February 2, 2005
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of the Stockholders
of Synergx Systems Inc., a Delaware corporation ("Synergx" or the "Company") to
be held at the offices of Dolgenos Newman & Cronin LLP, 96 Spring Street, 8th
Floor, New York, New York 10012, on March 10, 2005 at 11:00 a.m.
At the meeting you will be asked to consider and vote upon (a) the election
of seven (7) Directors to Synergx's Board of Directors; (b) the appointment of
Marcum & Kliegman LLP as Synergx's Auditors for the fiscal year ending September
30, 2005; and (c) any other business that properly comes before the meeting or
any adjournments or postponements thereof.
Your vote is important. We urge you to complete, sign, date and return the
enclosed proxy card promptly in the accompanying prepaid envelope. You may, of
course, attend the Meeting and vote in person, even if you have previously
returned your proxy card.
Sincerely yours,
Joseph Vitale,
President and Chief Operating Officer
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held on March 10, 2005
To the Stockholders of
Synergx Systems Inc.
Notice is hereby given that the Annual Meeting of Stockholders of Synergx
Systems Inc., a Delaware corporation ("Synergx" or the "Company") will be held
at 11:00 a.m., local time, on March 10, 2005 at the offices of Dolgenos Newman &
Cronin LLP, 96 Spring Street, 8th Floor, New York, New York, for the following
purposes:
(1) To consider and vote upon the election of the Board of Directors
consisting of seven (7) persons to serve until the next annual meeting of the
stockholders;
(2) To consider and vote upon a proposal to ratify the selection of Marcum
& Kliegman LLP as Synergx's independent auditors for the fiscal year ending
September 30, 2005;
(3) To conduct such other business as may properly come before the Annual
Meeting or any adjournments or postponements thereof.
Although all stockholders are invited to attend the Annual Meeting, only
stockholders of record at the close of business on January 31, 2005, are
entitled to notice of and to vote at the Annual Meeting. A list of stockholders
entitled to vote at the Annual Meeting will be open to examination by
stockholders during regular business hours at the Company's principal executive
offices from January 31, 2005, through the Annual Meeting date and at the Annual
Meeting.
By Order of the Board of Directors
John A. Poserina
Secretary, Synergx Systems Inc.
February 2, 2005
Syosset, New York
TO ASSURE YOUR REPRESENTATION AT THE ANNUAL MEETING OF STOCKHOLDERS PLEASE
SIGN, DATE AND RETURN YOUR PROXY IN THE ENCLOSED ENVELOPE WHETHER OR NOT YOU
EXPECT TO ATTEND IN PERSON. STOCKHOLDERS WHO ATTEND THE MEETING MAY REVOKE THEIR
PROXIES AND VOTE IN PERSON IF THEY DESIRE.
PROXY STATEMENT
SYNERGX SYSTEMS INC.
SOLICITATION OF PROXIES
The accompanying Proxy is solicited on behalf of the Board of Directors of
Synergx Systems Inc. (the "Company") for use at the Annual Meeting of
Stockholders (the "Annual Meeting") to be held on Wednesday, March 10, 2005, at
11:00 a.m. Eastern Standard Time, or any adjournment thereof, at the offices of
Dolgenos Newman & Cronin LLP, 96 Spring Street, 8th Floor, New York, New York.
The approximate date on which proxy materials are first being sent to
stockholders is February 2, 2005.
The cost of soliciting proxies will be borne by the Company. In addition to
solicitation by mail, officers, directors, and regular employees of the Company
may, without additional compensation, use their personal efforts to solicit
proxies by telephone, telegraph, telecopier or in person. The Company expects to
reimburse brokers, banks, custodians and other nominees for their reasonable
out-of-pocket expenses in handling proxy materials for beneficial owners of the
Common Stock. Should the Company's management deem it necessary, the Company may
also retain the services of a proxy solicitation firm to aid in the solicitation
of proxies for which the Company will pay a fee not expected to exceed $5,000
plus reimbursement for out-of-pocket expenses.
Vote Required
The election of the Company's directors requires a plurality of the votes
represented in person or by proxy at the Annual Meeting. The proposal to ratify
the appointment of Marcum & Kliegman LLP as the Company's independent registered
public accounting firm for the fiscal year ending September 30, 2005 will be
approved if it receives the affirmative vote of the majority of the shares of
Common Stock present or represented and entitled to vote at the Annual Meeting.
Effect of an Abstention and Broker Non-Votes
A stockholder who abstains from voting on any or all proposals will be
included in the number of stockholders present at the Annual Meeting for the
purpose of determining the presence of a quorum. Abstentions will not be counted
either in favor of or against the election of the nominees or any other
proposal. Consequently, abstentions will have no affect on the vote required to
approve the nominees for director or the other proposals being considered at the
Annual Meeting.
If you hold shares of our common stock in your broker's name (sometimes
called "street name" or "nominee name"), then you must provide voting
instructions to your broker. If you do not provide instructions to your broker,
your shares will not be voted on any matter on which your broker does not have
discretionary authority to vote for you. A vote that is not cast for this reason
is called a "broker non-vote." We will treat broker non-votes as shares present
for the purpose of determining whether a quorum is present at the meeting, but
we will not consider them present for purposes of calculating the vote on a
particular matter, nor will we count them as a vote FOR or AGAINST a matter or
as an ABSTENTION on the matter.
Stockholders can ensure that their shares are voted at the Annual Meeting
by signing and returning the enclosed proxy in the envelope provided. Shares of
Common Stock par value $.001 per share ("Common Stock") represented by the
accompanying proxy will be voted if the proxy is properly executed and is
received by the Company prior to the time of voting. Sending in a signed proxy
will not affect a stockholder's right to attend the Annual Meeting and vote in
person. The Company's principal executive offices are located at 209 Lafayette
Drive, Syosset, New York 11791.
Proxies may be revoked at any time prior to the voting thereof by written
notice mailed or delivered to the Secretary, by receipt of a proxy properly
signed and dated subsequent to an earlier proxy, or by revocation by request in
person at the Annual Meeting, but if not so revoked, the shares represented by
such proxy will be voted in accordance with the authority conferred by such
proxy. Where specific choices are not indicated on the proxy, proxies will be
voted in accordance with the recommendations of the Board of Directors.
ANNUAL REPORT
The Annual Report to Stockholders covering operations of the Company for
the fiscal year ended September 30, 2004, including financial statements, is
enclosed herewith and is incorporated herein by reference. FORM 10-KSB, THE
ANNUAL REPORT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, IS AVAILABLE TO
STOCKHOLDERS UPON WRITTEN REQUEST TO THE SECRETARY, SYNERGX SYSTEMS INC., 209
LAFAYETTE DRIVE, SYOSSET, NEW YORK 11791.
OUTSTANDING VOTING SECURITIES AND RECORD DATE
Only stockholders of record at the close of business on January 31, 2005
will be entitled to notice of and to vote at the Annual Meeting, each share
being entitled to one vote. Common Stock is the only class of capital stock
which has been issued by the Company. As of the close of business on January 10,
2005, there were 5,140,196 outstanding shares of Common Stock entitled to be
voted at the meeting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth as of January 10, 2005, the Company's best
knowledge of the amount of Common Stock beneficially owned and the percentage of
Common Stock so owned with respect to: (a) the persons or groups known to the
Company to be the beneficial owner of more than five percent of the Common Stock
of the Company; (b) certain executive officers of the Company; (c) each director
of the Company; and (d) all executive officers and directors of the Company as a
group.
Number of Shares Percent of Shares
--------------------------------------
Genterra Inc.(1) 1,574,290 30.63%
Daniel S. Tamkin (2) 255,468 4.38%
Joseph Vitale (3, 4) 34,250 nil
Henry Schnurbach 10,334 nil
John A. Poserina (3, 5) 32,334 nil
Dennis P. McConnell (6) 0 nil
Mark Litwin (8) 1,624,290 31.60%
J. Ian Dalrymple (9) 0 nil
All Executive Officers and
Directors as a Group (7 Persons) 1,935,012 37.32%
- ----------------------
(1) Address is 106 Avenue Road, Toronto, Ontario.
(2) Includes 11,668 shares of Common Stock issuable upon exercise of options
granted by the Company. Address is 96 Spring Street, New York, NY.
(3) Address is 209 Lafayette Drive, Syosset, NY 11791.
(4) Includes 24,252 shares of common stock issuable upon exercise of options
granted by the Company.
(5) Includes 9,334 shares of Common Stock issuable upon exercise of options
granted by the Company.
(6) Address is 96 Spring Street, New York, NY.
(7) Reserved
(8) By virtue of his position as an officer and/or director of such entities,
Mr. Litwin may be considered the beneficial owner of shares owned by
Genterra Inc. Mr. Litwin expressly disclaims such beneficial ownership.
Address is 106 Avenue Road, Toronto, Ontario.
(9) Address is 1200 Sheppard Avenue East, Willowdale, Ontario.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Seven (7) directors will be elected to hold office duly until the next
Annual Meeting of Stockholders and until their successors have been elected and
duly qualified. The persons named on the accompanying proxy will vote all shares
for which they have received proxies for the election of the nominees named
below unless contrary instructions are given. In the event that any nominee
should become unavailable, shares will be voted for a substitute nominee unless
the number of directors constituting a full board is reduced. Directors are
elected by plurality vote.
NOMINEES
The name, age and position with the Company of each nominee for director of the
Company is listed below, followed by summaries of the background and principal
occupations.
DATE
SERVICE
NAME AGE OFFICE COMMENCED
Daniel S. Tamkin 45 Chairman, Chief October 1990
Executive Officer,
General Counsel,
Director, and
Audit Committee
Joseph Vitale 58 President, Chief May 1994
Operating Officer
and Director
John A. Poserina 64 Treasurer, Vice January 1997
President, Chief
Financial Officer,
Secretary and
Director
Dennis P. McConnell 51 Director and January 1997
Audit Committee
Henry Schnurbach 53 Director and October 1988
Audit Committee
J. Ian Dalrymple 53 Director May 2002
Mark I. Litwin 42 Director May 2002
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH OF THE
NOMINEES.
Information Concerning Current Directors and Nominees for Director
Mr. Tamkin has a J.D. degree from New York University School of Law and an
A.B. degree from Columbia University. Mr. Tamkin has been Chief Executive
Officer since March 15, 1996, prior to which Mr. Tamkin was Vice President and
General Counsel of the Company from October 1990. Also since October 1990, Mr.
Tamkin has been Executive Vice President of Forum Financial Corporation, a
Toronto based merchant banking organization. Since November 1998, Mr. Tamkin has
been a Director, President and Chief Operating Officer of Camtx Corporation, a
manufacturer of textile products. Mr. Tamkin is presently Counsel to Dolgenos
Newman & Cronin LLP, counsel to the Company. Mr. Tamkin devotes a portion of his
time working on behalf of these other entities.
Mr. Vitale has been President of the Company since March 15, 1996. Mr.
Vitale has been active in the fire/communications industry with Casey Systems
Inc. since 1982. Mr. Vitale has been President of Casey since 1993 and has held
the positions of Director of Engineering, Vice President - Engineering and
Executive Vice President. Mr. Vitale holds a Bachelor of Science degree in
Engineering from C.W. Post College and a Master of Science degree in Electrical
Engineering from New York University.
Mr. Poserina joined the Company as Treasurer, Vice President, Chief
Financial Officer and Director as of January 1, 1997. From December 1995 until
he joined the Company, Mr. Poserina was an independent financial consultant.
Also, from July 1996 to September 1996, Mr. Poserina was Chief Financial Officer
of Happiness Express Inc. Mr. Poserina was Chief Financial Officer of Dorne and
Margolin Inc. from November 1994 to December 1995. Prior to that, Mr. Poserina
spent 15 years as Vice President, Treasurer and Chief Financial Officer of
Chryon Corporation, which was a NYSE listed company registered under the
Securities Exchange Act of 1934 (the "Exchange Act"). Mr. Poserina holds a
Bachelor of Science degree in accounting from the University of Rhode Island and
is a Certified Public Accountant.
Mr. McConnell is a partner in the firm of Dolgenos Newman & Cronin LLP,
counsel to the Company. Prior to being associated with Dolgenos Newman & Cronin
LLP, he was associated with Varet & Fink P.C. from 1989 to March 1993. Mr.
McConnell holds a J.D. degree from New York Law School.
Mr. Schnurbach has a Bachelor of Commerce degree from Sir George Williams
University and is a Certified Management Accountant in Ontario. Since October
1991, Mr. Schnurbach has been Chief Executive Officer of Cantar/Polyair
Corporation ("CPC"). Since February 1996, Mr. Schnurbach has also served as
President and director of Polyair Inter Pack Inc., an Ontario corporation
registered under the Exchange Act and traded on the Toronto and American Stock
Exchanges.
Mr. Dalrymple has a Bachelor of Commerce degree and a Masters of Arts in
Economics from the University of Toronto. Since 1990, Mr. Dalrymple has been a
director of Nigel Stephens Counsel Inc., an Ontario corporation, which provides
investment and portfolio management services; NSC Holdings Inc., an Ontario
corporation which provides investment research and client administrative
services; and Fordal Holdings Inc., an Ontario corporation which provides
trading, settlement and related services to portfolio management firms. Mr.
Dalrymple is also a director of Cornerstone 52 Foundation, a charitable
foundation with focus on children's charities. In addition, Mr. Dalrymple has
been, since 1993, a director of Nafund Inc., an Ontario investment corporation
and, since 1996, a director of Nafund Administrators Inc., an Ontario
corporation originating merchant banking investments and advisory services.
Mr. Litwin has a Bachelor of Arts and a Masters in Business Administration
from York University in Toronto, Canada. Since 1990, Mr. Litwin has been the
President, Chief Executive Officer and a director of Genterra Inc. an Ontario
corporation which is registered under the Exchange Act. Genterra is the largest
stockholder of Synergx.
There are no family relationships between any Director or Executive Officer
of Synergx and any other Director or Executive Officer of Synergx.
Directors hold office for a period of one year from the Annual Meeting of
Stockholders at which they are elected or until their successors are duly
elected and qualified. Officers are appointed by the Board of Directors and hold
office at the will of the Board.
There were seven meetings of the Board of Directors of the Company during
the fiscal year ended September 30, 2004 (some actions were taken by unanimous
consent). All directors attended 75% or more meetings of the Board of Directors.
During the fiscal year ended September 30, 2004, non-employee directors
were compensated at a rate of $2,000 annually plus $100 for each meeting
attended.
Nominating Committee
We have not established a Nominating Committee nor have we adopted a
charter for the nominating process. Currently, the entire board performs the
functions of a nominating committee, including identifying individuals qualified
to become board members, recommending nominees to fill vacancies in the
membership of the board as they occur and, prior to each annual meeting of
stockholders, recommending director nominees for election at such meeting, and
making recommendations concerning the size and composition of the board. Board
candidates are considered based upon various criteria, such as skills,
knowledge, perspective, broad business judgment and leadership, relevant
specific industry or regulatory affairs knowledge, business creativity and
vision, experience, and any other factors appropriate in the context of an
assessment of the needs of the board at that time. In addition, the board will
consider whether the individual satisfies criteria for independence as may be
required by applicable regulations and personal integrity and judgment.
Accordingly, we seek to attract and retain highly qualified directors who have
sufficient time to attend to their substantial duties and responsibilities to
the Company.
The board has the sole authority to retain, compensate and terminate any
search firm or firms to be used in connection with the identification,
assessment, and/or engagement of directors and director candidates. No such firm
has been retained by the Company in the past.
The board will consider proposed nominees whose names are submitted to it
by stockholders; however, it does not have a formal process for that
consideration. The Company has not adopted a formal process because it believes
that the informal consideration process has served the board's and the
stockholders' needs. The board intends to review periodically whether a more
formal policy should be adopted. If a stockholder wishes to suggest a proposed
name for board consideration, the name of that nominee and related personal
information should be forwarded to the board, in care of the corporate
Secretary, at least six months before the next annual meeting to assure time for
meaningful consideration by the board.
Stockholder Communication with Board Members
Although the Company has not to date developed formal processes by which
stockholders may communicate directly to directors, it believes that the
informal process, in which stockholder communications which are received by the
Secretary for the board's attention are forwarded to the board, has served the
board's and the stockholders' needs. In view of recently adopted Securities and
Exchange Commission disclosure requirements relating to this issue, the board
may consider development of more specific procedures. Until any other procedures
are developed and posted on the Company's corporate website, any communications
to the board of directors should be sent to it in care of the Secretary.
AUDIT COMMITTEE
The Corporation has a standing audit committee, with a written charter
which is attached as Appendix A , within the Board of Directors which currently
consists of Messrs. Daniel S. Tamkin, Dennis P. McConnell and Henry Schnurbach.
The Board of Directors has determined that, for the fiscal year ended
September 30, 2004, each of Messrs. McConnell and Schnurbach is an "independent
director," as such term is defined by Rule 4200(a)(15) of the National
Association of Securities Dealers' listing standards.
Report of the Audit Committee
The following "Report of the Audit Committee" shall not be deemed
incorporated by reference by any general statement incorporating this Proxy
Statement into any filing under the Securities Act of 1933 (Securities Act), or
under the Exchange Act, except to the extent that the Company specifically
incorporates this information by reference, and shall not otherwise be deemed
filed under the Securities Act or the Exchange Act.
The Audit Committee has reviewed and discussed the audited financial
statements with management. The Audit Committee has discussed with the
independent registered public accountants the matters required to be discussed
by Statement of Auditing Standards No. 61, "Communication with Audit
Committees," as may be modified or supplemented. The Audit Committee has
received the written disclosures and the letter from the independent registered
public accountants required by Independence Standards Board Standard No. 1, as
may be modified or supplemented, and has discussed with the independent
registered public accountants their independence. Based on the review and
discussions referred to above in this report, 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 last fiscal year for filing with
the SEC.
AUDIT COMMITTEE
Daniel S. Tamkin, Chairman
Henry Schnurbach
Dennis P. McConnell
MANAGEMENT
The following table sets forth certain information with respect to the
Executive Officers of the Company:
DATE SERVICE
NAME AGE OFFICE COMMENCED
Daniel S. Tamkin 45 Chairman, Chief October 1990
Executive Officer,
General Counsel,
Director, and
Audit Committee
Joseph Vitale 58 President, Chief May 1994
Operating Officer
and Director
John A. Poserina 64 Treasurer, Vice January 1997
President, Chief
Financial Officer,
Secretary and
Director
Mr. Tamkin's biographical information is included under "Information
Concerning Current Directors and Nominees for Directors" in this Proxy
Statement.
Mr.Vitale's biographical information is included under "Information
Concerning Current Directors and Nominees for Directors" in this Proxy
Statement.
Mr. Poserina's biographical information is included under "Information
Concerning Current Directors and Nominees for Directors" in this Proxy
Statement.
EXECUTIVE COMPENSATION
The following table sets forth certain information with respect to
compensation paid or accrued by the Company for services rendered to it for each
of the three fiscal years ended September 30, 2004, as to Daniel S. Tamkin, the
Company's present Chief Executive Officer, Joseph Vitale, the Company's
President and Chief Operating Officer, and John A. Poserina, the Company's Chief
Financial Officer and Secretary; none of the Company's other Executive Officers
had aggregate remuneration in excess of $100,000.
SUMMARY COMPENSATION TABLE
LONG
ANNUAL COMPENSATION TERM COMPENSATION
All Other
Year Salary ($) Bonus($) Other($) Option/SAR Compensation
-----------------------------------------------------------------------------------------
Daniel S. Tamkin
2004 $111,000 $20,000 $2,000 - -
2003 102,000 25,000 2,000 - -
2002 97,000 2,000 - -
Joseph Vitale
2004 $156,000 $20,000 $9,000 - -
2003 147,000 25,000 7,000 - -
2002 140,000 6,000 - -
John A. Poserina
2004 $168,000 $20,000 $9,000 - -
2003 158,000 25,000 6,000 - -
2002 151,000 5,600 - -
The following table details, as of September 30, 2004, the number and value
of option exercises and value of unexercised in-the-money options held by Daniel
S. Tamkin, Joseph Vitale and John A. Poserina:
Number of Value Number of Securities Value of Unexercised
Shares Acquired Realized Underlying Unexercised Options In-The-Money Options(1)
On Exercise Exercisable/Unexercisable Exercisable/Unexercisable
-------- --------- ---------- ------------ ----------- -------------
Daniel S. Tamkin 10,000 $25,575 11,668 -- $36,337 $ --
Joseph Vitale 10,000 $28,000 24,252 -- 75,549 --
John A. Poserina 10,000 $28,375 7,334 -- 29,169 --
- - - ------
(1) Net value, calculated as the difference between the exercise price and the
market price reported for September 30, 2004 ($2.83-bid, $3.09-ask ).
In December 1995, the Board of Directors voted to institute a 401(k) plan
for nonunion employees to be effective January 1, 1996. The plan includes a
profit sharing provision at the discretion of the Board of Directors. In the
years ending September 30, 2004 and 2003, the Board of Directors approved a
payment totaling $43,000 and $29,000, respectivley, for participants of the
non-union 401(k) plan.
The Company currently has issued and outstanding options to purchase 72,246
shares of its Common Stock, at various exercise prices ranging between $0.50 and
$0.56 per share, to certain of its officers, Directors and employees. See
"SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT."
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and certain officers and persons who own more than 10% of a registered
class of the Company's equity securities to file within certain specified time
periods reports of ownership and changes in ownership with the SEC. Such
officers, directors and shareholders are required by SEC regulations to furnish
the Company with copies of all such reports that they file. Based solely on a
review of copies of reports filed with the SEC since October 1, 2003, and
written representations by certain officers and directors, all persons subject
to the reporting requirements of Section 16(a) filed the required reports on a
timely basis during the Company's fiscal year 2004 with the exception of the
following: (i) On January 15, 2004, Investors Money Management Corporation filed
a late Form 4 detailing five transactions selling an aggregate of 225,000 shares
of common stock; and (ii) on May 12, 2004, Dennis P. McConnell filed a late Form
4 detailing two exercises of Company issued stock purchase options aggregating
8,334 shares of common stock.
Code of Business Conduct and Ethics
On January 24, 2005, the Company adopted a Code of Business Conduct and
Ethics that applies to our directors, officers and employees in the performance
of their responsibilities with respect to the Company's business. The Company's
Code of Business Conduct and Ethics is available on the Company's website at
www.synergxsystems.com under the Corporate Governance section, and are available
in print to any shareholder upon written request to the Secretary of the
Company.
Certain Relationships and Related Transactions
In 1985, Casey Systems Inc, a wholly owned subsidiary of the Company,
entered into a royalty agreement with Joseph Vitale, prior to his becoming the
President and Chief Operating Officer of the Company. The agreement pays Mr.
Vitale a royalty on certain systems marketed and serviced by Casey. In fiscal
year ended September 30, 2004, Casey paid $75,852 pursuant to the terms of the
agreement.
Management believes the foregoing transaction was entered into on terms at
least as favorable as could be obtained from unrelated parties negotiating at
arms-length. The following table summarizes fees for professional services
rendered by the principal accountant for the most recent fiscal years:
Audit Fees 2003 2004
Audit-Related Fees $53,500 $53,163
Tax Fees $22,000 $23,030
All Other Fees $12,865 $ 2,268
PROPOSAL NUMBER 2
RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors of Synergx selected Marcum & Kliegman LLP as
auditors for the fiscal year ending September 30, 2005, subject to stockholder
approval by ratification. Marcum & Kliegman LLP has been since September 2000,
the independent auditors for Synergx. A representative of Marcum & Kliegman LLP
is expected to be present at the Annual Meeting, at which time he or she will be
afforded an opportunity to make a statement, and will be available to respond to
questions.
The Board of Directors of Synergx may, in its discretion, direct
appointment of new independent auditors at any time during the fiscal year if
the Board believes such change would be in the best interests of Synergx and its
stockholders. No such change is anticipated.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF MARCUM &
KLIEGMAN LLP FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 2005.
OTHER BUSINESS
The proxy confers discretionary authority on the proxies with respect to
any other business which may come before the Annual Meeting. The Board of
Directors of Synergx knows of no other matters to be presented at the Annual
Meeting. The persons named in the proxy will vote the shares for which they hold
proxies according to their best judgment if any matters not included in this
Proxy properly come before the meeting, unless the contrary is indicated.
STOCKHOLDER PROPOSALS
Any stockholder proposal to be included in the proxy statement and form of
proxy relating to the 2005 Annual Meeting of Synergx Stockholders must be
received by the close of business on September 30, 2005 and must comply in all
other respects with the rules and regulations of the Securities and Exchange
Commission. Proposals received after that date will be considered untimely.
Proposals should be addressed to: Corporate Secretary, Synergx Systems Inc., 209
Lafayette Drive, Syosset, NY 11791.
APPENDIX A
SYNERGX SYSTEMS INC.
AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
CHARTER
I. PURPOSE
The primary function of the Audit Committee is to assist the Board of
Directors in fulfilling its oversight responsibilities by reviewing: the
financial reports and other financial information provided by the Corporation to
any governmental body or the public; the Corporation's systems of internal
controls regarding finance, accounting, legal compliance and ethics that
management and the Board have established; and the Corporation's auditing,
accounting and financial reporting processes generally. Consistent with this
function, the Audit Committee should encourage continuous improvement of, and
should foster adherence to, the corporation's policies, procedures and practices
at all levels. The Audit Committee's primary duties and responsibilities are to:
o Serve as an independent and objective party to monitor the Corporation's
financial reporting process and internal control system.
o Review and appraise the audit efforts of the Corporation's independent
accountants and internal auditing controls.
o Provide an open avenue of communication among the independent accountants,
financial and senior management, and the Board of Directors.
The Audit Committee will primarily fulfill these responsibilities by carrying
out the activities enumerated in Section IV. of this Charter.
II.COMPOSITION
The Audit Committee shall be comprised of three or more directors as
determined by the Board, the majority of whom shall be independent directors,
and free from any relationship that, in the opinion of the Board, would
interfere with the exercise of his or her independent judgment as a member of
the Committee. All members of the Committee shall have a working familiarity
with basic finance and accounting practices, and at least one member of the
Committee shall have accounting or related financial management expertise.
Committee members may enhance their familiarity with finance and accounting by
participating in educational programs conducted by the Corporation or an outside
consultant.
A director will not be considered "independent" if, among other things, he
or she has:
o been employed by the corporation or its affiliates in the current or past
three years;
o accepted any compensation from the corporation or its affiliates in excess
of $60,000 during the previous fiscal year (except for board service,
retirement plan benefits, or non-discretionary compensation);
o an immediate family member who is, or has been in the past three years,
employed by the corporation or its affiliates as an executive officer;
o been a partner, controlling shareholder or an executive officer of any
for-profit business to which the corporation made, or from which it
received, payments (other than those which arise solely from investments in
the corporation's securities) that exceed five percent of the
organization's consolidated gross revenues for that year, or $200,000,
whichever is more, in any of the past three years; or
o been employed as an executive of another entity where any of the company's
executive serve on that entity's compensation committee.
The members of the Committee shall be elected by the Board at the annual
organizational meeting of the Board or until their successors shall be duly
elected and qualified. Unless a Chair is elected by the full Board, the members
of the Committee may designate a Chair by majority vote of the full Committee
membership.
III. MEETINGS
The Committee shall meet at least four times annually, or more frequently
as circumstances dictate. As part of its job to foster open communication, the
Committee should meet at least annually with management, the Chief Financial
Officer and the independent accountants in separate executive sessions to
discuss any matters that the Committee or each of these groups believe should be
discussed privately. In addition, the Committee or at least its Chair should
meet with the independent accountants and management quarterly to review the
Corporations financials consistent with IV.4 below.
IV. RESPONSIBILITIES AND DUTIES
To fulfill its responsibilities and duties the Audit Committee shall:
Documents/Reports Review
1. Review and update this Charter periodically, at least annually, as
conditions dictate
2. Review the organization's annual financial statements and any reports or
other financial information submitted to any governmental body, or the
public, including any certification, report, opinion, or review rendered by
the independent accountants.
3. Review the regular internal reports to management prepared by the Chief
Financial Officer and management's response.
4. Review with financial management and the independent accountants the 10-Q
prior to its filing or prior to the release of earnings. The Chair of the
Committee may represent the entire Committee for purposes of this review.
Independent Accountants
5. Recommend to the Board of Directors the selection of the independent
accountants, considering independence and effectiveness and approve the
fees and other compensation to be paid to the independent accountants. On
an annual basis, the Committee should review and discuss with the
accountants all significant relationships the accountants have with the
Corporation to determine the accountants' independence.
6. Review the performance of the independent accountants and approve any
proposed discharge of the independent accountants when circumstances
warrant.
7. Periodically consult with the independent accountants out of the presence
of management about internal controls and the fullness and accuracy of the
organization's financial statements.
Financial Reporting Processes
8. In consultation with the independent accountants and the Chief Financial
Officer, review the integrity of the organization's financial reporting
processes, both internal and external.
9. Consider the independent accountants' judgments about the quality and
appropriateness of the Corporation's accounting principles as applied in
its financial reporting.
10. Consider and approve, if appropriate, major changes to the Corporation's
auditing and accounting principles and practices as suggested by the
independent accountants, management, or the internal auditing department.
Process Improvement
11. Establish regular and separate systems of reporting to the Audit Committee
by each of management, the independent accountants and the Chief Financial
Officer regarding any significant judgments made in management's
preparation of the financial statements and the view of each as to
appropriateness of such judgements.
12. Following completion of the annual audit, review separately with each of
management, the independent accountants and the Chief Financial Officer any
significant difficulties encountered during the course of the audit,
including any restrictions on the scope of work or access to required
information.
13. Review any significant disagreement among management and the independent
accountants in connection with the preparation of the financial statements.
14. Review with the independent accountants, the Chief Financial Officer and
management the extent to which changes or improvements in financial or
accounting practices, as approved by the Audit Committee, have been
implemented. (This review should be conducted at an appropriate of time
subsequent to implementation of changes or improvements, as decided by the
Committee.)
Legal Compliance
15. Ensure that management has the proper review system in place to ensure that
Corporation's financial statements, reports and other financial information
disseminated to governmental organizations, and the public satisfy legal
requirements.
16. Review activities, organizational structure, and qualifications of the
finance department.
17. Review, with the organization's counsel, legal compliance matters including
corporate securities trading policies.
18. Review, with the organization's counsel, any legal and regulatory matters
that could have a significant impact on the organization's financial
statements.
19. Perform any other activities consistent with this Charter, the
Corporation's By-laws and governing law as the Committee or the Board deems
necessary or appropriate.
Reviewed and Accepted:
Daniel S. Tamkin, Chairman Audit Committee
Dennis McConnell, Member Audit Committee
Henry Schnurbach, Member Audit Committee
SHARES SYNERGX SYSTEMS INC. PROXY NO.
209 Lafayette Drive, Syosset, New York 11791
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Daniel S. Tamkin and Dennis P. McConnell as
Proxies, each with the power to appoint his substitute and hereby authorizes
them to represent and to vote, as designated below and on the reverse hereof,
all shares of common stock of Synergx Systems Inc. ("Synergx") held of record by
the undersigned on January 31, 2005 at the annual meeting of stockholders of
Synergx to be held on March 10, 2005 or any adjournments thereof. The
undersigned hereby revokes any proxies heretofore given to vote said shares.
The undersigned hereby acknowledges receipt of Synergx's Annual Report for
2004 and of the Notice of Annual Meeting of Stockholders and attached Proxy
Statement dated February 2, 2005.
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 Proposals 1, and 2.
Please sign exactly as your name appears to the left hereof.
When signing as corporate officer, partner, attorney,
administrator, trustee or guardian, please give your full
title as such.
Dated , 2005
Authorized Signature
Title
Please mark boxes on reverse hereof in blue or black ink. Please date,
sign and return this Proxy Card promptly using the enclosed envelope.
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1. Election of Directors. For all nominees o Withhold Authority o
listed below (except as to vote for all nominees
marked to the contrary listed below
below)
(Instruction: To withhold authority to vote for any individual nominee strike a
line through the nominee's name below.)
Daniel S. Tamkin Dennis P. McConnell Henry Schnurbach Joseph Vitale
John A. Poserina Mark I. Litwin J. Ian Dalrymple
2. To ratify the appointment of Marcum & Kliegman LLP as independent
public accountants for Synergx for the fiscal year ending September 30,
2005.
For Against Abstain