Last evening, On Track Innovations (OTIV) filed notice for their annual meeting to be held on November 9, 2012. Included in this notice is a proxy solicitation for three board seats, and in my opinion, neither of the three candidates represent OTIV shareholders' best interests. None of the candidates offer any experience in the NFC (Near Field Communications) industry. Nor do any of the candidates have a background in intellectual property, a value that the company places great emphasis in their press releases.
With complete disregard to OTIV shareholders who have been demanding changes in company management and a stronger voice on the board, the OTIV board nominating committee has chosen nominees who, in my opinion, will just be "stooges" for an ineffective management team. These candidates offer no legitimate support of share holder interests, in my opinion, and standing up these board candidates demonstrates management's bad faith relating to shareholders.
The annual meeting proxy failed to address the dual role of Oded Bashan, the company chairman of the board and CEO. As previously reported in a Seeking Alpha article, this role must be approved every 3 years by shareholders. The failure of the company to include this vote in the proxy is a clear indication to me that Oded Bashan intends to keep this dual role as chairman and CEO, with complete disregard to shareholders who want to see a new management team in place
Furthermore, the proxy solicitation does NOT allow for on line voting. And in an unprecedented move that I have never seen in over 25 years of investing, the company requires that a photo ID (passport or driver's license) be included with the proxy vote. It is unclear to me whether this tactic is legal. I believe that the company is going to a great length to invalidate shareholder votes, and I caution every shareholder to pay particular attention to this issue. In my opinion, this attempt by the OTIV management team to make the proxy solicitation a chore for shareholders, will fail. The same shareholders who voted against increasing authorized shares to fund a poison pill package in March, 2012, will surely vote against any management board nominees, especially when management has nominated these individuals without shareholder consultation.
To conclude, this proxy runs afoul of shareholder wishes, and it demonstrates management disregard for shareholder interest and value. In my opinion, this board of directors and the management team should be removed and replaced with a shareholder friendly board and management team.
Disclosure: I am long OTIV.