LIGHTPATH TECHNOLOGIES INC
10-Ks and 10-Qs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934
(Amendment
No.
)
Filed by
the Registrant ¨
Filed
by a Party other than the Registrant ¨
Check the
appropriate box:
|
¨
|
Preliminary Proxy
Statement
|
|
¨
|
Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
|
|
x
|
Definitive Proxy
Statement
|
|
¨
|
Definitive Additional
Materials
|
|
¨
|
Soliciting Material Pursuant to
§240.14a-12
|
LIGHTPATH
TECHNOLOGIES, INC.
(Name
of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
|
x
|
No fee
required.
|
|
¨
|
Fee computed on table below per
Exchange Act Rules 14a-6(i)(1) and
0-11.
|
|
(1)
|
Title of each class of securities
to which the transaction
applies:
|
|
(2)
|
Aggregate number of securities to
which the transaction
applies:
|
|
(3)
|
Per unit price or other
underlying value of the transaction computed pursuant to Exchange Act Rule
0-11 (set forth the amount on which the filing fee is calculated and state
how it was
determined):
|
|
(4)
|
Proposed maximum aggregate value
of the
transaction:
|
|
(5)
|
Total fee
paid:
|
|
|
¨
|
Fee paid previously with
preliminary materials.
|
|
¨
|
Check box if any part of the fee
is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the
filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or Schedule
and the date of its filing.
|
|
(1)
|
Amount Previously
Paid:
|
|
(2)
|
Form, Schedule or Registration
Statement No.:
|
|
(3)
|
Filing
Party:
|
|
(4)
|
Date
Filed:
|
|
LightPath
Technologies, Inc.
Annual
Meeting of Stockholders
February
3, 2011
Notice
and Proxy Statement
January
3, 2011
Dear
LightPath Stockholder:
I am pleased to invite you to the
Annual Meeting of the Stockholders of LightPath Technologies, Inc. The
meeting will be held on Thursday, February 3, 2011 at 11:00 a.m. EST at the
Hyatt Regency Orlando International Airport Hotel. The address is 9300
Airport Boulevard, Orlando, FL 32827.
At the meeting, you and the other
stockholders will be asked to elect directors, participate in stockholder
advisory votes on our named executive officer compensation and the frequency
that stockholder advisory votes on our executive compensation will be
taken, and ratify our independent auditor. You will also have the opportunity to
hear what has happened in our business in the past year and to ask
questions.
The
enclosed Notice and Proxy Statement contain details concerning the foregoing
items and any other business to be conducted at the Annual Meeting. Other
detailed information about LightPath and its operations, including its audited
financial statements, are included in our Annual Report on Form 10-K, a copy of
which is enclosed. We urge you to read and consider these documents
carefully.
We hope you can join us at the
meeting. Whether or not you expect to attend, please read the enclosed
Proxy Statement, mark your votes on the enclosed proxy
card, sign and date
it, and return
it to us in the
enclosed postage-paid envelope. Your vote is important, so please
return your proxy card promptly.
|
Sincerely,
|
|
|
Robert
Ripp
|
|
|
Chairman
of the Board
|
Corporate
Headquarters
2603
Challenger Tech Court, Suite 100 * Orlando, Florida USA 32826 *
407-382-4003
LIGHTPATH
TECHNOLOGIES, INC.
2603
Challenger Tech Court, Suite 100
Orlando,
Florida USA 32826
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
To
Be Held On Thursday, February 3, 2011
Dear
Stockholder,
You are cordially invited to attend the
Annual Meeting of Stockholders of LightPath Technologies, Inc., a Delaware
corporation (the “Company”). The meeting will be held on Thursday, February 3,
2011 at 11:00 a.m. EST at the Hyatt Regency Orlando International Airport
Hotel. The address is 9300 Airport Boulevard, Orlando, FL 32827 for the
following purposes:
|
|
1.
|
To
elect Class I directors to the Company’s Board of
Directors;
|
|
|
2.
|
To
ratify the selection of Cross, Fernandez & Riley LLP as independent
public accountant;
|
|
|
3.
|
To
hold a stockholder advisory vote on the compensation of our named
executive officers disclosed in this proxy statement under the section
titled “Executive Compensation”, including the compensation tables and
other narrative executive compensation disclosures therein, required by
Item 402 of Securities and Exchange Commission Regulation S-K (a
“say-on-pay” vote);
|
|
|
4.
|
To
hold a stockholder advisory vote on the frequency that stockholder
advisory votes to approve the compensation of our named
executive officers will be taken (a “say on-frequency” vote);
and
|
|
|
5.
|
To
transact such other business as may properly come before the Annual
Meeting or any postponement or adjournment
thereof.
|
These items of business are more fully
described in the proxy statement accompanying this Notice.
The record date for the Annual Meeting
is December 13, 2010. Only stockholders of record at the close of business on
that date may vote at the meeting or any adjournment thereof.
|
By
Order of the Board of Directors,
|
|
|
J.
James Gaynor
|
|
|
President
& Chief Executive Officer
|
|
|
Orlando,
Florida
|
|
|
January
3, 2011
|
You are
cordially invited to attend the Annual Meeting in person. Whether or not you
expect to attend the meeting, please complete, date,
sign and return the enclosed proxy as promptly as possible in order to
ensure your representation at the meeting. A return envelope (which is postage
prepaid if mailed in the United States) is enclosed for your convenience. Even
if you have voted by proxy, you may still vote in person if you attend the
meeting. Please note, if a broker holds your shares of record, bank or other
nominee and you wish to vote at the meeting, you must obtain a proxy issued in
your name from that record holder.
PROXY
STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
To
be held February 3, 2011
LIGHTPATH
TECHNOLOGIES, INC.
2603
Challenger Tech Court, Suite 100
Orlando,
Florida USA 32826
Proxies
in the form enclosed with this proxy statement are solicited by the Board of
Directors of LightPath Technologies, Inc., a Delaware corporation (the
“Company”), for use at the Annual Meeting of Stockholders to be held Thursday,
February 3, 2011 at 11:00 a.m. EST, or at any adjournments or postponements
thereof, for the purposes set forth in the accompanying Notice of Annual Meeting
of Stockholders. The Annual Meeting will be held at 11:00 a.m. EST at the
Hyatt Regency Orlando International Airport Hotel. The address is 9300
Airport Boulevard, Orlando, FL 32827.
References
in this proxy statement to “LightPath”, “we”, “us”, “our”, or the “Company”
refers to LightPath Technologies, Inc.
IMPORTANT
NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE MEETING OF
STOCKHOLDERS TO BE HELD ON FEBRUARY 3, 2011.
This
proxy statement, the enclosed proxy card, and the Annual Report on Form 10-K for
the fiscal year ended on June 30, 2010, are made available to you on our
website, www.lightpath.com.
With respect to the Annual Meeting and all of our future shareholder meetings,
please contact Dorothy Cipolla at 1-800-472-3486 ext. 305, or dcipolla@lightpath.com
to request a copy of the proxy statement, annual report or proxy card or to
obtain directions to such meeting.
Why am I receiving these
materials?
We sent you this proxy statement and
the enclosed proxy card because our Board of Directors is soliciting your proxy
to vote at the Annual Meeting of Stockholders to be held on Thursday, February
3, 2011 at 11:00 a.m. EST at the Hyatt Regency Orlando International Airport
Hotel. The address is 9300 Airport Boulevard, Orlando, FL 32827. You are
invited to attend the Annual Meeting and we request that you vote on the
proposals described in this proxy statement. However, you do not need to attend
the meeting to vote your shares. Instead, you may simply complete, sign and
return the enclosed proxy card.
We intend to mail this proxy statement
and accompanying proxy card on or about January 3, 2011 to all stockholders of
record entitled to vote at the Annual Meeting.
1
Who can vote at the Annual
Meeting?
Only stockholders of record at the
close of business on December 13, 2010 will be entitled to vote at the Annual
Meeting. On this record date, there were 10,141,295 shares (including all
restricted stock awards at such date) of Class A common stock (our only class of
common stock) outstanding and entitled to vote.
Stockholder
of Record: Shares Registered in Your Name
If on December 13, 2010, your shares
were registered directly in your name with our transfer agent, Registrar and
Transfer Company, then you are a stockholder of record. As a stockholder of
record, you may vote in person at the meeting or vote by proxy. Whether or not
you plan to attend the meeting, we urge you to fill out and return the enclosed
proxy card to ensure your vote is counted. Even if you fill out and return
your proxy, you may still vote in person if you are able to attend the
meeting.
Beneficial
Owner: Shares Registered in the Name of a Broker or Bank
If on December 13, 2010 your shares
were held in an account at a brokerage firm, bank, dealer, or other similar
organization, then you are the beneficial owner of shares held in “street name”
and these proxy materials are being forwarded to you by that organization. The
organization holding your account is considered the stockholder of record for
purposes of voting at the Annual Meeting. As a beneficial owner, you have
the right to direct your broker or other agent on how to vote the shares in your
account. You are also invited to attend the Annual Meeting. However,
since you are not the stockholder of record, you may not vote your shares in
person at the meeting unless you request and obtain a valid proxy from your
broker or other agent.
What am I voting
on?
The following matters are scheduled for
the Annual Meeting: (i) the election of two Class I directors to our Board of
Directors; (ii) the ratification of the selection of Cross, Fernandez &
Riley LLP as independent auditor; (iii) an advisory vote of the compensation of
our named executive officers disclosed in this proxy statement under the section
titled “Executive Compensation”, including the compensation tables and other
narrative executive compensation disclosures therein, required by Item 402 of
Securities and Exchange Commission Regulation S-K (a “say-on-pay” vote); and
(iv) an advisory vote on the frequency that stockholder advisory votes to
approve the compensation of our named executive officers will be taken (a
“say-on-frequency” vote).
A vote may also be held on any other
business as may properly come before the Annual Meeting or any postponement or
adjournment thereof, although there is no other business anticipated to come
before the Annual Meeting.
Why is it important for me
to vote?
If you are the beneficial owner of
shares held in “street name” by a broker, the broker, as the record holder of
the shares, is required to vote those shares in accordance with your
instructions. If you do not direct your broker how to vote your shares, the
broker will be entitled to vote the shares with respect to “discretionary” items
but will not be permitted to vote the shares with respect to “non-discretionary”
items (resulting in a “broker non-vote”). The ratification of the appointment of
our independent public accountant under Proposal No. 2 is a “discretionary”
matter. The election of directors under Proposal No. 1, the say-on-pay
vote under Proposal No. 3 and the say-on-frequency vote under Proposal No. 4 are
“non-discretionary” items.
2
How do I
vote?
With regard to the election of
directors, you may vote “For” all nominees listed or you may vote “Against” any
or all of the nominees. With regard to the ratification of the appointment
of our independent public accountant, you may vote “For” or “Against” or abstain
from voting. With regard to the say-on-pay vote, you may vote “For” approval of
the compensation of our named executive officers, “Against” the approval of the
compensation of our named executive officers, or abstain from voting. With
regard to the say-on-frequency vote you may vote “Every 1 year”, “Every 2
years”, “Every 3 years” or abstain from voting. For all other matters, you
may vote “For” or “Against” or abstain from voting. The procedures for voting
are as follows:
Stockholder
of Record: Shares Registered in Your Name
If you are a stockholder of record, you
may vote in person at the Annual Meeting or vote by proxy using the enclosed
proxy card. Whether or not you plan to attend the meeting, we urge you to vote
by proxy to ensure your vote is counted. You may still attend the meeting and
vote in person if you have already voted by proxy.
· To
vote in person, come to the Annual Meeting and we will give you a ballot when
you arrive.
· To
vote using the proxy card, simply complete, sign and date the enclosed proxy
card and return it promptly in the envelope provided. If you return your signed
proxy card to us before the Annual Meeting, we will vote your shares as you
direct.
Beneficial
Owner: Shares Registered in the Name of Broker or Bank
If you are a beneficial owner of shares
registered in the name of your broker, bank, or other agent, you should have
received a proxy card and voting instructions with these proxy materials from
that organization rather than from LightPath. Simply complete and mail the proxy
card to ensure that your vote is counted. To vote in person at the Annual
Meeting, you must obtain a valid proxy from your broker, bank, or other agent.
Follow the instructions from your broker or bank included with these proxy
materials, or contact your broker or bank to request a proxy form.
If you fail to complete a proxy card or
provide your broker with voting instructions at least ten days before the
meeting, your broker will be unable to vote on the election of directors, the
say-on-pay vote or the say-on-frequency vote. Your broker may use his or
her discretion to cast a vote on any other routine or discretionary
matter.
How many votes do I
have?
On each matter to be voted upon, you
have one vote for each share of common stock you owned as of December 13,
2010.
3
What if I return a proxy
card but do not make specific choices?
If you return a signed and dated proxy
card without marking any voting selections, your shares will be voted “For” all
nominees listed for Proposal No. 1, “For” the ratification of our independent
public accountant for Proposal No. 2, “For” the compensation of our named
executive officers disclosed in this proxy statement under the section titled
“Executive Compensation”, including the compensation tables and other narrative
disclosures therein, required by Item 402 of SEC Regulation S-K for Proposal No.
3, and “Every 3 years” for approval of the frequency that stockholder
advisory votes to approve the compensation of our named executive officers will
be taken for Proposal No. 4. If any other matter is properly presented at the
meeting, your proxy (one of the individuals named on your proxy card) will vote
your shares using his or her best judgment.
Who is paying for this proxy
solicitation?
LightPath will pay for the entire cost
of soliciting proxies. In addition to these mailed proxy materials, our
directors and employees may also solicit proxies in person, by telephone, or by
other means of communication. Directors and employees will not be paid any
additional compensation for soliciting proxies. We will also reimburse brokerage
firms, banks and other agents for the cost of forwarding proxy materials to
beneficial owners.
What does it mean if I
receive more than one proxy card?
If you receive more than one proxy
card, your shares are registered in more than one name or are registered in
different accounts. Please complete, sign and return each proxy card to ensure that
all of your shares are voted.
What is
“householding”?
The SEC has adopted rules that permit
companies and intermediaries such as brokers to satisfy the delivery
requirements for proxy statements with respect to two or more security holders
sharing the same address by delivering a single proxy statement addressed to
those security holders. This process, which is commonly referred to as
“householding,” potentially means convenience for security holders and cost
savings for companies.
A number of brokers with account
holders who are LightPath stockholders will be “householding” our proxy
materials. A single proxy statement will be delivered to multiple stockholders
sharing an address unless contrary instructions have been received from the
affected stockholders. Once you have received notice from your broker or us that
they will be “householding” communications to your address, “householding” will
continue until you are notified otherwise or until you revoke your consent. If,
at any time, you no longer wish to participate in “householding” and would
prefer to receive a separate proxy statement, please notify your broker and also
notify us by sending your written request to Investor Relations, LightPath
Technologies, Inc., 2603 Challenger Tech Court, Suite 100, Orlando, Florida USA
32826 or by calling Investor Relations at 407-382-4003, ext. 314.
Stockholders who currently receive multiple copies of the proxy statement at
their address and would like to request “householding” of their communications
should also contact their broker and notify us in writing or by
telephone.
4
Can I revoke or change my
vote after submitting my proxy?
Yes. You can revoke your proxy at any
time before the final vote at the meeting. You may revoke your proxy in any one
of three ways:
· You
may submit another properly completed proxy card with a later date.
· You
may send a written notice that you are revoking your proxy to LightPath’s
Secretary at 2603 Challenger Tech Court, Suite 100, Orlando, Florida USA
32826.
· You
may attend the Annual Meeting and vote in person. Simply attending the meeting
will not, by itself, revoke your proxy.
How are votes
counted?
Votes will be counted by the inspector
of elections appointed for the meeting, who will separately count “For”,
“Against”, “Withhold Authority” and “Abstain” as applicable, and other votes,
abstentions and broker non-votes. A broker “non-vote” occurs when a
nominee/broker holding shares for a beneficial owner does not vote on a
particular proposal because the nominee/broker does not have discretionary
voting power with respect to that item and has not received voting instructions
from the beneficial owner. Abstentions will have the same effect as
“Against” votes. Broker non-votes are counted towards a quorum, but are
not counted for any purpose in determining whether a matter has been
approved.
How many votes are needed to
approve the proposals?
With
regard to Proposal No. 1 (election of directors), the two nominees receiving a
plurality of the votes cast at the meeting will be elected as directors of the
Company. A properly executed proxy marked “Withhold Authority” with
respect to the election of one or more directors will not be voted with respect
to the director or directors indicated, although it will be counted for purposes
of determining whether there is a quorum.
With
regard to Proposal No. 2 (ratification of independent auditor), a majority of
the votes cast at the meeting will ratify Cross, Fernandez & Riley LLP as
independent auditor of the Company.
With
regard to Proposal No. 3 (say-on-pay vote), a majority of the votes cast at the
meeting will approve our named executive officer compensation as disclosed in
the proxy statement under the section titled “Executive Compensation”, including
the compensation tables and other narrative disclosures therein, required by
Item 402 of SEC Regulation S-K.
With
regard to Proposal No. 4 (say-on-frequency vote), the frequency choice receiving
a plurality of the votes cast at the meeting will determine how often
stockholders will vote, on an advisory basis, on named executive officer
compensation.
5
What is the quorum
requirement?
A quorum of stockholders is necessary
to hold a valid meeting. A quorum will be present if at least a majority of the
outstanding shares of Class A common stock entitled to vote is represented by
votes at the meeting or by proxy. On the record date, there were 10,141,295
outstanding shares (including all restricted stock awards at such date) entitled
to vote. Thus 5,070,648 must be represented by votes at the meeting or by proxy
to have a quorum.
Your shares will be counted towards the
quorum only if you submit a valid proxy vote or vote at the meeting. Abstentions
and broker non-votes will be counted towards the quorum requirement. If there is
no quorum, a majority of the votes present at the meeting may adjourn the
meeting to another date.
How can I find out the
results of the voting at the Annual Meeting?
Preliminary voting results will be
announced at the Annual Meeting. LightPath will subsequently file a Current
Report on Form 8-K within four business days following such results becoming
final indicating the results from the Annual Meeting.
When are stockholder
proposals for the 2012 Annual Meeting due?
Stockholders interested in presenting a
proposal to be considered for inclusion in next year’s proxy statement and form
of proxy may do so by following the procedures prescribed in Rule 14a-8 under
the Securities Exchange Act of 1934, as amended (the “Securities Exchange Act”),
and the Company’s By-laws. To be considered for inclusion, stockholder
proposals must be submitted in writing to the Corporate Secretary, LightPath
Technologies, Inc., 2603 Challenger Tech Court, Suite 100, Orlando, Florida USA
32826 before September 3, 2011, which is 120 calendar days prior to the
anniversary of the mailing date of this proxy statement, and must be in
compliance with all applicable laws and regulations.
If a stockholder wishes to present a
proposal at the 2012 Annual Meeting, but the proposal is not intended to be
included in the Company's proxy statement relating to the meeting, the
stockholder must give advance notice to the Company prior to the deadline for
such meeting determined in accordance with the By-laws (the "By-law
Deadline"). Under the Company’s By-laws, in order for a proposal to be
timely, it must be received by the Company no later than 60 days, nor earlier
than 90 days, prior to the annual meeting date. If a stockholder gives
notice of such a proposal after the By-law Deadline, the stockholder will not be
permitted to present the proposal to the stockholders for a vote at the
meeting.
Furthermore, Rule 14a-4 under the
Securities Exchange Act also establishes a different deadline for submission of
stockholder proposals that are not intended to be included in the Company's
proxy statement with respect to discretionary voting (the "Discretionary Vote
Deadline"). The Discretionary Vote Deadline for the 2012 Annual Meeting is
November 18, 2011 (45 calendar days prior to the anniversary of the mailing date
of this proxy statement). If a stockholder gives notice of such a proposal
after the Discretionary Vote Deadline, the Company's proxy holders will be
allowed to use their discretionary voting authority to vote against the
stockholder proposal when and if the proposal is raised at the 2012 Annual
Meeting. A properly submitted proposal received after the Discretionary
Vote Deadline but before the By-law Deadline would be eligible to be presented
at the annual meeting, however, the Company believes that its proxy holders
would be allowed to use the discretionary authority granted by the proxy card to
vote against the proposal at the meeting without including any disclosure of the
proposal in the proxy statement relating to such meeting.
6
How do I get a copy of the
exhibits filed with the Company’s Form 10-K?
A copy of the Company’s Annual Report
for 2010, which contains the Company’s Form 10-K for the fiscal year ended June
30, 2010, and consolidated financial statements, has been delivered to you with
this proxy statement. We will provide to any stockholder as of the Record Date,
who so specifically requests in writing, a copy of the exhibits filed with the
Company’s Form 10-K. Requests for such copies should be directed to
Investor Relations at 2603 Challenger Tech Court, Suite 100, Orlando, Florida
USA 32826. In addition, copies of all exhibits filed electronically by the
Company may be reviewed and printed from the SEC website at http://www.sec.gov
under the EDGAR archives section.
Where can I get information
regarding how to send communications to the Board of Directors and the Company’s
policy regarding Board member’s attendance at annual
meetings?
The Board of Directors provides a
process for stockholders to send communications to the Board of Directors and
has adopted a policy regarding Board member’s attendance at annual
meetings. Information regarding these matters is contained on our website
at http://www.lightpath.com under “Investor
Relations,” “FAQs.”
7
PROPOSAL NO.
1
ELECTION
OF DIRECTORS
LightPath’s Board of Directors is
divided into three classes, denoted as Class I, Class II and Class III, serving
staggered three-year terms with one class elected at the annual meeting of
stockholders. The current Board of Directors consists of:
|
Class
I
|
Class
II
|
Class
III
|
|
Robert
Ripp
J.
James Gaynor
|
Sohail
Khan
Dr.
Steven Brueck
|
Louis
Leeburg
Gary
Silverman
|
The Class I directors’ term expires at
this annual meeting of stockholders. The Class III directors’ term expires
at the annual meeting of stockholders proposed to be held in 2012. The
Class II directors’ term expires at the annual meeting of stockholders proposed
to be held in 2013.
Pursuant to the Company’s Certificate
of Incorporation and By-laws, the current Board of Directors or the stockholders
may nominate persons for election to the Board of Directors. In accordance
with such governing documents and upon the recommendation of the Board of
Directors, Robert Ripp and J. James Gaynor, who are both current members of the
Board of Directors, have been nominated by the Board of Directors to serve as
Class I directors for a term ending at the third successive annual meeting of
stockholders following this Annual Meeting of stockholders, or until their
successor has been duly elected and qualified.
The individual named as proxy will vote
the enclosed proxy “FOR”
the election of Mr. Ripp and Mr. Gaynor unless you direct them to withhold your
votes. If Mr. Ripp or Mr. Gaynor become unable or unwilling to serve as a
director before the Annual Meeting, an event which is not presently anticipated,
discretionary authority may be exercised by the person named as proxy to vote
for substitute nominees proposed by the Board of Directors, or, if no substitute
is selected by the Board of Directors prior to or at the Annual Meeting, for a
motion to reduce the present membership of the Board to the number of nominees
available.
THE
BOARD OF DIRECTORS RECOMMENDS VOTING "FOR"
THE
ELECTION OF CLASS I DIRECTORS
8
Each of
our directors and officers serves until his or her successor is elected and
qualified. The names and ages of our directors and officers, the years
they became directors or officers, their principal occupations or employment for
at least the past five years and certain of their other directorships are set
forth below.
Class
I Directors
|
Robert
Ripp, 69
Director
(Chairman of the
Board)
|
Mr.
Ripp has served as a director of the Company since 1999 and as Chairman of
the Board since November 1999. During portions of fiscal year 2002 he also
served as the Company’s Interim President and Chief Executive
Officer. Mr. Ripp held various executive positions at AMP
Incorporated (“AMP”) from 1994 to 1999, including serving as Chairman and
Chief Executive Officer of AMP from August 1998 until April 1999, when AMP
was sold to TYCO International Ltd. Mr. Ripp previously spent 29
years with IBM of Armonk, New York. He held positions in all aspects
of operations within IBM culminating in the last four years as Vice
President and Treasurer. He retired from IBM in 1993. Mr. Ripp graduated
from Iona College and received a Masters of Business Administration degree
from New York University. Mr. Ripp is currently on the board of
directors of Ace, Ltd., and PPG Industries, both of which are listed on
the New York Stock Exchange. Mr. Ripp also serves on the Company’s
Compensation and Finance Committees. Mr. Ripp has dedicated over ten year
of service to the Company. His extensive executive management experience,
in addition to his financial expertise gained from various executive
positions, qualify him for service as a director of our
Company.
|
|
|
J.
James Gaynor, 59
President
& Chief Executive
Officer,
Director
|
Mr.
Gaynor was appointed as President & Chief Executive Officer and as a
director on February 1, 2008 and prior to that served as Interim Chief
Executive Officer from September 18, 2007. Mr. Gaynor previously served as
the Company’s Corporate Vice President of Operations since July 2006. Mr.
Gaynor is a mechanical engineer with over 25 years business and
manufacturing experience in volume component manufacturing in the
electronics and optics industries. Prior to joining the Company, from
August 2002 to July 2006, Mr. Gaynor was Director of Operations and
Manufacturing for Puradyn Filter Technologies. Previous to that, he was
Vice President of Operations and General Manager for JDS Uniphase
Corporation’s Transmission Systems Division. He has also held executive
positions with Spectrum Control, Rockwell International and Corning Glass
Works. His experience includes various engineering, manufacturing and
management positions in specialty glass, electronics, telecommunications
components and mechanical assembly operations. His global business
experience encompasses strategic planning, budgets, capital investment,
employee development, and cost reduction, acquisitions and business
start-up and turnaround success. Mr. Gaynor holds a Bachelor of Mechanical
Engineering degree from the Georgia Institute of Technology and has worked
in the manufacturing industries since 1976. Mr. Gaynor has an
in-depth knowledge of the optics industry gained through over 25 years of
working in various capacities in the industry. Mr. Gaynor understands the
engineering aspects of our business, due to his engineering background,
and has the management experience necessary to lead our Company and serve
as a director.
|
9
Class
II Directors
|
Sohail
Khan, 56
Director
|
Mr.
Khan has
served as a director of the Company since February 2005. Mr. Khan serves
on the board of directors for Gainspan Corporation and is currently
President and Chief Executive Officer of SiGe Semiconductor (“SiGe”).
Prior to SiGe, Mr. Khan was Entrepreneur in Residence and Operating
Partner of Bessemer Venture Partners, a venture capital group focused on
technology investments. From 1996 to 2006 he held various executive
positions with Agere Systems/Lucent Technologies ending as Executive Vice
President and Chief Strategy & Development Officer of Agere Systems.
Mr. Khan has also held various management positions at NEC Electronics,
Intel and the National Engineering Services of Pakistan. Mr. Khan received
a Bachelor of Science in Electrical Engineering from the University of
Engineering and Technology in Pakistan. Additionally, he received a
Masters of Business Administration from the University of California at
Berkeley. Mr. Khan’s experience in venture financing, specifically
technology investments, is an invaluable asset Mr. Khan contributes to the
Board composition. In addition, Mr. Khan’s significant experience in
executive management positions at various manufacturing companies, as well
as his background in engineering qualifies him for service as a director
of our Company.
|
|
|
Dr.
Steven Brueck, 66
Director
|
Dr.
Brueck has served as a director of the Company since July 2001. He is the
Director of the Center for High Technology Materials (CHTM) and Professor
of Electrical and Computer Engineering and Professor of Physics at the
University of New Mexico in Albuquerque, New Mexico, which he joined in
1985. He is a graduate of Columbia University with a Bachelor of Science
degree in Electrical Engineering and a graduate of the Massachusetts
Institute of Technology where he received his Masters of Science degree in
Electrical Engineering and Doctorate of Science degree in Electrical
Engineering. Dr. Brueck is a fellow of the OSA, the IEEE and the AAAS.
Dr. Brueck serves on the Company’s Audit Committee. Dr. Brueck’s
background in engineering and his significant experience in research and
materials systems qualify him for service as a director of our
Company.
|
10
Class
III Directors
|
Louis
Leeburg, 57
Director
|
Mr.
Leeburg has served as a director of the Company since May 1996. Mr.
Leeburg is currently a self-employed business consultant. From 1988
until 1993 he was the Vice President for Finance of The Fetzer Institute,
Inc. From 1980 to 1988 he was in financial positions with different
organizations with an emphasis in investment management. Mr. Leeburg
was an audit manager for Price Waterhouse & Co. until 1980. Mr.
Leeburg is currently on the board of directors of BioValve Inc., a private
venture capital backed company. Mr. Leeburg received a Bachelor of Science
degree in Accounting from Arizona State University. He is a member
of Financial Foundation Officers Group and the treasurer and trustee for
the John E. Fetzer Memorial Trust Fund and The Institute for Noetic
Sciences. Mr. Leeburg also serves on the Company’s Audit and Finance
Committees. Mr. Leeburg has a broad range of experience in accounting
and financial matters. His expertise gained in his role as an audit
manager for Price Waterhouse & Co. and his service as Vice President
of Finance of the Fetzer Institute, Inc. add invaluable knowledge to our
Board and qualify him for service as a director of our
Company.
|
|
|
Gary
Silverman, 71
Director
|
Mr.
Silverman has served as a director of the Company since September
2001. Mr. Silverman is currently the managing partner of GWS
Partners, established in 1995 to conduct searches for senior-level
executives and board of director candidates for a broad cross section of
publicly held corporations. From 1983 to 1995 he worked for
Korn/Ferry International as an executive recruiter and held the position
of Managing Director. He spent fourteen years with Booz, Allen &
Hamilton, and in his last position as Vice President and Senior Client
Officer was responsible for generation of new business, the management of
client assignments and the development of professional staff. Mr.
Silverman is a graduate of the University of Illinois with both a Bachelor
of Science degree and Masters of Science degree in Finance. Mr.
Silverman also serves on the Company’s Compensation Committee and Audit
Committee. Mr. Silverman contributes a unique attribute to our Board in
that he has extensive experience in the human resources aspect of our
Company. Mr. Silverman’s background in advising companies in the
development of professional staff qualifies him for service as a director
of our Company.
|
11
Executive
Officers Who Do Not Serve as Directors
|
Dorothy
Cipolla, 54
Chief
Financial Officer,
Secretary
and Treasurer
|
Ms.
Cipolla has been the Company’s Chief Financial Officer, Secretary and
Treasurer since February 2006. Ms. Cipolla was Chief Financial Officer and
Secretary of LaserSight Technologies, Inc., (“LaserSight”) from March 2004
to February 2006. Prior to joining LaserSight, she served in various
financial management positions. From 1994 to 1999, she was Chief Financial
Officer and Treasurer of Network Six, Inc., a NASDAQ-listed professional
services firm. From 1999 to 2002, Ms. Cipolla was Vice President of
Finance with Goliath Networks, Inc., a privately held network consulting
company. From 2002 to 2003, Ms. Cipolla was Department Controller of
Alliant Energy Corporation, a regulated utility. She received a Bachelor
of Science degree in Accounting from Northeastern University and is a
Certified Public Accountant in Massachusetts.
|
|
|
Dr.
Brian Soller, 37
Vice
President, Business Development and Sales
|
Dr.
Soller started serving as the Company’s Vice President of Business
Development and Sales in September 2010. Previously, Dr. Soller was
Corporate Vice President of Strategic Business Development at Luna
Innovations Incorporated (“Luna”) from June 2009 to August 2010, where he
focused on corporate growth via strategic alliances, marketing and sales
and channel strategy. Dr. Soller also held the following positions at
Luna: Division President of the Products Division from January 2008 to May
2009, Vice President & General Manager of the Luna Technologies
Division from November 2006 to December 2007, and Business Unit Director
of the Products Division from October 2005 to November
2006. From December 2001 to September 2005, he was a Senior Optical
Engineer at Luna. Dr. Soller is a Goldwater scholar who received his
Bachelor of Science degree in mathematics and physics from the University
of Wisconsin-LaCrosse. He conducted his doctoral studies as a National
Defense Science and Engineering Graduate fellow in optical science at the
University of Rochester in New York. He has authored numerous publications
and has several patents pending.
|
|
|
Alan
Symmons, 39
Vice
President of Engineering
|
Mr.
Symmons has been the Company’s Director of Engineering since October 2006.
In September 2010, he was promoted to Corporate Vice President of
Engineering. Prior to joining LightPath, Mr. Symmons was Engineering
Manager for Aurora Optical, a subsidiary of Multi-Fineline Electronix,
(“MFLEX”), dedicated to the manufacture of cell phone camera modules. From
2000 to 2006, Mr. Symmons worked for Applied Image Group – Optics,
(“AIG/O”), a recognized leader in precision injection molded plastic
optical components and assemblies, working up to Engineering Manager.
AIG/O was purchased by MFLEX in 2006. Prior to 2000, Mr. Symmons held
engineering positions at Ryobi N.A., SatCon Technologies and General
Dynamics. Mr. Symmons has a Bachelor of Science degree in Mechanical
Engineering from Rensselaer Polytechnic Institute and a Masters of
Business Administration degree from the Eller School of Management at the
University of Arizona.
|
12
Other
Significant Employees
|
Michael
Lancaster, 46
Director
of Operations
|
Mr.
Lancaster has been the Company’s Director of Operations since November
2006. Mr. Lancaster was the Materials Manager for Bolton Medical from
August 2005 to November 2006. Prior to joining Bolton Medical he held the
position of Logistics/Materials Manager for Hydro Aluminum from March 2000
to May 2005. Mr. Lancaster was also Materials Manager at Yuasa, Inc. from
October 1998 to April 2005. He obtained a Masters of Business
Administration degree and a Bachelor of Arts degree in Industrial
Relations from Western Illinois University.
|
|
|
Ray
Pini, 40
Director
of Marketing
|
Mr.
Pini was promoted to the Company’s Director of Marketing in August 2008.
Prior to that Mr. Pini was Marketing Manager from October 2006. Prior to
joining the Company, Mr. Pini was Marketing Applications Manager for
Horiba Jobin Yvon, Optical Spectroscopy Division from October 1994 to
October 2006. His noted publications include “Photoluminescence in the NIR
with an Array Detector”, “Optical Emissions Studies for the
Characterization of Pulsed Magnetron Sputtering Systems” and “Resolving
Resolution”. He is a member of Optical Society of America, SPIE- The
International Society for Optical Engineering and The Society for Applied
Spectroscopy. He obtained his Masters of Business Administration degree
from Rider University and a Masters of Science degree in Physics at the
University of Oregon.
|
|
|
Rob
Myers, 37
Director
of Sales
|
Mr.
Myers was appointed Director of Sales of the Company in September
2008. An employee of the Company for 10 years, Mr. Myers has
previously served in various Sales, Marketing, and Product Management
positions within the Company. Prior to joining the Company, Mr.
Myers was a Senior Sales Engineer with NSG America, a leading optical
gradient index lens manufacturer, and Hamamatsu Corporation, where he
specialized in infrared detectors and emitters. Mr. Myers'
management experience also includes 12 years of service as a Military
Intelligence Officer in the United States Army. He holds a Bachelor
of Science degree in Electrical Engineering from the Illinois Institute of
Technology and has worked in the optics industry since
1996.
|
13
|
Mr.
Bill Moreshead, 58
Manufacturing
Engineering Manager
|
Mr.
Moreshead has been with the Company since March 1987. Mr. Moreshead has
served as Senior Research Engineer, Mold Production Manager and Senior
Development/Product Engineer. From 2002 to 2007 he held the position of
Quality Assurance Director. Mr. Moreshead has been the Manufacturing
Engineering Manager of the Company since 2007. He holds a Master of
Science degree in Chemistry from the University of Florida and is
currently enrolled as a graduate student in a Ph.D. program in Chemistry
at the University of Central Florida. He was the principal scientist and
research assistant of a team that developed porous silica materials for
use in carbon monoxide detectors. He is co-author of winning proposals for
a NIST Advanced Technology program as well as several
publications.
|
Meetings
of the Board of Directors and its Committees
The Board of Directors has an Audit
Committee, a Compensation Committee and a Finance Committee. The Board of
Directors does not have a standing nominating committee. The entire Board
of Directors met six times, including telephonic meetings, during fiscal year
2010. All of the directors attended 92% or more of the meetings of the
Board of Directors and the meetings held by committees of the Board of Directors
on which they served. Except for Sohail Khan, all of the then elected directors
attended the 2010 Annual Meeting of Stockholders on February 4,
2010.
It is the
Company’s policy that all directors of the Company are required to make a
concerted and conscientious effort to attend the Company’s Annual Meeting of the
Stockholders in each year during which that director serves as a member of the
Board of Directors of the Company.
Audit
Committee. The Audit Committee, which consists of Dr. Steven
Brueck, Louis Leeburg (Chairman) and Gary Silverman, met four times during
fiscal year 2010. The meetings included discussions with management and the
Company’s independent auditors to discuss the interim and annual financial
statements and the annual report of the Company and the Company’s financial and
accounting functions and organization. The Audit Committee acts pursuant to a
written charter adopted by the Board of Directors, a copy of which is available
on the Company’s website at www.lightpath.com. The Audit Committee’s
responsibilities include, among others, direct responsibility for the engagement
and termination of the Company’s independent accountants, and overseeing the
work of the accountants and determining the compensation for their
engagement(s). The Board of Directors has determined that the Audit Committee is
comprised entirely of independent members as defined under applicable listing
standards set out by the SEC, the National Association of Securities Dealers
(NASD) and the Nasdaq Capital Market. The Board of Directors has also
determined that at least one member of the Audit Committee, Mr. Leeburg, is
an “audit committee financial expert” as defined by SEC rules. Mr.
Leeburg’s business experience that qualifies him to be determined an “audit
committee financial expert” is described above.
14
Compensation
Committee. The Compensation Committee, which consists of Sohail
Khan, Robert Ripp and Gary Silverman (Chairman), met once during fiscal year
2010. The Compensation Committee reviews and recommends to the Board of
Directors the compensation and benefits of certain executive officers of the
Company, including the Chief Executive Officer, and the Chief Financial Officer
and also administers the Amended and Restated Omnibus Plan, pursuant to which
incentive awards, including stock options, are granted to directors, executive
officers and key employees of the Company. The Compensation Committee does
not have a charter and may not delegate its authority to other
persons.
The
Compensation Committee is responsible for establishing, implementing and
continually monitoring the Company’s compensation policies and philosophy. The
Compensation Committee is responsible for determining executive compensation,
including approving recommendations regarding equity awards to all executive
officers of the Company. However, the Compensation Committee does rely on
the annual reviews made by the Chief Executive Officer with respect to the
performance of each of the Company’s other executive officers. In the case of
the Chief Executive Officer, compensation is determined solely based on the
review conducted by the Compensation Committee. The conclusions reached and
recommendations based on these reviews, including with respect to salary
adjustments and annual award amounts, are presented to the Compensation
Committee. The Compensation Committee can exercise its discretion in modifying
any recommended adjustments or awards to executive officers. Neither the
Compensation Committee nor management employed any compensation consultants
during the fiscal year 2010.
The
Compensation Committee also annually reviews director compensation to ensure
non-employee directors are adequately compensated for the time expended in
fulfilling their duties to the Company as well as the skill-level required by
the Company of members of the Board of Directors. After the Compensation
Committee completes their annual review, they make recommendations to the Board
of Directors regarding director compensation. For fiscal 2010, the Board
determined that the current cash and stock-based incentive compensation awarded
to directors was still appropriate.
Finance
Committee. The Finance Committee, which consists of Louis Leeburg
and Robert Ripp, did not meet during fiscal year 2010. The Finance
Committee reviews and provides guidance to the Board of Directors and management
with respect to the Company’s significant financial policies. The full
Board of Directors performed these functions in fiscal year 2010 especially with
regard to matters having to do with the Company’s financing transactions
concluded throughout the fiscal year.
All current committee members are
expected to be nominated for re-election to the same committees at a Board of
Directors meeting to be held immediately following the Annual
Meeting.
Nominations
Process and Criteria
The Board of Directors does not
consider it necessary to form a committee of the Board of Directors specifically
for governance or nomination matters due to the modest scope of the Company.
With respect to nomination matters, all independent directors participate in the
consideration of director nominees. The Board of Directors has determined that
each current director, except for Mr. Gaynor, meets the independence criteria
for members of a nominating committee as set forth in the applicable rules of
the Nasdaq Capital Market and the SEC. Due to the status of Mr. Gaynor as the
Company’s Chief Executive Officer, he is not an independent board member and may
not specifically nominate anyone for Board membership nor vote on the matter of
appointments to the Board of Directors.
15
Additionally, the Board of Directors
believes it is not necessary to adopt criteria for the selection of directors.
The Board of Directors believes that the desirable background of a new
individual member of the Board of Directors may change over time and that a
thoughtful, thorough selection process is more important than adopting criteria
for directors. The Board of Directors is fully open to utilizing whatever
methodology is efficient in identifying new, qualified directors when needed,
including using industry contacts of the Company’s directors or professional
search firms.
There were no fees paid or due to third
parties in fiscal 2010 to identify or evaluate or to assist in evaluating or
identifying potential nominees to the Board.
Any
stockholder wishing to propose that a person be nominated for or appointed to
the Board of Directors may submit such a proposal, according to the procedure
described in the stockholder proposal section on page 6 of this proxy
statement, to:
Corporate
Secretary
LightPath
Technologies, Inc.
2603
Challenger Tech Court, Suite 100
Orlando,
Florida 32826
Such
correspondence will be timely forwarded to the Chairman of the Audit Committee
for review and consideration in accordance with the criteria described above.
The independent directors will consider director candidates recommended by
stockholders.
Director
Independence
In
accordance with Nasdaq Capital Market and SEC rules, the Board of Directors
affirmatively determines the independence of each director and nominee for
election as a director in accordance with guidelines it has adopted, which
include all elements of independence set forth in the Nasdaq Capital Market
listing standards. Based on these standards, the Board has determined that
each of the following non-employee directors is independent and has no
relationship with the Company, except as a director and stockholder of the
Company:
|
Robert
Ripp
|
Steven
Brueck
|
|
Gary
Silverman
|
Sohail
Khan
|
|
Louis
Leeburg
|
All
members of the Audit and Compensation Committees are also independent. The
Board of Directors approved a Code of Business Conduct and Ethics on May 3, 2004
(the “Code”). The Code applies to the Chief Executive Officer, Chief
Financial Officer and senior financial officers and the entire Board of
Directors. A copy of the Code is posted on the Company’s website at www.lightpath.com.
16
Related
Transactions
When the Company is contemplating
entering into any transaction in which any executive officer, director, nominee
or any family member of the foregoing would have any direct or indirect
interest, regardless of the amount involved, the terms of such transaction have
to be presented to the full Board of Directors (other than any interested
director) for approval. The Board has not adopted a written policy for
related party transaction review but when presented with such transaction, they
are discussed by the full Board of Directors and documented in the board
minutes.
In July 2008, the Board of Directors
was presented with a Securities Purchase Agreement with twenty-four
institutional and private investors with respect to a private placement of 8%
senior convertible debentures. Among the investors were Steven Brueck, J. James
Gaynor, Louis Leeburg, Robert Ripp, Gary Silverman and James Magos, all of whom
were directors or officers of LightPath at the time of the transaction.
Mr. Ripp invested $250,000 and the others each invested $25,000 or less. The
principal amount outstanding on the convertible debenture held by Mr. Ripp is
$187,500 as of December 13, 2010. The principal amount outstanding on each of
the convertible debentures held by Dr. Brueck, Mr. Gaynor, Mr. Leeburg and Mr.
Silverman is $18,750 as of December 13, 2010. Mr. Magos converted in full his
convertible debenture to shares of common stock. All interest due on the
convertible debentures was previously prepaid by the Company in shares of common
stock.
In April
2010 the Board of Directors was presented with a Securities Purchase Agreement
with seven institutional and private investors, with respect to a private
placement of the Company’s Class A common stock at $2.20 per share for all
non-insider purchasers. Among the investors were J. James Gaynor, who invested
$5,000, and Louis Leeburg, who invested $10,000, both of whom were directors or
an officer of LightPath at the time of the offering. After Board
discussion and approval, Mr. Gaynor and Mr. Leeburg were allowed to participate
in the transaction at a price of $2.2325 per share of common stock.
Board
of Directors Leadership Structure and Role in Risk Oversight
Our full
Board of Directors is responsible for the oversight of our operational risk
management process. Our Board has assigned responsibility for addressing
certain risks, and the steps management has taken to monitor, control and report
such risks, to our Audit and Finance Committees. Such risks include risks
relating to execution of our growth strategy, the effects of the contracting in
the global economy and general financial condition and outlook on customer
purchases, component inventory supply, or ability to expand our partner network,
communication with investors, certain actions of our competitors, the protection
of our intellectual property, sufficiency of our capital, inventory investment
and risk of obsolescence, security of information systems and data, integration
of new information systems, credit risk, product liability and costs of reliance
on external advisors with appropriate reporting of these risks to be made to the
full Board.
17
Our Board
relies on our Compensation Committee to address significant risk exposures
facing the Company with respect to compensation, including risks relating to
retention of key employees, protection of partner relationships, management
succession and benefit costs, also with appropriate reporting of these risks to
be made to the full Board. Our Board’s role in the oversight of our risk
management has not affected our Board’s determination that separate Chief
Executive Officer and Chairman positions constitute the most appropriate
leadership structure for the Company at this time. Our Audit and Finance
Committees and our full Board review and comment on risk factors related to the
Company. The Audit and Finance Committees, along with the full Board, after
reviewing such risks factors, use the risk factors to initiate discussions with
appropriate members of our senior management if such risk factors raise
questions or concerns about the status of operational risks then facing the
Company.
Stockholder
Communications with the Board of Directors
Stockholders
and other parties interested in communicating directly with the Board of
Directors, a committee of the Board of Directors, or any individual director,
may do so by sending a written communication to the attention of the intended
recipient(s) in care of the Corporate Secretary, LightPath Technologies, Inc.,
2603 Challenger Tech Court, Suite 100, Orlando, Florida USA 32826. The
Corporate Secretary will forward all appropriate communications to the Chairman
of the Audit Committee.
18
AUDIT
COMMITTEE REPORT
The Audit Committee is responsible for,
among other things, reviewing and discussing the Company’s audited financial
statements with management, discussing with the Company's independent auditors
information relating to the auditors' judgments about the quality of the
Company's accounting principles, recommending to the Board of Directors that the
Company include the audited financial statements in its Annual Report on Form
10-K and overseeing compliance with the SEC requirements for disclosure of
auditors' services and activities. At the recommendation of the Audit Committee,
the Board of Directors first approved a charter for the Audit Committee on
November 14, 2000, which was subsequently revised and approved by the Board of
Directors on May 10, 2004.
Review
of Audited Financial Statements
The Audit Committee has reviewed the
Company's financial statements for the fiscal year ended June 30, 2010, as
audited by Cross, Fernandez & Riley, LLP, the Company's independent
auditors, and has discussed these financial statements with management. In
addition, the Audit Committee has discussed with Cross, Fernandez & Riley,
LLP the matters required to be discussed by Statements of Auditing Standard No.
114, as may be modified or supplemented. Furthermore, the Audit Committee has
received the written disclosures and the letter from Cross, Fernandez &
Riley, LLP required by the Independence Standards Board Standard No. 1, as may
be modified or supplemented, and has discussed with Cross, Fernandez &
Riley, LLP its independence.
Generally, the members of the Audit
Committee are not professionally engaged in the practice of auditing or
accounting and are not experts in the fields of accounting or auditing, or in
determining auditor independence. However, the Board of Directors has determined
that each member of the Audit Committee meets the independence criteria set
forth in the applicable rules of Nasdaq Capital Markets and the SEC, and that at
least one member of the Audit Committee, Mr. Leeburg, is an “audit
committee financial expert” as defined by SEC rules. Members of the Audit
Committee rely, without independent verification, on the information provided to
them and on the representations made by management. Accordingly, the Audit
Committee's oversight does not currently provide an independent basis to
determine that management has maintained procedures designed to assure
compliance with accounting standards and applicable laws and
regulations.
Recommendation
Based upon the foregoing review and
discussion, the Audit Committee recommended to the Board of Directors that the
audited financial statements for the fiscal year ended June 30, 2010, be
included in the Company's Annual Report on Form 10-K for such fiscal
year.
|
Audit
Committee:
|
||
|
Louis
Leeburg, Chairman
|
||
|
Dr.
Steven Brueck
|
||
|
Gary
Silverman
|
19
SECURITY
OWNERSHIP OF
CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth, as of December 13, 2010, the number and percentage
of outstanding shares of the Company's Class A common stock, owned by: (i) each
director (which includes all nominees) at such date, (ii) each of the officers
named in the Summary Compensation Table below, (iii) directors and executive
officers of the Company as a group at such date, and (iv) each person known by
the Company to be the beneficial owner of more than 5% of the outstanding Class
A common stock of the Company at such date.
The
number of shares beneficially owned by each director or executive officer is
determined under SEC rules, and the information is not necessarily indicative of
the beneficial ownership for any other purpose. Under such rules,
beneficial ownership includes any shares to which the individual has the sole or
shared voting power or investment power and also any shares which the individual
has the right to acquire within 60 days of December 13, 2010, through the
exercise of any stock option or other right to purchase, such as a
warrant. Unless otherwise indicated, each person has sole investment and
voting power (or shares such power with his or her spouse) with respect to the
shares set forth in the following table. In certain instances, the number of
shares listed may include, in addition to shares owned directly, shares held by
the spouse or children of the person, or by a trust or estate of which the
person is a trustee or an executor or in which the person may have a beneficial
interest. The table that follows is based upon information supplied by the
executive officer, directors and principal stockholders, or based upon
information in Schedule 13Gs filed with the SEC.
20
|
Securities
|
||||||||||||||||||||||||||||
|
Common
Stock Class A
|
Amount
of
Shares
of
Class
A
Common
Stock
Beneficially
|
Percent
Owned
|
||||||||||||||||||||||||||
|
Name
and Address (1)
|
Restricted
|
Unrestricted
|
Warrants
|
Debentures
|
Options
|
Owned
|
(%)
|
|||||||||||||||||||||
|
Robert
Ripp, Director (2)(3)
|
86,700 | 267,648 | 212,750 | 121,753 | 36,100 | 724,951 | 4 | % | ||||||||||||||||||||
|
Gary
Silverman, Director (4)
|
86,700 | 19,042 | 11,276 | 12,175 | 21,100 | 150,293 | 1 | % | ||||||||||||||||||||
|
Louis
Leeburg, Director (5)
|
86,700 | 20,709 | 11,731 | 12,175 | 6,100 | 137,415 | 1 | % | ||||||||||||||||||||
|
Sohail
Khan, Director (6)
|
87,900 | - | - | - | 6,100 | 94,000 | 1 | % | ||||||||||||||||||||
|
Dr.
Steve Brueck, Director (7)
|
86,700 | 9,980 | 11,276 | 12,175 | 6,100 | 126,231 | 1 | % | ||||||||||||||||||||
|
J.
James Gaynor, President & CEO (8)
|
- | 12,253 | 11,504 | 12,175 | 155,000 | 190,932 | 1 | % | ||||||||||||||||||||
|
Dorothy
Cipolla, CFO, Secretary & Treasurer
|
- | - | - | - | 64,000 | 64,000 | * | |||||||||||||||||||||
|
Brian
Soller, Vice President of Business Development and Sales
|
- | - | - | - | 20,000 | 20,000 | * | |||||||||||||||||||||
|
Alan
Symmons, Vice President of Engineering
|
- | - | - | - | 27,000 | 27,000 | * | |||||||||||||||||||||
|
All
directors and named executive officers currently holding office as a group
(9 persons)
|
434,700 | 329,632 | 258,537 | 170,453 | 341,500 | 1,534,822 | 8 | % | ||||||||||||||||||||
|
Berg &
Berg Enterprises, LLC (9)
|
- | 1,215,906 | - | - | - | 1,215,906 | 13 | % | ||||||||||||||||||||
* less
than 1%
Notes:
(1) Except
as otherwise noted, each of the parties listed above has sole voting and
investment power over the securities listed. The address for all directors and
executive officers is “in care of” LightPath Technologies, Inc., 2603 Challenger
Tech Court, Suite 100, Orlando, FL 32826. The address for Berg & Berg
Enterprises, LLC as indicated in a Schedule 13G filed February 14, 2008, is
10050 Bandley Drive, Cupertino, CA, 94014.
(2) Does
not include 7,812 shares of Class A common stock and warrants to purchase 15,000
shares of Class A common stock which are owned by trusts for Mr. Ripp's adult
children and for which he disclaims beneficial ownership.
(3) Includes
370,603 shares of Class A common stock with respect to which Mr. Ripp has the
right to acquire. Specifically, Mr. Ripp holds a debenture issued by the
Company in the principal amount of $187,500, which is currently convertible into
121,753 shares of Class A common stock. Mr. Ripp also holds warrants which
are currently exercisable for an aggregate of 212,750 shares of Class A common
stock and options which are currently exercisable for an aggregate of 36,100
shares of Class A common stock.
21
(4) Includes
44,551 shares of Class A common stock with respect to which Mr. Silverman has
the right to acquire. Specifically, Mr. Silverman holds a debenture issued
by the Company in the principal amount of $18,750, which is currently
convertible into 12,175 shares of Class A common stock. Mr. Silverman also
holds warrants which are currently exercisable for an aggregate of 11,276 shares
of Class A common stock and options which are currently exercisable for an
aggregate of 21,100 shares of Class A common stock.
(5) Includes
30,006 shares of Class A common stock with respect to which Mr. Leeburg has the
right to acquire. Specifically, Mr. Leeburg holds a debenture issued by
the Company in the principal amount of $18,750, which is currently convertible
into 12,175 shares of Class A common stock. Mr. Leeburg also holds
warrants which are currently exercisable for an aggregate of 11,731 shares of
Class A common stock and options which are currently exercisable for an
aggregate of 6,100 shares of Class A common stock.
(6)
Includes 6,100 shares of Class A common stock with respect to which Mr. Khan has
the right to acquire. Specifically, Mr. Khan holds options which are
currently exercisable for an aggregate of 6,100 shares of Class A common
stock.
(7) Includes
29,551 shares of Class A common stock with respect to which Dr. Brueck has the
right to acquire. Specifically, Dr. Brueck holds a debenture issued by the
Company in the principal amount of $18,750, which is currently convertible into
12,175 shares of Class A common stock. Dr. Brueck also holds warrants
which are currently exercisable for an aggregate of 11,276 shares of Class A
common stock and options which are currently exercisable for an aggregate of
6,100 shares of Class A common stock.
(8)
Includes 178,679 shares of Class A common stock with respect to which Mr. Gaynor
has the right to acquire. Specifically, Mr. Gaynor holds a debenture
issued by the Company in the principal amount of $18,750, which is currently
convertible into 12,175 shares of Class A common stock. Mr. Gaynor also
holds warrants which are currently exercisable for an aggregate of 11,504 shares
of Class A common stock and options which are currently exercisable for an
aggregate of 155,000 shares of Class A common stock.
(9) Excludes
1,011,227 shares of Class A common stock with respect to which Berg & Berg
Enterprises, LLC (“BBE”) may have the right to acquire in the future.
Specifically, BBE holds a debenture issued by the Company in the principal
amount of $750,000, which is convertible into 487,013 shares of Class A common
stock. BBE also holds warrants which are exercisable for an aggregate of
524,214 shares of Class A common stock. However, neither BBE nor the
Company is able to effect any conversion of the debenture or any exercise of the
warrants to the extent that after giving effect to such issuance after
conversion or exercise, as the case may be, BBE would beneficially own in excess
of 4.99% of the number of shares of Class A common stock outstanding immediately
after giving effect to the issuance of shares issuable upon conversion or
exercise of the debenture or warrants. Given that BBE currently holds in
excess of 4.99% of the issued and outstanding share of Class A common stock, the
debenture cannot be converted and the warrants cannot be exercised.
22
There are
no arrangements known to the Company which may at a subsequent date result in a
change-in-control.
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Securities Exchange Act requires the Company’s executive officers
and directors and persons who own more than 10% of the Company’s Class A common
stock to file reports of ownership and changes in ownership with the SEC and
furnish copies of such reports to the Company. The SEC has also designated
specific due dates for such reports and the Company must identify in this proxy
statement those persons who did not properly file such reports when due. To the
best of the Company’s knowledge, Berg & Berg Enterprises, LLC did not file
Forms 4 or 5 as required by Section 16(a) of the Securities and Exchange Act;
however all other required filings in fiscal year 2010 were properly made in a
timely fashion. In making the above statements, the Company has relied
solely on its review of copies of the reports furnished to the Company and
written representations from certain reporting persons.
EXECUTIVE
COMPENSATION
Compensation
Philosophy and Objectives. The Company’s compensation
policy is designed to attract and retain qualified key executives critical to
the Company’s achievement of reaching and maintaining profitability and positive
cash flow, and subsequently its growth and long-term success. To
attract, retain, and motivate the executives officers required to accomplish our
business strategy, the Compensation Committee establishes our executive
compensation policies and oversees our executive compensation
practices.
The
Compensation Committee believes that the most effective executive compensation
program is one that is designed to reward the achievement of our specific
annual, short-term and long-term goals, and which aligns executives’ interests
with those of the stockholders by rewarding performance that meets or exceeds
established goals, with the ultimate objective of improving stockholder
value.
It is the
objective of the Compensation Committee to have a portion of each executive
officer’s compensation contingent upon the Company’s performance as well as upon
the individual’s personal performance. Accordingly, each executive
officer’s compensation package is comprised of two elements: (i) base salary,
which reflects individual performance and expertise and (ii) bonus and long-term
equity incentive awards, which are tied to the achievement of certain
performance goals that the Compensation Committee established from time to time.
Based on the foregoing objectives, the Compensation Committee has structured
compensation of our executive officers to achieve the business goals set by the
Company and reward the executive officers for achieving such goals.
The
Compensation Committee also evaluates our compensation program to ensure that we
maintain the ability to attract and retain superior employees in key positions
and that compensation provided to key employees remains competitive relative to
the compensation paid to similarly situated executive officers.
23
Setting Executive
Compensation.
In making
compensation decisions, the Compensation Committee relies on the
following:
|
|
·
|
the
annual reviews made by the Chief Executive Officer with respect to the
performance of each of the Company’s other executive
officers;
|
|
|
·
|
the
annual review conducted by the Compensation Committee with respect to the
performance of the Chief Executive
Officer;
|
|
|
·
|
compensation
paid to executive officers of other manufacturing companies similar in
size and scope as the Company and its competitors;
and
|
|
|
·
|
the
annual performance of the Company with respect to our short-term and
long-term strategic plan.
|
There is
no pre-established policy or target for the allocation between either cash and
non-cash or short-term and long-term incentive compensation. Rather, the
Compensation Committee reviews information to determine the appropriate level
and mix of incentive compensation.
Based on
these factors, the Compensation Committee makes compensation decisions,
including salary adjustments and annual bonus awards for the Company’s executive
officers.
2010 Executive
Compensation Components. For the year ended
June 30, 2010, the principal components of compensation for executive
officers were:
|
|
•
|
base
salary; and
|
|
|
•
|
Bonus
and long-term equity incentive
awards.
|
Base Salary.
Base salaries are determined for each executive officer based on his or
her individual qualifications and relevant experience, the strategic goals which
he or she was responsible for, the compensation levels at companies which
compete with the Company for business and executive talent, and other incentives
necessary to attract and retain qualified management. Salary levels are reviewed
annually as part of our performance review process as well as upon a promotion
or other change in job responsibility. Merit based increases to base salaries
are based on the annual reviews conducted by the Chief Executive Officer, for
all executive officers other than the Chief Executive Officer, the annual review
conducted by the Compensation Committee with respect to the Chief Executive
Officer and the Compensation Committee’s assessment of each individual
executive’s performance. Due to existing economic conditions, no pay increases
were given to the named executive officers in fiscal 2010.
Bonuses and
Long-Term Equity Incentive Awards. We provide executive
officers and other employees with incentive compensation to incentivize and
reward them for high performance and achievement of certain Company goals. The
bonus program gives the Compensation Committee the latitude to award cash or
stock options as incentive compensation to executive officers as a reward for
our growth and profitability. Stock options are awarded under the Omnibus
Amended and Restated Incentive Plan. In granting these awards, the
Compensation Committee may establish any conditions or restrictions it deems
appropriate. Options are awarded at the closing price of the Company’s
stock on the date of the grant as determined by NASDAQ. For fiscal 2010, there
was no performance-based incentive compensation for the executive officers as a
result of our failure to achieve applicable performance targets. However, the
Compensation Committee did grant discretionary non-plan options to the
executives in fiscal 2010. For more information, please see the Narrative
Discussion of Summary Compensation section as related to J. James Gaynor and
Dorothy Cipolla.
24
Retirement
Benefits. We offer a qualified 401(k) defined contribution plan. The
ability of executive officers to participate fully in this plan is limited under
IRS and ERISA requirements. The 401(k) plan encourages employees to save for
retirement by investing on a regular basis through payroll
deductions.
Executive
Compensation and Risk. Although a substantial portion of the compensation
paid to our executive officers is performance-based, we believe our executive
compensation programs do not encourage excessive and unnecessary risk-taking by
our executive officers because these programs are designed to encourage our
executive officers to remain focused on both the short-term and long-term
operational and financial goals of the Company. We achieve this balance through
a combination of elements in our overall compensation plans, including: elements
that reward different aspects of short-term and long-term performance; incentive
compensation that rewards performance on a variety of different measures; and
cash awards and stock option awards, to encourage alignment with the interests
of stockholders.
Summary
Compensation Table
The
following table sets forth certain compensation awarded to, earned by or paid to
(i) the Chief Executive Officer and (ii) the one other most highly compensated
executive officer of the Company serving as executive officers at the end of
fiscal year 2010, for services rendered in executive officer capacities to the
Company during fiscal years 2010 and 2009. During fiscal years 2009 and 2010,
the Company had only one individual, other than the Chief Executive Officer,
serving as an executive officer.
|
Option
|
All
Other
|
|
||||||||||||||||
|
Fiscal
|
Salary
|
Awards
|
Compensation
|
Total
|
||||||||||||||
|
Name
and Position
|
Year
|
($)
|
($)**
|
($)
*
|
($)
|
|||||||||||||
|
(a)
|
(b)
|
(c)
|
(f)
|
(i)
|
(j)
|
|||||||||||||
|
J.
James Gaynor
|
2010
|
196,442 | 60,984 | 4,062 | 257,426 | |||||||||||||
|
President
& Chief Executive Officer
|
2009
|
210,289 | 50,345 | 5,219 | 265,853 | |||||||||||||
|
Dorothy
M. Cipolla
|
2010
|
138,173 | 32,585 | 6,411 | 170,758 | |||||||||||||
|
Chief
Financial Officer, Treasurer & Secretary
|
2009
|
140,481 | 48,730 | 2,936 | 192,147 | |||||||||||||
Notes:
* Other
Compensation, does not include perquisites and personal benefits that total less
than $10,000 in the aggregate. The nature of these compensatory items include
the Company’s matching of elective employee 401(k) deferrals and the Company’s
contribution toward the premium cost for employee and dependent medical, dental,
life and disability income insurances, which are also offered to all
employees.
25
**The
Company estimates the fair value of each stock option as of the date of grant in
accordance with Accounting Standards Codification (ASC) Topic 718, Compensation-Stock
Compensation (ASC Topic 718). For stock options and RSUs granted in the
years ended June 30, 2010 and 2009, the Company estimated the fair value of each
stock award as of the date of grant using the following
assumptions:
|
Year Ended
|
Year Ended
|
|
|
June 30, 2010
|
June 30, 2009
|
|
|
Range
of expected volatilities
|
131%
|
108%-132%
|
|
Weighted
average expected volatility
|
131%
|
119%
|
|
Dividend
yields
|
0%
|
0%
|
|
Range
of risk-free interest rate
|
1.34%
|
0.43%-1.79%
|
|
Expected
term, in years
|
3-7
|
3-5.5
|
Most
awards granted under the Company’s Plan vest ratably over two to four years and
generally have three-year to ten-year contract lives. The initial assumed
forfeiture rate used in calculating the fair value of option grants with both
performance and service conditions was 46% for 2009 and 44% for 2010. The
forfeiture rate for RSUs was 5% for 2009 and 0% for 2010. The volatility rate is
based on historical trends in common stock closing prices and the expected term
was determined based primarily on historical experience of previously
outstanding awards. The interest rate used is the treasury interest rate
for constant maturities. The forfeiture rate for RSUs for directors is 0%
because upon termination of service as a director, all outstanding RSUs
immediately vest. The Company uses the Black-Scholes-Merton pricing model. The
amount reflect the dollar amount recognized for financial statement reporting
purposes for the fiscal year ended June 30, 2010 in accordance with ASC
Topic 718 and thus may include amounts from awards granted in and prior to
fiscal 2010.
Narrative
Discussion of Summary Compensation Table
The
following is a narrative discussion of the material factors which we believe are
necessary to understand the information disclosed in the foregoing Summary
Compensation Table. The following narrative disclosure is separated into
sections, with a separate section for each of our executive
officers.
J. James
Gaynor
Cash Compensation (Base Salaries and
Bonuses). Mr. Gaynor was awarded total cash compensation for his services
to the Company in fiscal 2010 in the amount of $196,442. This represents his
annual base salary for fiscal 2010. The base salary paid to Mr. Gaynor for
fiscal 2010 constituted approximately 76% of the total compensation paid to Mr.
Gaynor as set forth in the “Total” column in the Summary Compensation
Table.
Long-Term Equity Incentive
Awards. On July 24, 2006, Mr. Gaynor was granted an option to
purchase 15,000 shares which vested on July 24, 2008. Based on the vesting
schedule of the options, we recognized compensation expense of $723 in 2009 in
accordance with ASC Topic 718.
26
On
October 27, 2006, Mr. Gaynor was granted an option to purchase 20,000 shares
which vested one-fourth of the shares on each of the first, second and third
anniversaries of the grant date, and vested as to the last fourth on October 27,
2010. Based on the vesting schedule of the options, we recognized
compensation expense of $18,093 in fiscal 2009 and $22,910 in fiscal 2010 and we
expect to recognize $7,636 in fiscal 2011 in accordance with ASC Topic
718.
On
November 6, 2007, Mr. Gaynor was granted an option to purchase 15,000 shares
which vests one-fourth of the shares on each of the first, second and third
anniversaries of the grant date, and vests as to the last fourth on November 6,
2011. Based on the vesting schedule of the options, we recognized
compensation expense of $10,119 in fiscal 2009, and $10,684 in fiscal 2010 and
we expect to recognize $10,684 in fiscal 2011 and $2,671 in fiscal 2012 in
accordance with ASC Topic 718.
On
November 6, 2007, Mr. Gaynor was granted an option to purchase 15,000 shares
which vested in thirteen months on December 6, 2008 if certain performance
targets were met. The targets were not met and the option was terminated.
We did not recognize compensation expense in fiscal 2009 or in fiscal 2010, in
accordance with ASC Topic 718.
On
January 31, 2008, Mr. Gaynor was granted an option to purchase 30,000 shares
which vests one-fourth of the shares on each of the first, second and third
anniversaries of the grant date, and vests as to the last fourth on January 31,
2012. Based on the vesting schedule of the options, we recognized $15,750
of compensation expenses for fiscal 2009 and $14,625 for fiscal 2010, we expect
to recognize compensation expense of $14,625 in fiscal 2011 and $8,531 in fiscal
2012 in accordance with ASC Topic 718.
Mr.
Gaynor did not receive an equity incentive award for fiscal 2009 because the
performance targets on which such award was based were not met.
On
February 4, 2010, the Compensation Committee granted Mr. Gaynor an option to
purchase 50,000 shares which vests one-fourth of the shares on each of the
first, second and third anniversaries of the grant date, and vests as to the
last fourth on February 4, 2014. Such option was a discretionary option
granted by the Board of Directors and was not based on the achievement of our
established performance targets. Based on the vesting schedule of the options,
we recognized $12,766 of compensation expenses for fiscal 2010, we expect to
recognize compensation expense of $30,638 in each of fiscal 2011, fiscal 2012
and fiscal 2013 and $17,872 in fiscal 2014 in accordance with ASC Topic
718.
Mr.
Gaynor did not receive an equity incentive award for fiscal 2010 because the
performance targets on which such award was based were not met.
All Other Compensation. Mr.
Gaynor is eligible to participate in COBRA health insurance and in any other
benefits generally available to our executive officers. He received other
compensation of $0 for fiscal 2010 and $5,219 for fiscal 2009 for payments made
for matching 401k contributions and insurance payments for health insurance,
dental insurance, life insurance, short term disability and long term disability
premiums.
27
Change of Control Agreement.
Mr. Gaynor is eligible to receive twenty-four months compensation in the event
of a change of control. For additional details, please see the section titled
“Potential Payments Upon Termination or Change in Control”.
Dorothy
Cipolla
Cash Compensation (Base Salaries and
Bonuses). Ms. Cipolla was awarded total cash compensation for her
services to the Company in fiscal 2010 in the amount of $138,173. This
represents her annual base salary for fiscal 2010. The base salary paid to
Ms. Cipolla for fiscal 2010 constituted approximately 81% of the total
compensation paid to Ms. Cipolla as set forth in the “Total” column in the
Summary Compensation Table.
Long-Term Equity Incentive
Awards. On February 28, 2006, Ms. Cipolla was granted a
stock option for 15,000 shares which vested on the second anniversary of the
grant date. Based on the vesting schedule of the shares, the Company recognized
compensation expense prior to fiscal 2009 in accordance with ASC Topic
718.
On
October 27, 2006, Ms. Cipolla was granted an option to purchase 20,000
shares which vested one-fourth of the shares on each of the first, second and
third anniversaries of the grant date, and vested as to the last fourth on
October 27, 2010. Based on the vesting schedule of the options, the Company
recognized compensation expense of approximately $24,000 in fiscal 2009 and
$22,910 in fiscal 2010 and expects to recognize $7,637 in fiscal 2011 in
accordance with ASC Topic 718.
On
November 6, 2007, Ms. Cipolla was granted an option to purchase 10,000
shares which vests one-fourth of the shares on each of the first, second and
third anniversaries of the grant date, and vests as to the last fourth on
November 6, 2011. Based on the vesting schedule of the options, the Company
recognized compensation expense of $6,746 in fiscal 2009 and $7,123 in fiscal
2010 and expects to recognize compensation expense of $7,123 in fiscal 2011 and
$1,781 in fiscal 2012 in accordance with ASC Topic 718.
On
November 6, 2007, Ms. Cipolla was granted an option to purchase 10,000
shares which vested on December 6, 2008 if certain performance targets were
met. The targets were not met and we did not recognize compensation expense in
fiscal 2009 or fiscal 2010 and the options were terminated in fiscal 2009, in
accordance with ASC Topic 718.
Ms.
Cipolla did not receive an equity incentive award for fiscal 2009 because the
performance targets on which such award was based were not met.
On
February 4, 2010, the Compensation Committee granted Ms. Cipolla an
option to purchase 10,000 shares which vests one-fourth of the shares on each of
the first, second and third anniversaries of the grant date, and vests as to the
last fourth on February 4, 2014. Such option was a discretionary option
granted by the Board of Directors and was not based on the achievement of our
established performance targets. Based on the vesting schedule of the options,
the Company recognized compensation expense of $2,553 in fiscal 2010 and expects
to recognize compensation expense of $6,128 in each of fiscal 2011, fiscal 2012
and fiscal 2013 and $3,574 in fiscal 2014 in accordance with ASC Topic
718.
28
Ms.
Cipolla did not receive an equity incentive award for fiscal 2010 because the
performance targets on which such award was based were not met.
All Other Compensation.
Ms. Cipolla is eligible to participate in COBRA health insurance or in any
other benefits generally available to the Company’s executive officers. She
received other compensation of $0 in fiscal 2010 and $2,936 in fiscal 2009 for
payments made for matching 401k contributions and insurance payments for health
insurance, life insurance, short term disability and long term disability
premiums.
Change of Control Agreement.
Ms. Cipolla is eligible to receive three months compensation in the event
of a change of control. For additional details, please see the section
titled “Potential Payments Upon Termination or Change in Control”.
Potential
Payments upon Termination or Change-in-Control
The
following table provides change of control payments due to the executive
officers named in the Summary Compensation Table. These payments would be due to
the executive officers in the event of a change of control.
|
Amount of Payment Upon
|
||||
|
Executive Officer
|
A Change of Control (1)
|
|||
|
J.
James Gaynor (2)
|
$ | 450,000 | ||
|
Dorothy
Cipolla (3)
|
$ | 41,250 | ||
(1) A
change of control is defined as any of the following transactions
occurring:
|
|
•
|
the
dissolution or liquidation of the
Company,
|
|
|
•
|
the
stockholders of the Company approve an agreement providing for a sale,
lease or other disposition of all or substantially all of the assets of
the Company and the transactions contemplated by such agreement are
consummated,
|
|
|
•
|
a
merger or a consolidation in which the Company is not the surviving
entity,
|
|
|
·
|
any
person acquires the beneficial ownership of securities of the Company
representing at least fifty percent (50%) of the combined voting
power entitled to vote in the election of directors, and, the individuals
who, prior to the transaction, are members of the Board of Directors
(the “Incumbent Board”) cease for any reason to
constitute at least fifty percent (50%) of the Board of Directors
except that if the election of or nomination for election by the
stockholders of any new director was approved by a vote of at least fifty
percent (50%) of the Incumbent Board, such new director shall be
deemed to be a member of the Incumbent
Board.
|
Notwithstanding
the foregoing, a public offering of the common stock of the Company shall not be
considered a change of control.
|
(2)
|
Payments
made pursuant to a change of control to Mr. Gaynor would be paid in a
lump sum and would only be paid out in the event Mr. Gaynor was no
longer employed by the Company.
|
|
(3)
|
Payments
made pursuant to a change of control to Ms. Cipolla would occur according
to our normal payroll schedule and would only be paid out in the event she
was no longer employed by the
Company.
|
29
Outstanding
Equity Awards at Fiscal Year-End
|
|
Option Awards
|
||||||||||||||
|
(a)
|
(b)
|
(c)
|
(e)
|
(f)
|
|||||||||||
|
Number of
|
Number of
|
||||||||||||||
|
Securities
|
Securities
|
||||||||||||||
|
Underlying
|
Underlying
|
||||||||||||||
|
Unexercised
|
Unexercised
|
Option
|
Option
|
||||||||||||
|
Options (#)
|
Options (#)
|
Exercise
|
Vesting
|
Expiration
|
|||||||||||
|
Name
|
Exercisable
|
Unexercisable
|
Price ($)
|
Schedule
|
Date
|
||||||||||
|
J.
James Gaynor
|
15,000 | - | $ | 3.47 |
2
year cliff
|
7/24/2016
|
|||||||||
| 15,000 | 5,000 | $ | 4.80 |
25%/yr
for 4 yrs
|
10/27/2016
|
||||||||||
| 7,500 | 7,500 | $ | 3.05 |
25%/yr
for 4 yrs
|
11/6/2017
|
||||||||||
| 15,000 | 15,000 | $ | 2.10 |
25%/yr
for 4 yrs
|
1/31/2018
|
||||||||||
| - | 50,000 | $ | 2.66 |
25%/yr
for 4 yrs
|
2/4/2020
|
||||||||||
|
Dorothy
Cipolla
|
15,000 | - | $ | 4.53 |
2
year cliff
|
2/28/2016
|
|||||||||
| 15,000 | 5,000 | $ | 4.80 |
25%/yr
for 4 yrs
|
10/27/2016
|
||||||||||
| 5,000 | 5,000 | $ | 3.05 |
25%/yr
for 4 yrs
|
11/6/2017
|
||||||||||
| - | 10,000 | $ | 2.66 |
25%/yr
for 4 yrs
|
2/4/2020
|
||||||||||
The stock
options are issued pursuant to the Omnibus Incentive Plan and have a ten year
life. The awards will terminate 90 days after termination of
employment.
DIRECTOR
COMPENSATION
Director
Compensation
The
Company uses a combination of cash and stock-based incentive compensation to
attract and retain qualified candidates to serve on its Board of Directors. In
setting director compensation, the Company considers the significant amount of
time that directors expend in fulfilling their duties to the Company as well as
the skill-level required by the Company of members of the Board of
Directors.
Cash
Compensation Paid to Board Members
For
fiscal year 2005 and beyond, all non-employee members of the Board of Directors
receive a retainer of $2,000 per month, paid quarterly. There are no meeting
attendance fees paid unless, by action of the Board of Directors, such fees are
deemed advisable due to a special project or other effort requiring extra-normal
commitment of time and effort. Additionally, the following fees are paid to the
Chairman of the Board and Committee Chairmen on a quarterly basis for their
responsibilities overseeing their respective functions:
30
|
Base Amount
|
10%
Reduction
|
|||||||
|
Chairman
of the Board
|
$ | 15,000 | $ | 13,500 | ||||
|
Audit
Committee Chairman
|
$ | 2,000 | $ | 1,800 | ||||
|
Compensation
Committee Chairman
|
$ | 1,000 | $ | 900 | ||||
|
Finance
Committee Chairman
|
$ | 1,000 | $ | 900 | ||||
The
Directors earned the amounts above for fiscal 2010 adjusted for a 10% reduction.
The 10% reduction was put in place when the Orlando staff received a 10% pay
reduction. The Board of Directors fees will revert to base amounts when the
Orlando pay reduction is eliminated. Directors who are employees of the Company
receive no compensation for their service as directors.
Director
Summary Compensation Table
The table
below summarizes the compensation paid by the Company to non-employee directors
for the fiscal year ended June 30, 2010.
|
Fees Earned or
|
Stock
|
|||||||||||
|
Paid
in Cash
|
Awards
|
Total
|
||||||||||
|
Name (1)
|
($)(2)
|
($)(3)(4)
|
($)
|
|||||||||
|
(a)
|
(b)
|
(c)
|
(h)
|
|||||||||
|
Robert
Ripp
|
$ | 92,400 | $ | 14,572 | $ | 106,972 | ||||||
|
Sohail
Khan
|
$ | 26,400 | $ | 14,572 | $ | 40,972 | ||||||
|
Steve
Brueck
|
$ | 26,400 | $ | 14,572 | $ | 40,972 | ||||||
|
Louis
Leeburg
|
$ | 35,200 | $ | 14,572 | $ | 49,772 | ||||||
|
Gary
Silverman
|
$ | 30,800 | $ | 14,572 | $ | 45,372 | ||||||
|
(1)
|
J.
James Gaynor, the Company’s President and Chief Executive Officer during
fiscal 2010, is not included in this table as he was an employee of the
Company and thus received no compensation for his services as director.
The compensation received by Mr. Gaynor as an employee of the Company
is shown in the Summary Compensation Table on page
25.
|
|
(2)
|
Does
not include earned but unpaid board fees at year end as follows: Mr. Ripp
- $18,900, Mr. Leeburg - $7,200, Mr. Silverman - $6,300, Mr. Brueck -
$5,400 and Mr. Khan - $5,400.
|
|
(3)
|
Reflects
the dollar amount recognized for financial statement reporting purposes
for the fiscal year ended June 30, 2010 in accordance with ASC Topic
718 and thus may include amounts from awards granted in and prior to
2010.
|
31
Narrative
Disclosure of Summary Compensation Table of Directors
Robert
Ripp
Cash Compensation (Base Fees and
Position Fees). Mr. Ripp earned total cash compensation for his
services to the Company in fiscal 2010 in the amount of $92,400. This represents
his retainer and chairman fees for fiscal 2010. Fees paid were $92,400 with
$18,900 due in accounts payable at year end. The base fees to Mr. Ripp for
fiscal 2010 constituted approximately 85% of the total fees paid to
Mr. Ripp as set forth in the “Total” column in the Summary Compensation
Table.
Long-Term Equity Incentive
Awards. On November 10, 2005, Mr. Ripp was granted a stock
option for 6,100 shares which vested one-third each on the first, second and
third anniversary of the grant date. Based on the vesting schedule of the
option, the Company recognized compensation expense of $2,293 in fiscal 2009 in
accordance with ASC Topic 718. On February 1, 2008, Mr. Ripp was
granted an option to purchase 30,000 shares which vests one-fourth of the shares
on each of the first, second and third anniversaries of the grant date, and
vests as to the last fourth on February 1, 2012. Based on the vesting
schedule of the option, the Company recognized compensation expense of $51,810
prior to fiscal 2009 in accordance with ASC Topic 718. On November 10,
2005, Mr. Ripp was granted a restricted stock unit for 10,000 shares which
vested one-third of the shares on each of the first and second anniversaries of
the grant date, and vested as to the last third on November 10, 2009. Based
on the vesting schedule of the restricted stock unit, the Company recognized
compensation expense of $1,268 in fiscal 2009 and $117 in fiscal 2010 in
accordance with ASC Topic 718. On October 27, 2006, Mr. Ripp was
granted a restricted stock unit for 10,000 shares which vested one-third of the
shares on each of the first and second anniversaries of the grant date, and
vested as to the last third on October 27, 2009. Based on the vesting
schedule of the restricted stock unit, the Company recognized compensation
expense of $12,920 in fiscal 2009 and $118 in fiscal 2010 in accordance with ASC
Topic 718. On November 6, 2007, Mr. Ripp was granted a restricted
stock unit for 10,000 shares which vests on November 6, 2011. Based on the
vesting schedule of the restricted stock unit, the Company recognized
compensation expense of $8,714 in fiscal 2009 and $7,123 in fiscal 2010 and
expects to recognize $7,123 in fiscal 2011 and $574 in fiscal 2012 in accordance
with ASC Topic 718. On October 30, 2008, Mr. Ripp was granted a
restricted stock unit for 15,000 shares which vested one-third of the shares on
each of the first and second anniversaries of the grant date, and vests as to
the last third on October 30, 2011. Based on the vesting schedule of the
restricted stock unit, the Company recognized compensation expense of $2,040 in
fiscal 2009 and $3,060 in fiscal 2010 and expects to recognize $3,060 in fiscal
2011 and $1,020 in fiscal 2012 in accordance with ASC Topic 718. On
February 4, 2010, Mr. Ripp was granted a restricted stock unit for
15,000 shares which vests one-third of the shares on each of the first and
second anniversaries of the grant date, and vests as to the last third on
February 4, 2013. Based on the vesting schedule of the restricted stock
unit, the Company recognized compensation expense of $4,155 in fiscal 2010 and
expects to recognize $9,970 in fiscal 2011 and fiscal 2012 and $5,815 in fiscal
2013 in accordance with ASC Topic 718.
Sohail
Khan
Cash Compensation (Base Fees and
Position Fees). Mr. Khan earned total cash compensation for his
services to the Company in fiscal 2010 in the amount of $26,400. This represents
his retainer for fiscal 2010. Fees paid were $26,400 with $5,400 due in accounts
payable at year end. The base fees to Mr. Khan for fiscal 2010 constituted
approximately 64% of the total fees paid to Mr. Khan as set forth in the
“Total” column in the Summary Compensation Table.
32
Long-Term Equity Incentive
Awards. On November 10, 2005, Mr. Khan was granted a stock
option for 6,100 shares which vested one-third each on the first, second and
third anniversary of the grant date. Based on the vesting schedule of the
option, the Company recognized compensation expense of $2,293 in fiscal in
accordance with ASC Topic 718. On November 10, 2005, Mr. Khan was
granted a restricted stock unit for 10,000 shares which vested one-third of the
shares on each of the first and second anniversaries of the grant date, and
vested as to the last third on November 10, 2009. Based on the vesting
schedule of the restricted stock unit, the Company recognized compensation
expense of $1,268 in fiscal 2009 and $117 in fiscal 2010 in accordance with ASC
Topic 718. On October 27, 2006, Mr. Khan was granted a restricted
stock unit for 10,000 shares which vested one-third of the shares on each of the
first and second anniversaries of the grant date, and vested as to the last
third on October 27, 2009. Based on the vesting schedule of the restricted
stock unit, the Company recognized compensation expense of $12,920 in fiscal
2009 and $118 in fiscal 2010 in accordance with ASC Topic 718. On
November 6, 2007, Mr. Khan was granted a restricted stock unit for
10,000 shares which vests on November 6, 2011. Based on the vesting
schedule of the restricted stock unit, the Company recognized compensation
expense of $7,507 in fiscal 2009 and $8,714 in fiscal 2010 and expects to
recognize $7,123 in fiscal 2011 and $574 in fiscal 2012 in accordance with ASC
Topic 718. On October 30, 2008, Mr. Khan was granted a
restricted stock unit for 15,000 shares which vested one-third of the shares on
each of the first and second anniversaries of the grant date, and vests as to
the last third on October 30, 2011. Based on the vesting schedule of the
restricted stock unit, the Company recognized compensation expense of $2,040 in
fiscal 2009 and $3,060 in fiscal 2010 and expects to recognize $3,060 in fiscal
2011 and $1,020 in fiscal 2012 in accordance with ASC Topic 718. On
February 4, 2010, Mr. Khan was granted a restricted stock unit for
15,000 shares which vests one-third of the shares on each of the first and
second anniversaries of the grant date, and vests as to the last third on
February 4, 2013. Based on the vesting schedule of the restricted stock
unit, the Company recognized compensation expense of $4,155 in fiscal 2010 and
expects to recognize $9,970 in fiscal 2011 and fiscal 2012 and $5,815 in fiscal
2013 in accordance with ASC Topic 718.
Steven
Brueck
Cash Compensation (Base Fees and
Position Fees). Mr. Brueck earned total cash compensation for his
services to the Company in fiscal 2010 in the amount of $26,400. This represents
his retainer for fiscal 2010. Fees paid were $26,400 with $5,400 due in accounts
payable at year end. The base fees to Mr. Khan for fiscal 2010 constituted
approximately 64% of the total fees paid to Mr. Khan as set forth in the
“Total” column in the Summary Compensation Table.
33
Long-Term Equity Incentive
Awards. On November 10, 2005, Mr. Brueck was granted a stock
option for 6,100 shares which vested one-third each on the first, second and
third anniversary of the grant date. Based on the vesting schedule of the
option, the Company recognized compensation expense of $2,293 in fiscal 2009 in
accordance with ASC Topic 718. On November 10, 2005, Mr. Brueck was
granted a restricted stock unit for 10,000 shares which vested one-third of the
shares on each of the first and second anniversaries of the grant date, and
vested as to the last third on November 10, 2009. Based on the vesting
schedule of the restricted stock unit, the Company recognized compensation
expense of $1,268 in fiscal 2009 and $117 in fiscal 2010 in accordance with ASC
Topic 718. On October 27, 2006, Mr. Brueck was granted a restricted
stock unit for 10,000 shares which vested one-third of the shares on each of the
first and second anniversaries of the grant date, and vested as to the last
third on October 27, 2009. Based on the vesting schedule of the restricted
stock unit, the Company recognized compensation expense of $12,920 in fiscal
2009 and $118 in fiscal 2010 in accordance with ASC Topic 718. On November 6,
2007, Mr. Brueck was granted a restricted stock unit for 10,000 shares
which vests on November 6, 2011. Based on the vesting schedule of the
restricted stock unit, the Company recognized compensation expense of $8,714 in
fiscal 2009 and $7,123 in fiscal 2010 and expects to recognize $7,123 in fiscal
2011 and $574 in fiscal 2012 in accordance with ASC Topic 718. On
October 30, 2008, Mr. Brueck was granted a restricted stock unit for
15,000 shares which vested one-third of the shares on each of the first and
second anniversaries of the grant date, and vests as to the last third on
October 30, 2011. Based on the vesting schedule of the restricted stock
unit, the Company recognized compensation expense of $2,040 in fiscal 2009 and
$3,060 in fiscal 2010 and expects to recognize $3,060 in fiscal 2011 and $1,020
in fiscal 2012 in accordance with ASC Topic 718. On February 4, 2010,
Mr. Brueck was granted a restricted stock unit for 15,000 shares which
vests one-third of the shares on each of the first and second anniversaries of
the grant date, and vests as to the last third on February 4, 2013. Based
on the vesting schedule of the restricted stock unit, the Company recognized
compensation expense of $4,155 in fiscal 2010 and expects to recognize $9,970 in
fiscal 2011 and fiscal 2012 and $5,815 in fiscal 2013 in accordance with ASC
Topic 718.
Louis
Leeburg
Cash Compensation (Base Fees and
Position Fees). Mr. Leeburg earned total cash compensation for his
services to the Company in fiscal 2010 in the amount of $35,200. This represents
his retainer and fee for audit committee chair for fiscal 2010. Fees paid were
$35,200 with $7,200 due in accounts payable at year end. The base fees to
Mr. Leeburg for fiscal 2010 constituted approximately 71% of the total fees
paid to Mr. Leeburg as set forth in the “Total” column in the Summary
Compensation Table.
Long-Term Equity Incentive
Awards. On November 10, 2005, Mr. Leeburg was granted a stock
option for 6,100 shares which vested one-third each on the first, second and
third anniversary of the grant date. Based on the vesting schedule of the
option, the Company recognized compensation expense of $2,293 in fiscal 2009 in
accordance with ASC Topic 718. On November 10, 2005, Mr. Leeburg was
granted a restricted stock unit for 10,000 shares which vested one-third of the
shares on each of the first and second anniversaries of the grant date, and
vested as to the last third on November 10, 2009. Based on the vesting
schedule of the restricted stock unit, the Company recognized compensation
expense of $1,268 in fiscal 2009 and $117 in fiscal 2010 in accordance with ASC
Topic 718. On October 27, 2006, Mr. Leeburg was granted a restricted
stock unit for 10,000 shares which vested one-third of the shares on each of the
first and second anniversaries of the grant date, and vested as to the last
third on October 27, 2009. Based on the vesting schedule of the restricted
stock unit, the Company recognized compensation expense of $12,920 in fiscal
2009 and $118 in fiscal 2010 in accordance with ASC Topic 718. On
November 6, 2007, Mr. Leeburg was granted a restricted stock unit for
10,000 shares which vests on November 6, 2011. Based on the vesting
schedule of the restricted stock unit, the Company recognized compensation
expense of $8,714 in fiscal 2009 and $7,123 in fiscal 2010 and expects to
recognize $7,123 in fiscal 2011 and $574 in fiscal 2012 in accordance with ASC
Topic 718. On October 30, 2008, Mr. Leeburg was granted a restricted
stock unit for 15,000 shares which vested one-third of the shares on each of the
first and second anniversaries of the grant date, and vests as to the last third
on October 30, 2011. Based on the vesting schedule of the restricted stock
unit, the Company recognized compensation expense of $2,040 in fiscal 2009 and
$3,060 in fiscal 2010 and expects to recognize $3,060 in fiscal 2011 and $1,020
in fiscal 2012 in accordance with ASC Topic 718. On February 4, 2010,
Mr. Leeburg was granted a restricted stock unit for 15,000 shares which
vests one-third of the shares on each of the first and second anniversaries of
the grant date, and vests as to the last third on February 4, 2013. Based
on the vesting schedule of the restricted stock unit, the Company recognized
compensation expense of $4,155 in fiscal 2010 and expects to recognize $9,970 in
fiscal 2011 and fiscal 2012 and $5,815 in fiscal 2013 in accordance with ASC
Topic 718.
34
Gary
Silverman
Cash Compensation (Base Fees and
Position Fees). Mr. Silverman earned total cash compensation for his
services to the Company in fiscal 2010 in the amount of $30,800. This represents
his retainer and fee for compensation committee chair for fiscal 2010. Fees paid
were $30,800 with $6,300 due in accounts payable at year end. The base fees to
Mr. Silverman for fiscal 2010 constituted approximately 68% of the total
fees paid to Mr. Silverman as set forth in the “Total” column in the
Summary Compensation Table.
Long-Term Equity Incentive
Awards. On November 10, 2005, Mr. Silverman was granted a stock
option for 6,100 shares which vested one-third each on the first, second and
third anniversary of the grant date. Based on the vesting schedule of the
option, the Company recognized compensation expense of $2,293 in fiscal 2009 in
accordance with ASC Topic 718. On February 1, 2008, Mr. Silverman was
granted a stock option for 15,000 shares which vested on the one third each on
the first, second and third anniversary of the grant date. Based on the vesting
schedule of the option, the Company recognized compensation expense prior to
fiscal 2009 in accordance with ASC Topic 718. On November 10, 2005,
Mr. Silverman was granted a restricted stock unit for 10,000 shares which
vested one-third of the shares on each of the first and second anniversaries of
the grant date, and vested as to the last third on November 10, 2009. Based
on the vesting schedule of the restricted stock unit, the Company recognized
compensation expense of $1,268 in fiscal 2009 and $117 in fiscal 2010 in
accordance with ASC Topic 718. On October 27, 2006, Mr. Silverman was
granted a restricted stock unit for 10,000 shares which vested one-third of the
shares on each of the first and second anniversaries of the grant date, and
vested as to the last third on October 27, 2009. Based on the vesting
schedule of the restricted stock unit, the Company recognized compensation
expense of $12,920 in fiscal 2009 and $118 in fiscal 2010 in accordance with ASC
Topic 718. On November 6, 2007, Mr. Silverman was granted a restricted
stock unit for 10,000 shares which vests on November 6, 2011. Based on the
vesting schedule of the restricted stock unit, the Company recognized
compensation expense of $8,714 in fiscal 2009 and $7,123 in fiscal 2010 and
expects to recognize $7,123 in fiscal 2011 and $5,734 in fiscal 2012 in
accordance with ASC Topic 718. On October 30, 2008, Mr. Silverman was
granted a restricted stock unit for 15,000 shares which vested one-third of the
shares on each of the first and second anniversaries of the grant date, and
vests as to the last third on October 30, 2011. Based on the vesting
schedule of the restricted stock unit, the Company recognized compensation
expense of $2,040 in fiscal 2009 and $3,060 in fiscal 2010 and expects to
recognize $3,060 in fiscal 2011 and $1,020 in fiscal 2012 in accordance with ASC
Topic 718. On February 4, 2010, Mr. Silverman was granted a restricted
stock unit for 15,000 shares which vests one-third of the shares on each of the
first and second anniversaries of the grant date, and vests as to the last third
on February 4, 2013. Based on the vesting schedule of the restricted stock
unit, the Company recognized compensation expense of $4,155 in fiscal 2010 and
expects to recognize $9,970 in fiscal 2011 and fiscal 2012 and $5,815 in fiscal
2013 in accordance with ASC Topic 718.
35
Stock
Option/Restricted Stock Program
All
directors are eligible to receive equity incentives under the Company’s Amended
and Restated Omnibus Incentive Plan, including stock options, restricted stock
awards or units.
In fiscal
year 2010, the following directors received grants under the Company’s Amended
and Restated Omnibus Incentive Plan:
|
Restricted Stock Units
|
|||||||||
|
Name of Director
|
Number of Units
Granted
|
Grant Date
|
Fair Value
Price Per
Share
|
||||||
|
Dr.
Steve Brueck
|
15,000 |
2/4/2010
|
$ | 1.99 | |||||
|
Sohail
Khan
|
15,000 |
2/4/2010
|
$ | 1.99 | |||||
|
Louis
Leeburg
|
15,000 |
2/4/2010
|
$ | 1.99 | |||||
|
Robert
Ripp
|
15,000 |
2/4/2010
|
$ | 1.99 | |||||
|
Gary
Silverman
|
15,000 |
2/4/2010
|
$ | 1.99 | |||||
| 75,000 | |||||||||
Equity
Compensation Plan Information
The following table sets forth as of
June 30, 2010, the end of the Company’s most recent fiscal year,
information regarding (i) all compensation plans previously approved by the
stockholders and (ii) all compensation plans not previously approved by the
stockholders:
Equity
Compensation Plans
|
Plan category
|
Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights
|
Weighted average exercise
and grant price of
outstanding options,
warrants and rights
|
Number of
securities
remaining
available for
future issuance
|
|||||||||
|
Equity
compensation plans approved by security holders
|
1,715,625 | $ | 6.33 | 480,161 | ||||||||
36
PROPOSAL NO.
2
RATIFICATION
OF INDEPENDENT AUDITOR
It is the
responsibility of the Audit Committee to select and retain independent auditors.
Our Audit Committee has appointed Cross Fernandez & Riley LLP (“CFR”) as our
independent auditors for the Company’s fiscal year ending June 30, 2011.
Although stockholder ratification of the Audit Committee’s selection of
independent auditors is not required by our By-laws or otherwise, we are
submitting the selection of CFR to stockholder ratification so that our
stockholders may participate in this important corporate decision. If not
ratified, the Audit Committee will reconsider the selection, although the Audit
Committee will not be required to select different independent auditors for the
Company.
Representatives
of CFR will be present at the Annual Meeting and will have an opportunity to
make a statement and respond to questions from stockholders present at the
meeting.
The following table presents fees paid
or to be paid for professional audit services rendered by CFR for the audit of
the Company’s annual financial statements during the years ended June 30, 2010
and 2009, and fees billed for other services rendered by CFR:
|
Fiscal 2010
|
Fiscal 2009
|
|||||||
|
Audit
Fees (1)
|
124,677 | 175,597 | ||||||
|
Audit-Related
Fees
|
— | — | ||||||
|
Tax
Fees
|
— | — | ||||||
|
All
Other Fees
|
— | — | ||||||
|
Total
All Fees
|
$ | 124,677 | $ | 175,597 | ||||
|
(1)
|
Audit
Fees consisted of fees billed for professional services rendered for the
audit of the Company’s annual financial statements and review of the
interim financial statements included in quarterly reports, and review of
other documents filed with the Securities and Exchange Commission within
those fiscal years.
|
The Audit
Committee has adopted policies and procedures to oversee the external audit
process including engagement letters, estimated fees and solely pre-approving
all permitted audit and non-audit work performed by CFR. The Audit Committee has
pre-approved all fees for audit and non-audit work performed.
THE
BOARD OF DIRECTORS RECOMMENDS VOTING "FOR"
THE
RATIFICATION OF CFR AS THE COMPANY’S INDEPENDENT AUDITOR FOR THE FISCAL YEAR
ENDING JUNE 30, 2011
37
PROPOSAL NO.
3
STOCKHOLDER
ADVISORY VOTE ON THE COMPENSATION
OF
OUR NAMED EXECUTIVE OFFICERS DISCLOSED IN THE PROXY STATEMENT
UNDER
THE SECTION TITLED “EXECUTIVE COMPENSATION”, INCLUDING THE COMPENSATION TABLES
AND OTHER NARRATIVE EXECUTIVE COMPENSATION DISCLOSURES THEREIN, REQUIRED BY ITEM
402 OF SEC REGULATION S-K
We believe executive compensation is an
important matter for the Company’s stockholders. A fundamental principle
of the Company’s executive compensation philosophy and practice continues to be
to pay for performance. An executive officer’s compensation package is
comprised of two components: (i) a base salary, which reflects individual
performance and expertise and (ii) bonus and long-term incentive awards, tied to
the achievement of certain performance goals that the Compensation Committee
establishes from time to time for the Company. We believe that this type
of compensation program is consistent with the Company’s strategy, competitive
practice, sound corporate governance principles, and stockholder interests and
concerns. We urge you to read this Proxy Statement for additional details
on the Company’s executive compensation, including the Company’s compensation
philosophy and objectives and the fiscal year 2010 compensation of the named
executive officers.
This proposal, commonly known as a
“say-on-pay” proposal, gives you as a stockholder the opportunity to endorse or
not endorse our executive pay philosophy, policies and procedures. This
vote is intended to provide an overall assessment of our executive compensation
program rather than focus on any specific item of compensation. Given the
information provided above and elsewhere in this Proxy Statement, the Board of
Directors asks you to approve the following resolution:
“RESOLVED, that the Company’s
stockholders approve the compensation of the Company’s named executive officers
described in the Proxy Statement under the section titled “Executive
Compensation”, including the compensation tables and other narrative executive
compensation disclosures therein, required by Item 402 of Regulation
S-K.”
As an advisory vote, this proposal is
non-binding on the Company. However, the Board of Directors and the
Compensation Committee value the opinions of our stockholders and will consider
the outcome of the vote when making future compensation decisions for our named
executive officers.
THE
BOARD OF DIRECTORS RECOMMENDS VOTING “FOR” THE APPROVAL OF THE COMPENSATION OF
OUR NAMED EXECUTIVE OFFICERS DISCLOSED IN THIS PROXY STATEMENT UNDER THE SECTION
TITLED “EXECUTIVE COMPENSATION”, INCLUDING THE COMPENSATION TABLES AND OTHER
NARRATIVE EXECUTIVE COMPENSATION DISCLOSURES THEREIN, REQUIRED BY ITEM 402 OF
SEC REGULATION S-K
38
PROPOSAL NO.
4
ADVISORY
VOTE ON FREQUENCY THAT STOCKHOLDER ADVISORY VOTES TO APPROVE THE COMPENSATION OF
OUR NAMED EXECUTIVE OFFICERS WILL BE TAKEN
As discussed above in Proposal No. 3,
executive compensation is an important matter for the Company’s
stockholders. In connection with recently enacted legislation, companies
are required to provide a separate stockholder advisory vote once every six
years to determine whether the stockholders’ say-on-pay vote should occur every
year, every two years or every three years. We believe that approval of
executive compensation should occur every three years, as stockholder feedback
on executive compensation would be more useful if the success of our
compensation program is judged over a period of time.
The
Company is asking stockholders to vote on whether the say-on-pay vote should
occur every year, every two years or every three years. As an advisory
vote, this proposal is non-binding on the Company. However, the Board of
Directors values the opinions of our stockholders and will consider the outcome
of the vote when determining how often a say-on-pay advisory vote of the
stockholders should be taken.
THE
BOARD OF DIRECTORS RECOMMENDS VOTING THAT THE FREQUENCY THAT STOCKHOLDER
ADVISORY VOTES TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS
SHOULD OCCUR “EVERY THREE YEARS”
39
OTHER
BUSINESS
The Board of Directors is not aware of
any other business to be considered or acted upon at the Annual Meeting of
stockholders other than that for which notice is provided in this proxy
statement and the accompanying notice. In the event any other matters
properly come before the Annual Meeting, it is expected that the shares
represented by proxy will be voted with respect thereto in accordance with the
judgment of the persons voting them.
2010
ANNUAL REPORT ON FORM 10-K
Copies of the Company’s Annual Report
for 2010, which contains the Company’s Form 10-K for the fiscal year ended June
30, 2010, and consolidated financial statements, as filed with the Securities
and Exchange Commission, have been included in this mailing. Additional
copies may be obtained without charge to stockholders upon written request to
Investor Relations at 2603 Challenger Tech Court, Suite 100, Orlando, Florida
USA 32826. In addition, copies of this document, the Form 10-K and all
other documents filed electronically by the Company may be reviewed and printed
from the SEC’s website at: http://www.sec.gov.
|
By
Order of the Board of Directors,
|
|
|
J.
James Gaynor
|
|
|
President
& Chief Executive Officer
|
|
|
Orlando,
Florida
|
|
|
January
3, 2011
|
40
PROXY
ANNUAL
MEETING OF STOCKHOLDERS
LIGHTPATH
TECHNOLOGIES, INC.
February
3, 2011
This
Proxy is solicited and proposed by the Board of Directors of LightPath
Technologies, Inc.,
which
recommends that you vote ”For” proposals 1, 2 and 3 and in favor
of “every 3 years” in proposal 4.
The
undersigned hereby appoints Robert Ripp (the “Proxy”), with power of
substitution, to vote on the following matters, which may properly come before
the Annual Meeting of Stockholders of LightPath Technologies, Inc. to be held on
February 3, 2011, or any adjournment or postponement thereof. The Proxy shall
cast votes according to the number of shares of common stock of the Company
which the undersigned may be entitled to vote with respect to the proposal set
forth below, in accordance with the specification indicated, if any, and shall
have all the powers which the undersigned would possess if personally present.
The undersigned hereby revokes any prior proxy to vote at the Annual Meeting,
and hereby ratifies and confirms all that said Proxy may lawfully do by virtue
hereof and thereof.
|
(1)
|
Proposal
No. 1: To approve the election of Class I Directors. Nominees
are:
|
||
|
Robert
Ripp
|
¨ FOR
|
¨ WITHHOLD
AUTHORITY
|
|
|
J.
James Gaynor
|
¨ FOR
|
¨ WITHHOLD
AUTHORITY
|
|
|
(2)
|
Proposal
No. 2: To ratify the selection of Cross, Fernandez & Riley LLP
as independent auditors.
|
||
|
¨ FOR
|
¨ AGAINST
|
¨ ABSTAIN
|
|
|
|
|||
|
(3)
|
Proposal
No. 3: An advisory vote of the compensation of our named executive
officers disclosed in the proxy statement under the section titled
“Executive Compensation”, including the compensation tables and
other narrative executive compensation disclosures therein, required by
Item 402 of SEC Regulation S-K.
|
||
|
¨ FOR
|
¨ AGAINST
|
¨ ABSTAIN
|
|
|
(4)
|
Proposal No. 4:
An
advisory vote on the frequency that stockholder advisory votes to approve
the compensation of our named executive officers will be
taken.
|
||
|
¨ Every
1 year ¨ Every
2 years ¨ Every
3 years ¨ ABSTAIN
|
|||
In his/her discretion, the
proxy is authorized to vote on such other business as may properly be brought
before the Annual Meeting or any adjournment or postponement
thereof.
|
¨
|
If
you plan to attend the Annual Meeting, please check
here
|
THIS
PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE
UNDERSIGNED STOCKHOLDER. UNLESS OTHERWISE SPECIFIED, THE SHARES WILL BE VOTED
‘FOR’ ALL ITMES UNDER
PROPOSAL NOS. 1, 2 AND 3 AND “EVERY 3 YEARS” UNDER PROPOSAL NO. 4.
The
undersigned hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders of the Company and the Proxy Statement dated January 3, 2011
and a copy of the Company’s Annual Report on Form 10-K.
|
|
Date:
|
|
||
|
|
Date:
|
|
Signatures
of Stockholder(s)
NOTE:
Signature should agree with name on stock certificate as printed hereon.
Executors, administrators, trustees and other fiduciaries should so indicate
when signing.
PLEASE
DATE, SIGN AND RETURN THIS PROXY PROMPTLY USING
THE
ENCLOSED POSTAGE PAID ENVELOPE THANK YOU
TABLE OF CONTENTS