SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
x
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Filed by Registrant
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o
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Filed by a Party other
than the
Registrant
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Check the
appropriate
box:
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o
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Preliminary Proxy
Statement
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o
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Confidential, for use by
Commission Only (as permitted by Rule 14a-6(e)(2))
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x
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Definitive Proxy
Statement
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o
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Definitive Additional
Materials
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o
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Soliciting Material Pursuant
to
§240.14a-12
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CONVERSION
SERVICES INTERNATIONAL, INC.
(Name
of Registrant As Specified in its Charter)
N/A
(Name
of Persons Filing Proxy Statement, if other than Registrant)
Payment of
Filing Fee
(Check the appropriate box):
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x
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No fee required.
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o
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Fee computed on table below
per
Exchange Act Rules 14a-6(i)(4) and 0-11.
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1)
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Title
of each class of securities to which transaction
applies:
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N/A
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2)
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Aggregate number of securities
to
which transaction applies:
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N/A
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3)
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Per unit price or other
underlying
value of transaction computed pursuant to Exchange Act Rule
0-11:
Set
forth the amount on which the filing fee is calculated and state how
it
was determined.
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N/A
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4)
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Proposed maximum aggregate
value
of transaction:
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N/A
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5)
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Total fee paid:
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N/A
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o
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Fee paid previously with
preliminary materials.
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o
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Check box if any part of
the fee
is offset as provided by Exchange Act Rule 0-11(a)(2) and
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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 date of its filing.
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1) Amount Previously
Paid:
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N/A
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2) Form, Schedule or Registration
Statement No.:
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N/A
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3) Filing Party:
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N/A
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4) Date Filed:
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N/A
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CONVERSION
SERVICES INTERNATIONAL, INC.
100
Eagle Rock Avenue
East
Hanover, New Jersey 07936
May
13,
2008
Dear
Fellow Stockholder:
The
2008
Annual Meeting of Stockholders (the “Annual Meeting”) of Conversion Services
International, Inc. (the “Company” or “CSI”) will be held at 10:00 a.m. on
Friday, June 13, 2008 at 100 Eagle Rock Avenue, East Hanover, New Jersey 07936.
Enclosed you will find a formal Notice of Annual Meeting, Proxy Card and Proxy
Statement, detailing the matters which will be acted upon. Directors and
Officers of the Company will be present to help host the meeting and to respond
to any questions from our stockholders. I hope you will be able to
attend.
Please
sign, date and return the enclosed Proxy without delay in the enclosed envelope.
If you attend the Annual Meeting, you may vote in person, even if you have
previously mailed a Proxy, by withdrawing your Proxy and voting at the meeting.
Any stockholder giving a Proxy may revoke the same at any time prior to the
voting of such Proxy by giving written notice of revocation to the Secretary,
by
submitting a later dated Proxy or by attending the Annual Meeting and voting
in
person. The Company’s Annual Report on Form 10-K (including audited financial
statements) for the fiscal year ended December 31, 2007 accompanies the Proxy
Statement. All shares represented by Proxies will be voted at the Annual Meeting
in accordance with the specifications marked thereon, or if no specifications
are made, (a) as to Proposal 1, the Proxy confers authority to vote “FOR” all of
the five persons listed as candidates for a position on the Board of Directors,
(b) as to Proposal 2, the Proxy confers authority to vote “FOR” the ratification
of Friedman LLP as the Company’s independent auditors for the fiscal year ending
December 31, 2008, (c) as to Proposal 3, the Proxy confers authority to vote
"FOR" amending the Company's Certificate of Incorporation, as amended, to
increase the amount of the Company's authorized common stock, par value $.001
per share (the "Common Stock"), from two hundred million (200,000,000) to three
hundred million (300,000,000), and (d) as to any other business which comes
before the Annual Meeting, the Proxy confers authority to vote in the Proxy
holder’s discretion.
The
Company’s Board of Directors believes that a favorable vote for each candidate
for a position on the Board of Directors and for all other matters described
in
the attached Notice of Annual Meeting and Proxy Statement is in the best
interest of the Company and its stockholders and recommends a vote “FOR” all
candidates and all other matters. Accordingly, we urge you to review the
accompanying material carefully and to return the enclosed Proxy
promptly.
Thank
you
for your investment and continued interest in Conversion Services International,
Inc.
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Sincerely,
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Scott
Newman
President
and Chief Executive Officer
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CONVERSION
SERVICES INTERNATIONAL, INC.
100
Eagle Rock Avenue
East
Hanover, New Jersey 07936
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
TO
BE HELD FRIDAY, JUNE 13, 2008
To
our
Stockholders:
Notice
is
hereby given that the 2008 Annual Meeting (the “Annual Meeting”) of Stockholders
of Conversion Services International, Inc. (the “Company” or “CSI”), a Delaware
corporation, will be held at our principal office at
100
Eagle
Rock Avenue, East Hanover, New Jersey 07936
,
on
Friday,
June 13,
2008
at
10:00
a.m., for the following purposes:
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1.
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To
elect
five
Directors
to the Board of Directors to serve until the 2009 Annual Meeting
of
Stockholders or until their successors have been duly elected or
appointed
and qualified;
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2.
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To
ratify the
appointment
by the Audit Committee of the Board of Directors of
Friedman
LLP
to
serve as the Company’s independent auditors for the fiscal year ending
December 31, 2008;
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3.
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To
amend the Company's Certificate of Incorporation, as amended, to
increase
the amount of the Company's authorized common stock, par value $.001
per
share (the "Common Stock"), from two hundred million (200,000,000)
to
three hundred million (300,000,000)
;
and
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4.
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To
consider and take action upon such other business as may properly
come
before the Annual Meeting or any adjournments
thereof.
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The
Board
of Directors has fixed the close of business on April 28, 2008, as the record
date for determining the stockholders entitled to notice of, and to vote at,
the
Annual Meeting or any adjournments thereof.
For
a
period of 10 days prior to the Annual Meeting, a stockholders list will be
kept
at the Company’s office and shall be available for inspection by stockholders
during usual business hours. A stockholders list will also be available for
inspection at the Annual Meeting.
Your
attention is directed to the accompanying Proxy Statement for further
information regarding each proposal to be made.
STOCKHOLDERS
UNABLE TO ATTEND THE MEETING IN PERSON ARE URGED TO COMPLETE, DATE AND SIGN
THE
ACCOMPANYING PROXY AND MAIL IT IN THE ENCLOSED STAMPED, SELF-ADDRESSED ENVELOPE
AS PROMPTLY AS POSSIBLE. IF YOU SIGN AND RETURN YOUR PROXY WITHOUT SPECIFYING
YOUR CHOICES IT WILL BE UNDERSTOOD THAT YOU WISH TO HAVE YOUR SHARES VOTED
IN
ACCORDANCE WITH THE DIRECTORS’ RECOMMENDATIONS. IF YOU ATTEND THE ANNUAL
MEETING, YOU MAY, IF YOU DESIRE, REVOKE YOUR PROXY AND VOTE IN
PERSON.
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By
Order of the
Board of Directors
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Scott
Newman,
Chairman
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May 13, 2008
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CONVERSION
SERVICES INTERNATIONAL, INC.
100
Eagle Rock Avenue
East
Hanover, New Jersey 07936
PROXY
STATEMENT
2008
Annual MEETING OF STOCKHOLDERS
This
Proxy Statement is furnished in connection with the solicitation by and on
behalf of the Board of Directors (the “Board of Directors” or “Board”) of
Conversion Services International, Inc. of proxies to be voted at the 2008
Annual Meeting of Stockholders to be held at 10:00 a.m. on Friday, June 13,
2008
at our principal office at 100 Eagle Rock Avenue, East Hanover, New Jersey
07936
and at any adjournments thereof (the “Annual Meeting”). In this proxy statement,
Conversion Services International, Inc. is referred to as “CSI”, “we”, “us”,
“our” or “the Company” unless the context indicates otherwise. The Annual
Meeting has been called to consider and take action on the following proposals:
(i) to elect five Directors to the Board of Directors to serve until the 2008
Annual Meeting of Stockholders or until their successors have been duly elected
or appointed and qualified; (ii) to ratify the appointment by the Audit
Committee of our Board of Directors of Friedman LLP as the Company’s independent
auditors for the fiscal year ending December 31, 2008; (iii)
to amend
the Company's Certificate of Incorporation, as amended, to increase the amount
of the Company's authorized common stock, par value $.001 per share (the "Common
Stock"), from two hundred million (200,000,000) to three hundred million
(300,000,000); and
(iv) to
consider and take action upon such other business as may properly come before
the Annual Meeting or any adjournments thereof.
The
Board
of Directors knows of no other matters to be presented for action at the Annual
Meeting. However, if any other matters properly come before the Annual Meeting,
the persons named in the proxy will vote on such other matters and/or for other
nominees in accordance with their best judgment.
The
Company’s Board of Directors recommends that the stockholders vote in favor of
each of the Director Nominees and each of the proposals.
Only
holders of record of Common Stock, of the Company at the close of business
on
April 28, 2008
(the
“Record Date”) will be entitled to vote at the Annual Meeting.
The
principal executive offices of the Company are located at 100 Eagle Rock Avenue,
East Hanover, New Jersey 07936 and its telephone number is (973) 560-9400.
The
approximate date on which this Proxy Statement, the proxy card and other
accompanying materials are first being sent or given to stockholders is
May
14
,
2008. A
copy of the Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2007 is enclosed with these materials, but should not be considered
proxy solicitation material.
INFORMATION
CONCERNING
SOLICITATION
AND VOTING
As
of the
Record Date, there were
114,857,189
outstanding
shares of Common Stock, each share entitled to one vote on each matter to be
voted on at the Annual Meeting. As of the Record Date, the Company believes
it
had approximately 1,748 beneficial holders of Common Stock. Only holders of
shares of Common Stock on the Record Date will be entitled to vote at the Annual
Meeting. The holders of Common Stock are entitled to one vote on all matters
presented at the meeting for each share held of record. The presence in person
or by proxy of holders of record of a majority of the shares outstanding and
entitled to vote as of the Record Date shall be required for a quorum to
transact business at the Annual Meeting. If a quorum should not be present,
the
Annual Meeting may be adjourned until a quorum is obtained.
Each
nominee to be elected as a director named in Proposal 1 must receive the vote
of
a plurality of the votes of the shares of Common Stock present in person or
represented by proxy at the meeting. For the purposes of election of directors,
although abstentions will count toward the presence of a quorum, they will
not
be counted as votes cast and will have no effect on the result of the
vote.
The
affirmative vote of the holders of a majority of the shares of Common Stock
present in person or represented by proxy at the meeting is required for
approval of the ratification of the selection of Friedman LLP as independent
auditors of the Company for the fiscal year 2008 described in Proposal 2.
Abstentions will not be counted as votes entitled to be cast on this matter
and
will have no effect on the result of the vote.
The
amendment of the Company's Certificate of Incorporation to increase the number
of authorized shares of Common Stock, as described in Proposal 3, requires
the
affirmative vote of the holders of a majority of the Company's outstanding
shares of Common Stock entitled to vote.
“Broker
non-votes,” which occur when brokers are prohibited from exercising
discretionary voting authority for beneficial owners who have not provided
voting instructions, will not be counted for the purpose of determining the
number of shares present in person or by proxy on a voting matter and will
have
no effect on the outcome of the vote. Brokers who hold shares in street name
may
vote on behalf of beneficial owners with respect to Proposals 1 and
2.
The
approval of Proposal 3 requires the affirmative vote of a majority of the
outstanding shares of common stock of the Company eligible to vote.
The
expense of preparing, printing and mailing this Proxy Statement, exhibits and
the proxies solicited hereby will be borne by the Company. In addition to the
use of the mails, proxies may be solicited by officers and directors and regular
employees of the Company, without additional remuneration, by personal
interviews, telephone or facsimile transmission. The Company will also request
brokerage firms, nominees, custodians and fiduciaries to forward proxy materials
to the beneficial owners of shares of Common Stock held of record and will
provide reimbursements for the cost of forwarding the material in accordance
with customary charges.
Proxies
given by stockholders of record for use at the Annual Meeting may be revoked
at
any time prior to the exercise of the powers conferred. In addition to
revocation in any other manner permitted by law, stockholders of record giving
a
proxy may revoke the proxy by an instrument in writing, executed by the
stockholder or his or her attorney authorized in writing or, if the stockholder
is a corporation, by an officer or attorney thereof duly authorized, and
deposited either at the corporate headquarters of the Company at any time up
to
and including the last business day preceding the day of the Annual Meeting,
or
any adjournments thereof, at which the proxy is to be used, or with the chairman
of such Annual Meeting on the day of the Annual Meeting or adjournments thereof,
and upon either of such deposits the proxy is revoked.
Proposals
1, 2 and 3 do not give rise to any statutory right of a stockholder to dissent
and obtain the appraisal of or payment for such stockholder’s
shares.
ALL
PROXIES RECEIVED WILL BE VOTED IN ACCORDANCE WITH THE CHOICES SPECIFIED ON
SUCH
PROXIES. PROXIES WILL BE VOTED IN FAVOR OF EACH DIRECTOR NOMINEEE AND FOR A
PROPOSAL IF NO CONTRARY SPECIFICATION IS MADE. ALL VALID PROXIES OBTAINED WILL
BE VOTED AT THE DISCRETION OF THE PERSONS NAMED IN THE PROXY WITH RESPECT TO
ANY
OTHER BUSINESS THAT MAY COME BEFORE THE ANNUAL MEETING.
Corporate
Governance
The
Company’s Board of Directors has long believed that good corporate governance is
important to ensure that the Company is managed for the long-term benefit of
stockholders. During the past year, the Company’s Board of Directors has
continued to review its governance practices in light of the Sarbanes-Oxley
Act
of 2002 and new
Securities
and Exchange Commission (the “SEC”)
rules
and regulations. This section describes key corporate governance guidelines
and
practices that the Company has adopted. Complete copies of the Audit Committee,
Compensation and Stock Option Committee and Nominating and Corporate Governance
Committee charters are posted on the Company’s website at
www.csiwhq.com
.
Alternatively, you can request a copy of any of these documents by writing
to
the Company. The contents of our website should not be considered proxy
solicitation material.
Code
of Conduct and Ethics
Our
Board
of Directors has adopted a Code of Conduct and Ethics which is applicable to
all
our directors, officers, employees, agents and representatives, including our
principal executive officer and principal financial officer, principal
accounting officer or controller, or other persons performing similar functions.
We have made available on our website copies of our Code of Conduct and Ethics
and charters for the committees of our Board and other information that may
be
of interest to investors.
Board
Meetings and Attendance of Directors
During
fiscal year 2007, the Board of Directors held 8 meetings, 7 of which were
attended by all of the Company's Directors during the period that such person
was a member of the Board of Directors, and took action by unanimous written
consent on 1 occasion. Directors are expected to attend all meetings. All of
our
Directors are expected to attend the Annual Meeting.
Special
meetings are held from time to time to consider matters for which approval
of
the Board of Directors is desirable or required by law.
Director
Independence
The
Board
has reviewed each of the directors’ relationships with the Company in
conjunction with Section 121(A) of the listing standards of the American Stock
Exchange (“AMEX”) and has affirmatively determined that three of our directors,
Lawrence K. Reisman, Frederick Lester and Thomas Pear, are independent of
management and free of any relationship that would interfere with their
independent judgment as members of the Audit Committee, Compensation
and
Stock
Option
Committee, and Nominating and Corporate Governance Committee.
Committees
of the Board of Directors
The
Board
of Directors has established three standing committees: (1) the Audit Committee,
(2) the Compensation and Stock Option Committee and (3) the Nominating and
Corporate Governance Committee. Each committee operates under a charter that
has
been approved by the Board. Copies of the Audit Committee, Compensation and
Stock Option Committee and Nominating and Corporate Governance Committee’s’
charters are posted on the Company’s website. Messrs. Reisman, Lester and Pear
are the members of each of such committees. Mr. Reisman is the chair of our
Audit Committee, Mr. Pear is the chair of our Compensation and Stock Option
Committee, and Mr. Lester is the chair of our Nomination and Corporate
Governance Committee.
Audit
Committee
The
Audit
Committee was formed in April 2005. The Audit Committee met 4 times in 2007.
Mr.
Lester was absent from one meeting, however, each member of the Audit Committee
was present at the other meetings, and did not act by unanimous written consent
during 2007. The Audit Committee is responsible for matters relating to
financial reporting, internal controls, risk management and compliance. These
responsibilities include appointing, overseeing, evaluating and approving the
fees of our independent auditors, reviewing financial information which is
included in our Annual Report on Form 10-K, discussions with management and
the
independent auditors regarding the results of the annual audit and our quarterly
financial statements, reviewing with management our system of internal controls
and financial reporting process and monitoring our compliance program and
system.
The
Audit
Committee operates pursuant to a written charter, which sets forth the functions
and responsibilities of this committee. A copy of the charter can be viewed
on
our website. All members of this committee are independent directors under
the
SEC rules. The Board of Directors has determined that Lawrence K. Reisman,
the
committee’s chairman, meets the SEC criteria of an “audit committee financial
expert”, as defined in Item 407(d)(5) of Regulation S-K.
Audit
Committee Report
The
Audit
Committee assists the Board of Directors in fulfilling its oversight
responsibilities with respect to the Company’s consolidated financial
statements, the Company’s compliance with legal and regulatory requirements, the
Company’s system of internal control over financial reporting and the
qualifications, independence and performance of its independent auditors. The
Audit Committee has the sole authority and responsibility to select, evaluate
and, when appropriate, replace the Company’s independent auditors.
Management
is responsible for the Company’s financial reporting process, including the
Company’s internal control over financial reporting, and for the preparation of
the Company’s consolidated financial statements in accordance with generally
accepted accounting principles. Friedman LLP (“Friedman”), as the Company’s
independent auditors, are responsible for auditing those financial statements
and expressing its opinion as to the fairness of the financial statement
presentation in accordance with generally accepted accounting principles. Our
responsibility is to oversee and review these processes. We are not, however,
professionally engaged in the practice of accounting or auditing and do not
provide any expert or other special assurance as to such financial statements
concerning compliance with laws, regulations or generally accepted accounting
principles or as to auditor independence. We rely, without independent
verification, on the information provided to us and on the representations
made
by management and the independent auditors.
In
this
context, we have met and held discussions with management for the fiscal year
ended December 31, 2007. Management represented to us that the Company’s
consolidated financial statements were prepared in accordance with generally
accepted accounting principles, and we have reviewed and discussed with
management and the Company’s external auditors, Friedman LLP, the Company’s
consolidated financial statements for the fiscal year ended December 31, 2007
and the Company’s internal control over financial reporting. We also discussed
with Friedman the matters required to be discussed by Statement on Auditing
Standards No. 61, as amended (Communication with Audit Committees).
Friedman provided to us the written disclosures required by Independence
Standards Board Standard No. 1, as amended (Independence Discussions with
Audit Committees), and we discussed their independence with them. In determining
Friedman’s independence, we considered whether their provision of non-audit
services to the Company was compatible with maintaining independence. We
received regular updates on Friedman’s fees and the scope of audit and non-audit
services they provided. All such services were provided consistent with
applicable rules and our pre-approval policies and procedures.
Based
on
our discussions with management and our external auditors, our review of the
representations of management, and subject in all cases to the limitations
on
our role and responsibilities referred to above and set forth in the Audit
Committee Charter, we recommended to the Board of Directors that the Company’s
audited consolidated financial statements for the fiscal year ended December
31,
2007 be included in the Company’s Annual Report on Form 10-K. We also
approved, subject to stockholder ratification, the selection of Friedman as
the
Company’s independent auditors for the fiscal year ending December 31,
2008.
Members
of the Audit Committee
Lawrence
K. Reisman (Chair)
Compensation
and
Stock Option
Committee
The
Compensation Committee and the Stock Option Committee met 2 times in 2007 and
acted by written consent a combined total of 1 time during 2007. The
Compensation and Stock Option Committee is responsible for matters relating
to
the development, attraction and retention of the Company’s management and for
matters relating to the Company’s compensation and benefit programs. As part of
its responsibilities, this committee evaluates the performance and determines
the compensation of the Company’s Chief Executive Officer and approves the
compensation of our senior officers, as well as to fix and determine awards
to
employees of stock options, restricted stock and other types of stock-based
awards.
The
Compensation and Stock Option Committee operates under a written charter that
sets forth the functions and responsibilities of this committee. A copy of
the
charter can be viewed on our website. Pursuant to its charter, the Compensation
and Stock Option Committee must be comprised of at least two (2) Directors
who,
in the opinion of the Board of Directors, must meet the definition of
“independent director” within the rules and regulations of the SEC. The Board of
Directors has determined that all members of this committee are independent
directors under the SEC rules and AMEX listing standards.
Nominating
and Corporate Governance Committee
The
Nominating and Corporate Governance Committee is responsible for providing
oversight on a broad range of issues regarding our corporate governance
practices and policies and the composition and operation of the Board of
Directors. These responsibilities include reviewing potential candidates for
membership on the Board and recommending to the Board nominees for election
as
directors of the Company.
The
Nominating and Corporate Governance Committee was formed in May 2005. During
2007, the Nominating and Corporate Governance Committee did not meet. A complete
description of the Nominating and Corporate Governance Committee’s
responsibilities is set forth in the Nominating and Corporate Governance written
charter. A copy of the charter is available to stockholders on the Company’s
website. All members of the Nominating and Corporate Governance Committee are
“independent” as independence for nominating committee members is defined by the
rules and regulations of the SEC and under the AMEX listing standards. The
Nominating and Corporate Governance Committee will consider director nominees
recommended by stockholders. To recommend a nominee please write to the
Nominating and Corporate Governance Committee c/o the Company, Attn: Secretary.
There are no minimum qualifications for consideration for nomination to be
a
director of the Company. The nominating committee will assess all director
nominees using the same criteria. Nominations made by stockholders must be
made
by written notice received by the Secretary of the Company within 30 days of
the
date on which notice of a meeting for the election of directors is first given
to stockholders. The Nominating and Corporate Governance Committee and the
Board
of Directors carefully consider nominees regardless of whether they are
nominated by stockholders, the Nominating and Corporate Governance Committee
or
existing board-members. During 2007, the Company did not pay any fees to any
third parties to assist in the identification of nominees. The Company did
not
receive any director nominee suggestions from stockholders for the Annual
Meeting.
Compensation
of Directors
Directors
of the Company who are not employees of the Company or its subsidiaries are
entitled to receive compensation for serving as directors in the amount of
$10,000 per annum. During 2007, 50% of this annual fee was paid in cash and
the
other 50% was paid in Company common stock. This policy was changed for 2008
and
the entire $10,000 annual compensation will be paid in Company common stock.
The
directors also receive $500 per Board meeting attended in person, $250 per
Board
meeting attended via teleconference, $250 per Committee meeting attended, and
an
annual stock option grant. Directors may be removed with or without cause by
a
vote of the majority of the stockholders then entitled to vote. Other than
as
described in “Executive Compensation” below, there were no other arrangements
pursuant to which any director was compensated during fiscal 2007 for any
services provided as a director.
Compensation
Committee Interlocks and Insider Participation
None
of
the members of the Compensation and Stock Option Committee is or has been an
officer or employee of the Company. In addition, none of the members of the
Compensation and Stock Option Committee had any relationships with the Company
or any other entity that require disclosure under the proxy rules and
regulations promulgated by the SEC.
PROPOSAL
1
ELECTION
OF DIRECTORS
At
the
Annual Meeting,
five
individuals
will be elected to serve as directors until the next annual meeting or until
their successors are duly elected, appointed and qualified. The Company’s Board
of Directors currently consists of five persons. All five of the individuals
who
are nominated for election to the Board of Directors are existing directors
of
the Company. Unless a stockholder WITHHOLDS AUTHORITY, a properly signed and
dated proxy will be voted “FOR” the election of the persons named below, unless
the proxy contains contrary instructions. Management has no reason to believe
that any of the nominees will not be a candidate or will be unable to serve
as a
director. However, in the event any nominee is not a candidate or is unable
or
unwilling to serve as a director at the time of the election, unless the
stockholder withholds authority from voting, the proxies will be voted “FOR” any
nominee who shall be designated by the present Board of Directors to fill such
vacancy.
The
name
and age of each of the five nominees, his position with the Company, his
principal occupation, and the period during which such person has served as
a
director are set out below.
Biographical
Summaries of Nominees for the
Board of Directors
Name
of Nominee
Age
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Age
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Position
with the Company
|
Principal
Occupation
|
Director
Since
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Scott
Newman
|
48
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President,
Chief Executive Officer and Chairman
|
President
and Chief Executive Officer of the Company
|
2004
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Glenn
Peipert
|
47
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Executive
Vice President, Chief Operating Officer and Director
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Executive
Vice President and Chief Operating Officer of the Company
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2004
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Lawrence
K. Reisman*
|
48
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Director
|
CPA
at the The Accounting Offices of L.K. Reisman
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2004
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Frederick
Lester**
|
50
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Director
|
Consulting
Partner, NE Banking & Capital Markets, Teradata, a division of
NCR
|
2006
|
|
|
|
|
|
Thomas
Pear***
|
55
|
Director
|
Principal
in Saw Mill Sports Management and management
consultant
|
2006
|
*
Chair
of the Audit Committee, and member of the Compensation and Stock Option
Committee and the Nominating and Corporate Governance Committee.
**
Chair
of the Nominating and Corporate Governance Committee, and member of the Audit
Committee and the Compensation and Stock Option Committee.
***
Chair
of the Compensation and Stock Option Committee, and member of the Audit
Committee and the Nominating and Corporate Governance Committee.
SCOTT
NEWMAN
has been
our President, Chief Executive Officer and Chairman since January 2004. Mr.
Newman founded the former Conversion Services International, Inc. in 1990
(before its merger with and into LCS Group, Inc. in 2004). He has over twenty
years of experience providing technology solutions to major companies
internationally. Mr. Newman has direct experience in strategic planning,
analysis, design, testing and implementation of complex big-data solutions.
He
possesses a wide range of software and hardware architecture/discipline
experience, including, client/server, data discovery, distributed systems,
data
warehousing, mainframe, scaleable solutions and e-business. Mr. Newman has
been
the architect and lead designer of several commercial software products used
by
Chase, Citibank, Merrill Lynch and Jaguar Cars. Mr. Newman advises and reviews
data warehousing and business intelligence strategy on behalf of our Global
2000
clients, including AT&T Capital, Jaguar Cars, Cytec and Chase. Mr. Newman is
a member of the Young Presidents Organization, a leadership organization that
promotes the exchange of ideas, pursuit of learning and sharing strategies
to
achieve personal and professional growth and success. Mr. Newman received his
B.S. from Brooklyn College in 1980.
GLENN
PEIPERT
has been
our Executive Vice President, Chief Operating Officer and Director since January
2004. Mr. Peipert held the same positions with the former Conversion Services
International, Inc. since its inception in 1990. Mr. Peipert has over two
decades of experience consulting to major organizations about leveraging
technology to enable strategic change. He has advised clients representing
a
broad cross-section of rapid growth industries worldwide. Mr. Peipert has hands
on experience with the leading data warehousing products. His skills include
architecture design, development and project management. He routinely
participates in architecture reviews and recommendations for our Global 2000
clients. Mr. Peipert has managed major technology initiatives at Chase, Tiffany,
Morgan Stanley, Cytec and the United States Tennis Association. He speaks
nationally on applying data warehousing technologies to enhance business
effectiveness and has authored multiple white papers regarding business
intelligence. Mr. Peipert is a member of the Institute of Management
Consultants, as well as TEC International, a leadership organization whose
mission is to increase the effectiveness and enhance the lives of chief
executives and those they influence. Mr. Peipert received his B.S. from Brooklyn
College in 1982.
LAWRENCE
K. REISMAN
has been
a Director of our company since February 2004 and is Chairman of the Board’s
Audit Committee, and a member of the Compensation and Stock Option Committee
and
the Nominating and Corporate Governance Committee. Mr. Reisman is a Certified
Public Accountant who has been the principal of his own firm, The Accounting
Offices of L.K. Reisman, since 1986. Prior to forming his company, Mr. Reisman
was a tax manager at Coopers & Lybrand and Peat Marwick Mitchell. He
routinely provides accounting services to small and medium-sized companies,
which services include auditing, review and compilation of financial statements,
corporate, partnership and individual taxation, designing accounting systems
and
management consulting services. Mr. Reisman received his B.S. and M.B.A. in
Finance from St. John’s University in 1981 and 1985, respectively.
FREDERICK
LESTER
has
been
a Director of our company since August 2006 and is Chairman of the Board’s
Nominating and Corporate Governance Committee, and a member of the Audit
Committee and the Compensation and Stock Option Committee. Mr. Lester is the
Regional Consulting Partner, NE Banking & Capital Markets, Teradata
Corporation. From 2005-2006, Mr. Lester was the Consulting Director at Cognos
Corporation, and from 1999-2005, he was the Managing Director at Competitive
Advantage, Inc. Prior to this, Mr. Lester served as Consulting Director for
KPMG
and Managing Partner at Teradata.
Mr.
Lester’s undergraduate studies at Columbia University focused on nuclear physics
and mathematics.
THOMAS
PEAR
has
been
a Director of our company since August 2006 and is Chairman of the Board’s
Compensation and Stock Option Committee, and a member of the Audit Committee
and
the Nominating and Corporate Governance Committee
.
Mr. Pear is a principal in Saw Mill Sports Management and a management
consultant. From 1993 to 2006, Mr. Pear served as chief
financial officer of The Atlantic Club, and also served as its president
from 2002 to 2006. Prior to this, Mr. Pear served as vice president
and general manager of DM Engineering, vice president and chief financial
officer of Tennis Equities, and staff accountant at Malkin, Studley and Ramey
CPA, PC. Mr. Pear received his B.S. in Accounting from Nichols College in
1974.
Board
members are elected annually by the stockholders and the
officers
are appointed annually by the Board of Directors.
Vote
Required
Provided
that a quorum of stockholders is present at the meeting in person, or is
represented by proxy, and is entitled to vote thereon, Directors will be elected
by a plurality of the votes cast at the meeting.
For the
purposes of election of directors, although abstentions will count toward the
presence of a quorum, they will not be counted as votes cast and will have
no
effect on the result of the vote.
Recommendation
of the Board of Directors
The
Board of Directors recommends a vote FOR Messrs. Newman, Peipert, Reisman,
Lester and Pear. Unless otherwise instructed or unless authority to vote is
withheld, the enclosed proxy will be voted FOR the election of the above listed
nominees and AGAINST any other nominees.
PROPOSAL
2
RATIFICATION
OF APPOINTMENT
OF
INDEPENDENT AUDITORS
Also
submitted for consideration and voting at the Annual Meeting is the ratification
of the appointment by the Company’s Board of Directors, upon the recommendation
of the Audit Committee, of Friedman LLP (“Friedman”) as independent auditors for
the purpose of auditing and reporting upon the financial statements of the
Company for the fiscal year ending December 31, 2008. The Board of Directors
of
the Company, upon the recommendation of the Audit Committee, has selected and
approved Friedman as independent auditors to audit and report upon the Company’s
financial statements. Notwithstanding its selection, the Audit Committee, in
its
discretion, may appoint another independent registered public accounting firm
at
any time during the year if the Audit Committee believes that such a change
would be in the best interests of the Company and its stockholders. If
the appointment is not ratified by our stockholders, the Audit Committee may
reconsider whether it should appoint another independent registered public
accounting firm. Friedman has no direct or indirect financial interest in the
Company.
Representatives
of Friedman are expected to be present at the Annual Meeting, and they will
be
afforded an opportunity to make a statement at the Annual Meeting if they desire
to do so. It is also expected that such representatives will be available at
the
Annual Meeting to respond to appropriate questions by stockholders.
Vote
Required
The
affirmative vote of holders of a majority of the votes cast at the Annual
Meeting is required for the ratification of the selection of Friedman as the
Company’s independent auditors for the fiscal year ending December 31,
2008.
Recommendation
of the Board of Directors
The
Board of Directors recommends a vote “FOR” the ratification of the appointment
of Friedman LLP as the Company’s independent auditors for the fiscal year ending
December 31, 2008. Unless marked to the contrary, proxies received from
stockholders will be voted in favor of the ratification of the selection of
Friedman LLP as independent auditors for the Company for the fiscal year
2008.
Information
about Fees Billed by Independent Auditors
The
following table sets forth fees billed to us by our independent registered
public accounting firms during the fiscal years ended December 31, 2007 and
December 31, 2006 for: (i) services rendered for the audit of our annual
financial statements and the review of our quarterly financial statements;
(ii)
services by our independent registered public accounting firms that are
reasonably related to the performance of the audit or review of our financial
statements and that are not reported as Audit Fees; (iii) services rendered
in
connection with tax compliance, tax advice and tax planning; and (iv) all other
fees for services rendered.
|
|
|
FY
2007
|
|
|
FY
2006
|
|
Audit
Fees
|
|
$
|
144,003
|
|
$
|
256,367
|
|
Audit
Related Fees
|
|
$
|
2,000
|
|
$
|
2,500
|
|
Tax
Fees
|
|
$
|
39,563
|
|
$
|
93,733
|
|
All
Other Fees
|
|
$
|
13,198
|
|
$
|
18,030
|
|
All
Other Fees
For
the
year ended December 31 2007, the Company incurred professional fees of $13,198
to its independent auditors with respect to other services. For the year ended
December 31, 2006, the Company incurred professional fees of $18,030 to its
independent auditors with respect to other services. For the years ended
December 31, 2007 and 2006, there were no fees billed by the Company’s
independent auditors for professional services rendered for information
technology services relating to financial information systems design and
implementation.
The
Audit
Committee has the sole authority to pre-approve all audit and non-audit services
provided by the independent auditors to the Company.
PROPOSAL
3
PROPOSAL
TO AMEND THE CERTIFICATE OF INCORPORATION
TO
EFFECT AN INCREASE IN AUTHORIZED COMMON STOCK
General
We
are
requesting stockholder approval to grant the Board of Directors the authority
to
effect an increase in the Company's authorized Common Stock from two hundred
million (200,000,000) to three hundred million (300,000,000) (the "Increase
in
Authorized"), for the following reasons:
the
Company is authorized to issue 200,000,000 shares of common stock of which
114,857,189 shares are currently outstanding and approximately 80,545,504 shares
are reserved for issuance under outstanding notes, warrants and options.
Therefore, we currently have only approximately 4,597,308 authorized shares
available to be issued or reserved for issuance upon the granting of new options
or upon the issuance of new warrants or other securities convertible into shares
of common stock.
The
Board
of Directors has unanimously adopted an amendment to the Certificate of
Incorporation to effect the increase in authorized shares of common stock and
declared that it is advisable for the stockholders to approve such
amendment.
Principal
Effects Of The Increase in Authorized Shares
The
increase in authorized shares of common stock was determined by the Company's
Board of Directors, in its sole discretion.
The
Company's stockholders will not realize any dilution in their voting rights
as a
result of the increase in authorized shares of common stock but will experience
dilution in their ownership percentage to the extent that additional shares
would be issued.
Issuance
of significant numbers of additional shares of the Company's Common Stock in
the
future (i) will dilute stockholders' percentage ownership and (ii) if such
shares are issued at prices below the then current book value per share, the
current stockholders could suffer dilution of their book value per
share.
When
the
Board of Directors decides to implement the increase in Authorized shares,
the
Company will amend Article Fourth Section A of the Company's certificate of
incorporation, relating to the Company's authorized capital, in its entirety
to
state as follows:
FOURTH:
A.
AUTHORIZED
The
aggregate number of shares of all classes of capital stock with the Corporation
shall have authority to issue shall be three hundred twenty million
(320,000,000) shares, consisting of:
(1)
twenty million (20,000,000) shares of preferred stock, par value $.001 per
share
("Preferred Stock"); and
(2)
three
hundred million (300,000,000) shares of common stock, par value $.001 per share
("Common Stock").
Based
on
stock information as of the Record Date after completion of the increase in
authorized shares, the Company will have approximately 114,857,189 shares of
issued and outstanding common stock out of 300,000,000 shares of authorized
Common Stock.
The
shares of authorized, but unissued Common Stock will be available from time
to
time for corporate purposes including raising additional capital, acquisitions
of companies or assets, for strategic transactions, and sales of Common Stock
or
securities convertible into Common Stock. The Company does not have any present
intention, plan, arrangement or agreement, written or oral, to issue any such
additional shares of Common Stock for any purpose, except for the issuance
of
shares of Common Stock upon the exercise of outstanding convertible securities,
options or warrants to purchase Common Stock. Although the Company does not
have
any present intention to issue any such additional shares of Common Stock,
except as noted above, the Company may in the future raise funds through the
issuance of Common Stock when conditions are favorable, even if the Company
does
not have an immediate need for additional capital at such time.
The
Company believes that the availability of the additional shares will provide
the
Company with the flexibility to meet business needs as they arise, to take
advantage of favorable opportunities and to respond to a changing corporate
environment. If the Company issues additional shares, the ownership interests
of
holders of the Company's Common Stock may be diluted.
The
following chart illustrates the impact of the increase in authorized shares
on
the amount of Company Common Stock outstanding, reserved for issuance and
available for issuance
No.
of Shares Common Stock
|
Current
|
After
giving effect to Proposal 3
|
outstanding
|
114,857,189
|
114,857,189
|
reserved
for issuance
|
80,545,504
|
80,545,504
|
available
for issuance
|
4,597,308
|
104,597,308
|
The
issuance of additional shares of Common Stock may, among other things, have
a
dilutive effect on earnings per share, and on stockholders' equity and voting
rights. The issuance of additional shares, or the perception that additional
shares may be issued, may also adversely affect the market price of the Common
Stock. Holders of Common Stock have no preemptive rights.
Shares
of
authorized and unissued Common Stock could be issued in one or more transactions
that could make more difficult, and therefore less likely, that any takeover
of
the Company could occur. Issuance of additional Common Stock could have a
deterrent effect on persons seeking to acquire control. The Board also could,
although it has no present intention of so doing, authorize the issuance of
shares of Common Stock to a holder who might thereby obtain sufficient voting
power to assure that any proposal to effect certain business combinations or
amendment to the Company's Certificate of Incorporation or Bylaws would not
receive the required stockholder approval. Accordingly, the power to issue
additional shares of Common Stock could enable the Board to make it more
difficult to replace incumbent directors and to accomplish business combinations
opposed by the incumbent Board.
Provisions
in our certificate of incorporation, our amended and restated bylaws and
applicable provisions of the Delaware General Corporation Law may make it more
difficult and expensive for a third party to acquire control of us even if
a
change of control would be beneficial to the interests of our stockholders.
Such
provisions could discourage potential takeover attempts and could adversely
affect the market price of our common stock. Specifically, the Company is
authorized to issue blank check preferred stock to thwart a takeover attempt
and
currently neither our certificate of incorporation nor our amended and restated
bylaws allows cumulative voting in the election of directors, which would
otherwise allow holders of less than a majority of stock to elect some
directors.
In
addition, Section 203 of the Delaware General Corporation Law may discourage,
delay or prevent a change in control by prohibiting us from engaging in a
business combination with an interested stockholder for a period of three years
after the person becomes an interested stockholder. The Company also has in
place employment agreements with Scott Newman and Glenn Peipert, which provide
for the payment to each of them in the event of a change of control. See
"Employment Agreements" below.
Procedure
For Effecting The Increase in Authorized
The
Company will file the certificate of amendment to the Certificate of
Incorporation with the Secretary of State of the State of Delaware at such
time
as the Board of Directors has determined the appropriate effective time for
the
increase in authorized shares. The form of certificate of amendment to the
Certificate of Incorporation is attached as Exhibit A to this Proxy
Statement.
Vote
Required
The
approval of the Increase in Authorized requires the affirmative vote of a
majority of the shares of voting stock present in person or represented by
proxy
at the Meeting.
Recommendation
of the Board of Directors
THE
BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR" PROPOSAL 3 TO
APPROVE THE INCREASE IN AUTHORIZED SHARES OF COMMON STOCK.
EXECUTIVE
COMPENSATION.
The
following table summarizes compensation information for the last two fiscal
years for (i) Mr. Scott Newman, our Principal Executive Officer and
(ii) the two most highly compensated executive officers other than the
Principal Executive Officer, who were serving as executive officers at the
end
of the fiscal year and who we refer to collectively, the Named Executive
Officers.
SUMMARY
COMPENSATION TABLE
Name
and
Principal
Position
|
|
Year
|
|
Salary
|
|
Bonus
|
|
Stock
Awards
|
|
Option
Awards(s)
|
|
Non-Equity
Incentive Plan
Compensation
|
|
Non-Qualified
Deferred
Compensation
Earnings
|
|
All
Other
Compensation
|
|
|
Total
|
|
|
|
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
|
|
($)
|
|
|
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scott
Newman
|
|
|
2007
|
|
|
440,489
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
36,627
|
(1)
|
|
|
477,116
|
|
President,
Chief
Executive
|
|
|
2006
|
|
|
479,167
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45,401
|
(1)
|
|
|
524,568
|
|
Officer
and
Chairman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Glenn
Peipert
|
|
|
2007
|
|
|
338,983
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,195
|
(1)
|
|
|
369,178
|
|
Executive
Vice
President,
Chief
|
|
|
2006
|
|
|
359,375
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
38,300
|
(1)
|
|
|
397,675
|
|
Operating
Officer
and
Director
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bryan
Carey
Senior
Vice
|
|
|
2007
|
|
|
313,476
|
|
|
—
|
|
|
—
|
|
|
62,500
|
|
|
—
|
|
|
—
|
|
|
16,612
|
(1)
|
|
|
392,588
|
|
President,
Managing
Director
DeLeeuw
Associates
|
|
|
2006
|
|
|
241,671
|
|
|
—
|
|
|
—
|
|
|
33,000
|
|
|
—
|
|
|
—
|
|
|
*
|
(2)
|
|
|
274,671
|
|
(1)
|
Amounts
shown reflect payments related to medical, dental and life insurance,
car
payments and 401(k) contributions by the
Company.
|
(2)
|
The
annual amount of perquisites and other personal benefits, if any,
did not
exceed $10,000 for each named executive officer and has therefore
been
omitted, unless otherwise stated
above.
|
The
following table shows outstanding equity awards at December 31,
2007:
Outstanding
Equity Awards at Fiscal Year-End
|
|
Option
Awards
|
|
Stock
Awards
|
|
Name
|
|
Number of
Securities
Underlying
Unexercised
Options
(#) Exercisable
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
|
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
|
|
Option
Exercise
Price
($)
|
|
Option
Expiration
Date
|
|
Number
of
Shares
or
Units
of
Stock
That
Have
Not
Vested
(#)
|
|
Market
Value
of
Shares
or
Units
of
Stock
That
Have
Not
Vested
($)
|
|
Equity
Incentive
Plan
Awards:
Number
of
Unearned Shares,
Units or
Other
Rights
That
Have Not
Vested
(#)
|
|
Equity
Incentive
Plan
Awards:
Market
or Payout
Value of Unearned
Shares,
Units or
Other
Rights
That
have not
Vested
($)
|
|
(a)
|
|
(b)
|
|
I
|
|
(d)
|
|
(e)
|
|
(f)
|
|
(g)
|
|
(h)
|
|
(i)
|
|
(j)
|
|
Scott
Newman
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Glenn
Peipert
|
|
|
166,666
|
|
|
83,334
|
|
|
—
|
|
|
0.83
|
|
|
11/16/2010
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Bryan
Carey
|
|
|
33,333
|
|
|
—
|
|
|
—
|
|
|
3.00
|
|
|
5/28/2014
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
83,333
|
|
|
41,667
|
|
|
—
|
|
|
0.83
|
|
|
11/16/2015
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
50,000
|
|
|
100,000
|
|
|
—
|
|
|
0.25
|
|
|
10/10/2016
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
—
|
|
|
250,000
|
|
|
—
|
|
|
0.30
|
|
|
5/10/2017
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
The
following table shows the details of compensation paid to outside directors
of
the Company during 2007:
Director
Compensation for 2007
Name
|
|
Fees
Earned or
Paid
in Cash
($)
|
|
Stock
Awards
($)
|
|
Option
Awards
($)
|
|
Non-Equity
Incentive Plan
Compensation
($)
|
|
Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
|
|
All Other
Compensation ($)
|
|
Total ($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
(f)
|
|
(g)
|
|
(h)
|
|
Frederick
Lester
|
|
|
12,000
|
|
|
5,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,000
|
|
Thomas
Pear
|
|
|
13,250
|
|
|
5,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,250
|
|
Lawrence
K. Reisman
|
|
|
12,750
|
|
|
5,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,750
|
|
Narrative
Disclosure to Summary Compensation
Scott
Newman, our President and Chief Executive Officer, agreed to a five-year
employment agreement dated as of March 26, 2004. The agreement provides for
an
annual salary to Mr. Newman of $500,000 and an annual bonus to be awarded by
the
Committee. The agreement also provides for health, life and disability
insurance, as well as a monthly car allowance. Effective August 6, 2007, the
Company and Scott Newman executed an amendment to Mr. Newman’s employment
agreement which reduces Mr. Newman’s annual salary to $375,000 per year. All
other provisions in the employment remain in full force and effect.
Glenn
Peipert, Executive Vice President and Chief Operating Officer, agreed to a
five-year employment agreement dated as of March 26, 2004. The agreement
provides for an annual salary to Mr. Peipert of $375,000 and an annual bonus
to
be awarded by the Committee. The agreement also provides for health, life and
disability insurance, as well as a monthly car allowance. Effective August
6,
2007, the Company and Glenn Peipert executed an amendment to Mr. Peipert’s
employment agreement which reduces Mr. Peipert’s annual salary to $315,000 per
year. All other provisions in the employment remain in full force and
effect.
Severance
Arrangements
The
following named executive officers have arrangements that provide for payment
of
severance payments:
*
|
In
the event that Scott Newman’s employment is terminated other than with
good cause, Mr. Newman will receive a lump sum payment of 2.99 times
his
base salary.
|
|
|
*
|
In
the event that Glenn Peipert’s employment is terminated other than with
good cause, Mr. Peipert will receive a lump sum payment of 2.99 times
his
base salary.
|
Change-in-Control
Arrangements
Messrs.
Newman and Peipert would be entitled to the above severance arrangements on
a
change of control. Further, our 2003 Incentive Plan provides that upon a change
in control, all unvested stock options shall immediately become vested (unless
the Committee determines otherwise).
At
present, the named executive officers hold the following unvested stock options
that would become vested upon a change in control.
Name
|
|
Number of Shares
Underlying Vested
Options (#)
|
|
Number of Shares
Underlying
Unvested Options
(#)
|
|
Scott
Newman
|
|
|
—
|
|
|
—
|
|
Glenn
Peipert
|
|
|
166,666
|
|
|
83,334
|
|
Bryan
Carey
|
|
|
166,666
|
|
|
391,667
|
|
Stock
Ownership Requirement for Management
The
Company does not have a formal policy requiring stock ownership by management.
One of the key objectives of the 2003 Incentive Plan is to promote ownership
of
the Company’s stock by management.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
The
following table sets forth certain information regarding the beneficial
ownership of our common stock, our only class of outstanding voting securities
as of May 12, 2008, based on 114,831,697 aggregate shares of common stock
outstanding as of such date, by: (i) each person who is known by us to own
beneficially more than 5% of our outstanding common stock with the address
of
each such person, (ii) each of our present directors and officers, and (iii)
all
officers and directors as a group:
Name and Address of
Beneficial Owner
(1)(2)
|
|
|
Amount of
Common Stock
Beneficially
Owned
|
|
|
Percentage of
Outstanding Common Stock
Beneficially Owned
|
|
Scott
Newman(3)
|
|
|
|
|
|
19,655,413
|
|
|
16.9
|
%
|
Glenn
Peipert(4)
|
|
|
|
|
|
10,367,060
|
|
|
8.9
|
%
|
William
Hendry(5)
|
|
|
|
|
|
|
|
|
*
|
|
William
McKnight(6)
|
|
|
|
|
|
|
|
|
*
|
|
Bryan
Carey (7)
|
|
|
|
|
|
|
|
|
*
|
|
Lawrence
K. Reisman(8)
|
|
|
|
|
|
|
|
|
*
|
|
Frederick
Lester(9)
|
|
|
|
|
|
|
|
|
*
|
|
Thomas
Pear(10)
|
|
|
|
|
|
|
|
|
*
|
|
Matthew
J. Szulik
|
|
|
|
|
|
|
|
|
25.2
|
%
|
Laurus
Master Fund, Ltd.
|
|
|
|
|
|
|
|
|
5.4
|
%
|
All
directors and officers as a group (8 persons)
|
|
|
|
|
|
|
|
|
26.9
|
%
|
*
Represents less than 1% of the issued and outstanding Common Stock.
(1)
Each
stockholder, director and executive officer has sole voting power and sole
dispositive power with respect to all shares beneficially owned by him, unless
otherwise indicated.
(2)
All
addresses are c/o Conversion Services International, Inc., 100 Eagle Rock
Avenue, East Hanover, New Jersey 07936.
(3)
Mr.
Newman is the Company’s President, Chief Executive Officer and Chairman of the
Board.
(4)
Mr.
Glenn
Peipert is the Company’s Executive Vice President, Chief Operating Officer and
Director. Consists of an option to purchase 166,666 shares of Common Stock
granted on November 16, 2005, and expiring on November 16, 2010, at an exercise
price of $0.83 per share, and does not include an option to purchase 83,334
shares of Common Stock which vest on November 16, 2008.
(5)
Mr.
William Hendry is the Company’s Vice President, Chief Financial Officer,
Secretary and Treasurer. Includes an option to purchase 30,000 shares of Common
Stock granted on May 28, 2004, and expiring on May 28, 2014, at an exercise
price of $3.00 per share. Includes an option to purchase 20,000 shares of Common
Stock granted on November 16, 2005, and expiring on November 16, 2015, at an
exercise price of $0.83 per share, and does not include an option to purchase
10,000 shares of Common Stock which vest on May 16, 2008. Consists of an option
to purchase 50,000 shares of Common Stock granted on October 10, 2006, and
expiring on October 10, 2016, at an exercise price of $0.25 per share, and
does
not include an option to purchase 100,000 shares of Common Stock which vests
as
follows: (i) 50,000 on October 10, 2008 and (ii) 50,000 on October 10,
2009.
(6)
Mr.
McKnight is the Company’s Senior Vice President - Information
Management.
(7)
Mr.
Carey
is the Company’s Senior Vice President and Managing Director, DeLeeuw
Associates, Inc. Consists of an option to purchase 33,333 shares of Common
Stock
granted on May 28, 2004, and expiring on May 28, 2014, at an exercise price
of
$3.00 per share. Consists of an option to purchase 83,333 shares of Common
Stock
granted on November 16, 2005, and expiring on November 16, 2015, at an exercise
price of $0.83 per share, and does not include an option to purchase 41,667
shares of Common Stock which vest on May 16, 2008. Consists of an option to
purchase 50,000 shares of Common Stock granted on October 10, 2006, and expiring
on October 10, 2016, at an exercise price of $0.25 per share and does not
include an option to purchase 100,000 shares of Common Stock which vests as
follows: (i) 50,000 on October 10, 2008 and (ii) 50,000 on October 10, 2009.
Does not include an option to purchase 250,000 shares of Common Stock granted
on
May 10, 2007, and expiring on May 10, 2017, at an exercise price of $0.30 per
share which vest as follows: (i) 83,333 on May 10, 2008, (ii) 83,333 on May
10,
2009 and (iii) 83,334 on May 10, 2010.
(8)
Mr.
Reisman is a Director. Consists of an option to purchase 30,000 shares of Common
Stock granted on May 28, 2004, and expiring on May 28, 2014, at an exercise
price of $3.00 per share. Consists of an option to purchase 13,333 shares of
Common Stock granted on November 16, 2005, and expiring on November 16, 2015,
at
an exercise price of $0.83 per share, and does not include an option to purchase
6,667 shares of Common Stock which vest on November 16, 2008. Consists of an
option to purchase 8,333 shares of Common Stock granted on October 10, 2006,
and
expiring on October 10, 2016, at an exercise price of $0.25 per share and does
not include an option to purchase 16,667 shares of Common Stock which vest
as
follows: (i) 8,333 on October 10, 2008, (ii) 8,334 on October 10, 2009. Includes
24,178 shares granted in October 2007 as a portion of the annual director
compensation.
(9)
Mr.
Lester is a Director. Consists of an option to purchase 8,333 shares of Common
Stock granted on October 10, 2006, and expiring on October 10, 2016, at an
exercise price of $0.25 and does not include an option to purchase 16,667 shares
of Common Stock which vests as follows: (i) 8,333 on October 10, 2008 and (ii)
8,334 on October 10, 2009. Includes 24,178 shares granted in October 2007 as
a
portion of the annual director compensation.
(10)
Mr.
Pear
is a Director. Consists of an option to purchase 8,333 shares of Common Stock
granted on October 10, 2006, and expiring on October 10, 2016, at an exercise
price of $0.25 and does not include an option to purchase 16,667 shares of
Common Stock which vests as follows: (i) 8,333 on October 10, 2008 and (ii)
8,334 on October 10, 2009. Includes 24,178 shares granted in October 2007 as
a
portion of the annual director compensation.
GENERAL
The
Management of the Company does not know of any matters, other than those stated
in this Proxy Statement, that are to be presented for action at the Annual
Meeting. If any other matters should properly come before the Annual Meeting,
proxies will be voted on those other matters in accordance with the judgment
of
the persons voting the proxies. Discretionary authority to vote on such matters
is conferred by such proxies upon the persons voting them.
The
Company will bear the cost of preparing, printing, assembling and mailing all
proxy materials that may be sent to stockholders in connection with this
solicitation. Arrangements will also be made with brokerage houses, other
custodians, nominees and fiduciaries, to forward soliciting material to the
beneficial owners of the Common Stock of the Company held by such persons.
The
Company will reimburse such persons for reasonable out-of-pocket expenses
incurred by them. In addition to the solicitation of proxies by use of the
mails, officers and regular employees of the Company may solicit proxies without
additional compensation, by telephone or facsimile transmission. The Company
does not expect to pay any compensation for the solicitation of
proxies.
A
copy of
the Company’s Form 10-K for the fiscal year ended December 31, 2007, as filed
with the SEC, accompanies this Proxy Statement. Upon written request, the
Company will provide each stockholder being solicited by this Proxy Statement
with a free copy of any exhibits and schedules thereto. All such requests should
be directed to Conversion Services International, Inc.,
100
Eagle
Rock Avenue, East Hanover, New Jersey 07936
,
Attn
:
William
Hendry, Chief Financial Officer.
All
properly executed proxies delivered pursuant to this solicitation and not
revoked will be voted at the Annual Meeting in accordance with the directions
given. In voting by proxy in regard to items to be voted upon, stockholders
may
(i) vote in favor of, or FOR, the item, (ii) vote AGAINST the item or, (iii)
ABSTAIN from voting on one or more items. Stockholders should specify their
choices on the enclosed proxy. Proxies may be revoked by stockholders at any
time prior to the voting thereof by giving notice of revocation in writing
to
the Secretary of the Company or by voting in person at the Annual Meeting.
If
the enclosed proxy is properly signed, dated and returned, the Common Stock
represented thereby will be voted in accordance with the instructions thereon.
If no specific instructions are given with respect to the matters to be acted
upon, the shares represented by the proxy will be voted FOR the election of
all
Directors, FOR the ratification of the appointment of Friedman LLP as the
Company’s independent auditors for the fiscal year ending December 31, 2008,
and
FOR
amending
the Company's Certificate of Incorporation, as amended, to increase the amount
of the Company's authorized common stock, par value $.001 per share (the "Common
Stock"), from two hundred million (200,000,000) to three hundred million
(300,000,000)
.
Stockholder
Proposals For the 2009 Annual Meeting and General
Communications
Any
stockholder proposals intended to be presented at the Company’s 2008 Annual
Meeting of Stockholders must be received by the Company at its office in East
Hanover, New Jersey on or before March 1, 2009 in order to be considered for
inclusion in the Company’s proxy statement and proxy relating to such meeting.
The Company has received no stockholder nominations or proposals for the 2008
Annual Meeting.
Stockholders
may communicate their comments or concerns about any other matter to the Board
of Directors by mailing a letter to the attention of the Board of Directors
c/o
William B. Hendry, Corporate Secretary, at the Company’s headquarters at 100
Eagle Rock Avenue, East Hanover, New Jersey 07936.
Revocability
of Proxy
Shares
represented by valid proxies will be voted in accordance with instructions
contained therein, or, in the absence of such instructions, in accordance with
the Board of Directors’ recommendations. Any person signing and mailing the
enclosed proxy may, nevertheless, revoke the proxy at any time prior to the
actual voting thereof by attending the Annual Meeting and voting in person,
by
providing written notice of revocation of the proxy or by submitting a signed
proxy bearing a later date. Any written notice of revocation should be sent
to
the attention of the Secretary of the Company at the address above. Any
stockholder of the Company has the unconditional right to revoke his or her
proxy at any time prior to the voting thereof by any action inconsistent with
the proxy, including notifying the Secretary of the Company in writing,
executing a subsequent proxy, or personally appearing at the Annual Meeting
and
casting a contrary vote. However, no such revocation will be effective unless
and until such notice of revocation has been received by the Company at or
prior
to the Annual Meeting.
Method
of Counting Votes
Unless
a
contrary choice is indicated, all duly executed proxies will be voted in
accordance with the instructions set forth on the proxy card. A broker non-vote
occurs when a broker holding shares registered in street name is permitted
to
vote, in the broker’s discretion, on routine matters without receiving
instructions from the client, but is not permitted to vote without instructions
on non-routine matters, and the broker returns a proxy card with no vote (the
“non-vote”) on the non-routine matter. Under the rules and regulations of the
primary trading markets applicable to most brokers, both the election of
directors and the ratification of the appointment of auditors are routine
matters on which a broker has the discretion to vote if instructions are not
received from the client in a timely manner. Abstentions will be counted as
present for purposes of determining a quorum but will not be counted for or
against the election of directors or the ratification of independent auditors.
As to Item 1, the Proxy confers authority to vote for all of the
five
persons
listed as candidates for a position on the Board of Directors even though the
block in Item 1 is not marked unless the names of one or more candidates are
lined out. The Proxy will be voted “For” Items 2 and 3 unless “Against” or
“Abstain” is indicated. If any other business is presented at the meeting, the
Proxy shall be voted in accordance with the recommendations of the Board of
Directors.
|
|
|
|
By
Order of the
Board of Directors
|
|
|
|
|
|
|
|
Scott
Newman
President
and Chief Executive
Officer
|
May 14, 2008
|
|
CONVERSION
SERVICES INTERNATIONAL INC.
THIS
PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS
The
undersigned hereby appoint(s) Scott Newman and Glenn Peipert with the power
of
substitution and resubstitution to vote any and all shares of capital stock
of
Conversion Services International, Inc. (the “Company”) which the undersigned
would be entitled to vote as fully as the undersigned could do if personally
present at the Annual Meeting of the Company, to be held on Friday, June 13,
2008, at 10:00 A.M. local time, and at any adjournments thereof, hereby revoking
any prior proxies to vote said stock, upon the following items more fully
described in the notice of any proxy statement for the Annual Meeting (receipt
of which is hereby acknowledged):
1.
|
ELECTION
OF
DIRECTORS
|
|
|
|
|
|
VOTE
|
|
|
|
o
|
|
FOR ALL nominees listed below EXCEPT
as marked
to the
contrary below
|
|
|
|
o
|
|
WITHHOLD AUTHORITY
to vote
for ALL nominees listed below
|
|
|
(INSTRUCTION:
To withhold
authority to vote for any individual
nominee
strike a line through the nominee’s name
below.)
|
Scott
Newman, Glenn Peipert, Lawrence K. Reisman, Frederick Lester and Thomas
Pear..
2.
|
RATIFICATION
OF THE APPOINTMENT OF FRIEDMAN LLP AS
|
INDEPENDENT
AUDITORS OF THE COMPANY FOR FISCAL YEAR 2008.
|
|
|
|
o
|
|
FOR the ratification
of
the appointment of Friedman LLP
|
|
|
|
o
|
|
WITHHOLD AUTHORITY
|
|
|
|
o
|
|
ABSTAIN
|
3.
|
A
MENDING
THE COMPANY'S CERTIFICATE OF INCORPORATION TO
|
INCREASE THE AMOUNT OF THE COMPANY'S
AUTHORIZED COMMON STOCK FROM
TWO HUNDRED MILLION (200,000,000)
TO THREE
HUNDRED MILLION (300,000,000)
|
|
|
|
o
|
|
FOR the increase
in
authorized shares of common stock
|
|
|
|
o
|
|
WITHHOLD AUTHORITY
|
|
|
|
o
|
|
ABSTAIN
|
THIS
PROXY WILL BE VOTED AS SPECIFIED ABOVE; UNLESS OTHERWISE INDICATED, THIS PROXY
WILL BE VOTED FOR ELECTION OF THE FIVE NOMINEES NAMED IN ITEM 1, THE
RATIFICATION OF THE APPOINTMENT OF FRIEDMAN LLP AS INDEPENDENT AUDITORS OF
THE
COMPANY FOR THE FISCAL YEAR 2008 IN ITEM 2 AND THE AMENDMENT OF THE COMPANY’S
CERTIFICATE
OF INCORPORATION TO INCREASE THE AMOUNT OF AUTHORIZED SHARES OF COMMON STOCK
IN
ITEM 3.
In
their discretion, the Proxies are authorized to vote upon such other business
as
may properly come before the meeting.
Please
mark, sign date and return this Proxy promptly using the accompanying postage
pre-paid envelope. THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF CONVERSION SERVICES INTERNATIONAL INC.
Dated:___________________________________
_________________________________________
Signature
_________________________________________
Signature
if jointly owned:
_________________________________________
Print
name:
Please
sign exactly as the name appears on your stock certificate. When shares of
capital stock are held by joint tenants, both should sign. When signing as
attorney, executor, administrator, trustee, guardian, or corporate officer,
please include full title as such. If the shares of capital stock are owned
by a
corporation, sign in the full corporate name by an authorized officer. If the
shares of capital stock are owned by a partnership, sign in the name of the
partnership by an authorized officer.
PLEASE
MARK, DATE, SIGN AND RETURN THIS PROXY PROMPTLY
IN
THE ENCLOSED ENVELOPE
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