-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VMQ4ayt1O1KgvLoSsk/dCjhgIkMSxz7Yp8Xyvg5Vt+++zG+yfo1wkUkyniW6ZDxW lUGL+zkB8Xtmmfe0naAv/A== 0000912057-96-015730.txt : 19960731 0000912057-96-015730.hdr.sgml : 19960731 ACCESSION NUMBER: 0000912057-96-015730 CONFORMED SUBMISSION TYPE: DEFS14A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19961205 FILED AS OF DATE: 19960730 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: INFORMATION MANAGEMENT TECHNOLOGIES CORP CENTRAL INDEX KEY: 0000824578 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-FACILITIES SUPPORT MANAGEMENT SERVICES [8744] IRS NUMBER: 581722085 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: DEFS14A SEC ACT: 1934 Act SEC FILE NUMBER: 000-16753 FILM NUMBER: 96600620 BUSINESS ADDRESS: STREET 1: 130 CEDAR ST 4TH FLR CITY: NEW YORK STATE: NY ZIP: 10006 BUSINESS PHONE: 2123066100 MAIL ADDRESS: STREET 1: 130 CEDAR STREET CITY: NEW YORK STATE: NY ZIP: 10006 DEFS14A 1 DEFINITIVE 14A SCHEDULE 14A (RULE 14A-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 Filed by the Registrant /X/ Filed by a Party other than the Registrant / / Check the appropriate box: / / Preliminary Proxy Statement / / Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) /X/ Definitive Proxy Statement / / Definitive Additional Materials / / Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12 INFORMATION MANAGEMENT TECHNOLOGIES CORPORATION - -------------------------------------------------------------------------------- (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): /X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or Item 22(a)(2) of Schedule 14A. / / $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3). / / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. 1) Title of each class of securities to which transaction applies: Common Stock ------------------------------------------------------------------------ 2) Aggregate number of securities to which transaction applies: N/A ------------------------------------------------------------------------ 3) 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): N/A ------------------------------------------------------------------------ 4) Proposed maximum aggregate value of transaction: N/A ------------------------------------------------------------------------ 5) Total fee paid: $125 ------------------------------------------------------------------------ / / Fee paid previously with preliminary materials. / / 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. 1) Amount Previously Paid: N/A ------------------------------------------------------------------------ 2) Form, Schedule or Registration Statement No.: N/A ------------------------------------------------------------------------ 3) Filing Party: N/A ------------------------------------------------------------------------ 4) Date Filed: N/A ------------------------------------------------------------------------ INFORMATION MANAGEMENT TECHNOLOGIES CORPORATION 130 CEDAR STREET FOURTH FLOOR NEW YORK, NEW YORK 10006 (212) 306-3100 ------------------------ NOTICE OF ANNUAL STOCKHOLDERS MEETING TO BE HELD DECEMBER 5, 1996 ------------------------ NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Information Management Technologies Corporation (the "Company") will be held at The Company's Office 130 Cedar Street, New York, NY 10006 at 10:30 a.m., EST, on Thursday, December 5 (the "Meeting"), for the following purposes: (1) To elect four (4) Directors to serve for the ensuing year or until their successors are elected and have been qualified. (2) To ratify the selection of Mahoney Cohen Rashba & Pokart, CPA, PC, as the independent public accountants for the Company's fiscal year ending March 31, 1996. (3) To ratify the Company's proposed 1997 Incentive Stock Option Plan. (4) Such other business as may be properly brought before the Meeting or any adjournment thereof. Only those Shareholders who were Shareholders of record at the close of business on October 31, 1996, will be entitled to notice of, and to vote at the meeting or any adjournment thereof. If a shareholder does not return a signed proxy card or does not attend the annual meeting and vote in person, the shares will not be voted. Shareholders are urged to mark the boxes on the proxy card to indicate how their shares are to be voted. If a shareholder returns a signed proxy card but does not mark the boxes, the shares represented by that proxy card will be voted as recommended by the Board of Directors. The Company's Board of Directors solicits proxies so each shareholder has the opportunity to vote on the proposals to be considered at the annual meeting. IMPORTANT WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE MARK, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENVELOPE WHICH HAS BEEN PROVIDED, IN THE EVENT YOU ARE ABLE TO ATTEND THE METING, YOU MAY REVOKE YOUR PROXY AND VOTE YOUR SHARES IN PERSON. July 29, 1996 By Order of the Board of Directors New York, New York /s/ Joseph A. Gitto --------------------------------------------- Joseph A. Gitto President and Chief Financial Officer
1 INFORMATION MANAGEMENT TECHNOLOGIES CORPORATION --------------------- DEFINITIVE PROXY STATEMENT ------------------------ FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON DECEMBER 5, 1996 This proxy statement and the accompanying proxy card are furnished in connection with the solicitation of proxies by the Board of Directors of Information Management Technologies Corporation (the "Company") for use at the Annual Meeting of Stockholders of the Company (the "Annual Meeting") to be held at the Company's offices at 130 Cedar Street, New York, NY 10006, Fourth Floor at 10:30 a.m. EST on December 5, 1996, and any adjournment or adjournments thereof, for the purposes set forth in the accompanying Notice of Annual Meeting of Stockholders. All stockholders are encouraged to attend the Annual Meeting. Your proxy is requested, however, whether or not you attend in order to assure maximum participation and to expedite the proceedings. At the Annual Meeting, stockholders will be requested to act upon the matters set forth in this Proxy Statement. If you are not present at the meeting, your shares can be voted only when represented by proxy. The shares represented by your proxy will be voted in accordance with your instructions if the proxy is properly signed and returned to the Company before the Annual Meeting. You may revoke your proxy at any time prior to its being voted at the Annual Meeting by delivering a new duly executed proxy with a later date or by delivering written notice of revocation to the Secretary of the Company prior to the day of the Annual Meeting or by appearing and voting in person at the Annual Meeting. It is anticipated that this proxy statement and accompanying proxy will first be mailed to the Company's stockholders on or about November 1, 1996. The Company's 1996 Annual Report to its stockholders on Form 10-K, filed with the Securities and Exchange Commission June 28, 1996, is also enclosed and should be read in conjunction with the matters set forth herein. The expenses incidental to the preparation and mailing of this proxy material are being paid by the Company. No solicitation is planned beyond the mailing of this proxy material to stockholders. Abstentions and broker non-votes will be counted towards determining whether a quorum is present. The Principal executive offices of the Company are located at 130 Cedar Street -- Fourth Floor, New York, New York 10006. The telephone number is (212) 306-6100. OUTSTANDING SHARES AND VOTING RIGHTS The only security entitled to vote at the Annual Meeting is the Company's Class A Common Stock. The Board of Directors, pursuant to the Bylaws of the company, has fixed October 31, 1996, at the close of business, as the record date of the determination of Stockholders entitled to notice of and to vote at the Annual Meeting or at any adjournment or adjournments thereof. At July 17, 1996, there were 4,726,539 shares of Class A Common Stock outstanding and entitled to vote at the Annual Meeting. Each share of a Class A Common Stock is entitled to one vote at the Annual Meeting. A majority of the shares of Class A Common Stock outstanding and entitled to vote which are represented at the Annual Meeting, in person or by proxy, will constitute a quorum. As per the By-laws of the Company, provided a quorum (majority) of issued and outstanding shares entitled to vote are present in person or by proxy, a majority vote in favor of a proposal is required for approval of an agenda item. 2 ITEM 1: ELECTION OF DIRECTORS The Board of Directors of the Company proposes that the Company's four current directors standing for re-election be elected as directors to serve until the next Annual Meeting of Stockholders and continuing until their successors are elected and qualified. Unless authority is withheld on the proxy, it is the intention of the proxy holder named on the proxy to vote the proxies received by him for the four directors standing for re-election named below:
CURRENT POSITION WITH COMPANY AS OF NAME AGE FILING DATE DIRECTOR SINCE - ----------------------- --- -------------------------------------------------- -------------- Robert H. Oxenberg 46 Chairman of the Board, Director 1992(1) Christopher D. Holbrook 45 Chief Executive Officer, Chief Operating Officer, 1995(2) Director Joseph A. Gitto, Jr. 33 President, Chief Financial Officer, Secretary 1995(3) Bruce M. Arnstein 39 Director 1996(4)
- ------------------------ (1) Resigned as Chief Executive Officer April 1996. (2) Appointed Chief Executive Officer April 1996. (3) Appointed President April 1996. (4) Mr. Arnstein was appointed as a director of the Company in May 1996. The executive officers of the Company are appointed by the Board of Directors to serve until their successors are elected and qualified. The directors of the Company are elected each year at the annual meeting of the stockholders for a term of one year and until their successors are elected and qualified. The following are brief descriptions of the directors, nominees and executive officers of the Company. ROBERT H. OXENBERG has served as director of the company since April 1992. Mr. Oxenberg was appointed Chief Executive Officer of the Company in March of 1995. Mr. Oxenberg resigned as the Company's Chief Executive Officer in April 1996 but continues to serve as a member of the Company's Board of Directors. Mr. Oxenberg is also a member of the Board of Directors of INSCI Corp. ("INSCI"), the Company's former majority owned subsidiary. Mr. Oxenberg is a consultant based in Aspen, Colorado. From August 1984, to July 1991, Mr. Oxenberg served as Manager of Corporate Investments for the Anschutz Corporation, a Denver-based privately held corporation. CHRISTOPHER D. HOLBROOK has served in various operations positions with the Company from September 1989, through February 1995. Most recently, he served as Executive Vice President of Operations. Mr. Holbrook has over 20 years of experience in management, operations and systems. Mr. Holbrook was appointed as President, Chief Operating Officer and Director of the Company on March 3, 1995. Mr. Holbrook was appointed Chief Executive Officer of the Company in April 1996, at which time he resigned his office as President of the Company. JOSEPH A. GITTO, JR. has served as Controller of the Company from September 1993, and as accounting manager from April 1992 to September 1993. Mr. Gitto was also Chief Financial Officer of EnviroSpan Safety Corp., an asbestos abatement company from January 1988, to March 1992. Mr. Gitto has also held various financial positions with Seltel, Inc., Shearson Lehman Brothers, and Dreyfus Corp. Mr. Gitto was appointed Executive Vice President, Chief Financial Officer and a member of the Board of Directors of the Company on March 3, 1995, and President of the Company in April 1996. BRUCE M. ARNSTEIN was appointed as a director in May 1996. Mr. Arnstein is the Director of Information Consulting Services for Edward Issacs and Company, LLP. Mr. Arnstein has over 18 years of consulting experience with companies that include: BMA Consulting; David Berdon and Co.; Goelet Corporation; and Arthur Andersen & Co. Mr. Arnstein currently serves as an executive committee member of several companies. 3 MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS During the fiscal year ended March 31, 1996, there were three (3) meetings of the Board of Directors, of which all Directors attended all meetings. The Board of Directors establishes policies for the Company and reviews management compensation standards and practices and administers the Amended and Restated 1987 Incentive Stock Option Plan, the Amended and Restated 1987 Non-Qualified Stock Option plan, and the Directors Option Plan. The Board created a compensation committee in Fiscal Year 1996 and appointed five (5) members to serve on the Company's compensation committee. In addition, during Fiscal Year 1996, the Board of Directors established a five (5) person audit committee COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS COMPENSATION The following table sets forth the compensation for each of the last three completed fiscal years ending March 31, earned by the Chief Executive Officer and each of the four most highly compensated executive officers and directors whose individual remuneration exceeded $100,000. SUMMARY COMPENSATION TABLE
ANNUAL LONG-TERM ALL OTHER COMPENSATION COMPENSATION COMPENSATION ----------------- --------------------- ------------ YEAR RESTRICTED NAME AND PRINCIPAL ENDED STOCK OPTIONS/ POSITION MARCH 31 SALARY BONUS AWARDS SARS - ---------------------------- -------- -------- ------- ---------- -------- Christopher D. Holbrook (4) 1996 $140,000 $20,000 -0- 250,000 -0- President & COO 1995 $142,020 $31,000 -0- 125,000 -0- 1994 $112,244 $22,000 -0- 18,750 -0- Joseph A. Gitto, Jr. (5) 1996 $ 90,104 $17,500 -0- 250,000 -0- Chief Financial Officer 1995 $ 82,348 $17,500 -0- 75,000 -0- 1994 $ 67,385 $ 5,000 -0- 3,125 -0- Robert H. Oxenberg (6) 1996 $ 22,154 -0- -0- -0- -0- 1995 -- -- -- -- -- 1994 -- -- -- -- -- David W. Grace (3) 1996 -0- -0- -0- -0- -0- Former President & CEO 1995 $ 14,000 -0- -0- -0- -0- 1994 -0- -0- -0- -0- -0- Gerald E. Dorsey (1) 1996 -0- -0- -0- -0- -0- Former President & CEO 1995 $144,231 -0- -0- -0- -0- 1994 $152,436 $50,000 -0- -0- $177(2)
- ------------------------ (1) Mr. Dorsey served as Chief Executive Officer of the Company from January 1991 to September 1994. Mr. Dorsey resigned as a director in September 1994. (2) Represents the payments of premiums on life insurance policies. (3) Mr. Grace served as Chief Executive Officer of the Company from September 1994 to March 1995, and as a Director from September 1992 to November 1995, at which time Mr. Grace elected not to stand for re-election as a director. (4) Mr. Holbrook was appointed as Chief Executive Officer in April 1996, at which time he resigned his office as President. (5) In April 1996, Mr. Gitto was appointed President of the Company. (6) In April 1996 Mr. Oxenberg resigned as Chief Executive Officer but continues to serve as a member of the Company's Board of Directors. 4 STOCK OPTION GRANTS The following table sets forth information concerning the grant of stock options to the Company's executive officers during the fiscal year ended March 31, 1996. OPTIONS GRANTS LAST YEAR
PERCENT OF TOTAL SHARES POTENTIAL REALIZED SHARES UNDERLYING VALUE AT ASSUMED UNDERLYING OPTIONS GRANTED PER SHARE ANNUAL OPTIONS TO EMPLOYEES IN EXERCISE EXPIRATION RATES OF STOCK GRANTED FISCAL YEAR PRICE (1) DATE PRICE APPRECIATION ----------- ------------------- ----------- ---------- --------------------- Christopher D. Holbrook 250,000 29% 1.88 3/3/2000 -- Joseph A. Gitto, Jr. 250,000 29% 1.88 3/3/2000 -- Robert H. Oxenberg -0- -0- -0- -- --
OPTIONS EXERCISES AND HOLDINGS The following table sets forth information concerning the exercise of options during the last fiscal year and unexercised options held by the Company's officers and directors as of the end of the fiscal year: AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
NUMBER OF SHARES UNDERLYING VALUE OF UNEXERCISED UNEXERCISED OPTIONS AT IN THE MONEY OPTIONS AT SHARES MARCH 31, 1996 MARCH 31, 1996 (2) ACQUIRED ON VALUE -------------------------- ---------------------------- EXERCISE REALIZED (1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE --------------- --------------- ----------- ------------- ------------- ------------- Christpher D. Holbrook -0- -0- 203,750 216,667 -0- $ 420,417 Joseph A. Gitto, Jr. -0- -0- 103,125 200,000 -0- $ 353,125 Robert Oxenberg -0- -0- 83,633 -- -0- $ 83,623
- ------------------------ (1) Calculated by multiplying the number of shares underlying options by the difference between the average of the closing bid and ask price of the Common Stock as reported by NASDAQ on the date of exercise and the exercise price of the options. (2) Calculated by multiplying the number of shares underlying options by the difference between the average of the closing bid and ask price of the Common Stock as reported by NASDAQ on March 31, 1996, and the exercise price of the options. REMUNERATION OF NON-MANAGEMENT DIRECTORS Each member of the Board of Directors who is not an officer or employee of the Company will be entitled to participate in the Directors Option Plan described herein, plus be entitled to reimbursement for travel and other expenses directly related to his activities as a Director. Commencing July 15, 1994, the Company has agreed to pay $1,000 for each meeting attended by a non-employee Director up to a maximum of $4,000 per year. STOCK OPTION PLANS 1987 NON-QUALIFIED STOCK OPTION PLAN The Company's 1987 Non-Qualified Stock Option Plan (the "NQSO Plan") was adopted by the Board of Directors and approved by the stockholders in August 1987, and amended by the stockholders in May 1995. The NQSO Plan provides for the granting of options to purchase shares of the Company's Class A Common Stock to key persons whom, in the judgment of the Compensation Committee of the Board of Directors (the "Committee"), the Company relies on the successful 5 conduct of its business. Directors of the Company who are not employees of the Company are not eligible to participate in the NQSO Plan. There are 4,000,000 shares reserved for issuance under the NQSO Plan, as amended. The exercise price of options granted under the NQSO Plan are determined by the Committee in its sole discretion, provided that it may not be less than the par value of the shares or fifty percent of the fair market value of the shares on the date of grant. The Committee determines the time periods during which options granted under the NQSO Plan may be exercised, although in no event shall any option granted under the NQSO Plan have an expiration date later than 10 years from the date of its grant. As of July 11, 1996, options to acquire a total of 1,415,772 shares were outstanding or approved for grant under the NQSO Plan at an average exercise price ranging from $1.00 to $9.89 per share after giving effect to the Company's four (4) for one (1) reverse stock split which was enacted on June 14, 1995. The NQSO Plan will continue in effect for a term of 10 years unless terminated earlier by the Board of Directors. INCENTIVE STOCK OPTION PLAN The Company's Incentive Stock Option Plan (the "ISO Plan") was adopted by the Board of Directors and approved by the stockholders in August 1987, and amended by the stockholders in May 1995. There are 3,000,000 shares reserved for issuance under the ISO Plan as amended. The ISO Plan provides for the granting to key employees of "Incentive stock options" within the meaning of Section 422 of the Internal Revenue Code of 1986 (the "Code"). All employees, including officers and employee directors of the Company, are eligible under the ISO Plan, which is intended to be used to attract and retain key personnel. The ISO Plan is administered by the Committee, which determines the terms of options granted, including the exercise price, dates and number of shares subject of the option. The exercise price of all options granted under the ISO Plan must be at least equal to the fair market value of the shares on the date of grant, and the term of each option may not exceed 10 years. With respect to any participant who may own more than 10% of the Company's outstanding voting shares, the exercise price of any incentive stock option must be at least equal to 110% of the fair market value of the Class A Common Stock on the date of grant and the term may be no longer than five years. As of July 11, 1996, options to acquire a total of 1,345,661 shares were outstanding or approved for grant under the ISO Plan at an exercise price ranging from $1.25 to $5.85 per share after giving effect to the Company's four (4) for one (1) stock split which was enacted on June 14, 1995. The ISO Plan will continue in effect for a term of 10 years from date of inception unless terminated earlier by the Board of Directors. DIRECTORS OPTION PLAN The Company's Directors Option Plan (the "Directors Plan") was adopted by the Board of Directors in October 1988, and amended by the stockholders in May 1995. A total of 1,500,000 shares of Class A Common Stock have been reserved for issuance under the Directors Plan as amended. As of July 11, 1996, options to acquire a total of 15,000 shares were outstanding or approved for grant under the directors options plan at an exercise price of $13.00. The Directors option plan provides that director stock options will be granted only on the date of the Annual Stockholders meeting in each even calendar year. The purpose of the Directors Plan is to retain the service of qualified non-officer, or non-employee, directors who are considered essential to the sustained progress of the Company. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Robert Oxenberg, who became a member of the Company's Board of Directors in April 1992, has acquired securities offered by the Company and INSCI in several private placements. See "Securities Ownership of Certain Beneficial Owners and Management." Effective October 1992, the Company signed a three-year consulting agreement with Mr. Oxenberg, pursuant to which Mr. Oxenberg provides consulting services to the Company and INSCI, the Company's former majority-owned subsidiary. Mr. Oxenberg also serves as a member of the Board of Directors of INSCI. This consulting 6 agreement was terminated in November 1993. Mr. Oxenberg was granted a five year option to acquire 10,000 shares of common stock of INSCI at an exercise price of $7.00 per share. Subsequently, the Company agreed to enter into a new consulting agreement with Mr. Oxenberg for one year commencing April 1996. D.H. Blair Investment Banking Corp. ("Blair") and its affiliates have granted a voting proxy in the shares which it owns or shall acquire during the term of such proxy to the Chief Executive Officer of the Company, and his successors. The voting agreement terminates in February 1999, and is suspended during any period when Blair or its affiliates are not "market makers" for the Company's securities. Mr. Pierce Lowrey, Jr., has granted a voting proxy in the shares which he owns or shall acquire during the term of such proxy to Christopher D. Holbrook and his successors as Chief Executive Officer of the Company, and his successors. The voting agreement terminates in March, 2004. On July 15, 1994, Mr. Norman R. Malo and Mr. George T. Olmstead tendered their resignations as members of the Company's Board of Directors. The Company has entered into consulting agreements with each of Messrs. Malo and Olmstead pursuant to which the Company granted an aggregate of 22,500 non-statutory stock options to each of Messrs. Malo and Olmstead under the Company's Non-Qualified Stock Option Plan. The consulting agreements provide that each of Messrs. Malo and Olmstead will provide consulting services to the Company for a three (3) year term. The non-qualified stock options granted to each of Messrs. Malo and Olmstead include 7,500 shares exercisable until December 31, 1996, at an exercise price of $10.00 per share, 7,500 shares exercisable until December 31, 1996, at an exercise price of $8.00 per share and 7,500 shares exercisable until December 31, 1997, at an exercise price of $13.00 per share. 401(K) PLAN In December 1994, the Company terminated its 401(K) plan. In January 1996, the Company established a new 401(K) plan covering all eligible employees. Contributions to the plan by the Company are based on a discretionary matching contribution of the employees' deferred compensation. Employee contributions are limited to 15% of annual salary. There were no employer contributions to the plan for the fiscal year ended March 31, 1996. COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT The Company to the best of its knowledge has not received a copy of any Form 5 with respect to the fiscal year ending March 31, 1996, or any representations from any officer, director or 10% shareholder of the company that such Form 5 was required to be filed. 7 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth, to the best knowledge of the Company, as of March 31, 1996, certain information with respect to (1) beneficial owners of more than five percent (5%) of the outstanding Class A Common Stock of the Company; (2) beneficial ownership of shares of the Company's Class A Common Stock by each director and named executive; and (3) beneficial ownership of shares of Class A Common Stock of the Company by all directors and officers as a group.
NAME OF BENEFICIALLY PERCENT OF BENEFICIAL OWNER OWNED (1)(2)(4) CLASS OWNED (2) - -------------------------------------------------------------------------------- --------------- -------------------- Robert Sachs.................................................................... 479,567 5% Robert Oxenberg (3)............................................................. 612,865 * Christopher D. Holbrook......................................................... 420,417 * Joseph A. Gitto, Jr............................................................. 353,125 * Directors and Executive Officers as a group (4 persons)......................... 1,386,407 13%**
- ------------------------ *Indicates percentage less than one percent (1%) **All current Directors, Executive Officers and Nominees (1) Unless otherwise noted, all shares are beneficially owned and the sole voting and investment power is held by the persons indicated. (2) Based upon the aggregate total of all shares of Class A Common Stock currently issued and outstanding in addition to shares issuable upon exercise of options or warrants currently exercisable or becoming exercisable within 60 days following the date of this report and which are held by the individuals named on the table and shares of the Company's 12% convertible preferred stock that is currently convertible. (3) D.H. Blair has entered into a voting agreement granting the voting rights of shares to Robert H. Oxenberg and his successors as Chief Executive Officer of the Company. Also includes shares of Class A Common Stock owned by Mr. Oxenberg and his successors as Chief Executive Officer of the Company. (4) Does not include the portions of options to purchase shares which are not currently exercisable or will become exercisable between the date hereof and sixty days following the date hereof. THE BOARD OF DIRECTORS RECOMMEND THAT THE STOCKHOLDERS VOTE "FOR" THE ELECTION OF THE FOUR (4) NOMINATED DIRECTORS. ITEM 2: RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS The Board of Directors has selected Mahoney Cohen Rashba & Pokart, CPA, PC, as the Company's independent auditors for the fiscal year ended March 31, 1996. Representatives of Mahoney Cohen Rashba & Pokart, CPA, PC, are expected to be present at the Annual Meeting. The affirmative vote of a majority of the outstanding voting shares of the Company's Class A Common Stock is required for the ratification of this selection. THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS. ITEM 3: RATIFICATION OF THE COMPANY'S PROPOSED 1997 INCENTIVE STOCK OPTION PLAN The Board of Directors has proposed a 1997 Incentive Stock Option Plan. It is recommended that 2,500,000 shares of the Company's Class A Common Stock be authorized and reserved for issuance under the proposed Plan. The term of the proposed Plan will be for a period of ten (10) years from the date of inception. 8 The proposed Plan will provide for the granting of incentive stock options to all eligible employees of the Company including officers and employee directors, whose services are considered valuable to the Company and who qualify under the Plan. The proposed Plan will provide for the granting of incentive stock options within the meaning of Section 422 of the Internal Revenue Code of 1986 (the "Code"). The administration of the proposed Plan will be under the supervision of Company's Compensation Committee. The exercise price of all options under the proposed plan will be determined at the time of grant, but in no event shall be less than the fair market value of the Class A Common Stock at the time of the grant. The Compensation Committee will recommend to the Board of Directors the terms of proposed options to be granted under the Plan, including the dates and number of shares subject to the options. The Board will make the final determination on proposed option grants. The Board of Directors believes that shareholder ratification of the proposed 1997 Incentive Stock Option Plan will be in the Company's best interest, as the existing Stock Option Plan will expire in 1997. The Board of Directors believe that the proposed Plan will enable the Company to attract new key employees and to maintain existing key employees in the Company, as the current plan is not adequate for the Company's requirements. THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCK HOLDERS VOTE "FOR" RATIFICATION OF THE PROPOSED 1997 INCENTIVE STOCK OPTION PLAN. DEADLINE FOR SUBMITTING STOCKHOLDER PROPOSALS Rules of the Securities and Exchange Commission require that any proposal by a stockholder must be received by the Company for consideration at the 1997 Annual Meeting of Stockholders must be received by the Company no later than March 7, 1997, if any such proposal is to be eligible for inclusion in the Company's proxy materials for its 1997 Annual Meeting. Under such rules, the Company is not required to include stockholder proposals in its proxy materials unless certain other conditions specified in such rules are met. OTHER MATTERS Management of the Company is not aware of any other matter to be presented for action at the Annual Meeting other than those mentioned in the Notice of Annual Meeting of Stockholders and referred to in this Proxy Statement. VOTING PROCEDURES Under Delaware law, each holder of record is entitled to vote the number of shares owned by the shareholder for any agenda item. There are no cumulative voting rights for the shareholders of the Company. The Company is not aware of any other agenda item to be added to the agenda as it has not been informed by any stockholders of any request to do so. There are no matters on the agenda which involve rights of appraisal of a stockholder. BY ORDER OF THE BOARD OF DIRECTORS __________/S/ JOSEPH A. GITTO_________ JOSEPH A. GITTO PRESIDENT AND CHIEF FINANCIAL OFFICER NEW YORK, NEW YORK JULY 29, 1996 9 -----END PRIVACY-ENHANCED MESSAGE-----