PROPOSAL 3: APPROVAL OF AMENDMENT TO
OUR 2003 STOCK INCENTIVE PLAN TO INCREASE THE MAXIMUM NUMBER OF SHARES OF COMMON
STOCK RESERVED FOR ISSUANCE THEREUNDER BY AN ADDITIONAL 250,000 SHARES OF COMMON
STOCK FROM 1,534,734 TO 1,784,734 SHARES
Our
stockholders are being asked to approve an amendment to our 2003 Stock Incentive
Plan, as amended (the 2003 Plan), that will increase the number of
shares of common stock available for issuance by 250,000, from 1,534,734 shares
to 1,784,734 shares. The 2003 Plan, as amended and restated to reflect the
proposed amendment, is attached as
Appendix
A
.
Our board
of directors approved the amendment of the 2003 Plan increasing the share
reserve on October 8, 2009, subject to stockholder approval at the annual
meeting.
We rely
significantly on equity incentives to attract and retain key employees and other
personnel essential to our long-term growth and future success. The 2003 Plan
serves as an important part of the compensation package that we offer to our
employees. Awards under the 2003 Plan provide our employees and other personnel
an opportunity to acquire or increase their ownership stake in Voxware, thereby
creating a strong incentive to work hard for our growth and success and
encouraging them to continue their employment with us. The purpose of the
proposed share increase is to assure that a sufficient reserve of common stock
remains available under the 2003 Plan to allow us to continue to provide equity
incentives to our key personnel on a competitive level.
Summary of the 2003 Stock Incentive
Plan
The
following is a summary of the principal features of the 2003 Plan, as most
recently amended by the Board. This summary, however, does not purport to be a
complete description of all the provisions of the 2003 Plan.
Types of Awards and
Administration.
The 2003
Plan allows for grants of stock options, restricted stock awards and restricted
stock unit awards. The principal features of these awards are described below.
The board has the authority to grant awards to eligible individuals. The board
may delegate any or all of its powers under the 2003 Plan to one or more
committees or subcommittees. The term Board, as used in this summary, will
mean the board or committee to the extent each such entity is acting within the
scope of its administrative authority under the 2003 Plan.
Share Reserve.
An
aggregate of 2,177,000 shares of common stock have been reserved for issuance
over the term of the 2003 Plan, including the 250,000 shares that are subject to
this Proposal.
No
participant in the 2003 Plan may receive option grants, restricted stock awards
or restricted stock unit awards for more than 350,000 shares per calendar year.
These limitations will assure that any deductions to which we would otherwise be
entitled upon the exercise of options with an exercise price per share equal to
the fair market value per share of our common stock on the grant date or the
subsequent sale of the shares purchased under those awards will not be subject
to the $1 million limitation on the income tax deductibility of compensation
paid per executive officer imposed under Section 162(m) of the Internal Revenue
Code.
As of
October 9, 2009, options to purchase 1,107,508 shares of our common stock and
restricted stock unit awards with respect to 113,536 shares of our common stock
were outstanding under the 2003 Plan, 206.213 shares of common stock had been
issued under the 2003 Plan and 27,298 shares of common stock remained available
for future grants.
Shares
subject to any outstanding options or other awards under the 2003 Plan which
expire or otherwise terminate prior to the issuance of shares under those awards
and unvested shares issued under the 2003 Plan and subsequently repurchased by
us pursuant to our repurchase rights under the 2003 Plan, will be available for
reissuance.
In the
event of any stock split, reverse stock split, stock dividend, recapitalization,
combination of shares, reclassification of shares, spin-off or similar change in
capitalization or event, or any distribution to holders of common stock other
than a normal cash dividend, then equitable adjustments will be made to (i) the
maximum number and class of securities issuable under the 2003 Plan, (ii) the
maximum number and class of securities for which any one person may be granted
options, restricted stock awards and restricted stock unit awards under the 2003
Plan per calendar year, (iii) the number and class of securities and the
exercise price per share in effect under each outstanding option granted under
the 2003 Plan and (iv) the number and class of securities subject to each
outstanding restricted stock unit awarded under the 2003 Plan.
32
Eligibility.
Officers
and employees, as well as consultants and other independent advisors in our
employ or in the employ of our parent or subsidiaries (whether now existing or
subsequently established) and non-employee members of our board and the board of
directors of our parent or subsidiaries are eligible to participate in the 2003
Plan. As of October 9, 2009, six executive officers, approximately 60 other
employees and six non-employee board members were eligible to participate
in the 2003 Plan.
Valuation.
The fair
market value per share of our common stock on any relevant date under the 2003
Plan will be the closing selling price per share on that date on the Nasdaq
Capital Market. As of October 9, 2009, the closing selling price per share was
$2.08.
Option Grants.
Eligible
persons may be granted options to purchase shares of our common stock. The Board
has complete discretion to determine which eligible individuals receive option
grants, the time or times when those options are to be awarded, the number of
shares subject to each such grant, the vesting schedule (if any) to be in effect
for the award, the maximum term for which any option is to remain outstanding
and the status of any granted option as either an incentive stock option or a
non-statutory option under the federal tax laws.
Each
granted option will have an exercise price determined by the Board but shall in
no event be less than 100% of the fair market value of the shares on the grant
date. No granted option will have a term in excess of ten years, and the option
will generally become exercisable in one or more installments over a specified
period of service measured from the grant date.
Restricted Stock.
The Board
may grant restricted stock awards entitling eligible individuals to acquire
shares of our common stock at a purchase price established by the Board. The
shares will be subject to our right to repurchase at their issue price or other
stated or formula price in the event that specified vesting criteria are not
satisfied.
The Board
will have the complete discretion to determine which eligible individuals are to
receive restricted stock awards, the time or times when those awards are to be
made, the number of shares subject to each such award, the price (if any) to be
paid for such shares and the vesting schedule to be in effect for the award. The
shares issued may be fully and immediately vested upon issuance or may vest upon
the completion of a designated service period or attainment of designated
performance goals.
Restricted Stock
Units.
The Board
may grant restricted stock unit awards entitling eligible individuals to receive
shares of common stock under those awards upon the attainment of designated
performance objectives or the satisfaction of specified employment or service
requirements or upon the expiration of a designated time period or the
occurrence of a designated event following the vesting of the award, including a
deferred distribution date following the termination of the individuals
employment or service.
The Board
will have the complete discretion to determine which eligible individuals are to
receive awards of restricted stock units, the time or times when those awards
are to be made, the number of shares subject to each such award and the vesting
and issuance schedule to be in effect for the award.
The
recipient will not have any stockholder rights with respect to the shares of
common stock subject to the restricted stock units until those units vest and
the shares are actually issued. However, the Board will have the discretionary
authority to award restricted stock units upon which dividend-equivalent units
may be paid or credited.
33
Reorganization Event.
In the
event of a reorganization event (as defined in the 2003 Plan), outstanding
awards under the 2003 Plan will be assumed by the acquiring or successor
corporation (or affiliate thereof) or replaced with comparable awards to acquire
shares of such corporation. However, if the acquiring or successor corporation
(or an affiliate thereof) does not assume or replace the outstanding awards, the
awards will accelerate in full as of a specified time prior to the
reorganization event and terminate upon the communication of the event. Any
shares issued with respect to any such accelerated awards will be subject to the
same vesting restrictions applicable to the shares prior to such acceleration.
In the event that the stockholders are to receive cash for their shares of
common stock pursuant to the reorganization event, the Board may cash out the
outstanding awards.
Stockholder Rights and
Transferability
.
No
optionee will have any stockholder rights with respect to the option shares
until such optionee has exercised the option and paid the exercise price for the
purchased shares. Options are not assignable or transferable other than by will
or the laws of inheritance following optionees death, and during the optionees
lifetime, the option may only be exercised by the optionee.
A
participant will have full stockholder rights with respect to any shares of
common stock issued to him or her under the 2003 Plan, whether or not his or her
interest in those shares is vested. A participant will not have any stockholder
rights with respect to the shares of common stock subject to a restricted stock
unit until that award vests and the shares of common stock are actually issued
thereunder. However, dividend-equivalent units may be paid or credited, either
in cash or in actual or phantom shares of common stock, on outstanding
restricted stock units, subject to such terms and conditions as the Board may
deem appropriate.
Special Tax Election.
The Board
may provide one or more holders of options, restricted stock issuances or
restricted stock units under the 2003 Plan with the right to have us withhold a
portion of the shares otherwise issuable to such individuals in satisfaction of
the withholding tax liability incurred by such individuals in connection with
the exercise of those options, the issuance of vested shares or the vesting of
unvested shares issued to them. Alternatively, the Board may allow such
individuals to deliver previously acquired shares of common stock in payment of
such tax liability.
Amendment and
Termination.
The Board
may amend or suspend the 2003 Plan at any time subject to any required
stockholder approval. The Board may terminate the 2003 Plan at any time, and the
2003 Plan will in all events terminate on the earlier of 10 years from (i) the
date on which the Plan was adopted by the Board or (ii) the date the Plan was
approved by the Company's stockholders, but Awards previously granted may extend
beyond that date.
Options/Stock Awards.
The table
below shows, as to each of our executive officers named in the Summary
Compensation Table and the various indicated individuals and groups, the number
of shares of common stock subject to options granted between January 1, 2008 and
October 9, 2009 under the 2003 Plan, together with the weighted average exercise
price payable per share.
Option Transactions
|
|
|
|
|
|
Weighted-Average Exercise
|
Name and Position
|
|
Number of Option Shares
|
|
Price
|
Scott J. Yetter, President and CEO
|
|
|
30,000
|
|
|
|
1.35
|
|
Charles
Rafferty, VP and GM North American Operations
|
|
|
20,000
|
|
|
|
1.35
|
|
Stephen Gerrard, VP Marketing and Strategic Planning
|
|
|
50,000
|
|
|
|
1.28
|
|
All current
executive officers as a group (7 persons)
|
|
|
280,000
|
|
|
|
2.02
|
|
All non-employee directors as a group (6 persons)
|
|
|
5,000
|
|
|
|
1.35
|
|
All employees,
including current officers who are
|
|
|
49,750
|
|
|
|
2.41
|
|
not executive
officers, as a group (approximately 60 persons)
|
|
|
|
|
|
|
|
|
34
Stock Awards
The
following table shows, as to each of our executive officers named in the Summary
Compensation Table and the various individuals and groups, the number of shares
of common stock subject to restricted stock awards and restricted stock units
granted under the 2003 Plan between January 1, 2008 and October 9, 2009. The
fair market value of the common stock on October 9, 2009 was $2.08 per
share.
|
|
Number of Shares Subject to
|
|
Number of Shares Subject to
|
Name and Position
|
|
Restricted Stock Awards
|
|
Restricted Stock
Units
|
Scott J. Yetter, President and CEO
|
|
|
-
|
|
|
|
-
|
|
Charles
Rafferty, VP and GM North American Operations
|
|
|
-
|
|
|
|
-
|
|
Stephen Gerrard, VP Marketing and Strategic Planning
|
|
|
-
|
|
|
|
-
|
|
All current
executive officers as a group (7 persons)
|
|
|
-
|
|
|
|
30,000
|
|
All non-employee directors as a group (6 persons)
|
|
|
-
|
|
|
|
-
|
|
All employees,
including current officers who are
|
|
|
-
|
|
|
|
-
|
|
not executive
officers, as a group (approximately 60 persons)
|
|
|
|
|
|
|
|
|
Section 409A.
Section 409A
. There are no stock
options awarded under our 2003 Plan that have an exercise price that is lower
than the trading value of our common stock on the option grant date. As a
result, there are no options that may be deemed to have been granted with
below-market exercise prices, which could potentially subject those options to
adverse income taxation under Section 409A of the Code.
Federal Income Tax
Consequences.
Option Grants.
Options
granted under the 2003 Plan may be either incentive stock options which satisfy
the requirements of Section 422 of the Internal Revenue Code, or the Code, or
non-statutory options which are not intended to meet such requirements. The
Federal income tax treatment for the two types of options differs as
follows:
Incentive
Options. No taxable income is recognized by the optionee at the time of the
option grant, and no taxable income is generally recognized at the time the
option is exercised. The optionee will, however, recognize taxable income in the
year in which the purchased shares are sold or otherwise disposed of. For
Federal tax purposes, dispositions are divided into two categories: (i)
qualifying and (ii) disqualifying. A qualifying disposition occurs if the sale
or other disposition is made after the optionee has held the shares for more
than two years after the option grant date and more than one year after the
exercise date. If either of these two holding periods is not satisfied, then a
disqualifying disposition will result.
If the
optionee makes a disqualifying disposition of the purchased shares, then we will
be entitled to an income tax deduction, for the taxable year in which such
disposition occurs, equal to the excess of (i) the fair market value of such
shares on the option exercise date over (ii) the exercise price paid for the
shares. In no other instance will we be allowed a deduction with respect to the
optionees disposition of the purchased shares.
35
Non-Statutory Options. No taxable income is recognized by an optionee
upon the grant of a non-statutory option. In general, the optionee will
recognize ordinary income, in the year in which the option is exercised, equal
to the excess of the fair market value of the purchased shares on the exercise
date over the exercise price paid for the shares. In addition, the optionee will
be required to satisfy the tax withholding requirements applicable to such
income.
If the
shares acquired upon exercise of the non-statutory option are unvested and
subject to repurchase by us in the event of the optionees termination of
service prior to vesting in those shares, then the optionee will not recognize
any taxable income at the time of exercise but will have to report as ordinary
income, as and when our repurchase right lapses, an amount equal to the excess
of (i) the fair market value of the shares on the date the repurchase right
lapses over (ii) the exercise price paid for the shares. The optionee may,
however, elect under Section 83(b) of the Income Tax Code to include as ordinary
income in the year of exercise of the option an amount equal to the excess of
(i) the fair market value of the purchased shares on the exercise date over (ii)
the exercise price paid for such shares. If the Section 83(b) election is made,
the optionee will not recognize any additional income as and when the repurchase
right lapses.
We will
be entitled to an income tax deduction equal to the amount of ordinary income
recognized by the optionee with respect to the exercised non-statutory option.
The deduction will, in general, be allowed for our taxable year in which such
ordinary income is recognized by the holder.
Restricted Stock
Issuance.
The tax
principles applicable to restricted stock issuances under the 2003 Plan will be
substantially the same as those summarized above for the exercise of
non-statutory option grants.
Restricted Stock
Units.
No
taxable income is recognized upon receipt of a restricted stock unit. The holder
will recognize ordinary income in the year in which the shares subject to that
unit are actually issued to the holder. The amount of that income will be equal
to the fair market value of the shares on the date of issuance, and the holder
will be required to satisfy the tax withholding requirements applicable to such
income.
We will
be entitled to an income tax deduction equal to the amount of ordinary income
recognized by the holder at the time the shares are issued. The deduction will
be allowed for the taxable year in which such ordinary income is recognized by
the holder.
Deductibility of Executive
Compensation
.
We
anticipate that any compensation deemed paid by us in connection with the
disqualifying disposition of incentive stock option shares or the exercise of
non-statutory options granted with exercise prices equal to the fair market
value of the shares on the grant date will qualify as performance-based
compensation for purposes of Section 162(m) of the Internal Revenue Code and
will not have to be taken into account for purposes of the $1 million limitation
per covered individual on the deductibility of the compensation paid to certain
of our executive officers. Accordingly, all compensation deemed paid under the
2003 Plan with respect to such dispositions or exercises will remain deductible
by us without limitation under Section 162(m) of the Income Tax Code. However,
any compensation deemed paid by us in connection with shares issued in
connection with restricted stock awards or restricted stock units will be
subject to the $1 million limitation.
Accounting Treatment.
Pursuant
to the accounting standards established by SFAS 123(R), the Company is required
to recognize all share-based payments, including grants of options, restricted
stock units and employee stock purchase rights, in our financial statements
effective July 1, 2006. Accordingly, options that are granted to our employees
and non-employee Board members are valued at fair value as of the grant date
under an appropriate valuation formula, and that value is charged as stock-based
compensation expense against our reported GAAP earnings over the designated
vesting period of the award. For shares issuable upon the vesting of restricted
stock units awarded under the 2003 Plan, we are required to expense over the
vesting period a compensation cost equal to the fair market value of the
underlying shares on the date of the award. If any other shares are unvested at
the time of their direct issuance, the fair market value of those shares at that
time will be charged to our reported earnings ratably over the vesting period.
Such accounting treatment for restricted stock units and direct stock issuances
will be applicable whether vesting is tied to service periods or performance
goals. The issuance of a fully-vested stock bonus will result in an immediate
charge to our earnings equal to the fair market value of the bonus shares on the
issuance date.
36
Stock
options granted to non-employee consultants will result in a direct charge to
our reported earnings based on the fair value of the grant measured on the
vesting date of each installment of the underlying shares. Accordingly, such
charge will take into account the appreciation in the fair value of the grant
over the period between the grant date and the vesting date of each installment
comprising that grant.
New Plan Benefits.
As of
October 9, 2009, no awards had been granted, and no shares had been issued,
under the 2003 Plan on the basis of the 250,000 increase to the share reserve
under the 2003 Plan that forms part of this Proposal.
Vote Required.
The
affirmative vote of a majority of our voting shares present or represented by
proxy and entitled to vote at this meeting is required for approval of the
amendments to the 2003 Plan. Should such stockholder approval not be obtained,
then the proposed amendments to increase the share reserve will not be
implemented. The 2003 Plan will, however, continue to remain in effect, and
option grants and stock issuances may continue to be made pursuant to the
provisions of the 2003 Plan prior to its amendment until the available reserve
of common stock under the 2003 Plan is issued.
Our
Board of Directors recommends a vote FOR the approval of the foregoing
amendment to the 2003 Stock Incentive Plan to increase the maximum number of
shares of common stock reserved for issuance thereunder by an additional 250,000
shares of common stock from 1,534,734 to 1,784,734 shares.
37
PROPOSAL 4: APPROVAL OF AMENDMENT TO
OUR 2003 STOCK INCENTIVE PLAN TO ALLOW
FOR A ONE-TIME STOCK OPTION EXCHANGE
PROGRAM
Introduction
We are
seeking stockholder approval of an amendment to our 2003 Plan to allow for a
one-time option exchange program (Option Exchange Program) that would allow
eligible employees and directors to exchange significantly underwater stock
options for the issuance of new stock options exercisable for fewer shares of
our common stock, with a lower exercise price that equals the fair market value
of our common stock on the grant date. Underwater stock options have an exercise
price which is greater than the market price of the underlying stock. We are
proposing this program because we believe that it will provide a more
cost-effective retention and incentive tool to our key contributors than issuing
incremental equity or paying additional cash compensation to offset the adverse
affect of these underwater stock options.
Overview
On
October 8, 2009, our board of directors authorized a one-time stock option
exchange program, or the Option Exchange Program, subject to stockholder
approval.
Stock
options will be eligible for exchange if they have an exercise price per share
greater than or equal to $2.25 and were granted under our 2003 Plan. We refer to
such options as Eligible Options. The opportunity to participate in the Option
Exchange Program will be offered to all of our domestic and certain of our
foreign employees and directors, collectively referred to as the Eligible
Participants. Eligible Options surrendered for exchange under the Option
Exchange Program will, upon the closing of the exchange offer, be exchanged for
new options, which we refer to as New Options, granted under the 2003 Stock
Incentive Plan, as amended.
Under
the proposed Option Exchange Program, each New Option will have: (1) an exercise
price per share equal to the closing price of our common stock as reported on
the Nasdaq Capital Market on the grant date of the New Option; (2) a new
expiration date of seven years from the date of grant; and (3) will vest in
accordance with the vesting schedule currently in place for the Eligible Option
it replaces. Consequently, New Options granted in exchange for Eligible Options
that are fully vested and exercisable on the expiration date of the Option
Exchange Program will be fully vested and exercisable for all of the underlying
shares on the New Options grant date, and New Options granted in exchange for
Eligible Options that are not fully vested and exercisable on the expiration
date of the Option Exchange Program will vest in accordance with the Eligible
Options original vesting schedule. For example, an Eligible Participant
exchanges an Eligible Option to purchase 1,000 shares of our common stock. The
Eligible Option is vested and exercisable with respect to 750 of the underlying
shares, and the remaining 250 shares are scheduled to vest in four successive
equal quarterly installments, provided the participant remains in our continued
service through each such vesting date. In exchange for the cancellation of the
Eligible Option, the Eligible Participant will receive a New Option, which is
vested and exercisable with respect to 75% of the underlying shares. The option
will vest and become exercisable with respect to the remaining 25% shares in
four successive equal quarterly installments upon the participants continued
service. The New Option will have a seven year term and an exercise price per
share equal to the closing price per share of our common stock as reported on
the Nasdaq Capital Market on its grant date.
The ratio
of shares underlying exchanged Eligible Options to shares underlying New Options
is expected to be 1.15 to 1.00, based on the relative fair value of the
exchanged Eligible Options to the New Options based on the Black-Scholes option
pricing model. We intend for the fair value of the New Options to be
approximately equal to the fair value of the Eligible Options surrendered based
on valuation assumptions made as of the close of the Option Exchange Program. We
expect that this exchange should result in no adverse impact on our reported
earnings. All New Options will be nonstatutory options regardless of whether the
Eligible Options exchanged therefor were incentive stock options or nonstatutory
stock options. Please see Description of the Option Exchange Program
Accounting Treatment and US Federal Income Tax Treatment below for a
further discussion of certain accounting and tax aspects of the Option Exchange
Program.
38
We believe that, if approved by our
stockholders, the Option Exchange Program will permit us to:
-
enhance long-term stockholder value by restoring
competitive incentives to Eligible Participants so they are further motivated
to complete and deliver the important strategic and operational initiatives of
our company, as underwater options undermine the effectiveness of options as
employee performance and retention incentives; and
-
reduce the number of shares issuable upon the
vesting and exercise of currently outstanding stock options and other stock
awards, by reducing the total number of currently outstanding stock
options.
If our
stockholders approve this proposal, our board of directors intends to launch the
exchange offer shortly after the annual meeting. If we do not obtain
stockholder approval of this proposal, we will not be able to implement the
Option Exchange Program.
Reasons for the Option Exchange
Program
We
believe that an effective and competitive employee incentive program is
imperative for the future growth and success of our business. We rely on highly
skilled and educated technical and managerial employees to implement our
strategic initiatives, expand and develop our business and satisfy customer
needs. Competition for these types of employees, particularly in the software
industry, is intense and many companies use stock options as a means of
attracting, motivating and retaining their best employees. At Voxware, stock
options constitute a key part of our incentive and retention programs because
our board of directors believes that equity compensation encourages employees to
act like owners of the business, motivating them to work toward our success and
rewarding their contributions by allowing them to benefit from increases in the
value of our shares.
Many of
our employees now hold stock options with exercise prices significantly higher
than the current market price of our common stock. As of October 9, 2009,
options to purchase approximately 1,107,508 shares of our common stock were
outstanding, of which Eligible Options to purchase 861,199 shares, 78%, had an
exercise price in excess of $2.25 per share. As of October 9, 2009, 77% of our
employees has one or more options with exercise prices in excess of $2.25 per
share. Although we continue to believe that stock options are an important
component of our employees total compensation, many of our employees view these
existing underwater options that have exercise prices in excess of $2.25 per
share as having little or no value due to the significant difference between the
exercise prices and the current market price of our common stock. As a result,
for many employees, these options are ineffective at providing the incentive and
retention value that our board believes is necessary to motivate our employees
to increase long-term stockholder value. We believe that the opportunity to
exchange Eligible Options for New Options exercisable for fewer shares, together
with a new minimum vesting requirement, represents a reasonable and balanced
exchange program with the potential for a significant positive impact on
employee retention, motivation and performance.
In
addition to the underwater options having little or no retention value, they
also would remain outstanding until they are exercised or expire unexercised.
These outstanding options expose our stockholders to potential dilution and may
place downward pressure on our stock price even if they are underwater and not
likely to be exercised. This potential dilution and downward pressure caused by
outstanding stock options is referred to as overhang. If approved by our
stockholders, the Option Exchange Program will reduce outstanding stock options
by eliminating underwater options that are currently outstanding. Under the
proposed Option Exchange Program, Eligible Participants will receive stock
options covering fewer shares than the options surrendered. As a result, the
number of shares subject to all outstanding equity awards will be reduced. For
example, assuming that all options outstanding on October 9, 2009 that have an
exercise price greater than or equal to $2.25 per share are eligible to
participate, then options for a total of 861,199 shares would be eligible for
participation. If all of these Eligible Options are surrendered for
cancellation, we would issue New Options to purchase an aggregate of 748,869
shares, resulting in a net reduction in overhang from the Option Exchange
Program of 112,330 shares or approximately 1.4% of the number of shares of our
common stock issued and outstanding as of October 9, 2009. The actual reduction
in the number of stock options outstanding that may result from the Option
Exchange Program could vary significantly and is dependent upon the actual level
of participation in the Option Exchange Program and the exchange ratios used.
All Eligible Options that are not exchanged will remain outstanding and in
effect in accordance with their existing terms.
39
In
addition, if we are unable to implement the Option Exchange Program, we may
determine it is necessary to issue additional options to our employees at
current market prices, thereby increasing the aggregate number of stock options
outstanding. These grants would deplete the current pool of options available
for future grants under the 2003 Plan and could also result in decreased
reported earnings which could negatively impact our stock price.
Consideration of
Alternatives
In
deciding to approve the proposed Option Exchange Program, we also considered a
number of alternatives as a means of incentivizing and retaining employees,
including:
Granting Additional Equity Awards
.
We considered making special grants
of stock options at current market prices outside of our annual grant practices.
However, these additional grants would substantially increase our overhang and
compensation expense, and dilute the interests of our stockholders.
Allowing the Existing Stock Options to Remain
Outstanding
.
We did not believe allowing the significantly underwater options to
remain outstanding would incentivize or retain our employees because so many of
the stock options held by our employees are significantly out of the money.
Allowing the existing stock options to remain outstanding would also not allow
us to reduce our overhang.
Exchanging Options for Cash
.
We considered implementing a program
to exchange underwater options for cash payments. However, such a program would
substantially reduce our cash flow from financing activities, which could
adversely affect our business. We also did not believe that such a program would
have significant long-term retention value and would not serve to align our
employees interests closely to those of our stockholders.
Following
consideration of the foregoing alternatives, the compensation committee
concluded, based on the reasons discussed above, that the Option Exchange
Program is the best alternative for both our employees and our
stockholders.
Description of the Option Exchange
Program
Implementing the Option Exchange Program.
Eligible Participants will be offered the opportunity to participate in
the Option Exchange Program pursuant to an Offer to Exchange which will be filed
with the Securities and Exchange Commission, or the SEC, on Schedule TO. From
the time the Option Exchange Program commences, Eligible Participants will be
given at least 20 business days to make an election to surrender all of their
Eligible Options in exchange for New Options. The New Options will be granted on
the day the Option Exchange Program expires. Even if the Option Exchange Program
is approved by our stockholders, our board will retain the authority, in its
sole discretion, to terminate or postpone the program at any time prior to the
closing of the Option Exchange Program or to exclude certain Eligible Options or
Eligible Participants from participating in the Option Exchange Program due to
tax, regulatory or accounting reasons or because participation would be
inadvisable or impractical. Stockholder approval of the Option Exchange Program
applies only to this specific exchange program. If we were to implement a
different stock option exchange program in the future, we would once again need
to seek stockholder approval.
Outstanding Options Eligible for the Option Exchange
Program.
To be eligible for exchange under
the Option Exchange Program, an option must have an exercise price that is
greater than or equal to $2.25. As of October 9, 2009, options to purchase
approximately 1,107,508 shares of our common stock were outstanding, of which
options to purchase approximately 861,199 shares would be eligible for exchange
under the Option Exchange Program.
Eligibility.
The
Option Exchange Program will be open to all of our domestic and certain of our
foreign employees and directors, who hold Eligible Options. To be eligible, an
individual must be employed and providing services to us or be one of our
directors at the time the Offer to Exchange commences. Additionally, in order to
receive the New Options, an Eligible Participant who surrenders his or her
Eligible Options for exchange must be an employee on the date the New Options
are granted. Individuals who have given or received notice of termination on or
prior to the expiration date of the Option Exchange Program will not be eligible
to participate. As of October 9, 2009, approximately 50 employees held Eligible
Options.
40
Exchange Ratios.
In the proposed Option Exchange Offer, Eligible Participants would be
offered a onetime opportunity to exchange all of their Eligible Options for New
Options covering a smaller number of shares calculated using an exchange ratio
of 1.15 to 1.00. We intend for the fair value of the New Options to be
approximately equal to the fair value of the Eligible Options surrendered based
on a Black-Scholes valuation methodology calculated by an independent third
party as of the close of the Option Exchange Program.
The following table shows the number of shares
underlying outstanding Eligible Options in each exercise price range above $2.25
per share as of October 9, 2009, and the number of New Options to be issued
based on the propose 1.15 to 1.00 exchange ratio. The exchange ratio
set forth in the table was determined based upon a Black-Scholes calculation of
the assumed fair value of the Exchange Options and New Options. This
Black-Scholes calculation takes into account factors that include original grant
price, remaining vesting period, remaining option term and
volatility.
2003 Stock Plan
Options
|
|
Number of
Eligible
|
|
|
|
Number of
New
|
Price
|
|
Options
|
|
Exchange Ratio
|
|
Options
|
$2.25 - $7.50
|
|
861,199
|
|
1.15:1
|
|
748,869
|
New
Options granted in accordance with the actual exchange ratios will be rounded
down to the nearest whole share on a grant-by-grant basis. Adjustments to any of
the assumptions used to calculate the information in the above table will result
in a change to the number of shares underlying New Options that may be granted
under the Option Exchange Program.
Election to Participate.
Participation
in the Option Exchange Program will be voluntary. Eligible Participants will
only be permitted to exchange all or none of their Eligible Options for New
Options.
Exercise Price of New Options.
All New
Options will be granted with an exercise price equal to the closing price of our
stock on the Nasdaq Capital Market on the day of the close of the Option
Exchange Program.
|
-
|
|
Vesting of New
Options.
The New Options will vest in
accordance with the vesting schedule currently in place for the Eligible
Option it replaces. Consequently, New Options granted in exchange for
Eligible Options that are fully vested and exercisable on the expiration
date of the Option Exchange Program will be fully vested and exercisable
for all of the underlying shares on the New Options grant date, and New
Options granted in exchange for Eligible Options that are not fully vested
and exercisable on the expiration date of the Option Exchange Program will
vest in accordance with Eligible Options original vesting
schedule.
|
Term
of the New Options.
The New Options will have
a new expiration date of seven years from the date of grant.
Other
Terms and Conditions of the New Options.
Other terms and conditions of the New Options will be set forth in option
agreements to be entered into as of the New Option grant date. Any additional
terms and conditions will be comparable to the existing terms and conditions of
the Eligible Options. All New Options will be nonstatutory stock options granted
under our 2003 Plan regardless of the tax status of the Eligible Options
tendered for exchange.
41
Return
of Surrendered Eligible Options to Plan.
Consistent with the terms of the 2003 Plan, the pool of shares available
for the grant of future awards under our 2003 Plan will be increased by that
number of shares equal to the difference between (a) the number of shares
underlying surrendered Eligible Options granted under the 2003 Plan and (b) the
number of shares underlying all New Options granted under the 2003
Plan.
Accounting Treatment.
We have adopted
the provisions of Financial Accounting Standards Board Statement of Financial
Accounting Standards No. 123 (Revised), or SFAS 123(R), regarding accounting for
share-based payments. Under SFAS 123(R), we are required to recognize any
incremental compensation cost of the stock options granted in the Option
Exchange Program. Incremental compensation cost is measured as the excess, if
any, of the fair value of each New Option granted to employees in exchange for
surrendered Eligible Options, measured as of the date the New Options are
granted, over the fair value of the Eligible Options surrendered in exchange for
the New Options, measured immediately prior to the cancellation. Such
incremental compensation cost, if any, is recognized ratably over the vesting
period of the New Options. However, because the exchange ratios will be
calculated to result in the fair value of Eligible Options surrendered being
equal to the fair value of the New Options replacing them, we do not expect to
recognize any incremental compensation expense for financial reporting purposes
as a result of the Option Exchange Program. As would be the case with Eligible
Options, in the event that any of the New Options are forfeited prior to their
vesting due to termination of service, the compensation cost for the forfeited
New Options will not be recognized.
U.S.
Federal Income Tax Consequences.
The
following is a summary of the material United States federal income tax
consequences of the Option Exchange Program for those Eligible Participants who
are subject to United States federal income tax. This summary is based on the
federal tax laws in effect as of the date of this proxy statement. Changes to
these laws could alter the tax consequences described below. A more detailed
summary of the applicable tax considerations to Eligible Participants will be
provided in the Option Exchange Program. This summary does not discuss all of
the tax consequences that may be relevant to an Eligible Participant in light of
his or her personal circumstances, nor is it intended to be applicable in all
respects to all categories of Eligible Participants.
We
believe that the exchange of Eligible Options for New Options pursuant to the
Option Exchange Program should be treated as a non-taxable exchange, and no
income should be recognized for United States federal income tax purposes by the
Eligible Participants upon the issuance of the New Options. All New Options will
be nonstatutory stock options, even if the exchanged options are incentive stock
options. As a result, upon the exercise of the New Options, the Eligible
Participants will recognize ordinary compensation income equal to the excess, if
any, of the fair market value of the purchased shares on the exercise date over
the exercise price paid for those shares. Upon disposition of the shares, the
Eligible Participants will recognize capital gain or loss (which will be
short-term or long-term depending on whether the shares were held for more than
one year from the date of exercise) equal to the difference between the selling
price and the fair market value of the shares on the date of exercise. The
holding period for the shares acquired through the exercise of an option will
begin on the day after the date of exercise. If Eligible Options that are
incentive stock options are not exchanged in the Option Exchange Program, then
such options may be deemed to be newly granted for United States federal income
tax purposes, depending on the final terms of the Option Exchange
Program.
There
will be no tax consequences to us with respect to the Option Exchange Program or
the exercise of New Options (or Eligible Options not exchanged) except that we
will be entitled to a deduction when an Eligible Participant has compensation
income. Any such deduction will be subject to the limitations of Section 162(m)
of the Internal Revenue Code.
Potential Modifications to Terms to Comply with Governmental
Requirements.
The terms of the Option
Exchange Program will be described in an Offer to Exchange that we will file
with the SEC. Although we do not anticipate that the SEC will require us to
modify the terms significantly, it is possible we will need to alter the terms
of the Option Exchange Program to comply with comments from the SEC. Changes in
the terms of the Option Exchange Program may also be required for tax purposes
for participants in the United States as the tax treatment of the Option
Exchange Program is not entirely certain.
Effect on
Stockholders
We are
not able to predict the impact the Option Exchange Program will have on your
interests as a stockholder, as we are unable to predict how many participants
will exchange their Eligible Options or what the future market price of our
common stock will be on the date that the New Options are granted. If the Option
Exchange Program is approved, the exchange ratios should result in (1) the
issuance of fewer shares subject to the New Options than were subject to the
cancelled Eligible Options tendered in the exchange offer and (2) the fair value
of Eligible Options surrendered being approximately equal to the fair value of
the New Options replacing them. As a consequence, we do not expect to recognize
any incremental compensation expense for financial reporting purposes from the
Option Exchange Program. In addition, the Option Exchange Program is intended to
reduce both the number of outstanding stock options and our need to issue
supplemental stock options in the future to remain competitive with other
employers.
42
Accordingly, we expect the Option Exchange Program to reduce the number
of shares subject to outstanding stock options. Based on an assumed exercise
price threshold of $2.25 for Eligible Options, we currently estimate a reduction
in the number of shares subject to outstanding stock options of approximately
112,330 shares assuming full participation in the Option Exchange Program by all
Eligible Participants with Eligible Options. The actual reduction in the number
of outstanding stock options that could result from the Option Exchange Program
could vary significantly and is dependent upon a number of factors, including
the actual level of participation in the Option Exchange Program.
New Plan Benefits Related to Option
Exchange Program
The
decision to participate in the Option Exchange Program is completely voluntary.
Therefore, we are not able to predict who or how many employees will elect to
participate, how many options will be surrendered for exchange or the number of
shares of our common stock that will be issued in exchange for cancelled
options.
Text of Amendment to 2003
Plan
In order
to permit the Company to implement the Option Exchange Program in compliance
with the 2003 Plan and applicable NASDAQ listing rules, our board of directors
approved an amendment to the 2003 Plan, subject to approval of such amendment by
our stockholders. If approved by our stockholders, the amendment will read
substantially as follows:
Notwithstanding any other provision of the Plan to the contrary, upon
approval of this amendment by the Companys stockholders in accordance with the
terms of this Plan, our Board of Directors or Compensation Committee may provide
for, and the Company may implement, a one-time-only option exchange offer,
pursuant to which certain outstanding Options could, at the election of the
person holding such Option, be tendered to the Company for cancellation in
exchange for the issuance of stock options,
provided
that such one-time-only
option exchange offer is commenced within 12 months of the date of such
stockholder approval.
Summary of 2003 Plan
Please refer to the summary of the
material terms of the 2003 Plan included in Proposal 2 above.
Board Recommendation
Our
Board of Directors unanimously recommends that the stockholders vote FOR the
approval of the stock option exchange program for employees and
directors.
43
PROPOSAL 5: RATIFICATION OF
APPOINTMENT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Subject
to stockholder approval, we have nominated BDO Seidman, LLP as our independent
registered public accounting firm for the fiscal year ending June 30, 2010.
Neither the firm nor any of its members has any direct or indirect financial
interest in or any connection with us in any capacity other than as auditors.
BDO Seidman, LLP has been employed by us to audit our consolidated financial
statements since March 2004.
The Board of Directors recommends a vote
FOR
the ratification of the appointment of BDO Seidman,
LLP as our independent registered public accounting firm for the fiscal year
ending June 30, 2010.
One or
more representatives of BDO Seidman, LLP is expected to attend the Meeting and
have an opportunity to make a statement and/or respond to appropriate questions
from stockholders.
Independent Registered Public
Accounting Firm Fees and Other Matters
The
following table summarizes the fees of BDO Seidman, LLP, our independent
registered public accounting firm, billed for each of the last two fiscal years
for audit services and other services:
Fee Category
|
|
2009
|
|
2008
|
Audit Fees
|
|
$
|
211,000
|
(1)
|
|
$
|
197,000
|
(2)
|
Audit-Related
Fees
|
|
|
--
|
|
|
|
--
|
|
Tax Fees
|
|
$
|
35,350
|
(3)
|
|
$
|
26,150
|
(4)
|
Total Fees
|
|
$
|
246,350
|
|
|
$
|
223,150
|
|
____________________
(1)
|
|
Consists of fees for professional
services rendered in connection with the audit of our financial statements
for the fiscal year ended June 30, 2009 and for the review of our
financial statements for the fiscal quarters ended September 30, 2008,
December 31, 2008 and March 31, 2009.
|
|
(2)
|
|
Consists of fees for professional
services rendered in connection with the review of our financial
statements for the fiscal quarters ended September 30, 2007, December 31,
2007 and March 31, 2008 and the audit of our financial statements for the
fiscal year ended June 30, 2008, includes fees for the review of certain
regulatory filings during the fiscal year ended June 30, 2008 of
$6,000.
|
|
(3)
|
|
Consists of fees for review of tax returns during the fiscal year
ended June 30, 2009.
|
|
(4)
|
|
Consists of fees for review of tax returns during the fiscal year
ended June 30, 2008.
|
Pre-Approval Policies and
Procedures
None of
the audit-related fees billed in 2009 related to services provided under the de
minimis exception to the Audit Committee pre-approval requirements.
The Audit
Committee has adopted policies and procedures relating to the approval of all
audit and non-audit services that are to be performed by our independent
registered public accounting firm. This policy generally provides that we will
not engage our independent registered public accounting firm to render audit or
non-audit services unless the service is specifically approved in advance by the
Audit Committee, or the engagement is entered into pursuant to one of the
pre-approval procedures described below.
From time
to time, the Audit Committee may pre-approve specified types of services that
are expected to be provided to us by our independent registered public
accounting firm during the next 12 months. Any such pre-approval is detailed as
to the particular service or type of services to be provided, and is also
generally subject to a maximum dollar amount.
The Audit
Committee has also delegated to the chairman of the Audit Committee the
authority to approve any audit or non-audit services to be provided to us by our
independent registered public accounting firm. Any approval of services by a
member of the Audit Committee pursuant to this delegated authority is reported
on at the next meeting of the Audit Committee.
44
HOUSEHOLDING
Some
banks, brokers and other nominee record holders may be participating in the
practice of householding proxy statements and annual reports. This means that
only one copy of our proxy statement or annual report may have been sent to
multiple stockholders in your household. We will promptly deliver a separate
copy of either document to you if you write or call us at the following address
or phone number: 300 American Metro Blvd., Suite 155, Hamilton, NJ 08619, (609)
514-4100. If you want to receive separate copies of the annual report and proxy
statement in the future, or if you are receiving multiple copies and would like
to receive only one copy for your household, you should contact your bank,
broker or other nominee record holders, or you may contact us at the above
address and phone number.
STOCKHOLDER PROPOSALS
Stockholders who wish to submit proposals for inclusion in our proxy
statement and form of proxy relating to the 2010 Annual Meeting of Stockholders
must advise the Secretary of Voxware of such proposals in writing by June 30,
2010.
Stockholders who intend to present a proposal at such meeting without
inclusion of such proposal in our proxy materials pursuant to Rule 14a-8 under
the Exchange Act are required to provide advance notice of such proposal to the
Secretary of Voxware at the aforementioned address not later than September 13,
2010.
If we do
not receive notice of a stockholder proposal within this timeframe, our
management will use its discretionary authority to vote the shares they
represent as our Board of Directors may recommend. We reserve the right to
reject, rule out of order, or take other appropriate action with respect to any
proposal that does not comply with these requirements.
OTHER MATTERS
The Board
of Directors is not aware of any matter to be presented for action at the
Meeting other than the matters referred to above, and does not intend to bring
any other matters before the Meeting. However, if other matters should come
before the Meeting, it is intended that holders of the proxies will vote thereon
in their discretion.
GENERAL
The
accompanying proxy is solicited by and on behalf of our Board of Directors,
whose notice of meeting is attached to this Proxy Statement, and the entire cost
of such solicitation will be borne by us.
In
addition to the use of the mails, proxies may be solicited by personal
interview, telephone and telegram by directors, officers and other employees of
Voxware who will not be specially compensated for these services. We will also
request that brokers, nominees, custodians and other fiduciaries forward
soliciting materials to the beneficial owners of shares held of record by such
brokers, nominees, custodians and other fiduciaries. We will reimburse such
persons for their reasonable expenses in connection therewith.
Certain
information contained in this Proxy Statement relating to the occupations and
security holdings of our directors and officers is based upon information
received from the individual directors and officers.
WE
WILL FURNISH, WITHOUT CHARGE, A COPY OF OUR ANNUAL REPORT ON FORM 10-K FOR THE
YEAR ENDED JUNE 30, 2009, INCLUDING FINANCIAL STATEMENTS AND SCHEDULES THERETO,
BUT NOT INCLUDING EXHIBITS, TO EACH OF OUR STOCKHOLDERS OF RECORD ON OCTOBER 27,
2009, AND TO EACH BENEFICIAL STOCKHOLDER ON THAT DATE, UPON WRITTEN REQUEST MADE
TO THE SECRETARY OF VOXWARE. A REASONABLE FEE WILL BE CHARGED FOR COPIES OF
REQUESTED EXHIBITS.
45
PLEASE
DATE, SIGN AND RETURN THE PROXY CARD AT YOUR EARLIEST CONVENIENCE IN THE
ENCLOSED RETURN ENVELOPE. A PROMPT RETURN OF YOUR PROXY CARD WILL BE APPRECIATED
AS IT WILL SAVE THE EXPENSE OF FURTHER MAILINGS.
|
By
Order of the Board of Directors
|
|
|
|
|
|
/s/ William G.
Levering
|
|
|
William G. Levering III
|
|
Secretary
|
Hamilton, New Jersey
October __, 2009
46
APPENDIX A
CERTIFICATE OF AMENDMENT
TO
THE AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION, AS AMENDED
OF
VOXWARE, INC.
The undersigned, for purposes of
amending the Amended and Restated Certificate of Incorporation, as amended (the
Certificate), of Voxware, Inc., a corporation organized and existing under and
by virtue of the General Corporation Law of the State of Delaware, does hereby
certify as follows:
FIRST
: The name of the corporation is Voxware, Inc. (the
Corporation).
SECOND
: The Certificate was filed with the Office of the Secretary of State of
the State of Delaware on June 27, 2003, and amended on December 30, 2003, April
30, 2004, December 29, 2004, November 28, 2005, and December 18,
2007.
THIRD
: Article FOURTH of the Certificate is hereby amended to read, in its
entirety, as follows:
The total number of shares of all
classes of stock which the Corporation shall have the authority to issue is
17,000,000 shares. The Corporation is authorized to have two classes of shares,
designated as Common Stock and Preferred Stock. The total number of shares of
Common Stock which the Corporation is authorized to issue is 15,000,000 shares,
and the par value of each of the shares of Common Stock is $0.001. The total
number of shares of Preferred Stock which the Corporation is authorized to issue
is 2,000,000 shares, and the par value of each of the shares of Preferred Stock
is $0.001. The 2,000,000 shares of Preferred Stock initially shall be
undesignated as to series.
The Preferred Stock may be issued in
one or more series at such time or times and for such consideration or
considerations as the Corporations Board of Directors may determine. Each
series of Preferred Stock shall be so designated as to distinguish the shares
thereof from the shares of all other series and classes. Except as otherwise
provided in this Amended and Restated Certificate of Incorporation, as amended,
different series of Preferred Stock shall not be construed to constitute
different classes of shares for the purpose of voting by classes.
The Board of Directors is expressly
authorized to provide for the issuance of all or any shares of any authorized
but undesignated Preferred Stock in one or more series, each with such
designations, preferences, voting powers (or no voting powers), relative,
participating, optional or other special rights and privileges and such
qualifications, limitations or restrictions thereof as shall be stated in the
resolution or resolutions adopted by the Board of Directors to create such
series, and a certificate of said resolution or resolutions shall be filed in
accordance with the General Corporation Law of the State of Delaware. The
authority of the Board of Directors with respect to each such series shall
include, without limitation of the foregoing, the right to provide that the
shares of each such series may: (i) have such distinctive designation and
consist of such number of shares; (ii) be subject to redemption at such time or
times and at such price or prices; (iii) be entitled to the benefit of a
retirement or sinking fund for the redemption of such series on such terms and
in such amounts; (iv) be entitled to receive dividends (which may be cumulative
or non-cumulative) at such rates, on such conditions, and at such times, and
payable in preference to, or in such relation to, the dividends payable on any
other class or classes or any other series of stock; (v) be entitled to such
rights upon the voluntary or involuntary liquidation, dissolution or winding up
of the affairs, or upon any distribution of the assets of the Corporation in
preference to, or in such relation to, any other class or classes or any other
series of stock; (vi) be convertible into, or exchangeable for, shares of any
other class or classes or any other series of stock at such price or prices or
at such rates of exchange and with such adjustments, if any; (vii) be entitled
to the benefit of such conditions, limitations or restrictions, if any, on the
creation of indebtedness, the issuance of additional shares of such series or
shares of any other series of Preferred Stock, the amendment of this Amended and
Restated Certificate of Incorporation, as amended, or the Corporations By-Laws,
the payment of dividends or the making of other distributions on, or the
purchase, redemption or other acquisition by the Corporation of, any other class
or classes or series of stock, or any other corporate action; or (viii) be
entitled to such other preferences, powers, qualifications, rights and
privileges, all as the Board of Directors may deem advisable and as are not
inconsistent with law and the provisions of this Amended and Restated
Certificate of Incorporation, as amended.
A-1
FOURTH
: Except as expressly amended herein, all provisions of the Certificate
filed with the Office of the Secretary of State of the State of Delaware on June
27, 2003, and as amended on December 30, 2003, April 30, 2004, December 29,
2004, November 28, 2005 and December 18, 2007, shall remain in full force and
effect.
FIFTH:
The foregoing amendment was duly adopted by the Board of Directors and by
the stockholders of the Corporation in accordance with Section 242 of the
General Corporation Law of the State of Delaware.
* * * * * * *
A-2
IN WITNESS WHEREOF
, the undersigned, being a duly authorized officer of the
Corporation, does hereby execute this Certificate of Amendment to the Restated
Certificate of Incorporation, as amended, this __ day of ___, 2009.
|
VOXWARE,
INC.
|
|
|
|
|
|
|
|
By:
|
|
|
Name:
|
Scott J. Yetter
|
|
Title:
|
President and Chief Executive
Officer
|
A-3
APPENDIX B
VOXWARE, INC.
2003 STOCK INCENTIVE PLAN
(Amended and Restated as of October __,
2009)
Purpose
1.
The
purpose of this 2003 Stock Incentive Plan (the Plan) of Voxware, Inc., a
Delaware
corporation (the Company), is to advance the interests of the Companys
stockholders by enhancing the Companys ability to attract, retain and motivate
persons who make (or are expected to make) important contributions to the
Company by providing such persons with equity ownership opportunities and
performance-based incentives and thereby better aligning the interests of such
persons with those of the Companys stockholders. Except where the context
otherwise requires, the term Company shall include any of the Companys
present or future parent or subsidiary corporations as defined in Sections
424(e) or (f) of the Internal Revenue Code of 1986, as amended, and any
regulations promulgated thereunder (the Code) and any other business venture
(including, without limitation, joint venture or limited liability company) in
which the Company has a controlling interest, as determined by the Board of
Directors of the Company (the Board).
Eligibility
2.
All
of the Companys employees, officers, directors, consultants and advisors are
eligible to be granted options, restricted stock awards or restricted stock unit
awards (each, an Award) under the Plan. Each person who has been granted an
Award under the Plan shall be deemed a Participant.
Administration and
Delegation
Administration by Board of Directors
.
The Plan will be administered by the Board. The Board shall have authority to
grant Awards and to adopt, amend and repeal such administrative rules,
guidelines and practices relating to the Plan as it shall deem advisable. The
Board may correct any defect, supply any omission or reconcile any inconsistency
in the Plan or any Award in the manner and to the extent it shall deem expedient
to carry the Plan into effect and it shall be the sole and final judge of such
expediency. All decisions by the Board shall be made in the Boards sole
discretion and shall be final and binding on all persons having or claiming any
interest in the Plan or in any Award. No director or person acting pursuant to
the authority delegated by the Board shall be liable for any action or
determination relating to or under the Plan made in good faith.
Appointment of Committees
. To the
extent permitted by applicable law, the Board may delegate any or all of its
powers under the Plan to one or more committees or subcommittees of the Board (a
Committee). All references in the Plan to the Board shall mean the Board or
a Committee of the Board to the extent that the Boards powers or authority
under the Plan have been delegated to such Committee.
Stock Available for
Awards
Number
of Shares
. Subject to adjustment under
Section 8, Awards may be made under the Plan for up to 2,034,734
shares of common stock,
$0.001 par value per share, of the Company (the Common Stock). Such authorized
share reserve includes a 500,000 share increase authorized by the Board on
October 16, 2009, subject to stockholder approval at the 2009 Annual Meeting. If
any Award expires or is terminated, surrendered or canceled without having been
fully exercised or is forfeited in whole or in part (including as the result of
unvested shares of Common Stock subject to such Award being repurchased by the
Company pursuant to a contractual repurchase right) or results in any Common
Stock not being issued, the unused Common Stock covered by such Award shall
again be available for the grant of Awards under the Plan, subject, however, in
the case of Incentive Stock Options (as hereinafter defined), to any limitations
under the Code. Shares issued under the Plan may consist in whole or in part of
authorized but unissued shares or treasury shares.
Per-Participant Limit
. Subject to
adjustment under Section 8, the maximum number of shares of Common Stock with
respect to which Awards may be granted to any Participant under the Plan shall
be
350,000
per calendar year. The per-Participant limit described in this Section 4(b)
shall be construed and applied consistently with Section 162(m) of the Code
(Section 162(m)).
B-1
Stock Options
General
. The Board may grant options
to purchase Common Stock (each, an Option) and determine the number of shares
of Common Stock to be covered by each Option, the exercise price of each Option
and the conditions and limitations applicable to the exercise of each Option,
including conditions relating to applicable federal or state securities laws, as
it considers necessary or advisable. An Option which is not intended to be an
Incentive Stock Option (as hereinafter defined) shall be designated a
Nonstatutory Stock Option.
Incentive Stock Options
. An Option
that the Board intends to be an incentive stock option as defined in Section
422 of the Code (an Incentive Stock Option) shall only be granted to employees
of Voxware, Inc., or any of Voxware, Inc.s present or future parent or
subsidiary corporations as defined in Sections 424(e) or (f) of the Code, and
shall be subject to and shall be construed consistently with the requirements of
Section 422 of the Code. The Company shall have no liability to a Participant,
or any other party, if an Option (or any part thereof) that is intended to be an
Incentive Stock Option is not an Incentive Stock Option.
Dollar
Limitation
. The aggregate Fair Market Value
of the shares of Common Stock (determined as of the respective date or dates of
grant) for which one or more options granted to any employee under the Plan (or
any other option plan of the Company or any parent or subsidiary corporations as
defined in Code Sections 424(e) or (f)) may for the first time become
exercisable as Incentive Stock Options during any one calendar year shall not
exceed the sum of One Hundred Thousand Dollars ($100,000).
To the extent a Participant holds two (2) or more such options
which become exercisable for the first time in the same calendar year, then for
purposes of the foregoing limitations on the exercisability of those options as
Incentive Stock Options, such options shall be deemed to become first
exercisable in that calendar year on the basis of the chronological order in
which they were granted, except to the extent otherwise provided under
applicable law or regulation.
Exercise Price
. The Board shall
establish the exercise price at the time each Option is granted and specify it
in the applicable option agreement; provided, however, that the exercise price
per share shall not be less than one hundred percent (100%) of the Fair Market
Value of the Common Stock on the grant date. For purposes of the Plan, Fair
Market Value per share of Common Stock on any relevant date shall be the
closing selling price per share of Common Stock on the date in question on the
national market or stock exchange serving as the primary market for the Common
Stock, as such price is reported by the National Association of Securities
Dealers (if primarily traded on the Nasdaq Global, Nasdaq Global Select or
Nasdaq Capital Market) or as officially quoted in the composite tape of
transactions on any stock exchange on which the Common Stock is primarily
traded. If there is no closing selling price for the Common Stock on the date in
question, then the Fair Market Value shall be the closing selling price on the
last preceding date for which such quotation exists.
Duration of Options
. Each Option shall
be exercisable at such times and subject to such terms and conditions as the
Board may specify in the applicable option agreement provided, however, that no
Option will be granted for a term in excess of 10 years.
Exercise of Option
. Options may be
exercised by delivery to the Company of a written notice of exercise signed by
the proper person or by any other form of notice (including electronic notice)
approved by the Board together with payment in full as specified in Section 5(g)
for the number of shares for which the Option is exercised.
Payment Upon Exercise.
Common Stock
purchased upon the exercise of an Option granted under the Plan shall be paid
for as follows:
-
in cash or by check, payable to the
order of the Company;
-
except as the Board may, in its sole
discretion, otherwise provide in an option agreement, by (i) delivery of an
irrevocable and unconditional undertaking by a creditworthy broker to deliver
promptly to the Company sufficient funds to pay the exercise price and any
required tax withholding or (ii) delivery by the Participant to the Company of
a copy of irrevocable and unconditional instructions to a creditworthy broker
to deliver promptly to the Company cash or a check sufficient to pay the
exercise price and any required tax withholding;
B-2
-
by delivery of shares of Common Stock
owned by the Participant valued at Fair Market Value on the exercise date,
provided (i) such method of payment is then permitted under applicable law and
(ii) such Common Stock has been held for the requisite period (if any)
necessary to avoid any resulting charge to the Companys earnings for
financial reporting purposes; or
-
by any combination of the above
permitted forms of payment.
Substitute Options
. In connection with
a merger or consolidation of an entity with the Company or the acquisition by
the Company of property or stock of an entity, the Board may grant Options in
substitution for any options or other stock or stock-based awards granted by
such entity or an affiliate thereof. Substitute Options may be granted on such
terms as the Board deems appropriate in the circumstances, notwithstanding any
limitations on Options contained in the other sections of this Section 5 or in
Section 2.
Restricted Stock
Grants
. The Board may grant Awards
entitling recipients to acquire shares of Common Stock, subject to the right of
the Company to repurchase all or part of such shares at their issue price or
other stated or formula price (or to require forfeiture of such shares if issued
at no cost) from the recipient in the event that conditions specified by the
Board in the applicable Award are not satisfied prior to the end of the
applicable restriction period or periods established by the Board for such Award
(each, a Restricted Stock Award).
Terms
and Conditions
. The Board shall determine the
terms and conditions of any such Restricted Stock Award, including the
conditions for repurchase (or forfeiture) and the issue price, if
any.
Stock
Certificates
. Any stock certificates issued
in respect of a Restricted Stock Award shall be registered in the name of the
Participant and, unless otherwise determined by the Board, deposited by the
Participant, together with a stock power endorsed in blank, with the Company (or
its designee). At the expiration of the applicable restriction periods, the
Company (or such designee) shall deliver the certificates no longer subject to
such restrictions to the Participant or if the Participant has died, to the
beneficiary designated, in a manner determined by the Board, by a Participant to
receive amounts due or exercise rights of the Participant in the event of the
Participants death (the Designated Beneficiary). In the absence of an
effective designation by a Participant, Designated Beneficiary shall mean the
Participants estate.
Restricted Stock
Units
Grant
of Restricted Stock Unit Awards
. The Board
may grant restricted stock units (Restricted Stock Unit Award) entitling
recipients to receive shares of Common Stock on such terms and conditions as may
be selected by the Board. The Board shall have the complete discretion to
determine the number of units subject to each Restricted Stock Unit
Award.
Vesting and Issuance
Provisions
.
Restricted Stock Unit Awards may, in the discretion of the
Board, vest upon the attainment of designated performance objectives or the
satisfaction of specified employment or service requirements. Shares of Common
Stock subject to the Restricted Stock Unit Awards may be issued on the vesting
date or upon the expiration of a designated time period or the occurrence of a
designated event following the vesting of the Award, including (without
limitation) a deferred distribution date following the termination of the
Participants employment or service. The vesting and issuance provisions
applicable to each Restricted Stock Unit Award shall be set forth in the
Participants Restricted Stock Unit Award agreement.
The Participant shall not have any stockholder rights with
respect to the shares of Common Stock subject to a Restricted Stock Unit Award
until that Award vests and the shares of Common Stock are actually issued
thereunder. However, dividend-equivalent units may be paid or credited, either
in cash or in actual or phantom shares of Common Stock, on outstanding
Restricted Stock Unit Awards, subject to such terms and conditions as the Board
may deem appropriate.
B-3
Outstanding Restricted Stock Unit Awards shall automatically
terminate, and no shares of Common Stock shall actually be issued in
satisfaction of those Awards, if the performance objectives or employment or
service requirements established for those Awards are not attained or satisfied.
The Board, however, shall have the discretionary authority to issue vested
shares of Common Stock under one or more outstanding Restricted Stock Unit
Awards as to which the designated performance objectives or employment or
service requirements have not been attained or satisfied.
Adjustments for Changes in Common
Stock and Certain Other Events
Changes in Capitalization
. In the
event of any stock split, reverse stock split, stock dividend, recapitalization,
combination of shares, reclassification of shares, spin-off or other similar
change in capitalization or event, or any distribution to holders of Common
Stock other than a normal cash dividend, (i) the number and class of securities
available under this Plan, (ii) the per-Participant limit set forth in Section
4(b), (iii) the number and class of securities and exercise price per share
subject to each outstanding Option, (iv) the repurchase price per share subject
to each outstanding Restricted Stock Award and (v) the number and class of
securities subject to each outstanding Restricted Stock Unit Award under the
Plan shall be equitably adjusted by the Board in such manner as the Board deems
appropriate in order to preclude the enlargement or dilution of rights and
benefits thereunder, and those adjustments shall be final, binding and
conclusive. If this Section 8(a) applies and Section 8(c) also applies to any
event, Section 8(c) shall be applicable to such event, and this Section 8(a)
shall not be applicable.
Liquidation or Dissolution
. In the
event of a proposed liquidation or dissolution of the Company, the Board shall
upon written notice to the Participants provide that all then unexercised
Options will (i) become exercisable in full as of a specified time at least 10
business days prior to the effective date of such liquidation or dissolution and
(ii) terminate effective upon such liquidation or dissolution, except to the
extent exercised before such effective date. The Board may specify the effect of
a liquidation or dissolution on any Restricted Stock Award and Restricted Stock
Unit Award granted under the Plan at the time of the grant.
Reorganization
Events
.
Definition
. A
Reorganization Event shall mean: (a) any merger or consolidation of the
Company with or into another entity as a result of which all of the Common Stock
of the Company is converted into or exchanged for the right to receive cash,
securities or other property or (b) any exchange of all of the Common Stock of
the Company for cash, securities or other property pursuant to a share exchange
transaction.
Consequences of a Reorganization Event on
Options
. Upon the occurrence of a
Reorganization Event, the Board shall provide that all outstanding Options shall
be assumed, or equivalent options shall be substituted, by the acquiring or
succeeding corporation (or an affiliate thereof). For purposes hereof, an Option
shall be considered to be assumed if, following consummation of the
Reorganization Event, the Option confers the right to purchase, for each share
of Common Stock subject to the Option immediately prior to the consummation of
the Reorganization Event, the consideration (whether cash, securities or other
property) received as a result of the Reorganization Event by holders of Common
Stock for each share of Common Stock held immediately prior to the consummation
of the Reorganization Event (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding shares of Common Stock); provided, however, that if the
consideration received as a result of the Reorganization Event is not solely
common stock of the acquiring or succeeding corporation (or an affiliate
thereof), the Company may, with the consent of the acquiring or succeeding
corporation, provide for the consideration to be received upon the exercise of
Options to consist solely of common stock of the acquiring or succeeding
corporation (or an affiliate thereof) equivalent in fair market value to the per
share consideration received by holders of outstanding shares of Common Stock as
a result of the Reorganization Event.
3.
Notwithstanding the foregoing, if the acquiring or succeeding corporation
(or an affiliate thereof) does not agree to assume, or substitute for, such
Options, then the Board shall, upon written notice to the Participants, provide
that all then unexercised Options will become exercisable in full as of a
specified time prior to the Reorganization Event and will terminate immediately
prior to the consummation of such Reorganization Event, except to the extent
exercised by the Participants before the consummation of such Reorganization
Event; provided, however, that in the event of a Reorganization Event under the
terms of which holders of Common Stock will receive upon consummation thereof a
cash payment for each share of Common Stock surrendered pursuant to such
Reorganization Event (the Acquisition Price), then the Board may instead
provide that all outstanding Options shall terminate upon consummation of such
Reorganization Event and that each Participant shall receive, in exchange
therefor, a cash payment equal to the amount (if any) by which (A) the
Acquisition Price multiplied by the number of shares of Common Stock subject to
such outstanding Options (whether or not then exercisable), exceeds (B) the
aggregate exercise price of such Options. To the extent all or any portion of an
Option becomes exercisable solely as a result of the first sentence of this
paragraph, upon exercise of such Option the Participant shall receive shares
subject to a right of repurchase by the Company or its successor at the Option
exercise price. Such repurchase right (1) shall lapse at the same rate as the
Option would have become exercisable under its terms and (2) shall not apply to
any shares subject to the Option that were exercisable under its terms without
regard to the first sentence of this paragraph.
B-4
Consequences of a Reorganization Event on Restricted Stock
Awards
. Upon the occurrence of a
Reorganization Event, the repurchase and other rights of the Company under each
outstanding Restricted Stock Award shall inure to the benefit of the Companys
successor and shall apply to the cash, securities or other property which the
Common Stock was converted into or exchanged for pursuant to such Reorganization
Event in the same manner and to the same extent as they applied to the Common
Stock subject to such Restricted Stock Award.
Consequences of a Reorganization
Event on Restricted Stock Unit Awards
. Upon
the occurrence of a Reorganization Event, the Board shall provide that all
outstanding Restricted Stock Unit Awards shall be assumed, or equivalent
restricted stock unit awards shall be substituted, by the acquiring or
succeeding corporation (or an affiliate thereof). For purposes hereof, a
Restricted Stock Unit Award shall be considered to be assumed if, following
consummation of the Reorganization Event, the Restricted Stock Unit Award
confers the right to receive, for each share of Common Stock subject to the
Restricted Stock Unit Award immediately prior to the consummation of the
Reorganization Event, and subject to the same vesting schedule in effect for the
Restricted Stock Unit Award immediately prior to such Reorganization Event, the
consideration (whether cash, securities or other property) received as a result
of the Reorganization Event by holders of Common Stock for each share of Common
Stock held immediately prior to the consummation of the Reorganization Event
(and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding shares of
Common Stock). However, if the consideration received as a result of the
Reorganization Event is not solely common stock of the acquiring or succeeding
corporation (or an affiliate thereof), the Company may, with the consent of the
acquiring or succeeding corporation (or affiliate thereof), provide for the
consideration to be received upon the vesting of the Restricted Stock Unit
Awards to consist solely of common stock of the acquiring or succeeding
corporation (or an affiliate thereof) equivalent in fair market value to the per
share consideration received by holders of outstanding shares of Common Stock as
a result of the Reorganization Event.
Notwithstanding the foregoing, if the acquiring or succeeding
corporation (or an affiliate thereof) does not agree to assume, or substitute
for, such Restricted Stock Unit Awards, then the Board shall, upon written
notice to the Participants, provide that all then unvested Restricted Stock Unit
Awards and the underlying shares will vest in full as of a specified time prior
to the Reorganization Event.
General Provisions Applicable to
Awards
.
Transferability of Awards
. Except as
the Board may otherwise determine or provide in an Award, Awards shall not be
sold, assigned, transferred, pledged or otherwise encumbered by the person to
whom they are granted, either voluntarily or by operation of law, except by will
or the laws of descent and distribution, and, during the life of the
Participant, shall be exercisable only by the Participant. References to a
Participant, to the extent relevant in the context, shall include references to
authorized transferees.
Documentation
. Each Award shall be
evidenced in such form (written, electronic or otherwise) as the Board shall
determine. Each Award may contain terms and conditions in addition to those set
forth in the Plan.
Board
Discretion
. Except as otherwise provided by
the Plan, each Award may be made alone or in addition or in relation to any
other Award. The terms of each Award need not be identical, and the Board need
not treat Participants uniformly.
Termination of Status
. The Board shall
determine the effect on an Award of the disability, death, retirement,
authorized leave of absence or other change in the employment or other status of
a Participant and the extent to which, and the period during which, the
Participant, the Participants legal representative, conservator, guardian or
Designated Beneficiary may exercise rights under the Award.
B-5
Withholding
. Each Participant shall
pay to the Company, or make provision satisfactory to the Board for payment of,
any taxes required by law to be withheld in connection with Awards to such
Participant no later than the date of the event creating the tax liability. To
the extent the Board provides in an Award, Participants may satisfy such tax
obligations in whole or in part by delivery of shares of Common Stock, including
shares retained from the Award creating the tax obligation, valued at their Fair
Market Value; provided, however, that the total tax withholding where stock is
being used to satisfy such tax obligations cannot exceed the Companys minimum
statutory withholding obligations (based on minimum statutory withholding rates
for federal and state tax purposes, including payroll taxes, that are applicable
to such supplemental taxable income). The Company may, to the extent permitted
by law, deduct any such tax obligations from any payment of any kind otherwise
due to a Participant.
Amendment of Award
. The Board may
amend, modify or terminate any outstanding Award, including but not limited to,
substituting therefor another Award of the same or a different type, changing
the date of exercise or realization, and converting an Incentive Stock Option to
a Nonstatutory Stock Option, provided that the Participants consent to such
action shall be required unless the Board determines that the action, taking
into account any related action, would not materially and adversely affect the
Participant.
Conditions on Delivery of Stock
. The
Company will not be obligated to deliver any shares of Common Stock pursuant to
the Plan or to remove restrictions from shares previously delivered under the
Plan until (i) all conditions of the Award have been met or removed to the
satisfaction of the Company, (ii) in the opinion of the Companys counsel, all
other legal matters in connection with the issuance and delivery of such shares
have been satisfied, including any applicable securities laws and any applicable
stock exchange or stock market rules and regulations, and (iii) the Participant
has executed and delivered to the Company such representations or agreements as
the Company may consider appropriate to satisfy the requirements of any
applicable laws, rules or regulations.
Acceleration
. The Board may at any
time provide that any Award shall become immediately vested in full or in part,
free of some or all restrictions or conditions, or otherwise realizable in full
or in part, as the case may be.
Miscellaneous
.
No
Right To Employment or Other Status
. No
person shall have any claim or right to be granted an Award, and the grant of an
Award shall not be construed as giving a Participant the right to continued
employment or any other relationship with the Company. The Company expressly
reserves the right at any time to dismiss or otherwise terminate its
relationship with a Participant free from any liability or claim under the Plan,
except as expressly provided in the applicable Award.
No
Rights As Stockholder
. Subject to the
provisions of the applicable Award, no Participant or transferee of an Award
shall have any rights as a stockholder with respect to any shares of Common
Stock to be distributed with respect to an Award until becoming the record
holder of such shares.
Effective Date and Term of Plan
. The
Plan became effective on the date on which it was initially adopted by the
Board. No Awards shall be granted under the Plan after the completion of ten
years from the earlier of (i) the date on which the Plan was adopted by the
Board or (ii) the date the Plan was approved by the Companys stockholders, but
Awards previously granted may extend beyond that date.
Amendment of Plan
. The Board may
amend, suspend or terminate the Plan or any portion thereof at any time.
However, amendments to the Plan will be subject to stockholder approval to the
extent required under applicable law or regulation or pursuant to the listing
standards of the stock exchange on which the Common Stock is at the time
primarily traded.
Notwithstanding any other provision
of the Plan to the contrary, upon approval of this amendment by the Company's
stockholders in accordance with the terms of this Plan, our Board of Directors
or Compensation Committee may provide for, and the Company may implement, a
one-time-only option exchange offer, pursuant to which certain outstanding
Options could, at the election of the person holding such Option, be tendered to
the Company for cancellation in exchange for the issuance of stock options,
provided that such one-time-only option exchange offer is commenced within 12
months of the date of such stockholder approval.
Governing Law
. The provisions of the
Plan and all Awards made hereunder shall be governed by and interpreted in
accordance with the laws of the State of Delaware, without regard to any
applicable conflicts of law.
B-6
VOXWARE, INC.
PROXY SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS
OF THE COMPANY FOR THE ANNUAL MEETING OF STOCKHOLDERS
The undersigned hereby constitutes and
appoints Scott J. Yetter and William G. Levering III, and each of them, true and
lawful agent and proxy with full power of substitution in each, to represent and
to vote on behalf of the undersigned all of the shares of Common Stock of
Voxware, Inc. (the Company) which the undersigned is entitled to vote at the
Annual Meeting of Stockholders of the Company to be held at the offices of
Morgan, Lewis & Bockius LLP, 502 Carnegie Center, Princeton, New Jersey at
9:00 a.m. (local time) on December 10, 2009 and at any adjournment or
adjournments thereof, upon the proposals set forth on the reverse side and more
fully described in the Notice of Annual Meeting of Stockholders and Proxy
Statement for the Meeting (receipt of which is hereby acknowledged).
This proxy, when properly executed,
will be voted in the manner directed herein by the undersigned shareholder. If
no direction is made, this proxy will be voted FOR proposals 1, 2 and
5.
(continued and to be signed on
reverse side)
THIS PROXY CARD IS VALID ONLY WHEN
SIGNED AND DATED
VOXWARE, INC.
Please mark your votes as in this
example.
x
1.
|
ELECTION OF
DIRECTORS.
|
|
|
|
|
|
|
Nominees:
|
01) Joseph A. Allegra
|
FOR
o
|
WITHHOLD
o
|
|
|
02) James L. Alexandre
|
FOR
o
|
WITHHOLD
o
|
|
|
03) Donald R. Caldwell
|
FOR
o
|
WITHHOLD
o
|
|
|
04) Don Cohen
|
FOR
o
|
WITHHOLD
o
|
|
|
05) Robert Olanoff
|
FOR
o
|
WITHHOLD
o
|
|
|
06) David J. Simbari
|
FOR
o
|
WITHHOLD
o
|
|
|
07) Scott J. Yetter
|
FOR
o
|
WITHHOLD
o
|
|
|
|
|
|
2.
|
To amend our Amended and Restated
Certificate of Incorporation, as amended to increase the number of shares
of Common Stock authorized for issuance from 12,000,000 shares to
15,000,000 shares.
|
|
|
|
|
|
|
|
FOR
o
|
AGAINST
o
|
ABSTAIN
o
|
|
|
|
|
|
3.
|
To amend our 2003 Stock Incentive
Plan to increase the maximum number of shares of common stock reserved for
issuance thereunder by an additional 250,000 shares of common stock from
1,534,734 to 1,784,734 shares.
|
|
|
|
|
|
|
|
FOR
o
|
AGAINST
o
|
ABSTAIN
o
|
|
|
|
|
|
4.
|
To approve an amendment to our 2003 Stock Incentive Plan to allow for a one-time stock
option exchange program under which eligible employees and directors would
be able to elect to exchange outstanding stock options with an exercise
price of $2.25 or greater issued under our 2003 Stock Incentive Plan for
new options at an exchange rate of 1.15 to 1.00.
|
|
|
|
|
|
|
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FOR
o
|
AGAINST
o
|
ABSTAIN
o
|
|
|
|
|
|
5.
|
To ratify the appointment of BDO
Seidman, LLP as the independent registered public accountant of the
Company for the year ending June 30,
2010.
|
|
|
|
|
|
|
|
FOR
o
|
AGAINST
o
|
ABSTAIN
o
|
|
|
|
|
|
6.
|
In his discretion, the proxy is
authorized to vote upon such other matters as may properly come before
the
Meeting.
|
PLEASE MARK, SIGN, DATE AND RETURN
THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
NOTE:
|
This proxy must be signed
exactly as the name appears hereon. When shares are held by joint tenants,
both should sign. If the signer is a corporation, please sign full
corporate name by duly authorized officer, giving full title as such. If
the signer is a partnership, please sign in partnership name by authorized
person.
|
If you would like to attend the Annual
Meeting, please check the box to the right.
o
|
|
|
|
|
Signature (PLEASE SIGN WITHIN
BOX)
|
Date
|
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Signature
(Joint Owners)
|
Date
|
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