def14a
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO.___)
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
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Definitive Proxy Statement |
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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 Additional Materials |
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Soliciting Material Pursuant to §240.14a-12 |
Mad Catz Interactive, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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fee required. |
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. |
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(1)
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Title 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 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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(5)
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Total fee paid:
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Fee 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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(1)
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Amount Previously Paid:
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Form, Schedule or Registration Statement No.:
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Filing Party:
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Date Filed:
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July 15, 2011
Dear Fellow Shareholder:
You are cordially invited to attend our Annual and Special
Meeting of Shareholders on Thursday, August 18, 2011, at
10:00 a.m., Pacific Time at Mad Catz, Inc.s offices
located at 7480 Mission Valley Road, Suite 101,
San Diego, California, 92108.
The business to be conducted at the Annual and Special Meeting
is explained in the accompanying Notice of Annual and Special
Meeting of Shareholders and Management Proxy Circular and Proxy
Statement. At the Annual and Special Meeting, we will also
discuss our results for the past year.
Whether or not you attend the Annual and Special Meeting, it is
important that your shares be represented and voted at the
Annual and Special Meeting. Please complete, sign and date your
proxy card today and return it in the envelope provided. If you
decide to attend the Annual and Special Meeting and you are a
registered shareholder, you will be able to vote in person, even
if you have previously submitted your proxy.
Thank you for your continued support.
Sincerely,
Darren Richardson
President and Chief Executive Officer
MAD CATZ INTERACTIVE,
INC.
7480 MISSION VALLEY ROAD, SUITE 101
SAN DIEGO, CALIFORNIA 92108
NOTICE OF ANNUAL AND SPECIAL
MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 18,
2011
The 2011 Annual and Special Meeting of Shareholders (the
Meeting) of Mad Catz Interactive, Inc. (the
Company) will be held at Mad Catz, Inc.s
offices located at 7480 Mission Valley Road, Suite 101,
San Diego, California, 92108, on Thursday, August 18,
2011, beginning at 10:00 a.m., Pacific Time. The purposes
of the Meeting are to:
1. Receive the Annual Report of the Company containing the
consolidated annual financial statements for the year ended
March 31, 2011 and the auditors report thereon;
2. Elect four directors of the Company to serve until the
Annual Meeting of Shareholders to be held in 2012 and until
their respective successors are elected and qualified;
3. Appoint KPMG LLP as the Independent Registered Public
Accounting Firm and Auditor of the Company and to authorize the
Board of Directors to fix the Independent Registered Public
Accounting Firm and Auditors remuneration;
4. Consider and, if deemed advisable, approve (with or
without variation) a special resolution authorizing an amendment
to the Companys Articles to effect, at the discretion of
the Board of Directors, a reverse stock split of the
Companys currently issued and outstanding Common Stock at
a ratio within the range of one post-split share for every three
pre-split shares to one post-split share for every five
pre-split shares, with the final decision whether to proceed
with the reverse stock split and the exact ratio and timing of
the reverse stock split to be determined by the Board of
Directors, in its discretion, if at all, prior to March 31,
2012;
5. Consider, and, if deemed advisable, approve an amendment
to the Mad Catz Interactive, Inc. Stock Option Plan
2007, as amended (the 2007 Plan), to increase the
number of shares reserved and authorized for issuance thereunder
by 3,000,000 shares;
6. Consider, and, if deemed advisable, approve a resolution
confirming By-law Number 3, which amends By-law Number 2 of the
Company, to increase the quorum requirements for meetings of
shareholders of the Company to a minimum of 2 persons,
being either shareholders or proxyholders, holding or
representing, in the aggregate not less than a majority of the
votes entitled to be cast at the meeting; and
7. Transact such other business as may properly come before
the Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on
July 11, 2011 as the record date for determining the
shareholders entitled to notice of and to vote at the Meeting
and any adjournment or postponement thereof.
These items of business, including the nominees for director,
are more fully described in the Management Proxy Circular and
Proxy Statement accompanying this notice.
Whether or not you plan to attend the Meeting, we encourage
you to vote your shares by proxy. This will ensure the presence
of a quorum at the Meeting. Voting by proxy will not limit your
right to change your vote or to attend the Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
Darren Richardson
President and Chief Executive Officer
July 15, 2011
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY
MATERIALS FOR THE 2011 ANNUAL AND SPECIAL MEETING OF
SHAREHOLDERS TO BE HELD ON AUGUST 18, 2011.
THE
MANAGEMENT PROXY CIRCULAR AND PROXY STATEMENT AND THE ANNUAL
REPORT ARE AVAILABLE AT
https://materials.proxyvote.com/556162.
TABLE OF
CONTENTS
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MAD CATZ
INTERACTIVE, INC.
7480 MISSION VALLEY ROAD,
SUITE 101
SAN DIEGO, CALIFORNIA 92108
MANAGEMENT
PROXY CIRCULAR AND PROXY STATEMENT FOR
THE ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD AUGUST 18, 2011
This Management Proxy Circular and Proxy Statement is furnished
in connection with the solicitation by the Board of Directors
(the Board) of Mad Catz Interactive, Inc. (the
Company, Mad Catz, we or
us) of proxies from the holders of shares of Common
Stock of the Company to be voted at the Annual and Special
Meeting of Shareholders to be held on Thursday, August 18,
2011, beginning at 10:00 a.m., Pacific Time, at Mad Catz,
Inc.s offices located at 7480 Mission Valley Road,
Suite 101, San Diego, California, 92108 (the
Meeting). This Management Proxy Circular and Proxy
Statement, the proxy card, and our Annual Report will first be
mailed to shareholders entitled to vote at the Meeting on or
about July 18, 2011. All dollar references in this
Management Proxy Circular and Proxy Statement are in
U.S. dollars unless otherwise indicated.
QUESTIONS
AND ANSWERS ABOUT THE PROXY
MATERIALS AND OUR 2011 ANNUAL AND SPECIAL MEETING
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What is the purpose of the Meeting? |
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The Meeting is being held to receive our Annual Report
containing the consolidated financial statements for the year
ended March 31, 2011 and the auditors report thereon
and to consider and vote upon (1) the election of four
directors to serve until the next Annual Meeting of Shareholders
in 2012 and until their successors are duly elected;
(2) the appointment of KPMG LLP as our Independent
Registered Public Accounting Firm and Auditor and the
authorization of the Board to fix the remuneration of the
Independent Registered Public Accounting Firm and Auditor;
(3) the approval of a special resolution authorizing an
amendment to our Articles to effect, at the discretion of the
Board of Directors, a reverse stock split of our currently
issued and outstanding Common Stock at a ratio within the range
of one post-split share for every three pre-split shares to one
post-split share for every five pre-split shares, with the final
decision whether to proceed with the reverse stock split and the
exact ratio and timing of the reverse stock split to be
determined by the Board of Directors, in its discretion, if at
all, prior to March 31, 2012; (4) the approval of an
amendment to the Mad Catz Interactive, Inc. Stock Option
Plan 2007 to increase the number of shares reserved
and authorized for issuance thereunder; and (5) the
approval of a resolution to confirm By-law Number 3, which
increases the quorum requirements for meetings of the
shareholders. The Board knows of no other business that will be
presented for consideration at the Meeting. In |
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addition, management will report on the Companys
performance during fiscal year 2011 and respond to questions
from shareholders. |
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What is the Boards Recommendation? |
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The Boards recommendations are set forth together with a
description of the proposals in this Management Proxy Circular
and Proxy Statement. In summary, the Board recommends that you
vote: |
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FOR the election of the four directors named
in this Management Proxy Circular and Proxy Statement to serve
until the Meeting of Shareholders in 2012 and until their
successors are duly elected and qualified (see page 6);
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FOR the appointment of KPMG LLP as our
Independent Registered Public Accounting Firm and Auditor and
the authorization of the Board to fix the remuneration of the
Independent Registered Public Accounting Firm and Auditor (see
page 9);
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FOR the approval of a special resolution
authorizing an amendment to our Articles to effect, at the
discretion of the Board of Directors, a reverse stock split of
our currently issued and outstanding Common Stock at a ratio
within the range of one post-split share for every three
pre-split shares to one post-split share for every five
pre-split shares, with the final decision whether to proceed
with the reverse stock split and the exact ratio and timing of
the reverse stock split to be determined by the Board of
Directors, in its discretion, if at all, prior to March 31,
2012 (see page 9);
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FOR the approval of an amendment to the Mad
Catz Interactive, Inc. Stock Option Plan 2007 to
increase the number of shares reserved and authorized for
issuance thereunder by 3,000,000 shares (see page 15);
and
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FOR the approval of a resolution confirming
By-law Number 3, which amends By-law Number 2 of the Company, to
increase the quorum requirements for meetings of shareholders of
the Company to a minimum of 2 persons, being either
shareholders or proxyholders, holding or representing, in the
aggregate not less than a majority of the votes entitled to be
cast at the meeting (see page 20).
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Who is entitled to vote at the Meeting? |
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Only holders of record of shares of Common Stock as of the close
of business on July 11, 2011, the record date fixed by the
Board (the Record Date), will be entitled to receive
notice of and to vote at the Meeting. As of July 11, 2011,
there were 63,442,296 shares of Common Stock issued and
outstanding. |
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What shares can I vote? |
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You may vote all shares of Mad Catz Common Stock owned by you as
of the close of business on the Record Date. You may cast one
vote per share that you held on the Record Date. A list of
shareholders entitled to vote at the Meeting will be available
during ordinary business hours at Mad Catz, Inc.s offices
located at 7480 Mission Valley Road, Suite 101,
San Diego, California 92108 for a period of at least
10 days prior to the Meeting and at the Meeting. |
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How can I vote my shares at the Meeting? |
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If your shares are registered directly in your name with our
transfer agent, Computershare Trust Company of Canada, you
are considered the shareholder of record with
respect to those shares and the proxy materials and proxy card
are being sent directly to you by Mad Catz. As the shareholder
of record, you have the right to vote in person at the Meeting.
If you choose to do so, you can bring the enclosed proxy card or
vote at the Meeting. Most of our shareholders hold their shares
through a broker, bank or other nominee (that is, in
street name) rather than directly in their own name.
If you hold your shares in street name, your broker, bank or
other nominee is forwarding the proxy materials to you, together
with a voting instruction card. Because a beneficial owner is
not the shareholder of record, you may not vote these shares in
person at the Meeting unless you obtain a legal
proxy from the broker, bank or other nominee that holds
your shares, giving you the right to vote the shares at the
Meeting. Even if you plan |
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to attend the Meeting, we recommend that you vote your shares
in advance as described below so that your vote will be counted
if you later decide not to attend the Meeting. The shares
represented by proxy at the Meeting will be voted or withheld
from voting in accordance with the instructions of the
shareholder granting such proxy on any ballot which may be
called for. If the shareholder specifies a choice with respect
to any matter to be acted upon, the shares subject to such proxy
will be voted accordingly. |
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Applicable regulatory policy requires your broker to seek voting
instructions from you in advance of the Meeting. Every broker
has its own mailing procedures and provides its own return
instructions, which you should carefully follow in order to
ensure that your shares are voted at the Meeting. The majority
of brokers now delegate responsibility for obtaining
instructions from clients to Broadridge Communication Solutions,
Canada (Broadridge). Broadridge mails a Voting
Information Form instead of the form of proxy. You are asked to
complete and return the Voting Information Form to Broadridge by
mail or facsimile. Alternately, you can call the toll-free
telephone number noted on your Voting Information Form to vote
your shares. If you receive a Voting Information Form from
Broadridge, it cannot be used as a proxy to vote shares directly
at the Meeting because the proxy must be returned to Broadridge
in advance of the Meeting in order to have the shares voted. |
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How will my shares be voted if I return a blank proxy
card? |
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If you are a shareholder of record, and you sign and return a
proxy card without giving specific voting instructions, your
shares will be voted FOR the election, as directors
of the Company, of the four nominees named in this Management
Proxy Circular and Proxy Statement, FOR the
appointment of KPMG LLP as our Independent Registered Public
Accounting Firm and Auditor and the authorization of the Board
to fix the remuneration of the Independent Registered Public
Accounting Firm and Auditor, FOR the approval of a
special resolution authorizing an amendment to our Articles to
effect, at the discretion of the Board of Directors, a reverse
stock split of our currently issued and outstanding Common Stock
at a ratio within the range of one post-split share for every
three pre-split shares to one post-split share for every five
pre-split shares, with the final decision whether to proceed
with the reverse stock split and the exact ratio and timing of
the reverse stock split to be determined by the Board of
Directors, in its discretion, if at all, prior to March 31,
2012, FOR approval of an amendment to the Mad Catz
Interactive, Inc. Stock Option Plan 2007 to increase
the number of shares reserved and authorized for issuance
thereunder, and FOR approval of a resolution
confirming By-law Number 3, which amends By-law Number 2 of the
Company, to increase the quorum requirements for meetings of
shareholders of the Company. If you hold your shares in street
name and do not provide your broker with voting instructions
(including by returning a blank voting instruction card), your
shares may constitute broker non-votes. Generally,
broker non-votes occur when a broker is not permitted to vote on
a specific matter without instructions from the beneficial owner
and instructions are not given. Shares that are the subject of a
broker non-vote with respect to a proposal on a non-routine
matter will not be counted as a vote cast for or
against the proposal. |
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How can I vote my shares without attending the Meeting? |
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Whether you are the shareholder of record or hold your shares in
street name, you may direct your vote without attending the
Meeting by completing and mailing your proxy card in the
enclosed pre-paid envelope or completing and returning the
Voting Instruction Form in accordance with the instructions
contained therein. Each shareholder has the right to appoint
a person or company to represent the shareholder at the Meeting
other than the person or company, if any, designated on the
proxy card. A shareholder desiring to appoint some other
person (who need not be a shareholder of the Company) to
represent him, her or it at the Meeting may do so either by
inserting such other persons name in the blank space
provided in the proxy card or by completing another proxy card
and in either case by delivering, at any time up to and
including the second business day preceding the day of the
Meeting or any adjournment thereof, the completed proxy card
addressed to the Corporate Secretary of the Company,
c/o Computershare
Trust Company of Canada, Attention Proxy Department, 100
University Avenue, 9th Floor, North Tower, Toronto, Ontario,
Canada, M5J 2Y1, or to the Chairman or the Corporate Secretary
of the Company at the beginning of the Meeting or any
adjournment thereof. If your shares are held in |
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street name, carefully follow the corresponding instructions in
the Voting Instruction Form. Also, your Voting
Instruction Form may contain instructions from your broker,
bank or nominee that allow you to vote your shares using the
Internet or by telephone. Please consult with your broker, bank
or nominee if you have any questions regarding the electronic
voting of shares held in street name. |
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Can I change my vote or revoke my proxy? |
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You may change your vote or revoke your proxy at any time before
your proxy is voted at the Meeting. If you are a shareholder of
record, you may change your vote or revoke your proxy:
(1) by delivering to the Company at Mad Catz Interactive,
Inc. c/o McMillan LLP, 181 Bay Street, Suite 4400, Toronto,
Ontario, Canada M5J 2T7 (Attention: P. Collins) a written notice
of revocation of your proxy on or before August 16, 2011 or
to the Chairman of the Meeting on the day of the Meeting;
(2) by delivering to the Company an authorized proxy
bearing a later date; (3) by attending the Meeting and
voting in person; or (4) in any other manner permitted by
law. Attendance at the Meeting in and of itself, without voting
in person, will not cause your previously granted proxy to be
revoked. For shares you hold in street name, you may change your
vote by submitting new voting instructions to your broker, bank
or other nominee or, if you have obtained a legal proxy from
your broker, bank or other nominee giving you the right to vote
your shares at the Meeting, by attending the Meeting and voting
in person. |
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How many shares must be present or represented to conduct
business at the Meeting? |
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The quorum requirement for holding the Meeting and transacting
business at the Meeting is that at least two persons be present
in person, each being a shareholder or representative duly
authorized in accordance with the Canada Business Corporations
Act entitled to vote thereat or a duly appointed proxy for a
shareholder so entitled. |
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What if a quorum is not present at the Meeting? |
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Under Canadian law, if a quorum is not present at the opening of
the Meeting, the shareholders present may adjourn the Meeting to
a fixed time and place, but may not transact any other business.
If we propose to have the shareholders vote whether to adjourn
the Meeting, the proxy holders will vote all shares for which
they have authority in favor of the adjournment. |
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What vote is required to approve each of the proposals? |
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Each of the proposals described in this Proxy Statement (other
than with respect to the reverse stock split) requires the
affirmative vote of a majority of the votes cast on those
proposals by the shareholders present (in person or by proxy)
and entitled to vote at the Meeting. The proposal to approve a
special resolution of shareholders authorizing the reverse stock
split requires the affirmative vote of at least two-thirds of
the votes cast by the shareholders present (in person or by
proxy) and entitled to vote at the Meeting. |
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What happens if additional matters are presented at the
Meeting? |
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Other than the five proposals described in this Management Proxy
Circular and Proxy Statement, we are not aware of any other
business to be acted upon at the Meeting. If you grant a proxy,
the persons named as proxy holders, Thomas R. Brown, Chairman of
the Board, and Darren Richardson, President and Chief Executive
Officer, will have the discretion to vote your shares on any
additional matters properly presented for a vote at the Meeting. |
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Who will count the votes? |
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A representative of the Company will be appointed at the Meeting
to tabulate the votes and act as Scrutineer and Inspector of
Elections. |
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Where can I find the voting results of the Meeting? |
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We will announce preliminary voting results at the Meeting and
publish final results in a Current Report on
Form 8-K
within four business days following the Meeting. In addition, a
report of the final votes will be made available at
www.sedar.com. |
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Who will bear the cost of soliciting votes for the
Meeting? |
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The solicitation of proxies will be conducted by mail, and the
Company will bear all attendant costs. These costs will include
the expense of preparing and mailing proxy solicitation
materials for the Meeting and reimbursements paid to brokerage
firms and others for their expenses incurred in forwarding
solicitation materials regarding the Meeting to beneficial
owners of our common stock. We may conduct further solicitation
personally, telephonically, through the Internet or by facsimile
through our officers, directors and employees, none of whom will
receive additional compensation for assisting with the
solicitation. We may generate other expenses in connection with
the solicitation of proxies for the Meeting, which we will pay. |
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May I propose matters for consideration at next years
Annual Meeting or nominate individuals to serve as directors? |
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Yes. If you wish to propose a matter for consideration at next
years Annual Meeting or if you wish to nominate a person
for election as a director of the Company, see the information
set forth in Shareholder Proposals and
Shareholder Nominations below. |
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What do I need for admission to the Meeting? |
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You are entitled to attend the Meeting only if you are a
shareholder of record or a beneficial owner as of July 11,
2011, the Record Date, or you hold a valid proxy for the
Meeting. You should be prepared to present photo identification
for admittance. If you are the shareholder of record, your name
will be verified against the list of shareholders of record
prior to your being admitted to the Meeting. If you hold your
shares in street name, you should provide proof of beneficial
ownership on the Record Date, such as a brokerage account
statement showing that you owned Mad Catz stock as of the Record
Date, a copy of the Voting Instruction Form provided by
your broker, bank or other nominee, or other similar evidence of
ownership as of the Record Date. If you do not provide photo
identification or comply with the other procedures outlined
above upon request, you will not be admitted to the Meeting. |
5
PROPOSAL 1
ELECTION OF DIRECTORS
The Companys articles of incorporation provide that the
Board shall consist of a minimum of three directors and a
maximum of 12 directors. The Board currently consists of
four members: Messrs. Thomas R. Brown, Darren Richardson,
Robert J. Molyneux and William Woodward.
The Board has fixed the number of directors to be elected at the
Meeting at four. All of the nominees for director are current
members of the Board.
Each director elected at the Meeting will hold office for a
one-year term until the 2012 Annual Meeting of Shareholders or
until his successor is duly elected, unless prior thereto the
director resigns or the directors office becomes vacant by
reason of death or other cause. If any such person is unable or
unwilling to serve as a nominee for the office of director at
the date of the Meeting or any postponement or adjournment
thereof, the proxies may be voted for a substitute nominee,
designated by the proxy holders or by the present Board to fill
such vacancy, or for the balance of those nominees named without
nomination of a substitute, and the Board may be reduced
accordingly. The Board has no reason to believe that any of such
nominees will be unwilling or unable to serve if elected as a
director.
In considering candidates for election to the Board of
Directors, the independent members of the Board of Directors
seeks to assemble a Board of Directors that, as a whole, possess
the appropriate balance of professional, management and industry
experience, qualifications, attributes, skills, expertise and
involvement in areas that are of importance to our business and
professional reputation. The independent Directors also evaluate
other board service, business, financial and strategic judgment
of potential nominees, and desire to have a Board of Directors
that represents a diverse mix of backgrounds, perspectives and
expertise that consists of Directors who complement and
strengthen the skills of other Directors and who also exhibit
integrity, collegiality, sound business judgment and any other
qualities that the independent members of the Board of Directors
view as critical to effective functioning of the Board of
Directors. Each of the nominees for election to the Board of
Directors has demonstrated a successful track record of
strategic, business and financial planning and operating skills.
In addition, each of the nominees for election to the Board has
proven experience in management and leadership development and
an understanding of operating and corporate governance issues
for a multinational public company.
The following information is furnished with respect to the
Boards nominees for election as directors of the Company,
including the nominees position with the Company, tenure
as director and age as of July 11, 2011. Stock ownership
information is shown under the heading Security Ownership
of Certain Beneficial Owners and Management and is based
upon information furnished by the respective individuals.
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Position with the Company and
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Director
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Name and Place of Residence
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Principal Occupation
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Age
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Since
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Thomas R. Brown(1)
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Chairman of the Board, Businessman
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60
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2006
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Poway, California,
United States
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Darren Richardson
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President, Chief Executive Officer and Director
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50
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2005
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San Diego, California,
United States
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Robert J. Molyneux(1)
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Director, Businessman
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56
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2006
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Toronto, Ontario,
Canada
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William Woodward(1)
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Director, Businessman
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51
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2006
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Santa Monica, California,
United States
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(1) |
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Member of the Audit Committee. |
Set forth below is information regarding each of the above named
individuals, including a description of his positions and
offices held with the Company, a description of his principal
occupation and business
6
experience during at least the last five years and directorships
presently held by him in other companies. The information below
includes specific experience, qualifications, attributes or
skills of each nominee that led the independent members of the
Board of Directors to believe that, as of the date of this proxy
statement, that nominee should continue to serve on the Board of
Directors. However, each independent Director may have a variety
of reasons for believing a particular person would be an
appropriate board member, and these views may differ from the
views of other independent Directors. For the number of shares
of Common Stock beneficially owned, or controlled or directed,
directly or indirectly, by each of the above named individuals,
see Security Ownership of Certain Beneficial Owners and
Management.
Thomas R.
Brown
Mr. Brown has been a director of the Company since May 2006
and has served as Chairman of the Board since April 2008.
Mr. Brown serves as President, Chief Executive Officer and
director of LRAD Corporation, a leading innovator of highly
intelligible, clear directed acoustic solutions, a position he
has held since September 2006. Previously, he served as
President of Brown Thompson Executive Search, a financial
executive search firm, since April 2005. From April 2001 to
September 2004, Mr. Brown was Executive Vice President and
Deputy President of the Information Technology division of Sony
Electronics, where he was responsible for supply chain
operations including Information Technology, Procurement, North
American Manufacturing Operations and Finance. He continued to
consult with Sony Electronics on its ERP implementation from
September 2004 to January 2005. From April 2000 to September
2004, Mr. Brown was concurrently the Executive Vice
President and President of Information Technology Division for
Sony Electronics, where he was responsible for establishing the
North American personal computer division. Mr. Brown holds
a Bachelor of Arts degree in Economics from Rutgers University.
Mr. Brown is also a certified public accountant. The
Company believes that Mr. Browns senior management,
accounting and financial analysis expertise, including his
experience as Chief Executive Officer and interim Chief
Financial Officer of LRAD Corporation and his management and
financial experience with Sony Electronics in the consumer
electronics industry qualify him for service on the Board of
Directors.
Darren
Richardson
Mr. Richardson has been President and Chief Executive
Officer of the Company since April 1, 2004, and a director
of the Company since 2005. Prior to his appointment as President
and Chief Executive Officer, Mr. Richardson served as
Executive Vice President of the Company since October 1997 and
as President and Chief Operating Officer of Mad Catz, Inc. since
September 1999. Mr. Richardson served in several senior
management capacities with Games Trader from 1997 until 1999,
including Chief Operating Officer, and Vice President of
Business Development, responsible for sales and marketing with a
focus on new account development. He holds a Master of Business
Administration degree from Trinity College, Dublin, and a
Bachelor of Commerce degree from the University of Wollongong,
Australia. The Company believes that Mr. Richardsons
expertise and experience in the video game industry, as well his
as senior management positions with the Company for nearly
13 years, qualify him for service on the Board of Directors.
Robert J.
Molyneux
Mr. Molyneux has been a director of the Company since June
2006. Mr. Molyneux has been a principal in Imperial Capital
Corporation, a private equity buy-out firm based in Toronto,
Canada, since September 2004. Previously, Mr. Molyneux was
President of Ravenna Capital Corporation, a private merchant
banking firm he founded in 1992. Mr. Molyneux holds an
Honours Bachelor of Business Administration degree from Wilfrid
Laurier University. Mr. Molyneux obtained his chartered
accountant license in 1981 and has worked in the financial
markets in various roles since 1982, when his chartered
accountant license became inactive. The Company believes that
Mr. Molyneuxs financial analysis and management
expertise, including his senior management roles in investment
and private merchant banking, qualify him for service on the
Board of Directors.
7
William
Woodward
Mr. Woodward has been a director of the Company since June
2006. Mr. Woodward has been the Managing Director and a
founder of Anthem Venture Partners since 2000. Prior to founding
Anthem Venture Partners, Mr. Woodward was a Managing
Director of Avalon Investments, an early-stage technology
venture capital firm. Mr. Woodward has founded numerous
technology companies, including Paracomp, which later became
MacroMedia, Inc., one of the largest multimedia software
companies in the world at its initial public offering, and Pulse
Entertainment, the worlds leading 3D animation engine and
tools company for mobile communications. Mr. Woodward sits
on the board of directors of several private companies,
including Axiom Microdevices, Solarflare, Buzznet, Wavestream
and Planet A.T.E., and is Chairman of the Board of Pulse
Entertainment. The Company believes that
Mr. Woodwards board and management experience in the
consumer products and consumer electronics industries as well as
his expertise in technology investment qualify him for service
on the Board of Directors.
There are no family relationships among any executive officers
or directors of the Company.
Cease
Trading Orders or Corporate Bankruptcies
To the knowledge of management, none of the nominees for
election as a director of the Company:
(a) is, at the date of this Management Proxy Circular and
Proxy Statement, or has been, within 10 years before the
date of this Management Proxy Circular and Proxy Statement, a
director, chief executive officer or chief financial officer of
any company (including Mad Catz) that,
(i) was subject to a cease trade or similar order or an
order that denied the company access to any exemption under
securities legislation (each an order) that was
issued while such nominee director was acting in the capacity as
director, chief executive officer or chief financial
officer; or
(ii) was subject to an order that was issued after such
nominee director ceased to be a director, chief executive
officer or chief financial officer and which resulted from an
event that occurred while such nominee director was acting in
the capacity as director, chief executive officer or chief
financial officer; or
(b) is, at the date of this Management Proxy Circular and
Proxy Statement, or has been within 10 years before the
date of this Management Proxy Circular and Proxy Statement, a
director or executive officer of any company (including Mad
Catz) that, while such nominee director was acting in that
capacity, or within a year of such nominee director ceasing to
act in that capacity, became bankrupt, made a proposal under any
legislation relating to bankruptcy or insolvency or was subject
to or instituted any proceedings, arrangement or compromise with
creditors or had a receiver, receiver manager or trustee
appointed to hold its assets; or
(c) has, within the 10 years before the date of this
Management Proxy Circular and Proxy Statement, become bankrupt,
made a proposal under any legislation relating to bankruptcy or
insolvency, or become subject to or instituted any proceedings,
arrangement or compromise with creditors, or had a receiver,
receiver manager or trustee appointed to hold the assets of the
nominee director.
To the knowledge of management, none of the nominees for
election as a director of the Company has been subject to:
(a) any penalties or sanctions imposed by a court relating
to securities legislation or by a securities regulatory
authority or has entered into a settlement agreement with a
securities regulatory authority; or
(b) any other penalties or sanctions imposed by a court or
regulatory body that would likely be considered important to a
reasonable securityholder in deciding whether to vote for such
nominee director.
Recommendation
of the Board of Directors
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH NOMINEE
DIRECTOR.
8
PROPOSAL 2
APPOINTMENT AND REMUNERATION OF
THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM AND
AUDITOR
The Board and Audit Committee of the Board of the Company have
recommended the accounting firm of KPMG LLP to be appointed as
our Independent Registered Public Accounting Firm and Auditor
for the fiscal year ending March 31, 2012.
Unless authority to vote is withheld, the persons named in the
accompanying proxy card intend to vote for the re-appointment of
KPMG LLP as our Independent Registered Public Accounting Firm
and Auditor for the Companys fiscal year ending
March 31, 2012 and to authorize the Board to fix the
remuneration of the Independent Registered Public Accounting
Firm and Auditor. KPMG LLP has been our independent auditor and
its predecessors for more than ten years.
The Audit Committee of the Board may terminate the engagement of
KPMG LLP as the Companys Independent Registered Public
Accounting Firm and Auditor without the approval of the
shareholders if the Audit Committee determines it is necessary
or appropriate to terminate their engagement.
A representative of KPMG LLP is expected to attend the Meeting
and will have an opportunity to make a statement if he or she
desires to do so, and will be available to answer appropriate
questions from shareholders.
Recommendation
of the Board of Directors
THE BOARD OF DIRECTORS RECOMMENDS SHAREHOLDER APPROVAL OF THE
RE-APPOINTMENT OF KPMG LLP AS OUR INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM AND AUDITOR AND THE AUTHORIZATION OF THE BOARD
TO FIX THE REMUNERATION OF THE INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM AND AUDITOR.
PROPOSAL 3
AMENDMENT TO ARTICLES TO EFFECT A
REVERSE STOCK SPLIT OF THE COMMON STOCK
General
The Board of Directors has approved, and is hereby soliciting
shareholder approval of, a special resolution authorizing an
amendment to our Articles to effect, at the discretion of the
Board of Directors, a reverse stock split (also known as a stock
consolidation) of our currently issued and outstanding Common
Stock at a ratio within the range of one post-split share for
every three pre-split shares to one post-split share for every
five pre-split shares, with the final decision whether to
proceed with the reverse stock split and the exact ratio and
timing of the reverse stock split to be determined by the Board
of Directors, in its discretion, if at all, prior to
March 31, 2012.
Purpose
of the Reverse Stock Split
The Board believes that the reverse stock split is beneficial to
the Company and its shareholders for the following reasons:
NASDAQ Listing. The Company has submitted an
application to list its Common Stock on the Nasdaq Capital
Market. Among other initial listing requirements, Nasdaq
requires a stock price of at least $4.00 per share. Our Common
Stock, which is currently listed on the Toronto Stock Exchange
and the NYSE Amex under the symbol MCZ, does not
meet this requirement. The Board of Directors has determined
that a reverse stock split of our issued and outstanding shares
of Common Stock would be a suitable action to achieve a stock
price of $4 per share or more. The closing price of our common
stock on July 11, 2011 was $1.44 per share.
9
Potential for increased institutional investor interest, more
attractive share price. A sustained higher per
share price of the Common Stock, which may result from a reverse
stock split, could heighten the interest of the financial
community in the Company and broaden the pool of investors that
may consider investing in the Company, potentially increasing
the trading volume and liquidity of the Common Stock. As a
matter of policy, many institutional investors are prohibited
from purchasing stocks below certain minimum price levels. In
addition, brokers often discourage their customers from
purchasing such stocks. To the extent that the price per share
of the Common Stock remains at a higher per share price as a
result of the reverse stock split, some of these concerns may be
ameliorated.
Reduced shareholder transaction costs and Company
fees. Many investors pay commissions based on the
number of shares of Common Stock traded when they buy or sell
Common Stock. If the share price was higher, these investors
would pay lower commissions to trade a fixed dollar amount of
Common Stock than they would if the share price was lower. In
addition, the Company also believes that the reverse stock split
may also reduce certain of its ongoing costs, such as the
listing and transfer agent fees.
Certain
Risks Associated with the Reverse Stock Split
There can be no assurance that we will be able to meet all of
the requirements for listing our Common Stock on the Nasdaq
Capital Market or to meet the continued listing standards of the
Nasdaq Capital Market after a reverse stock split.
The Nasdaq Capital Market has several other initial listing
requirements applicable to the listing of the Common Stock and
to continue as a listed company thereafter. While the Company
believes it currently meets these standards (other than the
minimum bid price requirement described above), we cannot assure
you that our Common Stock will be accepted for listing on the
Nasdaq Capital Market following the reverse stock split or that
it will maintain compliance with all of the requirements to
remain listed. Moreover, there can be no assurance that the
market price of the Common Stock after the reverse stock split
will adjust to reflect the decrease in Common Stock outstanding
or that the market price following a reverse stock split will
either exceed or remain in excess of the current market price.
If the reverse stock split is implemented, the resulting
per-share price may not attract institutional investors or
investment funds and may not satisfy the investing guidelines of
these investors, and consequently, the trading liquidity of
Common Stock may not improve.
While the Company believes that a higher share price may help
generate investor interest in the Common Stock, the reverse
stock split may not result in a share price that will attract
institutional investors or investment funds or satisfy the
investing guidelines of institutional investors or investment
funds. A decline in the market price of the Common Stock after
the reverse stock split may result in a greater percentage
decline than would occur in the absence of the reverse stock
split. If the reverse stock split is implemented and the market
price of the Common Stock declines, the percentage decline may
be greater than would occur in the absence of the reverse stock
split. The market price of the Common Stock is also based on the
Companys performance and other factors, which are
unrelated to the number of shares of Common Stock outstanding.
The reverse stock split may result in some shareholders
owning odd lots that may be more difficult to sell
or require greater transaction costs per share to sell.
The reverse stock split may result in some shareholders owning
odd lots of less than 100 shares of Common
Stock on a post-split basis. Odd lots may be more difficult to
sell, or require greater transaction costs per share to sell,
than Common Stock in board lots of even multiples of
100 shares.
Board
Discretion to Implement the Reverse Stock Split
The Board of Directors believes that shareholder approval of a
range of reverse-split ratios (rather than a single exchange
ratio) is in the best interests of our shareholders because it
provides the Board of Directors with the flexibility to achieve
the desired results of the reverse stock split and because it is
not possible to predict market conditions at the time the
reverse stock split would be implemented. If shareholders
approve this proposal, the Board of Directors would carry out a
reverse stock split only upon the Board of Directors
10
determination that a reverse stock split would be in the best
interests of the shareholders at that time. The Board of
Directors would then set the ratio for the reverse stock split
within the range approved by shareholders and in an amount it
determines is advisable and in the best interests of the
shareholders considering relevant market conditions at the time
the reverse stock split is to be implemented. In determining the
ratio, following receipt of shareholder approval, the Board of
Directors may consider, among other things:
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the historical prices and trading volume of the Common Stock;
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the then-prevailing trading price and trading volume of the
Common Stock and the anticipated impact of the reverse stock
split on the trading market for the Common Stock;
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the outlook for the trading price of the Common Stock;
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threshold prices of brokerage houses or institutional investors
that could impact their ability to invest or recommend
investments in the Common Stock;
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our ability to maintain compliance with the listing requirements
of the Nasdaq Capital Market; and
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prevailing general market and economic conditions.
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The Board of Directors intends to select a reverse stock split
ratio that it believes would be most likely to achieve the
anticipated benefits of the reverse stock split described above.
Effect on
Existing Common Stock
If the reverse stock split is implemented, the number of shares
of Common Stock issued and outstanding will be reduced from
63,442,296 shares (as of July 11, 2011) to
between 12,688,459 shares and 21,147,432 shares,
depending on which exchange ratio is ultimately effected. Except
for the change resulting from the adjustment for fractional
shares (described below), the change in the number of shares of
Common Stock outstanding that will result from the reverse stock
split will not affect any shareholders percentage
ownership in the Company.
The Companys Articles permit it to authorize and issue an
unlimited number of shares of Common Stock without obtaining
shareholder approval. Unlike companies with a limited number of
authorized shares, which are able to issue more shares without
shareholder approval following a reverse stock split because the
reverse stock split reduces the outstanding number of shares
without reducing the authorized number of shares, the Company
will have the same ability to authorize and issue shares without
obtaining shareholder approval following the reverse stock split
as it currently has. Future issuances of Common Stock could have
the effect of diluting the earnings per share and book value per
share, as well as the stock ownership and voting rights, of the
currently outstanding Common Stock. The Company does not have
any plan, commitment, arrangement, understanding or agreement
regarding the issuance of Common Stock after the reverse stock
split.
In addition, because the Companys Articles permit it to
authorize and issue an unlimited number of shares of Common
Stock without obtaining shareholder approval, the Company does
not believe that the reverse stock split will have an
anti-takeover effect. As described above, companies with a
limited number of authorized shares are able, following a
reverse stock split, to issue more shares than prior to the
reverse stock split without shareholder approval, which
increased the ability of these companies to make it more
difficult to complete a change of control or takeover
transaction by issuing dilutive shares. Because the Company is
permitted to authorize and issue an unlimited number of shares
of Common Stock without obtaining shareholder approval, the
reverse stock split will not increase or decrease the
Companys ability to issue dilutive shares without
shareholder approval in an effort to prevent a change of control
or takeover transaction.
Effect on
Equity Compensation Plans
The number of shares of Common Stock issuable upon the exercise
of options and warrants to acquire shares of Common Stock, and
the exercise price thereof, will be adjusted proportionately to
reflect the reverse stock split.
11
Effective
Date
If the reverse stock split is implemented, the Company will file
a Certificate of Amendment with the Director under the Canada
Business Corporations Act. The reverse stock split becomes
effective upon (or at such later time as may be set forth in the
Certificate of Amendment) such filing of the Certificate of
Amendment. No further action on the part of shareholders would
be required to either effect or abandon the reverse stock split.
If the Board of Directors does not implement the reverse stock
split prior to March 31, 2012, the authority granted in
this proposal to implement the reverse stock split will
terminate. The Board of Directors reserves its right to elect
not to proceed and abandon the reverse stock split if it
determines, in its sole discretion, that this proposal is no
longer in the best interests of our shareholders.
Mechanics
of the Reverse Stock Split
Exchange
of Stock Certificates
If the reverse stock split is implemented, each certificate
representing pre-split shares will, until surrendered and
exchanged as described below, for all corporate purposes, be
deemed to represent, respectively, only the number of post-split
shares.
Accompanying this Management Proxy Circular and Proxy Statement
is the form of Letter of Transmittal which must be used in
forwarding certificates for surrender and exchange for
certificates representing the number of shares of Common Stock
the holder is entitled to receive as a consequence of the
reverse stock split. The Letter of Transmittal includes
instructions specifying other details of the exchange.
If the proposed reverse stock split is approved by shareholders
and implemented, the Company will publicly announce the
effective date of the reverse stock split and the reverse stock
split ratio selected. Following such announcements, shareholders
are encouraged to deliver a completed Letter of Transmittal and
relevant certificates representing the pre-reverse-split shares
to Computershare Trust Company of Canada (the
Depositary) at the address specified in the Letter
of Transmittal, whereupon new share certificates representing
the post reverse-split shares will be forwarded to those
shareholders without charge.
The method chosen for delivery of share certificates and
Letters of Transmittal to the Depositary is the responsibility
of the shareholder and neither the Depositary nor the Company
will have any liability in respect of share certificates
and/or
Letters of Transmittal which are not actually received by the
Depositary.
No delivery of post-split share certificates will be made until
the shareholder has surrendered to the Depositary the current
share certificates together with a completed and executed Letter
of Transmittal, whereupon the shareholder will receive in
exchange therefor certificates representing the number of shares
of Common Stock following the reverse stock split to which the
holder is entitled. No shareholder will be required to pay a
transfer or other fee to exchange his, her or its certificates.
Shareholders should not send in certificates until the Company
announces that the reverse-split has become effective. In
connection with the reverse stock split, the CUSIP for the
Common Stock will change from its current CUSIP number. This new
CUSIP number will appear on any new stock certificates issued
representing post-split shares.
Shareholders
should not destroy any share certificate(s) and should not
submit any share certificate(s) until following the announcement
by the Company of the completion of the reverse split.
Effect
on Registered Book-entry Holders of Common
Stock
Holders of Common Stock may hold some or all of their Common
Stock electronically in book-entry form (street
name) under the direct registration system for securities.
These shareholders will not have stock certificates evidencing
their ownership. They are, however, provided with a statement
reflecting the number of shares of Common Stock registered in
their accounts.
If you hold registered Common Stock in book-entry form, you do
not need to take any action to receive your post-split shares,
if applicable. If you are entitled to post-split shares, a
transaction statement will
12
automatically be sent to your address of record indicating the
number of shares of Common Stock you hold following the reverse
stock split.
Fractional
Shares
No fractional shares will be issued. As set forth in the special
resolution, any fractional share resulting from the reverse
stock split will be rounded up to the next whole share.
No
Dissent Rights
Under, the Canada Business Corporations Act, our
shareholders are not entitled to dissent rights with respect to
the reverse stock split, and we will not independently provide
shareholders with any such right.
Accounting
Matters
The per share net income or loss of our Common Stock, for all
periods, will be restated because there will be fewer
outstanding shares of Common Stock of the Company.
U.S.
Federal Income Tax Considerations
The following is a summary of certain material U.S. federal
income tax consequences of the proposed reverse stock split to
U.S. Holders (as defined below). The following does not
purport to be a complete discussion of all of the possible
U.S. federal income tax consequences of the reverse stock
split and is included for general information only. It does not
address any U.S. state, local, estate, gift, or
non-U.S. income
or other tax consequences. It addresses only U.S. Holders
who hold the pre-split shares and post-split shares as capital
assets. It does not address U.S. Holders subject to special
rules, such as financial institutions, regulated investment
companies, personal holding companies, tax-exempt organizations,
insurance companies, dealers in securities, foreign
stockholders, persons that own or have owned (directly,
indirectly or constructively) 5% or more, by voting power or
value, of the outstanding equity interests of the Company,
U.S. Holders who hold the pre-split shares as part of a
straddle, hedge or conversion transaction, U.S. Holders who
are subject to the alternative minimum tax provisions of the
Internal Revenue Code of 1986, as amended (the
Code), U.S. Holders who hold options or
warrants to acquire Common Stock, or U.S. Holders who
acquired their pre-split shares pursuant to the exercise of
employee stock options, warrants or otherwise as compensation.
This summary assumes that the Company will not be and has never
been a passive foreign investment company within the
meaning of Section 1297 of the Code. This summary is based
upon the Code, applicable U.S. Treasury Regulations
promulgated thereunder, judicial authority and current
administrative rulings, all as in effect on the date of this
proxy statement. Changes to the laws could alter the tax
consequences described below, possibly retroactively. We have
not obtained a ruling from the Internal Revenue Service (the
IRS) or an opinion of legal or tax counsel with
respect to the consequences of the reverse stock split. The tax
treatment of a U.S. Holder may vary depending upon his, her
or its particular facts and circumstances. Each U.S. Holder
is advised to consult his, her or its tax advisor as to his, her
or its own situation.
This discussion does not address the U.S. federal income
tax considerations of the proposed reverse stock split to an
entity that is a partnership for U.S. federal income tax
purposes, or the partners of such partnership. Partnerships and
partners should consult their own tax advisors.
For purposes of this summary, a U.S. Holder is
a beneficial owner of Common Stock that, for U.S. federal
income tax purposes, is (a) an individual who is a citizen
or resident of the United States, (b) a corporation, or
other entity classified as a corporation for U.S. federal
income tax purposes, that is treated, for U.S. federal
income tax purposes, as being created or organized in or under
the laws of the United States, any state in the U.S. or the
District of Columbia, (c) an estate if the income of the
estate is subject to U.S. federal income tax regardless of
the source of the income, or (d) a trust if (i) the
trust has validly elected to be treated as a U.S. person
for U.S. federal income tax purposes or (ii) a
U.S. court is able to exercise primary supervision over the
administration of the trust and one or more U.S. persons
have the authority to control all substantial decisions of the
trust.
13
The reverse stock split is intended to constitute a
reorganization within the meaning of Section 368 of the
Code. Assuming that the reverse stock split is not undertaken as
part of a plan to increase any stockholders proportionate
ownership of the Company and that the reverse stock split
qualifies as a reorganization, a U.S. Holder generally
should not recognize gain or loss as a result of the reverse
stock split. The aggregate tax basis of the Common Stock
received by such U.S. Holder in the reverse stock split
should be equal to the aggregate tax basis of the pre-split
shares exchanged therefor (including any portion of the
U.S. Holders tax basis allocated to fractional
shares). The holding period of the post-split shares received
should include the holding period of the pre-split shares
exchanged therefor.
The Company should not recognize any gain or loss as a result of
the reverse stock split.
The Companys view regarding the tax consequences of the
proposed reverse stock split is not binding on the IRS or the
courts. ACCORDINGLY, EACH U.S. HOLDER SHOULD CONSULT WITH
HIS, HER OR ITS OWN TAX ADVISER WITH RESPECT TO ALL OF THE
POTENTIAL TAX CONSEQUENCES TO HIM, HER OR IT OF THE REVERSE
STOCK SPLIT.
Certain
Canadian Federal Income Tax Considerations
The following is a summary of the principal Canadian federal
income tax consequences generally applicable to a shareholder
who, for purposes of the Income Tax Act (Canada) (the
Tax Act) and at all relevant times, holds Common
Stock as capital property and who is not affiliated with, and
deals at arms length with, the Company. Generally, the
Common Stock will be considered to be capital property of a
shareholder provided that they are not held in the course of
carrying on a business or in connection with an adventure or
concern in the nature of trade. Certain shareholders who are
residents in Canada, for purposes of the Tax Act, and who might
not otherwise be considered to hold their Common Stock as
capital property may, in certain circumstances, be entitled to
have the Common Stock and all other Canadian
securities, as defined in the Tax Act, treated as capital
property by making the irrevocable election permitted by
subsection 39(4) of the Tax Act. This summary is not applicable
to a shareholder: (i) that is a financial
institution for the purposes of the mark-to market rules
contained in the Tax Act; (ii) that is a specified
financial institution or restricted financial
institution as defined in the Tax Act; (iii) an
interest in which is or would constitute a tax shelter
investment as defined in the Tax Act, or (iv) that
reports its Canadian tax results in a currency other than the
Canadian currency. Such shareholders are advised to consult
their own tax advisors. This summary also does not address any
tax considerations relevant to the acquisition, holding or
disposition of Common Stock, other than those Canadian federal
income tax issues that are directly the consequence of the
proposed reverse stock split.
The summary is based on the current provisions of the Tax Act
and the regulations thereunder, which are herein referred to as
the Regulations, and the current administrative practices and
assessing policies of the Canada Revenue Agency
(CRA) published in writing prior to the date hereof.
This summary takes into account all specific proposals to amend
the Tax Act and the Regulations publicly announced by or on
behalf of the Minister of Finance (Canada) prior to the date
hereof and assumes that all such proposed amendments will be
enacted in the form proposed. This summary does not otherwise
take into account or anticipate any change in law, or
administrative practices and assessing policies, whether by
legislative, government or judicial decision or action.
This summary is of a general nature only and is not intended to
be, and should not be construed as, legal or tax advice to any
particular shareholder. This summary is not exhaustive of all
Canadian federal income tax considerations and does not take
into account provincial, territorial or foreign tax
considerations, which may vary from the Canadian federal income
tax considerations described herein. Shareholders are advised to
consult their own tax advisors with regard to their particular
circumstances.
Under the current administrative practices and assessing
policies of the CRA, a shareholder will not be considered to
have disposed of his, her or its Common Stock for Canadian
federal income tax purposes solely as a result of the reverse
stock split. Consequently, the reverse stock split will not
result in the realization of any gain or loss by a shareholder.
In general, for a shareholder that holds Common Stock as capital
property, the aggregate adjusted cost base of the Common Stock
held by such shareholder immediately after the reverse
14
stock split will be the same as the aggregate adjusted cost base
of the Common Stock held by such shareholder immediately before
the reverse stock split.
Resolution
In order to effect the reverse stock split, the following
special resolution of shareholders must be passed by the
affirmative vote of at least two-thirds of the votes cast by the
shareholder present (in person or by proxy) and entitled to vote
at the Meeting.
RESOLVED, AS A SPECIAL RESOLUTION OF SHAREHOLDERS
THAT:
1. The Company be and is hereby authorized to amend the
Articles of the Company, if and when the Board of Directors
shall deem appropriate to do so, but in any event no later than
March 31, 2012, to consolidate the total number of issued
and outstanding common shares of the Company on the basis of a
consolidation ratio to be determined in the sole and absolute
discretion of the Board of Directors of the Company, but not to
be less than one (1) post-consolidation share for every
three (3) pre-consolidation shares issued and outstanding
but not to exceed one (1) post-consolidation share for
every five (5) pre-consolidation shares issued and
outstanding, in each case immediately prior to the date that a
Certificate of Amendment is issued by the Director appointed
pursuant to the Canada Business Corporations Act, (the
Share Consolidation);
2. No fractional shares shall be issued in connection with
the Share Consolidation and any fractional share resulting from
the Share Consolidation will be rounded up to the next whole
share, all as now fully described in the Management Proxy
Circular and Proxy Statement of the Company;
3. The Board of Directors of the Company, in its sole
discretion, be and is hereby authorized to implement the Share
Consolidation;
4. Any director or officer of the Company be and hereby is,
authorized and empowered, acting for, in the name of and on
behalf of the Company, to do all things and execute all
instruments necessary or desirable to give effect to this
special resolution including, without limitation, to execute,
under seal of the Company or otherwise, and to deliver Articles
of Amendment, to the Director under the Canada Business
Corporations Act; and
5. Notwithstanding that this special resolution has been
duly passed by the shareholders of the Company, the Board of
Directors of the Company hereby is authorized and empowered to
revoke this special resolution at any time prior to the issuance
of a Certificate of Amendment giving effect to the amendment of
the Articles of the Company and to determine not to proceed with
the amendment without the further approval of or notice to the
shareholders of the Company.
Recommendation
of the Board of Directors
THE BOARD OF DIRECTORS RECOMMENDS SHAREHOLDER APPROVAL OF THE
REVERSE STOCK SPLIT RESOLUTION. PROXIES RECEIVED PURSUANT TO
THIS SOLICITATION WILL BE VOTED FOR THE APPROVAL OF THE REVERSE
STOCK SPLIT RESOLUTION, UNLESS THE SHAREHOLDER HAS SPECIFIED IN
THE PROXY THAT HIS, HER OR ITS COMMON STOCK ARE TO BE VOTED
AGAINST THE APPROVAL OF THE REVERSE STOCK SPLIT RESOLUTION. THE
REVERSE STOCK SPLIT RESOLUTION IS A SPECIAL RESOLUTION AS
DEFINED IN THE CANADA BUSINESS CORPORATIONS ACT.
CONSEQUENTLY, THE REVERSE STOCK SPLIT RESOLUTION WILL REQUIRE
THE AFFIRMATIVE VOTE OF AT LEAST TWO-THIRDS OF THE VOTES CAST BY
THE SHAREHOLDERS PRESENT (IN PERSON OR BY PROXY) AND ENTITLED TO
VOTE AT THE MEETING.
15
PROPOSAL 4
AMENDMENT TO THE MAD CATZ INTERACTIVE, INC. STOCK OPTION
PLAN 2007
Introduction
Shareholders are requested under this Proposal 4 to
consider and if appropriate, approve an amendment to the Mad
Catz Interactive, Inc. Stock Option Plan, as amended (the
2007 Plan) to increase the number of shares of
common stock reserved and authorized for issuance thereunder by
3,000,000 from 7,300,000 to 10,300,000 shares (the
Plan Amendment). The Board has adopted, subject to
shareholder approval, the Plan Amendment, and it will become
effective upon approval by our shareholders. Share amounts in
this Proposal 4 are provided on a pre-proposed reverse
stock split basis. If, and to the extent that, the reverse stock
split described in Proposal 3 is effected, such share
amounts will be adjusted accordingly.
Of the 7,300,000 shares of common stock currently
authorized for issuance in connection with grants made under the
2007 Plan, only 1,050,634 shares remain available for
future grants or awards as of June 15, 2011. While some
additional shares may become available under the 2007 Plan
through employee terminations or option expirations, the number
is not expected to be substantial.
The Company and the Board believe strongly that the increase of
shares issuable under the 2007 Plan is essential to the
Companys continued success. The Companys employees,
consultants and independent Board members are valuable assets.
The Board has determined that it is in the best interest of the
Company and its shareholders to increase the shares issuable
under the 2007 Plan. The Board believes that grants of stock
options under the 2007 Plan help create long-term equity
participation in the Company and assist in attracting,
retaining, motivating and rewarding employees and independent
Directors. If shareholders do not approve the amendment, it will
not be implemented and the Company will have to limit the number
of awards granted in future periods.
New Plan
Benefits
No grants have been made with respect to additional shares of
common stock to be reserved for issuance under the 2007 Plan. In
addition, the number of shares of common stock that may be
granted to executive officers, directors and all employees
including non-executive officers is indeterminable at this time,
as such grants generally are subject to the discretion of the
Board, except that each of the independent directors are
automatically awarded options to purchase 25,000 shares of
common stock concurrently with each annual meeting of the
Company.
Vote
Required
The affirmative vote of the majority of the shares present in
person or represented by proxy and voted on the proposal at the
Meeting is required to approve the Plan Amendment. Abstentions
from voting and broker non-votes will have no effect on the
approval or non-approval of this matter since only votes cast
either for or against will be counted in
determining whether the Plan Amendment has been approved by a
majority of the votes cast thereon.
Recommendation
of the Board of Directors
THE BOARD OF DIRECTORS RECOMMENDS SHAREHOLDER APPROVAL OF THE
PROPOSED AMENDMENT TO THE MAD CATZ INTERACTIVE, INC. STOCK
OPTION PLAN 2007.
Description
of the 2007 Plan (including the changes contemplated by the
proposed Plan Amendment)
The following is a summary of certain principal features of the
2007 Plan, reflecting the proposed amendments described in
Proposal 4. The 2007 Plan was attached as Annex A to
the Management Proxy Circular and Proxy Statement filed
August 19, 2010 on EDGAR in the United States and SEDAR in
Canada. No other changes have been or are being proposed to the
2007 Plan.
16
Administration
The 2007 Plan is currently administered by the Board, although
the Board may delegate this authority at a future time to a
committee of the Board. Subject to the provisions of the 2007
Plan, the Board (or if authorized by the Board, a committee of
the Board) determines, among other things, the persons to whom
from time to time awards may be granted, the number of shares
subject to each award, share prices, any restrictions or
limitations on the awards, and any vesting, exchange, deferral,
surrender, cancellation, acceleration, termination, exercise or
forfeiture provisions related to the awards. The Board or
applicable Board committee may also delegate to the Chief
Executive Officer the authority to allocate stock option grants
among non-management employees within the terms of reference and
scope as determined by the Board or applicable Board committee.
Eligibility
Persons eligible to participate in the 2007 Plan are directors,
officers and employees of or consultants to the Company or of
any subsidiary of the Company, as determined by the Board or
applicable Board committee who demonstrate the potential of
becoming key personnel of, or performing valuable services for
the Company or any of its subsidiaries.
Limitation
on Awards and Shares Available
The 2007 Plan currently authorizes up to 7,300,000 shares
for issuance. The proposed Plan Amendment would increase the
number of shares of common stock reserved and authorized for
issuance by 3,000,000 shares, to a total of 10,300,000,
being the maximum number of shares that have previously been
issued or which could be issuable under the 2007 Plan since its
inception in 2007. The number of shares reserved for issuance
under the 2007 Plan from time to time is not necessarily
reflective of the number of options that are outstanding at any
given time because options that are exercised do not replenish
the number of shares reserved under the 2007 Plan. Currently the
Company has options outstanding under the 2007 Plan to purchase
5,218,868 shares of common stock and options outstanding
under the Prior Plan to purchase 1,125,000 shares of common
stock.
Under the terms of the 2007 Plan, the aggregate number of shares
of Common Stock issued to insiders of the Company within any
12-month
period, or issuable to insiders of the Company at any time,
under the 2007 Plan and any other security-based compensation
arrangement of the Company, may not exceed 10% of the total
number of issued and outstanding shares of Common Stock of the
Company at such time. Insider is defined in the 2007
Plan to include directors and senior officers (and their
respective associates) of the Company and of certain
subsidiaries of the Company. Share compensation
arrangements is defined under the 2007 Plan as any
compensation or incentive mechanism involving the issuance or
potential issuance of securities of the Company, including
financially assisted share purchases, stock options and stock
appreciation rights involving the issuance of authorized but
unissued shares of the Company.
In addition, to prevent the dilution or enlargement of the
rights of holders under the 2007 Plan, the 2007 Plan provides
for the adjustment of the terms of the awards or the number of
shares reserved for issuance thereunder in the event of any
stock split, reverse stock split, stock dividend payable on our
shares of common stock, combination or exchange of shares, or
other extraordinary event occurring after the grant of an award.
Shares of the Companys common stock that are awarded under
the 2007 Plan will be authorized but unissued shares. If any
award granted under the 2007 Plan is forfeited or terminated,
the shares of common stock reserved for issuance pursuant to the
award will be made available for future award grants under the
2007 Plan.
Awards
Stock options, including incentive stock options, as defined
under Section 422 of the Internal Revenue Code (the
Code), and nonqualified stock options may be granted
under the 2007 Plan. Stock option grants to members of the Board
will, unless otherwise determined by the Board or applicable
Board committee, vest and become exercisable immediately after
such grant. Stock option grants to persons other than members of
17
the Board will, unless otherwise determined by the Board or
applicable Board committee, vest and become exercisable as
follows: 25% of the shares underlying such option shall vest and
become exercisable on the first anniversary of the date of grant
and the remainder shall vest and become exercisable in 36 equal
monthly installments. The option exercise price of all stock
options granted pursuant to the 2007 Plan will be as determined
by the Board or applicable Board committee and will equal at
least 100% of fair market value of the common stock of the
Company on the date of grant. In no circumstances shall the
exercise price of an option be less than the closing sale price
of the common stock on the Toronto Stock Exchange (or on any
other stock exchange on which the Companys shares are then
listed) on the last trading day prior to the effective date of
grant. The effective date of grant will not be earlier than the
actual date of grant. Stock options granted under the 2007 Plan
will have a term for exercise as determined by the Board or
applicable Board committee provided that such term will end on
or before the tenth anniversary of the effective date of grant.
The aggregate fair market value of the shares with respect to
which options intended to be incentive stock options are
exercisable for the first time by an optionee who is a citizen
or resident of the United States in any calendar year may not
exceed $100,000.
Upon the exercise of a stock option, the purchase price must be
paid in full in either cash or its equivalent, or by tendering
previously acquired shares of the Companys common stock
with a fair market value at the time of exercise equal to the
exercise price (provided such shares have been held for such
period of time as may be required by the Board (or the
applicable Board committee) in order to avoid adverse accounting
consequences) or other property acceptable to the Board (or the
applicable Board committee) (including through the delivery of a
notice that the participant has placed a market sell order with
a broker with respect to shares then issuable upon exercise of
the option, and that the broker has been directed to pay a
sufficient portion of the net proceeds of the sale to the
Company in satisfaction of the option exercise price, provided
that payment of such proceeds is then made to the Company upon
settlement of such sale). However, no participant who is a
member of the Board or an executive officer of the Company will
be permitted to pay the exercise price of an option in any
method in violation of Section 13(k) of the Securities
Exchange Act of 1934, as amended.
The Company does not currently intend to provide financial
assistance in connection with the exercise of stock options
granted under the 2007 Plan.
Assignability
Options granted under the 2007 Plan may only be assigned to:
(i) a spouse of the optionee: (ii) a trustee,
custodian or administrator acting on behalf of or for the
benefit of the optionee or a spouse of the optionee;
(iii) a registered retirement savings plan or a registered
retirement income fund of the optionee or his or her spouse;
(iv) a holding entity (as defined in National
Instrument
45-106 of
the Canadian Securities Administrators) of the optionee or his
or her spouse; and (v) the legal personal representatives
of a deceased optionee.
Blackout
Periods
The Company prohibits its directors, officers and employees from
trading in its securities with knowledge of any material
information concerning the Company which has not been publicly
disclosed. As it may be difficult from time to time for an
individual to determine if he or she is in possession of
material non-public information, the Company identifies certain
restricted periods (or blackout periods) during
which its personnel are not to trade in securities of the
Company, which includes exercising stock options. The 2007 Plan
permits options that would otherwise expire during or
immediately following a blackout period to remain exercisable
until the fifth business day following the cessation of such
blackout period.
Cessation
of Employment
If an optionee ceases to be a director, officer or employee of,
or a consultant to, the Company or any of its subsidiaries, then
unless otherwise determined by the Board or applicable Board
committee, the option will terminate and cease to be exercisable
after 90 days from the earlier of the date on which the
optionee ceases
18
to be a director, officer, employee or consultant, or the date
on which the optionee was given notice of dismissal.
Change
in Control
In the event the Board recommends that shareholders accept or
vote in favor of a bona fide offer for the shares of the Company
that will result in a change of control of the Company, then all
options which are outstanding, although not yet exercisable
(vested), will become immediately exercisable, subject to the
terms of the 2007 Plan. The Board may, in its discretion, give
its express consent to the vesting of options which are
outstanding, although not yet exercisable, upon receipt of an
offer that it is not prepared to recommend. In addition, all
options which are outstanding, although not yet exercisable,
will automatically vest and become exercisable immediately prior
a change in control transaction.
Amendment
and Termination
The Board may terminate, amend, or modify the 2007 Plan at any
time; provided, however, that shareholder approval must be
obtained (i) to reduce the exercise price of an option
either directly or indirectly including by means of the
cancellation of an option and the reissue of a similar option;
(ii) to extend the period available to exercise an option
beyond the normal expiration date (except in respect of blackout
periods as provided in the 2007 Plan); (iii) to increase
the levels of insider participation under the 2007 Plan;
(iv) to increase the number of shares reserved for issuance
under the 2007 Plan (other than pursuant to the provisions of
the 2007 Plan); (v) to add any additional categories of
persons eligible to receive options under the 2007 Plan;
(vi) to increase the number options that may be granted to
non-employee directors initially or annually thereafter under
the 2007 Plan; and (vii) to amend any assignment rights set
forth in the 2007 Plan. All other amendments to the 2007 Plan
could be made at the discretion of the Board. For example, the
Boards discretion will include without limitation,
authority to make amendments to clarify any ambiguity,
inconsistency or omission in the 2007 Plan and other amendments
of a clerical or housekeeping nature, to alter the vesting or
termination provisions of any option or of the 2007 Plan, to
modify the mechanics of exercise, and to add a financial
assistance provision.
Securities
Law
The 2007 Plan is intended to conform to the extent necessary
with all provisions of the laws, regulations and rules of all
public agencies and authorities applicable to the issuance and
distribution of shares and to the listing of shares on any stock
exchange on with the shares of the Company may be listed. The
2007 Plan will be administered, and options will be granted and
may be exercised, only in such a manner as to conform to such
laws, rules and regulations. To the extent permitted by
applicable law, the 2007 Plan and options granted thereunder
shall be deemed amended to the extent necessary to conform to
such laws, rules and regulations.
U.S.
Tax Consequences
The tax consequences of the 2007 Plan under current United
States federal law are summarized in the following discussion
which deals with the general tax principles applicable to the
2007 Plan, and is intended for general information only.
Alternative minimum tax, Canadian tax and state, provincial and
local income taxes are not discussed. Tax laws are complex and
subject to change and may vary depending on individual
circumstances and from locality to locality. The tax information
summarized is not tax advice.
Incentive Stock Options: An
optionholder recognizes no taxable income for regular income tax
purposes as a result of the grant or exercise of an incentive
stock option qualifying under section 422 of the Code.
Optionholders who neither dispose of their shares within two
years following the date the option was granted nor within one
year following the exercise of the option will normally
recognize a capital gain or loss upon a sale of the shares equal
to the difference, if any, between the sale price and the
purchase price of the shares. If an optionholder satisfies such
holding periods, upon a sale of the shares, the Company will not
be entitled to any deduction for federal income tax purposes. If
an optionholder disposes of shares within two years after the
date of grant or within one year after the date of exercise (a
disqualifying disposition), the difference
19
between the fair market value of the shares on the exercise date
and the option exercise price (not to exceed the gain realized
on the sale if the disposition is a transaction with respect to
which a loss, if sustained, would be recognized) will be taxed
as ordinary income at the time of disposition. Any gain in
excess of that amount will be a capital gain. If a loss is
recognized, there will be no ordinary income, and such loss will
be a capital loss. Any ordinary income recognized by the
optionholder upon the disqualifying disposition of the shares
generally will result in a deduction by the Company for federal
income tax purposes.
Nonqualified Stock Options: Options not
designated or qualifying as incentive stock options will be
nonqualified stock options having no special tax status. An
optionholder generally recognizes no taxable income as the
result of the grant of such an option. Upon exercise of a
nonqualified stock option, the optionholder normally recognizes
ordinary income in the amount of the difference between the
option exercise price and the fair market value of the shares on
the exercise date. If the optionholder is an employee, such
ordinary income generally is subject to withholding of income
and employment taxes. Upon the sale of stock acquired by the
exercise of a nonqualified stock option, any gain or loss, based
on the difference between the sale price and the fair market
value on the exercise date, will be taxed as a capital gain or
loss. No tax deduction is available to the Company with respect
to the grant of a nonqualified stock option or the sale of the
stock acquired pursuant to such grant. The Company generally
should be entitled to a deduction equal to the amount of
ordinary income recognized by the optionholder as a result of
the exercise of a nonqualified stock option.
Other
Considerations
The Code allows publicly-held corporations to deduct
compensation in excess of $1,000,000 paid to the
corporations chief executive officer and its four other
most highly compensated executive officers if the compensation
is payable solely based on the attainment of one or more
performance goals and certain statutory requirements are
satisfied. The Company intends for stock options granted at fair
market value to be deductible by the Company as
performance-based compensation not subject to the $1,000,000
limitation on deductibility.
PROPOSAL 5
CONFIRMATION OF BY-LAW NUMBER 3
Shareholders are requested under this Proposal 5 to
consider and, if appropriate, to approve a resolution confirming
By-law Number 3, a by-law amending By-law Number 2 of the
Company. By-law Number 3 was adopted by the Board of Directors
on June 13, 2011. By-law Number 3 amends Section 10.10
of By-law No. 2 so as to increase the quorum requirement
for meetings of shareholders of the Company. By-law Number 3
provides that the quorum necessary for any meeting of
shareholders shall be a minimum of 2 persons, being either
shareholders or proxyholders, holding or representing, in the
aggregate not less than a majority of the votes entitled to be
cast at the meeting. The purpose of the proposed amendment is to
conform the Companys quorum requirements for meetings of
shareholders to the Nasdaq Capital Markets initial listing
requirements. As explained in Proposal 3, the Company has
submitted an application to list its Common Stock on the Nasdaq
Capital Market. The quorum requirements set forth in
Section 10.10 of the Companys current By-law Number
2, do not meet this requirement. The Board of Directors has
determined that the proposed amendment will bring the
Companys quorum requirements for shareholder meetings into
compliance with the applicable Nasdaq initial listing
requirement.
The full text of By-law No. 3 is attached as Annex A
hereto.
Vote
Required
The affirmative vote of the majority of the shares present in
person or represented by proxy and voted on the proposal at the
Meeting is required to approve the resolution confirming By-law
Number 3. Abstentions from voting and broker non-votes will have
no effect on the approval or non-approval of this matter since
only votes cast either for or against
will be counted in determining whether the resolution confirming
By-Law
20
Number 3 has been approved by a majority of the votes cast
thereon. In the event that such approval is not forthcoming,
By-law No. 3 will cease to be effective as of the date of
the Meeting.
Resolution
The full text of the resolution confirming By-law No. 3 is
as follows:
BE IT RESOLVED THAT:
1. By-law No. 3, in the form attached as Annex A
to the Management Proxy Circular and Proxy Statement for the
Annual and Special Meeting of Shareholders of Mad Catz
Interactive, Inc. to be held on August 18, 2011 and adopted
by the directors of the Company on June 13, 2011, is hereby
confirmed as a by-law of the Company.
Recommendation
of the Board of Directors
THE BOARD OF DIRECTORS RECOMMENDS SHAREHOLDER APPROVAL OF THE
RESOLUTION CONFIRMING THE ADOPTION OF BY-LAW NUMBER 3.
21
PRINCIPAL
ACCOUNTANT FEES AND SERVICES
Audit
Fees for Fiscal 2011 and 2010
The aggregate fees billed to the Company by KPMG LLP, the
Companys Independent Registered Public Accounting Firm and
Auditor, for the fiscal years ended March 31, 2011 and 2010
were as follows:
|
|
|
|
|
|
|
|
|
|
|
2011
|
|
|
2010
|
|
|
Audit Fees(1)
|
|
$
|
722,000
|
|
|
$
|
743,500
|
|
Audit-Related Fees(2)
|
|
|
5,000
|
|
|
|
|
|
Tax Fees(3)
|
|
$
|
115,900
|
|
|
$
|
132,000
|
|
All Other Fees
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Audit Fees consist of the audit of our annual financial
statements included in the Companys Annual Report on
Form 10-K
for its 2011 and 2010 fiscal years, respectively, reviews of
interim financial statements and services that are normally
provided by the independent auditors in connection with
statutory and regulatory filings or engagements for those fiscal
years. |
|
(2) |
|
Audit related fees consist of fees for assurance and related
services, such as comfort letters and consents for registration
statements. |
|
(3) |
|
Tax Fees consist of fees for tax compliance services. |
The Audit Committee has considered whether the provision of
non-audit services is compatible with maintaining the
independence of KPMG LLP and has concluded that the provision of
such services is compatible with maintaining the independence of
the Companys auditors.
Audit
Committee Policy Regarding Pre-Approval of Audit and Permissible
Non-Audit Services of the Companys Independent
Auditors
The Companys Audit Committee has established a policy that
all audit and permissible non-audit services provided by the
independent auditors will be pre-approved by the Audit
Committee. These services may include audit services,
audit-related services, tax services and other services. The
Audit Committee considers whether the provision of each
non-audit service is compatible with maintaining the
independence of the Companys auditors. Pre-approval is
detailed as to the particular service or category of services
and is generally subject to a specific budget. The independent
auditors and management are required to periodically report to
the Audit Committee regarding the extent of services provided by
the independent auditors in accordance with this pre-approval,
and the fees for the services performed to date.
22
REPORT OF
THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
Preliminary Note: The following Report of the Audit Committee
of the Board does not constitute soliciting material and should
not be deemed filed or incorporated by reference into any other
filing of the Company under the Securities Act of 1933 or the
Securities Exchange Act of 1934, except to the extent
specifically incorporated by the Company.
The Audit Committee of the Board is composed of three
independent directors as required by the listing standards of
the American Stock Exchange and by Canadian securities
regulatory authorities (CSA) and operates under a
written charter adopted by the Board. The members of the Audit
Committee for fiscal year ended March 31, 2011 were Thomas
R. Brown (Chairman), Robert J. Molyneux and William Woodward.
Management is responsible for the Companys internal
controls and the financial reporting process. KPMG LLP, the
Companys Independent Registered Public Accounting Firm and
Auditor for the fiscal year ended March 31, 2011, is
responsible for performing an independent audit of the
Companys consolidated financial statements in accordance
with auditing standards generally accepted in the United States
of America and for issuing reports thereon. The Audit
Committees responsibility is to monitor and oversee these
processes.
In this context, the Audit Committee has met and held
discussions with management and the independent accountants.
Management represented to the Audit Committee that the
Companys consolidated financial statements were prepared
in accordance with accounting principles generally accepted in
the United States of America, and the Audit Committee has
reviewed and discussed the consolidated financial statements
with management and the independent accountants. The Audit
Committee discussed with the independent accountants matters
required to be discussed by Statement on Auditing Standards
No. 61 (Communication with Audit Committees).
The Companys independent accountants also provided to the
Audit Committee the written disclosures required by applicable
requirements of the Public Company Accounting Oversight Board
regarding the independent accountants communications with
the Audit Committee concerning independence, and the Audit
Committee discussed with the independent accountants that
firms independence. The Audit Committee also considered
whether the provision of non-audit services by the independent
accountants is compatible with their independence.
Based upon the Audit Committees discussion with management
and the Companys Independent Registered Public Accounting
Firm and Auditor and the Audit Committees review of the
representation of management and the report of the independent
accountants to the Audit Committee, the Audit Committee
recommended that the Board include the audited consolidated
financial statements in the Companys Annual Report on
Form 10-K
for the fiscal year ended March 31, 2011 filed with the
Securities and Exchange Commission.
The Audit Committee
Thomas R. Brown, Chair
Robert J. Molyneux
William Woodward
June 13, 2011
23
Relevant
Education and Experience of Audit Committee Members
By virtue of their prior history and business experience, each
of Messrs. Brown, Molyneux and Woodward, the current
members of the Companys Audit Committee, have the relevant
experience to meaningfully contribute to the Audit Committee.
See Election of Directors above for a description of
the relevant education and experience of the Audit Committee
Members.
CORPORATE
GOVERNANCE
The Board has developed corporate governance practices to help
it fulfill its responsibility to shareholders to oversee the
work of management in the conduct of the Companys business
and to seek to serve the long-term interests of shareholders.
The Companys corporate governance practices are
memorialized in our Mandate of the Board of Directors of Mad
Catz Interactive, Inc., our Codes of Conduct for Directors and
for Employees and the Charter of the Audit Committee of the
Board. We continually review these governance practices and
update them as necessary to reflect changes in regulatory
requirements and evolving oversight practices. These documents
are available on our website at www.madcatz.com and upon
request in writing to our Secretary, Whitney E. Peterson.
Board of
Directors
Our Board consists of four members. Three of our current
directors are independent under the requirements set forth in
the NYSE Amex listing rules and CSA National Instrument
58-101
Disclosure of Corporate Governance Practices. For a
director to be considered independent, the Board must determine
that the director does not have a material relationship with the
Company that would interfere with the exercise of independent
judgment. The Board has established guidelines to assist it in
determining director independence, which conform to the
independence requirements of the NYSE Amex listing rules and CSA
National Instrument
58-101
Disclosure of Corporate Governance Practices. In addition
to applying these independence guidelines, the Board considers
all relevant facts and circumstances in making an independence
determination, and not merely from the standpoint of the
director, but also from that of persons or organizations with
which the director has an affiliation. The Board has determined
that Messrs. Brown, Molyneux and Woodward are independent.
Board
Leadership Structure
Leadership of the Company is currently shared between
Mr. Brown, Chairman of the Board of Directors, and
Mr. Richardson, President and Chief Executive Officer. The
Company does not have a formal policy with respect to separation
of the offices of Chairman of the Board and Chief Executive
Officer, and the Board of Directors believes that flexibility in
appointing the Chairman of the Board and Chief Executive Officer
allows the Board of Directors to make a determination as to such
positions from time to time and in a manner that it believes is
in the best interest of the Company and its shareholders. The
Board of Directors believes that the current structure is best
for the Company because it allows Mr. Richardson to focus
on the Companys
day-to-day
business, while allowing Mr. Brown to lead the Board of
Directors in its primary role of review and oversight of
management.
Meetings
of the Board of Directors
During fiscal year ended March 31, 2011, our Board held 5
meetings. During fiscal year ended March 31, 2011, all of
our directors attended in person or by telephone at least 75% or
more of the aggregate number of Board meetings and committee
meetings on which they served (during the periods for which they
served as such). All directors are strongly encouraged to attend
the Annual Meeting of Shareholders, unless attendance would be
impracticable or constitute an undue burden. Messrs. Brown,
Molyneux and Richardson attended the 2010 Annual Meeting of
Shareholders in person and Mr. Woodward participated by
telephone.
24
Time is allotted at the end of each Board meeting for an
executive session involving only our independent directors and
non-management directors. Thomas R. Brown, Chairman of the
Board, acts as presiding director at each executive session.
Audit
Committee of the Board of Directors
The Board has a standing Audit Committee which operates pursuant
to a written charter adopted by the Board. The Audit Committee
was established in accordance with the requirements of
Section 3(a)(58)(A) of the Securities Exchange Act of 1934
and National Instrument
52-110
Audit Committees. The Audit Committee selects and engages
the Companys independent auditors, reviews the scope of
audit engagements, reviews management letters of such auditors
and managements response thereto, approves professional
services provided by such auditors, reviews the independence of
such auditors, reviews any major accounting changes made or
contemplated, considers the range of audit and non-audit fees,
reviews the adequacy of the Companys internal accounting
controls and annually reviews its charter and submits any
recommended changes to the Board for its consideration. The
Audit Committee consists of three members: Thomas R. Brown
(Chairman), Robert J. Molyneux and William Woodward. The Board
has determined that each member of the Audit Committee is
independent and meets the financial literacy
requirements of the NYSE Amex listing standards, that each
member of the Audit Committee meets the enhanced independence
standards established by the United States Securities and
Exchange Commission (SEC) and that Mr. Brown
qualifies as an audit committee financial expert as
that term is defined in the rules and regulations established by
the SEC. The Audit Committee held 4 meetings in the fiscal year
ended March 31, 2011.
Role of
Board of Directors in Risk Oversight
The Companys management is primarily responsible to manage
risk and inform the Board of Directors regarding the most
material risks confronting the Company. The Board of Directors
has oversight responsibility of the processes established to
monitor and manage such risks. The Board of Directors believes
that such oversight function is the responsibility of the entire
Board of Directors through frequent reports and discussions at
regularly scheduled Board meetings. In addition, the Board has
delegated specific risk management oversight responsibility to
the Audit Committee and to the independent members of the Board.
In particular, the Audit Committee oversees management of risks
related to accounting, auditing and financial reporting and
maintaining effective internal controls for financial reporting.
The independent members of the Board oversee risk management
related to the Companys corporate governance practices and
the Companys executive compensation plans and
arrangements. These specific risk categories and the
Companys risk management practices are regularly reviewed
by the entire Board of Directors in the ordinary course of
regular Board meetings.
Shareholder
Communications with the Board of Directors
It is the Companys policy to forward to the directors any
shareholder correspondence it receives that is addressed to
them. Shareholders who wish to communicate with the directors
may do so by sending their correspondence addressed to the
director or directors as follows Attn: Corporate Secretary, Mad
Catz Interactive, Inc., 7480 Mission Valley Road,
Suite 101, San Diego, California 92108.
Director
Nominations
The Board performs the functions associated with a nominating
committee. The Companys independent directors make
recommendations to the full Board for nominations to fill
vacancies on the Board and for selecting the management nominees
for the directors to be elected by the Companys
shareholders at each Annual Meeting. The Board believes this
process is preferable to a standing nominating committee because
it wishes to involve all of its independent directors in the
nomination process.
25
Director
Qualifications
Although the Board does not have established specific minimum
age, education, experience or skill requirements for potential
directors or a formal policy regarding diversity, the Board
believes that the appropriate mix and a broad diversity of
skills, perspectives, experience, age and gender will help to
enhance the performance of the Board. The independent directors
take into account all factors they consider appropriate in
fulfilling their responsibilities to identify and recommend
individuals to the Board as director nominees. Those factors may
include, without limitation, the following:
|
|
|
|
|
an individuals business or professional experience,
accomplishments, education, judgment, understanding of the
business and the industry in which the Company operates,
specific skills and talents, independence, time commitments,
reputation, general business acumen and personal and
professional integrity or character;
|
|
|
|
the size and composition of the Board and the interaction of its
members, in each case with respect to the needs of the Company
and its shareholders; and
|
|
|
|
regarding any individual who has served as a director of the
Company, his or her past preparation for, attendance at, and
participation in meetings and other activities of the Board or
its committees and his or her overall contributions to the Board
and the Company.
|
Identification
and Evaluation of Nominees
In making nominations for director, the independent directors
identify nominees by first evaluating the current members of the
Board willing to continue their service. Current members with
qualifications and skills that are consistent with the
independent directors criteria for Board service are
re-nominated. As to new candidates, the independent directors
will generally poll the Board members and members of management
for recommendations. The independent directors may also review
the composition and qualification of the boards of directors of
the Companys competitors, and may seek input from industry
experts or analysts. The independent directors evaluate the
qualifications, experience and background of potential
candidates. In making their determinations, the independent
directors evaluate each individual in the context of the Board
as a whole, with the objective of assembling a group that can
best represent shareholders interests through the exercise
of sound judgment. After review and deliberation of all feedback
and data, the independent directors make recommendations to the
Board by a majority vote. Historically, the Board has not relied
on third-party search firms to identify director nominees. The
Board may in the future choose to engage third-party search
firms in situations where particular qualifications are required
or where existing contacts are not sufficient to identify an
appropriate candidate.
The independent directors may use multiple sources for
identifying and evaluating nominees for directors, including
referrals from the Companys current directors and
management as well as input from third parties, including
executive search firms retained by the Board. The independent
directors will obtain background information about candidates,
which may include information from directors and
officers questionnaires and background and reference
checks, and will then interview qualified candidates. The
Companys other directors will also have an opportunity to
meet and interview qualified candidates. The independent
directors will then determine, based on the background
information and the information obtained in the interviews,
whether to recommend to the Board that a candidate be nominated
to the Board.
Shareholder
Nominations
The Board may from time to time consider qualified nominees
recommended by shareholders, who may submit recommendations to
the Board through a written notice to the Companys
Corporate Secretary at the principal executive offices of the
Company, 7480 Mission Valley Road, Suite 101,
San Diego, California, within the time frames required by
the Companys bylaws and applicable law as described under
Shareholder Proposals below. Nominees for director
who are recommended by shareholders will be evaluated in the
same manner as any other nominee for director.
26
STATEMENT
ON CORPORATE GOVERNANCE PRACTICES
The CSA has issued guidelines for effective corporate governance
under National Policy
58-201
Corporate Governance Guidelines (the CSA
Guidelines). The CSA Guidelines deal with matters such as
the constitution and independence of corporate boards, their
functions, the effectiveness and education of board members, and
other items pertaining to sound corporate governance. The CSA
has issued National Instrument
58-101
Disclosure of Corporate Governance Practices (the
Instrument) which requires that each reporting
issuer disclose, on an annual basis, its approach to corporate
governance by disclosing the information required by the
Instrument.
The Companys Board has adopted a formal mandate outlining
its responsibilities. A copy of the Mandate is appended hereto
as Annex B. The Directors Code of Conduct and the
Code of Conduct for the Companys employees have also been
implemented. The mandate and the codes of conduct, along with
the charter of the Companys Audit Committee, may be viewed
on the Companys website at www.madcatz.com. The Company
intends to satisfy the disclosure requirement under
Form 8-K
regarding (1) any amendments to its Codes of Conduct, or
(2) any waivers under its Codes of Conduct relating to the
Chief Executive Officer and Chief Financial Officer by posting
such information on its website at www.madcatz.com.
The Company believes that its corporate governance practices
ensure that the business and affairs of the Company are
effectively managed so as to enhance shareholder value. The
disclosure requirements of the Instrument and a commentary on
the Companys approach with respect to each requirement are
set forth below.
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|
|
Disclosure Requirements
|
|
Comments
|
|
Disclose the identity of directors who are independent.
|
|
Thomas R. Brown Robert J. Molyneux William Woodward
For more information about each director nominated for election at the Meeting, please refer to the section entitled Election of Directors on page 6 of this Management Proxy Circular and Proxy Statement.
|
|
|
|
Disclose the identity of directors who are not independent, and
describe the basis for that determination.
|
|
Darren Richardson, the President and Chief Executive Officer of
the Company, is considered not independent (as defined in the
Instrument), by virtue of his position with the Company. For
more information about each director, please refer to the
section entitled Election of Directors on
page 6 of this Management Proxy Circular and Proxy
Statement.
|
|
|
|
Disclose whether or not a majority of directors are independent.
|
|
The Board is currently composed of four directors, a majority of
whom are independent (as defined in the Instrument). After
consideration of the criteria set forth in the Instrument, the
Board has concluded that three of the current directors are
independent. The remaining director is the President and Chief
Executive Officer of the Company.
|
|
|
|
If a director is presently a director of another issuer that is
a reporting issuer (or the equivalent) in a jurisdiction or a
foreign jurisdiction, identify both the director and the other
issuer.
|
|
Thomas R. Brown LRAD Corporation
|
27
|
|
|
Disclosure Requirements
|
|
Comments
|
|
Disclose whether or not the independent directors hold regularly
scheduled meetings at which non-independent directors and
members of management are not in attendance. If the independent
directors hold such meetings, disclose the number of meetings
held since the beginning of the issuers most recently
completed financial year end.
|
|
The Board meets quarterly and at the end of each meeting of the
Board, independent directors meet separately without the
President and Chief Executive Officer, who is the only
non-independent director.
|
|
|
|
Disclose whether or not the chair of the board is an independent
director. If the board has a chair or lead director who is an
independent director, disclose the identity of the independent
chair or lead director, and describe his role and
responsibilities.
|
|
Thomas R. Brown is the Chairman of the Board and is an independent director.
The Chairman has the responsibility, among other things, of ensuring that the Board discharges its responsibilities effectively. The Chairman acts as a liaison between the Board and the Chief Executive Officer and chairs Board meetings. Further, the Chairman ensures that the non-management members of the Board meet on a regular basis without management being present.
|
|
|
|
Disclose the attendance record of each director for all board
meetings held since the beginning of the issuers most
recently completed financial year.
|
|
Darren Richardson 5 meetings since April 1, 2010.
Thomas R. Brown 5 meetings since April 1, 2010.
Robert J. Molyneux 5 meeting since April 1, 2010.
William Woodward 5 meetings since April 1, 2010.
|
|
|
|
Disclose the text of the boards written mandate.
|
|
Please refer to Annex B for the Boards written mandate.
|
|
|
|
Disclose whether or not the board has developed written position
descriptions for the chair and the chair of each board
committee. If the board has not developed written position
descriptions for the chair and/or the chair of each board
committee, briefly describe how the board delineates the role
and responsibilities of each such position.
|
|
The Board has developed a written position description for each
of the following, as recommended by the CSA Guidelines: Chair of
the Board and Chair of the Audit Committee.
|
|
|
|
Disclose whether or not the board and CEO have developed a
written position description for the CEO. If the board and CEO
have not developed such a position description, briefly describe
how the board delineates the role and responsibilities of the
CEO.
|
|
The Board and the Chief Executive Officer have developed a
written position description for the Chief Executive Officer.
|
|
|
|
Briefly describe what measure the board takes to orient new directors regarding:
(i) the role of the board, its committees and its directors, and
(ii) the nature and operation of the issuers business.
|
|
There is currently no formal orientation program in place for
new members of the Board. The Board as a whole and members of
management informally provide such orientation. In addition,
new members receive an information package, a tour of the
facilities and are provided with the opportunity to interact
with and request briefings from other directors and management.
In light of the Companys size, the high level of
experience of the members of the Board and the low turnover rate
of its members, the Board believes that this approach is
practical and effective.
|
28
|
|
|
Disclosure Requirements
|
|
Comments
|
|
Briefly discuss what measures, if any, the board takes to
provide continuing education for its directors. If the board
does not provide continuing education, describe how the board
ensures that its directors maintain the skill and knowledge
necessary to meet their obligations as directors.
|
|
Given the size of the Company and the in-depth collective public
company, financial and industry experience of the Board, there
is no formal continuing education program in place. Board
members are entitled to attend seminars they determine necessary
to keep them up-to-date with current issues relevant to their
service as directors of the Company. The Companys
independent auditor provides the Board with regular updates on
the current state of the rules, regulations, and guidelines that
may be applicable to the Company. The Companys outside
SEC counsel also attends Board meetings and provides updates on
new laws and rules applicable to the Company.
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|
|
Disclose whether or not the board has adopted a written code for
the directors, officers and employees. If the board has adopted
a written code:
(i) disclose how a person or company may obtain a copy of
the code,
(ii) describe how the board monitors compliance with its
code, or if the board does not monitor compliance, explain
whether and how the board satisfies itself regarding compliance
with its code, and
(iii) provide a cross-reference to any material change
report filed since the beginning of the issuers most
recently completed financial year that pertains to any conduct
of a director or executive officer that constitutes a departure
from the code.
|
|
The Board has adopted a written code of conduct for its directors, and a written code of conduct for its employees.
(i) a copy of the Companys codes of conduct referred to above can be obtained on the Companys website at www.madcatz.com or, alternatively, by written request to the Corporate Secretary of the Company at 7480 Mission Valley Road, Suite 101, San Diego, California 92108.
(ii) Code of conduct for employees: the Company requires all employees to certify receipt of the code upon acceptance of employment and maintains a copy of the code on its intranet for access by employees. The Companys human resource department monitors compliance by employees with the code. Depending on the seriousness of the violation, any violation of the code is reported to the employees manager, the Companys General Counsel or to the Companys Chief Executive Officer.
Code of conduct for directors: The Board as a whole monitors compliance by directors with the code.
(iii) Not applicable.
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|
|
Describe any steps the board takes to ensure directors exercise
independent judgment in considering transactions and agreements
in respect of which a director or executive officer has a
material interest.
|
|
Each director and executive officer is required to fully
disclose his or her interest in respect of any transaction or
agreement to be entered into by the Company. Once such interest
has been disclosed, the Board as a whole determines the
appropriate level of involvement that the director or executive
officer should have in respect of the transaction or agreement.
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29
|
|
|
Disclosure Requirements
|
|
Comments
|
|
Describe any other steps the board takes to encourage and
promote a culture of ethical business conduct.
|
|
Management, supported by the Board, has put structures in place to ensure effective communication between the Company and its stakeholders and the public. The Company provides appropriate disclosure as required by law, and legal counsel reviews all press releases and shareholder reports. The Company requires all employees to certify receipt of the Companys code of conduct upon acceptance of employment and maintains a copy of the code on its intranet for access by employees. The Companys human resource department monitors compliance by employees with its code of conduct. Each year, the Companys General Counsel conducts mandatory training of all employees to encourage ethical behavior.
Directors are permitted to contact and engage outside advisors at the expense of the Company.
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|
Describe the process by which the board identifies new
candidates for board nomination.
|
|
The Board assesses each new candidate by considering his or her
competencies and skills based on such candidates prior
service on the boards of other corporations and his or her
corporate background. The candidates attributes are then
considered against the competencies and skills that the Board
considers necessary for the Board as a whole to possess and the
competencies and skills that each existing member of the Board
possesses.
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|
Disclose whether or not the board has a nominating committee
composed entirely of independent directors.
|
|
The Board does not have a standing nominating committee. See
Corporate Governance Director Nominations
|
|
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|
If the board has a nominating committee, describe the
responsibilities, powers and operation of the nominating
committee.
|
|
Not applicable.
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30
|
|
|
Disclosure Requirements
|
|
Comments
|
|
Describe the process by which the board determines compensation
for the issuers directors and officers.
|
|
The Companys executive compensation program is designed
and implemented principally by the independent members of the
Board with input from a number of sources, including the
Companys Chief Executive Officer and such additional
compensation information as the Board deems appropriate. The
Board does not delegate, and does not expect to delegate in the
future, to management or any other parties, its duties to review
the Companys executive compensation program, which it will
review annually. In determining compensation for executive
officers, the Board will annually review information which it
deems relevant. The Board will also evaluate the Companys
performance and generally determine whether the compensation
elements and levels that it provides to its executive officers
are appropriate relative to their counterparts, in light of each
executive officers individual contribution to the
Companys performance. The Board does not believe that it
is appropriate to establish compensation levels based on
compensation provided by other companies. Instead, the Board
relies upon its judgment in making compensation decisions, after
reviewing the performance of the Company and carefully
evaluating each executive officers individual performance
and the Companys performance during the year. The Board,
other than the Companys Chief Executive Officer, directly
determines the compensation package provided to the Chief
Executive Officer based on the Chief Executive Officers
individual performance and the performance of the Company,
receiving input as it deems appropriate. For executive officers
other than the Chief Executive Officer, the Companys Chief
Executive Officer makes recommendations for each
individuals compensation package to the Board. In making
these recommendations the Chief Executive Officer considers the
individuals performance, the individuals
contribution to Company performance and input from the
Companys human resources department. The Board discusses
these recommendations with the Chief Executive Officer. The
Board further reviews and discusses these recommendations in
executive session without any members of management present.
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|
Disclose whether or not the board has a compensation committee
composed entirely of independent directors.
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|
The Board does not have a standing compensation committee.
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|
If the board has a compensation committee, describe the
responsibilities, powers and operation of the compensation
committee.
|
|
Not applicable.
|
31
|
|
|
Disclosure Requirements
|
|
Comments
|
|
If a compensation consultant or advisor has, at any time since
the beginning of the issuers most recently completed
financial year, been retained to assist in determining
compensation for any of the issuers directors and
officers, disclose the identity of the consultant or advisor and
briefly summarize the mandate for which they have been retained.
If the consultant or advisor has been retained to perform any
other work for the issuer, state that fact and briefly describe
the nature of the work.
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|
Not applicable.
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|
If the board has standing committees other than the audit,
compensation and nominating committees, identify the committees
and describe their function.
|
|
Not applicable.
|
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Disclose whether or not the board, its committees and individual
directors are regularly assessed with respect to their
effectiveness and contribution. If assessments are regularly
conducted, describe the process used for the assessments. If
assessments are not regularly conducted, describe how the board
satisfies itself that the board, its committees, and its
individual directors are performing effectively.
|
|
In order to assess the effectiveness and contribution of the
Board and Board committees, the Board reviews, on an annual
basis, the size and composition of the Board and Board
committees. This review process comprises Board effectiveness,
Board and committee structure, Board processes as well as
director and committee evaluations.
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32
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of July 11, 2011, 63,442,296 shares of Common Stock
of the Company have been issued and are outstanding as fully
paid and non-assessable, and carrying a right to one vote per
share. The following table sets forth certain information
regarding beneficial ownership of or control or direction,
directly or indirectly, over the Companys Common Stock as
of July 11, 2011, by (i) each shareholder known by the
Company to be a beneficial owner of more than 5% of any class of
the Companys voting securities or to the knowledge of the
Companys directors and executive officers, any person or
company that beneficially owns or controls or directs, directly
or indirectly, over 10% or more of the shares of the Company,
(ii) each director and director nominee of the Company,
(iii) the Chief Executive Officer and each additional
executive officer named in the summary compensation table under
Executive Compensation below and (iv) all
directors, director nominees and executive officers of the
Company as a group. The Company believes that, except as
otherwise noted, each individual named has sole investment and
voting power with respect to the shares of Common Stock
indicated as beneficially owned by such individual. Unless
otherwise indicated, the business address of each named person
is
c/o Mad
Catz, Inc., 7480 Mission Valley Road, Suite 101,
San Diego, California 92108.
|
|
|
|
|
|
|
|
|
|
|
Number of Shares
|
|
|
|
|
|
|
Beneficially Owned,
|
|
|
Percent of
|
|
|
|
Controlled or Directed,
|
|
|
Common Stock
|
|
Beneficial Owner
|
|
Directly or Indirectly(1)
|
|
|
Outstanding(2)
|
|
|
Thomas R. Brown
|
|
|
325,000
|
|
|
|
*
|
|
Robert J. Molyneux
|
|
|
275,000
|
|
|
|
*
|
|
William Woodward
|
|
|
225,860
|
|
|
|
*
|
|
Darren Richardson
|
|
|
2,158,750
|
|
|
|
3.2
|
%
|
Brian Andersen
|
|
|
385,833
|
|
|
|
|
*
|
Whitney Peterson
|
|
|
897,357
|
|
|
|
1.3
|
%
|
All Officers and Directors as a Group (7 persons)
|
|
|
4,452,801
|
|
|
|
6.6
|
%
|
|
|
|
(1) |
|
As to each person or group in the table, the table includes the
following shares issuable upon exercise of options that are
exercisable within 60 days from July 11, 2011: Thomas
R. Brown: 225,000; Robert J. Molyneux: 225,000; William
Woodward: 100,000; Darren Richardson: 1,293,750; Brian Andersen:
370,833; Whitney Peterson: 289,857; and all executive officers
and directors as a group: 2,589,441. |
|
|
|
(2) |
|
Except as otherwise provided, all percentages are calculated
based upon the total number of shares outstanding of
63,442,296 shares of the Company as of July 11, 2011,
plus the number of options presently exercisable or exercisable
within 60 days of July 11, 2011 by the named security
holder. |
33
EXECUTIVE
COMPENSATION
Summary
Compensation Table
The table below summarizes the total compensation paid or earned
by the Companys Chief Executive Officer, and each of its
two other most highly compensated executive officers, the named
executive officers, for the fiscal years ended March 31,
2011 and March 31, 2010.
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|
|
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|
|
|
|
|
|
|
|
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|
|
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|
|
|
|
|
|
|
|
|
|
|
Option
|
|
All Other
|
|
|
Name and Principal Position
|
|
Year
|
|
Salary
|
|
Bonus(1)
|
|
Awards(2)
|
|
Compensation
|
|
Total
|
|
Darren Richardson
|
|
|
2011
|
|
|
$
|
410,598
|
|
|
$
|
493,159
|
|
|
$
|
58,000
|
|
|
$
|
17,500(3
|
)(4)
|
|
$
|
979,257
|
|
President, Chief
|
|
|
2010
|
|
|
|
398,996
|
|
|
|
239,398
|
|
|
|
33,000
|
|
|
|
16,902(3
|
)(4)
|
|
|
688,296
|
|
Executive Officer and Director
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brian Andersen
|
|
|
2011
|
|
|
|
238,597
|
|
|
|
261,557
|
|
|
|
43,500
|
|
|
|
1,966
|
(3)
|
|
|
545,620
|
|
Chief Operating
|
|
|
2010
|
|
|
|
160,808
|
|
|
|
74,200
|
|
|
|
22,000
|
|
|
|
12,769
|
(3)
|
|
|
269,777
|
|
Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Whitney Peterson
|
|
|
2011
|
|
|
|
266,954
|
|
|
|
293,913
|
|
|
|
43,500
|
|
|
|
8,751
|
(4)
|
|
|
613,118
|
|
Vice President
|
|
|
2010
|
|
|
|
259,412
|
|
|
|
129,706
|
|
|
|
33,000
|
|
|
|
7,851
|
(4)
|
|
|
429,969
|
|
and General Counsel
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Represents bonuses earned during the applicable fiscal year as a
result of the Companys and the individuals
performance. |
|
(2) |
|
Reflects the aggregate fair value of stock options granted as of
the applicable grant date calculated in accordance with FASB ASC
Topic 718. The assumptions made in the valuation of the stock
awards are discussed in Note 10, Stock-Based
Compensation, of Notes to Consolidated Financial
Statements included in the Companys Annual Report on
Form 10-K
for the year ended March 31, 2011. |
|
(3) |
|
Includes amounts related to an auto allowance. |
|
(4) |
|
Includes amounts related to 401(k) employer matches. |
Employment
Contracts; Potential Payments Upon Termination or
Change-in-Control
Certain of the Companys executive officers whose
compensation is required to be reported in the Summary
Compensation Table are parties to written employment agreements
with the Company. Among other things, these employment
agreements contain severance and other provisions that will
provide for payments to the executive officer following
termination of employment with the Company. A summary of the
employment agreements with our executive officers follows:
Darren
Richardson
The Company is party to an employment agreement with
Mr. Richardson, pursuant to which Mr. Richardson
serves as President and Chief Executive Officer of the Company
and Mad Catz, Inc. Under the terms of the amended employment
agreement, Mr. Richardsons annual base salary is
currently $410,966. The agreement provides for a three-year term
and thereafter automatically renews for successive one-year
periods unless either party gives prior notice of termination.
The agreement has been extended for a one-year period. If,
during the term of the agreement, there is a termination of
employment without cause or in certain other specified
circumstances, Mr. Richardson will be entitled to receive
one years salary. These specified circumstances include
where there has occurred a change of control in the Company or
its wholly owned subsidiary Mad Catz, Inc.
Brian
Andersen
The Company is party to an employment agreement with Brian
Andersen, pursuant to which Mr. Andersen serves as Chief
Operating Officer of the Company and Mad Catz, Inc. Under the
terms of the employment agreement, Mr. Andersens
annual base salary is currently £163,152. The agreement
provides for a three-year term and thereafter automatically
renews for successive one-year periods unless either party gives
prior notice
34
of termination. If, during the term of the agreement, there is a
termination of employment either without cause or in certain
other specified circumstances, Mr. Andersen will be
entitled to receive one years salary. These specified
circumstances include where there has occurred a change of
control in Mad Catz or its subsidiary Mad Catz, Inc.
Whitney
Peterson
The Company is party to an employment agreement with Whitney
Peterson, pursuant to which Mr. Peterson serves as Vice
President Corporate Development and General Counsel of Mad Catz,
Inc. Under the terms of the employment agreement,
Mr. Petersons annual base salary is currently
$267,194. The agreement provides for a three-year term and
thereafter automatically renews for successive one-year periods
unless either party gives prior notice of termination. If,
during the term of the agreement, there is a termination of
employment either without cause or in certain other specified
circumstances, Mr. Peterson will be entitled to receive one
years salary. These specified circumstances include where
there has occurred a change of control in Mad Catz or its
subsidiary Mad Catz, Inc.
Outstanding
Equity Awards at Fiscal Year-End
The following table contains information regarding unexercised
options for each named executive officer outstanding as of
March 31, 2011.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
|
Number of Securities
|
|
|
Number of Securities
|
|
|
|
|
|
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
|
Unexercised Options
|
|
|
Unexercised Options
|
|
|
Option Exercise
|
|
|
Option Expiration
|
|
Name
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
Price
|
|
|
Date
|
|
|
Darren Richardson
|
|
|
300,000
|
|
|
|
|
|
|
|
C$ 0.46
|
|
|
|
09/20/2016
|
|
|
|
|
500,000
|
|
|
|
|
|
|
|
C$ 0.56
|
|
|
|
10/13/2016
|
|
|
|
|
187,500
|
|
|
|
12,500
|
(1)
|
|
|
$ 1.23
|
|
|
|
06/07/2017
|
|
|
|
|
187,500
|
|
|
|
112,500
|
(2)
|
|
|
$ 0.47
|
|
|
|
09/30/2018
|
|
|
|
|
56,250
|
|
|
|
93,750
|
(3)
|
|
|
$ 0.33
|
|
|
|
09/02/2019
|
|
|
|
|
|
|
|
|
200,000
|
(4)
|
|
|
$ 0.43
|
|
|
|
09/16/2020
|
|
Brian Andersen
|
|
|
25,000
|
|
|
|
|
|
|
|
C$ 0.46
|
|
|
|
09/20/2016
|
|
|
|
|
50,000
|
|
|
|
|
|
|
|
C$ 0.56
|
|
|
|
10/13/2016
|
|
|
|
|
121,875
|
|
|
|
8,125
|
(1)
|
|
|
$ 1.23
|
|
|
|
06/07/2017
|
|
|
|
|
125,000
|
|
|
|
75,000
|
(2)
|
|
|
$ 0.47
|
|
|
|
09/30/2018
|
|
|
|
|
7,500
|
|
|
|
62,500
|
(3)
|
|
|
$ 0.33
|
|
|
|
09/02/2019
|
|
|
|
|
|
|
|
|
150,000
|
(4)
|
|
|
$ 0.43
|
|
|
|
09/16/2020
|
|
Whitney Peterson
|
|
|
60,889
|
|
|
|
8,125
|
(1)
|
|
|
$ 1.23
|
|
|
|
06/07/2017
|
|
|
|
|
125,000
|
|
|
|
75,000
|
(2)
|
|
|
$ 0.47
|
|
|
|
09/30/2018
|
|
|
|
|
56,250
|
|
|
|
93,750
|
(3)
|
|
|
$ 0.33
|
|
|
|
09/02/2019
|
|
|
|
|
|
|
|
|
150,000
|
(4)
|
|
|
$ 0.43
|
|
|
|
09/16/2020
|
|
|
|
|
(1) |
|
Granted on June 7, 2007. Vest 25% on the first anniversary
of the grant date and thereafter in 36 equal monthly
installments. |
|
(2) |
|
Granted on September 30, 2008. Vest 25% on the first
anniversary of the grant date and thereafter in 36 equal monthly
installments. |
|
(3) |
|
Granted on September 2, 2009. Vest 25% on the first
anniversary of the grant date and thereafter in 36 equal monthly
installments. |
|
(4) |
|
Granted on September 16, 2010. Vest 25% on the first
anniversary of the grant date and thereafter in 36 equal monthly
installments. |
35
Compensation
of Directors
The following table shows all the fees earned or cash paid by
the Company during the fiscal year ended March 31, 2011 to
the Companys non-employee directors. No option and
restricted stock awards, long-term incentive plan payouts or
other types of payments, other than the amount identified in the
chart below, were paid to these directors during the fiscal year
ended March 31, 2011.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees Earned or
|
|
|
Option
|
|
|
|
|
Name
|
|
Paid in Cash
|
|
|
Awards(1)
|
|
|
Total
|
|
|
Thomas R. Brown
|
|
$
|
93,500
|
|
|
$
|
6,750
|
|
|
$
|
100,250
|
|
Robert J. Molyneux
|
|
|
58,500
|
|
|
|
6,750
|
|
|
|
65,250
|
|
William Woodward
|
|
|
59,500
|
|
|
|
6,750
|
|
|
|
66,250
|
|
|
|
|
(1) |
|
The amounts in this column reflect the aggregate fair value of
stock options granted as of the applicable grant date calculated
in accordance with FASB ASC Topic 718. The assumptions made in
the valuation of the stock awards are discussed in Note 10,
Stock-Based Compensation, of Notes to Consolidated
Financial Statements included in the Companys Annual
Report on
Form 10-K
for the year ended March 31, 2011. On March 31, 2011,
Thomas Brown had 225,000 outstanding stock option awards, Robert
J. Molyneux had 225,000 outstanding stock option awards, and
William Woodward had 100,000 outstanding stock option awards. |
The Companys non-employee directors receive the following
compensation for board service: $50,000 annual retainer; $20,000
additional annual retainer to the Chairman of the Board; and
$10,000 additional annual retainer to the Audit Committee chair.
In addition, non-employee directors receive $2,500 for each
Board meeting attended in person, $500 for each Board meeting
attended by telephone that is shorter than two hours and $1,000
for each Board meeting attended by telephone that is longer than
two hours. Audit Committee Members also receive $1,500 for each
committee meeting attended. Non-employee directors also receive
an annual option grant of 25,000 shares of Common Stock.
EQUITY
COMPENSATION PLAN INFORMATION
The following table sets forth information regarding all of the
Companys equity compensation plans as of March 31,
2011.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Securities
|
|
|
|
|
|
|
|
|
|
Remaining Available for
|
|
|
|
Number of Securities to
|
|
|
Weighted-Average
|
|
|
Future Issuance Under
|
|
|
|
be Issued Upon Exercise
|
|
|
Exercise Price of
|
|
|
Equity Compensation Plans
|
|
|
|
of Outstanding Options,
|
|
|
Outstanding Options,
|
|
|
(Excluding Securities
|
|
Plan Category
|
|
Warrants, and Rights
|
|
|
Warrants, and Rights
|
|
|
Reflected In Column (a))
|
|
|
Equity compensation plans approved by security holders
|
|
|
6,343,868
|
(1)
|
|
$
|
0.58
|
|
|
|
1,050,634
|
|
Equity compensation plans not approved by security holders
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
6,343,868
|
|
|
$
|
0.58
|
|
|
|
1,050,634
|
|
|
|
|
(1) |
|
Includes 5,218,868 shares underlying options issued
pursuant to the Companys 2007 Stock Option Plan and
1,125,000 shares underlying options issued pursuant to the
Companys Amended and Restated Incentive Stock Option Plan. |
The Company maintains two stock option plans: the 2007 Stock
Option Plan and the Amended and Restated Incentive Stock Option
Plan (the Prior Plan). The Companys
shareholders approved the 2007 Stock Option Plan at the 2007
annual and special meeting of the Company. The 2007 Stock Option
Plan replaced the Prior Plan and no additional options have been
or will be granted pursuant to the Prior Plan.
36
Options previously granted under the Prior Plan will continue to
be outstanding until exercised or terminated in accordance with
their terms.
2007
Stock Option Plan
Please see the description under Proposal 4.
Amended
and Restated Incentive Stock Option Plan (the Prior
Plan)
The Prior Plan authorized the Board to issue options to acquire
shares in the Common Stock of the Company to directors, officers
and employees of the Company or its subsidiaries and to other
persons providing ongoing management or consulting services to
the Company or its subsidiaries. The Prior Plan was replaced by
the 2007 Stock Option Plan and no further options will be
granted under the Prior Plan.
The number of shares reserved for issuance to any one person
pursuant to options granted under the Prior Plan together with
shares reserved for issuance pursuant to other share
compensation arrangements, may not exceed 5% of the number of
shares of Common Stock then issued.
As at July 11, 2011, 1,125,000 shares of Common Stock
of the Company were issuable upon the exercise of stock options
issued and outstanding under to the Prior Plan, representing
1.8% of the aggregate number of shares of Common Stock of the
Company issued and outstanding as of such date.
The exercise price for any option granted under the Prior Plan
is fixed by the Board but in no event can the exercise price be
less than the closing price of the Companys shares on the
Toronto Stock Exchange on the last trading day prior to the
grant of such option or if there is no closing price, at a price
less than the average of the bid and ask prices on the Toronto
Stock Exchange on such trading day.
The maximum term of any option granted under the Prior Plan is
5 years and the Board may determine the terms of vesting,
if any.
The participation of insiders of the Company under the Prior
Plan is limited such that insiders, collectively, may not hold
options or be issued shares within any
12-month
period under the Prior Plan or any other share compensation
arrangement exceeding 10% of the outstanding issue
and individually, exceeding 5% of the outstanding
issue. Outstanding issue is defined as the number of
shares of the Company then issued and outstanding less any
shares issued within the previous 12 months pursuant to
share compensation arrangements.
If an optionholder under the Prior Plan ceases to be a director,
officer or employee of the Company or any subsidiary or a
consultant to the Company or any subsidiary, then all options
held by such optionholder terminate and cease to be exercisable
90 days thereafter.
Options granted under the Prior Plan are non-assignable and
non-transferable by the optionholder except that the personal
representatives of a deceased optionholder may exercise an
option.
RELATED
PERSON TRANSACTIONS
Except as described below, from April 1, 2010 to the
present, there have been no (and there are no currently
proposed) transactions in which the amount involved exceeded
$120,000 to which the Company or any of its subsidiaries was (or
is to be) a participant and in which any executive officer,
director, nominee for director, 5% beneficial owner of the
Companys Common Stock or member of the immediate family of
any of the foregoing persons had (or will have) a direct or
indirect material interest.
In April 2011, the Company paid to the holder of the Loan Notes
issued in connection with the Companys acquisition of its
Saitek company subsidiaries $14,733,000 which represented
repayment in full of all amounts owed under the Loan Notes. The
Loan Notes were convertible into shares of the Companys
Common Stock representing more than 5% of the Companys
outstanding stock.
37
SECTION 16(a)
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Each director, executive officer of the Company, and person who
owns more than 10% of a registered class of the Companys
equity securities is required by Section 16(a) of the
Securities Exchange Act of 1934 to report to the Securities and
Exchange Commission (the SEC) his or her
transactions in the Companys securities. Regulations
promulgated by the SEC require the Company to disclose in this
Management Proxy Circular and Proxy Statement any reporting
violations with respect to the 2011 fiscal year, which came to
the Companys attention based on a review of the applicable
filings required by the SEC to report such status as an officer
or director or such changes in beneficial ownership as submitted
to the Company. These statements are based solely on a review of
the copies of such reports furnished to the Company by its
officers, directors and security holders and a representation
that such reports accurately reflect all reportable transactions
as holdings. The Company believes that its directors and
executive officers, and persons who beneficially own more than
10% of a registered class of its equity securities, have
complied with all filing requirements of Section 16(a)
applicable to such persons for fiscal year ended March 31,
2011.
SHAREHOLDER
PROPOSALS
Shareholders wishing to submit proposals on matters appropriate
for shareholder action to be presented at Mad Catz Annual
Meeting of Shareholders may do so in accordance with
Rule 14a-8
promulgated under the Exchange Act. For such proposals to be
included in our proxy materials relating to its 2012 Annual
Meeting of Shareholders, all applicable requirements of
Rule 14a-8
must be satisfied and such proposals must be received by the
Company at its principal executive offices no later than
April 1, 2011. Shareholders wishing to bring a proposal
before the 2012 Annual Meeting of Shareholders in accordance
with Canadian laws must provide written notice of such proposal
to our Corporate Secretary at the principal executive offices of
the Company no later than April 17, 2012.
OTHER
MATTERS
The Board does not intend to bring any other business before the
Meeting, and so far as is known to the Board, no matters are to
be brought before the Meeting except as specified in the Notice
of the Meeting. In addition to the scheduled items of business,
the meeting may consider shareholder proposals (including
proposals omitted from this Management Proxy Circular and Proxy
Statement and form of proxy pursuant to the proxy rules of the
SEC) and matters relating to the conduct of the Meeting. As to
any other business that may properly come before the Meeting, it
is intended that proxies will be voted in respect thereof in
accordance with the judgment of the persons voting such proxies.
ANNUAL
REPORT
Our Annual Report on
Form 10-K
for the fiscal year ended March 31, 2011, as filed by us
with the SEC (excluding exhibits), is a portion of the Annual
Report that is being mailed, together with this Management Proxy
Circular and Proxy Statement, to all shareholders entitled to
vote at the Meeting. However, such Annual Report, including the
Annual Report on
Form 10-K,
is not to be considered part of this proxy solicitation material.
COPIES OF THE ANNUAL REPORT ON
FORM 10-K
(INCLUDING FINANCIAL STATEMENTS AND FINANCIAL STATEMENT
SCHEDULES) MAY BE OBTAINED WITHOUT CHARGE BY WRITING TO THE
SECRETARY OF THE COMPANY, 7480 Mission Valley Road,
Suite 101, San Diego, California 92108. A request for
a copy of the Annual Report on
Form 10-K
must set forth a good-faith representation that the requesting
party was either a holder of record or a beneficial owner of
Common Stock of the Company on the Record Date. Exhibits to the
Form 10-K,
if any, will be mailed upon similar request and payment of
specified fees to cover the costs of copying and mailing such
materials.
38
ADDITIONAL
INFORMATION
Additional information relating to the Company may be found on
SEDAR at www.sedar.com and on EDGAR at www.sec.gov. Shareholders
may contact the Corporate Secretary of the Company, at 7480
Mission Valley Road, Suite 101, San Diego, California
92108 to obtain, free of charge, copies of the Companys
financial statements and Managements Discussion and
Analysis (MD&A). Financial information is
provided in the Companys comparative financial statements
and MD&A for the Companys most recently completed
financial year.
The contents and sending of this Management Proxy Circular and
Proxy Statement have been approved by the Board.
By Order of the Board of Directors
Darren Richardson,
President and Chief Executive Officer
San Diego, California
July 15, 2011
39
Annex A
BY-LAW
NUMBER 3
A by-law to amend By-Law Number 2 of
MAD CATZ INTERACTIVE, INC.
(the Corporation)
BE IT ENACTED as a by-law of the Corporation as follows:
1. Section 10.10 of By-Law Number 2 of the Corporation
is hereby repealed in its entirety and replaced with the
following provision:
10.10 Quorum
A quorum for the transaction of business at any meeting of
shareholders shall be two persons present in person, each being
a shareholder or representative duly authorized in accordance
with the Act entitled to vote thereat or a duly appointed proxy
for a shareholder so entitled and holding or representing, in
the aggregate, not less than a majority of the votes entitled to
be cast at the meeting. If a quorum is present at the opening of
the meeting, the shareholders present in person or by proxy may
proceed with the business of the meeting even if a quorum is not
present throughout the meeting.
ENACTED by the Board of Directors as a by-law of the
Corporation this 13th day of June, 2011.
A-1
Annex B
MANDATE
OF THE MAD CATZ INTERACTIVE, INC. BOARD OF DIRECTORS
The Board of Mad Catz Interactive, Inc., (the
Company) believes that the appropriate mix of
skills, experience, age and gender will help to enhance its
performance. The Boards composition should reflect
business experience compatible with the Companys business
objectives.
Composition
The Board will be comprised of a minimum of three and a maximum
of twelve directors, a majority of whom will be
independent1.
Following the meeting, the Board will consist of four members.
Pursuant to the Canada Business Corporations Act, at
least 25% of the directors of the Company must be resident
Canadians. The Chair of the Board is an independent director.
Meetings
The Board shall meet at least four times annually, or more
frequently, as circumstances dictate. In addition, the Board
shall hold separate, regularly scheduled meetings of independent
directors at which members of management are not present.
Position
Descriptions
The Board shall develop clear position descriptions for
directors, including the Chair of the Board and the Chair of
each Board committee. Additionally, the Board, together with the
Chief Executive Officer (CEO), shall develop a clear
position description for the CEO, which includes defining
managements responsibilities. The Board shall also develop
or approve the corporate goals and objectives that the CEO is
responsible for meeting.
The Board is elected by the shareholders and represents all
shareholders interests in continuously creating
shareholder value. The following is the mandate of the Board.
|
|
|
|
|
Advocate and support the best interests of the Company.
|
|
|
|
Review and approve strategic, business and capital plans for the
Company and monitor managements execution of such plans.
|
|
|
|
Review whether specific and relevant corporate measurements are
developed and adequate controls and information systems are in
place with regard to business performance.
|
|
|
|
Review the principal risks of the Companys business and
pursue the implementation by management of appropriate systems
to manage such risks.
|
|
|
|
Monitor progress and efficiency of strategic, business, and
capital plans and require appropriate action to be taken when
performance falls short of goals.
|
|
|
|
Review measures implemented and maintained by the Company to
ensure compliance with statutory and regulatory requirements.
|
|
|
|
Select, evaluate, and compensate the President and CEO.
|
|
|
|
Annually review appropriate senior management compensation
programs.
|
|
|
|
Monitor the practices of management against the Companys
disclosure policy to ensure appropriate and timely communication
to shareholders of material information concerning the Company.
|
|
|
|
Monitor safety and environmental programs.
|
|
|
|
Monitor the development and implementation of programs for
management succession and development.
|
1 For
the definition of independent director, please see the Glossary
of Terms
B-1
|
|
|
|
|
Approve selection criteria for new candidates for directorship.
|
|
|
|
Provide new directors with a comprehensive orientation, and
provide all directors with continuing education opportunities.
|
|
|
|
Assure shareholders of conformity with applicable statutes,
regulations and standards (for example, environmental risks and
liabilities, and conformity with financial statements).
|
|
|
|
Regularly conduct assessments of the effectiveness of the Board,
as well as the effectiveness and contribution of each Board
committee and each individual director.
|
|
|
|
Establish the necessary committees to monitor the Company.
|
|
|
|
Provide advice to and act as a sounding board for the President
and CEO.
|
|
|
|
Discharge such other duties as may be required in the good
stewardship of the Company.
|
In addressing its mandate, the Board assumes responsibility for
the following approvals:
Financial Approvals:
|
|
|
|
|
Strategic plan
|
|
|
|
Annual business and capital plans
|
|
|
|
Annual financial statements and auditors report
|
|
|
|
Quarterly earnings and press release
|
|
|
|
Budgeted capital expenditures
|
|
|
|
Unbudgeted capital expenditures in excess of US$1,000,000
|
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Acquisitions/divestitures
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Significant financing or refinancing opportunities
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Dividend policy
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Share re-purchase programs
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Individual operating, real property or capital leases having
total commitment in excess of US$1,000,000
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Human Resources Approvals:
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Appointment/succession/dismissal of President and CEO
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Compensation of President and CEO
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*
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Executive compensation arrangements and incentive plans
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Administration and Compliance Approvals:
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Appointment of Board Committees and their Chairs
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Nomination of Directors
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*
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Recommendation of Auditors to the Shareholders
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Proxy circular
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Appointment of Chairman
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* Board may delegate to
committees
B-2
MAD CATZ INTERACTIVE, INC.
PROXY
SOLICITED BY THE BOARD OF DIRECTORS OF THE CORPORATION FOR USE
AT THE ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON AUGUST 18, 2011
The undersigned shareholder of Mad Catz Interactive, Inc. (the Corporation) hereby appoints
Thomas R. Brown, Chairman of the Board of Directors, or, failing him, Darren Richardson, President
and Chief Executive Officer of the Corporation, or instead of either of the foregoing,
_________________________ as proxy of the undersigned with full power of substitution to attend,
vote and otherwise act for and on behalf of the undersigned at the above-noted annual and special
meeting of shareholders of the Corporation and any adjournment thereof (the Meeting) to the same
extent and with the same powers as if the undersigned was present at the Meeting, and the person
named is specifically directed to vote as indicated herein. The undersigned hereby undertakes to
ratify and confirm all the said proxy may do by virtue hereof, and hereby revokes any proxy
previously given in respect of the Meeting. Without limiting the general authorization and power
hereby given, all of the common shares registered in the name of the undersigned are to be voted as
follows:
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1.
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Election of Directors.
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FOR
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WITHHOLD
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FOR ALL
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INSTRUCTIONS: IF YOU MARK THE FOR ALL EXCEPT
CATEGORY, INDICATE THE NOMINEE(S) AS TO WHICH
YOU DESIRE TO WITHHOLD AUTHORITY BY STRIKING A
LINE THROUGH SUCH NOMINEE(S) NAME IN THE LIST
BELOW:
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ALL
o
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AS TO ALL
o
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EXCEPT
o |
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Darren Richardson Thomas R. Brown |
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Robert J. Molyneux William Woodward |
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2.
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To appoint KPMG LLP as the Independent Registered
Public Accounting Firm and Auditor of the Corporation and to
authorize the Board of Directors to fix the Independent
Registered Public Accounting Firm and Auditors
remuneration.
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FOR
o
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WITHHOLD
o |
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3.
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To approve a special resolution authorizing an
amendment to the Corporations Articles to effect, at the
discretion of the Board of Directors, a reverse stock split
of the Corporations currently issued and outstanding Common
Stock.
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FOR
o
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AGAINST
o |
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4.
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To approve an amendment to the Mad Catz Interactive,
Inc. Stock Option Plan2007 to increase the number of
shares authorized for issuance thereunder.
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FOR
o
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AGAINST
o |
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5.
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To approve a resolution confirming By-law Number 3
to increase the quorum requirements for meetings of
shareholders of the Corporation.
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FOR
o
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AGAINST
o |
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DATED the _____ day of __________, 2011.
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Signature
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Signature of joint holder, if any
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Date |
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Please sign exactly as the shares are issued. When shares are held by joint tenants, both should
sign. When signing as attorney, as executor, administrator, trustee or guardian, please give full
title as such. If a corporation, please sign in full corporate name by president or other
authorized officer. If a partnership, please sign in partnership name by authorized person.
NOTES:
1. |
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If no choice is specified, the proxy will be VOTED FOR items 1, 2, 3, 4 and 5. |
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2. |
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Shareholders are entitled to vote at the Meeting either in person or by proxy. A proxy must
be dated and signed by the shareholder or his or her attorney duly authorized in writing or,
if the shareholder is a corporation, by an officer or attorney thereof duly authorized. The
signature should agree with the name on this proxy. If the proxy is not dated in the above
space, it will be deemed to bear the date on which it was mailed by the Corporation. |
- 2 -
3. |
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Each shareholder has the right to appoint a person to represent the shareholder at the
Meeting other than the persons specified above. Such right may be exercised by inserting in
the space provided the name of the person to be appointed, who need not be a shareholder of
the Corporation. |
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4. |
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This proxy confers authority for the above-named persons to vote in their discretion with
respect to amendments or variations to the matters identified in the notice of meeting which
accompanied this proxy and with respect to other matters which may properly come before the
Meeting. |
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE 2011 ANNUAL AND
SPECIAL MEETING OF STOCKHOLDERS TO BE HELD ON AUGUST 18, 2011
THE MANAGEMENT PROXY CIRCULAR AND PROXY STATEMENT AND THE ANNUAL REPORT ARE
AVAILABLE AT
https://materials.proxyvote.com/556162