UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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Filed by a Party other than the Registrant |_|
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|X| Preliminary Proxy Statement
|_| Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
|_| Definitive Proxy Statement
|_| Definitive Additional Materials
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ACCESS INTEGRATED TECHNOLOGIES, INC.
(Name of Registrant As Specified In Its Charter)
N/A
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ACCESS INTEGRATED TECHNOLOGIES, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 15, 2005
Dear Fellow Stockholders:
We invite you to attend the 2005 Annual Meeting of
Stockholders of Access Integrated Technologies, Inc., a Delaware corporation
(the "Company"), which will be held on September 15, 2005, at 2:00 p.m., eastern
time, at the American Stock Exchange, 86 Trinity Place, New York, New York
10006. At the meeting, you will be asked to vote on the following proposals (as
more fully described in the Proxy Statement accompanying this Notice):
1. Proposal One - To elect eight (8) members of the Company's
Board of Directors to serve until the 2006 Annual Meeting of
Stockholders (or until successors are elected or directors
resign or are removed).
2. Proposal Two - To amend the Company's First Amended and
Restated 2000 Stock Option Plan to increase the total number
of shares of the Company's Class A Common Stock available from
the grant of options thereunder from 850,000 to 1,100,000
shares.
3. Proposal Three - To approve the issuance of 453,175 shares of
the Company's Class A Common Stock in connection with the
private placement of Convertible Debentures convertible into
such Common Stock.
4. To transact such other business as may properly come before
the Annual Meeting or any adjournment thereof.
Only stockholders of record at the close of business on July
28, 2005 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.
BY ORDER OF THE BOARD OF DIRECTORS
A. Dale Mayo
President, Chief Executive Officer and
Chairman of the Board of Directors
Morristown, New Jersey
Date: July 29, 2005
ACCESS INTEGRATED TECHNOLOGIES, INC.
55 MADISON AVENUE, SUITE 300
MORRISTOWN, NEW JERSEY 07960
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PROXY STATEMENT
---------------------------------
2005 ANNUAL MEETING OF STOCKHOLDERS
SEPTEMBER 15, 2005
INFORMATION CONCERNING VOTING AND PROXY SOLICITATION
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 Annual Meeting of Stockholders of the Company to be held on
Thursday, September 15, 2005, at 2:00 p.m. eastern time, or at any adjournment
thereof (the "Annual Meeting"). The Annual Meeting will be held at the American
Stock Exchange, 86 Trinity Place, New York, New York 10006. 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 Secretary of the Company 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:
o 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.
o FOR amending the Company's First Amended and Restated 2000 Stock
Option Plan to increase the number of shares of Class A Common Stock
available from the grant of options thereunder from 850,000 shares to
1,100,000 shares (Proposal No. 2), unless you designate otherwise.
o FOR approving the issuance of 453,175 shares of the Company's Class A
Common Stock in connection with the private placement of Convertible
Debentures convertible into such Common Stock.
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 29, 2005.
RECORD DATE AND VOTING SECURITIES
Stockholders of record at the close of business on July 28, 2005 (the "Record
Date") are entitled to notice of and to vote at the Annual Meeting. As of the
Record Date, (a) [_______] shares of the Company's Class A Common Stock, $.001
par value ("Class A Common Stock"), were issued and outstanding and (b) 925,811
shares of the Company's Class B Common Stock, $.001 par value ("Class B Common
Stock," and together with the Class A Common Stock, the "Common Stock"), were
issued and outstanding.
REVOCABILITY OF PROXIES
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 Secretary of the
Company a written notice of revocation or 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.
VOTING AND SOLICITATION
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 votes for each share of Class B Common Stock held as of
the Record Date. Stockholders will not be entitled to cumulate their votes in
the election of directors.
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.
This proxy solicitation is being made by the Board and 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. Proxies may be solicited by
certain of the Company's directors, officers and regular employees, without
additional compensation, in person or by telephone, e-mail or facsimile.
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 of record 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.
APPRAISAL RIGHTS
Under Delaware General Corporation Law (the "DGCL") 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.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS TO BE PRESENTED AT THE 2006 ANNUAL
MEETING
The Company currently intends to hold its 2006 Annual Meeting of Stockholders on
or about September 14, 2006. 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 2005 Annual Meeting of Stockholders, such
proposal must be received by the Company no later than March 1, 2006. Any notice
of a proposal submitted outside the processes of Rule 14a-8 promulgated under
the Exchange Act, which a stockholder intends to bring forth at the Company's
2005 Annual Meeting of Stockholders, will be untimely for purposes of Rule 14a-4
of the Act and the By-laws of the Company if received by the Company after March
1, 2006. All stockholder proposals must be made in writing addressed to
Secretary, Access Integrated Technologies, Inc., 55 Madison Avenue, Suite 300,
Morristown, New Jersey 07960.
ELECTION OF DIRECTORS (PROPOSAL ONE)
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. Each nominee for election at the Annual Meeting shall, if
elected, serve on the Board until his successor is elected at the next annual
meeting of stockholders or until his earlier resignation or removal.
The directors shall be elected by a plurality of the outstanding 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.
The following biographical information about the nominees to the Company's Board
is set forth as of July 15, 2005.
A. DALE MAYO (AGE 63): DIRECTOR SINCE MARCH 2000; CURRENTLY PRESIDENT, CHIEF
EXECUTIVE OFFICER AND CHAIRMAN OF THE BOARD OF DIRECTORS
Mr. Mayo is a co-founder of the Company and has been Chairman, President and
Chief Executive Officer since the Company's inception in March 2000. From
January to March 2000, Mr. Mayo explored various business opportunities,
including data center operations and digital cinemas. From December 1998 to
January 2000, he had been the President and Chief Executive Officer of
Cablevision Cinemas, LLC. In December 1994, Mr. Mayo co-founded Clearview Cinema
Group, Inc., which was sold to Cablevision Cinemas in 1998. Mr. Mayo was also
the founder, chairman and chief executive officer 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 (AGE 44): DIRECTOR SINCE MARCH 2000; CURRENTLY SENIOR
VICE PRESIDENT - DATA CENTER OPERATIONS AND A DIRECTOR
Mr. Farrell is a co-founder of the Company and has been Senior Vice President --
Data Center Operations and a director since the Company's inception. 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.
BRETT E. MARKS (AGE 43): DIRECTOR SINCE MARCH 2000; CURRENTLY SENIOR
VICE PRESIDENT - BUSINESS DEVELOPMENT AND A DIRECTOR
Mr. Marks is a co-founder of the Company and has been Senior Vice President --
Business Development and a director since the Company's inception. From December
1998 to March 2000, Mr. Marks had been Vice President of Real Estate and
Development of Cablevision Cinemas, LLC. From June 1998 until December 1998, he
was Vice President of First New York Realty Co., Inc. In December 1994, Mr.
Marks co-founded, with Mr. Mayo, Clearview Cinema Group, Inc. and was
instrumental in the site selection process that helped to increase its number of
theater locations.
ROBERT DAVIDOFF (AGE 78): DIRECTOR SINCE JULY 2000
Mr. Davidoff has been a director of the Company since July 2000 and has been the
Chairman of the Company's Compensation Committee since November 2000. Mr.
Davidoff currently serves on the Company's Audit Committee and Nominating
Committee. Since 1990, Mr. Davidoff has been a Managing Director of Carl Marks &
Co., Inc. and, since 1989, the General Partner of CMNY Capital II, L.P., a
venture capital affiliate of Carl Marks & Co. Since 1998, Mr. Davidoff has
served as a director of Sterling/Carl Marks Capital, Inc. He is also the
Chairman and Chief Investment Officer of CM Capital Corporation, the firm's
leveraged buyout affiliate. Mr. Davidoff is a director of Hubco Exploration,
Inc., Rex Stores Corporation and Marisa Christina, Inc. Mr. Davidoff serves on
the compensation committee of Hubco Exploration, Inc. and the audit and
compensation committees of each of Rex Stores Corporation and Marisa Christina,
Inc. Mr. Davidoff served as a director of Clearview Cinema Group, Inc. from
December 1994 to December 1998.
GARY S. LOFFREDO (AGE 40): DIRECTOR SINCE SEPTEMBER 2000; CURRENTLY SENIOR
VICE PRESIDENT - BUSINESS AFFAIRS, GENERAL COUNSEL, SECRETARY AND A DIRECTOR
Mr. Loffredo has been the Company's Senior Vice President -- Business Affairs,
General Counsel and Secretary, and a director since September 2000. From March
1999 to August 2000, he had been Vice President, General Counsel and Secretary
of Cablevision Cinemas, LLC. 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 (AGE 61): DIRECTOR SINCE OCTOBER 2001
Mr. Clevenger has been a director of the Company since October 2001. Mr.
Clevenger served on the Company's Compensation Committee from February 2002 to
April 2004 and has been reappointed to serve on the Compensation Committee in
June 2005. Mr. Clevenger also has served on the Company's Nominating Committee
since June 2005 and on the Company's Audit Committee since April 2004. 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") and its
predecessor company 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 Group, Inc. from May 1996 to December 1998.
MATTHEW W. FINLAY (AGE 37): DIRECTOR SINCE OCTOBER 2001
Mr. Finlay has been a director of the Company since October 2001 and has been
the Chairman of the Company's Audit Committee since February 2002. He is a
director of MidMark, which he joined in 1997. 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.
GERALD C. CROTTY (AGE 53): DIRECTOR SINCE AUGUST 2002
Mr. Crotty has been a director of the Company since August 2002, has served on
the Company's Audit Committee from July 2003 to April 2004, and has served on
the Company's Compensation Committee since April 2004. Mr. Crotty co-founded
and, since June 2001, has directed, Weichert Enterprise LLC, a private and
public equity market investment firm. Weichert Enterprise oversees the holdings
of Excelsior Ventures Management, a private equity and venture capital firm that
Mr. Crotty co-founded in 1999. From 1991 to 1998, he held various executive
positions with ITT Corporation, including President and Chief Operating Officer
of ITT Consumer Financial Corp. and Chairman, President and Chief Executive
Officer of ITT Information Services, Inc. Mr. Crotty also serves as a director
of AXA Premier Funds Trust.
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, 2005 (the "Last Fiscal Year"), the Board
held four meetings and the Board members acted six times by unanimous written
consent in lieu of holding a meeting. Each current member of the Board who was
then serving attended at least seventy-five percent of the total number of
meetings of the Board and of the committees of the Board on which he served in
the Last Fiscal Year. Messrs. Davidoff, Crotty, Clevenger and Finlay are
considered "independent" under the rules of the AMEX.
No director has resigned or declined to stand for reelection to the Board for
any reason since March 31, 2004. The Board currently does not provide a process
for securityholders 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 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, at Secretary, 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. The Company's Secretary 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 directors
attended the 2004 Annual Meeting of Stockholders and currently intends to attend
the 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. Davidoff, Clevenger and Finlay. Mr.
Finlay is the Chairman of the Audit Committee. The Audit Committee held five
meetings in the Last Fiscal Year. The Audit Committee has met with the Company's
management and its 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. Davidoff and Clevenger are financially literate, and Mr.
Davidoff is financially sophisticated, as those terms are defined under the
rules of the AMEX. Mr. Davidoff is also a financial expert, as such term is
defined under the Sarbanes-Oxley Act of 2002. Messrs. Davidoff, Clevenger and
Finlay are considered "independent" under the rules of the AMEX.
The Audit Committee has adopted a formal written charter which was attached as
APPENDIX A to the Company's proxy statement for the 2004 Annual Meeting of
Stockholders. 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 and Crotty.
Mr. Davidoff is the Chairman of the Compensation Committee. The Compensation
Committee met one time during the Last Fiscal Year. The Compensation Committee,
based on recommendation by the Company's Chief Executive Officer, approves the
compensation package of the Company's Chief Executive Officer 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 grants and
discretionary bonuses to its officers, employees, directors and consultants.
Messrs. Davidoff, Clevenger and Crotty are considered "independent" under the
rules of the AMEX. For the fiscal year ended March 31, 2005, the Company was a
controlled company (as defined by the AMEX to be a company in which over 50% of
the voting power is held by an individual, a group or another company). For
fiscal years beginning with March 31, 2006, the Company will no longer be a
controlled company
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. Messrs. Clevenger and Davidoff are considered "independent" under the
rules of the AMEX.
The Nominating Committee adopted a formal written charter which was attached as
APPENDIX B to the Company's proxy statement for the 2004 Annual Meeting of
Stockholders. The 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 charter is not currently available on the Company's
website.
The Nominating Committee currently does not have a policy regarding the
consideration of director candidates recommended by stockholders. The Board
believes that it is appropriate for the Company to not have such a policy
because the Nominating Committee has not previously received any director
candidate recommendations from a non-director stockholder. However, the
Nominating Committee will consider any such candidates recommended by
stockholders. 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 2006 Annual Meeting
of Stockholders to Secretary, Access Integrated Technologies, Inc., 55 Madison
Avenue, Suite 300, Morristown, New Jersey 07960 by March 31, 2006.
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 and preferably have experience in the
Company's business and other relevant business fields (e.g., finance,
accounting, law, banking).
Members of the Nominating Committee will meet prior to 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 Company's
Nominating Committee Charter and the rules of the AMEX. 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.
DIRECTOR AND EXECUTIVE OFFICER COMPENSATION
The Company's executive officers are A. Dale Mayo, Chairman of the Board, Chief
Executive Officer and President, Jeff Butkovsky, Senior Vice President - Chief
Technology Officer, Kevin J. Farrell, Senior Vice President - Data Center
Operations and a member of the Board, Gary S. Loffredo, Senior Vice President -
Business Affairs, General Counsel, Secretary and a member of the Board, Brett E.
Marks, Senior Vice President - Business Development and a member of the Board,
Brian D. Pflug, Senior Vice President - Accounting and Finance and David Gajda,
Senior Vice President - International. Biographical information for Messrs.
Mayo, Farrell, Loffredo and Marks is included above.
JEFF BUTKOVSKY, age 45, has been the Company's Senior Vice President - Chief
Technology Officer since May 2004 and was the Company's Senior Vice President --
Managed Services from October 2000 to May 2004. Previously, Mr. Butkovsky had
served as 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 employed by Micron Electronics
Incorporated from May 1996 to June 1999, where he was the Northeast Regional
Director.
BRIAN D. PFLUG, age 38, has been the Company's Senior Vice President --
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.
DAVID GAJDA, age 49, is a co-founder of Hollywood SW and had been its Chief
Executive Officer since its inception in 1997. Following the completion of the
Company's acquisition of Hollywood SW, Mr. Gajda resigned as its Chief Executive
Officer and became the President and Chief Operating Officer of Hollywood SW. In
April 2005, Mr. Gajda was promoted to Senior Vice President of International
Marketing of the Company. Prior to co-founding Hollywood SW, Mr. Gajda owned and
managed a strategic consulting company, DWG, from 1990 to 1997. At DWG, he
helped many entertainment companies develop their three- to five-year strategic
systems plans.
The following table sets forth certain information concerning compensation
received by the Company's Chief Executive Officer at March 31, 2005, and its
five other most highly compensated executive officers at March 31, 2005, for
services rendered in all capacities during the Last Fiscal Year (the "Named
Executives").
Summary compensation table
Annual Compensation Long-Term Compensation
----------------------------------------------------------- ----------------------
Securities
Restricted Underlying All Other
Name and Fiscal Other Annual Stock Options Compensation
PRINCIPAL POSITION(S) YEAR SALARY($) BONUS($) COMPENSATION (1) AWARDS($)(2) (#)(3) ($)(4)
--------------------- ---- --------- -------- ---------------- ------------ ------ ------
A. Dale Mayo 2005 $250,000 $363,000 $14,400 $31,168(5)
Chief Executive 2004 $250,000 $252,035 $14,400 -- -- $27,428(5)
Officer and President 2003 $250,000 $147,973 $14,400 -- -- $16,453(5)
Gary S. Loffredo 2005 $173,083 $22,500 $10,000 -- 40,000 $6,465
Senior Vice President - 2004 $155,000 $35,000 $10,000 -- 50,000 $8,146
Business Affairs; General 2003 $150,000 $7,500 $10,000 -- 20,000 $22,065(6)
Counsel; and Secretary
Jeff Butkovsky 2005 $152,500 $20,000 $7,200 -- 45,000 $4,839
Senior Vice President - 2004 $130,000 $15,000 $7,200 -- 30,000 $3,744
Chief Technology Officer 2003 $125,000 $10,000 $5,400 -- 20,000 $15,673(7)
Brian Pflug 2005 $123,708 $20,000 $7,200 -- 40,000 $6,510
Senior Vice President - 2004 $105,000 $35,000 $7,200 -- 50,000 $6,573
Accounting and Finance 2003 $100,000 $7,500 $ -- -- 10,000 $21,502(6)
Kevin J. Farrell 2005 $113,437 $12,000 $7,200 -- -- $5,424
Senior Vice President - 2004 $103,125 $15,000 $7,200 -- -- $5,696
Data Center Operations 2003 $100,000 $10,000 $7,200 -- -- $5,502
David Gajda 2005 $175,000 $15,000 $ -- -- -- $1,094
Senior Vice President 2004 $72,917 $ -- $ -- -- -- $ --
International(8) 2003 $ -- $ -- $ -- -- -- $ --
(1) Reflects car allowances paid by the Company.
(2) The Company has not made any restricted stock awards.
(3) Reflects stock options granted under the Company's First Amended and
Restated 2000 Stock Option Plan to Messrs. Loffredo, Butkovsky and
Pflug. In addition Messrs. Mayo, Loffredo, Butkovsky and Pflug each
hold 200,000 AccessDM stock options under AccessDM's stock option plan.
(4) Includes 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 employee
contributions up to the lesser of 6% of the employee's pay (on a
per-payroll period basis) or the statutory annual limit set by the
Internal Revenue Service.
(5) Includes premiums for two ten-year term life insurance policies, each
in the benefit amounts of $5 million, under which the Company is the
beneficiary. Under one of the policies, 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) Includes $16,000 of shares of Class A Common Stock issued by the
Company to Messrs. Loffredo and Pflug in December 2002, which shares
were valued by an independent appraiser and are not subject to any
contractual restrictions.
(7) Includes $12,000 of shares of Class A Common Stock issued by the
Company to Mr. Butkovsky in December 2002, which shares were valued by
an independent appraiser and are not subject to any contractual
restrictions.
(8) Mr. Gajda was promoted to Senior Vice President- International on April
1, 2005. Mr. Gajda was formerly President and Chief Operating Officer
for Hollywood Software, Inc. from the acquisition date of November 4,
2003 through March 31, 2005.
OPTIONS GRANTED DURING THE LAST FISCAL YEAR
The following table sets forth information concerning stock options granted to
the Named Executives during the Last Fiscal Year.
Individual Grants
-------------------------------------------------------------------------------
Shares of Class A Common % of Total Options Granted to
Stock Underlying Options Employees in Exercise Expiration
NAME GRANTED(#) FISCAL YEAR PRICE($) DATE
---- -------------------------- -------------------- -------------- ----------------
A. Dale Mayo -- -- -- --
Gary S. Loffredo 40,000 17% $3.60 1/13/2015
Jeff Butkovsky 45,000 19% $3.60 1/13/2015
Brian Pflug 40,000 17% $3.60 1/13/2015
Kevin J. Farrell -- -- -- --
David Gajda -- -- -- --
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
The following table sets forth information regarding the number of stock options
exercised by the Named Executives during the Last Fiscal Year and, as of March
31, 2005, the number of securities underlying unexercised stock options and the
value of the in-the-money options held by the Named Executives. The Company has
not granted any stock appreciation rights.
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options
OPTIONS AT FY-END (#) AT FY-END ($)(1)
--------------------- ----------------
Shares of Class A
Common Stock
Acquired ON Value
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
A. Dale Mayo(2) -- -- -- -- -- --
Gary S. Loffredo (2) -- -- 120,000 80,000 $115,333 $203,867
Jeff Butkovsky (2) -- -- 58,333 71,667 $60,400 $183,400
Brian Pflug (2) -- -- 68,519 76,667 $71,333 $190,067
Kevin J. Farrell -- -- -- -- -- --
David Gajda -- -- -- -- -- --
(1) Based on the trading price of shares of the Company's Class A Common Stock
on March 31, 2005.
(2) In addition to the above, Messrs. Mayo, Loffredo, Butkovsky and Pflug each
hold 200,000 AccessDM stock options under the AccessDM stock option plan. There
is no public market for AccessDM's common stock.
EMPLOYEE BENEFIT PLANS
Since 2002, the Company belonged to a Professional Employer Organization
("PEO"). Through the PEO, the Company purchases all of its benefits and payroll
services, along with other PEO member companies. For tax filing and for benefits
purposes, the employees of the Company are considered to be employees of the
PEO. However, Hollywood Software, Inc. ("Hollywood SW"), one of the Company's
subsidiaries, is not a member of the PEO, and purchases its benefits from other
providers.
Through the PEO, the Company has a 401(k) plan that permits eligible employees
to contribute up to 15% of their compensation, not to exceed the statutory
limit. The Company automatically matches 50% of all of its employees'
contributions. Employee contributions, employer matching contributions and
related earnings vest immediately.
Hollywood SW's employees are also covered by a profit sharing plan qualified
under section 401 of the Internal Revenue Code of 1986, as amended (the "IRC").
The plan provides for Hollywood SW to make discretionary profit contributions on
behalf of eligible employees. Hollywood SW made no contributions in 2004 or
2005.
Effective January 1, 2005, the Company terminated its PEO arrangement and is
currently purchasing employee benefits from other providers. Effective January
1, 2005, Hollywood SW also terminated the Hollywood SW profit sharing plan. The
Company also established a new 401(k) plan with a company match of 50% of the
first 6% of employee contributions. Employer matching contributions vest over a
5-year period. Total 401(k) plan expenses for the years ended March 31, 2004 and
2005 were $39,000 and $60,000, respectively.
EMPLOYMENT AGREEMENTS BETWEEN THE COMPANY AND NAMED EXECUTIVES
A. DALE MAYO. In July 2000, the Company entered into an employment agreement
with A. Dale Mayo, which was amended on December 1, 2000. The amended employment
agreement provides for the Company's payment of an annual base salary of
$250,000 and annual bonuses equal to 3.5% of its annual gross revenues up to $10
million and 2% of any annual gross revenues in excess of $10 million. In
connection with the Company's November 2003 initial public offering (the "IPO"),
the Company and Mr. Mayo entered into a second amendment to the employment
agreement and agreed that his employment term will be extended through September
30, 2006; however, it will be automatically renewed for successive one-year
terms unless written notice is given by either the Company or Mr. Mayo at least
six months prior to the end of the term (as may be extended) that such party
desires to terminate the agreement. The Company and Mr. Mayo have further agreed
his combined annual salary and bonus will be limited to $1.2 million in any
fiscal year. Under his employment 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, within certain geographical limitations. 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 until the scheduled expiration of the agreement, during which
time Mr. Mayo will be obligated to seek other employment.
KEVIN J. FARRELL. In April 2000, the Company entered into an employment
agreement with Kevin Farrell. The employment agreement provides for the
Company's payment of an annual base salary of $100,000, which amount was
increased to $112,500 on January 1, 2004. A bonus may be granted in the sole
discretion of the Company's board of directors. The employment agreement expires
on December 31, 2005; however, it will be automatically renewed for successive
one-year terms unless written notice is given by either the Company or Mr.
Farrell at least 120 days prior to the end of the term (as it may be extended)
that such party desires to terminate the agreement. Mr. Farrell's employment
will terminate on his death, disability or termination for cause (as defined
therein). In addition, Mr. Farrell has entered into a confidentiality,
non-solicitation and non-compete agreement with the Company, under which Mr.
Farrell has agreed to not disclose or use any confidential information of the
Company, to assign all intellectual property made, developed or conceived by Mr.
Farrell in connection with his employment by the Company and to not compete
with, or to solicit employees from, the company for a period of one year after
his employment agreement is terminated or expires.
DIRECTORS' COMPENSATION
The Company's directors do not presently receive any cash compensation for
serving as directors or participating on any committee of the Board, but are
reimbursed for the out-of-pocket expenses that they incur in attending Board
meetings. Non-employee directors are eligible for grants under the Company's
First Amended and Restated 2000 Stock Option Plan and, to date, four present
directors and one former director have been granted options covering an
aggregate of 60,000 shares of Class A Common Stock for services provided by them
as directors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ELECTION OF THE
NOMINEES NAMED ABOVE.
AMENDMENT TO FIRST AMENDED AND RESTATED 2000 STOCK OPTION PLAN (PROPOSAL TWO)
The Board adopted the Company's 2000 Stock Option Plan, on June 1, 2000 and, in
July 2000, the Company's stockholders approved this plan by written consent.
Under this plan, which was amended and restated in January 2003 pursuant to the
First Amended and Restated 2000 Stock Option Plan (as amended, the "Plan") and
further amended in September 2003 and October 14, 2004, the Company may grant
both incentive and non-statutory stock options to the Company's employees,
non-employee directors and consultants. The primary purpose of the Plan is to
enable the Company to attract, retain and motivate its employees, non-employee
directors and consultants. The current Plan authorizes up to 850,000 shares of
the Company's Class A Common Stock for issuance upon the exercise of options
granted under the Plan. As of July 15, 2005, stock options covering 850,000
shares of the Company's Class A Common Stock had been granted under the Plan and
85,897 shares of the Company's Class A Common Stock had been granted under the
Plan, subject to the stockholders' approval to this proposal two. The total
market value of the Class A Common Stock underlying these options was $9.4
million as of July 15, 2005. However, stock options covering 54,600 shares of
Class A Common Stock are currently out-of-the-money.
Pursuant to Amendment No. 3 to the Plan in the form attached hereto as APPENDIX
A, the Board proposes to amend the Plan to increase the number of shares of
Class A Common Stock authorized for issuance upon the exercise of options from
850,000 to 1,100,000. This proposal requires approval by a majority of the
outstanding votes cast at the Annual Meeting.
The following table sets forth certain information, as of March 31, 2005,
regarding the shares of the Company's Class A Common Stock authorized for
issuance under the current Plan.
------------------------------------- ----------------------------- -------------------------- -----------------------
Number of Shares of Class A Number of Shares of
Common Stock issuable upon Weighted average of Class A Common Stock
exercise of outstanding exercise price ($) of remaining available
PLAN OPTIONS (#) outstanding OPTIONS ($) for FUTURE ISSUANCE (#)
------------------------------------- ----------------------------- -------------------------- -----------------------
AccessIT First Amended and Restated
2000 Stock Option Plan approved by
stockholders........................ 762,897(1) $5.50 87,103(1)
------------------------------------- ----------------------------- -------------------------- -----------------------
AccessIT compensation plans not
approved by stockholders............ N/A N/A N/A
------------------------------------- ----------------------------- -------------------------- -----------------------
AccessDM compensation plan approved
by stockholders..................... 1,005,000(2) $0.21 995,000(2)
------------------------------------- ----------------------------- -------------------------- -----------------------
AccessDM compensation plans not
approved by stockholders............ N/A N/A N/A
------------------------------------- ----------------------------- -------------------------- -----------------------
(1) Shares of AccessIT Class A common stock
(2) Shares of AccessDM common stock
Under the Plan, stock options covering no more than 100,000 shares of Class A
Common Stock may be granted to any participant in any single calendar year and
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 Plan expire 10 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 vest
generally over three-year periods. The Plan is administered by the Board.
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 Common
Stock on the date of grant. Incentive stock options granted to holders 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 Common
Stock on the date of grant. Incentive and non-statutory stock options granted
under the Plan are subject to vesting provisions, and exercise is subject to the
continuous service of the optionee. The exercise prices and vesting periods (if
any) for non-statutory options are set in the discretion of the Board. Upon a
change of control of the Company, all options (incentive and non-statutory) that
have not previously vested will become immediately and 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 grant.
The following is a brief summary of the principal anticipated federal income tax
consequences of grants under the Plan to recipients and the Company. This
summary is not intended to be exhaustive and does not describe all federal,
state or local tax laws.
OPTION GRANTS. Options granted under the Plan may be either incentive stock
options which satisfy the requirements of Section 422 of the IRC or
non-statutory options which are not intended to meet such requirements. The
federal income tax treatments for the two types of options are as follows:
INCENTIVE 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. Any additional gain or loss
recognized upon the disposition will be recognized as a capital gain or loss by
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.
NON-STATUTORY 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 the optionee will
be required to satisfy the tax withholding requirements applicable 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.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ADOPTION OF THE
AMENDMENT TO THE PLAN. APPROVAL OF ISSUANCE OF 453,175 SHARES OF THE COMPANY'S
CLASS A COMMON STOCK IN CONNECTION WITH THE PRIVATE PLACEMENT OF CONVERTIBLE
DEBENTURES CONVERTIBLE INTO SUCH COMMON STOCK (PROPOSAL THREE)
On February 10, 2005, the Company completed a private placement offering
comprised of the issuance of 7% convertible debentures (the "Convertible
Debentures") and warrants (the "Convertible Debentures Warrants") to a group of
institutional investors for aggregate proceeds of $7.6 million. The Convertible
Debentures have a four year term, with one third of the unconverted principal
balance repayable in 12 equal monthly installments beginning three years after
the closing. The remaining unconverted principal balance is repayable at
maturity. The Company may pay the interest in cash or, at its option if certain
conditions are met, by issuing shares of its Class A Shares. If the Company is
eligible to issue Class A Common Stock to repay interest, the number of shares
issuable is based on 93% of the 5-day average closing price preceding the
interest due date. The Convertible Debentures are initially convertible into
1,867,322 shares of Class A Common Stock, based upon a conversion price of $4.07
per share subject to adjustments from time to time. Additionally, the Company
issued to the investors Convertible Debentures Warrants to purchase up to
560,197 shares of Class A Shares, at an initial exercise price of $4.44 per
share, subject to adjustments from time to time. The Convertible Debentures
Warrants are exercisable beginning on September 9, 2005 until 5 years
thereafter. The Company used the proceeds of the offering, in part, for the
acquisition of substantially all of the assets of the Pavilion Theater, an
eight-screen movie theatre and card located in Brooklyn, New York, which, while
continuing to operate as a fully functional multiplex, has become a showplace
for the Company to demonstrate its integrated digital cinema solutions to the
movie entertainment industry. The remainder of the proceeds of the offering were
for working capital and general corporate purposes.
The Company's Class A Common Stock is listed for trading on the American Stock
Exchange (the "AMEX") and, therefore, is subject to the rules of the AMEX.
Pursuant to the AMEX Listing Standards, Policies and Requirements, including
Section 713 thereof ("AMEX Rule 713"). In particular, AMEX Rule 713 requires
listed companies to obtain shareholder approval prior to issuing common stock
(or securities convertible into common stock) in a private financing at a price
less than the market value of the common stock, where the amount of common stock
to be issued (or issuable upon conversion) is or will be greater than 20% of the
common stock or voting power of the company outstanding prior to the issuance
(the "20% Rule"). This proposal requires approval by a majority of the
outstanding votes cast at the Annual Meeting.
As of February 9, 2005, the date prior to the closing of the offering, the
Company had 9,355,422 shares of Class A Common Stock outstanding (excluding
shares held in treasury). Accordingly, 1,871,084 shares constituted 20% of the
outstanding shares of Class A Common Stock. Therefore, the issuance of any
shares in excess of 1,871,083 would trigger the 20% Rule. When taking into
account the shares of Class A Common Stock that the Company may issue in payment
of interest in lieu of cash and the shares of Class A Common Stock that would
become issuable upon the exercise of additional warrants that may be issued by
the Company if the Convertible Debentures are redeemed, in addition to the
1,867,322 shares of Class A Common Stock initially issuable upon the conversion
of the Convertible Debentures by the Company, the 20% Rule is triggered with
respect to up to [ ] shares of Class A Common Stock. Because the exercise price
of the Convertible Debentures Warrants was not less than the market price when
they were issued, the shares underlying the Convertible Debentures Warrants were
not included in the calculation of 20% of the outstanding shares. Stockholder
approval is required regarding the potential issuance of 453,175 shares of Class
A Common Stock. In the event that stockholder approval is not obtained, the
Company will not elect to redeem the Convertible Debentures and will not issue
shares of Class A Common Stock in payment of interest in lieu of cash, to the
extent that shares in excess of the 1,871,083 shares described above would be
required to be issued.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE
ISSUANCE OF 453,175 SHARES OF THE COMPANY'S CLASS A COMMON STOCK IN CONNECTION
WITH
THE PRIVATE PLACEMENT OF CONVERTIBLE DEBENTURES CONVERTIBLE INTO SUCH COMMON
STOCK.
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: Mr.
Mayo failed to timely file a Form 5 regarding four gifts made to his family
members on March 31, 2005; Messrs. Butkovsky, Loffredo and Pflug failed to
timely file a Form 4 regarding stock options granted to each of them on January
13, 2005; Messrs. Davidoff and Crotty failed to timely file a Form 4 regarding
stock options granted to each of them on March 17, 2004; Messrs. Finlay and
Clevenger failed to timely file two Form 4s regarding stock options grated to
each of them on March 17, 2004 and July 1, 2004; and Mr. Clevenger failed timely
file two Form 4s regarding stock options granted to him on March 17, 2004 and
July 1, 2004. All of the foregoing late filings were inadvertent and promptly
corrected after discovery of the reporting obligations.
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
In connection with the execution of one of the Company's long-term real property
leases, A. Dale Mayo, one of the Company's co-founders and the President and
Chief Executive Officer, and Brett E. Marks, a co-founder and an executive
officer and director of the Company, posted a letter of credit in the aggregate
amount of $525,000 in June 2000. This letter of credit was reduced by one-third
in each of the three successive years and terminated in June 2003. The Company
reimbursed Messrs. Mayo and Marks for the issuance costs of approximately
$10,000 for the letter of credit.
Wayne Clevenger and Matthew Finlay, two of the Company's directors, are
directors of MidMark, which previously held all of the Company's outstanding
Series A and Series B preferred stock and related contingent warrants. In
connection with its purchase of shares of the Company's Series A and Series B
preferred stock, the Company paid MidMark a $75,000 investment banking fee. In
September 2003, the Company entered into an exchange agreement with MidMark,
under which the Company agreed to issue 2,207,976 additional shares of Class A
Common Stock to MidMark in exchange for all of the Company's outstanding shares
of Series A and Series B preferred stock, including accrued dividends thereon,
and through the exercise and exchange of certain warrants. Upon the IPO, MidMark
(i) converted all 8,202,929 shares of its Series A and Series B preferred stock
into 1,640,585 shares of Class A Common Stock; (ii) exchanged warrants that were
exercisable, subject to certain future conditions, for up to 951,041 shares of
Class A Common Stock, for 320,000 shares of Class A Common Stock; (iii)
exercised a warrant exercisable for up to 144,663 shares of Class A Common Stock
(143,216 shares on a cashless-exercise basis); and (iv) accepted 104,175 shares
of Class A Common Stock as payment of all accrued dividends on shares of Series
A and Series B preferred stock held by such stockholder. The number of shares of
Class A Common Stock issued as payment of accrued dividends was calculated at
the offering price of $5.00. Additionally, MidMark also purchased $333,000 of
one-year notes, which was repaid in April 2002, and was issued 6,902 of the
one-year notes warrants. Each of these directors have been granted options to
purchase 5,000 shares of the Company's Class A Common Stock. The Company paid
MidMark a management fee of $50,000 per year until November 2003.
From March 2002 to August 2002, the Company borrowed from, and issued five-year
promissory notes (each bearing interest at 8% per year) to, Mr. Mayo, Mr. Marks,
CMNY, John L. O'Hara, a member of the Company's board of advisors, and several
other investors in the aggregate principal amount of $3.175 million. From June
2003 to July 2003, the Company borrowed from, and issued five-year promissory
notes (each bearing interest at 8% per year) to, Mr. O'Hara and several other
investors in the aggregate principal amount of $1.23 million. In connection with
these five-year notes, the Company granted to these investors ten-year warrants
with an exercise price of $0.05 per share to purchase up to an aggregate of
440,500 shares of Class A Common Stock, which warrants were exercised before the
completion of the IPO. Messrs. Mayo, Marks and O'Hara and CMNY have exercised
all of the warrants attached to the five-year notes held by them and purchased
an aggregate of 142,500 shares of Class A Common Stock. The net proceeds of the
five-year note issuances were used to repay the one-year notes and to fund the
Company's working capital requirements.
On March 24, 2004, pursuant to the Exchange Offer, the Company exchanged $2.5
million and $1.7 million aggregate principal amount of five-year promissory
notes for shares of Class A Common Stock and for longer term 6% convertible
notes, respectively. The Company issued 707,477 unregistered shares of Class A
common stock and $1.7 aggregate principal amount of convertible notes
convertible into a maximum of 308,225 shares of Class A Common Stock (i) at any
time up to the maturity date at each holder's option or (ii) automatically on
the date when the average closing price on the American Stock Exchange of the
Class A Common Stock for 30 consecutive trading days has been equal to or
greater than $12.00.
A. Dale Mayo and Brett E. Marks invested $250,000 and $125,000, respectively, in
the Company's offering of one-year 8% notes and received warrants to purchase
4,601 and 2,301 shares, respectively, of Class A Common Stock at $0.05 per
share. These notes were repaid prior to March 31, 2002. Messrs. Mayo and Marks
invested $250,000 and $125,000, respectively, in the Company's offering of
five-year 8% promissory notes and received warrants to purchase 25,000 and
12,500 shares, respectively, of Class A Common Stock at $0.05 per share. In
September 2003, all of the warrants that were attached to the Company's one-year
and five-year promissory notes held by Messrs. Mayo and Marks were exercised. In
March 2004 Messrs. Mayo and Marks participated in the Exchange Offer and
exchanged their 5-year notes and accrued interest totaling $382,000 for
Convertible Notes, convertible into 67,713 shares of Class A Common Stock. As of
March 31, 2004 and 2005, the principal due to these executive officers included
in notes payable was $382,000.
Robert Davidoff, one of the Company's directors, is the general partner of CMNY
Capital II, L.P., which holds 157,927 shares of Class A Common Stock, and a
director of Sterling/Carl Marks Capital, Inc., which holds 51,025 shares of
Class A Common Stock. CMNY Capital II, L.P. also invested $1 million in the
Company's offering of one-year promissory notes, which was repaid in March 2002,
and invested $1 million in the Company's offering of five-year promissory notes.
The warrants attached to such one-year and five-year notes were exercised in
August 2003 and are included in the share numbers above. Mr. Davidoff has also
been granted options to purchase 9,000 shares of Class A Common Stock. In March
2004 CMNY Capital II, LP participated in the Exchange Offer and exchanged its
five-year promissory notes and accrued interest totaling $1 million for
Convertible Notes, convertible into 180,569 shares of Class A Common Stock. As
of March 31, 2004 and 2005, the principal due to CMNY Capital II, LP of $1
million in each of those years, is included in notes payable.
Harvey Marks, a member of the Company's board of advisors, is the father of
Brett E. Marks, one of the Company's founders and executive officers, and is a
partner in an entity that performs real estate services for the Company. Marks
also has been granted options to purchase 41,025 shares of Class A Common Stock
at a weighted average exercise price of $6.83 per share.
In the fiscal years ended March 31, 2003 and March 31, 2004, MidMark
Investments, Inc., the operating company of MidMark, received $50,000 per year
for management services rendered. Messrs. Clevenger and Finlay are the Managing
Director and Vice President, respectively, of MidMark Investment, Inc.
In January 2003, the Board approved the purchase of two separate ten-year, term
life insurance policies on the life of A. Dale Mayo. Each policy carries a death
benefit of $5 million, and the Company is the beneficiary of each policy. Under
one of the policies, however, the proceeds will be used to repurchase, after
reimbursement of all premiums paid by the Company, some or all of the shares of
the Company's capital stock held by Mr. Mayo's estate at the then-determined
fair market value.
In connection with the Hollywood SW acquisition, the Company purchased all of
the outstanding capital stock of Hollywood SW from its security holders, David
Gajda and Robert Jackovich, on November 3, 2003. Messrs. Gajda and Jackovich
have continued as executive officers of Hollywood SW under new employment
agreements and have received an aggregate of 400,000 unregistered shares of the
Company's Class A Common Stock, less 40,444 unregistered shares of Class A
Common Stock that were issued to certain optionees of Hollywood SW.
Hollywood SW and Hollywood Media Center, LLC, a limited liability company that
is 95% owned by David Gajda, one of the sellers of Hollywood SW, entered into a
Commercial Property Lease, dated January 1, 2000, for 2,115 square feet of
office space. The Company has assumed Hollywood SW's obligations under this
lease pursuant to the acquisition, including the monthly rental payments of
$2,335. The lease is currently a month-to-month tenancy with the same monthly
rent. Mr. Gajda was President of Hollywood SW until March 2005 and was recently
promoted to Senior Vice President of International Marketing of AccessIT. On May
1, 2004 an additional 933 square feet were rented on a month-to-month basis for
monthly additional rental payments of $1,000.
In connection with Russell J. Wintner's employment arrangement with AccessDM,
the Company paid Mr. Wintner a finder's fee of $25,000 during the fiscal year
ended March 2004, in connection with his efforts related to the Hollywood SW
acquisition.
In connection with the Managed Services acquisition, the Company purchased all
of the outstanding capital stock of Managed Services from its sole security
holder, Erik Levitt, on January 9, 2004. Mr. Levitt continued as an executive
officer of Managed Services under a new employment agreement and as
consideration for the sale of Managed Services capital stock, received $250,000
and 100,000 unregistered shares of Class A Common Stock.
On November 17, 2004, the Company, through its wholly-owned subsidiary, FiberSat
Global Services, Inc. ("FiberSat"), acquired substantially all of the assets and
certain specified liabilities of FiberSat Global Services, LLC ("Seller") from
the Seller's members. One of the members has continued as an executive officer
of FiberSat under a new employment agreement and has received 35,000
unregistered shares of Class A common stock as consideration for the sale of his
shares of the Seller's capital stock. Also, the Company agreed to pay this
executive an annual base salary of $175,000 which shall be increased five
percent annually, plus a bonus, if and as determined in the sole discretion of
FiberSat's board of directors.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of July 12, 2005, the Company's directors, executive officers and principal
stockholders beneficially own, directly or indirectly, in the aggregate,
approximately 47.1% of its outstanding Class A Common Stock and 100% of its
Class B Common Stock. Class B Common Stock entitles the holder to ten votes per
share of Class B Common Stock and Class A Common Stock entitles the holder to
one vote per share of Class A Common Stock. In particular, A. Dale Mayo, the
Company's President and Chief Executive Officer, beneficially owns 925,811
shares of Class B Common Stock and 55,411 shares of Class A Common Stock, which
represent approximately 49.4% of the total voting power of the Company's
outstanding Common Stock. These stockholders, and Mr. Mayo himself, will 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 15, 2005, 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 five percent 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
SHARES BENEFICIALLY OWNED (A)
NAME (B) NUMBER PERCENT
-------- ------ -------
A. Dale Mayo............................................. 981,222 (c) 9.3%
Brett E. Marks............................................ 556,134 (d) 5.8%
Kevin J. Farrell.......................................... 305,000 3.2%
Gary S. Loffredo.......................................... 139,998 (e) 1.4%
Jeff Butkovsky............................................ 76,667 (f) *
Brian Pflug............................................... 88,518 (g) *
David Gajda............................................... 179,778 1.9%
Robert Davidoff, 40 Stoner Avenue, Great Neck, NY 11021... 394,522 (h) 4.0%
Gerald Crotty............................................. 3,000 (h) *
James Weichert, 1625 State Route 10
Morris Plains, NJ 07950-2933.............................. 531,588 5.6%
MidMark Equity Partners II, L.P., 177 Madison Avenue,
Morristown, NJ07960....................................... 214,879 (i) 23.2%
Wayne L. Clevenger, c/o MidMark Equity Partners II, L.P.,
177 Madison Avenue, Morristown, NJ 07960..................2,218,212 (j) 23.2%
Matthew Finlay, c/o MidMark Equity Partners II, L.P., 177
Madison Avenue, Morristown, NJ 07960......................2,218,212 (k) 23.2%
All directors and executive officers as a group.......... 4,946,383 45.0%
--------------------
* Less than 1%
(a) Applicable percentage of ownership is based on 9,556,857 shares of Class A
common stock outstanding as of July 15, 2005 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 15, 2005 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 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 825,811 shares of Class B common stock held by Mr. Mayo and
100,000 shares of Class B common stock held by Mr. Mayo's spouse. Mr. Mayo
disclaims beneficial ownership of all 100,000 shares of Class B common
stock held by Mr. Mayo's spouse. The holder of each share of class B common
stock is entitled to ten votes per share. Including the voting rights of
his shares of Class B common stock, Mr. Mayo may exercise up to 49.4% 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 share of
Class A common stock.
(d) Includes 35,906 shares of Class A common stock held by Mr. Marks' spouse.
(e) Includes 119,998 shares of Class A common stock underlying options that may
be acquired upon exercise of such options.
(f) Includes 61,667 shares of Class A common stock underlying options that may
be acquired upon exercise of such options.
(g) Includes 68,518 shares of Class A common stock underlying options that may
be acquired upon exercise of such options.
(h) Represents 5,000 shares of Class A common stock underlying options that may
be acquired upon exercise of such options; 157,927 shares owned by CMNY
Capital II, L.P., for which Mr. Davidoff serves as a director; 51,025
shares owned by Sterling Equities/Carl Marks Capital, Inc., for which Mr.
Davidoff serves as a director; and 180,570 shares into which a subordinated
promissory note held by CMNY Capital II, L.P., is convertible. Other than
the 5,000 shares first described, Mr. Davidoff disclaims beneficial
ownership of such shares.
(i) Includes beneficial ownership by MidMark Advisors II, LLC, the general
partner of MidMark Equity Partners II, L.P.
(j) Mr. Clevenger is a managing director of MidMark Equity Partners II, L.P.
and a managing member of MidMark Advisors II, LLC. Represents 3,333 shares
of Class A common stock underlying options that may be acquired upon
exercise of such options; and 2,214,879 shares owned by MidMark Equity
Partners II, L.P. Other than the 3,333 shares first described, Mr.
Clevenger disclaims beneficial ownership of such shares.
(k) Mr. Finlay is a director of MidMark Equity Partners II, L.P. Represents
3,333 shares of Class A common stock underlying options that may be
acquired upon exercise of such options and 2,214,879 shares owned by
MidMark Equity Partners II, L.P. Other than the 3,333 shares first
described, Mr. Finlay disclaims beneficial ownership of such shares.
CLASS B COMMON STOCK
SHARES BENEFICIALLY OWNED(A)
NAME AND ADDRESS NUMBER PERCENT OF CLASS
----------------- ------ ----------------
A. Dale Mayo, c/o Access Integrated Technologies, Inc.,
55 Madison Avenue, Suite 300, Morristown, New Jersey 07960.......... 925,811 (b) 100.0%
All directors and executive officers as a group (one person)........ 925,811 100.0%
--------------------
(a) Applicable percentage of ownership is based on 925,811 shares of Class B
Common Stock outstanding as of July 15, 2005 together with all applicable
options, warrants and other securities convertible into shares of the
Company's 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 B Common Stock
subject to options, warrants or other convertible securities exercisable
within 60 days after July 15, 2005 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.
(b) Includes 100,000 shares of Class B Common Stock held by Mr. Mayo's spouse.
Mr. Mayo disclaims beneficial ownership of all 100,000 shares of Class B
Common Stock held by Mr. Mayo's spouse. Each share of Class B Common Stock
is convertible at any time at the holder's option into one share of Class A
Common Stock.
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 Company's Annual Report on Form 10-KSB,
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 generally accepted accounting principles, the matters
required to be discussed by 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 generally accepted auditing standards.
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 Annual Report on Form 10-KSB for the
year ended March 31, 2005 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 FUTURE 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
PricewaterhouseCoopers LLP ("PwC") served as the Company's independent
registered public accounting firm to audit the financial statements of the
Company for the fiscal year ended March 31, 2004. Eisner LLP ("Eisner") served
as the independent registered public accounting firm to audit the Company's
financial statements for the fiscal year ended March 31, 2005 and has been
appointed to do so again for the fiscal year ending March 31, 2006. No
representative of either PwC or Eisner will be present at the Annual Meeting.
On September 9, 2004, the Audit Committee of the Board dismissed PwC as the
Company's independent registered public accounting firm and engaged Eisner as
its new independent registered public accounting firm.
The audit reports of PwC on the Company's consolidated financial statements as
of and for the fiscal years ended March 31, 2003 and March 31, 2004 did not
contain any adverse opinion or disclaimer of opinion and were not modified as to
uncertainty, audit scope or accounting principle.
During the fiscal years ended March 31, 2003 and March 31, 2004 and through
September 9, 2004, there were no disagreements between the Company and PwC on
any matter of accounting principles or practices, financial statement disclosure
or auditing scope or procedure, which disagreements if not resolved to PwC's
satisfaction would have caused PwC to make reference thereto in its reports on
the consolidated financial statements for such years.
No reportable events of the type described in Item 304(a)(1)(iv)(B) of
Regulation S-B occurred during the fiscal years ended March 31, 2003 and March
31, 2004 and through September 9, 2004.
During the two fiscal years ended March 31, 2003 and March 31, 2004 and through
September 9, 2004, the Company did not consult with Eisner on any matter that
(i) involved the application of accounting principles to a specific completed or
contemplated transaction, or the type of audit opinion that might be rendered on
the Company's financial statements, in each case where written or oral advice
was provided that was an important factor considered by the Company in reaching
a decision as to the accounting, auditing or financial reporting issue; or (ii)
was either the subject of a disagreement, as that term is described in Item
304(a)(1)(iv)(A) of Regulation S-B and the related instruction to Item 304 of
Regulation S-B, or reportable information, as that term is described in Item
304(a)(1)(iv)(B) of Regulation S-B.
PwC furnished the Company with a letter addressed to the SEC stating that it
agrees with the above statements. A copy of PwC's letter was filed as an exhibit
to the Current Report on Form 8-K filed by the Company with the SEC on September
14, 2004 to report this event.
The Company's Audit Committee has also adopted policies and procedures for
pre-approving all non-audit work performed by PwC, for fiscal year ended March
31, 2004, and by Eisner for the fiscal year ended March 31, 2005. 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 PwC and Eisner for the
fiscal years ended March 31, 2004 and March 31, 2005, respectively, for these
various services were:
Type of Fees 2004 2005
---- ----
(1) Audit Fees $190,380 $160,107
(2) Audit-Related Fees 26,308 8,500
(3) Tax Fees 15,875 32,600
(4) ALL OTHER FEES 1,400 0
-------------- ----- -----
Total $233,963 $201,207
======== ========
In the above table, in accordance with the Securities and Exchange Commission's
definitions and rules, "audit fees" are fees the Company paid PwC and Eisner for
professional services for the audit of the Company's consolidated financial
statements included in Form SB-2 and Form 10-KSB and review of consolidated
financial statements included in Form SB-2 and Form 10-QSBs, and for services
that are normally provided by the accountant in connection with statutory and
regulatory filings or engagements for the fiscal years ended March 31, 2004 and
2005; "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. 100% of the services set forth in
sections (1) through (4) above were approved by the Audit Committee in
accordance with its charter.
OTHER MATTERS
The Board knows of no other business other than that set forth above to be
transacted at the Annual Meeting, but if other matters requiring a vote of the
stockholders arise, the persons designated as proxies will vote the shares of
Common Stock represented by the proxy cards in accordance with their judgment on
such matters.
BY ORDER OF THE BOARD OF DIRECTORS
---------------
A. Dale Mayo
PRESIDENT, CHIEF EXECUTIVE OFFICER AND CHAIRMAN OF THE BOARD OF DIRECTORS
July 29, 2005
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 15, 2005 at 2:00 p.m., eastern 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.
1. Election of eight (8) directors (INSTRUCTION: TO WITHHOLD AUTHORITY TO
VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S
NAME IN THE LIST BELOW)
FOR all nominees listed to the [__] A. Dale Mayo
right (except as marked to the Kevin J. Farrell
contrary) Gary S. Loffredo
Brett E. Marks
Wayne L. Clevenger
Gerald C. Crotty
Robert Davidoff
Matthew W. Finlay
AGAINST, or ABSTAIN from, voting [__]
for all nominees listed to the right
2. Proposal to amend the Company's First Amended and Restated 2000 Stock
Option Plan to increase the number of shares of Class A Common Stock
available from the grant of options thereunder from 850,000 to
1,100,000.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Proposal to approve the issuance of 453,175 shares of the Company's
Class A Common Stock in connection with the private placement of
Convertible Debentures convertible into such Common Stock.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS.
Dated: _________________, 2005
Signature: __________________________
Name: __________________________
I will [_] will not [_] attend the Meeting.
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. Please date,
sign and mail your
Proxy Card in the
envelope provided as
soon as possible.
APPENDIX A
AMENDMENT NO. 3
TO
FIRST AMENDED AND RESTATED
ACCESS INTEGRATED TECHNOLOGIES, INC. 2000 STOCK OPTION PLAN
AMENDMENT NO. 3, dated as of ____________, 2005 (this "Amendment"), to the
First Amended and Restated 2000 Stock Option 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 850,000 shares to1,100,000
shares.
NOW, THEREFORE, BE IT RESOLVED the Plan is hereby amended as follows:
1. The first sentence of Section 4.01 shall be revised and amended to read
as follows:
"The maximum number of shares authorized to be issued under the Plan and
available for issuance as Options shall be 1,100,000 shares of Common Stock."
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 15 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