciting Proxies will be
borne by the Company. The Company has no contract or arrangement with
any party in connection with the solicitation of proxies. Following
the mailing of the Proxy materials, solicitation of Proxies may be made by
officers and employees of the Company by mail, telephone, telegram or personal
interview. Properly executed Proxies will be voted in accordance with
instructions given by stockholders at the places provided for such purpose
in
the accompanying Proxy. Unless contrary instructions are given by
stockholders, it is intended to vote the shares represented by such Proxies
for
the election of the seven nominees for director named herein and for the
selection of Marcum & Kliegman LLP as independent auditors. The
current members of the Board of Directors presently hold voting authority for
Common Stock representing an aggregate of 54,113 votes, or approximately 1%
of
the total number of votes eligible to be cast at the Annual
Meeting. The members of the Board of Directors have indicated their
intention to vote affirmatively on all of the proposals. Barry Hertz, the
Company’s principal stockholder who owns or controls 4,702,775 votes or
approximately 56% of the total votes eligible to be cast at the Annual Meeting
has indicated his intention to vote affirmatively on all of the proposals.
VOTING
SECURITIES
Stockholders
of record as of the close
of business on the Record Date will be entitled to notice of, and to vote at,
the Meeting or any adjournments thereof. On the Record Date there
were 8,392,000 outstanding shares of common stock, par value $.01 per share
(the
"Common Stock"). Each holder of Common Stock is entitled to one vote
for each share held by such holder. The presence, in person or by
proxy, of the holders of a majority of the outstanding shares of Common Stock
is
necessary to constitute a quorum at the Meeting. Proxies submitted
which contain abstentions or broker non-votes will be deemed present at the
Meeting in determining the presence of a quorum.
1
SECURITY
OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth, as of September 30, 2007, information regarding
the
beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange
Act
of 1934) of the Company's Common Stock based upon the most recent information
available to the Company for (i) each person known by the Company to own
beneficially more than five (5%) percent of the Company's outstanding Common
Stock, (ii) each of the Company's officers and directors and (iii) all officers
and directors of the Company as a group. Unless otherwise indicated,
each stockholder's address is c/o the Company, 95 Rockwell Place, Brooklyn,
New
York 11217.
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Shares
Owned
Beneficially (1)
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||||||||
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Name
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No.
of
Shares
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%
of
Class
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||||||
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Barry
Hertz
(2)
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4,902,775
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57.
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1%
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|||||
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Martin
Kaye
(3)
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137,680
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1.
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6%
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|||||
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Stanley
Stern
(4)
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27,953
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*
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||||||
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Albert
Drillick
(5)
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38,180
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*
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||||||
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Abraham
Biderman
(6)
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24,000
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*
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||||||
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E.
Bruce Fredrikson (7)
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27,600
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*
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||||||
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Philip
Ort
(6)
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18,000
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*
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||||||
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Shaya
Sofer
(6)
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18,000
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*
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||||||
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All
Officers and Directors as a Group
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||||||||
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(seven
persons)(8)
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291,413
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3.
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4%
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|||||
---------------
*
= less
than 1%
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(1)
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Unless
otherwise
indicated, (i) each person has sole investment and voting power with
respect to the shares indicated and (ii) the shares indicated are
currently outstanding shares. For purposes of this table, a
person or group of persons is deemed to have "beneficial ownership"
of any
shares as of a given date which such person has the right to acquire
within 60 days after such date. For purposes of computing the
percentage of outstanding shares held by each person or group of
persons
named above on a given date, any security which such person or persons
has
the right to acquire within 60 days after such date is deemed to
be
outstanding for the purpose of computing the percentage ownership
of such
person or persons, but is not deemed to be outstanding for the purpose
of
computing the percentage ownership of any other person. Subject
to the foregoing, the percentages are calculated based on 8,392,000
shares
outstanding.
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(2)
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Consists
of
3,985,906 shares owned by Mr. Hertz, 697,880 shares owned by Trusts
established in the names of Mr. Hertz’s children and 18,989 shares held by
a family LLC managed by Mr. Hertz who owns 8% of such LLC. Mr.
Hertz disclaims beneficial interest in shares owned by the Trust
and 92%
of the family LLC not owned by him. Also includes 200,000 shares
issuable
upon the exercise of presently exercisable options under the Company’s
Stock Option Plans.
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(3)
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Consists
of 7,680
shares owned of record and 130,000 shares issuable upon the exercise
of
presently exercisable options granted under the Company's Stock Option
Plans.
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(4)
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Consists
of 9,953
shares owned of record and 18,000 shares issuable upon the exercise
of
presently exercisable options granted under the Company's Stock Option
Plans.
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(5)
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Consist
of 30,220
shares owned of record jointly with his wife, 660 shares owned by
a trust
in the name of his child, and 7,300 shares issuable upon the exercise
of
presently exercisable options granted under the Company's Stock Option
Plans.
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(6)
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Consists
of shares
issuable upon the exercise of presently exercisable options granted
under
the Company’s Stock Option Plans.
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(7)
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Consists
of 5,600
shares owned of record and 22,000 shares issuable upon the exercise
of
presently exercisable options granted under the Company's Stock Option
Plans.
|
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(8)
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Consists
of 54,113
outstanding shares and 237,300 shares issuable upon exercise of options
described in footnotes 2 through 7
above.
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2
ITEM
I. ELECTION OF DIRECTORS
It
is the intention of the persons named in the enclosed form of
Proxy, unless such form of Proxy specifies otherwise, to nominate and to vote
the shares represented by such Proxy for the election as directors of Martin
Kaye, Stanley Stern, Albert Drillick, Abraham Biderman, Dr. E. Bruce Fredrikson,
Phillip Ort and Shaya Sofer to hold office until the next Annual Meeting of
Stockholders or until their respective successors shall have been duly elected
and qualified. All of the nominees are presently directors of the Company.
The
Company has no reason to believe that any of the nominees will become
unavailable to serve as directors for any reason before the Annual
Meeting. However, in the event that any of them shall become
unavailable, the person designated as proxy reserves the right to substitute
another person of his choice when voting at the Annual Meeting.
Officers
and
Directors
The
officers and directors of the
Company are as follows:
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Name
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Age
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Position
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||
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Martin
Kaye
|
60
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Chief
Executive
Officer since March 16, 2007,
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||
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Chief
Financial
Officer, Secretary and Director
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||||
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Stanley
Stern
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57
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Chief
Compliance
Officer, TDSC, Director
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||
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Albert
Drillick
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61
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Senior
Systems
Analyst, Director
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||
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Abraham
Biderman
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59
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Director
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||
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E.
Bruce Fredrikson
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69
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Chairman
of the
Board since March 16, 2007
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||
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Philip
Ort
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58
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Director
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||
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Shaya
Sofer
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58
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Director
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||
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Key
Employees are
as follows:
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||||
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Barry
Hertz
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57
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Chief
of Technology,
served as Chairman of the Board
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||
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and
Chief Executive Officer until March 16, 2007
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||||
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David
Drillick
|
36
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Chief
Operating
Officer, TDSC
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||
Martin
Kaye has been Chief Executive Officer
since March 16, 2007, and has been Chief Financial Officer, Secretary and a
Director of the Company since 1994. Mr. Kaye is a certified public
accountant. Mr. Kaye served as Chief Financial Officer of Innodata
from October 1993 and Director from March 1995 until his resignation from those
positions in May 2001. He had been an audit partner with Deloitte
& Touche LLP for more than five years until his resignation in 1993. Mr.
Kaye holds a B.B.A. in accounting from Baruch College (1970).
Stanley
Stern has been Chief Compliance Officer
of the Company’s broker-dealer subsidiary, TDSC, since April,
2005. He served as Senior Vice President - Customer Relations from
June 2000 to November 2005. He has been a Director of the Company
since May 1999. He previously served as Director from April 1994
until his resignation in September 1997. He served as Vice President
of the Company and in other capacities for more than five years until his
resignation in December 1996. From January 1998 through May 2000, Mr.
Stern was Chief Operating Officer of Integrated Medical Technologies, Inc.,
an
Internet-based provider of medical services information. Mr. Stern
holds a B.B.A. from Baruch College (1973).
3
Albert
Drillick has
been a Director of the Company since February 2004. He has served as a Director
of Applications and Senior Systems Analyst for the Company for more than the
past five years. He holds a Ph.D. degree in Mathematics from New York University
Courant Institute (1971).
Abraham
Biderman has been a Director of the
Company since August 2002. Mr. Biderman is Chairman of Eagle
Advisers, LLC, a diversified financial services and money management
firm. From January 1990 to September 2003, he was Executive Vice
President of Lipper & Company, Inc., a diversified financial services
firm. Prior thereto, he served as special advisor to the Deputy Mayor
and then the Mayor during New York City's Koch Administration. From
January 1988 through December 1989, Mr. Biderman was Commissioner of New York
City's Department of Housing, Preservation and Development. Prior
thereto, he served as Commissioner of New York City's Department of Finance
and
as Chairman of New York City's Employee Retirement System. Mr. Biderman is
a
member of the Fiscal Opportunities Task Force of the New York City Partnership,
a member of the Housing Committee of the Real Estate Board of New York, a
Director of m-Phase Technologies, Inc., a company that manufactures and markets
high-bandwidth telecommunications products incorporating DSL technology, and
is
also on the boards of numerous not-for-profit and philanthropic
organizations. Mr. Biderman is a certified public accountant and
graduated with a B.A. in Accounting from Brooklyn College (1970).
Dr.
E. Bruce Fredrikson has been a Director of
the Company since June 1994 and he has served as Chairman since March 16, 2007.
Dr. Fredrikson is currently an independent consultant in corporate finance
and
governance. He is Professor of Finance, Emeritus, at Syracuse
University's Martin J. Whitman School of Management where he taught from 1966
until his retirement in May 2003. He is a director of Consumer Portfolio
Services, Inc., a consumer finance company, and Colonial Commercial Corp.,
a
supplier of HVAC products and supplies. Dr. Fredrikson holds an A.B.
in economics from Princeton University and a M.B.A. in accounting and a Ph.D.
in
finance from Columbia University.
Philip
Ort has been a Director of the Company since June 2004. Mr.
Ort has been the owner/operator of a family Real Estate Management and
Investment business comprising residential and commercial properties since
1972. He serves on the boards of several non-profit
organizations. He attended Brooklyn College from 1967 to
1970.
Shaya
Sofer has been a Director of the Company since June
2004. Since January 2001, he has been Senior Managing Project
Director of Energy Spectrum Inc., an energy consulting firm focusing on CHP
"Combine Heat and Power" (Cogeneration). Prior thereto, he was a
consultant. He served as Director of Facilities for Track Data Corp.
and as Executive Vice President of Fast Track Systems, a disaster recovery
business, from 1985 through 1998. He also was a member of the board
of directors of Track Data Corp. from 1986 through 1995, prior to its merger
with Global Market Information, Inc. Mr. Sofer holds a B.A. in Mathematics
from
Queens College (1972).
4
Barry
Hertz has served as Chief of Technology
since March 16, 2007. Prior thereto he served as the Company's Chairman and
Chief Executive Officer since its inception. Mr. Hertz reached a
settlement with the Securities and Exchange Commission ("SEC") regarding
insider-trading charges. Mr. Hertz consented, without admitting or
denying the allegations in the SECs complaint, to a two-year bar from serving
as
an officer or director of a publicly traded company and a two-year bar from
association with a broker or dealer. He holds a Masters degree in
Computer Science from New York University (1973) and a B.S. degree in
Mathematics from Brooklyn College (1971). Until his resignation in
May 2001, Mr. Hertz also served as Chairman of Innodata Corporation
("Innodata"), a public company co-founded by Mr. Hertz, of which the Company
was
a Principal Stockholder, and which is a global outsourcing provider of Internet
and on-line digital content services.
David
Drillick has been Chief Operating Officer of TDSC, the Company's
broker-dealer subsidiary, since December 2005. He has served as the
Company's Vice President of Online Trading Operations since August
2000. Mr. Drillick was a Principal at Pond Equities, a full service
securities broker-dealer, from November 1997 through August 2000. He
had previously been a Branch Manager for King Financial Services, a
self-clearing and full service securities broker-dealer. Mr. Drillick
holds a B.S. degree in Mathematics/Actuarial Studies from Touro College
(1992).
Directors
are elected to serve until the next annual meeting of
stockholders and until their successors are elected and
qualified. Officers serve at the discretion of the Board. There are
no family relationships among directors or officers. Albert Drillick
is the father of David Drillick, Chief Operating Officer of TDSC, the Company’s
broker-dealer subsidiary.
Director
Independence
The
Board of Directors has determined each of the following
directors to be an “independent director” as defined in Rule 4200(a)(15) of the
listing standards of the National Association of Securities Dealers (“the NASD
listing standards”): E. Bruce Fredrikson, Abraham Biderman, Phillip Ort and
Shaya Sofer.
Controlled
Company
Exemption
The
Company is a Controlled Company as defined in NASDAQ’s Stock
Market Rule 4350(c)(5) as the Company is owned more than 50% by one
individual. Accordingly, a majority of independent directors is not
required to serve on the Company’s Board of Directors.
Meetings
of the
Board of Directors
The
Board of Directors held four meetings during the year ended
December 31, 2006. During 2006, each director attended in excess of
75% of both (i) the total number of board meetings held during the period for
which he was a director and (ii) the total number of meetings of each committee
of the board on which the director served during the period for which he was
on
the committee. The Company does not have a policy requiring incumbent
directors and director nominees to attend the Company’s annual meeting of
stockholders. All directors attended last year's annual
meeting.
5
Committees
of the
Board of Directors
The
Company has a separately designated standing audit committee
established in accordance with Section 3(a)(58)(A) of the Exchange
Act. Serving on the Committee are Dr. E. Bruce Fredrikson, Abraham
Biderman and Philip Ort. The Board of Directors has determined that
it has an audit committee financial expert serving on the audit committee,
Abraham Biderman. Mr. Biderman is an independent director as defined
in Item 7(d)(3)(iv) of Schedule 14A. The function of the Audit
Committee is to make recommendations concerning the selection each year of
independent auditors of the Company, to review the effectiveness of the
Company's internal accounting methods and procedures, to consider whether the
principal accountant’s provision of non-audit services is compatible with
maintaining the principal accountant’s independence and to determine through
discussions with the independent auditors whether any instructions or
limitations have been placed upon them in connection with the scope of their
audit or its implementation. The Audit Committee met four times
during 2006. The Board of Directors has determined that the members
of the Audit Committee are "independent" as defined in NASDAQ Stock Market’s
Marketplace Rule 4200.
The
Board of Directors does not have a Compensation Committee. In
accordance with NASDAQ Stock Market’s Marketplace Rule 4200, a majority of
“independent” directors is required to recommend and approve the compensation of
executive officers.
The
Company does not have a standing Nominating Committee. Due to the size of the
Company and the resulting efficiency of a Board of Directors that is also
limited in size, as well as the lack of turnover in the Company’s Board of
Directors, the Board of Directors has determined that it is not necessary or
appropriate at this time to establish a separate Nominating Committee. Potential
candidates are discussed by the entire Board of Directors, and director nominees
are selected by Board of Director resolution subject to the recommendation
of a
majority of the independent directors. All of the nominees
recommended for election to the Board of Directors at the Annual Meeting are
directors standing for re-election. Although the Board of Directors has not
established any minimum qualifications for director candidates, when considering
potential director candidates, the Board considers the candidate's character,
judgment, diversity, skills, including financial literacy, and experience in
the
context of the needs of the Company and the Board of Directors. In
2006, the Company did not pay any fees to any third party to assist in
identifying or evaluating potential nominees.
Report
of the
Audit Committee
The
following report of the Audit Committee does not constitute soliciting material
and should not be deemed filed or incorporated by reference into any other
Company filing under the Securities Act of 1933 or the Securities Exchange
Act
of 1934, except to the extent the Company specifically incorporates this Report
by reference therein.
6
The
responsibilities of the Audit Committee, which are set forth in the Audit
Committee Charter, include providing oversight to the Company's financial
reporting process through periodic meetings with the Company’s independent
accountants and management to review accounting, auditing, internal controls
and
financial reporting matters. The Audit Committee is also responsible
for the appointment, compensation and oversight of the Company’s independent
auditors. The management of the Company is responsible for the preparation
and
integrity of the financial reporting information and related systems of internal
controls. The Audit Committee, in carrying out its role, relies on the Company's
senior management, including senior financial management, and its independent
accountants.
The
Audit Committee has implemented procedures to ensure that during the course
of
each fiscal year it devotes the attention that it deems necessary or appropriate
to each of the matters assigned to it under the Audit Committee’s Charter. To
carry out its responsibilities, the Audit Committee met four times during fiscal
2006.
The
primary purpose of the Audit Committee is to assist the Board of Directors
in
fulfilling its oversight responsibilities relating to the quality and integrity
of the Company’s financial reports and financial reporting processes and systems
of internal controls. Management of the Company has primary
responsibility for the Company’s financial statements and the overall reporting
process, including maintenance of the Company’s system of internal
controls. The Company retains independent auditors who are
responsible for conducting an independent audit of the Company’s financial
statements, in accordance with generally accepted auditing standards, and
issuing a report thereon.
7
On
the
basis of the foregoing reviews and discussions, the Audit Committee recommended
to the Board of Directors that the audited financial statements be included
in
the Company’s Annual Report on Form 10-K for the fiscal year ended December 31,
2006, for filing with the Securities and Exchange Commission. The
Audit Committee has also recommended, subject to shareholder approval, the
selection of the Company's independent auditors.
Audit
Committee
E.
Bruce Fredrikson
Abraham
Biderman
Philip
Ort
Code
of
Ethics
The
Company has adopted a Code of
Ethics that applies to its Chief Executive Officer and Chief Financial Officer.
The Code as well as any amendments and waivers of the Code, if any, is posted
on
the Company’s website at http://www.trackdata.com/codeofethics.
Compliance
With
Section 16(a) of the Securities Exchange Act of 1934
The
Company believes that during the period from January 1, 2006
through December 31, 2006 all Section 16(a) filing requirements applicable
to
its officers, directors and greater than ten-percent beneficial owners were
complied with.
Stockholders
Communications With the Board of Directors
Generally,
stockholders
who have questions or concerns regarding the Company should contact our Investor
Relations department at 718-522-7373. However, stockholders may communicate
with
the Board of Directors by sending a letter to Board of Directors of Track Data
Corporation, c/o Corporate Secretary, 95 Rockwell Place, Brooklyn, NY
11217. Any communications must contain a clear notation indicating
that it is a "Stockholder--Board Communication" or a "Stockholder--Director
Communication" and must identify the author as a stockholder. The
office of the Corporate Secretary will receive the correspondence and forward
appropriate correspondence to the Chairman of the Board or to any individual
director or directors to whom the communication is directed. The
Company reserves the right not to forward to the Board of Directors any
communication that is hostile, threatening, illegal, does not reasonably relate
to the Company or its business, or is similarly inappropriate. The office of
the
Corporate Secretary has authority to discard or disregard any inappropriate
communication or to take any other action that it deems to be appropriate with
respect to any inappropriate communications.
COMPENSATION
DISCUSSION AND ANALYSIS
Overview
This
compensation discussion describes the material elements of compensation awarded
to, earned by, or paid to each of our executive officers who served as named
executive officers during the last completed fiscal year. This compensation
discussion focuses on the information contained in the following tables and
related footnotes and narrative for primarily the last completed fiscal
year. Our Board oversaw and administered our executive compensation
program. There is no compensation committee.
8
The
principal elements of our executive compensation program are base salary and
long-term equity incentives in the form of stock options. Other
benefits and perquisites consist of health insurance benefits, a qualified
401(k) savings plan. Our philosophy is to position the aggregate of these
elements at a level that is commensurate with our size and sustained
performance.
Compensation
Program Objectives and Philosophy
In
General. The objectives of our compensation programs
are to attract, motivate and retain talented and dedicated executive officers,
provide our executive officers with both cash and equity incentives to further
the interests of the Company and our stockholders, and provide employees with
long-term incentives so we can retain them.
Generally,
the
compensation of our executive officers is composed of a base salary and equity
awards in the form of stock options. In setting base salaries, the Board
generally reviewed the individual contributions of the particular executive.
In
addition, stock options are granted to provide the opportunity for long-term
compensation based upon the performance of our common stock over
time.
Competitive
Market. We define our competitive market for executive
talent and investment capital to be the technology and business services
industries. To date, we have not engaged in the benchmarking of executive
compensation but we may choose to do so in the future.
Compensation
Process. Our Board approved the compensation of our
named executive officers taking into consideration recommendations from our
principal executive officer (for compensation other than his own), as well
as
competitive market guidance.
Regulatory
Considerations. Given the compensation cost to us of
awarding stock options under recent accounting pronouncements, we will consider
the size and frequency of any future stock option awards under our long-term
equity incentive program.
Base
Salaries
In
General. We provide the opportunity for our named
executive officers and other executives to earn a competitive annual base
salary. We provide this opportunity to attract and retain an appropriate caliber
of talent for the position, and to provide a base wage that is not subject
to
performance risk. We review base salaries for our named executive officers
annually and increases are based on our performance and individual performance.
The salary of our principal executive officer was set by our Board at $303,000
for 2007, the same rate as in 2006. Our Board also approved no increase in
compensation for 2007 from the annual base salary rate from 2006 for Mr. Stern
–
$154,500; Mr. Hertz - $454,500 and an increase for Mr. Drillick from $165,000
to
$166,000.
Total
Compensation Comparison. No options were awarded
to executive officers in 2006 and, except for a $9,000 bonus awarded to Mr.
Drillick, base salary represented total compensation for executive
officers.
9
Annual
Cash
Incentives
In
General. There are no programs presently in place to
provide the opportunity for our named executive officers and other executives
to
earn an annual cash incentive award. There are no specific individual
performance goals for 2006 incentive awards, but the Board may exercise
discretion and take into account individual and corporate performance in
determining awards.
Long-term
Equity
Incentives
In
General. We provide the opportunity for our named
executive officers and other executives to earn a long-term equity incentive
award. Long-term incentive awards provide employees with the incentive to stay
with us for longer periods of time, which in turn, provides us with greater
stability. These awards also are less costly to us in the short term than cash
compensation. We review long-term equity incentives for our named executive
officers and other executives annually.
Stock
Options. For our named executive officers, our stock
option program is based on grants that are individually
negotiated. We have traditionally used stock options as our form of
equity compensation because stock options provide a relatively straightforward
incentive for our executives, result in less immediate dilution of existing
shareholders’ interests and, prior to our adoption of FAS 123(R), resulted in
less compensation expense for us relative to other types of equity awards.
For a
discussion of the determination of the fair market value of these grants, see
Note A to Notes to Consolidated Financial Statements.
The
Board granted options at the end of 2005 and there were no new grants in 2006
to
our named executive officers.
We
do
not time stock option grants to executives in coordination with the release
of
material non-public information. Our stock options have a 5-year contractual
exercise term. In general, the option grants are also subject to the following
post-termination and change in control provisions:
|
Event
|
Award
Vesting
|
Exercise
Term
|
||
|
Termination
by Us
for Reason Other than Cause, Disability or Death
|
Forfeit
Unvested
|
Vested
–
30
days
|
||
|
Disability
or
Death
|
Forfeit
Unvested
|
Vested
–
12
months
|
||
|
Termination
for
Cause
|
Forfeit
Vested and
Unvested
|
Expire
|
||
|
Change
in
Control
|
Not
accelerated, comparable substitute, if necessary
|
Unchanged
|
Executive
Benefits
and Perquisites
We
provide the opportunity for our named executive officers and other executives
to
receive certain perquisites and general health and welfare benefits. We also
offer participation in our defined contribution 401(k) plan. We do not match
employee contributions for executive officers under our 401(k) plan. We provide
these benefits to provide an additional incentive for our executives and to
remain competitive in the general marketplace for executive talent. For the
last
completed fiscal year, we provided the following personal benefits and
perquisites to our named executives officers: the Company pays a
portion of medical insurance premiums, and, in 2007, will pay long term
healthcare insurance for Messrs. Hertz, Kaye and Stern.
10
The
following table sets forth information with respect to compensation paid by
the
Company for services to it during the year ended December 31, 2006 to the
Company's Chief Executive Officer and to the executive officers whose aggregate
annual salary and bonus exceeded $100,000 in 2006.
Summary
Compensation Table
|
Fiscal
|
Annual
|
||||||||
|
Name
and
Position
|
Year
|
Salary
|
Bonus
|
Total
|
|||||
|
Barry
Hertz
|
2006
|
$454,500
|
-
|
$454,500
|
|||||
|
Chairman,
CEO until
his resignation on March 16, 2007
|
|||||||||
|
Martin
Kaye
|
2006
|
$303,000
|
-
|
$303,000
|
|||||
|
Chief
Executive
Officer since March 16, 2007,
|
|||||||||
|
Chief
Financial
Officer
|
|||||||||
|
Key
Employees
|
|||||||||
|
Stanley
Stern
|
2006
|
$154,500
|
-
|
$154,500
|
|||||
|
Senior
Vice
President until December 1, 2005,
|
|||||||||
|
Chief
Compliance
Officer of TDSC since
|
|||||||||
|
April
1,
2005
|
|||||||||
|
David
Drillick
|
2006
|
$165,000
|
$9,000
|
$174,000
|
|||||
|
Chief
Operating
Officer of TDSC
|
|||||||||
|
since
December 1,
2005
|
|||||||||
The
above table does not include
certain perquisites and other personal benefits, the total value of which does
not exceed $10,000. There were no options awarded in 2006. There are
no employment agreements, stock appreciation rights, pension plans or long-term
incentive plans or deferred compensation plans. No options were exercised in
2006.
11
Outstanding
Equity
Awards at December 31, 2006
|
Name
|
Number
of
Securities Underlying Unexercised Options (1)
|
Option
Exercise Price
|
Option
Expiration Date
|
||||||||
|
Barry
Hertz
|
50,000
|
$5.00
|
01/22/08
|
||||||||
|
50,000
|
$6.25
|
01/22/08
|
|||||||||
|
100,000
|
$7.50
|
03/11/09
|
|||||||||
|
Martin
Kaye
|
20,000
|
$5.00
|
01/22/08
|
||||||||
|
20,000
|
$6.25
|
01/22/08
|
|||||||||
|
40,000
|
$7.50
|
03/11/09
|
|||||||||
|
50,000
|
$3.00
|
12/27/10
|
|||||||||
|
Stanley
Stern
|
2,000
|
$5.00
|
01/22/08
|
||||||||
|
2,000
|
$6.25
|
01/22/08
|
|||||||||
|
4,000
|
$7.50
|
03/11/09
|
|||||||||
|
10,000
|
$3.00
|
12/27/10
|
|||||||||
|
David
Drillick
|
2,000
|
$5.00
|
01/22/08
|
||||||||
|
2,000
|
$6.25
|
01/22/08
|
|||||||||
|
4,000
|
$7.50
|
01/04/09
|
|||||||||
|
10,000
|
$3.00
|
12/27/10
|
|||||||||
(1)
All outstanding options are presently exercisable.
Directors
Compensation Table
|
Name
|
Fees
Earned
or Paid in Cash
|
All
Other
Compensation
|
Total
|
||||
|
E.
Bruce Fredrikson
|
$15,000
|
$1,500
|
$16,500
|
||||
|
Abraham
Biderman
|
$15,000
|
$1,500
|
$16,500
|
||||
|
Philip
Ort
|
$15,000
|
$1,000
|
$16,000
|
||||
|
Shaya
Sofer
|
$15,000
|
$1,000
|
$16,000
|
At
December 31, 2006 the aggregate number of outstanding options for each director
is as follows: E. Bruce Fredrikson – 22,000; Abraham Biderman – 24,000; Philip
Ort – 18,000; and Shaya Sofer – 18,000.
Compensation
Committee Interlocks and Insider Participation
For
the Company's fiscal year ended December 31, 2006, Messrs.
Hertz and Kaye were officers of the Company and were members of the Board of
Directors (there is no compensation committee).
12
Compensation
Committee Report
The
Company does not have a compensation committee. Accordingly, the
entire Board of Directors reviewed and discussed the Compensation Discussion
and
Analysis required by Item 402(b) with management; and based on such review
and
discussions, the Board recommended that the Compensation Discussion and Analysis
be included in the Company's Annual Report on Form 10-K.
Board
of
Directors:
Martin
Kaye
Albert
Drillick
Stanley
Stern
E.
Bruce Fredrikson
Abraham
Biderman
Philip
Ort
Shaya
Sofer
Principal
Accountant Fees and Services
Audit
Fees.
The
audit fees for 2006 and 2005 were $150,000 and $110,000, respectively, for
Marcum & Kliegman LLP. All services provided by independent
accountants were approved by the audit committee.
Audit
Related Fees.
During
the fiscal years 2006 and 2005, Marcum & Kliegman LLP did not render audit
related services.
Tax
Fees.
Tax
fees consisted of representation on tax exams and preparation of tax returns.
The fees were $39,000 in 2006 and $25,000 in 2005 for Marcum & Kliegman
LLP.
All
Other Fees.
During
the Fiscal years 2006 and 2005, Marcum & Kliegman LLP rendered no
professional services other than Audit and Tax matters.
Audit
Committee Pre-Approval Policies and Procedures.
The
Audit Committee is directly and solely responsible for oversight, engagement
and
termination of any independent auditor employed by the Company for the purpose
of preparing or issuing an audit report or related work.
The
Committee:
Meets
with the independent auditor prior to the audit and discusses the planning
and
staffing of the audit;
13
Approves
in advance the
engagement of the independent auditor for all audit services and non-audit
services and approves the fees and other terms of any such
engagement;
Obtains
periodically from
the independent auditor a formal written statement of the matters required
to be
discussed by Statement of Auditing Standards No. 61, as amended, and, in
particular, describing all relationships between the auditor and the Company;
and Discusses with the auditor any disclosed relationships or services that
may
impact auditor objectivity and independence.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
The
Company leases its executive office
facilities in Brooklyn from a limited partnership owned by the Company’s
Principal Stockholder and members of his family. The Company paid the
partnership rent of $630,000 and $623,000 for the years ended
December 31, 2006 and 2005, respectively. The lease provided for the
Company to pay $630,000 per annum through April 1, 2006. The Company has since
paid at the same rate without a lease.
In
connection with the Company's
arbitrage trading program, the Company's Principal Stockholder pledged
approximately 1.8 million shares of his holdings of the Company's common stock
as additional collateral for the arbitrage trading accounts. The
Company is paying its Principal Stockholder at the rate of 2% per annum on
the
value of the collateral pledged. Such payments aggregated $42,000 and
$44,000 for the years ended December 31, 2006 and 2005,
respectively.
The
Company's Principal Stockholder had
a margin loan of approximately $3 million as a customer of the Company's
broker-dealer that was collateralized by 2.5 million of the Company's shares
owned by him. The loan was repaid in November 2005.
In
2005, the Company's Principal Stockholder sold 300,000 shares of the Company's
common stock to the Company for $837,000.
In
April 2006, the Company's Principal Stockholder formed a private limited
partnership of which he is the general partner for the purpose of operating
a
hedge fund for trading in certain options strategies. The Company has
no financial interest in or commitments related to, the hedge
fund. The hedge fund opened a trading account with the Company's
broker-dealer. The Company charged commissions to the hedge fund
totaling $89,000 for the year ended December 31, 2006.
The
Company has an employee savings program under which employees may make deposits
and receive interest at the prime rate. As of December 31, 2006, the Company’s
Chief Financial Officer (also Chief Executive Officer since March 16, 2007)
had
deposits in the program of $479,000 and received interest of $32,000 and $16,000
during the years ended December 31, 2006 and 2005, respectively.
The
Company does not have any written policies and procedures for review, approval
or ratification of any transaction required to be reported as related party
transactions. The Board of Directors determines in each matter, based
on their review of the transaction, whether to approve such
transaction. The Board policy is to obtain approval of a majority of
the indendent directors and a majority of the entire
Board. Continuing transactions will be reviewed
annually.
14
Corporate
Governance
The
Board of Directors has determined each of the following directors to be an
“independent director” as defined in Rule 4200(a)(15) of the listing standards
of the NASDAQ Stock Market: E. Bruce Fredrikson, Abraham Biderman, Phillip
Ort
and Shaya Sofer.
The
Company has a separately designated
standing audit committee established in accordance with Section 3(a)(58)(A)
of
the Exchange Act. Serving on the Committee are Dr. E. Bruce Fredrikson, Abraham
Biderman, and Philip Ort. The Board of Directors has determined that it has
an
audit committee financial expert serving on the audit committee, Abraham
Biderman. Mr. Biderman is an independent director as defined in item 7(d)(3)(iv)
of Schedule 14A.
The
Board of Directors does not have a Compensation Committee or a Nominating
Committee. In accordance with NASDAQ Stock Market’s Marketplace Rule 4200, a
majority of “independent” directors is required to recommend and approve the
compensation of executive officers.
15
ITEM
II. RATIFICATION OF APPOINTMENT OF INDEPENDENT
AUDITORS
Subject
to approval by the
stockholders, the Board of Directors has appointed Marcum & Kliegman LLP as
the independent auditors to audit the financial statements of the Company for
the fiscal year ending December 31, 2007. Marcum & Kliegman LLP
also served as the Company's auditors for the fiscal year ended December 31,
2006 and 2005. It is expected that a representative of Marcum & Kliegman LLP
will be present at the Annual Meeting with the opportunity to make a statement
if he desires to do so and to be available to respond to appropriate questions
from stockholders.
In
the event that the stockholders fail
to ratify this appointment, other certified public accountants will be
considered upon recommendation of the Audit Committee. Even if this
appointment is ratified, our Board of Directors, in its discretion, may direct
the appointment of a new independent accounting firm at any time during the
year, if the Board believes that such a change would be in the best interest
of
the Company and its stockholders.
THE
BOARD OF
DIRECTORS UNANIMOUSLY RECOMMENDS YOU VOTE FOR RATIFICATION OF THE APPOINTMENT
OF
MARCUM & KLIEGMAN LLP AS INDEPENDENT AUDITORS
VOTE
REQUIRED
Election
of
Directors. Directors will be elected at the meeting by a
plurality of the votes cast (i.e., the seven nominees receiving the greatest
number of votes will be elected as Directors).
Ratification
of the Appointment of
Independent Auditors. The appointment of Marcum & Kliegman
LLP as independent auditors requires the affirmative vote of a majority of
the
shares present in person or represented by proxy at the meeting and entitled
to
vote on the matter. Abstentions will have the same effect as a vote
against such ratification, whereas broker non-votes and shares not represented
at the meeting will not be counted for purposes of determining whether such
ratification has been approved.
EXPENSE
OF
SOLICITATION
The
cost of soliciting proxies, which also includes the
preparation, printing and mailing of the Proxy Statement, will be borne by
the
Company. Solicitation will be made by the Company primarily through
the mail, but regular employees of the Company may solicit proxies personally,
by telephone or telegram. The Company will request brokers and
nominees to obtain voting instructions of beneficial owners of the stock
registered in their names and will reimburse them for any expenses incurred
in
connection therewith.
16
PROPOSALS
OF
STOCKHOLDERS
Stockholders
of the Company who intend to present a proposal for
action at the next Annual Meeting of Stockholders of the Company must notify
the
Company's management of such intention by notice in writing received at the
Company's principal executive offices on or before May 23, 2008 in order for
such proposal to be included in the Company's Proxy Statement and form of proxy
relating to such Meeting. Stockholders who wish to present a proposal
for action at the next Annual Meeting are advised to contact the Company as
soon
as possible in order to permit the inclusion of any proposal in the Company's
proxy statement.
ANNUAL
REPORT
A
copy of our Annual Report on Form
10-K for the 2006 Fiscal Year has been mailed concurrently with this Proxy
statement to all stockholders entitled to notice of and to vote at the Annual
Meeting. The annual report is not incorporated into the Proxy
Statement and is not considered proxy solicitation material.
OTHER
MATTERS
The
Company knows of no items of
business that are expected to be presented for consideration at the Annual
Meeting which are not enumerated herein. However, if other matters properly
come
before the Meeting, it is intended that the person named in the accompanying
Proxy will vote thereon in accordance with his best judgement.
PLEASE
DATE, SIGN AND RETURN THE PROXY CARD AT
YOUR EARLIEST CONVENIENCE IN THE ENCLOSED RETURN ENVELOPE. NO POSTAGE IS
REQUIRED IF MAILED IN THE UNITED STATES. A PROMPT RETURN OF YOUR PROXY CARD
WILL
BE APPRECIATED AS IT WILL SAVE THE EXPENSE OF FURTHER
MAILINGS.
|
Brooklyn,
New
York
October
25,
2007
|
By
Order of the
Board of Directors
|
|
|
Martin
Kaye,
Secretary
|
||
17
PROXY
TRACK
DATA CORPORATION
ANNUAL
MEETING OF STOCKHOLDERS
THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The
undersigned Stockholder of Common Stock of Track Data Corporation (the
"Company") hereby revokes all previous proxies, acknowledges receipt of the
Notice of the Meeting of Stockholders to be held on Thursday, December 6, 2007
and hereby appoints Martin Kaye, as proxies of the undersigned, with full power
of substitution, to vote and otherwise represent all of the shares of the
undersigned in the Company at said meeting and at any adjournments thereof
with
the same effect as if the undersigned were present and voting the
shares. The shares represented by this proxy shall be voted on the
following matters and, in their discretion, upon any other business which may
properly come before said meeting.
1.
Election of Directors:
|
o
|
For
all nominees
listed below
(except
as
indicated)
|
o
|
Withhold
authority
to
vote for
all
nominees
listed
below
|
To
withhold authority for any individual nominee, strike through that nominee's
name in the list below.
|
Martin
Kaye
|
Albert
Drillick
|
Stanley
Stern
|
|||
|
Abraham
Biderman
|
E.
Bruce
Fredrikson
|
Phillip
Ort
|
|||
|
Shaya
Sofer
|
2.
Ratification of the selection of Marcum & Kliegman LLP as independent
auditors:
|
o
|
For
|
o
|
Against
|
o
|
Abstain
|
THE
SHARES REPRESENTED BY THIS PROXY, DULY EXECUTED, WILL BE VOTED IN ACCORDANCE
WITH THE SPECIFICATIONS MADE. IF NO SPECIFICATION IS MADE, THE SHARES
REPRESENTED BY THIS PROXY WILL BE VOTED IN FAVOR OF EACH OF THE ABOVE NOMINEES,
FOR SELECTION OF MARCUM & KLIEGMAN LLP AS INDEPENDENT AUDITORS, AND FOR SUCH
OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING AS THE PROXYHOLDERS DEEM
ADVISABLE.
Dated:
______________,
2007
Signature(s)
of
Stockholder _______________________________
(Title,
if
appropriate) ____________________________________
This
proxy should be signed by the Stockholder(s) exactly as his or her name appears
hereon. Persons signing in a fiduciary capacity should so
indicate. If shares are held by joint tenants or as community
property, each owner should sign. If a corporation, please sign in
full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
TO
ASSURE YOUR REPRESENTATION AT THE ANNUAL MEETING, PLEASE MARK, SIGN AND DATE
THIS PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.