UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
l4A
(Rule
14a-101)
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the Registrant |X|
Filed by
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appropriate box:
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Preliminary
Proxy Statement
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Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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Definitive
Proxy Statement
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Definitive
Additional Materials
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Soliciting
Material Under Rule l4a-l2
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ACCESS
INTEGRATED TECHNOLOGIES, INC.
(Name of
Registrant As Specified In Its Charter)
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(Name
of Person(s) Filing Proxy statement, if Other Than the
Registrant)
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Payment
of Filing Fee (Check the appropriate box):
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computed on table below per Exchange Act Rules l4a-6(i)(4) and
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of each class of securities to which transaction
applies:
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(2)
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Aggregate
number of securities to which transaction
applies:
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(3)
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Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth in the amount on which the filing fee is
calculated and state how it was
determined):
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(4)
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Proposed
maximum aggregate value of
transaction:
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paid previously with preliminary
materials.
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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.
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No.:
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ACCESS
INTEGRATED TECHNOLOGIES, INC.
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
To
Be Held On September 4, 2008
Dear
Fellow Stockholders:
We invite
you to attend the 2008 Annual Meeting of Stockholders of Access Integrated
Technologies, Inc., a Delaware corporation (the “Company”), which will be held
on September 4, 2008, at 2:00 p.m., local time (the “Annual Meeting”), at the
offices of Kelley Drye & Warren LLP, 101 Park Avenue, 29
th
Floor,
New York, New York 10178. At the Annual Meeting, you will be asked to
vote on the following proposals (as more fully described in the Proxy Statement
accompanying this Notice):
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1.
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To
elect eight (8) members of the Company’s Board of Directors to serve until
the 2009 Annual Meeting of Stockholders (or until successors are elected
or directors resign or are
removed).
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2.
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To
amend the Company’s Fourth Amended and Restated Certificate of
Incorporation to designate as Class A all authorized common stock that is
not currently designated as either Class A or Class
B.
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3.
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To
increase the number of shares of Class A Common Stock authorized to be
issued in payment of interest under the Company’s 2007 Senior
Notes.
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4.
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To
amend the Company’s Second Amended and Restated 2000 Equity Incentive Plan
to increase the total number of shares of Class A Common Stock available
for issuance thereunder.
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5.
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To
ratify the appointment of Eisner LLP as our independent auditors for the
fiscal year ending March 31, 2009.
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6.
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To
transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.
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Only
stockholders of record at the close of business on July 18, 2008 are entitled to
notice of and to vote at the Annual Meeting or any adjournment
thereof.
YOUR VOTE
IS VERY IMPORTANT. WE HOPE YOU WILL ATTEND THIS ANNUAL MEETING IN
PERSON, BUT IF YOU CANNOT, PLEASE SIGN AND DATE THE ENCLOSED
PROXY. RETURN THE PROXY IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO
POSTAGE IF MAILED IN THE UNITED STATES. IF YOU ATTEND THE ANNUAL
MEETING, YOU MAY VOTE IN PERSON EVEN IF YOU HAVE RETURNED A PROXY. IF
YOU RECEIVED MORE THAN ONE PROXY CARD, IT IS AN INDICATION THAT YOUR SHARES ARE
REGISTERED IN MORE THAN ONE ACCOUNT. PLEASE COMPLETE, DATE, SIGN AND
RETURN
EACH
PROXY CARD YOU RECEIVE.
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BY
ORDER OF THE BOARD OF DIRECTORS
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A.
Dale Mayo
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President,
Chief Executive Officer and
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Chairman
of the Board of Directors
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Morristown,
New Jersey
Date: July
28, 2008
ACCESS
INTEGRATED TECHNOLOGIES, INC.
55
Madison Avenue, Suite 300
Morristown,
New Jersey 07960
_________________________________
PROXY
STATEMENT
_________________________________
2008
ANNUAL MEETING OF STOCKHOLDERS
SEPTEMBER
4, 2008
GENERAL
This
Proxy Statement is being furnished to the stockholders of ACCESS INTEGRATED
TECHNOLOGIES, INC. (the “Company”) in connection with the solicitation of
proxies by the Board of Directors of the Company (the “Board”). The
proxies are for use at the 2008 Annual Meeting of Stockholders of the Company to
be held on Thursday, September 4, 2008, at 2:00 p.m., local time, or at any
adjournment thereof (the “Annual Meeting”). The Annual Meeting will
be held at the offices of Kelley Drye & Warren LLP, 101 Park Avenue, 29
th
Floor,
New York, New York 10178. The Company’s telephone number is (973)
290-0080.
The
shares represented by your proxy will be voted at the Annual Meeting as therein
specified (if the proxy is properly executed and returned, and not
revoked). You may revoke your proxy at any time before the proxy is
exercised by delivering to the Company’s Secretary, Mr. Gary Loffredo, a written
revocation or a duly executed proxy bearing a later date. You may
also revoke your proxy by attending the Annual Meeting and voting in
person.
The
shares represented by your proxy will be voted as indicated on your properly
executed proxy. If no directions are given on the proxy, the shares
represented by your proxy will be voted:
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·
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FOR
the election of the director nominees named herein (Proposal No. 1),
unless you specifically withhold authority to vote for one or more of the
director nominees.
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·
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FOR
amending the Company’s Fourth Amended and Restated Certificate of
Incorporation to designate as Class A all authorized common stock that is
not currently designated as either Class A or Class B, (Proposal No. 2),
unless you designate otherwise.
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FOR
increasing the number of shares of Class A Common Stock authorized to be
issued in payment of interest under the Company’s 2007 Senior Notes,
(Proposal No. 3), unless you designate
otherwise.
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FOR
amending the Company’s Second Amended and Restated 2000 Equity Incentive
Plan to increase the total number of shares of Class A Common Stock
available for issuance thereunder, (Proposal No. 4), unless you designate
otherwise.
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FOR
ratifying the appointment of Eisner LLP as our independent auditors for
the fiscal year ending March 31, 2009 (Proposal No. 5), unless you
designate otherwise.
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The
Company knows of no other matters to be submitted to the Annual
Meeting. If any other matters properly come before the Annual
Meeting, it is the intention of the persons named in the accompanying form of
proxy to vote the shares they represent as the Board may recommend.
These
proxy solicitation materials are first being mailed to the stockholders on or
about July 28, 2008.
VOTING
SECURITIES
Stockholders
of record at the close of business on July 18, 2008 (the “Record Date”) are
entitled to notice of and to vote at the Annual Meeting. As of the
Record Date, (a) 26,797,817 shares of the Company’s Class A Common Stock, $0.001
par value (“Class A Common Stock”), were issued and outstanding and (b) 733,811
shares of the Company’s Class B Common Stock, $0.001 par value (“Class B Common
Stock,” and together with the Class A Common Stock, the “Common Stock”), were
issued and outstanding.
Each
holder of Class A Common Stock is entitled to one vote for each share of Class A
Common Stock held as of the Record Date. Each holder of Class B
Common Stock is entitled to ten (10) votes for each share of Class B Common
Stock held as of the Record Date. Each share of Class B Common Stock
is convertible at any time at the holder’s option into one (1) share of Class A
Common Stock. Stockholders do not have cumulative voting rights in
the election of directors.
QUORUM;
ABSTENTIONS; BROKER NON-VOTES
A
majority of the aggregate combined voting power of the outstanding shares of
Class A Common Stock and Class B Common Stock as of the Record Date must be
present, in person or by proxy, at the Annual Meeting in order to have the
required quorum for the transaction of business. If the aggregate
voting power of the shares of Common Stock present, in person and by proxy, at
the Annual Meeting does not constitute the required quorum, the Annual Meeting
may be adjourned to a subsequent date for the purpose of obtaining a
quorum.
Shares of
Common Stock that are voted “FOR,” “AGAINST” or “ABSTAIN” are treated as being
present at the Annual Meeting for purposes of establishing a
quorum. Shares that are voted “FOR,” “AGAINST” or “ABSTAIN” with
respect to a matter will also be treated as shares entitled to vote at the
Annual Meeting (the “Votes Cast”) with respect to such
matter. Abstentions will be counted for purposes of quorum and will
have the same effect as a vote “AGAINST” a proposal.
Broker
non-votes (i.e., votes from shares of Common Stock held as of the Record Date by
brokers or other custodians as to which the beneficial owners have given no
voting instructions) will be counted for purposes of determining the presence or
absence of a quorum for the transaction of business, but will not be counted for
purposes of determining the number of Votes Cast with respect to a particular
proposal on which the broker has expressly not voted. Accordingly,
broker non-votes will not affect the outcome of the voting on a
proposal.
DEADLINE
FOR RECEIPT OF STOCKHOLDER PROPOSALS TO BE PRESENTED AT NEXT ANNUAL
MEETING
The
Company currently intends to hold its 2009 Annual Meeting of Stockholders on or
about September 4, 2009. In order for any stockholder proposal
submitted pursuant to Rule 14a-8 promulgated under the Securities Exchange Act
of 1934, as amended (the “Exchange Act”), to be included in the Company’s Proxy
Statement to be issued in connection with the 2009 Annual Meeting of
Stockholders, such stockholder proposal must be received by the Company no later
than March 30, 2009. Any such stockholder proposal submitted,
including any accompanying supporting statement, may not exceed 500 words, as
per Rule 14a-8(d) of the Exchange Act. Any such stockholder proposals
submitted outside the processes of Rule 14a-8 promulgated under the Exchange
Act, which a stockholder intends to bring forth at the Company’s 2009 Annual
Meeting of Stockholders, will be untimely for purposes of Rule 14a-4 of the
Exchange Act if received by the Company after June 13, 2009. All
stockholder proposals must be made in writing addressed to the Company’s
Secretary, Mr. Loffredo, Access Integrated Technologies, Inc., 55 Madison
Avenue, Suite 300, Morristown, New Jersey 07960.
REVOCABILITY
OF PROXY
Any proxy
given pursuant to this solicitation may be revoked by the person giving it at
any time before its use by delivering to the Company’s Secretary, Mr. Loffredo,
a written notice of revocation, a duly executed proxy bearing a later date or by
attending the Annual Meeting and voting in person. Attending the
Annual Meeting in and of itself will not constitute a revocation of a
proxy.
DISSENTERS’
RIGHT OF APPRAISAL
Under
Delaware General Corporation Law and the Company’s Certificate of Incorporation,
stockholders are not entitled to any appraisal or similar rights of dissenters
with respect to any of the proposals to be acted upon at the Annual
Meeting.
SOLICITATION
Proxies
may be solicited by certain of the Company’s directors, executive officers and
regular employees, without additional compensation, in person, or by telephone,
e-mail or facsimile. The cost of soliciting proxies will be borne by
the Company. The Company expects to reimburse brokerage firms, banks,
custodians and other persons representing beneficial owners of shares of Common
Stock for their reasonable out-of-pocket expenses in forwarding solicitation
material to such beneficial owners.
Some
banks, brokers and other record holders have begun the practice of
“householding” proxy statements and annual reports. “Householding” is
the term used to describe the practice of delivering a single set of proxy
statements and annual reports to any household at which two or more stockholders
reside if a company reasonably believes the stockholders are members of the same
family. This procedure would reduce the volume of duplicate
information stockholders receive and would also reduce a company’s printing and
mailing costs. The Company will promptly deliver an additional copy
of either document to any stockholder who writes or calls the Company at the
following address or phone number: Investor Relations, Access Integrated
Technologies, Inc., 55 Madison Avenue, Suite 300, Morristown, New Jersey 07960,
(973) 290-0080.
PROPOSAL
ONE
ELECTION
OF DIRECTORS
The Board
currently consists of eight (8) directors. All eight of the current
members of the Board have been nominated for re-election. Each
nominee has consented to being named as a nominee for election as a director and
has agreed to serve if elected. At the Annual Meeting directors will
be elected to serve one-year terms expiring at the next annual meeting of
stockholders or until successors are elected or until earlier resignation or
removal.
The
directors shall be elected by a plurality of the Votes Cast at the Annual
Meeting. A “plurality” means that the individuals who receive the
largest number of Votes Cast are elected as directors up to the maximum number
of directors to be elected at the Annual Meeting. If any nominee is
not available for election at the time of the Annual Meeting (which is not
anticipated), the proxy holders named in the proxy, unless specifically
instructed otherwise in the proxy, will vote for the election of such other
person as the existing Board may recommend, unless the Board decides to reduce
the number of directors of the Company.
Certain
information about the nominees to the Company’s Board is set forth
below.
A. Dale Mayo, 67,
is a
co-founder of the Company and has been President, Chief Executive Officer
(“CEO”) and Chairman of the Board of Directors (“Chairman”) since the Company’s
inception in March 2000. From December 1998 to January 2000, he had
been the President and CEO of Cablevision Cinemas, LLC (“Cablevision
Cinemas”). In December 1994, Mr. Mayo co-founded Clearview Cinema
Group, Inc. (“Clearview Cinema”), which was sold to Cablevision Cinemas in
1998. Mr. Mayo was also the founder, Chairman and CEO of Clearview
Leasing Corporation, a lessor of computer peripherals and telecommunications
equipment founded in 1976. Mr. Mayo began his career as a computer
salesman with IBM in 1965.
Kevin J. Farrell, 47,
is a
co-founder of the Company and a member of the Board since the Company’s
inception in March 2000 and the Company’s Senior Vice President (“SVP”) –
Facilities since March 2006. From March 2000 to February 2006, he had
been the Company’s SVP - Data Center Operations. From December 1998
to March 2000, he had served as Director of Operations of Gateway Colocation,
LLC, of which he was also a co-founder, where he was responsible for the
completion of 80,000 square feet of carrier neutral colocation space and
supervised infrastructure build-out, tenant installations and daily
operations. Prior to joining Gateway, Mr. Farrell had served, from
1993 to 1998, as Building Superintendent and Director of Facility Maintenance at
the Newport Financial Center in Jersey City, NJ. He is a former
officer of the International Union of Operating Engineers.
Gary S. Loffredo, 43,
has been
the Company’s SVP -- Business Affairs, General Counsel and Secretary, and a
member of the Board since September 2000. From March 1999 to August
2000, he had been Vice President, General Counsel and Secretary of Cablevision
Cinemas. At Cablevision Cinemas, Mr. Loffredo was responsible for all
aspects of the legal function, including negotiating and drafting commercial
agreements, with emphases on real estate, construction and lease
contracts. He was also significantly involved in the business
evaluation of Cablevision Cinemas’ transactional work, including site selection
and analysis, negotiation and new theater construction oversight. Mr.
Loffredo was an attorney at the law firm of Kelley Drye & Warren LLP from
September 1992 to February 1999.
Wayne L. Clevenger, 65,
has
been a member of the Board since October 2001. He has more than 20
years of private equity investment experience. He has been a Managing
Director of MidMark Equity Partners II, L.P. (“MidMark”), a private
equity fund, since 1989. Mr. Clevenger was President of Lexington
Investment Company from 1985 to 1989, and, previously, had been employed by DLJ
Capital Corporation (Donaldson, Lufkin & Jenrette) and INCO Securities
Corporation, the venture capital arm of INCO Limited. Mr. Clevenger
served as a director of Clearview Cinema from May 1996 to December
1998.
Gerald C. Crotty, 56,
has been
a member of the Board since August 2002. Mr. Crotty has served as
President of Weichert Enterprise LLC, a private equity investment firm since
2001. He previously served as Chairman of Excelsior Ventures
Management LLC from 1999 to 2001. From 1991 to 1998, he held various
executive positions with ITT Corporation and its affiliates, including President
and Chief Operating Officer of ITT Consumer Financial Corporation and Chairman,
President and Chief Executive Officer of ITT Information
Services. Mr. Crotty also serves as a director of AXA Premier VIP
Trust and Jones Apparel Group, Inc.
Robert Davidoff, 81,
has been
a member of the Board since July 2000. Since 1990, Mr. Davidoff has
been a Managing Director of Carl Marks & Co., Inc. (“Carl Marks”) and, since
1989, the General Partner of CMNY Capital II, L.P. (“CMNY”), a venture capital
affiliate of Carl Marks. Mr. Davidoff is a director of Rex Stores
Corporation. Mr. Davidoff served as a director of Clearview Cinema
from December 1994 to December 1998.
Matthew W. Finlay, 41,
has
been a member of the Board since October 2001. Since 1997, Mr. Finlay
has been a director of MidMark. Previously, he had been a Vice
President with the New York merchant banking firm Juno Partners and its
investment banking affiliate, Mille Capital, from 1995 to 1997. Mr.
Finlay began his career in 1990 as an analyst with the investment banking firm
Southport Partners.
Robert E. Mulholland, 56,
has
been a member of the Board since January 2006. Mr. Mulholland is
currently the Chairman of Sound Securities LLC, an institutional broker
dealer. Mr. Mulholland retired in 2005 after a 25-year career at
Merrill Lynch & Co. where he most recently served as Senior Vice President
and Executive Committee member and also co-headed Merrill Lynch’s America’s
Region, covering North and South America.
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ELECTION OF THE
NOMINEES NAMED ABOVE.
PROPOSAL
TWO
AMENDMENT
TO THE COMPANY’S
FOURTH
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
The
Company’s Fourth Amended and Restated Certificate of Incorporation (the
“Certificate of Incorporation”) authorizes the issuance of a total of 80,000,000
shares of common stock. Of such shares, 40,000,000 are designated as
Class A Common Stock; 15,000,000 are designated as Class B Common Stock; and
25,000,000 are undesignated. As of July 18, 2008, there were
26,849,257 shares of Class A Common Stock issued and 26,797,817 shares of Class
A Common Stock outstanding and 51,440 shares of Class A Common Stock issued but
not outstanding. Such shares are held in treasury and are available
for re-issuance by the Company. As of July 18, 2008, there are
733,881 shares of Class B Common Stock issued and outstanding. In
addition, the Certificate of Incorporation authorizes the issuance of 15,000,000
shares of preferred stock, none of which are issued and
outstanding.
In
addition to the 26,797,817 shares of Class A Common Stock currently outstanding,
the Company has 7,764,536 shares of Class A Common Stock reserved for issuance
pursuant to (a) the exercise of outstanding warrants, (b) the Company’s Second
Amended and Restated Equity Incentive Plan, (c) the senior notes issued by the
Company to investors in August 2007, both for payment of additional interest
shares required and for payment of interest through
the
original maturity in August 2010 under the 2007 Senior Notes (as defined in
Proposal 3 below), and (d) the conversion of the Class B Common
Stock.
The
aggregate number of outstanding and reserved shares of Class A Common Stock is
34,562,353, leaving only 5,437,647 shares of Class A Common Stock for future
issuances. Such future issuances could include the sale of securities
in order to raise capital, the payment of the purchase price in acquisitions,
payment of interest and additional interest under the 2007 Senior Notes (as
described in Proposal 3 below), additional shares issued in connection with
grants made to employees under new or expanded existing compensation plans or
arrangements, and other uses not currently anticipated. Accordingly,
the Company is proposing that the 25,000,000 shares of undesignated common stock
be designated as Class A Common Stock. The Company believes that such
designation is in the best interests of the Company, as it would provide the
Company with flexibility and alternatives in structuring future transactions,
and that it would be detrimental to the Company if it were unable to issue
shares of Class A Common Stock at such times and upon terms as the Board deems
necessary or appropriate.
This
proposal requires approval by a majority of the Votes Cast at the Annual
Meeting. The amendment designating as Class A Common Stock the
25,000,000 shares of undesignated common stock is attached hereto as
Appendix
A
.
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE
AMENDMENT TO THE CERTIFICATE OF INCORPORATION.
PROPOSAL
THREE
APPROVAL
OF THE ISSUANCE OF UP TO 1,800,000 ADDITIONAL SHARES OF THE COMPANY’S CLASS A
COMMON STOCK IN CONNECTION WITH THE PAYMENT OF INTEREST ON THE 2007 SENIOR
NOTES
In August
2007, the Company issued in a private placement to certain purchasers 10% senior
notes due 2010 (the “2007 Senior Notes”) in the aggregate amount of
$55,000,000. The 2007 Senior Notes require that, on a quarterly
basis, (a) interest be paid either in cash or, at the Company’s option and
subject to certain conditions, in shares of Class A Common Stock (“Interest
Shares”) and (b) the Company issue shares of Class A Common Stock to the
purchasers as payment of additional interest owed under the 2007 Senior Notes
based on a formula (“Additional Interest Shares”). The number of
Additional Interest Shares required at any particular payment date is calculated
pursuant to a formula based on the then-current market price of the Class A
Common Stock, which price may be lower than the market price of the Class A
Common Stock at the time the private placement of the 2007 Senior Notes was
consummated (the “Closing”). The Company reserved sufficient shares
of Class A Common Stock for issuance such number of shares of Class A Common
Stock as it deemed appropriate for the issuance of Additional Interest Shares
and Interest Shares and has available 5,437,647 unreserved shares of Class A
Common Stock, as discussed in Proposal Two above. However, because
the number of shares required to satisfy any additional interest or interest
payment fluctuates with the price per share of Class A Common Stock on the
NASDAQ Global Market (“NASDAQ”) at the time such interest payment becomes due,
the exact number of shares that will be needed for Additional Interest Shares
and, in order to permit the Company flexibility in interest payment choices in
accordance with the terms of the 2007 Senior Notes, Interest Shares, is
unknown. At the time the 2007 Senior Notes were issued, the price per
share of the Class A Common Stock on NASDAQ was $6.56. As of July 18,
2008, such price was $2.11. Accordingly, more Additional Interest
Shares and Interest Shares will be required to discharge an interest payment
than previously estimated.
The
Company’s Class A Common Stock is listed for trading on NASDAQ and, therefore,
is subject to the rules and regulations of NASDAQ. Pursuant to the
NASDAQ Qualitative Listing Requirements, including Rule 4350(i), approval of the
Company’s stockholders would be required for the issuance, in connection with a
private placement of securities, of Class A Common Stock equal to 20% or more of
the Class A Common Stock outstanding prior to such issuance if the issuance is
made at less than market value of the stock. Because the number of
shares comprising an issuance of Additional Interest Shares and/or Interest
Shares is calculated based on then-current stock price, NASDAQ considers such
issuance(s) to be at less than market value if the stock price at time of
issuance is lower than at the Closing.
Immediately
prior to the Closing, there were 24,236,579 shares of Class A Common Stock
outstanding. Accordingly, 4,847,316 shares constituted 20% of the
outstanding shares of Class A Common Stock. Therefore, we can issue
4,847,315 shares without triggering Rule 4350(i). The Company has
already issued 2,245,363 shares of Class A Common Stock in payment of Additional
Interest Shares and Interest Shares and can only issue another
2,601,952
shares prior to obtaining stockholder approval for such
issuance(s). Depending upon the variations in stock price and based
upon the current stock price, the Company estimates that it could need up to a
total of approximately 7,900,000 shares (that is, approximately 5,300,000
additional shares beyond the 2,601,952 shares available to it without
stockholder approval) to satisfy the requirement for Additional Interest Shares
and the option for Interest Shares. In any event, the Company
believes that it has sufficient shares available for the issuance of Additional
Interest Shares as required by the 2007 Senior Notes through their original
maturity in August 2010. Accordingly, the Company is seeking the
approval of stockholders to issue up to an additional 1,800,000 shares of Common
Stock in connection with the 2007 Senior Notes, which number of shares the
Company believes will be sufficient through September 2009.
In the
event that stockholder approval is not obtained, the Company will lose its
ability to issue Interest Shares in lieu of cash for interest
payments. However, the Board believes that the flexibility of having
the option to pay interest in cash or by issuing Interest Shares would be in the
best interests of the Company.
This
proposal requires approval by a majority of the Votes Cast at the Annual
Meeting.
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE
ISSUANCE OF UP TO 1,800,000 ADDITIONAL SHARES OF THE COMPANY’S CLASS A COMMON
STOCK IN CONNECTION WITH THE PAYMENT OF INTEREST ON THE 2007 SENIOR
NOTES.
PROPOSAL
FOUR
AMENDMENT
TO SECOND AMENDED AND RESTATED
2000
EQUITY INCENTIVE PLAN TO INCREASE NUMBER OF SHARES
ISSUABLE
THEREUNDER
Our Board
adopted the Company’s 2000 Equity Incentive Plan (as subsequently amended, “the
Plan”), on June 1, 2000 and, in July 2000, our stockholders approved the Plan by
written consent. The Plan was amended and restated in January 2003 as
the First Amended and Restated 2000 Stock Option Plan; it was further amended in
September 2003, October 2004, September 2005 and September 2006; and it was
further amended and restated in September 2007 as the Second Amended and
Restated 2000 Equity Incentive Plan. Under the Plan, we may grant
incentive and nonqualified stock options, stock, restricted stock, stock
appreciation rights (“SARs”), performance awards and other equity-based
awards. On May 9, 2008, the Board approved an amendment (the
“Amendment”) to the Plan allowing for the grant of restricted stock units
(“RSUs”) in addition to stock options, Class A Common Stock, restricted Class A
Common Stock, stock appreciation rights, performance awards and other
equity-based awards. The Amendment did not require shareholder
approval. The Plan is administered by the Compensation
Committee.
The Plan
currently authorizes up to 2,200,000 shares of the Company’s Class A Common
Stock for issuance pursuant to awards made under the Plan. The
Company believes that the availability of an additional 1,500,000 shares of the
Company’s Class A Common Stock under the Plan is in the best interests of the
Company and its stockholders because the availability of an adequate equity
incentive program is an important factor in attracting and retaining qualified
officers and employees essential to the success of the Company (whether through
acquisitions or otherwise) and in aligning their long-term interests with those
of the stockholders. The increase in the number of shares of Class A
Common Stock available for issuance under the Plan will permit the Company to
continue the operation of the Plan for the benefit of new participants (either
new hires to current operations or employees of acquired companies), as well as
to allow additional awards to current participants.
Pursuant
to this proposal, in the form of the amendment attached hereto as
Appendix B
, the Board
proposes to amend the Plan to increase the number of shares of Class A Common
Stock authorized for issuance upon the exercise of options from 2,200,000 to
3,700,000. This amendment is conditioned upon the approval by
stockholders of the amendment to our Certificate of Incorporation, discussed in
Proposal Two above. If Proposal Two is not approved by stockholders,
the amendment to the Plan will not take effect even if stockholders approve it
in this Proposal Four.
This
proposal requires approval by a majority of the Votes Cast at the Annual
Meeting. As of July 18, 2008, stock options outstanding covering
2,378,322 shares of the Company’s Class A Common Stock, 99,280 shares of
restricted Class A Common Stock and restricted stock units covering 723,700
shares of Class A Common Stock that may be settled in cash or shares of Class A
Common Stock or a combination thereof, at the Company's discretion,
had been
granted under the Plan; however 320,003 of such stock options and all of the
restricted stock units remain subject to the approval of this Proposal
Four.
Under the
Plan, no participant may be granted incentive stock options with an aggregate
fair market value, as of the date on which such options were granted, of more
than $100,000 becoming exercisable for the first time in any given calendar
year. Options granted under the Second Amended and Restated Plan
expire ten years following the date of grant (or such shorter period of time as
may be provided in a stock option agreement or five years in the case of
incentive stock options granted to stockholders who own greater than 10% of the
total combined voting power of the Company) and are subject to restrictions on
transfer. Options granted under the Plan generally vest over periods
up to three years. The Plan is administered by the Compensation
Committee, and may be amended or terminated by the Board, although no amendment
or termination may adversely affect the right of any individual with respect to
any outstanding option without the consent of such individual.
The Plan
provides for the granting of incentive stock options with exercise prices of not
less than 100% of the fair market value of the Company’s Class A Common Stock on
the date of grant. Incentive stock options granted to stockholders of
more than 10% of the total combined voting power of the Company must have
exercise prices of not less than 110% of the fair market value of the Company’s
Class A Common Stock on the date of grant. Incentive and
non-statutory stock options granted under the Second Amended and Restated Plan
are subject to vesting provisions, and exercise is subject to the continuous
service of the optionee, except for consultants. The exercise prices
and vesting periods (if any) for non-statutory options may be set at the
discretion of the Board or the Compensation Committee. Upon a change
of control of the Company, all options (incentive and non-statutory) that have
not previously vested will vest immediately and become fully
exercisable. In connection with the grants of options under the Plan,
the Company and the participants have executed stock option agreements setting
forth the terms of the grants. Options covering no more than 500,000
shares may be granted to one participant during any calendar year unless
pursuant to a multi-year award, in which case no more than options covering
500,000 shares per year of the award, during which period no additional options
may be granted to such participant, may be granted.
The Plan
also provides for the granting of Class A Common Stock, restricted Class A
Common Stock, stock appreciation rights, restricted stock units and performance
awards. Grants of restricted stock and restricted stock units are
subject to vesting requirements, generally vesting over periods up to three
years, determined by the Compensation Committee and set forth in notices to the
participants. Grants of stock, restricted stock and restricted stock
units shall not exceed 40% of the total number of shares available to be issued
under the Plan.
Stock
appreciation rights (“SARs”) consist of the right to the monetary equivalent of
the increase in value of a specified number of shares over a specified period of
time. Upon exercise, SARs may be paid in cash or shares of Class A
Common Stock or a combination thereof. Grants of SARs are subject to
vesting requirements, similar to those of stock options, determined by the
Compensation Committee and set forth in agreements between the Company and the
participants. Restricted stock units (“RSUs”) shall be similar to
restricted stock except that no Class A Common Stock is actually awarded to the
Participant on the grant date of the RSUs and the Compensation Committee shall
have the discretion to pay such RSUs upon vesting in cash or shares of Class A
Common Stock or a combination thereof.
Performance
awards consists of awards of stock and other equity-based awards that are valued
in whole or in part by reference to, or are otherwise based on, the market value
of the Class A Common Stock, or other securities of the Company, and may be paid
in shares of Class A Common Stock, cash or another form of property as the
Compensation Committee may determine. Grants of performance awards
shall entitle participants to receive an award if the measures of performance
established by the Committee are met. Such measures shall be
established by the Compensation Committee but the relevant measurement period
for any performance award must be at least 12 months. Grants of
performance awards shall not cover the issuance of shares that would exceed 20%
of the total number of shares available to be issued under the Plan, and no more
than 500,000 shares pursuant to any performance awards shall be granted to one
participant in a calendar year unless pursuant to a multi-year
award. The terms of grants of performance awards would be set forth
in agreements between the Company and the participants.
Our Class
A Common Stock is listed for trading on NASDAQ under the symbol
“AIXD”. The last reported closing price per share of our Class A
Common Stock as reported by NASDAQ on July 18, 2008 was $2.11 per
share.
Federal
Income Tax Consequences
The
federal income tax consequences of the issuance and/or exercise of awards under
the Plan are as described below. The following information is not a
definitive explanation of the tax consequences of the awards, and recipients
should consult with their own tax advisors with respect to the tax consequences
inherent in the ownership and/or exercise of the awards, and the ownership and
disposition of any underlying securities. Tax consequences will also
vary depending upon the jurisdiction where the recipient of the award may
reside.
Incentive
Stock Options
No
taxable income is recognized by the optionee at the time of the option grant,
and no taxable income is generally recognized at the time the option is
exercised, provided that the optionee may incur alternative minimum tax
liability upon exercise. The optionee will, however, recognize
taxable income in the year in which the purchased shares of Class A Common Stock
are sold or otherwise made the subject of a taxable disposition.
For
federal tax purposes, dispositions are divided into two categories: (i)
qualifying and (ii) disqualifying. A qualifying disposition occurs if
the sale or other disposition is made after the optionee has held the shares of
Class A Common Stock for more than two (2) years after the option grant date and
more than one (1) year after the exercise date. If either of these
two holding periods is not satisfied, then a disqualifying disposition will
result.
Upon a
qualifying disposition, the optionee will recognize long-term capital gain in an
amount equal to the excess of (i) the amount realized upon the sale or other
disposition of the purchased shares over (ii) the exercise price paid for the
shares. If there is a disqualifying disposition of the shares of
Class A Common Stock, then the excess of (i) the fair market value of those
shares on the exercise date over (ii) the exercise price paid for the shares
will be taxable as ordinary income to the optionee.
If the
optionee makes a disqualifying disposition of the purchased shares of Class A
Common Stock, then the Company will be entitled to an income tax deduction, for
the taxable year in which such disposition occurs, equal to the excess of (i)
the fair market value of such shares on the option exercise date over (ii) the
exercise price paid for the shares. In no other instance will the
Company be allowed a deduction with respect to the optionee’s disposition of the
purchased shares of Class A Common Stock.
Nonqualified
Stock Options
No
taxable income is recognized by an optionee upon the grant of a non-statutory
option. The optionee will in general recognize ordinary income in the
year in which the option is exercised, equal to the excess of the fair market
value of the purchased shares of Class A Common Stock on the exercise date over
the exercise price paid for the shares, and tax withholding requirements will
apply to such income.
The
Company will be entitled to an income tax deduction equal to the amount of
ordinary income recognized by the optionee with respect to the exercised
non-statutory option. The deduction will in general be allowed for
the taxable year of the Company in which such ordinary income is recognized by
the optionee.
Restricted
Shares
A
recipient will not be taxed at the date of an award of restricted shares,
provided that the restricted shares are subject to substantial risk of
forfeiture, but will be taxed at ordinary income rates on the fair market value
of any restricted shares as of the date that the restrictions
lapse. However, the recipient of restricted shares may elect, within
30 days after transfer of such shares to the recipient, under Section 83(b) of
the Internal Revenue Code to include in income the fair market value of the
restricted shares as of the date of such transfer. At the time the
shares are included in income, the Company will be entitled to a corresponding
deduction. Any disposition of shares after restrictions lapse will be
subject to the regular rules governing long-term and short-term capital gains
and losses, with the basis for this purpose equal to the fair market value of
the shares at the end of the restricted period (or on the date of the transfer
of the restricted shares, if the employee elects to be taxed on the fair market
value upon such transfer.
Stock
Appreciation Rights
A
recipient who is granted a SAR will not recognize any taxable income on the
receipt of the SAR. Upon the exercise of an SAR, (a) the recipient
will recognize ordinary income equal to the excess of the fair market value of
the
shares on the exercise date over the exercise price for the SAR and (b) the
Company will be entitled to a deduction on the date of exercise in an amount
equal to the ordinary income recognized by the recipient.
Restricted
Stock Unit
A
recipient who is granted a RSU will not recognize any taxable income on the
receipt of the RSU. Upon the vesting of an RSU, (a) the recipient
will recognize ordinary income equal to the fair market value of the shares
issued at the time the RSUs are paid out and (b) the Company will be entitled to
a deduction on the date of vesting in an amount equal to the ordinary income
recognized by the recipient.
Performance
Awards and Stock Awards
A
recipient will recognize ordinary income equal to any cash that is paid and the
fair market value of the Class A Common Stock (on the date that the shares are
first transferable and not subject to a substantial risk of forfeiture) that is
received in settlement of an award of performance units or as a stock
award.
Effects
on the Company
The
Company generally will be entitled to claim a federal income tax deduction on
account of the exercise of a nonqualified stock option or SAR or upon the
taxability to the recipient of restricted stock, or the settlement of a
performance award (subject to tax limitations on the Company’s deductions in any
year that certain remuneration paid to certain executives exceeds $1
million). The amount of the deduction is equal to the ordinary income
recognized by the recipient. The Company will not be entitled to a
federal income tax deduction on account of the grant or the exercise of an
incentive stock option unless the recipient has made a “disqualifying
disposition” of the shares acquired on exercise of the incentive stock option,
in which case the Company will be entitled to a deduction at the same time and
in the same amount as the recipient’s recognition of ordinary
income.
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” THE ADOPTION OF THE
AMENDMENT TO THE PLAN TO INCREASE THE NUMBER OF SHARES ISSUABLE UNDER THE
PLAN.
PROPOSAL
FIVE
RATIFICATION
OF THE APPOINTMENT OF OUR INDEPENDENT AUDITORS
The Board
has selected the firm of Eisner LLP as our independent auditors for the fiscal
year ending March 31, 2009, subject to ratification by our stockholders at the
Annual Meeting. Eisner LLP has been our independent auditors since
the fiscal year ended March 31, 2005. No representative of Eisner LLP
is expected to be present at the Annual Meeting.
More
information about our independent auditors is available under the heading
“Independent Auditors” on page 26 below.
THE
BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE RATIFICATION OF THE
APPOINTMENT OF EISNER LLP AS OUR INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING
MARCH 31, 2009.
OTHER
MATTERS
The Board
does not know of any other matters that may be brought before the Annual
Meeting. However, if any such other matters are properly brought
before the Annual Meeting, the proxies may use their own judgment to determine
how to vote your shares.
MATTERS
RELATING TO OUR GOVERNANCE
Board
of Directors
The Board
intends to meet at least quarterly and the independent directors serving on the
Board intend to meet in executive session (i.e., without the presence of any
non-independent directors and management) at least once a
year. During the fiscal year ended March 31, 2008 (the “Last Fiscal
Year”), the Board held five meetings and the Board members acted five times by
unanimous written consent in lieu of holding a meeting. Each current
member of the Board, who was then serving, attended at least 75% of the total
number of meetings of the Board and of the committees of the Board on which they
served in the Last Fiscal Year. Messrs. Clevenger, Crotty
,
Davidoff, Finlay and
Mulholland are considered “independent” under the rules of the
NASDAQ.
One
director resigned for personal reasons, and no director declined to stand for
reelection to the Board for any reason, during the Last Fiscal
Year. After such resignation and in accordance with the Company’s
By-laws, the number of directors was reduced from nine to eight. The
Board currently does not provide a process for stockholders to send
communications to the Board. In the opinion of the Board, it is
appropriate for the Company not to have such a process in place because the
Board believes there is currently not a need for a formal policy due to, among
other things, the limited number of stockholders of the
Company. While the Board will, from time to time, review the need for
a formal policy, at the present time, stockholders who wish to contact the Board
may do so by submitting any communications to the Company’s Secretary, Mr.
Loffredo, Access Integrated Technologies, Inc., 55 Madison Avenue, Suite 300,
Morristown, New Jersey 07960, with an instruction to forward the communication
to a particular director or the Board as a whole. Mr. Loffredo will
receive the correspondence and forward it to any individual director or
directors to whom the communication is directed.
The
Company does not currently have a policy in place regarding attendance by Board
members at the Company’s annual meetings. However, each of the
current directors, who was then serving, attended the 2007 Annual Meeting of
Stockholders, and currently intends to attend this Annual Meeting.
The Board
has three standing committees, consisting of an Audit Committee, a Compensation
Committee and a Nominating Committee.
Audit
Committee
The Audit
Committee consists of Messrs. Clevenger, Davidoff and Finlay. Mr.
Finlay is the Chairman of the Audit Committee. The Audit Committee
held four meetings in the Last Fiscal Year. The Audit Committee has
met with the Company’s management and the Company’s independent registered
public accounting firm to review and help ensure the adequacy of its internal
controls and to review the results and scope of the auditors’ engagement and
other financial reporting and control matters. Both Messrs. Clevenger
and Davidoff are financially literate, and Mr. Davidoff is financially
sophisticated, as those terms are defined under the rules of the
NASDAQ. Mr. Davidoff is also a financial expert, as such term is
defined under the Sarbanes-Oxley Act of 2002. Messrs. Clevenger,
Davidoff and Finlay are considered “independent” under the rules of the
NASDAQ.
The Audit
Committee has adopted a formal written charter which was attached as Appendix B
to the Company’s proxy statement for its annual meeting of stockholders held on
September 18, 2007. The Audit Committee is responsible for ensuring
that the Company has adequate internal controls and is required to meet with the
Company’s auditors to review these internal controls and to discuss other
financial reporting matters. The Audit Committee is also responsible
for the appointment, compensation and oversight of the
auditors. Additionally, the Audit Committee is responsible for the
review and oversight of all related party transactions and other potential
conflict of interest situations between the Company and its officers, directors,
employees and principal stockholders.
Compensation
Committee
The
Compensation Committee consists of Messrs. Davidoff, Clevenger, Crotty and
Mulholland. Mr. Davidoff is the Chairman of the Compensation
Committee. The Compensation Committee met nine times during the Last
Fiscal Year. The Compensation Committee, based on recommendation by
the Company’s CEO, approves the compensation package of the Company’s CEO and
the levels of compensation and benefits payable to the Company’s other executive
officers, reviews general policy matters relating to employee compensation and
benefits and recommends to the entire Board, for its approval, stock option and
other equity-based award grants to its executive officers, employees and
consultants and discretionary bonuses to its executive officers and
employees. The Compensation Committee approves the compensation
package of the Company’s directors. The Compensation
Committee
has the authority to appoint and delegate to a sub-committee the authority to
make grants and administer bonus and compensation plans and
programs. Messrs. Clevenger, Crotty, Davidoff, and Mulholland are
considered “independent” under the rules of the NASDAQ.
The
Compensation Committee adopted a formal written charter (the “Compensation
Charter”) which is attached as
Appendix C
to this
proxy statement. The Compensation Charter sets forth the duties,
authorities and responsibilities of the Compensation Committee. The
Compensation Charter is not currently available on the Company’s
website.
During
the Last Fiscal Year, the Compensation Committee engaged HR & Survey
Solutions, LLC, a compensation consulting firm, for the limited purpose of
reviewing the bonus structure for the Company. The consultant advised
the Compensation Committee on the bonuses for certain management employees,
including the restricted stock awards discussed above, and is helping develop a
management incentive program for the future.
Nominating
Committee
The
Nominating Committee consists of Messrs. Clevenger and Davidoff. Mr.
Clevenger is the Chairman of the Nominating Committee. The Nominating
Committee held one meeting during the Last Fiscal Year. The
Nominating Committee evaluates and approves nominations for annual election to,
and to fill any vacancies in, the Board and recommends to the Board the
directors to serve on committees of the Board. Messrs. Clevenger and
Davidoff are considered “independent” under the rules of the
NASDAQ.
The
Nominating Committee adopted a formal written charter (the “Nominating Charter”)
which is attached as
Appendix D
to this
proxy statement. The Nominating Charter sets forth the duties and
responsibilities of the Nominating Committee and the general skills and
characteristics that the Nominating Committee employs to determine the
individuals to nominate for election to the Board. The Nominating
Charter is not currently available on the Company’s website.
The
Nominating Committee will consider any candidates recommended by
stockholders. In considering a candidate submitted by stockholders,
the Nominating Committee will take into consideration the needs of the Board and
the qualification of the candidate. Nevertheless, the Board may
choose not to consider an unsolicited recommendation if no vacancy exists on the
Board and/or the Board does not perceive a need to increase the size of the
Board. Stockholders should submit any recommendations of director
candidates for the Company’s 2009 Annual Meeting of Stockholders to the
Company’s Secretary, Mr. Loffredo, Access Integrated Technologies, Inc., 55
Madison Avenue, Suite 300, Morristown, New Jersey 07960 in accordance with the
procedures set forth above under the heading “Deadline for Receipt of
Stockholder Proposals to be Presented at Next Annual Meeting.”
There are
no specific minimum qualifications that the Nominating Committee believes must
be met by a Nominating Committee-recommended director
nominee. However, the Nominating Committee believes that director
candidates should, among other things, possess high degrees of integrity and
honesty; have literacy in financial and business matters; have no material
affiliations with direct competitors, suppliers or vendors of the Company; and
preferably have experience in the Company’s business and other relevant business
fields (for example, finance, accounting, law and banking).
Members
of the Nominating Committee meet in advance of each of the Company’s annual
meetings of stockholders to identify and evaluate the skills and characteristics
of each director candidate for nomination for election as a director of the
Company. The Nominating Committee reviews the candidates in
accordance with the skills and qualifications set forth in the Nominating
Charter and the rules of the NASDAQ. There are no differences in the
manner in which the Nominating Committee evaluates director nominees based on
whether or not the nominee is recommended by a stockholder.
Code
of Business Conduct and Ethics
We have
adopted a code of ethics applicable to all members of the Board, executive
officers and employees. Such code of ethics is available on our Internet
website, www.accessitx.com. We intend to disclose any amendment to,
or waiver of, a provision of our code of ethics by filing a Current Report on
Form 8-K with the Securities and Exchange Commission (“SEC”).
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of July 18, 2008, the Company’s directors,
executive officers and principal stockholders beneficially own, directly or
indirectly, in the aggregate, approximately 16.0% of its outstanding Class A
Common Stock and 100% of its Class B Common Stock. These
stockholders, and Mr. Mayo individually, have significant influence over the
Company’s business affairs, with the ability to control matters requiring
approval by the Company’s stockholders, including the three proposals set forth
in this Proxy Statement as well as approvals of mergers or other business
combinations.
The
following table sets forth as of July 18, 2008, certain information with respect
to the beneficial ownership of the Common Stock as to (i) each person known by
the Company to beneficially own more than 5% of the outstanding shares of the
Company’s Common Stock, (ii) each of the Company’s directors, (iii) each of the
Company’s Named Executives and (iv) all of the Company’s directors and executive
officers as a group.
CLASS
A COMMON STOCK
|
Name
(b)
|
Shares
Beneficially Owned (a)
|
Number
|
|
Percent
|
A.
Dale Mayo
|
1,364,199
|
(c)
|
4.9%
|
Jeff
Butkovsky
|
138,000
|
(d)
|
*
|
Kevin
J. Farrell
|
275,000
|
(e)
|
1.0%
|
Charles
Goldwater
|
55,800
|
(f)
|
*
|
Gary
S. Loffredo
|
213,000
|
(g)
|
*
|
Brian
D. Pflug
|
160,686
|
(h)
|
*
|
Wayne
L. Clevenger
c/o
MidMark Equity Partners II, L.P.,
177
Madison Avenue
Morristown,
NJ 07960
|
1,878,179
|
(i)
|
7.0%
|
Gerald
C. Crotty
|
30,300
|
(j)
|
*
|
Robert
Davidoff
|
370,796
|
(k)
|
1.4%
|
Matthew
W. Finlay
c/o
MidMark Equity Partners II, L.P.,
177
Madison Avenue
Morristown,
NJ 07960
|
1,856,593
|
(l)
|
6.9%
|
Robert
E. Mulholland
|
66,411
|
(m)
|
*
|
MidMark
Equity Partners II, L.P.
177
Madison Avenue
Morristown,
NJ 07960
|
1,881,479
|
(n)
|
7.0%
|
Alydar
Partners, LLC
222
Berkeley Street, 17th Floor,
Boston,
MA 02116
|
1,579,200
|
(o)(s)
|
5.9%
|
Aquifer
Opportunity Fund, L.P.
460
Park Avenue, Suite 2101
New
York, NY 10022
|
1,687,828
|
(p)(s)
|
6.3%
|
Cortina
Asset Management, LLC
330
East Kilbourn Avenue, Suite 850,
Milwaukee,
Wisconsin 53202
|
1,578,562
|
(s)
|
5.9%
|
Magnetar
Capital Partners LP
1603
Orrington Avenue, 13th Floor
Evanston,
IL 60201
|
1,700,032
|
(q)(s)
|
6.3%
|
All
directors and executive officers as a group (12 persons)
|
4,594,085
|
(r)
|
16.0%
|
--------------------
(a)
|
Applicable
percentage of ownership is based on 26,797,817 shares of Class A Common
Stock outstanding as of July 18, 2008 together with all applicable
options, warrants and other securities convertible into shares of our
Class A Common Stock for such stockholder. Beneficial ownership
is determined in accordance with the rules of the SEC, and includes voting
and investment power with respect to shares. Shares of Class A
Common Stock subject to options, warrants or other convertible securities
exercisable within 60 days after July 18, 2008 are deemed outstanding for
computing the percentage ownership of the person holding such
|
|
options,
warrants or other convertible securities, but are not deemed outstanding
for computing the percentage of any other person. Except as
otherwise noted, the named beneficial owner has the sole voting and
investment power with respect to the shares of Common Stock
shown.
|
|
|
(b)
|
Unless
otherwise indicated, the business address of each person named in the
table is c/o Access Integrated Technologies, Inc., 55 Madison Avenue,
Suite 300, Morristown, New Jersey
07960.
|
(c)
|
Includes
733,811 shares of Class B Common Stock held by Mr. Mayo, 87,500 shares of
Class A common stock held by Mr. Mayo’s spouse, of which Mr. Mayo
disclaims beneficial ownership, and 12,000 shares of Class A common stock
held for the account of Mr. Mayo’s grandchildren, the custodian of which
accounts is Mr. Mayo’s spouse, of which Mr. Mayo also disclaims beneficial
ownership. In addition, Mr. Mayo holds 71,127 shares of
Class A Common Stock, 59,761 restricted shares of Class A common
stock and 400,000 shares of Class A Common Stock underlying options that
may be acquired upon exercise of such options. The holder of
each share of Class B Common Stock is entitled to ten (10) votes per
share. Including the voting rights of Mr. Mayo’s shares of
Class B Common Stock, Mr. Mayo may exercise up to 22.1% of the total
voting power of our Common Stock. Each share of Class B Common
Stock is convertible at any time at the holder’s option into one (1) share
of Class A Common Stock.
|
(d)
|
Includes
3,000 restricted shares of Class A common stock and 120,000 shares of
Class A common stock underlying options that may be acquired upon exercise
of such options.
|
(e)
|
Includes
2,000 restricted shares of Class A common
stock.
|
(f)
|
Includes
7,500 restricted shares of Class A common stock and 48,300 shares of Class
A common stock underlying options that may be acquired upon exercise of
such options.
|
(g)
|
Includes
3,000 restricted shares of Class A common stock and 190,000 shares of
Class A common stock underlying options that may be acquired upon exercise
of such options.
|
(h)
|
Includes
4,000 restricted shares of Class A common stock and 135,186 shares of
Class A common stock underlying options that may be acquired upon exercise
of such options.
|
(i)
|
Mr.
Clevenger is a managing director of MidMark and of MidMark Investments,
Inc. (“MidMark Investments”) and a managing member of MidMark Advisors II,
LLC. Includes 30,000 shares of Class A Common Stock owned
directly, 33,300 shares of Class A Common Stock underlying options that
may be acquired upon exercise of such options held by MidMark Investments
and 1,814,879 shares owned by MidMark. Other then the 30,000
shares first described, Mr. Clevenger disclaims beneficial ownership of
such shares except to the extent of any pecuniary interest
therein.
|
(j)
|
Represents
shares of Class A Common Stock underlying options that may be acquired
upon exercise of such options.
|
(k)
|
Includes
32,300 shares of Class A Common Stock underlying options that may be
acquired upon exercise of such options, and 338,496 shares owned by CMNY,
for which Mr. Davidoff serves as a director.
Other then the
32,300 shares first described, Mr. Davidoff disclaims beneficial ownership
of such shares except to the extent of any pecuniary interest
therein.
|
(l)
|
Mr.
Finlay is a director of MidMark and of MidMark
Investments. Includes 8,414 shares of Class A Common Stock
owned directly, 33,300 shares of Class A Common Stock underlying options
that may be acquired upon exercise of such options held by MidMark
Investments and 1,814,879 shares owned by MidMark. Other then
the 8,414 shares first described, Mr. Finlay disclaims beneficial
ownership of such shares except to the extent of any pecuniary interest
therein.
|
(m)
|
Includes
13,300 shares of Class A common stock underlying options that may be
acquired upon exercise of such options and 38,011 shares owned by Mr.
Mulholland’s spouse.
|
(n)
|
Includes
66,600 shares of Class A Common Stock underlying options that may be
acquired upon exercise of such options held by MidMark Investments and
1,814,879 shares owned by MidMark, which shares may be deemed to be
beneficially owned by MidMark Advisors II, LLC, the general partner of
MidMark.
|
(o)
|
Includes
beneficial ownership as follows: 449,891 shares of Class A Common Stock
held by Alydar Capital, LLC; 420,737 shares of Class A Common Stock held
by Alydar Fund Limited (“Alydar Ltd”); and 708,572 shares of Class A
Common Stock held by Alysheba Fund Limited (“Alysheba”). Alydar
Partners, LLC is the investment manager of Alydar Ltd and
Alysheba. John A. Murphy, an individual, is managing member of
Alydar Capital, LLC and Alydar Partners, LLC. Mr. Murphy and
Alydar Partners, LLC disclaim beneficial ownership of these securities
except to the extent of any pecuniary interest
therein.
|
|
(p)
|
Aquifer
Capital Group, LLC (“Aquifer Capital”) is investment manager of Aquifer
Opportunity Fund, L.P. (“Aquifer Fund”), and has power to vote and dispose
of the shares held by Aquifer Fund. Adam M. Mizel, the
principal of Aquifer Capital, and Aquifer Capital disclaim beneficial
ownership of these securities.
|
|
(q)
|
Includes
beneficial ownership by Magnetar Capital Partners LP
(Magnetar”). Supernova Management LLC is the general partner of
Magnetar. Alec N. Litowitz, an individual, is the manager of
Supernova Management LLC. Mr. Litowitz and Supernova Management
LLC disclaim beneficial ownership of these
securities.
|
|
(r)
|
Includes
79,261 restricted shares of Class A common stock, 1,035,986 shares of
Class A Common Stock underlying options that may be acquired upon exercise
of such options and 733,811 shares of Class A Common Stock underlying
outstanding shares of Class B Common Stock that may be acquired upon
conversion of such Class B Common
Stock.
|
|
(s)
|
Based
solely on the numbers of shares reported in the most recent Schedule 13D
or Schedule 13G, as amended, if applicable, filed by such stockholder with
the SEC through July 18, 2008.
|
CLASS
B COMMON STOCK
|
|
Shares
Beneficially Owned(a)
|
Name
(b)
|
Number
|
Percent
|
A.
Dale Mayo
|
733,811
|
100.0%
|
All
directors and executive officers as a group (one person)
|
733,811
|
100.0%
|
--------------------
|
(a)
|
Applicable
percentage of ownership is based on 733,811 shares of Class B Common Stock
outstanding as of July 18, 2008. There are no shares of Class B
Common Stock subject to options, warrants or other convertible
securities. Except as otherwise noted, the named beneficial
owner has the sole voting and investment power with respect to the shares
of Class B Common Stock shown. The holder of each share of
Class B Common Stock is entitled to ten (10) votes per
share. Each share of Class B Common Stock is convertible at any
time at the holder’s option into one (1) share of Class A Common
Stock.
|
|
(b)
|
The
business address of the person named in the table is c/o Access Integrated
Technologies, Inc., 55 Madison Avenue, Suite 300, Morristown, New Jersey
07960.
|
EXECUTIVE
OFFICER AND DIRECTOR COMPENSATION
Executive
Officers
The
Company’s executive officers are A. Dale Mayo, President, CEO and Chairman, Jeff
Butkovsky, SVP – Chief Technology Officer (“CTO”), Kevin J. Farrell, SVP -
Facilities and a member of the Board, Charles Goldwater, SVP, Gary S. Loffredo,
SVP – Business Affairs, General Counsel, Secretary and a member of the Board,
and Brian D. Pflug, SVP – Accounting and Finance. Biographical
information for Messrs. Mayo, Farrell and Loffredo is included above in Proposal
One.
Jeff Butkovsky
,
48
, has been the Company’s SVP
– CTO since May 2004 and was the Company’s SVP -- Managed Services from October
2000 to May 2004. Previously, Mr. Butkovsky was Eastern Regional
Director for LogicStream, Inc., a managed service provider and colocation
company from March 2000 to October 2000. He served as a sales
executive with Auspex Systems, Inc., a network attached storage company, from
June 1999 to March 2000. Mr. Butkovsky was the Northeast Regional
Director of Micron Electronics Incorporated from May 1996 to June
1999.
Charles Goldwater
,
57
, has been the Company’s SVP
and President of the Media Services Group since July 2006 and the President and
COO of Christie/AIX, Inc. (“AccessIT DC”), the Company’s indirectly wholly-owned
subsidiary since August 2005. From 2002 to 2005, Mr. Goldwater was
the CEO of Digital Cinema Initiatives, LLC (“DCI”) a joint venture of seven
motion picture studios: Buena Vista Pictures Distribution (Disney), Twentieth
Century Fox Film Corporation (Fox), Metro-Goldwyn-Mayer, Paramount Pictures,
Sony Pictures Entertainment, Universal Studios, and Warner Bros.
Studios. Prior to DCI, Mr. Goldwater’s 30-year career focused
principally on the exhibition side of the film industry, where he held senior
management positions with USA Cinemas and National Amusements, and with Loews
Theatres. Mr. Goldwater also served as President/CEO of Mann Theatres
in Los Angeles and as President of Cablevision Cinemas.
Brian D. Pflug
,
41
, has been the Company’s SVP
-- Accounting and Finance since January 2003. From September 2000 to
December 2002, he had been the Company’s Vice President --
Controller. From July 1998 to September 2000, Mr. Pflug was the
Controller of Cablevision Cinemas, where he was responsible for all accounting
functions, including financial reporting, payroll and accounts
payable. Prior to that, Mr. Pflug was employed for four years at GPU,
Inc. (which later merged with FirstEnergy Corp.), a large energy provider, in
the areas of SEC reporting and accounting research. Mr. Pflug began
his career as an auditor at Coopers & Lybrand and is a Certified Public
Accountant.
COMPENSATION
DISCUSSION AND ANALYSIS
Compensation
Philosophy and Objectives
The
Company’s executive compensation philosophy is focused on enabling the Company
to hire and retain qualified, motivated executives while meeting its business
needs and objectives. Consistent with this philosophy, the Company’s executive
compensation program (the “Compensation Program”) has been designed around the
following objectives:
·
|
Provide
competitive compensation levels to enable the recruitment and retention of
highly qualified executives.
|
·
|
Design
incentive programs that link pay to corporate performance to encourage and
reward excellence and contributions that further AccessIT’s
success.
|
·
|
Align
the interests of executives with those of shareholders through grants of
equity-based compensation that also provide opportunities for ongoing
executive ownership.
|
An
overriding principle in delivering on these objectives is to ensure that
compensation decisions are made in the Company’s best financial interests, such
that incentive awards are both affordable and reasonable.
The
Company became a public company in 2003. Since that time, it has experienced
significant growth in revenues. It now faces the challenges of rapid growth in a
new and evolving market. Going forward, the Company is focused on improving both
shareholder returns and its cash position. As the Company has evolved, so too
has the Compensation Program. Initially focused on revenue growth, the
Compensation Program was designed to reward the CEO as revenue increased. Going
forward, the Compensation Program instead will be structured to reward for other
strategic goals (as described below) and increasing shareholder value. Thus, the
compensation elements will be linked to stock value and effective use of cash
flow.
The
Compensation Program consists of base salary, annual incentive and long-term
equity compensation. In addition, all Named Executives receive some modest
personal benefits and perquisites. The Company does not, however, provide
supplemental retirement benefits for Named Executives; retirement benefits are
accumulated through the Company’s 401(k) Plan which is open to all employees.
Among the Named Executives, only the CEO has an employment
agreement.
The
Compensation Committee annually reviews the executive compensation elements and
assesses the integrity of the Compensation Program as a whole to ensure that it
continues to be aligned with our compensation objectives, and thus, supports the
attainment of our goals. The 2008 review conducted by the Compensation Committee
resulted in a number of actions. To use available capital efficiently and to
increase the alignment of the executives’ interests with those of the
shareholders, the Compensation Committee took the following steps: it (i)
authorized that half of the CEO’s bonus above the threshold amount be paid in
restricted stock; (ii) eliminated a provision in the CEO’s
contract
which guaranteed a portion of his annual incentive; (iii) approved grants of
performance-vested restricted stock units (with a grant date of May 9, 2008) to
all Named Executives except the CEO; and (iv) authorized a special one-time
stock option grant to the CEO (with a grant date of March 31,
2008).
Periodically,
the Company reviews competitive compensation levels, mix and practices to ensure
all Compensation Program features continue to be in line with the market, while
still reflecting the unique needs of our business model. Additionally, in
response to business and talent needs, executive management brings compensation
proposals to the Compensation Committee which then reviews the proposal and
either approves or denies the proposed changes.
Competitive
Positioning and Mix of Pay
Benchmarking
The
primary source of peer data for executives is a customized peer group developed
to reflect competitors for business and talent. The peer group was established
as part of a comprehensive benchmarking assessment undertaken by the
Compensation Committee (working with an outside consulting firm, HR & Survey
Solutions, LLC) at the end of 2007. While company size is a significant driver
of compensation levels (as it is a fairly consistent indicator of an executive’s
scope of responsibility), only a limited number of public companies are
comparable to the Company in terms of size and business. In addition, the
Company is in a growth mode, and given its rapid growth, it needs to make
comparisons to companies that represent where it is headed as well as where it
currently resides. Therefore, peer companies were selected based on the
following considerations:
Company size
: Peers
reflect both current and projected company size. The median revenue for the peer
group is $274 million.
Industry
: Selected
companies occupy a similar space in the market and are working toward achieving
“breakthroughs” in the technological process.
Company maturity
:
Selected companies are in a growth mode.
The peer
group includes the following six companies: Akamai Technologies, DG FastChannel,
Inc., IMAX Corporation, Macrovision Corp., National CineMedia, Inc., and TIVO
Inc.
Relative
to the peer group, the CEO’s base salary and total cash compensation was found
to be positioned close to the 75
th
percentile while total direct compensation level was below median. While the
Compensation Committee has not defined a targeted pay positioning for the Named
Executives, as the CEO is the primary driver of the business, such prominent
positioning is appropriate in the Compensation Committee’s view. However, the
Compensation Committee has taken steps to shift a larger portion of pay into
variable vehicles (see CEO Compensation Arrangements below).
The other
Named Executives are positioned at the median of the peer group for base salary
and below median for total compensation. It is the belief of the Compensation
Committee that these positions are more traditional than the CEO’s position, and
the available talent pool to fill these positions is broader. Thus, while these
positions are paid below the median of the peer group, the Compensation
Committee believes that their pay levels, and potential opportunity for wealth
creation through stock grants, are robust enough to retain and motivate
them.
Going
forward, the Compensation Committee plans to continue its work to establish a
comprehensive framework for assuring pay is competitive and performance-based.
Identifying the peer group was the first step; the Compensation Committee will
continue to develop elements of such a framework in keeping with the Company’s
executive compensation philosophy in the future.
Pay
Mix
The
Company is evolving from a pay philosophy that emphasized fixed pay to one that
believes a substantial portion of each executive’s compensation should be at
risk and dependent upon performance. Currently, the mix of pay for Named
Executives, except the CEO, favors base salary. In contrast, the CEO’s current
pay mix is weighted toward variable pay.
·
|
Going
forward, the Company plans to deliver a greater proportion of total
compensation through variable elements. While the Committee has not
adopted a targeted mix of either long-term to short-term, fixed to
variable, or equity and non-equity compensation, they have taken steps to
increase the portion of variable compensation. Initial steps in
this direction include a grant of performance-based restricted stock units
to the Named Executives (other than the CEO) on May 9, 2008. An additional
step was the elimination of the CEO’s guaranteed
bonus.
|
Elements
of Compensation
Base
Salary
Base
salaries are fixed compensation with the primary function of aiding in
attraction and retention. These salaries are reviewed annually as well as at the
time of a promotion or other change in responsibilities. Increases are based on
an evaluation of the previous year’s performance of the Company and the
executive, the relative strategic importance of the position, market conditions,
and competitive pay levels.
In 2008,
all Named Executives except the CEO received a salary increase. The salary
increases for these executives were based on recommendations made by the CEO and
approved by the Compensation Committee. The amounts reflect performance
contribution, including taking into account the Company’s recent acquisitions
and increased revenues. Mr. Goldwater received an increase of 17%, reflecting
his increased responsibilities and accountabilities for the Company’s Media
Services Group and AccessIT DC, especially following a period of rapid growth in
this area. Messrs. Loffredo’s and Pflug’s salaries increased by
approximately 10% and Mr. Butkovsky’s increased by 11%, each in an effort to
bring it closer to the median of the peer group. Mr. Mayo did not receive a
salary increase, reflecting the plan to transition the focus of his compensation
to variable pay, and maintain his salary at a level appropriate to the CEO of a
public company of the Company’s size and scope.
Annual
Incentive Awards
The CEO
is eligible to receive a discretionary annual incentive cash award. The CEO’s
performance is assessed by the Compensation Committee against achievement of the
Company’s strategic goals (See CEO Compensation Arrangements, below, for further
explanation). For the Last Fiscal Year, the CEO also received a
guaranteed bonus. This was part of a transition package from the prior
revenue-based incentive plan and has been discontinued.
The other
Named Executives are also eligible to receive discretionary annual incentive
cash awards, with respect to which the CEO makes recommendations to the
Compensation Committee for its review and approval. No annual cash awards were
granted to Named Executives for the fiscal year ended March 31,
2008.
Long-Term
Incentive Awards
The
Compensation Committee annually considers long-term incentive awards, for which
it has the authority to grant a variety of equity-based awards. The primary
objective of such awards is to align the interests of executives with those of
shareholders by increasing executive ownership and fostering a long-term
focus. In recent years, such awards have been made after fiscal year
end in order to permit consideration of year end performance.
Long-term
incentive awards for Named Executives have historically consisted of stock
options. The CEO received a stock option grant in March 2008 (discussed in more
detail below). The other Named Executives received a grant of incentive stock
options in October of 2007 that had been authorized by the Compensation
Committee after the end of fiscal year ended March 31, 2007. The
sizes of such grants were recommended by the CEO to the Compensation Committee
based on the value of such grants, at the then-current stock price, of amounts
intended to bring the other Named Executives closer to appropriate market levels
of overall compensation.
The
grants made to the other Named Executives in May 2008 consisted of restricted
stock units (“RSUs”). These grants were designed to aid in retention, provide a
discretionary reward for performance, increase executive ownership, and focus
Named Executives on improving share price. The grant featured accelerated
vesting based on stock price appreciation. The RSUs will fully vest at the end
of year one if the stock price achieves $12.00 per share for 10 consecutive
trading days (a “10-day period”) during such year. If stock price reaches $9.50
per share for a 10-day period during year one, two-thirds of the shares vest; a
stock price of $7.00 per share for a 10-day period during year one triggers
one-third of the shares to vest. No vesting occurs if the stock price does not
achieve at least $7.00 per share for a 10-day period during that year. The same
schedule applies in year two of the grant. At the end of year three, all
remaining unvested shares vest regardless of price. Subject to shareholder
approval, the RSUs may be
settled
in stock or cash or a combination thereof, at the Company’s discretion. Until
that approval is obtained, these awards will be treated as liabilities for
financial reporting purposes pursuant to FAS 123(R).
The
actual size of the grant was developed to provide an equity-based reward for
performance of the executive team (deemed especially important by the CEO and
Compensation Committee since the team was not awarded an annual cash incentive).
Grant size was calibrated against competitive levels using a projected target
stock price of $7.00. Grant levels were as follows: 100,000 RSUs to Mr.
Goldwater; 90,000 RSUs to Mr. Loffredo; 75,000 RSUs each to Messrs. Butkovsky
and Pflug.
CEO
Compensation Arrangements
As
explained above, Mr. Mayo, the President and CEO, is also the founder of the
Company. Historically, his compensation has been determined pursuant to the
terms of his employment agreement and has reflected his leadership and influence
as the driving force behind the Company’s success. As the Company has evolved,
the Compensation Committee, while recognizing the continued importance of his
leadership and influence, has taken actions to shift the CEO’s pay such that
base salary becomes less prominent, and performance-based variable compensation
opportunity comprises a larger portion of overall pay. These steps align Mr.
Mayo’s compensation with those of CEOs in peer companies by holding his base
salary at its 2005 level and revising his variable compensation arrangements to
include performance-based annual and long-term incentives.
In the
Last Fiscal Year, Mr. Mayo received a base salary of $600,000 (maintained at
2005 levels), a guaranteed annual bonus of $240,000 (a temporary arrangement as
part of the transition from the prior incentive arrangement), and performance
award of $300,000, paid half in cash and half in restricted stock.
In
accordance with his employment contract, this $300,000 award was based on 2007
calendar year performance. The amount was based on an assessment of performance
in five areas: revenue, EBITDA, installed screens, financing, and strategic
relationships and acquisition integration. These align with the Company’s
strategic objectives. While specific performance goals and weightings were not
defined, the Compensation Committee assessed actual performance against the
Company’s strategic goals and developed an overall consensus regarding the CEO’s
performance and a corresponding incentive payout.
Going
forward, the guaranteed annual bonus has been eliminated, making any annual
incentive strictly performance-based and paid at the discretion of the
Compensation Committee. At target performance, Mr. Mayo may receive an award
equal to 75% of salary. Incentive awards begin to pay out at a threshold level
of performance. Achieving threshold performance can result in an award equal to
50% of the target award. Payments are capped at 175% of the target award.
Performance between the specified levels will result in pro-rated
payments.
To
increase the portion of variable compensation, and to ensure alignment with
shareholder interests, Mr. Mayo received a one-time grant of 750,000 stock
options in March 2008 that will expire in March 2018. As with the
RSUs granted to the other Named Executives, the stock option grant vests at the
end of three years, but has an accelerated vesting based on stock price
appreciation (see discussion of Restricted Stock Units above). This performance
acceleration feature heightens the emphasis on the linkage between executive
compensation and shareholder return.
Personal
Benefits and Perquisites
In
addition to the benefits provided to all employees and grandfathered benefits
(provided to all employees hired before January 1, 2005), Named Executives are
eligible for an annual physical; an allowance of $4,000 to cover any
unreimbursed healthcare costs; and supplemental life insurance coverage of
$200,000. The CEO only is eligible for a long-term care policy and a $5 million
key-man life insurance policy, the proceeds of which shall be used to
repurchase, after reimbursement of all premiums paid by the company, the CEO’s
stock from his estate in the event of his death.
It is the
Company’s policy to provide minimal and modest perquisites to the Named
Executives, including an annual automobile allowance.
Employment
Agreement for CEO
The
Company provides an employment agreement to the CEO as a means of retention
during periods of uncertainty and operational challenge. Additionally, the
employment agreement includes non-compete and non-solicitation
provisions.
The provisions for severance benefits are at typical competitive
levels. See page 21 for a description of the material terms of
Mr. Mayo’s employment agreement.
Stock
Ownership Guidelines
The
Company does not maintain formal stock ownership guidelines.
Policy
on Deductibility of Compensation
Section
162(m) of the Internal Revenue Code limits the deductibility of compensation in
excess of $1 million paid to certain executive officers named in this proxy
statement, unless certain requirements are met. No element of the Company’s
compensation, including the annual incentive awards and restricted stock, meets
these requirements. Given the Company’s net operating losses, 162(m) is not
currently a material factor in designing compensation.
Recapture
Policy
The
Company intends to recapture compensation as required under the Sarbanes-Oxley
Act. However, there have been no instances where it needed to recapture any
compensation.
COMPENSATION
COMMITTEE REPORT
The
following report does not constitute soliciting material and is not considered
filed or incorporated by reference into any other filing by the Company under
the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934,
as amended.
The
Compensation Committee has reviewed and discussed with management the
Compensation Discussion and Analysis that precedes this Report as required by
Item 402(b) of the SEC’s Regulation S-K. Based on its review and discussions
with management, the Compensation Committee recommended to the Board the
inclusion of the Compensation Discussion and Analysis in this Proxy
Statement.
The
Compensation Discussion and Analysis discusses the philosophy, principles, and
policies underlying the Company’s compensation programs that were in effect
during the Last Fiscal Year and which will be applicable going forward until
amended.
Respectfully
submitted,
The
Compensation Committee of the Board of Directors
Robert
Davidoff, Chairman
Wayne L.
Clevenger
Gerald C.
Crotty
Robert E.
Mulholland
THE
FOREGOING COMPENSATION COMMITTEE REPORT SHALL NOT BE “SOLICITING MATERIAL” OR BE
DEEMED FILED WITH THE SEC, NOR SHALL SUCH INFORMATION BE INCORPORATED BY
REFERENCE INTO ANY FILING UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
EXCHANGE ACT, EXCEPT TO THE EXTENT THE COMPANY SPECIFICALLY INCORPORATES IT BY
REFERENCE INTO SUCH FILING.
The
following table sets forth certain information concerning compensation received
by the Company’s CEO and its four other most highly compensated individuals who
were serving as executive officers at the end of the Last Fiscal Year, for
services rendered in all capacities during the Last Fiscal Year (the “Named
Executives”).
|
SUMMARY
COMPENSATION TABLE
|
|
|
|
|
|
|
|
|
|
|
Name
and
Principal
Position(s)
|
Year
|
Salary
($)
|
Bonus
($)(1)
|
Stock
Awards
($)(2)
|
Option
Awards
($)(3)
|
All
Other Compensation
($)(4)
|
Total
($)
|
A.
Dale Mayo
|
2008
|
600,000
|
390,000
|
8,936
|
578
|
56,058
|
1,055,572
|
President,
CEO and Chairman
|
2007
|
600,000
|
500,000
|
-
|
1,314,969
|
53,978
(5)
|
2,468,947
|
Charles
Goldwater
|
2008
|
350,000
|
-
|
7,081
(6)
|
27,175
|
25,753
|
410,009
|
SVP,
President-MSG, President and COO of AccessIT DC
|
2007
|
240,417
|
18,000
|
-
|
84,212
|
25,328
|
367,957
|
Gary
S. Loffredo
|
2008
|
275,000
|
-
|
2,832
(6)
|
3,757
|
27,394
|
308,983
|
SVP
– Business Affairs, General Counsel and Secretary
|
2007
|
250,000
|
13,750
|
-
|
73,400
|
27,129
|
364,279
|
Jeff
Butkovsky
|
2008
|
250,000
|
-
|
2,832
(6)
|
3,757
|
23,809
|
280,398
|
SVP
- CTO
|
2007
|
225,000
|
15,000
|
-
|
73,400
|
23,221
|
336,621
|
|
|
|
|
|
|
|
|
Brian
D. Pflug
|
2008
|
220,000
|
-
|
3,777
(6)
|
3,757
|
23,696
|
251,230
|
SVP
– Accounting and Finance
|
2007
|
200,000
|
3,000
|
-
|
73,400
|
23,471
|
299,871
|
(1)
|
Reflects
amounts earned during such fiscal
year.
|
(2)
|
The
amounts in this column reflect the dollar amount recognized for financial
statement reporting purposes for the fiscal years ended March 31,
2007 and 2008, in accordance with SFAS No. 123(R) and thus
include amounts from awards granted in and prior to the respective fiscal
years. Assumptions used in the calculation of these amounts are
included in footnote 2 to the Company’s audited financial statements for
the fiscal year ended March 31, 2008, included in the Company’s
Annual Report on Form 10-K filed with the SEC on June 16, 2008, as
amended on June 26, 2008 (the “Form
10-K”).
|
(3)
|
The
amounts in this column reflect the dollar amount recognized for financial
statement reporting purposes for the fiscal years ended March 31,
2007 and 2008, in accordance with SFAS No. 123(R) and thus
include amounts from awards granted in and prior to the respective fiscal
years. Assumptions used in the calculation of these amounts are
included in footnote 2 to the Company’s audited financial statements for
the fiscal year ended March 31, 2008, included in the
Form 10-K. The amounts for 2007 include the value of stock
options granted for which vesting was accelerated during the fiscal year
ended March 31, 2006, in anticipation of the adoption of SFAS
123(R). However, such expense was not recognized until
stockholders approved an increase to the Plan during the fiscal year ended
March 31, 2007.
|
(4)
|
Includes
automobile allowances, additional life insurance premiums and certain
medicals expenses paid by the Company and the Company’s matching
contributions under its 401(k) plan and the premiums for group term life
insurance paid by the Company. Under its 401(k) plan, the
Company automatically matches 50% of the first 6% of employee
contributions (on a per-payroll period basis) or the statutory annual
limit set by the Internal Revenue
Service.
|
(5)
|
Excludes
premiums for one ten-year term life insurance policy, in the benefit
amount of $5 million, under which the Company is the beneficiary and also
excludes the premiums for an additional ten-year term life insurance
policy in the benefit amount of $5 million, under which the proceeds of
the policy are to be used to repurchase, after reimbursement of all
premiums paid by the Company, shares of the Company’s capital stock held
by Mr. Mayo’s estate.
|
(6)
|
Excludes
the value of 340,000 restricted stock units awarded in May 2008 for
services rendered in all capacities during the Last Fiscal Year, which are
subject to the stockholders’ approval of Proposal Four
above. These restricted stock units were awarded to the Named
Executives, other than the CEO, as follows: 100,000 RSUs to Mr.
Goldwater, 90,000 RSUs to Mr. Loffredo, and 75,000 RSUs each to Messrs.
Butkovsky and Pflug. The Company may pay such restricted stock
units upon vesting in cash or shares of Class A Common Stock or a
combination thereof at the Company’s
discretion.
|
Employment
agreements and arrangements between the Company and Named
Executives
A. Dale Mayo
. In
March 2008, the Company entered into an amended and restated employment
agreement (the “Agreement”) with A. Dale Mayo. The Agreement with Mr.
Mayo supercedes the terms and conditions of his existing amended and restated
employment agreement (the “Previous Agreement”) and extends the term of his
employment to March 31, 2011; upon such expiration, either the Board or Mr. Mayo
may exercise the option to have Mr. Mayo serve only as Chairman and Chief
Executive Officer of the Company for a term of three years, with both his time
commitment and Base Salary (as defined therein) reduced by 50% from their levels
immediately before such change in roles. Under the Previous
Agreement, Mr. Mayo received an annual base salary of $600,000
and a
guaranteed bonus of $240,000 per year. Under the Employment
Agreement, Mr. Mayo will receive a base salary of $600,000, subject to increase
for subsequent years in the sole discretion of the Compensation Committee of the
Board (the “Committee”), and an annual bonus based on the satisfaction of
certain performance targets to be set annually by the Committee, which bonus
shall not exceed 131.25% of Mr. Mayo’s then-Base Salary and is payable in cash,
as to the portion of any bonus earned for an initial target, and then 50% in
cash and 50% in restricted stock for any additional bonus amount earned for
higher targets. Under the Agreement, Mr. Mayo has agreed to not
disclose or use any confidential information of the Company and, for a period of
one year after the termination or expiration of his agreement, not to compete
with the Company. The Company may terminate Mr. Mayo’s employment if
Mr. Mayo is convicted of theft or embezzlement, fraud, unauthorized
appropriation of any assets or property or any felony involving dishonesty or
moral turpitude. In the event of such termination, the Company will
pay only any earned but unpaid salary up to the date of
termination. If the Company terminates Mr. Mayo for any other reason,
Mr. Mayo will be entitled to receive his salary, including bonuses, until the
scheduled expiration of the Agreement, during which time Mr. Mayo will be
obligated to seek other employment. In addition, on June 15, 2006,
Mr. Mayo entered into an employment agreement with AccessIT DC, an indirectly
wholly-owned subsidiary of the Company, pursuant to which he serves as CEO of
AccessIT DC but for which he receives no compensation in addition to that which
he receives from the Company.
The
following table sets forth certain information concerning grants of stock
options and restricted stock made under the Company’s Second Amended and
Restated 2000 Equity Incentive Plan to the Company’s Named Executives during the
Last Fiscal Year.
GRANTS
OF PLAN-BASED AWARDS
Name
|
Grant
date
|
Estimated
future payouts under equity incentive plan awards
|
All
other stock awards: Number of shares of stock or units
(#)
|
Exercise
or base price of option awards
($/Sh)
|
Grant
date fair value of stock and option awards
|
Threshold
(#)
|
Target
(#)
|
Maximum
(#)
|
A.
Dale Mayo
|
3/31/2008
|
--
|
750,000
(1)
|
--
|
|
$3.25
|
$1,173,485
|
|
2/7/2008
|
|
|
|
59,761
|
|
$150,000
|
Charles
Goldwater
|
10/18/2007
|
--
|
15,000
|
--
|
|
$5.16
|
$38,781
|
|
9/20/2007
|
|
|
|
7,500
(2)
|
|
$41,700
|
Gary
S. Loffredo
|
10/18/2007
|
--
|
10,000
|
--
|
|
$5.16
|
$25,854
|
|
9/20/2007
|
|
|
|
3,000
(2)
|
|
$16,680
|
Jeff
Butkovsky
|
10/18/2007
|
--
|
10,000
|
--
|
|
$5.16
|
$25,854
|
|
9/20/2007
|
|
|
|
3,000
(2)
|
|
$16,680
|
Brian
D. Pflug
|
10/18/2007
|
--
|
10,000
|
--
|
|
$5.16
|
$25,854
|
|
9/20/2007
|
|
|
|
4,000
(2)
|
|
$22,240
|
(1)
|
Of
such grant, 320,003 shares are subject to the stockholders’ approval of
Proposal Four discussed above.
|
(2)
|
Excludes
340,000 restricted stock units awarded in May 2008 for services rendered
in all capacities during the Last Fiscal Year, which are subject to the
stockholders’ approval of Proposal Four above. These restricted
stock units were awarded to the Named Executives, other than the CEO, as
follows: 100,000 RSUs to Mr. Goldwater, 90,000 RSUs to Mr.
Loffredo, and 75,000 RSUs each to Messrs. Butkovsky and
Pflug. The Company may pay such restricted stock units upon
vesting in cash or shares of Class A Common Stock or a combination thereof
at the Company’s discretion.
|
The following table sets
forth certain information concerning outstanding equity awards of the Company’s
Named Executives at the end of the Last Fiscal Year. All outstanding
stock awards reported in this table represent restricted stock that vests in
equal annual installments over three years. At
the end of the Last Fiscal
Year,
there were no unearned equity awards under performance-based
plans.
OUTSTANDING
EQUITY AWARDS AT MARCH 31, 2008
|
OPTION
AWARDS
|
STOCK
AWARDS
|
Name
|
Number
of Securities
Underlying
Unexercised
Options
Exercisable (#)(1)
|
Number
of Securities
Underlying
Unexercised
Options
Unexercisable
(#)
|
Option
Exercise Price
($)
|
Option
Expiration
Date
|
Number
of Shares or Units of Stock That Have Not Vested
(#)(2)
|
Market
Value of Shares or Units of Stock That Have Not Vested
(3)
|
A.
Dale
|
100,000(4)
|
|
7.04
|
6/9/2015
|
|
|
Mayo
|
300,000(5)
|
|
10.89
|
12/15/2015
|
|
|
|
|
750,000
(6)
|
3.25
|
3/31/2018
|
|
|
|
|
|
|
|
59,761(18)
|
$188,247
|
Charles
|
25,000(4)
|
|
10.07
|
8/2/2015
|
|
|
Goldwater
|
10,000(4)
|
|
9.98
|
10/26/2015
|
|
|
|
10,000(5)
|
|
10.25
|
3/8/2016
|
|
|
|
3,300(7)
|
6,700(7)
|
9.45
|
10/3/2016
|
|
|
|
|
15,000(8)
|
5.16
|
10/18/2017
|
|
|
|
|
|
|
|
7,500(19)
|
$23,625
|
Gary
S.
|
50,000(9)
|
|
7.50
|
8/2/2010
|
|
|
Loffredo
|
20,000(10)
|
|
5.00
|
2/28/2012
|
|
|
|
20,000(11)
|
|
2.50
|
12/18/2012
|
|
|
|
50,000(12)
|
|
5.00
|
11/4/2013
|
|
|
|
40,000(13)
|
|
3.60
|
1/13/2015
|
|
|
|
10,000(5)
|
|
10.25
|
3/8/2016
|
|
|
|
|
10,000(8)
|
5.16
|
10/18/2017
|
|
|
|
|
|
|
|
3,000(19)
|
$9,450
|
Jeff
|
5,000(14)
|
|
12.50
|
10/30/2010
|
|
|
Butkovsky
|
10,000(10)
|
|
5.00
|
2/28/2012
|
|
|
|
10,000(15)
|
|
7.50
|
7/12/2012
|
|
|
|
10,000(11)
|
|
2.50
|
12/18/2012
|
|
|
|
30,000(12)
|
|
5.00
|
11/4/2013
|
|
|
|
45,000(13)
|
|
3.60
|
1/13/2015
|
|
|
|
10,000(5)
|
|
10.25
|
3/8/2016
|
|
|
|
|
10,000(8)
|
5.16
|
10/18/2017
|
|
|
|
|
|
|
|
3,000(19)
|
$9,450
|
Brian
D.
|
186(16)
|
|
8.06
|
6/1/2010
|
|
|
Pflug
|
5,000(16)
|
|
7.50
|
6/1/2010
|
|
|
|
10,000(17)
|
|
12.50
|
12/12/2010
|
|
|
|
10,000(10)
|
|
5.00
|
2/28/2012
|
|
|
|
10,000(11)
|
|
2.50
|
12/18/2012
|
|
|
|
50,000(12)
|
|
5.00
|
11/4/2013
|
|
|
|
40,000(13)
|
|
3.60
|
1/13/2015
|
|
|
|
10,000(5)
|
|
10.25
|
3/8/2016
|
|
|
|
|
10,000(8)
|
5.16
|
10/18/2017
|
|
|
|
|
|
|
|
4,000(19)
|
$12,600
|
(1)
|
Reflects
stock options granted under the Company’s Second Amended and Restated 2000
Equity Incentive Plan.
|
(2)
|
Reflects
restricted stock awards granted under the Company’s Second Amended and
Restated 2000 Equity Incentive Plan and excludes 340,000 restricted stock
units awarded in May 2008 for services rendered during the Last Fiscal
Year, which are subject to the stockholders’ approval of Proposal Four
above. These restricted stock units were awarded to the Named
Executives, other than the CEO, as follows: 100,000 RSUs to Mr.
Goldwater, 90,000 RSUs to Mr. Loffredo, and 75,000 RSUs each to
|
|
Messrs.
Butkovsky and Pflug. The Company may pay such restricted stock
units upon vesting in cash or shares of Class A Common Stock or a
combination thereof at the Company’s discretion.
|
(3)
|
Reflects
the market value of shares of stock that have not vested using the last
reported closing price per share of the Class A Common Stock as reported
by NASDAQ on March 31, 2008 of $3.15.
|
(4)
|
Such
options vested on March 8, 2006.
|
(5)
|
Such
options vested on September 14,
2006.
|
(6)
|
Of
such grant, 320,003 shares are subject to the stockholders’ approval of
Proposal Four above. Such options will vest on March 31, 2011
or earlier as follows: (a) on March 31, 2009, 1/3 of the options will vest
if the Class A Common Stock has traded at $7.00 or more for at least 10
consecutive trading days (a "10-day period") during the year ending on
such date; 2/3 of the options will vest if the Class A Common Stock has
traded at $9.50 or more for a 10-day period during the year ending on such
date; or all of the options will vest if the Class A Common Stock has
traded at $12.00 or more for a 10-day period during the year ending on
such date; and (b) on March 31, 2010, 1/3 of the unvested options will
vest if the Class A Common Stock has traded at $7.00 or more for a 10-day
period during the two years ending on such date; 2/3 of the unvested
options will vest if the Class A Common Stock has traded at $9.50 or more
for a 10-day period during the two years ending on such date; or all of
the unvested options will vest if the Class A Common Stock has traded at
$12.00 or more for a 10-day period during the year ending on such
date.
|
(7)
|
Of
such total options, 1/3 vested on October 3, 2007 and 1/3 will vest on
October 3 of each of 2008 and 2009.
|
(8)
|
Of
such options, 1/3 will vest on October 18 of each of 2008, 2009 and
2010.
|
(9)
|
Of
such options, 1/3 vested on August 2 of each of 2001, 2002 and
2003.
|
(10)
|
Of
such options, 1/3 vested on February 28 of each of 2003, 2004 and
2005.
|
(11)
|
Of
such options, 1/3 vested on December 18 of each of 2003, 2004 and
2005.
|
(12)
|
Of
such options, 1/3 vested on November 4 of each of 2004 and 2005 and 1/3
vested on September 14, 2006.
|
(13)
|
Such
options vested on December 1, 2005.
|
(14)
|
Of
such options, 1/3 vested on October 30 of each of 2001, 2002 and
2003.
|
(15)
|
Of
such options, 1/3 vested on July 12 of each of 2003, 2004 and
2005.
|
(16)
|
Of
such options, 1/3 vested on June 1 of each of 2001, 2002 and
2003.
|
(17)
|
Of
such options, 1/3 vested on December 12 of each of 2001, 2002 and
2003.
|
(18)
|
Of
such restricted shares, 1/3 will vest on January 24 of each of 2009, 2010
and 2011.
|
(19)
|
Of
such restricted shares, 1/3 will vest on September 20 of each of 2008,
2009 and 2010.
|
Directors
The
following table sets forth certain information concerning compensation received
by the Company’s Directors for services rendered as a director during the Last
Fiscal Year.
|
|
Fees
Earned or Paid in Cash
($)
|
|
|
|
|
|
Non-Equity
Incentive
Plan
Compensation
($)
|
|
Non-Qualified
Deferred Compensation Earnings
($)
|
|
All
Other
Compensation
($)
|
|
|
Wayne
L. Clevenger
|
|
--
|
|
--
|
|
$9,514
(3)
|
|
--
|
|
--
|
|
--
|
|
$9,514
|
Gerald
C. Crotty
|
|
--
|
|
--
|
|
$9,514
|
|
--
|
|
--
|
|
--
|
|
$9,514
|
Robert
Davidoff
|
|
--
|
|
--
|
|
$9,514
|
|
--
|
|
--
|
|
--
|
|
$9,514
|
Matthew
W. Finlay
|
|
--
|
|
--
|
|
$9,514
(3)
|
|
--
|
|
--
|
|
--
|
|
$9,514
|
Robert
E. Mulholland
|
|
--
|
|
--
|
|
$9,514
|
|
--
|
|
--
|
|
--
|
|
$9,514
|
(1)
|
Excludes
20,690 restricted stock units awarded to each director in May 2008 for
services rendered as a director during the Last Fiscal Year, which are
subject to the stockholders’ approval of Proposal Four
above. The Company may pay such restricted stock units upon
vesting in cash or shares of Class A Common Stock or a combination thereof
at the Company’s discretion. Such restricted stock units for
|
|
Messrs.
Clevenger and Finlay are held by MidMark Investments. Messrs.
Clevenger and Finlay disclaim beneficial ownership of such securities,
except to the extent of any pecuniary interest therein.
|
(2)
|
The
amounts in this column reflect the dollar amount recognized for financial
statement reporting purposes for the fiscal year ended March 31, 2008, in
accordance with SFAS No. 123(R). Assumptions used in the
calculation of these amounts are included in Note 2 to the Company’s
audited financial statements for the fiscal year ended March 31, 2008,
included in the Form 10-K.
|
(3)
|
Such
option awards are held by MidMark Investments. Messrs.
Clevenger and Finlay disclaim beneficial ownership of such securities,
except to the extent of any pecuniary interest
therein.
|
Mr.
Farrell is a director and officer of the Company but is not a Named
Executive. He did not receive any compensation for services rendered
as a director during the Last Fiscal Year.
Effective
April 1, 2008, for the fiscal year ending March 31, 2009, each non-employee
Company Director will receive $8,000 per year for board participation, $1,000
per year for committee participation and $1,000 per board meeting they attend in
person or via telephone.
EQUITY
COMPENSATION PLANS
The
following table sets forth certain information, as of March 31, 2008, regarding
the shares of AccessIT’s Class A Common Stock and AccessDM’s common stock
authorized for issuance under their respective equity compensation
plans.
Plan
|
|
Number
of shares of common stock issuable upon exercise of outstanding
options
|
|
Weighted
average of exercise price of outstanding options
|
|
Number
of shares of common stock remaining available for future
issuance
|
AccessIT
Second Amended and Restated 2000 Equity Incentive Plan (“the Plan”)
approved by shareholders
|
|
2,076,569
(1)(6)
|
|
$6.68
|
|
--
(2)
|
AccessIT
compensation plans not approved by shareholders
|
|
N/A
|
|
N/A
|
|
N/A
|
AccessDM
compensation plan approved by AccessDM’s shareholders
|
|
1,055,000
(3)(5)
|
|
$0.95
(4)
|
|
945,000
(3)
|
AccessDM
compensation plans not approved by AccessDM’s shareholders
|
|
N/A
|
|
N/A
|
|
N/A
|
(1)
|
Shares
of AccessIT Class A Common Stock.
|
(2)
|
The
issuance of an additional 320,003 stock options and 723,700 restricted
stock units is subject to the stockholders’ approval of Proposal Four
above.
|
(3)
|
Shares
of AccessDM common stock.
|
(4)
|
Since
there is no public trading market for AccessDM’s common stock, the fair
market value of AccessDM’s common stock on the date of grant was
determined by an appraisal of such
options.
|
(5)
|
As
of March 31, 2008, there were 50,000,000 shares of AccessDM’s common stock
authorized and 19,213,758 shares of AccessDM’s common stock issued and
outstanding.
|
(6)
|
Excludes
723,700 restricted stock units awarded in May 2008 which are subject to
the stockholders' approval of Proposal Four above. The Company
may pay such restricted stock units upon vesting in cash or shares of
Class A Common Stock or a combination thereof at the Company’s
discretion.
|
AccessIT
equity incentive plan
Our Board
adopted the Plan on June 1, 2000 and, in July 2000, our shareholders approved
the Plan by written consent. Under the Plan, we may grant both
incentive and non-statutory stock options to our employees, non-employee
directors and consultants. The primary purpose of the Plan is to
enable us to attract, retain and motivate our employees, non-employee directors
and consultants. On June 9, 2005, the Board approved the expansion of
the Plan from 850,000 to 1,100,000 options, which was approved by the
shareholders at the Company’s 2005 Annual Meeting held on September 15,
2005. On July 6, 2006, the Board approved the expansion of the Plan
from 1,100,000 to 2,200,000 options, which was approved by the shareholders at
the Company’s 2006 Annual Meeting
held on
September 14, 2006. On September 18, 2007, upon the approval of
shareholders at the Company’s 2007 Annual Meeting, the Plan was amended to allow
stock, restricted stock, stock appreciation rights, performance awards and other
equity-based awards to be granted, in addition to stock options. On
May 9, 2008, the Board approved an amendment (the “Amendment”) to the Plan
allowing for the grant of restricted stock units (“RSUs”) in addition to stock
options, Class A Common Stock, restricted Class A Common Stock, stock
appreciation rights, performance awards and other equity-based
awards. The Amendment did not require shareholder
approval. As of
March 31,
2008, there were 2,076,569 options outstanding to purchase shares of Class A
Common Stock, and there were no shares of Class A Common Stock available for
issuance under the Plan. Subsequent to March 31, 2008, 723,700 RSUs
were granted. Such RSUs may be settled in cash or shares of Class A
Common Stock or a combination thereof, at the Company’s discretion and subject
to the stockholders’ approval of Proposal Four above.
More
information about the Plan is provided in connection with Proposal Four
above.
AccessDM
stock option plan
AccessDM’s
Board adopted its stock option plan (“the AccessDM Plan”) on May 13, 2003 and
its shareholders approved the AccessDM Plan on May 13, 2003. Under
the AccessDM Plan, AccessDM grants stock options to its employees, non-employee
directors and consultants. The AccessDM Plan authorizes up to
2,000,000 shares of AccessDM common stock for issuance upon the exercise of
options granted under the AccessDM Plan. As of March 31, 2008,
AccessDM has issued options to purchase 1,055,000 of its shares to employees,
and there were options to purchase 945,000 shares of AccessDM common stock
available for grant under the AccessDM Plan.
Under the
AccessDM Plan, stock options covering no more than 500,000 shares may be granted
to any participant in any single calendar year and no participant may be granted
ISOs with an aggregate fair market value, as of the date on which such options
were granted, of more than $100,000 becoming exercisable for the first time in
any given calendar year. Stock options granted under the AccessDM
Plan expire ten years following the date of grant (or such shorter period of
time as may be provided in a stock option agreement or five years in the case of
ISOs granted to shareholders who own greater than 10% of the total combined
voting power of AccessDM and are subject to restrictions on
transfer. Stock options granted under the AccessDM Plan vest
generally over periods up to three years. The AccessDM Plan is
administered by AccessDM’s Board.
The
AccessDM Plan provides for the granting of ISOs with exercise prices of not less
than 100% of the fair market value of AccessDM’s common stock on the date of
grant. ISOs granted to holders of more than 10% of the total combined
voting power of AccessDM must have exercise prices of not less than 110% of the
fair market value of AccessDM common stock on the date of grant. ISOs
and non-statutory stock options granted under the AccessDM Plan are subject to
vesting provisions, and exercise is subject to the continuous service of the
participants. The exercise prices and vesting periods (if any) for
non-statutory options are set at the discretion of AccessDM’s
Board. Upon a change of control of AccessDM, all stock options
(incentive and non-statutory) that have not previously vested will vest
immediately and become fully exercisable. In connection with the
grants of stock options under the AccessDM Plan, AccessDM and the participants
have executed stock option agreements setting forth the terms of the
grants.
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section
16(a) of the Exchange Act requires the Company’s directors, executive officers
and persons who beneficially own more than 10% of its Common Stock to file
reports of ownership and changes in ownership with the Commission and to furnish
the Company with copies of all such reports they file. Based on the
Company’s review of the copies of such forms received by it, or written
representations from certain reporting persons, the Company believes that none
of its directors, executive officers or persons who beneficially own more than
10% of the Company’s Common Stock failed to comply with Section 16(a) reporting
requirements in the Company’s Last Fiscal Year, except for the
following: Messrs. Clevenger, Crotty, Davidoff, Finlay and Mulholland
each failed to timely file a Form 4 regarding one transaction.
CERTAIN
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
None.
REPORT
OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The
Board’s Audit Committee (“Audit Committee”) oversees the Company’s financial
reporting process on behalf of the Board. In fulfilling its oversight
responsibilities, the Audit Committee reviewed and discussed with management the
audited financial statements in the Form 10-K, including a discussion of the
acceptability of the accounting principles, the reasonableness of significant
judgments and the clarity of disclosures in the financial
statements.
The Audit Committee reviewed
and discussed with the independent auditors, who are responsible for expressing
an opinion on the conformity of those audited financial statements with the
standards of the Public Company Accounting Oversight Board, the matters required
to be discussed by Statements on Auditing Standards (SAS 61), as may be modified
or supplemented, and their judgments as to the acceptability of the Company’s
accounting principles and such other matters as are required to be discussed
with the Audit Committee under the standards of the Public Company Accounting
Oversight Board.
In
addition, the Audit Committee has discussed with the independent auditors the
auditors’ independence from management and the Company, including receiving the
written disclosures and letter from the independent auditors as required by the
Independence Standards Board Standard No. 1, as may be modified or supplemented,
and has considered the compatibility of any non-audit services with the
auditors’ independence.
The Audit
Committee discussed with the Company’s independent auditors the overall scope
and plans for their audit. The Audit Committee meets with the
independent auditors, with and without management present, to discuss the
results of their examinations and the overall quality of the Company’s financial
reporting.
In
reliance on the reviews and discussions referred to above, the Audit Committee
recommended to the Board, and the Board approved, that the audited financial
statements be included in the Form 10-K for the year ended March 31, 2008 for
filing with the SEC.
Respectfully
submitted,
The Audit
Committee of the Board of Directors
Matthew
W. Finlay, Chairman
Wayne L.
Clevenger
Robert
Davidoff
THE
FOREGOING AUDIT COMMITTEE REPORT SHALL NOT BE “SOLICITING MATERIAL” OR BE DEEMED
“FILED” WITH THE SEC, NOR SHALL SUCH INFORMATION BE INCORPORATED BY REFERENCE
INTO ANY FILING UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE EXCHANGE
ACT, EXCEPT TO THE EXTENT THE COMPANY SPECIFICALLY INCORPORATES IT BY REFERENCE
INTO SUCH FILING.
INDEPENDENT
AUDITORS
Eisner
served as the independent registered public accounting firm to audit the
Company’s consolidated financial statements since the fiscal year ended March
31, 2005 and the Board has appointed Eisner to do so again for the fiscal year
ending March 31, 2009.
The
Company’s Audit Committee has adopted policies and procedures for pre-approving
all non-audit work performed by Eisner for the fiscal years ended March 31, 2007
and 2008.
In
determining whether to approve a particular audit or permitted non-audit
service, the Audit Committee will consider, among other things, whether the
service is consistent with maintaining the independence of the independent
registered public accounting firm. The Audit Committee will also
consider whether the independent registered public accounting firm is best
positioned to provide the most effective and efficient service to our Company
and whether the service might be expected to enhance our ability to manage or
control risk or improve audit quality. Specifically, the Audit
Committee has pre-approved the use of Eisner for detailed, specific types of
services within the following categories of non-audit services: acquisition due
diligence and audit services; tax services; and reviews and procedures that the
Company requests Eisner to undertake on matters not required by laws or
regulations. In each case, the Audit Committee has required
management to obtain specific pre-approval from the Audit Committee for any
engagements.
The
aggregate fees billed for professional services by Eisner for these various
services were:
|
For
the fiscal years ended
March
31,
|
Type
of Fees
|
2007
|
|
2008
|
(1)
Audit Fees
|
$270,632
|
|
$541,200
|
(2)
Audit-Related Fees
|
102,235
|
|
5,000
|
(3)
Tax Fees
|
182,465
|
|
287,799
|
(4)
All Other Fees
|
-
|
|
-
|
|
$555,332
|
|
$833,999
|
In the
above table, in accordance with the SEC’s definitions and rules, “audit fees”
are fees the Company paid Eisner for professional services for the audit of the
Company’s consolidated financial statements for the fiscal year ended March 31,
2007 included in Form S-3 and Form 10-KSB and review of consolidated financial
statements incorporated by reference into Form S-3
and Form S-8 and
included in Form 10-QSBs, for professional services for the audit of the
Company’s consolidated financial statements for the fiscal year ended March 31,
2008 included in Form S-3
and Form
10-K and review of consolidated financial statements incorporated by reference
into Form S-3 and Form S-8 and included in Form 10-Qs and for services that are
normally provided by the accountant in connection with statutory and regulatory
filings or engagements; “audit-related fees” are fees for assurance and related
services that are reasonably related to the performance of the audit or review
of the Company’s consolidated financial statements; “tax fees” are fees for tax
compliance, tax advice and tax planning; and “all other fees” are fees for any
services not included in the first three categories. All of the
services set forth in sections (1) through (4) above were approved by the Audit
Committee in accordance with the Audit Committee Charter.
Appendix
A
CERTIFICATE
OF AMENDMENT
TO
FOURTH
AMENDED AND RESTATED
CERTIFICATE
OF INCORPORATION
OF
ACCESS
INTEGRATED TECHNOLOGIES, INC.
The
undersigned, being the President of Access Integrated Technologies, Inc., a
Delaware corporation (the “Corporation”), pursuant to Section 242 of the General
Corporation Law of the State of Delaware, as amended (the “DGCL”), does hereby
certify as follows:
|
1.
|
Pursuant
to a unanimous written consent of the Board of Directors of the
Corporation (the “Board”), the Board adopted resolutions (the “Amending
Resolutions”) to amend the Corporation’s Fourth Amended and Restated
Certificate of Incorporation of the Corporation, as filed with the
Delaware Secretary of State on November 14,
2003;
|
|
2.
|
Pursuant
to a majority vote of the Corporation’s Shareholders in accordance with
Section 242 of the DGCL, the holders of the Corporation’s outstanding
capital stock voted in favor of the Amending Resolutions;
and
|
|
3.
|
The
Amending Resolutions were duly adopted in accordance with Section 242 of
the DGCL.
|
NOW,
THEREFORE, to effect the Amending Resolutions, Article Fourth of the Certificate
of Incorporation shall be deleted in its entirety and replaced as
follows:
“FOURTH:
Capitalization
: The
total number of shares of capital stock that the Corporation shall have
authority to issue is Ninety-Five Million (95,000,000) shares as
follows: (i) Eighty Million (80,000,000) shares of common stock, of
which Sixty-Five Million (65,000,000) shares shall be Class A Common Stock, par
value $.001 per share (the “Class A Common Stock”), and Fifteen Million
(15,000,000) shares shall be Class B Common Stock, par value $.001 per share
(the “Class B Common Stock”); and (ii) Fifteen Million (15,000,000) shares of
preferred stock, par value $.001 per share (the “Preferred Stock”), of which the
Board of Directors shall have the authority by resolution or resolutions to fix
all of the powers, preferences and rights, and the qualifications, limitations
and restrictions of the Preferred Stock permitted by the Delaware General
Corporation Law and to divide the Preferred Stock into one or more class and/or
classes and designate all of the powers, preferences and rights, and
the
qualifications, limitations and restrictions of each class permitted by the
Delaware General Corporation Law.
Except as
otherwise provided by law or this Fourth Amended and Restated Certificate of
Incorporation, as amended from time to time (this “Certificate of
Incorporation”), the holders of the Class A Common Stock and the Class B Common
Stock, shall have all the same rights and privileges as Common Stock, except
that the holders of Class A Common Stock and the Class B Common Stock shall be
entitled to vote on all matters to be voted on by the stockholders of the
Corporation on the following basis: (i) each share of the Class A
Common Stock shall entitle the holder thereof to one vote, and (ii) each share
of Class B Common Stock shall entitle the holder thereof to ten
votes.
Each
share of Class B Common Stock may also be converted, at any time at the option
of the holder thereof, into one (1) validly issued, fully paid and
non-assessable share of Class A Common Stock (subject to adjustment to reflect
stock splits, consolidations, recapitalizations and
reorganizations). Each holder of Class B Common Stock that desires to
convert its shares of Class B Common Stock, into shares of Class A Common Stock
shall surrender the certificate or certificates therefor, duly endorsed, at the
office of the Corporation or of any transfer agent for the Class B Common Stock
and shall give written notice to the Corporation at such office that such holder
elects to convert the same and shall state therein the number of shares of Class
B Common Stock being converted. Thereupon the Corporation shall
promptly issue and deliver to such holder a certificate or certificates for the
number of shares of Class A Common Stock to which such holder is entitled,
together with a cash adjustment of any fraction of a share as hereinafter
provided. Such conversion shall be deemed to have been made
immediately prior to the close of business on the date of such surrender of the
certificate or certificates representing the shares of Class B Common Stock be
converted, and the person or entity entitled to receive the shares of Class A
Common Stock issuable upon such conversion shall be treated for all purposes as
the record holder of such shares of Class A Common Stock on such
date.
At the
option of the holders of fifty-one (51%) percent of the shares of outstanding
Class B Common Stock, voting as a class, each share of Class B Common Stock
shall be converted (the “Class B Conversion”) into one (1) validly issued, fully
paid and non-assessable share of Class A Common Stock (subject to adjustment to
reflect stock splits, stock dividends, consolidations, recapitalizations,
reorganizations or other like occurrences). All holders of record of
shares of Class B Common Stock, then outstanding shall be given at least ten
(10) days’ prior written notice of the date fixed (the “Conversion Date”) and
place designated by the Corporation for mandatory conversion of all such shares
of Class B
Common
Stock, pursuant to this paragraph. Such notice shall be sent by
first-class or registered mail, postage prepaid, to each record holder of Class
B Common Stock, at such holder’s address last shown on the records of the
Corporation or of any transfer agent for the Class B Common
Stock. Each holder of Class B Common Stock shall surrender the
certificate or certificates, duly endorsed, at the office of the Corporation or
any transfer agent for the Class B Common Stock by the Conversion
Date. Thereupon the Corporation shall promptly issue and deliver to
such holder a certificate or certificates for the number of shares of Class A
Common Stock to which such holder is entitled, together with a cash adjustment
of any fraction of a share as hereinafter provided. Such conversion
shall be deemed to have been made immediately prior to the close of business on
the date of such surrender of the certificate or certificates representing the
shares of Class B Common Stock to be converted, and the person or entity
entitled to receive the shares of Class A Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder of such shares
of Class A Common Stock on such date; provided, however, that if such
certificate or certificates are not surrendered by such holder by the Conversion
Date, such conversion shall be deemed to have been made on the Conversion Date
and such holder thereafter shall be deemed to have a right to receive only such
number of shares of Class A Common Stock into which such holder’s shares of
Class B Common Stock shall be converted in accordance herewith.
Upon the
effectiveness (the “Effective Date”) of the Certificate of Amendment filed by
the Corporation on September 18, 2003, each five (5) shares of Class A and B
Common Stock issued and outstanding on the Effective Date (the “Old Common
Stock”) shall be converted into one (1) share of Class A and B Common Stock,
respectively (the “New Common Stock”), subject to the treatment of fractional
share interests as described below. A holder of such five (5) shares
shall be entitled to receive, upon surrender of a stock certificate or stock
certificates representing such Old Common Stock (the “Old Certificates,” whether
one or more) to the Corporation for cancellation, a certificate of certificates
(the “New Certificates,” whether one or more) representing the number of whole
shares of the New Common Stock into which and for which the shares of the Old
Common Stock formerly represented by such Old Certificates so surrendered are
reclassified under the terms hereof. No certificates representing
fractional share interests in New Common Stock will be issued, and no such
fractional share interest will entitle the holder thereof to vote, or to any
rights of a stockholder of the Corporation. In lieu of such
fractional shares, each holder of Class Old Common Stock who or that would
otherwise have been entitled to a fraction of a share of such common stock upon
surrender of such holder’s Old Certificates will be entitled to receive one sole
share of such common stock. If more than one Old Certificate shall be
surrendered at one time for the account of the
same
stockholder, the number of full shares of New Common Stock for which New
Certificates shall be issued shall be computed on the basis of the aggregate
number of shares represented by the Old Certificates so
surrendered. In the event that the Corporation determines that a
holder of Old Certificates has not tendered all his or her certificates for
exchange, the Corporation shall carry forward any fractional share until all
certificates of that holder have been presented for exchange such that any
stockholder will not be entitled to receive more than one share of New Common
Stock in lieu of fractional shares. If any New Certificate is to be
issued in a name other than that in which the Old Certificates surrendered for
exchange are issued, the Old Certificates so surrendered shall be properly
endorsed and registered in such name or names as such holder may direct, subject
to compliance with applicable laws and the Third Amended and Restated
Stockholders’ Agreement, as amended, supplemented, restated or otherwise
modified from time to time, among the Corporation and certain of its
stockholders to the extent such designation shall involve a transfer, and the
person or persons requesting such exchange shall affix any requisite stock
transfer tax stamps to the Old Certificates surrendered, or provide funds for
their purchase, or establish to the satisfaction of the Corporation that such
taxes are not payable. From and after the Effective Date, the amount
of capital represented by the shares of the New Common Stock into which and for
which the shares of the Old Common Stock are reclassified under the terms hereof
shall be the same as the amount of capital represented by the shares of Old
Common Stock so reclassified, until thereafter reduced or increased in
accordance with applicable law.
Except as
specifically set forth herein, the Certificate of Incorporation shall not be
amended, modified or otherwise altered by this Certificate of
Amendment.
* * *
[Signature
page follows]
IN
WITNESS WHEREOF, the Corporation has caused this Amendment to the Certificate of
Incorporation of Access Integrated Technologies, Inc. to be signed by A. Dale
Mayo, its President, Chief Executive Officer and Chairman of the Board of
Directors, this __ day of
__________
,
2008, who acknowledges that the foregoing is the act and deed of the Corporation
and that the facts stated herein are true.
|
|
|
By:
|
|
|
|
|
Name:
|
A.
Dale Mayo
|
|
|
|
Title:
|
President,
Chief Executive Officer and
|
|
|
|
|
Chairman
of the Board of Directors
|
Appendix
B
AMENDMENT
NO. 2
TO
SECOND
AMENDED AND RESTATED
ACCESS
INTEGRATED TECHNOLOGIES, INC. 2000 EQUITY INCENTIVE PLAN
AMENDMENT NO. 2
, dated as of
September 4, 2008 (this “Amendment”), to the Second Amended and Restated 2000
Equity Incentive Plan (as amended, the “Plan”) of Access Integrated
Technologies, Inc., a Delaware corporation (the “Corporation”).
WHEREAS
, the Corporation
maintains the Plan, effective as of June 1, 2000; and
WHEREAS
, in order to provide
the Corporation with the flexibility to be able to grant additional stock
options to its employees, the Board of Directors of the Corporation deems it to
be in the best interest of the Corporation and its stockholders to amend the
Plan in order to increase the maximum number of shares of the Corporation’s
Class A Common Stock, par value $.001 per share, which may be issued and sold
under the Plan from 2,200,000 shares to 3,700,000 shares.
NOW, THEREFORE, BE IT RESOLVED
the Plan is hereby amended as follows:
1. The
first sentence of Section 5.2 shall be revised and amended to read as
follows:
“The
total number of shares of Stock (including Restricted Stock, if any) optioned or
granted under this Plan during the term of the Plan shall not exceed 3,700,000
shares.”
2. This
Amendment shall be effective as of the date first set forth above, which is the
date that this Amendment was approved by a majority of the outstanding votes
cast at the September 4, 2008 meeting of the holders of the Corporation’s Class
A Common Stock and Class B Common Stock.
3. In
all respects not amended, the Plan is hereby ratified and confirmed and remains
in full force and effect.
|
|
ACCESS
INTEGRATED TECHNOLOGIES, INC.
|
|
|
By:
|
|
|
|
|
A.
Dale Mayo
|
|
|
|
President,
Chief Executive Officer and
|
|
|
|
Chairman
of the Board of Directors
|
Appendix
C
COMPENSATION
COMMITTEE CHARTER
ACCESS
INTEGRATED TECHNOLOGIES, INC.
I.
Purposes
The
Committee has been established by the Board to assist the Board in discharging
and performing the duties of the Board with respect to management compensation,
succession planning and employee benefits, including the assessment and
compensation of the Chief Executive Officer; the assessment and compensation of
directors and other executive officers; the assessment of compensation
arrangements, plans, policies and programs; the assessment of benefit and
welfare plans and programs; the assessment of organizational systems and plans
(including those relating to management development and succession planning);
and the production of any report on executive compensation required by any
applicable rules and regulations.
II.
Powers and
Resources
The
Committee has the right to exercise any and all power and authority of the Board
with respect to matters within the scope of this Charter, subject to the
ultimate power and authority of the Board. The Board shall continue
to have the ultimate duty and responsibility to manage or direct the management
of the business and affairs of the Company.
The
Committee has the authority to:
·
|
conduct
any and all investigations it deems necessary or appropriate, to contact
directly the human resources department and other employees and advisors
and require them to provide any and all information and advice it deems
necessary or appropriate, and to retain legal, human resource or other
advisors it deems necessary or
appropriate;
|
·
|
set
aside for payment, pay and direct the payment of such legal, human
resource and other advisors; the advisors retained by the Committee shall
report directly to the Committee, and shall be accountable to the
Committee and the Board, for their services;
and
|
·
|
to
the extent that it deems appropriate or desirable, appoint one or more
subcommittees whose members are non-employee directors and outside
directors as set forth below and delegate to such subcommittee(s) the
authority to make (including determining the terms and conditions of)
grants or awards under, and to otherwise administer, bonus and
compensation plans and programs.
|
III.
Composition
The
Committee shall consist of at least three Directors, as may be determined from
time to time by the Board. Each Committee member shall be appointed
by the Board and shall be: (1) a member of the Board, (2) a
non-employee director within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934, (3) an outside director within the meaning of Section
162(m) of the Internal Revenue Code of 1986, and (4) an independent director
within the meaning of the rules of the American Stock Exchange or such other
primary trading market or securities exchange on which the Company’s securities
are then traded.
Each
member of the Committee shall serve until the next annual organizational meeting
of the Board or the earlier of his or her termination as a member of the
Committee by the Board, the election of his or her successor as a member of the
Committee or his or her death, resignation or removal. The Board
shall appoint a new member or members in the event that there is a vacancy on
the Committee that reduces the number of members below three, or if the Board
determines that the number of members on the Committee should be
increased.
Unless a
Chair is elected by the Board, the members of the Committee may designate a
Chair by a majority vote. The Chair shall supervise the conduct of
the meetings and shall have other responsibilities as this Charter or the
Committee may specify from time to time.
IV.
Meetings
The
Committee shall meet in regular sessions at least four
times a year and in
special sessions as circumstances warrant, and may hold additional meetings in
person or telephonically as often as may be necessary or appropriate, at the
discretion of the Chair. When appropriate, the Committee may meet in
separate executive sessions with management, employees, general counsel and
internal audit to discuss any matters that the Committee or any of these groups
believes warrant Committee attention. The Chair may also request that
members of management, legal counsel, or other advisors attend the meetings of
the Committee, but any individual whose performance or compensation is to be
discussed at a Committee meeting should not attend such meeting unless
specifically invited by the Committee (and the Chief Executive Officer may not
be present during voting or deliberations as to his or her
compensation).
Committee
members are expected to use all reasonable efforts to attend meetings and to
spend the time needed to properly discharge their responsibilities. A
majority of the members of the Committee shall constitute a quorum for the
transaction of business. The act of a majority of the members present
at any meeting at which there is a quorum shall be the act of the
Committee. Any Committee member may be excused from a meeting to
permit the remaining members of the Committee to act on any matter in which such
member's participation is not appropriate, and such member's absence will not
destroy the quorum for purposes of acting on such matter.
V.
Compensation
Members
of the Committee shall receive such fees, if any, for their service as Committee
members as may be determined by the Board. Members of the Committee
may not receive any compensation from the Company except the fees that they
receive for service as a member of the Board or any committee thereof provided
that compensation to a firm of which a member holds an equity interest shall not
be considered compensation for the purposes hereof.
VI.
Procedures
The
Committee shall determine its meeting schedule, the agenda for each meeting, the
information to be provided to it before or at each meeting and all other matters
relating to the conduct of its meetings and other activities. The
Chair of the Committee shall establish and distribute (or request the Secretary
to distribute) to each Committee member prior to each meeting an agenda for the
meeting. Each Committee member is free to raise at any meeting
subjects that are not on the agenda for that meeting. Information
that is important to understanding the business to be conducted at a meeting
should generally be distributed to the Committee members as soon as practicable
in advance of the meeting, and Committee members should review these materials
before the meeting.
The
Committee shall keep minutes of its meetings and other proceedings.
It is the
sense of the Board that, subject to Section VII below, the activities and
procedures of the Committee should remain flexible so that it may appropriately
respond to changing circumstances. Thus, this Charter is
intended to provide a set of flexible guidelines for the effective functioning
of the Committee. The Committee may modify or amend this Charter and the
authority and responsibilities of the Committee set forth herein at any
time.
VII.
Committee Authority and
Responsibilities
Without
limiting the scope of its responsibilities, duties and authority set forth
above, the Committee shall have the following authority and duties:
Senior
Management and Director Compensation
1.
|
Review
and approve annually the goals and objectives relevant to compensation of
the Chief Executive Officer (the “
CEO
”), evaluate
at least annually his or her performance in light of those goals and
objectives, and set his or her compensation based on such
evaluation. In determining the CEO’s compensation, the
Committee should consider the Company’s performance and relative
stockholder return, the value of similar incentive awards to chief
executive officers at comparable companies, the awards given to the
Company’s CEO in past years, and such other factors as the Committee deems
appropriate.
|
2.
|
Review
and approve, as appropriate, the compensation of the other executive
officers at least annually and review compensation of other members of
senior management and other employees generally. The Committee
shall consider all relevant factors in determining the appropriate level
of compensation for other executive officers, including without limitation
the factors applicable with respect to the
CEO.
|
3.
|
Monitor
the search for, and review and approve the proposed compensation (as well
as any amendment or other modification to any existing employment contract
or similar agreement) for, any (a) officer and (b) employee whose proposed
or current base salary exceeds $250,000 per
year.
|
4.
|
Periodically
review and approve, as appropriate, the compensation of the
directors.
|
5.
|
Review
and approve, as appropriate, the bonus and incentive compensation
arrangements, plans, policies and programs, including annual and long-term
and cash and stock-based plans, and determine for each year whether
individual incentive targets have been achieved by the CEO and senior
executives under such plans.
|
6.
|
Review
periodically and approve, as appropriate, policies on management
perquisites. Where necessary, review management’s determination
of whether particular perquisites are business-related or
personal. Advise the Audit Committee as to such
policies.
|
7.
|
Review
any compensation or other benefit received by any director or executive
officer from any affiliated entities to confirm compliance with the
Company’s code of conduct and ethics and related
policies.
|
8.
|
Select,
retain, evaluate and, as appropriate, terminate and replace any executive
search firm or compensation consulting firm with respect to the selection
and compensation of the Company’s senior
officers.
|
9.
|
Review
compliance with prohibition on personal loans to directors and executive
officers.
|
Administration
of Plans
10.
|
Administer
all stock-based compensation plans and such other programs as may be
designated by the Board, including the review and grant of stock option
and other equity incentive grants to executive officers and other
employees and directors, in each case subject to any limitations
prescribed by the Board and subject to any authority delegated by the
Committee to the subcommittee described
below.
|
11.
|
Review
creation, modification, termination and funding of compensation,
retirement, benefit and welfare arrangements, plans, policies and programs
for senior management and other employees
generally.
|
12.
|
Review
the administration of the self-directed retirement and other plans as to
whether the rules relating to investments in the common stock are properly
protective of employee interests.
|
13.
|
Review
periodically financial and investment policies and objectives of qualified
and non-qualified retirement and benefit
plans.
|
14.
|
As
and when required, establish performance goals and certify that
performance goals have been attained for purposes of Section 162(m) of the
Internal Revenue Code.
|
15.
|
Approve
all option plans (and amendments thereto) that are not subject to
stockholder approval.
|
Employee
and Other Compensation Matters
16.
|
Review
and approve employment terms and agreements for new executive officers,
any severance arrangements for executive officers, and any change of
control, indemnification or other employment or compensation-related
agreements to be entered into with executive
officers.
|
17.
|
Review
periodically employee relations policies
generally.
|
18.
|
Review
periodically equal opportunity employment and sexual harassment prevention
policies, and monitor compliance with such policies and applicable
laws.
|
19.
|
Review
and make recommendations with respect to stockholder proposals related to
compensation matters.
|
Succession
Planning
20.
|
Coordinate
with senior management the long-range planning for development and
succession of senior management, including contingency planning for
unanticipated sudden developments.
|
Regulatory
Matters
21.
|
Prepare
annually the report to stockholders to be included in the annual proxy
statement as required by the rules of the
SEC.
|
Reports
to Board
22.
|
Report
on its meetings, proceedings and other activities at each meeting of the
Board.
|
VIII.
Evaluation
The
Committee shall review and reassess the adequacy of this Charter annually and
recommend any proposed changes to the Board for approval. In
addition, the Committee shall review annually the Committee’s own performance to
determine whether the Committee is functioning effectively, including evaluating
the Committee’s contributions to the Company, with a specific emphasis on areas
in which such contributions could be improved.
IX.
Publication
This
Charter shall be published as required by the rules and regulations of
applicable law and as otherwise deemed advisable by the Committee.
Appendix
D
ACCESS
INTEGRATED TECHNOLOGIES, INC.
CHARTER
OF THE NOMINATING COMMITTEE OF THE BOARD OF DIRECTORS
Purpose
Acting
pursuant to Section 141(c)(2) of the Delaware General Corporation Law and
Section 2.7 of the By-laws of Access Integrated Technologies, Inc. (the
“Company”), the Board of Directors of the Company (the “Board”) has established
a Nominating Committee (the “Committee”) for the purpose of selecting,
evaluating and recommending to the Board qualified candidates for election or
appointment to the Board.
Membership
The
Committee will consist of a minimum of two members of the Board of Directors,
all of whom shall be “independent directors” under the standards set forth in
the rules and regulations of the American Stock Exchange (or such other
securities exchange or market where the Company’s securities are primarily
listed), as well as under any additional or supplemental independence standards
applicable to nominating committees established under any applicable law, rule
or regulation. The members of the Committee will be appointed by and
serve at the discretion of the Board. Unless a Chairman of the
Committee is elected by the Board, the members of the Committee may designate a
Chairman.
Responsibilities
The
following shall be the principal recurring duties of the Committee in carrying
out its responsibilities. These duties are set forth as a guide with
the understanding that the Committee may supplement them as appropriate and may
establish policies and procedures from time to time that it deems necessary or
advisable in fulfilling its responsibilities under this Charter, the Company’s
By-laws and governing law. The responsibilities of the Committee
shall include (1) annually presenting to the Board a list of individuals
recommended for nomination for election to the Board at the annual meeting of
stockholders and (2) assisting the Board in identifying, interviewing and
recruiting candidates for the Board.
The
Committee may establish (i) a policy for the consideration of any director
candidates recommended by stockholders, including a statement that the Committee
will consider director nominations recommended by stockholders, (ii) procedures
to be followed by stockholders in submitting recommendations for director
nominees and (iii) a process for identifying and evaluating
nominees.
In
carrying out such responsibilities, the Committee shall have the power and
authority to retain such consultants, outside counsel and other advisors as the
Committee may deem appropriate and shall have the sole authority to approve the
fees and other terms of such engagements.
Director
Qualification Guidelines
The
Committee believes that it is in the best interest of the Company and its
stockholders to identify and select highly-qualified candidates to serve as
directors. The Committee will seek
candidates
for election and appointment who possess the skills and characteristics listed
on
Annex A
hereto and who are committed to staunchly representing the interests of the
stockholders. The Committee also believes that the Board should be
comprised of a group of individuals who have been associated with institutions
noted for excellence and who have broad experience and the ability to exercise
sound business judgment.
Meetings
and Reports
The
Committee will hold a regular meeting at least once each year generally in
conjunction with regularly scheduled meetings of the Board, and such special
meetings as the Chairman of the Committee or the Chairman of the Board may
direct. The Committee will maintain written minutes of its meetings,
which minutes will be filed with the minutes of the meetings of the
Board. The Committee will make regular reports to the
Board.
ANNEX
A TO NOMINATING COMMITTEE CHARTER
SKILLS AND CHARACTERISTICS
FOR DIRECTORS
Board
Composition
The Board
as a whole should possess the following core competencies:
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1.
|
Accounting,
Finance and Disclosure: ability to protect and inform
stockholders and debtholders through liquidity and capital resource
management and internal financial and disclosure
controls;
|
|
2.
|
Business
Judgment: ability to assess business risk and stockholder
valuation creation strategies;
|
|
3.
|
Management: ability
to apply general management best practices in a complex, rapidly evolving
business environment;
|
|
4.
|
Crisis
Response: ability and time to perform during periods of both
short-term and prolonged crisis;
|
|
5.
|
Industry
Knowledge: ability to assess opportunities and threats unique
to the Company’s industry;
|
|
6.
|
Leadership: ability
to attract, motivate and energize a high-performance leadership team;
and
|
|
7.
|
Strategy/Vision: ability
to provide strategic insight and direction by encouraging innovation,
conceptualizing key trends, evaluating strategic decisions and
continuously challenging the Company to sharpen its
vision.
|
Specific
Qualifications
Directors
should have the following skills and characteristics:
|
1.
|
Have
high personal standards of:
|
|
c.
|
Desire
to make full disclosure of all present and future conflicts of
interest.
|
|
2.
|
Have
the ability to make informed business
judgments;
|
|
3.
|
Have
literacy in financial and business
matters;
|
|
4.
|
Have
the ability to be an effective team
member;
|
|
5.
|
Have
a commitment to active involvement and an ability to give priority to the
Company;
|
|
6.
|
Have
no material affiliations with direct
competitors;
|
|
7.
|
Have
achieved high levels of accountability and success in his or her given
fields;
|
|
8.
|
Have
no geographic travel restrictions;
|
|
9.
|
Have
an ability and willingness to learn the Company’s
business;
|
|
10.
|
Preferably
have experience in the Company’s business or in professional fields (i.e.
finance, accounting, law or banking) or in other industries or as a
manager of international businesses so as to have the ability to bring new
insight, experience or contacts and resources to the
Company;
|
|
11.
|
Preferably
have no direct affiliations with major suppliers or vendors;
and
|
|
12.
|
Preferably
have previous public company board experience together with good
references.
|
ACCESS
INTEGRATED TECHNOLOGIES, INC.
PROXY
This
Proxy is Solicited on Behalf of the Board of Directors
The
undersigned hereby appoints A. Dale Mayo and Gary S. Loffredo, or either of
them, with full power of substitution, as proxies to vote at the Annual Meeting
of Stockholders of ACCESS INTEGRATED TECHNOLOGIES, INC. (the “Company”) to be
held on September 4, 2008 at 2:00 p.m., local time, and at any adjournment or
adjournments thereof, hereby revoking any proxies heretofore given, to vote all
shares of Common Stock of the Company held or owned by the undersigned as
directed on the reverse side of this proxy card, and, in their discretion, upon
such other matters as may come before the meeting. IF NO DIRECTION IS
MADE, SHARES WILL BE VOTED
FOR
EACH OF THE
PROPOSALS BELOW. In addition, the shares will be voted as the Board
of Directors of the Company may recommend with respect to any other business as
may properly come before the meeting or any adjournment thereof.
(Continued
and to be signed on the reverse side)
ANNUAL
MEETING OF STOCKHOLDERS OF
ACCESS
INTEGRATED TECHNOLOGIES, INC.
September
4, 2008
Please
date, sign and mail your Proxy Card in the envelope provided as soon as
possible.
THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. PLEASE SIGN,
DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR
VOTE IN BLUE OR BLACK INK AS SHOWN HERE [X]
1.
|
Election
of eight (8) directors
|
FOR
ALL NOMINEES
|
[ ]
|
|
○
|
A.
Dale Mayo
|
|
|
|
○
|
Kevin
J. Farrell
|
WITHHOLD
AUTHORITY FOR ALL NOMINEES
|
[ ]
|
|
○
|
Gary
S. Loffredo
|
○
|
Wayne
L. Clevenger
|
|
|
|
○
|
Gerald
C. Crotty
|
FOR
ALL EXCEPT
(see
instructions below)
|
[ ]
|
|
○
|
Robert
Davidoff
|
○
|
Matthew
W. Finlay
|
|
|
|
○
|
Robert
E. Mulholland
|
INSTRUCTION:
to withhold authority to vote for any individual nominee(s), mark “FOR ALL
EXCEPT” and fill in the circle next to each nominee you wish to withhold
as shown here:
·
|
2.
|
Proposal
to amend the Company’s Fourth Amended and Restated Certificate of
Incorporation to designate as Class A all authorized common stock that is
not currently designated as either Class A or Class
B.
|
FOR
|
AGAINST
|
ABSTAIN
|
[ ]
|
[ ]
|
[ ]
|
3.
|
Proposal
to increase the number of shares of Class A common stock authorized to be
issued in payment of interest under the Company’s 2007 Senior
Notes.
|
FOR
|
AGAINST
|
ABSTAIN
|
[ ]
|
[ ]
|
[ ]
|
4.
|
Proposal
to amend the Company’s Second Amended and Restated 2000 Equity Incentive
Plan to increase the total number of shares of Class A Common Stock
available for issuance thereunder.
|
FOR
|
AGAINST
|
ABSTAIN
|
[ ]
|
[ ]
|
[ ]
|
5.
|
Proposal
to ratify the appointment of Eisner LLP as our independent auditors for
the fiscal year ending March 31,
2009.
|
FOR
|
AGAINST
|
ABSTAIN
|
[ ]
|
[ ]
|
[ ]
|
MARK
“X” HERE IF YOU PLAN TO ATTEND THE MEETING.
¨
|
Signature
of Stockholder:__________________________________________
|
Date:
|
________________________
|
Signature
of Stockholder:__________________________________________
|
Date:
|
________________________
|
NOTE:
Please sign exactly as your name or names appear on this Proxy. When
shares are held jointly, each holder should sign. When signing as an
executor, administrator, attorney, trustee or guardian, please give full title
as such.
If the
signer is a corporation, please sign full corporate name by duly authorized
officer, giving full title as such. If signer is a partnership,
please sign in partnership name by authorized person.
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