INSIGNIA
SOLUTIONS PLC
(Registered
in England and Wales No. 01961960)
Notice
of Annual General Meeting
Notice is
hereby given that the Annual General Meeting (the "AGM") of Insignia Solutions
plc (the "Company") will
be held at 7575 E. Redfield Road, Suite 201, Scottsdale, AZ 85260 on June [ ],
2009 at 9 am for the following purposes:
Ordinary
Business
To
consider and, if thought fit, pass the following resolutions which will be
proposed as ordinary resolutions:
To
receive the audited financial statements of the Company for the years ended
December 31, 2007 and December 31, 2006, together with the directors' report and
the auditor's report on those financial statements.
2.
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Appointment of UK
auditors
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To
appoint MacIntyre Hudson as statutory auditors of the Company to hold office
until the conclusion of the next general meeting at which accounts are laid
before the Company and to authorize the directors to fix their
remuneration.
3.
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Appointment of U.S. independent
accountants
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To
appoint Malone & Bailey LLP as U.S. independent accountants of the Company
to hold office until the conclusion of the next general meeting at which
accounts are laid before the Company and to authorize the directors to fix their
remuneration.
.
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Re-election of Vincent
Pino
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To
re-elect Vincent Pino, as a director to a one year term who offers himself for
re-election in accordance with the Company's articles of
association.
5.
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Election of Peter
Engel
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To elect
Peter Engel as a director to a one year term who, having been appointed since
the last Annual General Meeting, offers himself for re-election in accordance
with the Company's articles of association.
6.
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Election of Filipe
Sobral
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To elect
Filipe Sobral as a director
to a one year term who, having been appointed since the last Annual General
Meeting, offers himself for re-election in accordance with the Company's
articles of association.
7.
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Election of Christopher
Baker
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To elect
Christopher Baker as a
director to a one year term who, having been appointed since the last Annual
General Meeting, offers himself for re-election in accordance with the Company's
articles of association.
8.
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Election of Lawrence
Schafran
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To elect
Lawrence Schafran as a director to a one
year term who, having been appointed since the last Annual General Meeting,
offers himself for re-election in accordance with the Company's articles of
association.
Special
Business
To
consider and, if thought fit, pass the following resolutions of which
Resolutions 9, 10, and 12 will be proposed as ordinary resolutions and
Resolution 11 will be proposed as a special resolution.
9.
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Increase in authorized share
capital
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That the
authorized share capital of the Company be increased by £1,900,000 to £3,000,000
by the creation of an additional 190,000,000 ordinary shares of £0.01 each
ranking pari passu in all respects with the existing ordinary shares of £0.01
each in the capital of the company.
10.
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Directors' authority to allot
shares
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That, in
substitution for any equivalent authorities and powers granted to the directors
prior to the passing of this Resolution, the directors be and they are hereby
generally and unconditionally authorized pursuant to Section 80, Companies Act
1985 (the "Act") to
exercise all powers of the Company to allot relevant securities (as defined in
section 80(2) of the Act) provided that this authority shall be limited to
relevant securities up to an aggregate nominal amount of £1,900,000, and unless
previously revoked, varied or extended, this authority shall expire on the date
falling five years from the passing of this resolution, except that the Company
may at any time before such expiry make an offer or agreement which would or
might require relevant securities to be allotted after such expiry and the
directors may allot relevant securities in pursuance of such an offer or
agreement as if this authority had not expired.
10.
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Directors' power to issue
shares for cash
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That the
directors be and they are hereby empowered pursuant to section 95(1) of the Act
to allot equity securities (as defined in section 94(2) of the Act) of the
Company wholly for cash where such allotment is pursuant to the authority of the
directors under section 80 of the Act conferred by Resolution 10 above as if
Section 89(1) of the Act did not apply to such allotment provided that unless
previously revoked, varied or extended, this power shall expire on the date
falling five years after the date of the passing of this resolution except that
the Company may before the expiry of this power make an offer or agreement which
would or might require equity securities to be allotted after such expiry and
the directors may allot equity securities in pursuance of such an offer or
agreement as if this power had not expired.
(a) the
power conferred by this Resolution shall be limited to:
(i) the
allotment of equity securities in connection with an offer of equity securities
to the holders of ordinary shares in the capital of the Company in proportion as
nearly as practicable to their respective holdings of such shares, but subject
to such exclusions or other arrangements as the directors may deem necessary or
expedient in relation to fractional entitlements or legal or practical problems
under the laws or requirements of any regulatory body or any stock exchange;
and
(ii) the
allotment, otherwise than pursuant to sub-paragraph (a)(i) above, of equity
securities up to an aggregate nominal value equal to £1,900,000;
and
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(b)
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unless
previously revoked, varied or extended, this power shall expire on the
date falling five years after the date of the passing of this resolution
except that the Company may before the expiry of this power make an offer
or agreement which would or might require equity securities to be allotted
after such expiry and the directors may allot equity securities in
pursuance of such an offer or agreement as if this power had not
expired.
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11.
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Adoption of
2009 Long Term Incentive Plan (the "Incentive
Plan")
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That the Company's Incentive Plan, the principal features
of which are summarized on pages 17-24 of the proxy statement
enclosed with this Notice,
in the form of the Incentive Plan to be produced at the AGM and signed by
the Chairman for the purposes of identification, be and the same is hereby
approved, and the directors be and they are hereby authorized to do all acts and things as may be
necessary to carry the same into effect.
By
Order of the Board of Directors
Dated [ ] April
2009
Notes:
1.
|
All
members registered in the register of members of the Company at the start
of the AGM (or, if the AGM is adjourned, at the start of any adjourned
AGM) who hold ordinary shares are entitled to attend, speak and vote at
the AGM. A member who is entitled to attend, speak and vote may
appoint a proxy to attend, speak and vote instead of
him. A proxy need not also be a member of the Company but must
attend the AGM in order to represent a member. A member may appoint
more than one proxy provided each proxy is appointed to exercise rights
attached to different shares (so a member must have more than one share to
be able to appoint more than one proxy). A form of proxy is
enclosed. The
notes to the form of proxy include instructions on how to appoint the
Chairman of the AGM or another person as proxy. To be effective
the form must reach the Company at 7575 E. Redfield Road, Suite 201,
Scottsdale, Arizona 85260 by 9 a.m on June [ ], 2009.
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2.
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A
copy of the Incentive Plan proposed to be adopted pursuant to resolution
11 is available for
inspection at the registered office of the Company during the usual
business hours on any weekday (Saturday, Sunday and public holidays
excluded) from the date of this notice until the conclusion of the AGM and
will also be available for inspection at the place of the AGM from 9 a.m.
on the day of the AGM until its
conclusion.
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3.
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As
at April [ ], 2009 (being the last business day prior to the publication
of this Notice) the Company's issued share capital consists of 101,227,045
ordinary shares, carrying one vote each. Therefore, the total
voting rights in the Company as at April [ ], 2009 are 101,227,045
votes.
|
FORWARD
LOOKING STATEMENTS
Information
included in this Proxy Statement contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E
of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). This information may involve known and unknown risks,
uncertainties and other factors which may cause the Company's actual results,
performance or achievements to be materially different from the Company's future
results, performance or achievements expressed or implied by any forward-looking
statements. Forward-looking statements, which involve assumptions and
describe the Company's future plans, strategies and expectations, are generally
identifiable by use of the words "may," "will," "should," "expect,"
"anticipate," "estimate," "believe," "intend" or "project" or the negative of
these words or other variations on these words or comparable
terminology. These forward-looking statements are based on
assumptions that may be incorrect, and there can be no assurance that these
projections included in these forward-looking statements will come to
pass. The Company's actual results could differ materially from those
expressed or implied by the forward-looking statements as a result of various
factors.
It is
possible the assumptions made by the Company for purposes of such
forward-looking statements may not be valid and that the results may not
materialize. These risk, uncertainties and contingencies include, but
are not limited to, the following:
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·
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our
ability to attract customers;
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·
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the
anticipated benefits and risks associated with our business
strategy;
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·
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our
future operating results;
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·
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the
anticipated size or trends of the markets in which we compete and the
anticipated competition in those
markets;
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·
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potential
government regulation;
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·
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future
capital requirements and our ability to satisfy our capital
needs;
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·
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the
potential for additional issuances of our
securities;
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·
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the
possibility of future acquisitions of businesses, products or
technologies;
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·
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the
results of upgrades to our
infrastructure;
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·
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our
belief that manufacturers will recognize us as an efficient wholesaler and
liquidation solution;
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·
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our
belief that we can maintain or improve upon customer service levels that
we and our customers consider
acceptable;
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·
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our
belief that we can maintain sales at appropriate levels despite the
seasonal nature of our business;
and
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·
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our
belief that we can successfully offer and sell a constantly changing mix
of products and services.
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The
Company cautions you not to place undue reliance on these forward-looking
statements. Such forward-looking statements relate only to events as
of the date on which the statements are made. The Company undertakes
no obligation to update any forward-looking statements, whether as a result of
new information, future events or otherwise, even if the experience of future
changes make it clear that any projected results or events expressed or implied
therein will not be realized. You are advised, however, to consult
any further disclosures the Company makes in future public statements and press
releases.
INSIGNIA
SOLUTIONS PLC
7575
E. Redfield Road, Suite 201
Scottsdale,
AZ 85260
PROXY
STATEMENT
April
[ ], 2009
This
Proxy Statement is for holders of ordinary shares of £0.01 each and holders of
American Depositary Shares ("ADSs") evidenced by American
depositary receipts of Insignia Solutions plc ("Insignia" or the "Company"), a company organized
under the laws of England and Wales. This proxy statement is
furnished by the Board of Directors of Insignia (the "Board") in connection with the
solicitation of specific voting instruction from the holders of ADSs and proxies
from holders of ordinary shares for voting at the Annual General Meeting (the
"AGM" or the "Annual General Meeting") of
Insignia to be held at 7575 E. Redfield Road, Suite 201, Scottsdale, AZ 85260,
on June [__], 2009 at 9 a.m. local time. All proxies will be voted in
accordance with the instructions contained therein and, if no choice is
specified, the person or persons appointed as proxy will vote or abstain from
voting, at their discretion.
At April
1, 2009, Insignia had 101,227,045 ordinary shares issued and entitled to vote,
of which approximately 99% were held in the form of ADSs. Each ADS
represents one ordinary share. A minimum of two persons present in
person, by corporate representative or by proxy holding together not less than
one-third of the ordinary shares then in issue will constitute a quorum for the
transaction of business at the AGM. This proxy statement and the accompanying
form of proxy were first mailed to shareholders on or about ________,
2009.
VOTING
RIGHTS AND SOLICITATION OF PROXIES
Holders
of ordinary shares entitled to attend and vote at the AGM may appoint a proxy to
attend and, on a poll of such holders, to vote in their place. A
proxy need not be a shareholder of Insignia. Voting will be by a poll
on all the resolutions to be considered. Holders of Insignia's
ordinary shares are entitled to one vote for each ordinary share
held. Holders of ADS Shares are entitled to one vote for each ADS
held. Shares may not be voted cumulatively.
Resolutions
1 through 8 in the notice of AGM (the "Notice") comprise the ordinary
business of the AGM and are ordinary resolutions, which require the affirmative
vote of a majority of the votes cast at the AGM in person or by
proxy. Resolutions 9 through 10 and resolution 12 in the notice are
items of special business which are again proposed as ordinary resolutions,
requiring the same majority. Resolution 11 in the notice is an item
of special business proposed as a special resolution which requires the
affirmative vote of at least 75% of the votes cast at the AGM in person or by
proxy. Insignia will tabulate all votes and will separately tabulate,
for each resolution, affirmative and negative votes, abstentions and broker
non-votes. Abstentions and broker non-votes will not be counted in
determining the votes. A form of proxy is enclosed which, to be
effective, must be signed, dated and deposited with Capita Registrars not less
than 48 hours before the time of the AGM, together with the power of attorney or
other authority (if any) under which it is signed. Holders of ADSs
should complete and return the voting instruction form provided to them to Bank
of New York in accordance with the instructions contained therein, so that it is
received on or before June [ ], 2009. The close of
business on _________, 2009 has been fixed as the record date for the
determination of the holders of ADSs entitled to provide voting instructions to
The Bank of New York, as depositary.
Insignia
will pay the expenses of soliciting proxies and voting
instructions. Following the original mailing of the proxies and other
soliciting materials, Insignia and/or its agents may also solicit proxies and
voting instructions by mail, telephone, telegraph or in
person. Following the original mailing of the proxies and other
soliciting materials, Insignia will request that brokers, custodians, nominees,
The Bank of New York, as depositary, and other record holders of Insignia's
ordinary shares or ADSs forward copies of the proxies and other soliciting
materials to persons for whom they hold ordinary shares or ADSs and request
authority for the exercise of proxies and/or voting instructions. In
such cases, Insignia, upon the request of the record holder, will reimburse such
holder for their reasonable expenses.
REVOCABILITY
OF PROXIES
Any
person signing a proxy in the form accompanying this proxy statement has the
power to revoke it at any time prior to one hour before the commencement of the
AGM by written instrument delivered to Capita Registrars, or, in the case of ADS
holders, to the Bank of New York stating that the proxy is revoked,
by attendance at the AGM and voting in person or by duly filing a replacement
proxy. Please note, however, that if a person's shares are held of
record by a broker, bank or other nominee and that person wishes to vote at the
AGM, the person concerned should ensure that the broker, bank or other nominee
duly appoints such person as its proxy in order that he or she may do
so.
As described further herein, the
Board has approved the matters set forth in Resolutions 1 through 12 and
believes they are fair to, and in the best interests of, the Company and its
shareholders. The Board recommends a vote "for" each of these
resolutions.
QUESTIONS
AND ANSWERS ABOUT THE ANNUAL GENERAL MEETING AND THE RESOLUTIONS
INFORMATION
ABOUT ANNUAL GENERAL MEETING
When
is the Annual General Meeting?
June
[__], 2009, 9 a.m. (local time).
Where
will the Annual Meeting be held?
The
Annual General Meeting will be held at Insignia’s international headquarters
located at 7575 E. Redfield Road, Suite 201, Scottsdale, AZ 85260.
What
is being considered at the AGM?
At the
AGM, shareholders will be considering the resolutions set out in the Notice of
Annual General Meeting appearing on pages 6-24 of this Proxy
Statement.
Who
is entitled to vote at the AGM?
Holders
of ordinary shares and holders of American Depositary Shares
(“ADS”).
YOUR
BOARD HAS APPROVED EACH OF THE RESOLUTIONS SET FORTH HEREIN.
How
do I vote?
You may
vote either in person at the AGM, or by completing and returning a proxy setting
out your voting intentions. Your proxy will be entitled to attend,
speak and vote at the AGM on your behalf. Voting in respect of each resolution
will be taken on a poll.
What
if I return my proxy card but do not include voting instructions?
Proxies
that are signed and returned but do not include voting instructions will be
voted FOR all of the resolutions proposed in the Notice.
What
does it mean if I receive more than one proxy card?
It means
you have multiple accounts with brokers and/or the Company's transfer agent.
Please vote all of these ordinary shares. It is recommended that you contact
your broker and/or the Company's transfer agent to consolidate as many accounts
as possible under the same name and address. The Company's transfer agent in the
case of ordinary shares is Capita Registrars and their telephone number is +44
871 664 0300 and in the case of ADSs, Bank of New York is the transfer agent and
their telephone number is +1 212 815-8257.
Will
my shares be voted if I do not provide my proxy?
If you
hold your shares directly in your own name, they will not be voted if you do not
provide a proxy.
Your
shares may be voted under certain circumstances if they are held in the name of
a brokerage firm. Brokerage firms generally have the authority to vote
customers' un-voted shares on certain "routine" matters. None of the
increase in the Company's authorized share capital, the granting to the
directors of authority to allot shares and to disapply pre-emption rights, or
the adoption of the 2009 Stock Incentive Plan are considered "routine" matters.
When a brokerage firm votes its customers' un-voted shares, these shares are
counted for the purposes of establishing a quorum.
How
do I vote if I hold shares registered in the name of a broker or
bank?
If, on
________, 2009, your shares were not held in your name, but rather 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 a Notice
of Proxy Materials was forwarded to you by that organization. The organization
holding your account is considered to be the shareholder of record for purposes
of voting at the AGM. However, as a beneficial owner, you have the right to
direct your broker or other agent regarding how to vote the shares held in your
account. You are also invited to attend the AGM. However, since you are not the
shareholder of record, you may not vote your shares in person at the AGM unless
you request and obtain a valid proxy from your broker or other agent and bring
such proxy to the AGM. If you want to attend the AGM, but not vote, you must
provide proof of beneficial ownership as of the record date, such as your most
recent account statement prior to ________, 2009, a copy of the voting
instruction card provided by your broker or other agent, or other similar
evidence of ownership. Whether or not you plan to attend the AGM, you are urged
to vote by proxy in advance of the AGM to ensure your vote is
counted.
Can
I change my mind after I return my proxy?
Yes. You
may change your vote at any time before one hour prior to the commencement of
the AGM. If you are a shareholder of record, you can do this by giving written
notice to Capita Registrars, or, in the case of ADS holders, to the Bank of New
York by submitting another proxy with a later date, or by attending
the AGM and voting in person. If you are a shareholder in "street" or "nominee"
name, you should consult with the bank, broker or other nominee regarding that
entity's procedures for revoking your voting instructions.
How
many shareholders must be present to hold the AGM?
You are
counted as present at the AGM if you attend the AGM in person (or, in the case
of a corporation, a duly authorized corporate representative attends in person)
or if you properly return a proxy by mail and your proxy attends and votes at
the AGM. In order for us to conduct the Company's meeting, two members holding
at least one third of the Company's issued and outstanding ordinary share
capital must be present in person, by corporate representative or by proxy at
the AGM. This is referred to as a quorum. On April 1, 2009, there were
101,227,045 ordinary shares outstanding.
What
vote is required to approve the ordinary business?
Resolutions
1 through 8 are ordinary resolutions, which will require the approval of more
than fifty (50%) percent of the votes exercised in person or by proxy at the
AGM. Abstentions or "broker non-votes" are not counted as a vote
under English law and will therefore not be counted in determining the number of
votes exercised at the AGM.
What
vote is required to approve the increase in authorized share
capital?
The
resolution proposing the increase in authorized share capital is an ordinary
resolution, which will require the approval of more than fifty percent (50%) of
the votes exercised in person or by proxy at the AGM. Abstentions or
"broker non-votes" are not counted as a vote under English law and will
therefore not be counted in determining the number of votes exercised at the
AGM.
What
vote is required to grant authority to the directors to allot
shares?
The
resolution proposing to grant the directors authority to allot shares is an
ordinary resolution, which will require the approval of more than fifty percent
(50%) of the votes exercised in person or by proxy at the
AGM. Abstentions or "broker non-votes" are not counted as a vote
under English law and will therefore not be counted in determining the number of
votes exercised at the AGM.
What
vote is required to grant authority to the directors to issue shares for cash
free of statutory pre-emption rights?
The
resolution proposing to grant the directors authority to issue shares for cash
free of statutory pre-emption rights is a special resolution, which will require
the approval of seventy-five percent (75%) or more of the votes exercised in
person or by proxy at the AGM. Abstentions or "broker non-votes" are
not counted as a vote under English law and will therefore not be counted in
determining the number of votes exercised at the AGM.
What
vote is required to approve the 2009 Long-Term Incentive Plan?
The
resolution proposing the approval of the 2009 Long-Term Incentive Plan is an
ordinary resolution, which will require the approval of more than fifty percent
(50%) of the votes exercised in person or by proxy at the
AGM. Abstentions or "broker non-votes" are not counted as a vote
under English law and will therefore not be counted in determining the number of
votes exercised at the AGM.
Who
will bear the costs of this solicitation?
The
Company will bear the entire cost of solicitation of proxies, including
preparation, assembly, printing and mailing of this proxy statement, the proxy
card and any additional information furnished to shareholders. Copies of
solicitation materials will be furnished to banks, brokerage houses, fiduciaries
and custodians holding ordinary shares or ADSs in their names shares
beneficially owned by others to forward to the beneficial owners. The Company
may reimburse persons representing beneficial owners of ordinary shares or ADSs
for their costs of forwarding solicitation materials to the beneficial owners.
Original solicitation of proxies by mail may be supplemented by telephone,
facsimile or personal solicitation by the Company's directors, officers or other
regular employees.
How
can I find out the results of the voting at the Annual General
Meeting?
Preliminary
voting results will be announced at the Annual General Meeting. Final voting
results will be published in the Company's quarterly report or on a Current
Report on Form 8-K.
EXPLANATORY
NOTES RELATING TO THE BUSINESS TO BE CONDUCTED AT THE ANNUAL GENERAL
MEETING
RESOLUTION
1
RECEIPT
OF STATUTORY DIRECTORS' REPORT AND ACCOUNTS
At the
AGM, shareholders will receive the U.K. statutory accounts of Insignia in
respect of the financial years ended December 31, 2007 and December 31, 2006,
together with Directors' and Auditors' reports relating to those
accounts. It is a U.K. legal requirement that the accounts and the
reports are laid before the shareholders of Insignia in a general meeting,
following which they will be approved and signed on behalf of the Board and
delivered to Companies House in the U.K. The U.K.
statutory Directors' Report and Accounts are attached hereto beginning on page
F-1.
THE
BOARD RECOMMENDS A VOTE "FOR" RESOLUTION 1
RESOLUTION
2
RE-APPOINTMENT
OF U.K. AUDITORS
Insignia
has selected MacIntyre Hudson as its U.K. statutory auditors and independent
accountants to perform the audit of Insignia's financial statements for the year
ending December 31, 2008. The shareholders are being asked to
reappoint MacIntyre Hudson until the conclusion of the Company's next annual
general meeting at which accounts are laid before the Company and to authorize
the Board to determine their remuneration. A representative of
MacIntyre Hudson is expected to attend the AGM telephonically, will have the
opportunity to make a statement at the AGM if they desire to do so and are
expected to be available to respond to appropriate questions.
The
following is a summary of fees paid to MacIntyre Hudson for services
rendered:
Audit
Fees
The
aggregate fees billed or expected to be billed for professional services
rendered by MacIntyre Hudson for the years ended December 31, 2008 and December
31, 2007, for the annual audit of the Company's financial statements for such
years amounted to approximately $34,200 and $31,300, respectively.
Audit-Related
Fees
The
aggregate fees billed or expected to be billed for audit–related services not
reported as Audit Fees rendered by MacIntyre Hudson for the years ended December
31, 2008 and December 31, 2007 for (a) the audit of the Company's financial
statements and other documents presented to Companies House and (b)
reviews of SEC filings amounted to approximately $1,300 and $9,600,
respectively.
Tax
Fees
The
aggregate fees billed or expected to be billed for tax services rendered by
MacIntyre Hudson for the years ended December 31, 2008 and December 31, 2007
amounted to approximately $3,800 and $6,100, respectively. The Company did not
receive tax services for the years ended December 31, 2008 and December 31,
2007.
All
Other Fees
The
Company did not receive products and services provided by MacIntyre Hudson,
other than those discussed above, for the fiscal years ended December 31, 2008
and December 31, 2007.
Pre-Approval
Policy
All
services rendered as of today's date were approved by the Board. On a
going-forward basis, the audit committee will pre-approve all auditing services
and permitted non-audit services to be performed for us by MacIntyre Hudson,
including the fees and terms thereof (subject to the de minimus exceptions for
non-audit services described in the Exchange Act which are approved by the audit
committee prior to the completion of the audit). The audit committee
may form and delegate authority to subcommittees of the audit committee
consisting of one or more members and when appropriate, shall be presented to
the full audit committee at its next scheduled meeting.
THE
BOARD RECOMMENDS A VOTE "FOR" RESOLUTION 2
RESOLUTION
3
APPOINTMENT
OF U.S. INDEPENDENT ACCOUNTANTS
Effective
as of September 12, 2008, Insignia selected Malone & Bailey PC as its U.S.
independent accountants to perform the audit of Insignia's financial statements
for the fiscal years ending December 31, 2008 and December 31, 2007. The
shareholders are being asked to ratify such appointment. A
representative of Malone & Bailey LLP will be available to attend the AGM
telephonically to respond to appropriate questions and will be given the
opportunity to make a statement if they desire to do so.
Until
September 12, 2008, the Company previously engaged Burr, Pilger & Mayer LLP
as its U.S. independent accountants. Burr, Pilger & Mayer LLP has
not performed any audit related services regarding the Company's financial
statements since June 1, 2007 relating to the consolidated financial statements
for the fiscal year ended December 31, 2006.
The
following is a summary of fees paid to Malone & Bailey PC for services
rendered:
Audit
Fees
The
aggregate fees billed or expected to be billed for professional services related
to the audit of the financial statements for the years ended December 31, 2008
and December 31, 2007 by Malone & Bailey PC was approximately $123,536 and $110,959,
respectively.
Audit-Related
Fees
The
aggregate fees billed or expected to be billed for audit–related services not
reported as audit fees rendered by Malone & Bailey PC for the years ended
December 31, 2008 and December 31, 2007 amounted to approximately $96,268 and $0, respectively.
These fees were associated with the required audits of the historical financials
of DollarDays, LLC due to the reverse merger between Insignia and
DollarDays.
Tax
Fees
The
aggregate fees billed or expected to be billed for tax services rendered by
Malone & Bailey PC for the years ended December 31, 2008 and December 31,
2007 amounted to approximately $0. The Company did not receive tax
services for the years ended December 31, 2008 and December 31,
2007.
All
Other Fees
The
Company did not receive products and services provided by Malone & Bailey
PC, other than those discussed above, for the fiscal years ended December 31,
2008 and December 31, 2007.
Pre-Approval
Policy
All of
the foregoing services were approved by the Board. On a going-forward
basis, the audit committee will pre-approve all auditing services and permitted
non-audit services to be performed for us by Malone & Bailey LLP, including
the fees and terms thereof (subject to the de minimus exceptions for non-audit
services described in the Exchange Act which are approved by the audit committee
prior to the completion of the audit). The audit committee may form
and delegate authority to subcommittees of the audit committee consisting of one
or more members, and when appropriate, certain matters shall be presented to the
full audit committee at its next scheduled meeting.
THE
BOARD RECOMMENDS A VOTE "FOR" RESOLUTION 3
RESOLUTIONS
4 THROUGH 8
RE-APPOINTMENT
OF DIRECTORS
At the
AGM, shareholders will be asked to re-elect Vincent Pino and re-appoint Peter
Engel, Filipe Sobral, Christopher Baker and Lawrence Schafran, who, in
accordance with the Company's existing Articles of Association, offer themselves
for election following their appointment by the Board of the
Company.
Brief
biographical details of each of the directors standing for re-election or
re-appointment are set out below:
Vincent S. Pino, Director.
Mr. Pino was appointed a director of Insignia in October 1998. In
2003 he co-founded Center Pointe Sleep Associates, LLC, a privately held
developer and operator of independent diagnostic sleep labs, and currently
serves as its Chairman. From February 1998 until his retirement in
November 2000, he served as President of Alliance Imaging, a provider of
diagnostic imaging and therapeutic services. Mr. Pino began his association
with Alliance in 1988 as Chief Financial Officer. From 1991 through 1993,
Mr. Pino held the position of Executive Vice President and Chief Financial
Officer. Mr. Pino received an MBA and a B.S. degree in finance from the
University of Southern California in 1972 and 1970, respectively.
Peter Engel, President, Chief
Executive Officer and Chairman of the Board of Directors. On
June 23, 2008, pursuant to the transactions contemplated by the Merger Agreement
and concurrent with the completion of the Merger, Peter Engel was appointed
Chief Executive Officer and Chairman of the Board of Directors of Insignia.
Mr. Engel, 73, has served as the Chairman and Chief Executive Officer of
DollarDays since February 2007. From 2003 through 2006, Mr. Engel was President
of Affinity Publishing, a book packaging company. From 1998 to 2000
he was the president of the audio book division of NewStar Media, Inc. (formerly
a Nasdaq company). From 1992 to 1998 he was the president and CEO of
Affinity Communications Corp., a West Coast publishing and book concept
developer whose books were published by many major publishers, including Crown,
Harper Collins, Little Brown, McGraw Hill, Penguin, Pocket, Putnam, Random
House, Regnery, St. Martins Press, Simon & Schuster and Viking. In 1980, Mr.
Engel founded and became the president and CEO of The American Consulting
Corporation (“ACC”), a marketing services firm. ACC’s clients included Campbell
Soup, Carter-Wallace, Coors, Citicorp, Clorox, Dunkin’ Donuts, Frito-Lay,
Gillette, Johnson and Johnson, Kraft, Mattel, Nestle, Nike, Ocean Spray,
PepsiCo, Quaker, and Seagram as well as over forty other companies. Mr. Engel
took ACC public in 1987 and sold it in 1988. From 1971 to 1980, Mr. Engel was a
Group Vice President at Colgate Palmolive. Mr. Engel is a former
Associate Professor at the University of Southern California entrepreneurial
program. Under his own name, he is the author of three novels, five business
books and several gift books. In addition, he has ghost-written a number of
books on alternative health and other issues. He holds a Bachelors of Commerce
from McGill University in Montreal, and has completed the course work, but not
the dissertation, for a PhD in history at New York’s Columbia
University.
Filipe Sobral, Director.
Mr. Sobral was appointed Director of Insignia in June 2008 and
currently serves as Controller and US Investments Manger for Amorim Holding II
SGPS, SA, a Portugal based investment firm. From 2001 to 2007, Mr. Sobral held
several positions with Valeo, SA, one of Europe’s largest automotive suppliers,
including CFO positions at manufacturing facilities in Brazil and
Portugal. Prior to Valeo, Mr. Sobral served as CFO of a privately
held construction company in Portugal. He holds a BA in Economics and
Business Administration from Universidade do Porto and an MBA from Salvador da
Bahia.
Christopher Baker, Director.
Mr. Baker served as Chairman of DollarDays from October 2001 to
March 2007 and was appointed to the Board of Directors of Insignia in June,
2008. From 2003 through the present date, Mr. Baker has served as
managing partner of C.P. Baker & Company. Mr. Baker founded C.P.
Baker & Company in 1990 after working as a derivatives sales trader for
companies such as Donaldson, Lufkin and Jenrette and Goldman Sachs. At C.P.
Baker & Company, Christopher Baker started, built and invested in companies
spanning a wide range of industries, including nutrition, wholesale e-commerce,
retail, marketing, education, consumer health and
entertainment. Christopher Baker is an employee and registered
representative of C.P. Baker Securities, Inc., a registered broker-dealer and
FINRA member. Mr. Baker received a Bachelor of Arts from Tufts University in
1974 and received his Masters in Business from Harvard Business School in
1978.
Lawrence Schafran, Director.
Mr. Schafran was appointed a Director and Chairman of the Company’s Audit
Committee in July 2008. Mr. Schafran has extensive experience in the financial
markets, complex litigation and corporate governance, and is a member of the
Board of Directors of other publicly-traded companies. Since July 2003, Mr.
Schafran has served as a Managing Director of Providence Capital, Inc., a
private New York City based investment firm, specializing in small-cap mining
and oil/gas exploration firms. From 1999 through 2002, Mr. Schafran served as
Trustee, Chairman/Interim-CEO/President and Co- Liquidating Trustee of the
Special Liquidating Trust of Banyan Strategic Realty Trust. He also currently
serves as a Director of SulphCo, Inc. (ASE: SUF), New Frontier Energy, Inc.
(OBB: NFEI.OB), RemoteMDx, Inc. (OBB: REDX.OB), Tarragon Corporation (PNK:
TARRQ.PK), Nat'l Patent Development Corp. (OBB: NPDV.OB)) and Taurex Resources,
plc (AIM: CDL.LN). Mr. Schafran received a Bachelor of Arts in Finance and a
Masters in Business Administration from the University of
Wisconsin.
THE
BOARD RECOMMENDS A VOTE "FOR" RESOLUTIONS 4 THROUGH 8
RESOLUTION
9
INCREASE
IN AUTHORIZED SHARE CAPITAL
The directors wish to increase the
authorized share capital of the Company so that
further shares can be issued. It is proposed to increase the authorized share capital from 110,000,000 to 300,000,000 ordinary shares which will leave approximately
43% of the authorized share capital available for
issue after the issuance of
the Merger Consideration and other share issuances, options and restricted stock
grants as discussed herein.
Other than expressly set
forth herein, the directors
have no current plans to issue further ordinary shares.
Currently,
the Company is unable to issue all of the Merger Consideration or to issue new
ordinary shares, options or warrants, as the Company's authorized share capital
is inadequate. This resolution would enable us to issue new ordinary
shares, as required under the terms of the Merger, as well as enable us to issue
shares in the future whether pursuant to a financing or acquisition transaction
or in the ordinary course of the Company's business.
On June
23, 2008, Insignia and its wholly-owned subsidiary, Jeode, Inc., entered into an
Agreement and Plan of Merger (the "Merger Agreement") with DollarDays
International, Inc., a Delaware corporation ("DollarDays"), providing for the
merger of DollarDays into Jeode (the "Merger"). The Merger was
completed on June 23, 2008. Under the terms of the Merger Agreement,
Insignia will (1) issue American Depositary Shares ("ADSs") representing
73,333,333 ordinary shares to DollarDays' shareholders, (2) issue a warrant for
8,551,450 ordinary shares to Peter Engel, the chief executive officer of
DollarDays, (3) issue a warrant for 3,603,876 ordinary shares to a financial
advisor to DollarDays, and (4) issue options to purchase 6,213,142 ADSs, in
replacement of outstanding DollarDays options (collectively, the "Merger
Consideration").
At the
time of the Merger, Insignia's authorized capital consisted of 110,000,000
ordinary shares, of which 50,934,080 ordinary shares, including ordinary shares
underlying ADSs, were issued and outstanding. Pursuant to the terms
of the Merger Agreement, Insignia was required to issue 73,333,333 ordinary
shares in the form of ADSs to DollarDays shareholders and reserve 19,515,859
ordinary shares underlying options and warrants.
As a
result of Insignia not having enough authorized capital to issue all of the
Merger Consideration, as a closing condition to the Merger Agreement, Insignia
was required to (1) issue 46,978,375 ADSs to DollarDays shareholders at the time
of closing of the Merger, and (2) take all necessary actions, including
obtaining shareholder approval from Insignia shareholders as may be required to
increase the authorized share capital of Insignia as may be necessary to
authorize and deliver all of the remaining Merger Consideration.
As of the
date of this prospectus, Insignia has issued 44,695,981 ADSs to DollarDays
shareholders and Insignia must issue the remaining 28,637,352
ADSs and 20,086,821 options and warrants to DollarDays shareholders and various
other individuals.
In
addition, pursuant to the Merger Agreement, Insignia agreed to issue
approximately 7,682,926 ADSs to an investor in DollarDays (“Amorim”) in
exchanged for repayment of a promissory note and cash invested as follows: (1)
4,921,791 ADSs at the time of closing of the Merger and (2) taking all necessary
actions, including obtaining shareholder approval as may be necessary to
authorize and deliver an additional 2,761,135 ADSs. As of the date of
this prospectus, Insignia has issued 5,596,984 ADSs to Amorim, but must issue
the remaining 2,085,942 ADSs.
The
Company also agreed to issue 570,962 warrants to a financial advisor in
connection with the Merger.
Furthermore,
the Company currently has a 1995 Incentive Stock Option Plan (the "1995 Option
Plan"), of which Insignia has outstanding 94,750 ordinary shares of the
8,527,071 ordinary shares reserved under such Plan. As of the date of
this prospectus, no additional shares are available for issuance pursuant to the
1995 Option Plan. Insignia intends to adopt a new stock option plan,
as discussed herein, to issue the outstanding Merger Consideration due to
DollarDays Shareholders. For more information regarding the new stock
option plan, please see Resolution 12.
The
Company’s Board of Directors has approved the grant of an aggregate of
14,756,360 shares of restricted shares vesting as follows:
|
·
|
Twenty
percent at the date of grant;
|
|
·
|
Twenty
percent on the first anniversary of the date of grant conditional upon the
achievement of a closing price not less than $0.06 and daily volume of
50,000 shares for 25 days of the 30 day period prior to the anniversary
date;
|
|
·
|
Thirty
percent on the second anniversary of the date of grant conditional upon
the achievement of a closing price not less than $0.10 and daily volume of
50,000 shares for 25 days of the 30 day period prior to the anniversary
date; and
|
|
·
|
Thirty
percent on the third anniversary of the date of grant conditional upon the
achievement of a closing price not less than $0.15 and daily volume of
50,000 shares for 25 days of the 30 day period prior to the anniversary
date.
|
As the
Company did not have available authorized shares available for the grant of
restricted stock, the Company will issue the shares at a future date when shares
are available.
The
increase in the number of authorized shares would enable the Company, without
further shareholder approval, to reserve and issue shares underlying the Merger
Consideration and all other ordinary shares, options and warrants due to the
various individuals and to issue shares from time to time as may be required for
proper business purposes, such as raising additional capital for ongoing
operations, business and asset acquisitions, stock splits and dividends, present
and future employee benefit programs and other corporate purposes. As
of the date hereof, there are no plans to issue additional ordinary shares other
than as expressly set forth herein.
Shares
to be Issued
As
previously described, the Company is currently obligated under various
agreements to issue an aggregate of 30,723,294 ordinary shares, 20,086,821
options and warrants, and 14,756,360 restricted shares. The increase in the
number of authorized shares is being proposed in part to provide for sufficient
authorized but unissued shares to satisfy the Company's obligations under these
agreements. The specific amounts and the terms upon which the Company shall be
obligated to issue the ordinary shares are as follows:
The
following table reflects the total amount of ordinary shares the Company is
obligated to issue or reserve for issuance, on a pre and post increase in
authorized capital.
|
|
Issued
|
|
|
To Be
Issued
|
|
Transaction
|
|
Pre-Increase
|
|
|
Post-Increase
|
|
|
|
|
|
|
|
|
Merger ADS
consideration
|
|
|
44,695,981 |
|
|
|
28,637,352 |
|
Amorin ADS
consideration
|
|
|
5,596,984 |
|
|
|
2,085,942 |
|
Merger
warrants
|
|
|
- |
|
|
|
12,155,326 |
|
Merger
options
|
|
|
- |
|
|
|
7,360,533 |
|
Other
warrants
|
|
|
- |
|
|
|
570,962 |
|
Restricted
shares
|
|
|
- |
|
|
|
14,756,360 |
|
|
|
|
|
|
|
|
|
|
Total
obligations
|
|
|
50,292,965 |
|
|
|
65,566,475 |
|
Total currently
outstanding
|
|
|
50,934,080 |
|
|
|
101,227,045 |
|
Total potentially
outstanding
|
|
|
101,227,045 |
|
|
|
166,793,520 |
|
Total shares
authorized
|
|
|
110,000,000 |
|
|
|
300,000,000 |
|
Percentage of authorized shares
outstanding
|
|
|
92 |
% |
|
|
56 |
% |
THE
BOARD RECOMMENDS A VOTE "FOR" RESOLUTION 9
RESOLUTION
10
AUTHORITY
TO ALLOT ORDINARY SHARES
This
resolution grants the directors authority to allot shares in the capital of the
Company and other relevant securities up to an aggregate nominal value of
£1,900,000, representing approximately 110% of the nominal value of the issued
ordinary share capital of the Company as shown in the latest audited accounts of
the Company. The directors do not have any present intention of
exercising this authority other than in relation to the Merger and the proposed
2009 Incentive Plan but they consider it desirable that the specified amount of
authorized but unissued share capital is available for issue so that they can
more readily take advantage of possible opportunities. Unless
revoked, varied or extended, this authority will expire on the fifth anniversary
of the date of the resolution.
THE
BOARD RECOMMENDS A VOTE "FOR" RESOLUTION 10
RESOLUTION 11
AUTHORITY TO ISSUE ORDINARY SHARES
FOR CASH FREE OF STATUTORY PRE-EMPTION
RIGHTS
This resolution authorizes the directors in certain circumstances
to allot equity securities for cash other than in accordance with the statutory
pre-emption rights (which require a company to offer all allotments for cash
first to existing shareholders in proportion to their
holdings). The relevant circumstances are either where the allotment
takes place in connection with a rights issue or the allotment is limited to a
maximum nominal amount of £1,900,000, representing approximately
110% of the nominal value of the issued
ordinary share capital of the Company. Unless revoked, varied or extended, this
authority will expire on the fifth anniversary of the date of the
resolution.
THE
BOARD RECOMMENDS A VOTE "FOR" RESOLUTION 11
RESOLUTION
12
APPROVAL
OF THE 2009 LONG TERM INCENTIVE PLAN
Background
The
Company's 2009 Long-Term Incentive Plan (the "Incentive Plan") has been approved
by the Board. The purposes of the Company's Incentive Plan are to create
incentives designed to motivate the Company's employees to significantly
contribute toward the Company's growth and profitability, to provide the
Company's executives, directors and other employees, and persons who, by their
position, ability and diligence, are able to make important contributions to the
Company's growth and profitability, with an incentive to assist us in achieving
the Company's long-term corporate objectives, to attract and retain executives
and other employees of outstanding competence, and to provide such persons with
an opportunity to acquire an equity interest in the Company.
The
Company may grant incentive and non-qualified stock options, stock appreciation
rights, performance units, restricted stock awards and performance bonuses, or
collectively, awards, to the Company's officers and key employees, and those of
the Company's subsidiaries. In addition, the Incentive Plan authorizes the grant
of non-qualified stock options and restricted stock awards to the Company's
directors and to any independent contractors and consultants who by their
position, ability and diligence are able to make important contributions to the
Company's future growth and profitability. Generally, all classes of the
Company's employees are eligible to participate in the Company's Incentive Plan.
Except for the Merger Consideration of 7,360,533 options due to DollarDays
optionholders as discussed in this Proxy, no options, restricted
stock or other awards under the Incentive Plan have been made or committed to be
made as of the date of this proxy statement.
The
following is a summary of the material provisions of the Company's Incentive
Plan and is qualified in its entirety by reference to the complete text of the
Company's Incentive Plan, a copy of which is attached to this proxy statement
as Exhibit "A".
Shares
Subject to the 2009 Incentive Plan
Upon the
approval of Resolution 12, the Company will have reserved a maximum of
20,000,000 of the Company's authorized ordinary shares for issuance upon the
exercise of awards to be granted pursuant to the Incentive Plan. Each share
issued under an option or under a restricted stock award will be counted against
this limit. Shares to be delivered at the time a stock option is exercised or at
the time a restricted stock award is made may be available from authorized but
unissued shares or from stock previously issued but which the Company has
reacquired and holds in the Company's treasury.
In the
event of any change in the Company's outstanding ordinary shares by reason of
any reorganization, recapitalization, stock split, stock dividend, combination
of shares, asset acquisition, consolidation, issuance of rights or other similar
transactions, the number of the Company's ordinary shares which may be issued
upon exercise of outstanding options, and the exercise price of options
previously granted under the Company's Incentive Plan, will be proportionally
adjusted to prevent any enlargement or dilution of the rights of holders of
previously granted options under the Company's Incentive Plan as may be
appropriate to reflect any such transaction or event.
Administration
The Board
has established a compensation committee that, among other duties, will
administer the Incentive Plan. The compensation committee is composed of four
members of the Board, a majority of whom will be "non-employee directors" within
the meaning of Rule 16b-3(b)(3) of the Securities Exchange Act of 1934, as
amended. Members of the Company's compensation committee will serve at the
pleasure of the Board. In connection with the administration of the Company's
Incentive Plan, the compensation committee, with respect to awards to be made to
any person who is not one of the Company's directors, will:
·
|
determine
which employees and other persons will be granted awards under the
Company's Incentive Plan;
|
·
|
grant
the awards to those selected to participate;
|
·
|
determine
the exercise price for options; and
|
·
|
prescribe
any limitations, restrictions and conditions upon any awards, including
the vesting conditions of awards.
|
With
respect to stock options or restricted stock awards to be made to any of the
Company's directors, the compensation committee will make recommendations to the
Board:
·
|
which
of such persons should be granted stock options, restricted stock awards,
performance units or stock appreciation rights;
|
·
|
the
terms of proposed grants of awards to those selected by the Board to
participate;
|
·
|
the
exercise price for options; and
|
·
|
any
limitations, restrictions and conditions upon any
awards.
|
Any grant
of awards to any of the Company's directors under the Incentive Plan must be
approved by the Board.
In
addition, the compensation committee will:
·
|
interpret
the Company's Incentive Plan; and
|
·
|
make
all other determinations and take all other action that may be necessary
or advisable to implement and administer the Company's Incentive
Plan.
|
Types
of Awards
The
Company's Incentive Plan permits the compensation committee to grant the
following types of awards.
Stock Options. Stock options
are contractual rights entitling an optionee who has been granted a stock option
to purchase a stated number of the Company's ordinary shares at an exercise
price per share determined at the date of the grant. Options are evidenced by
stock option agreements with the respective optionees. The exercise price for
each stock option granted under the Company's Incentive Plan will be determined
by the Board or a committee of the Board at the time of the grant, but will not
be less than fair market value on the date of the grant. The Board or a
committee of the Board will also determine the duration of each option; however,
no option may be exercisable more than ten years after the date the option is
granted. Within the foregoing limitations, the Board or committee of the Board
may, in its discretion, impose limitations on exercise of all or some options
granted under the Company's Incentive Plan, such as specifying minimum periods
of time after grant during which options may not be exercised. Options granted
under the Company's Incentive Plan will vest at rates specified in the option
agreement at the time of grant; however, all options granted under the Company's
Incentive Plan will vest upon the occurrence of a change of control, as defined
in the Incentive Plan. The Company's Incentive Plan also contains provisions for
the Company's Board or a committee of the Board to provide in the participants'
option award agreements for accelerating the right of an individual employee to
exercise his or her stock option or restricted stock award in the event of
retirement or other termination of employment. No cash consideration is payable
to us in exchange for the grant of options.
The
Company may grant either Incentive Stock Options or Non-Qualified
Options. Incentive Stock Options are options within the meaning of Section 422 of
the Internal Revenue Code of 1986. Non-Qualified Options are any
options that are not Incentive Stock Options.
Incentive
Stock Options may be granted only to the Company's employees or employees of the
Company's subsidiaries, and must be granted at a per share option price not less
than the fair market value of the Company's ordinary shares on the date the
Incentive Stock Option is granted. The exercise price of stock options may be
paid in cash, in whole shares of the Company's ordinary shares, in a combination
of cash and ordinary shares, or in such other form of consideration as the Board
or the committee of the Board may determine, equal in value to the exercise
price. In the case of an Incentive Stock Option granted to a shareholder who
owns shares of the Company's outstanding stock representing more than 10% of the
total combined voting power of all of the Company's outstanding stock entitled
to vote in the election of directors, the per share option price must be not
less than 110% of the fair market value of one ordinary share on the date the
Incentive Stock Option is granted, and the term of such option may not exceed
five years. The Code, the aggregate fair market value, determined at the time an
Incentive Stock Option is granted, of the Company's ordinary shares with respect
to which Incentive Stock Options may be exercised by an optionee for the first
time during any calendar year under all of the Company's incentive stock option
plans may not exceed $100,000. Options granted under the Incentive
Plan shall be exercisable, in whole or in such installments and at such times,
and shall expire at such time, as shall be determined by the Board when the
options are awarded. The Board shall also determine other terms and
conditions of related to the options, such as employee service periods, holding
periods and terms of forfeiture.
Non-Qualified
Options may be granted to the Company’s employees,
directors, independent contractors and consultants and the per share
exercise price for Non-Qualified Options may not be less than the fair market
value of one ordinary share on the date the Non-Qualified Option is granted.
Non-Qualified Options are not subject to any of the restrictions described above
with respect to Incentive Stock Options. The exercise price of stock
options may be paid in cash, in whole shares of the Company's ordinary shares,
in a combination of cash and ordinary shares, or in such other form of
consideration as the Board or the committee of the Board may determine, equal in
value to the exercise price. Options granted under the Incentive Plan shall be
exercisable, in whole or in such installments and at such times, and shall
expire at such time, as shall be determined by the Board when the options are
awarded. The Board shall also determine other terms and conditions of
related to the options, such as employee service periods, holding periods and
terms of forfeiture. However, only ordinary
shares which the option holder has held for at least six months on the date of
the exercise may be surrendered in payment of the exercise price for the
options. In no event may a stock option be exercised after the expiration of its
stated term.
Stock Appreciation Rights. A
stock appreciation right permits the grantee to receive an amount (in cash,
ordinary shares, or a combination thereof) equal to the number of stock
appreciation rights exercised by the grantee multiplied by the excess of the
fair market value of the Company's ordinary shares on the exercise date over the
stock appreciation rights' exercise price. Stock appreciation rights may or may
not be granted in connection with the grant of an option. The exercise price of
stock appreciation rights granted under the Incentive Plan will be determined by
the Board or a committee of the Board; provided, however, that such exercise
price cannot be less than the fair market value of one ordinary share on the
date the stock appreciation right is granted (subject to adjustments). A stock
appreciation right may be exercised in whole or in such installments and at such
times as determined by the Board or a committee of the Board.
Restricted Stock. Restricted
ordinary shares may be granted under the Company's Incentive Plan subject to
such terms and conditions, including forfeiture and vesting provisions, and
restrictions against sale, transfer or other disposition as the Board, or a
committee of the Board, may determine to be appropriate at the time of making
the award. In addition, the Board or a committee of the Board may direct that
share certificates representing restricted stock be inscribed with a legend as
to the restrictions on sale, transfer or other disposition, and may direct that
the certificates, along with a stock power signed in blank by the grantee, be
delivered to and held by the Company until such restrictions lapse. The Board or
a committee of the Board, in its discretion, may provide in the award agreement
for a modification or acceleration of shares of restricted stock in the event of
permanent disability, retirement or other termination of employment or business
relationship with the grantee.
Performance Units. The
Incentive Plan permits grants of performance units, which are rights to receive
cash payments equal to the difference (if any) between the fair market value of
one ordinary share on the date of grant and its fair market value on the date of
exercise of the award, except to the extent otherwise provided by the Board or a
committee of the Board, or as required by law. Such awards are subject to the
fulfillment of conditions that may be established by the Board or a committee of
the Board including, without limitation, the achievement of performance targets
based upon the factors described above relating to restricted stock
awards.
Performance Bonus. The
Incentive Plan permits grants of performance bonuses, which may be paid in cash,
ordinary shares or a combination thereof, as determined by the Board or a
committee of the Board. The maximum value of performance bonus awards granted
under the Incentive Plan shall be established by the compensation committee at
the time of the grant. An employee's receipt of such amount will be contingent
upon achievement of performance targets during the performance period
established by the compensation committee. The performance targets will be
determined by the Board or a committee of the Board based upon the factors
described above relating to restricted stock awards. Following the end of the
performance period, the Board or a committee of the Board will determine the
achievement of the performance targets for such performance period. Payment may
be made within 60 days of such determination. Any payment made in ordinary
shares will be based upon the fair market value of the ordinary shares on the
payment date.
Transferability
With the
exception of Non-Qualified Stock Options, awards are not transferable other than
by will or by the laws of descent and distribution, except as specifically
approved by the Board. Non-Qualified Stock Options are transferable
on a limited basis. Restricted stock awards are not transferable during the
restriction period.
Change
of Control Event
The
Incentive Plan provides for the acceleration of any unvested portion of any
outstanding awards under the Incentive Plan upon a change of control event
unless the terms of a particular award state otherwise.
Termination
of Employment/Relationship
Awards
granted under the Company's Incentive Plan that have not vested will generally
terminate immediately upon the grantee's termination of employment or business
relationship with us or any of the Company's subsidiaries for any reason other
than retirement, disability or death. The Board or a committee of the Board may
determine at the time of the grant that an award agreement should contain
provisions permitting the grantee to exercise the stock options for any stated
period after such termination, or for any period the Board or a committee of the
Board determines to be advisable after the grantee's employment or business
relationship with us terminates by reason of retirement, disability, death or
termination without cause. Incentive Stock Options will, however, terminate no
more than three months after termination of the optionee's employment, twelve
months after termination of the optionee's employment due to disability and
three years after termination of the optionee's employment due to death, except
as otherwise determined by the Board. The Board or a committee of the Board may
permit a deceased optionee's stock options to be exercised by the optionee's
executor or heirs during a period acceptable to the Board or a committee of the
Board following the date of the optionee's death but such exercise must occur
prior to the expiration date of the stock option.
Dilution;
Substitution
As
described above, the Company's Incentive Plan will provide protection against
substantial dilution or enlargement of the rights granted to holders of awards
in the event of stock splits, recapitalizations, asset acquisitions,
consolidations, reorganizations or similar transactions. New award rights may,
but need not, be substituted for the awards granted under the Company's
Incentive Plan, or the Company's obligations with respect to awards outstanding
under the Company's Incentive Plan may, but need not, be assumed by another
corporation in connection with any asset acquisition, consolidation,
acquisition, separation, reorganization, sale or distribution of assets,
liquidation or like occurrence in which the Company is involved. In
the event the Company's Incentive Plan is assumed, the stock issuable with
respect to awards previously granted under the Company's Incentive Plan shall
thereafter include the stock of the corporation granting such new option rights
or assuming the Company's obligations under the Incentive Plan.
Amendment
of the Incentive Plan
The
Company's Board may amend the Company's Incentive Plan at any time. However,
without shareholder approval, the Company's Incentive Plan may not be amended in
a manner that would:
·
|
increase
the number of shares that may be issued under the Company's Incentive
Plan;
|
·
|
materially
modify the requirements for eligibility for participation in the Company's
Incentive Plan;
|
·
|
materially
increase the benefits to participants provided by the Company's Incentive
Plan; or
|
·
|
otherwise
disqualify the Company's Incentive Plan for coverage under Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as
amended.
|
Awards
previously granted under the Company's Incentive Plan may not be impaired or
affected by any amendment of the Company's Incentive Plan, without the consent
of the affected grantees.
Accounting
Treatment
Under
generally accepted accounting principles with respect to the financial
accounting treatment of stock options used to compensate employees, upon the
grant of stock options under the Company's Incentive Plan, the fair value of the
options will be measured on the date of grant and this amount will be recognized
as a compensation expense ratably over the vesting period. Stock appreciation
rights granted under the Incentive Plan must be settled in ordinary shares.
Therefore, stock appreciation rights granted under the Incentive Plan will
receive the same accounting treatment as options. The cash the Company receives
upon the exercise of stock options will be reflected as an increase in the
Company's capital. No additional compensation expense will be recognized at the
time stock options are exercised, although the issuance of ordinary shares upon
exercise may reduce basic earnings per share, as more ordinary shares would then
be outstanding.
When the
Company makes a grant of restricted stock, the fair value of the restricted
stock award at the date of grant will be determined and this amount will be
recognized over the vesting period of the award. The fair value of a restricted
stock award is equal to the fair market value of the Company's ordinary shares
on the date of grant.
Due to
consideration of the accounting treatment of stock options and restricted stock
awards by various regulatory bodies, it is possible that the present accounting
treatment may change.
Tax
Treatment
The
following is a brief description of the federal income tax consequences, under
existing law, with respect to awards that may be granted under the Company's
Incentive Plan.
Incentive Stock Options. An
optionee will not realize any taxable income upon the grant or the exercise of
an Incentive Stock Option. However, the amount by which the fair market value of
the shares covered by the Incentive Stock Option (on the date of exercise)
exceeds the option price paid will be an item of tax preference to which the
alternative minimum tax may apply, depending on each optionee's individual
circumstances. If the optionee does not dispose of the shares of the Company's
ordinary shares acquired by exercising an Incentive Stock Option within two
years from the date of the grant of the Incentive Stock Option or within one
year after the shares are transferred to the optionee, when the optionee later
sells or otherwise disposes of the stock, any amount realized by the optionee in
excess of the option price will be taxed as a long-term capital gain and any
loss will be recognized as a long-term capital loss. The Company generally will
not be entitled to an income tax deduction with respect to the grant or exercise
of an Incentive Stock Option.
If any of
the Company's ordinary shares acquired upon exercise of an Incentive Stock
Option are resold or disposed of before the expiration of the prescribed holding
periods, the optionee would realize ordinary income, instead of capital gain.
The amount of the ordinary income realized would be equal to the lesser of (i)
the excess of the fair market value of the stock on the exercise date over the
option price; or (ii) in the case of a taxable sale or exchange, the amount of
the gain realized. Any additional gain would be either long-term or short-term
capital gain, depending on whether the applicable capital gain holding period
has been satisfied. In the event of a premature disposition of shares of stock
acquired by exercising an Incentive Stock Option, the Company would be entitled
to a deduction equal to the amount of ordinary income realized by the
optionee.
Non-Qualified Options. An
optionee will not realize any taxable income upon the grant of a Non-Qualified
Option. At the time the optionee exercises the Non-Qualified Option, the amount
by which the fair market value at the time of exercise of the shares covered by
the Non-Qualified Option exceeds the option price paid upon exercise will
constitute ordinary income to the optionee in the year of such exercise. The
Company will be entitled to a corresponding income tax deduction in the year of
exercise equal to the ordinary income recognized by the optionee. If the
optionee thereafter sells such shares, the difference between any amount
realized on the sale and the fair market value of the shares at the time of
exercise will be taxed to the optionee as capital gain or loss, short- or
long-term depending on the length of time the stock was held by the optionee
before sale.
Stock Appreciation Rights. A
participant realizes no taxable income and the Company is not entitled to a
deduction when a stock appreciation right is granted. Upon exercising a stock
appreciation right, a participant will realize ordinary income in an amount
equal to the fair market value of the shares received minus any amount paid for
the shares, and the Company will be entitled to a corresponding deduction. A
participant's tax basis in the ordinary shares received upon exercise of a stock
appreciation right will be equal to the fair market value of such shares on the
exercise date, and the participant's holding period for such shares will begin
at that time. Upon sale of the ordinary shares received upon exercise of a stock
appreciation right, the participant will realize short-term or long-term capital
gain or loss, depending upon whether the shares have been held for more than one
year. The amount of such gain or loss will be equal to the difference between
the amount realized in connection with the sale of the shares, and the
participant's tax basis in such shares.
Restricted Stock Award. A
recipient of restricted stock generally will not recognize any taxable income
until the shares of restricted stock become freely transferable or are no longer
subject to a substantial risk of forfeiture. At that time, the excess of the
fair market value of the restricted stock over the amount, if any, paid for the
restricted stock is taxable to the recipient as ordinary income. If a recipient
of restricted stock subsequently sells the shares, he or she generally will
realize capital gain or loss in the year of such sale in an amount equal to the
difference between the net proceeds from the sale and the price paid for the
stock, if any, plus the amount previously included in income as ordinary income
with respect to such restricted shares.
A
recipient has the opportunity, within certain limits, to fix the amount and
timing of the taxable income attributable to a grant of restricted stock.
Section 83(b) of the Code permits a recipient of restricted stock, which is not
yet required to be included in taxable income, to elect, within 30 days of the
award of restricted stock, to include in income immediately the difference
between the fair market value of the shares of restricted stock at the date of
the award and the amount paid for the restricted stock, if any. The election
permits the recipient of restricted stock to fix the amount of income that must
be recognized by virtue of the restricted stock grant. The Company will be
entitled to a deduction in the year the recipient is required (or elects) to
recognize income by virtue of receipt of restricted stock, equal to the amount
of taxable income recognized by the recipient.
Performance Units and Performance
Bonuses. A participant realizes no taxable income and the Company is not
entitled to a deduction when performance units or performance bonuses are
awarded. When the performance units or performance bonuses vest and become
payable upon the achievement of the performance objectives, the participant will
realize ordinary income equal to the amount of cash received or the fair market
value of the shares received minus any amount paid for the shares, and the
Company will be entitled to a corresponding deduction. A participant's tax basis
in ordinary shares received upon payment will be equal to the fair market value
of such shares when the participant receives them. Upon sale of the shares, the
participant will realize short-term or long-term capital gain or loss, depending
upon whether the shares have been held for more than one year at the time of
sale. Such gain or loss will be equal to the difference between the amount
realized upon the sale of the shares and the tax basis of the shares in the
participant's hands.
Section 162(m) of the Code.
Section 162(m) of the Code precludes a public corporation from taking a
deduction for annual compensation in excess of $1.0 million paid to its chief
executive officer or any of its four other highest-paid officers. However,
compensation that qualifies under Section 162(m) of the Code as
"performance-based" is specifically exempt from the deduction limit. Based on
Section 162(m) of the Code and the regulations thereunder, the Company's ability
to deduct compensation income generated in connection with the exercise of stock
options or stock appreciation rights granted under the Incentive Plan should not
be limited by Section 162(m) of the Code. Further, the Board believes that
compensation income generated in connection with performance awards granted
under the Incentive Plan should not be limited by Section 162(m) of the Code.
The Incentive Plan has been designed to provide flexibility with respect to
whether restricted stock awards or performance bonuses will qualify as
performance-based compensation under Section 162(m) of the Code and, therefore,
be exempt from the deduction limit. If the vesting restrictions relating to any
such award are based solely upon the satisfaction of one of the performance
goals set forth in the Incentive Plan, then the Board believes that the
compensation expense relating to such an award will be deductible by us if the
awards become vested. However, compensation expense deductions relating to such
awards will be subject to the Section 162(m) deduction limitation if such awards
become vested based upon any other criteria set forth in such award (such as the
occurrence of a change in control or vesting based upon continued employment
with us).
Certain Awards Deferring or
Accelerating the Receipt of Compensation. Section 409A of the Internal
Revenue Code, enacted as part of the American Jobs Creation Act of 2004, imposes
certain new requirements applicable to "nonqualified deferred compensation
plans." If a nonqualified deferred compensation plan subject to Section 409A
fails to meet, or is not operated in accordance with, these new requirements,
then all compensation deferred under the plan may become immediately taxable.
Stock appreciation rights and deferred stock awards which may be granted under
the plan may constitute deferred compensation subject to the Section 409A
requirements. It is the Company's intention that any award agreement governing
awards subject to Section 409A will comply with these new rules.
New
Plan Benefits
The
following options, restricted stock and other awards have been made or committed
under the 2009 Long-Term Incentive Plan:
Merger
Consideration of 7,360,533 options due to DollarDays optionholders.
Interests
of Directors or Officers
The
Company's directors may grant awards under the Incentive Plan to themselves as
well as the Company's officers and consultants, in addition to granting awards
to the Company's other employees and employees of DollarDays.
THE
BOARD RECOMMENDS A VOTE "FOR" RESOLUTION 12
OTHER
INFORMATION
The
directors of Insignia Solutions plc whose names appear below accept
responsibility for the information contained in this document. To the best of
the knowledge and belief of such directors (who have taken all reasonable care
to ensure that such is the case) the information contained in this document is
in accordance with the facts and does not omit anything likely to affect the
import of such information.
Change
in Control
On the
closing date of the Merger, Insignia consummated the transactions contemplated
by the Merger Agreement, pursuant to which Insignia acquired all of the issued
and outstanding shares of DollarDays in exchange for the issuance of ordinary
shares (or ADSs representing ordinary shares) of Insignia to the DollarDays
Shareholders and Amorim. As previously disclosed under Item 2.01,
Insignia did not have enough authorized capital to issue all of the
consideration due to the DollarDays Shareholders and Amorim. As of
the date of this proxy statement, the DollarDays Shareholders and Amorim
represent 49.7% of the issued and outstanding ordinary shares of
Insignia. Upon approval by the Insignia shareholders to increase the
authorized capital of Insignia and approval of the 2009 Incentive Plan, the
remaining consideration due to the DollarDays Shareholders and Amorim,
respectively, will represent 62.9% of the issued and outstanding ordinary shares
of Insignia.
The
issuance of the ordinary shares (or ADS representing ordinary shares) was exempt
from registration under the Securities Act of 1933, as amended (“Securities
Act”), pursuant to Section 4(2) of, and Regulation D promulgated under, the
Securities Act. Following the Merger, DollarDays became a
wholly-owned subsidiary of Insignia and, except for Vincent Pino, designees of
DollarDays became the sole officers and directors of Insignia.
No
officer, director, promoter, or affiliate of Insignia has, or proposes to have,
any direct or indirect material interest in any asset proposed to be acquired by
Insignia through security holders, contracts, options or otherwise.
Directors
and Executive Officers
As of
April 1, 2009, the executive officers and directors of Insignia were as
follows:
Name
|
|
Age
|
|
Positions and Offices
with Insignia
|
Peter
Engel
|
|
74
|
|
Chief
Executive Officer,
Chairman
of the Board
|
Vincent
Pino
|
|
60
|
|
Director
|
Lawrence
Schafran
|
|
70
|
|
Director
|
Christopher
Baker
|
|
56
|
|
Director
|
Filipe
Sobral
|
|
33
|
|
Director
|
Peter Engel, President, Chief
Executive Officer and Chairman of the Board of Directors. On
June 23, 2008, pursuant to the transactions contemplated by the Merger Agreement
and concurrent with the completion of the Merger, Peter Engel was appointed
Chief Executive Officer and Chairman of the Board of Directors of Insignia.
Mr. Engel, has served as the Chairman and Chief Executive Officer of
DollarDays since February 2007. From 2003 through 2006, Mr. Engel was President
of Affinity Publishing, a book packaging company. From 1998 to 2000
he was the president of the audio book division of NewStar Media, Inc. (formerly
a Nasdaq company). From 1992 to 1998 he was the president and CEO of
Affinity Communications Corp., a West Coast publishing and book concept
developer whose books were published by many major publishers, including Crown,
Harper Collins, Little Brown, McGraw Hill, Penguin, Pocket, Putnam, Random
House, Regnery, St. Martins Press, Simon & Schuster and Viking. In 1980, Mr.
Engel founded and became the president and CEO of The American Consulting
Corporation (“ACC”), a marketing services firm. ACC’s clients included Campbell
Soup, Carter-Wallace, Coors, Citicorp, Clorox, Dunkin’ Donuts, Frito-Lay,
Gillette, Johnson and Johnson, Kraft, Mattel, Nestle, Nike, Ocean Spray,
PepsiCo, Quaker, and Seagram as well as over forty other companies. Mr. Engel
took ACC public in 1987 and sold it in 1988. From 1971 to 1980, Mr. Engel was a
Group Vice President at Colgate Palmolive. Mr. Engel is a former
Associate Professor at the University of Southern California entrepreneurial
program. Under his own name, he is the author of three novels, five business
books and several gift books. In addition, he has ghost-written a number of
books on alternative health and other issues. He holds a Bachelors of Commerce
from McGill University in Montreal, and has completed the course work, but not
the dissertation, for a PhD in history at New York’s Columbia
University.
Vincent S. Pino, Director.
Mr. Pino was appointed a director of Insignia in October 1998. In
2003 he co-founded Center Pointe Sleep Associates, LLC, a privately held
developer and operator of independent diagnostic sleep labs, and currently
serves as its Chairman. From February 1998 until his retirement in
November 2000, he served as President of Alliance Imaging, a provider of
diagnostic imaging and therapeutic services. Mr. Pino began his association
with Alliance in 1988 as Chief Financial Officer. From 1991 through 1993,
Mr. Pino held the position of Executive Vice President and Chief Financial
Officer. Mr. Pino received an MBA and a B.S. degree in finance from the
University of Southern California in 1972 and 1970, respectively.
Lawrence Schafran, Director.
Mr. Schafran was appointed a Director and Chairman of the Company’s Audit
Committee in July 2008. Mr. Schafran has extensive experience in the financial
markets, complex litigation and corporate governance, and is a member of the
Board of Directors of other publicly-traded companies. Since July 2003, Mr.
Schafran has served as a Managing Director of Providence Capital, Inc., a
private New York City based investment firm, specializing in small-cap mining
and oil/gas exploration firms. From 1999 through 2002, Mr. Schafran served as
Trustee, Chairman/Interim-CEO/President and Co- Liquidating Trustee of the
Special Liquidating Trust of Banyan Strategic Realty Trust. He also currently
serves as a Director of SulphCo, Inc. (ASE: SUF), New Frontier Energy, Inc.
(OBB: NFEI.OB), RemoteMDx, Inc. (OBB: REDX.OB), Tarragon Corporation (PNK:
TARRQ.PK), Nat'l Patent Development Corp. (OBB: NPDV.OB)) and Taurex Resources,
plc (AIM: CDL.LN). Mr. Schafran received a Bachelor of Arts in Finance and a
Masters in Business Administration from the University of
Wisconsin.
Christopher Baker, Director.
Mr. Baker served as Chairman of DollarDays from October 2001 to
March 2007 and was appointed to the Board of Directors of Insignia in June,
2008. From 2003 through the present date, Mr. Baker has served as
managing partner of C.P. Baker & Company. Mr. Baker founded C.P.
Baker & Company in 1990 after working as a derivatives sales trader for
companies such as Donaldson, Lufkin and Jenrette and Goldman Sachs. At C.P.
Baker & Company, Christopher Baker started, built and invested in companies
spanning a wide range of industries, including nutrition, wholesale e-commerce,
retail, marketing, education, consumer health and
entertainment. Christopher Baker is an employee and registered
representative of C.P. Baker Securities, Inc., a registered broker-dealer and
FINRA member. Mr. Baker received a Bachelor of Arts from Tufts University in
1974 and received his Masters in Business from Harvard Business School in
1978.
Filipe Sobral, Director.
Mr. Sobral was appointed Director of Insignia in June 2008 and
currently serves as Controller and US Investments Manger for Amorin Holding II
SGPS, SA, a Portugal based investment firm. From 2001 to 2007, Mr. Sobral held
several positions with Valeo, SA, one of Europe’s largest automotive suppliers,
including CFO positions at manufacturing facilities in Brazil and
Portugal. Prior to Valeo, Mr. Sobral served as CFO of a privately
held construction company in Portugal. He holds a BA in Economics and
Business Administration from Universidade do Porto and an MBA from Salvador da
Bahia.
Mr. Pino
and Mr. Schafran serve as independent directors of the Company.
The Board
has appointed members to a standing Audit Committee and Compensation Committee.
The members of the committees are identified in the following
table.
Director
|
Audit
|
Compensation
|
Christopher
Baker
|
|
Chair
|
Peter Engel
|
|
|
Vincent
Pino
|
|
ü
|
Lawrence
Schafran
|
Chair
|
ü
|
Filipe
Sobral
|
ü
|
ü
|
Significant
Employees of DollarDays
Marc Joseph, President and Chief
Operating Officer. Marc Joseph has been President of
DollarDays since inception in 1999. From 1997 to 2002, Mr. Joseph
founded and built Rebs Corporation into an 11 store chain of hair salons, which
he ultimately sold. Prior to Rebs Corporation, Mr. Joseph held
several progressive executive positions in retailing and discount
merchandising. He holds a degree in Business Administration from
Miami University.
Michael Moore, Chief Financial
Officer. Mr. Moore joined DollarDays in March 2007 as
Controller and was promoted to Chief Financial Officer in late
2007. From 1999 to 2007, he was employed by the Safeway
Corporation, holding several positions in finance and operations, most recently
as Controller of Safeway’s Arizona ice cream facility. Prior to
joining Safeway, Mr. Moore served as CFO of Vita Bran, a privately held pet food
manufacturer. Mr. Moore holds a Bachelor of Science degree in
Business with an emphasis in Accounting granted in 1983 from the University of
the Pacific.
Certain
Relationships and Related Transactions, and Director Independence
None
Legal
Proceedings
We have
no material proceedings pending nor are we aware of any pending investigation or
threatened litigation by any third party.
Changes
to the Board of Directors
In
connection with the transactions contemplated by the Merger Agreement, there was
a change in Insignia’s Board of Directors and in management. Prior to
the consummation of the Merger, Insignia’s Board of Directors consisted of
Viscount Nicholas Bearsted, Mark McMillan and Vincent Pino. Effective
at the closing of the transactions contemplated by the Merger Agreement,
Viscount Nicholas Bearsted, and Mark McMillan resigned from our Board of
Directors and Vincent Pino remained on the Board of Directors as an independent
director. Simultaneously at the closing, the Board of Directors
appointed Peter Engel, Christopher Baker and Filipe Sobral to serve on the Board
of Directors and Peter Engel was
appointed Chief Executive Officer of Insignia.
Subsequent
to, and in connection with, the Merger, George Monk also resigned from his
position as Chief Financial Officer. The then current Board of
Directors of Insignia appointed Larry Schafran as a director of
Insignia.
The
following table sets forth certain information with respect to the beneficial
ownership of the Company's Ordinary Shares, as of March 17, 2009
for:
•
|
each
person or entity who the Company knows beneficially owns more than 5% of
the Company's Shares;
|
•
|
each
of the Company's Directors;
|
•
|
each
of the Company's Executive Officers;
and
|
•
|
all
of the Company's Executive Officers and Directors as a
group.
|
Beneficial
ownership is determined in accordance with the rules of the Securities and
Exchange Commission and includes voting or investment power with respect to any
securities. In the table below, the number of shares listed for each person or
entity includes shares underlying options held by the person or entity, but
excludes shares underlying options held by any other person or entity. In
addition, in the table below, each person's or entity's options that are
exercisable within 60 days of the date hereof is disclosed. Percentage of
beneficial ownership is based on 101,227,045 ordinary shares issued as of March
17, 2009.
To the
Company's knowledge, except as indicated by footnotes and subject to applicable
community property laws in the United States, each person named in the table
below has sole voting and investment power with respect to the shares set forth
opposite such person's name. Unless otherwise indicated, the address of the
Company's officers and directors is c/o: Insignia Solutions PLC, 7575 E.
Redfield Road, Suite 201, Scottsdale, AZ 85260, USA.
|
|
Ordinary Shares
Beneficially Owned
|
|
Name of Beneficial Owner
|
|
Number of
Shares
|
|
|
Percentage
of Shares
|
|
5%
Stockholder
|
|
|
|
|
|
|
Anasazi
L.P. III (1)
|
|
|
5,756,458 |
|
|
|
5.7
|
% |
Amorim
Holdings
|
|
|
9,662,952 |
|
|
|
9.5
|
% |
DD-B
Holdings (2)
|
|
|
5,148,233 |
|
|
|
5.1
|
% |
Peter
Engel, President, Chief Executive Officer, Director
|
|
|
1,101,567 |
|
|
|
1.1
|
% |
Christopher
Baker, Director (3)
|
|
|
36,188,554 |
|
|
|
35.6
|
% |
Filipe
Sobral, Director
|
|
|
0 |
|
|
|
0
|
% |
Vincent
Pino, Director (4)
|
|
|
520,165 |
|
|
|
0.5
|
% |
Lawrence
Schafran, Director
|
|
|
0 |
|
|
|
0
|
% |
|
|
|
|
|
|
|
|
|
All
Directors and Executive Officers as a group (5 persons)
|
|
|
|
|
|
|
37.3
|
% |
(1)
includes 166,999 options currently exercisable or exercisable within 60
days.
(2)
includes 145,196 options currently exercisable or exercisable within 60
days.
(3)
includes: (1) 892,881 options currently exercisable or exercisable within
60 days, (2) 385,528 shares held by Anasazi L.P., to which Mr. Baker is the
managing member of Anasazi L.P. and has the sole power to vote and dispose of
such shares; (3) 2,478,819 shares held by Anasazi L.P. II, to which Mr. Baker is
the managing member of Anasazi L.P. II and has the sole power to vote and
dispose of such shares; (4) 5,756,458 shares of Anasazi L.P. III, to which Mr.
Baker is the managing member of Anasazi L.P. III and has the sole power to vote
and dispose of such shares; (5) 681,140 shares of C.P. Baker & Company Ltd.,
to which Mr. Baker is the managing member and holds a 99% voting interests in
all of the issued and outstanding interests of C.P. Baker & Company Ltd.;
and (6) 5,148,233 shares of DD-B Holdings, to which Mr. Baker is the managing
member of DD-B Holdings and has the sole power to vote and dispose of such
shares.
(4)
includes 101,626 options currently exercisable or exercisable within 60
days.
It is
anticipated that the percentage shareholding of each director in the issued
share capital of the Company will be less than his or her percentage
shareholding in the issued share capital of the Company noted above following
the issuance of new shares pursuant to the Merger Agreement.
Except as
discussed above and in paragraph 3 below, none of the directors (nor any
person connected with any of them within the meaning of Section 346 of the UK
Companies Act) has any interest in the share capital of the Insignia Solutions
plc.
Plan
Category
|
|
Number of securities to be issued
upon exercise of outstanding options, warrants and
rights
|
|
|
Weighted average exercise price of
outstanding options, warrants and
rights
|
|
|
Number of securities remaining
available for future issuance under equity compensation
plans
|
|
Equity compensation plans approved
by securityholders
|
|
|
1,299,826 |
|
|
$ |
0.27 |
|
|
|
- |
|
Equity compensation plans not
approved by securityholders
|
|
|
7,360,533 |
|
|
$ |
0.22 |
|
|
|
12,639,467 |
|
Total
|
|
|
8,660,359 |
|
|
$ |
0.22 |
|
|
|
12,639,467 |
|
(a) Director
and Executive Officer Options and Warrants
The
following is a table setting forth certain information regarding options and
warrants held by the directors and executive officers of Insignia Solutions plc
as of March 17, 2009:
|
|
Number
|
|
|
|
|
|
|
|
|
|
of Options
|
|
|
Exercise
|
|
Grant
|
|
Expiration
|
Name
|
|
or Warrants
|
|
|
Price
|
|
Date
|
|
Date
|
Christopher
Baker
|
|
|
145,196 |
|
|
$ |
0.17 |
|
May 15,
2007
|
|
May 15,
2012
|
|
|
|
21,803 |
|
|
|
0.17 |
|
June 6,
2007
|
|
June 6,
2012
|
|
|
|
446,440 |
|
|
|
0.17 |
|
July 31,
2007
|
|
July 31,
2012
|
|
|
|
446,441 |
|
|
|
0.17 |
|
September 1,
2007
|
|
September 1,
2012
|
|
|
|
145,196 |
|
|
|
0.17 |
|
May 15,
2007
|
|
May 15,
2012
|
Peter Engel
|
|
|
8,551,450 |
|
|
$ |
0.01 |
|
June 23,
2008
|
|
June 23,
2013
|
Vincent
Pino
|
|
|
1,250 |
|
|
|
7.25 |
|
April 20,
1999
|
|
April 17,
2009
|
|
|
|
1,250 |
|
|
|
7.19 |
|
July 20,
1999
|
|
July 17,
2009
|
|
|
|
1,250 |
|
|
|
5.00 |
|
October 19,
1999
|
|
October 16,
2009
|
|
|
|
5,000 |
|
|
|
5.25 |
|
January 20,
2000
|
|
January 17,
2010
|
|
|
|
5,000 |
|
|
|
5.81 |
|
January 16,
2001
|
|
January 14,
2011
|
|
|
|
1,000 |
|
|
|
2.00 |
|
October 15,
2001
|
|
October 13,
2011
|
|
|
|
5,000 |
|
|
|
1.34 |
|
January 24,
2002
|
|
January 22,
2012
|
|
|
|
5,000 |
|
|
|
0.37 |
|
January 28,
2003
|
|
January 25,
2013
|
|
|
|
50,000 |
|
|
|
0.37 |
|
April 22,
2003
|
|
April 19,
2013
|
|
|
|
10,000 |
|
|
|
2.68 |
|
January 20,
2004
|
|
January 17,
2014
|
|
|
|
10,000 |
|
|
|
0.75 |
|
February 10,
2005
|
|
February 8,
2015
|
(b) Loans
There are
no outstanding loans granted by Insignia Solutions plc to any of its executive
officers or directors, nor are there any guarantees provided by Insignia
Solutions plc for the benefit of its executive officers or
directors.
(c) Certain
Relationships and Related Transactions
During
the years ended December 31, 2008 and 2007, the Company paid an aggregate of $0
and $66,331, respectively, to entities controlled by controlling members in
exchange for managerial services.
(d) Executive
Officers and Directors' Service Contracts and
Compensation
Insignia
Solutions plc does not have any employment contracts or other agreements with
its executive officers or directors. However, Insignia Solutions plc
pays certain fees to its non-employee Directors.
|
|
The
Company currently pays its non-employee directors the following
compensation: |
|
|
|
•
|
|
Base Annual Board Service
Fee: Each director is paid $20,000
annually.
|
•
|
|
Excess In-Person Board Meeting
Fee: Each director is paid $1,000 for in-person attendance at each
in-person Board and $500 for telephonic meetings or telephonic attendance
at in-person board meetings.
|
•
|
|
Base Audit Committee Service
Fee: Each member of the Audit Committees receives $5,000
annually.
|
•
|
|
Compensation Committee Annual
Fee: Each member of the Nominating and Compensation Committees is
paid $5,000 annually.
|
|
|
|
•
|
|
Expenses: Each director
receives expense reimbursement for reasonable travel for in-person board
and committee meeting attendance.
|
•
|
|
Restricted
Shares: Each director received a grant of 800,000
restricted shares vesting on certain terms over four
years.
|
Prior to
July 25, 2008, non-employee directors were paid $1,000 for every regular meeting
attended, $2,500 per quarter of service on the Board, $500 per quarter
for service on each committee, plus $500 for each committee meeting attended,
and reimburses outside directors for reasonable expenses in attending meetings
of the Board. The Chairman of the Board receives an additional $1,500 per
quarter. In addition, each new outside director is granted an option to purchase
25,000 shares and each outside director is granted an option to purchase
10,000 shares annually for so long as he serves as an outside director. No
options were issued to outside directors in 2008 or 2007.
Compensation
Committee Report
The Compensation Committee has the
primary responsibility for the approval and implementation of the compensation
program for the Company’s executive officers and key employees. In
assessing the compensation plans for executive officers and key employees, the
Compensation Committee considers total compensation opportunities, both short-
and long-term, while at the same time focusing on the Company’s short- and long-term
objectives. The Compensation Committee discussed and has recommended approval of the Company’s
current compensation program, which generally consists of base salary, potential
cash bonus and equity awards. The current Compensation Committee is comprised of
Mr. Baker, Mr. Pino, Mr. Schafran and Mr. Sobral.
Compensation Committee and Insider
Participation
In 2008, Viscount Nicholas Bearsted, Mr.
Baker, Mr. Pino, Mr.
Schafran and Mr. Sobral
served on the Compensation Committee. Viscount Bearsted served on the
Compensation Committee until his resignation from the Board of
Directors. Mr. Baker, Mr. Schafran and Mr. Sobral were appointed to the Compensation
Committee following their appointment to the Board of
Directors.
Audit
Committee
The
Company has established an Audit Committee and is charged with assisting and
representing the Board of Directors in fulfilling its oversight responsibilities
with respect to the integrity of the financial statements of the
Company. The Audit Committee’s current members are Mr. Schafran and
Mr. Sobral. The Company has determined that Mr. Schafran qualifies as
the “audit committee financial expert.”
The Company has adopted a code of ethics
that applies to all officers and employees, including its principal executive
officer, principal financial officer and controller. This code of ethics is
filed as Exhibit 14.0 to the Company’s Annual Report on Form 10-K for
the fiscal year ended December 31, 2003 filed with the Securities and
Exchange Commission.
The
following table shows information regarding the compensation earned during the
fiscal yearsended December 31, 2007 and 2008 by the Board and the Company's
executive officers.
2007
and 2008 Compensation and Equity Awards
2007
and 2008 SUMMARY COMPENSATION TABLE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
|
|
|
|
|
|
|
|
|
Salary
|
|
|
|
|
|
Stock
|
|
|
Option
|
|
|
Incentive
Plan
|
|
|
All
Other
|
|
|
|
|
Name
|
|
Year
|
|
and
Fees
|
|
|
Bonus
|
|
|
Awards
|
|
|
Awards
(1)
|
|
|
Compensation
|
|
|
Compensation
|
|
|
Total
|
|
Peter
Engel, Director and CEO
|
|
2008
|
|
$ |
122,308 |
|
|
$ |
50,000 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
115,445 |
(2 |
) |
|
$ |
287,753 |
|
|
|
2007
|
|
|
83,333 |
|
|
|
50,000 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
133,333 |
|
Marc
Joseph, President - DollarDays
|
|
2008
|
|
|
136,464 |
|
|
|
50,000 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
186,464 |
|
|
|
2007
|
|
|
115,000 |
|
|
|
50,000 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
165,000 |
|
Michael
Moore, CFO - DollarDays
|
|
2008
|
|
|
98,819 |
|
|
|
10,000 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
108,819 |
|
|
|
2007
|
|
|
100,000 |
|
|
|
10,000 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
110,000 |
|
Mark
McMillan, CEO, President
|
|
2008
|
|
|
9,000 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
34,500 |
(6 |
) |
|
|
43,500 |
|
&
Director (3) (4)
|
|
2007
|
|
|
348,703 |
|
|
|
512,227 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
164 |
|
|
|
|
861,094 |
|
George
Monk, CFO (5)
|
|
2008
|
|
|
120,000 |
|
|
|
488,000 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
57,667 |
|
|
|
|
665,667 |
|
|
|
2007
|
|
|
240,000 |
|
|
|
469,227 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2,587 |
|
|
|
|
711,814 |
|
Vincent
Pino, Director
|
|
2008
|
|
|
30,000 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
125,500 |
(6 |
) |
|
|
155,500 |
|
|
|
2007
|
|
|
26,000 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
26,000 |
|
Nicholas
Bearsted, Director (3)
|
|
2008
|
|
|
18,500 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
18,500 |
|
|
|
2007
|
|
|
32,000 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
32,000 |
|
Christopher
Baker, Director
|
|
2008
|
|
|
14,000 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
14,000 |
|
Filipe
Sobral, Director
|
|
2008
|
|
|
16,000 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
16,000 |
|
Lawrence
Schafran, Director
|
|
2008
|
|
|
16,000 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
16,000 |
|
David
Frodsham, Director (7)
|
|
2007
|
|
|
10,000 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
10,000 |
|
(1) Effective January 1,
2006, we adopted the fair value recognition provisions of
SFAS No. 123(R), “ Share-Based Payments ”
(SFAS No. 123(R)), requiring us to recognize expense related to
the fair value of our stock-based compensation awards. Stock-based
compensation expense for all stock-based compensation awards granted
subsequent to December 31, 2005 is based on the grant-date fair value
estimated in accordance with the provisions of SFAS No. 123(R).
The amounts in this column reflect the dollar amount recognized for
financial statement reporting purposes for the fiscal years ended
December 31, 2008 and 2007 in accordance with SFAS 123(R).
Assumptions used in the calculation of these amounts are included in the
footnotes to our audited financial statements for the fiscal years ended
December 31, 2008 and 2007, included in the Company's Annual Report
on Form 10-K filed March 31, 2009.
|
|
(2) Represents the amount
recognized for financial statement reporting purposes in accordance with
SFAS No. 123(R) for warrants issued during the
year.
|
|
(3) Resigned as a director
effective June 23, 2008.
|
|
(4) Resigned as CEO and President
effective April 4, 2007.
|
|
(5) Resigned as CFO effective June
30, 2008.
|
|
(6) Represents amounts paid in
connection with reverse merger with DollarDays.
|
|
(7) Resigned as a director
effective June 30,
2007.
|
RELATED
PARTY TRANSACTIONS
During
the years ended December 31, 2008 and 2007, the Company paid an aggregate of $0
and $66,331, respectively, to entities controlled by controlling members in
exchange for managerial services.
FINANCIAL
AND OTHER INFORMATION
Please
refer to the Company’s Annual Report on Form 10-K filed on March 31,
2009.
PROXY
SOLICITATION
All costs
of solicitation of proxies will be borne by the Company. In addition
to solicitation by mail, the Company's officers and regular employees may
solicit proxies personally or by telephone. The Company does not
intend to utilize a paid solicitation agent.
PROXIES
A shareholder may revoke his, her or
its proxy at any time prior to its use by giving written notice to the Secretary
of the Company, by executing a revised proxy at a later date or by attending the
AGM and voting in person. Proxies in the form enclosed, unless
previously revoked, will be voted at the AGM in accordance with the
specifications made thereon or, in the absence of such specifications in
accordance with the recommendations of the Board.
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities
Exchange Act of 1934, as amended, requires the Company's directors and officers,
and person who own more than 10% of the Company's ordinary shares to file
initial reports of ownership and reports of changes in ownership with the
SEC. Such persons are required by the SEC regulation to furnish the
Company with copies of all Section 16(a) forms that they file. Based
solely on its review of the copies of such forms furnished to Insignia and
written representations from the executive officers and directors, the Company
believes that all Section 16(a) filing requirements were met, except as
follows:
Peter
Engel, Form 3, regarding merger on June 23, 2008; Filipe Sobral, Form 3,
regarding merger on June 23, 2008; Christopher Baker, Form 3,
regarding merger on June 23, 2008; and Lawrence Schafran, Form 3, appointment as
director subsequent to merger on June 23, 2008.
SHAREHOLDER
RESOLUTIONS FOR 2010 ANNUAL MEETING
Under the rules of the Securities and
Exchange Commission, resolutions of shareholders intended to be presented at the
Company's 2010 Annual General Meeting must be received by the Company at its
registered office no later than __________, 2010 to be included in the Company's
Proxy Statement and form of proxy relating to the AGM. This is
without prejudice to shareholders' rights under the U.K. Companies Acts to
propose resolutions that may properly be considered at that
meeting. In addition, if the Company is not notified by ____, 2010 of
a resolution to be brought before the Company's 2009 Annual General Meeting by a
shareholder, then proxies held by management may provide the discretion to vote
against such resolution even though it is not discussed in the proxy statement
for such meeting.
SHAREHOLDER
COMMUNICATIONS
Shareholders wishing to communicate
with the Board may direct such communications to the Board of Directors c/o
Insignia Solutions plc, Attn: Peter Engel. Mr. Engel will present a
summary of all shareholder communications to the Board of Directors at
subsequent Board meetings. The directors will have the opportunity to
review the actual communications at their discretion.
OTHER BUSINESS
The Board knows of no other matter to
be presented at the AGM. If any additional matter should properly
come before the AGM, it is the intention of the persons named in the enclosed
proxy to vote such proxy in accordance with their judgment on any such
matters.
Whether
or not you expect to attend the AGM, please complete, date, sign and promptly
return the accompanying proxy in the enclosed postage paid envelope so that your
shares may be represented at the AGM.
The
proxy should be returned to Capita Registrars, not later than 9 a.m. on June [
], 2009, being 48 hours prior to the time fixed for the Annual General Meeting,
or in the case of ADS holders to the Bank of New York by 5 p.m., New York time,
on June [ ], 2009, at BNY Mellon Shareholder Services, PO Box 3549, S.
Hackensack, New Jersey 07606-9249, U.S.A.