SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary proxy statement
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
ACCOM, INC.
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(Name of Registrant as Specified in Its Charter)
ACCOM, INC.
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(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transactions applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, schedule or registration statement no.:
(3) Filing party:
(4) Date filed:
- -------------------
* Set forth the amount on which the filing fee is calculated and state how it
was determined.
<PAGE>
ACCOM, INC.
1490 O'BRIEN DRIVE
MENLO PARK, CA 94025
Dear Fellow Stockholders:
You are cordially invited to attend the Annual Meeting of Stockholders (the
"Annual Meeting") of Accom, Inc. ("Accom" or the "Company") which will be held
on Tuesday, February 18, 1997, at 10:00 a.m., local time, at the Company's
principal executive offices in Menlo Park, California.
At the Annual Meeting, you will be asked to consider and vote upon the
following proposals: (i) the election of four directors of the Company and (ii)
the ratification of Ernst & Young LLP as independent auditors of the Company for
the year ended September 30, 1997.
The enclosed Proxy Statement more fully describes the details of the business
to be conducted at the Annual Meeting.
After careful consideration, the Company's Board of Directors has unanimously
approved the proposals and recommends that you vote IN FAVOR OF each such
proposal.
After reading the Proxy Statement, please mark, date, sign and return, if
possible, by no later than February 10, 1997 the enclosed proxy card in the
accompanying reply envelope. If you decide to attend the Annual Meeting, please
notify the Secretary of the Company that you wish to vote in person and your
proxy will not be voted. YOUR SHARES CANNOT BE VOTED UNLESS YOU SIGN, DATE AND
RETURN THE ENCLOSED PROXY, OR ATTEND THE ANNUAL MEETING IN PERSON.
A copy of the Accom, Inc. 1996 Annual Report is also enclosed.
We look forward to seeing you at the Annual Meeting.
Sincerely yours,
Junaid Sheikh
Chairman of the Board of Directors,
President and Chief Executive Officer
Menlo Park, California
January 20, 1997
- --------------------------------------------------------------------------------
IMPORTANT
PLEASE MARK, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT AT YOUR EARLIEST
CONVENIENCE IN THE ENCLOSED POSTAGE-PREPAID RETURN ENVELOPE SO THAT IF YOU ARE
UNABLE TO ATTEND THE ANNUAL MEETING, YOUR SHARES MAY BE VOTED.
- --------------------------------------------------------------------------------
<PAGE>
ACCOM, INC.
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 18, 1997
----------------------------------------
The Annual Meeting of Stockholders (the "Annual Meeting") of Accom, Inc.
("Accom" or the "Company") will be held at the Company's principal executive
offices at 1490 O'Brien Drive, Menlo Park, California 94025, on Tuesday,
February 18, 1997, at 10:00 a.m., for the following purposes:
1. To elect four (4) directors to hold office until the next Annual
Meeting of Stockholders and until their respective successors are duly
elected and qualified. The nominees are Junaid Sheikh, Robert L. Wilson,
Lionel M. Allan and Gary W. Kalbach.
2. To ratify the appointment of Ernst & Young LLP as independent auditors
of the Company for the year ending September 30, 1997.
3. To transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
The record date for determining those stockholders entitled to notice of, and
to vote at, the Annual Meeting and any adjournment thereof is January 7, 1997. A
complete list of the stockholders entitled to vote at the Annual Meeting will be
available for inspection at the offices of the Company for at least ten days
prior to the Annual Meeting.
All stockholders are cordially invited to attend the Annual Meeting. However,
to assure your representation at the meeting, please carefully read the
accompanying Proxy Statement which describes the matters to be voted upon at the
Annual Meeting and sign, date and return the enclosed proxy card in the reply
envelope provided. Should you receive more than one proxy because your shares
are registered in different names and addresses, each proxy should be returned
to assure that all your shares will be voted. If you attend the Annual Meeting
and vote by ballot, your proxy vote will be revoked automatically and only your
vote at the Annual Meeting will be counted. The prompt return of your proxy card
will assist us in preparing for the Annual Meeting.
By Order of the Board of Directors,
William W. Ericson,
Secretary
Menlo Park, California
January 20, 1997
<PAGE>
ACCOM, INC.
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PROXY STATEMENT
----------------------------------------
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of Accom, Inc., a Delaware
corporation, with principal executive offices at 1490 O'Brien Drive, Menlo Park,
California 94025 ("Accom" or the "Company"), to be voted upon at the Annual
Meeting of Stockholders on Tuesday, February 18, 1997 (the "Annual Meeting") and
at any adjournment or adjournments thereof.
These proxy materials were first mailed to stockholders on or about January
20, 1997.
PURPOSE OF MEETING
The specific proposals to be considered and acted upon at the Annual Meeting
are summarized in the accompanying Notice of Annual Meeting of Stockholders.
Each proposal is described in more detail in this Proxy Statement.
REVOCABILITY OF PROXIES
Any stockholder giving a proxy pursuant to this solicitation may revoke it at
any time prior to exercise of such proxy by providing written notice of such
revocation to the Secretary of the Company at its offices at 1490 O'Brien Drive,
Menlo Park, California 94025, or by providing a duly executed proxy bearing a
later date, or by attending the meeting and voting in person.
VOTING AND SOLICITATION
Stockholders of record at the close of business on January 7, 1997 are
entitled to notice of and to vote at the Annual Meeting. As of the close of
business on such date, the Company had 6,568,892 shares of Common Stock
outstanding and entitled to vote and approximately 97 stockholders of record,
including several holders who are nominees for an undetermined number of
beneficial owners. Each holder of Common Stock is entitled to one vote for each
share held as of the record date. All votes will be tabulated by the inspector
of election appointed for the meeting, who will separately tabulate affirmative
and negative votes, abstentions and broker non-votes. Abstentions will be
counted towards the tabulation of votes cast on proposals presented to the
stockholders and will have the same effect as negative votes, whereas broker
non-votes will not be counted for purposes of determining whether a proposal has
been approved or not.
The cost of soliciting these proxies, consisting of the printing, handling
and mailing of the proxy card and related material, and the actual expense
incurred by brokerage houses, custodians, nominees and fiduciaries in forwarding
proxy material to the beneficial owners of stock, will be paid by the Company.
In order to assure a majority vote will be present in person or by proxy at the
Annual Meeting, it may be necessary for certain officers, directors, regular
employees and other representatives of the Company to solicit proxies by
telephone, facsimile, telegraph or in person. These persons will receive no
extra compensation for their services. The Company reserves the right to have an
outside solicitor conduct the solicitation of proxies and to pay such solicitor
for its services.
The Annual Report of the Company for the year ended September 30, 1996 has
been mailed to all stockholders entitled to notice of and to vote at the Annual
Meeting. The Annual Report is not incorporated into this Proxy Statement and is
not considered proxy soliciting material.
1
<PAGE>
----------------------------------------
PROPOSAL NO. 1
ELECTION OF DIRECTORS
----------------------------------------
At the Annual Meeting, four (4) directors will be elected by the stockholders
to serve until the next Annual Meeting and until their successors are elected
and qualified, or until their death, resignation or removal. THE BOARD OF
DIRECTORS WILL VOTE ALL PROXIES RECEIVED BY THEM IN FAVOR OF THE FOUR (4)
NOMINEES LISTED BELOW UNLESS OTHERWISE INSTRUCTED IN WRITING ON SUCH PROXY. In
the event any nominee is unable to or declines to serve as a director at the
time of the Annual Meeting, the proxies will be voted for an additional nominee
who will be designated by the current Board of Directors to fill the vacancy. As
of the date of this Proxy Statement, the Board of Directors is not aware of any
nominee who is unable or will decline to serve as director.
The four nominees receiving the highest number of votes in person or by proxy
at the Annual Meeting will be elected as directors.
INFORMATION WITH RESPECT TO NOMINEES
Set forth below is information regarding the nominees, including information
furnished by them as to their principal occupation at present and for the last
five years, certain other directorships held by them, the year in which each
became a director of the Company and their ages as of December 31, 1996:
NOMINEES POSITION(S) WITH THE COMPANY AGE
- ----------------------- ----------------------------------------------- ---
Junaid Sheikh ......... Chairman of the Board; President; 43
Chief Executive Officer
Robert L. Wilson ...... Executive Vice President, Chief Operating 42
Officer, Chief Financial Officer and Director
Lionel M. Allan ....... Director 53
Gary W. Kalbach ....... Director 55
BUSINESS EXPERIENCE OF BOARD NOMINEES
Junaid Sheikh has served as the Chairman of the Company's Board of Directors
since June 1988 and as the Company's President and Chief Executive Officer since
November 1991. Mr. Sheikh was also the President and Chairman of the Board of
Directors of Axial Systems Corporation ("Axial"), a maker of on-line editing
systems, from May 1990 to October 1991.
Robert L. Wilson has served as Executive Vice President, Chief Operating
Officer and Chief Financial Officer of the Company since joining the Company in
May 1994 and has served on the Company's Board of Directors since April 1995.
From March 1991 to April 1994, Mr. Wilson served as President and Chief
Executive Officer of The Grass Valley Group (a subsidiary of Tektronix, Inc.),
which provides video systems to the high-end production, post-production and
broadcast market. From March 1989 to March 1991, Mr. Wilson was a Vice President
of the Merchant Banking Group of Wasserstein Perella & Co., Inc. ("Wasserstein
Perella"), an investment bank; in that capacity, he was Chief Financial Officer
and a director of the Wickes Companies, which was an affiliate of Wasserstein
Perella.
Lionel M. Allan has served on the Company's Board of Directors since April
1995. Mr. Allan is President of Allan Advisors, Inc., a legal consulting firm
that he founded in April 1992. Previously, and for more than 20 years, Mr. Allan
was in private law practice with Hopkins & Carley. Mr. Allan also is a director
and past Chairman of the Board of KTEH Public Television Channel 54 in San Jose,
California, a director of Custom Chrome, Inc., a motorcycle products company,
and a director of Catalyst Semiconductor, Inc., a semiconductor company.
2
<PAGE>
Gary W. Kalbach has served on the Company's Board of Directors since August
1988. Mr. Kalbach co-founded El Dorado Ventures, a venture capital partnership,
in May 1986 and has been a general partner of El Dorado Ventures since its
inception. Mr. Kalbach is currently a director of Optical Specialties, Inc., a
semiconductor equipment company, and Socket Communications, Inc., a data
communications company.
The Company currently has authorized four directors. Each director is elected
for a period of one year at the Company's annual meeting of stockholders and
serves until the next annual meeting or until his successor is duly elected and
qualified. There are no family relationships among any of the directors or
executive officers of the Company. Except for grants of stock options, directors
are not compensated for their services as directors.
BOARD MEETINGS AND COMMITTEES
The Board of Directors held a total of five meetings during the year ended
September 30, 1996. Each incumbent director attended at least 75% of the
aggregate number of meetings of the Board of Directors and of the Committees on
which such directors served and that were held during the period that such
individual was a member of the Board of Directors.
In connection with the Company's initial public offering, in 1995 the Board
established the Audit Committee, which reviews the Company's annual audit and
meets with the Company's independent auditors to review the Company's internal
accounting controls and financial management practices. This Committee currently
consists of Messrs. Allan and Kalbach. The Audit Committee held one meeting
during the fiscal year ended September 30, 1996.
In connection with the Company's initial public offering, in 1995 the Board
also established the Compensation Committee, which reviewed and approved the
Company's general compensation policies, established the compensation levels for
the Company's executive officers and was responsible for administration of the
Company's 1995 Stock Option/Stock Issuance Plan. The Compensation Committee held
two meetings during the fiscal year ended September 30, 1996 and acted by
unanimous written consent on nine other occasions. This Committee was
discontinued effective September 15, 1996 as a result of changes to rules under
Section 16 of the Securities Exchange Act of 1934. The functions of the former
Compensation Committee are now performed by the full Board of Directors.
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PROPOSAL NO. 2
RATIFICATION OF SELECTION OF
INDEPENDENT AUDITORS
----------------------------------------
The firm of Ernst & Young LLP served as independent auditors for the Company
for the fiscal year ended September 30, 1996. The Board of Directors has
selected that firm to continue in this capacity for the current fiscal year. The
Company is asking the stockholders to ratify the selection by the Board of
Directors of Ernst & Young LLP, as independent auditors, to audit the accounts
and records of the Company for the year ending September 30, 1997, and to
perform other appropriate services. A representative of Ernst & Young LLP is
expected to be present at the Annual Meeting to respond to stockholders'
questions, and if he or she so desires, will be given an opportunity to make a
brief statement.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THE RATIFICATION OF THE
SELECTION OF ERNST & YOUNG LLP. In the event that a majority of the shares voted
at the Annual Meeting do not vote for the ratification, the Board of Directors
will reconsider such selection. Under all circumstances, the Board of Directors
retains the corporate authority to change the auditors at a later date.
3
<PAGE>
EXECUTIVE COMPENSATION AND RELATED INFORMATION
REPORT OF THE BOARD OF DIRECTORS
The Board of Directors has general responsibility for establishing the
compensation payable to the Company's executive officers and other key
executives and has the sole and exclusive authority to administer the Company's
1995 Stock Option/Stock Issuance Plan (the "Stock Option Plan") under which
grants may be made to such individuals. Until September 15, 1996, such functions
were performed by the Compensation Committee of the Board and are now performed
by the full Board of Directors.
General Compensation Policy
Under the supervision of the Board of Directors, the Company's compensation
policy is designed to attract and retain qualified key executives critical to
the Company's growth and long-term success. It is the objective of the Board of
Directors to have a portion of each executive's compensation contingent upon the
Company's performance as well as upon the individual's personal performance.
Accordingly, each executive officer's compensation package is comprised of three
elements: (i) base salary which reflects individual performance and expertise,
(ii) variable bonus awards payable in cash and tied to the achievement of
certain performance goals that the Board of Directors establishes from time to
time for the Company and (iii) long-term stock-based incentive awards which are
designed to strengthen the mutuality of interests between the executive officers
and the Company's stockholders.
The summary below describes in more detail the factors which the Board of
Directors considers in establishing each of the three primary components of
the compensation package provided to the executive officers.
Base Salary
The level of base salary is established primarily on the basis of the
individual's qualifications and relevant experience, the strategic goals for
which he or she has responsibility, the compensation levels at companies which
compete with the Company for business and executive talent, and the incentives
necessary to attract and retain qualified management. Base salary is adjusted
each year to take into account the individual's performance and to maintain a
competitive salary structure. Company performance does not play a significant
role in the determination of base salary.
Cash-Based Incentive Compensation
Cash bonuses are awarded on a discretionary basis to executive officers on
the basis of their success in achieving designated individual goals and the
Company's success in achieving specific company-wide goals, such as customer
satisfaction, revenue growth and earnings growth.
Long-Term Incentive Compensation
The Company has utilized its stock option plans to provide executives and
other key employees with incentives to maximize long-term stockholder values.
Awards under this plan by the Board of Directors take the form of stock options
designed to give the recipient a significant equity stake in the Company and
thereby closely align his or her interests with those of the Company's
stockholders. Factors considered in making such awards include the individual's
position in the Company, his or her performance and responsibilities, and
internal comparability considerations. In addition, the Board of Directors has
established certain general guidelines in making option grants to the executive
officers in an attempt to target a fixed number of unvested option shares based
upon each individual's position with the Company and his or her existing
holdings of unvested options. However, the Board of Directors is not required to
adhere strictly to these guidelines and may vary the size of the option grant
made to each executive officer as it determines the circumstances warrant.
Each option grant allows the executive officer to acquire shares of Common
Stock at a fixed price per share (the fair market value on the date of grant)
over a specified period of time (up to 10 years). The options typically vest in
periodic installments over a five-year period, contingent upon the executive
4
<PAGE>
officer's continued employment with the Company. Accordingly, the option will
provide a return to the executive officer only if he or she remains in the
Company's service, and then only if the market price of the Common Stock
appreciates over the option term.
CEO Compensation
In setting the compensation payable during fiscal 1996 to the Company's Chief
Executive Officer, Junaid Sheikh, the Board of Directors used the same factors
as described above for the executive officers. The Board established a
combination compensation package for Mr. Sheikh, including a base salary, and
stock option grants in line with those received by other executives of
comparably-sized companies in similar industries.
Report on Repriced Stock Options
In April 1996, the Board of Directors' Compensation Committee determined that
it was in the best interest of the Company to offer to reprice the then-existing
stock options of the Company with exercise prices in excess of the then-current
fair market value of the Company's Common Stock. Included in the repricing
actions were options held by the Company's executive officers and directors not
serving on the Compensation Committee.
The objectives of the Stock Option Plan are to promote the interests of the
Company by providing employees, certain directors, and certain consultants or
independent contractors an incentive to acquire a proprietary interest in the
Company and to continue to render services to the Company. It was the view of
the Committee that stock options with exercise prices substantially above the
current market price of the Company's Common Stock were viewed negatively by
most optionees of the Company, and provided little, if any, equity incentive to
the optionees. The Committee thus concluded that such option grants seriously
undermined the specific objectives of the Stock Options Plan and should properly
be repriced. In making this decision, the Committee also considered the fairness
of such a determination in relation to other stockholders. In the opinion of the
Committee, the stockholders' long-term best interests were clearly served by the
retention and motivation of optionees.
In this context, the Committee decided that effective April 23, 1996 (the
"Grant Date") all optionees (except for Compensation Committee members) holding
stock options with exercise prices in excess of the fair market value of the
Company's Common Stock should receive a one-for-one repricing of their
then-existing unexercised stock options with a new exercise price set at $3.25
per share, the fair market value of the Company's Common Stock on the Grant
Date. The Company completed this repricing through a one-for-one stock option
exchange of "underwater" stock options for all optionees. The new options were
subject to the same vesting schedule as the cancelled options.
The exchange was completed in May 1996.
It is the opinion of the Board of Directors that this program helped build
optionee morale and provided new incentives for the Company's employees and
management.
The Board of Directors
Junaid Sheikh
Robert W. Wilson
Gary W. Kalbach
Lionel M. Allan
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee during the fiscal year ended
September 30, 1996 were Mr. Kalbach and Nyal D. McMullin. Mr. McMullin resigned
from the Committee as a director in September 1996. Neither Mr. Kalbach nor Mr.
McMullin was at any time during the year ended September 30, 1996 or at any
other time an officer or employee of the Company. As stated above under "Board
Meetings and Committees," the Compensation Committee has been discontinued and
the functions of the former committee are now performed by the full Board of
Directors.
5
<PAGE>
No executive officer of the Company serves as a member of the board of
directors or compensation committee of any entity which has one or more
executive officers serving as a member of the Company's Board of Directors.
STOCK PERFORMANCE GRAPH
The following graph shows a comparison of cumulative total stockholder
returns for the Company, the NASDAQ Total Return Index, and the Hambrecht &
Quist Technology Index for the period commencing September 26, 1995, the date of
the initial public offering of the Company's Common Stock, to the last day of
the Company's fiscal year ended September 30, 1996.
[The following descriptive data is supplied in accordance with Rule 304(d) of
Regulation S-T.]
Cumulative Total Return
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9/26/95 9/30/95 9/30/96
Accom, Inc. $100 $ 92.22 $ 22.22
NASDAQ $100 $100.55 $119.25
Hambrecht & Quist Technology Index $100 $101.17 $112.23
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended, which might incorporate future filings made by
the Company under those statutes, the preceding Report of the Board of Directors
on Executive Compensation and Performance Graph are not to be incorporated by
reference into any of those previous filings; nor is such report or graph to be
incorporated by reference into any future filings which the Company may make
under those statutes.
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<PAGE>
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following Summary Compensation Table sets forth the compensation earned
by the Company's Chief Executive Officer and the four other highest-paid
executive officers whose salary and bonus for the fiscal year ended September
30, 1996 was in excess of $100,000 (collectively, the "Named Officers") for
services rendered in all capacities to the Company for that fiscal year.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
ANNUAL LONG-TERM
COMPENSATION COMPENSATION
FISCAL ------------------- --------------
YEAR SECURITIES ALL OTHER
ENDED BONUS UNDERLYING COMPENSATION
NAME AND PRESENT PRINCIPAL POSITION SEPT. 30 SALARY ($) ($)(1) OPTIONS (#)* ($)
- ------------------------------------ ---------- ---------- ------- ------------ --------------
<S> <C> <C> <C> <C> <C>
Junaid Sheikh ...................... 1995 $154,992 $14,499 4,166 $ 909(2)
President, Chief Executive Officer 1996 $159,644 $ 0 137,286(3) $ 2,266(2)
and Chairman of the Board
Robert L. Wilson ................... 1995 $141,551 $14,155 208,332 $ 1,356(4)
Executive Vice President, Chief 1996 $149,333 $ 0 309,212(5) $ 369(6)
Operating Officer, Chief Financial
Officer and Director
Paul G. Hansil(7) .................. 1995 $102,917 $19,500 62,500 $47,970(8)
Senior Vice President, Sales 1996 $140,436 $ 0 113,333(9) $ 369(4)
and Marketing
Ian Craven ......................... 1995 $125,000 $12,500 3,125 $ 610(2)
Senior Vice President, Engineering 1996 $129,000 $ 0 33,125(10) $ 1,203(2)
Lance E. Kelson .................... 1995 $108,334 $10,833 3,125 $ 536(2)
Vice President, Virtual Studios(11) 1996 $113,300 $ 0 23,125(12) $ 981(2)
<FN>
- -----------------
* Includes options repriced in the fiscal year ending September 30, 1996.
(1) Bonus compensation for fiscal year 1995 was paid in fiscal year 1996.
(2) Represents standard life insurance and key man insurance premiums paid by
the Company for the benefit of the Named Officer.
(3) Includes options to purchase 54,166 shares of the Company's Common Stock
that were cancelled on April 23, 1996 and repriced to $3.25 per share. See
"Option Grants in Last Fiscal Year" below.
(4) Represents $1,000 in moving expenses and $356 of standard life insurance
paid by the Company for the benefit of Mr. Wilson.
(5) Includes options to purchase 243,332 shares of the Company's Common Stock
that were cancelled on April 23, 1996 and repriced to $3.25 per share. See
"Option Grants in Last Fiscal Year" below.
(6) Represents standard life insurance premiums paid by the Company for the
benefit of the Named Officer.
(7) Mr. Hansil joined the Company in April 1995.
(8) Represents $334 in standard life insurance premiums paid by the Company for
the benefit of the Named Officer and $47,636 in relocation expenses.
(9) Includes options to purchase 98,333 shares of the Company's Common Stock
that were cancelled on April 23, 1996 and repriced to $3.25 per share. See
"Option Grants in Last Fiscal Year" below.
(10) Includes options to purchase 18,125 shares of the Company's Common Stock
that were cancelled on April 23, 1996 and repriced to $3.25 per share. See
"Option Grants in Last Fiscal Year" below.
(11) Prior to August 1996, Mr. Kelson served as Vice President, Product
Planning.
(12) Includes options to purchase 13,125 shares of the Company's Common Stock
that were cancelled on April 23, 1996 and repriced to $3.25 per share. See
"Option Grants in Last Fiscal Year" below.
</FN>
</TABLE>
7
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OPTION GRANTS
The following table provides information with respect to the stock option
grants made during the year ended September 30, 1996 under the Company's 1995
Stock Option/Stock Issuance Plan to the Company's executive officers named in
the Summary Compensation Table above. No stock appreciation rights were granted
to these individuals during such fiscal year.
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL
RATE OF STOCK
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
----------------------------------------------------- ---------------------
% OF TOTAL
OPTIONS EXERCISE
GRANTED TO OR BASE
OPTIONS EMPLOYEES IN PRICE(2) EXPIRATION
NAME GRANTED(1) FISCAL YEAR ($/SHARE) DATE 5% ($)(3) 10% ($)(3)
- ---------------- -------------- ------------- ---------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Junaid Sheikh .. 50,000(4) 8.5% $5.75 01/15/06 N/A N/A
4,166(5) N/A $3.25 04/23/06 8,530 21,526
50,000(5) N/A $3.25 04/23/06 102,375 258,350
33,120(6) 5.6% $1.88 09/03/06 39,227 99,002
Robert L. Wilson 35,000(4) 6.0% $5.75 01/15/06 N/A N/A
208,332(5)(7) N/A $3.25 04/23/06 426,560 1,076,451
35,000(5) N/A $3.25 04/23/06 71,603 180,845
30,880(6) 5.3% $1.88 09/03/06 36,574 92,307
Paul G. Hansil . 15,000(4) 2.6% $5.75 01/15/06 N/A N/A
20,833(5) N/A $3.25 04/23/06 42,656 107,644
62,500(5) N/A $3.25 04/23/06 127,969 322,938
15,000(5) N/A $3.25 04/23/06 30,713 77,505
Ian Craven ...... 15,000(4) 2.6% $5.75 01/15/06 N/A N/A
3,125(5) N/A $3.25 04/23/06 6,398 16,147
15,000(5) N/A $3.25 04/23/06 30,712 51,670
Lance E. Kelson 10,000(4) 1.7% $5.75 01/15/06 N/A N/A
3,125(5) N/A $3.25 04/23/06 6,398 16,147
10,000(5) N/A $3.25 04/23/06 20,475 51,670
<FN>
(1) Each option is currently exercisable, and unless otherwise footnoted, the
shares issuable thereunder are subject to a repurchase right of the
Company, which expires in five equal and successive annual installments
upon the optionee's completion of each year of service with the Company
measured from the grant date. However, the shares of Common Stock purchased
subject to a right of repurchase will immediately vest in full in the event
the Company is acquired by a merger, consolidation or asset sale, except to
the extent the Company's repurchase right with respect to those shares are
to be assigned to the acquiring entity. The Board of Directors also has the
authority to provide for the automatic vesting of shares subject to the
outstanding option upon the occurrence of certain hostile takeovers. Each
option has a maximum term of 10 years, subject to earlier termination in
the event of the optionee's cessation of employment with the Company.
(2) The exercise price may be paid in cash, in shares of Common Stock valued at
fair market value on the exercise date or through a cashless exercise
procedure involving a same-day sale of the purchased shares. The Company
may also finance the option exercise by loaning the optionee sufficient
funds to pay the exercise price for the purchased shares and the federal
and state income tax liability incurred by the optionee in connection with
such exercise.
(3) The 5% and 10% assumed annual rates of compounded stock price appreciation
are mandated by the Securities and Exchange Commission. There is no
assurance provided to any executive officer or any other holder of the
Company's securities that the actual stock price appreciation over the
10-year
8
<PAGE>
option term will be at the assumed 5% and 10% levels or at any other
defined level. Unless the market price of the Common Stock appreciates over
the option term, no value will be realized from the option grants made to
the executive officers. Potential Realizable Value is not calculated for
options that were cancelled during the fiscal year ended September 30,
1996.
(4) Such option was repriced on April 23, 1996 to $3.25 per share. See
"Ten-Year Option/SAR Repricings" below.
(5) Represents option granted on April 23, 1996 in connection with the
cancellation of an existing outstanding option with an exercise price in
excess of $3.25. See "Ten-Year Option/SAR Repricings" below.
(6) Such option is currently exercisable with no repurchase right in favor of
the Company.
(7) Mr. Wilson's option is currently exercisable. 41,666 shares issuable
thereunder were immediately vested upon the grant date. The remaining
166,666 shares issuable thereunder are subject to a repurchase right of the
Company, which expires in five equal and successive annual installments
upon Mr. Wilson's completion of each year of service with the Company
measured from May 16, 1994.
</FN>
</TABLE>
OPTION EXERCISES AND HOLDINGS
The table below sets forth information concerning the exercise of options
during the fiscal year ended September 30, 1996 and unexercised options held as
of the end of such year by the Company's executive officers named in the Summary
Compensation Table above. No stock appreciation rights were exercised during
such fiscal year or outstanding as of the end of that fiscal year.
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<CAPTION>
NUMBER VALUE OF
OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
SHARES AGGREGATE OPTIONS AT OPTIONS AT
ACQUIRED ON VALUE REALIZED FISCAL YEAR END FISCAL YEAR END(1)
NAME EXERCISE ($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
------------- -------------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Junaid Sheikh ... 0 $0 33,954/53,332 $3,974/$0
Robert L. Wilson 0 $0 139,214/134,997 $3,706/$0
Paul G. Hansil .. 0 $0 33,333/65,000 $0/$0
Ian Craven ....... 0 $0 625/17,500 $0/$0
Lance E. Kelson . 0 $0 625/12,500 $0/$0
<FN>
(1) Market price at fiscal year end ($2.00) less exercise price. For purposes
of this calculation, the fiscal year end market price of the shares is
deemed to be the closing sale price of the Company's Common Stock as
reported on the NASDAQ National Market on Monday, September 30, 1996.
</FN>
</TABLE>
9
<PAGE>
<TABLE>
TEN-YEAR OPTION/SAR REPRICINGS
The following table sets forth certain information as of September 30, 1996
with respect to the repricing of certain stock options held by the Company's
executive officers.
<CAPTION>
NUMBER OF
SECURITIES MARKET LENGTH OF
UNDERLYING PRICE OF EXERCISE ORIGINAL
OPTIONS/ STOCK AT PRICE AT OPTION TERM
SAR'S TIME OF TIME OF NEW REMAINING AT
REPRICED OR REPRICING OR REPRICING OR EXERCISE DATE OF
AMENDED AMENDMENT AMENDMENT PRICE REPRICING OR
NAME DATE (#) ($) ($) ($) AMENDMENT
------- ----------- -------------- -------------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C>
Junaid Sheikh(1) .............. 4/23/96 4,166 $3.25 $4.80 $3.25 8.75 years
4/23/96 50,000 $3.25 $5.75 $3.25 9.75 years
Robert L. Wilson(1) ........... 4/23/96 208,332 $3.25 $4.80 $3.25 8.67 years
4/23/96 35,000 $3.25 $5.75 $3.25 9.75 years
Paul G. Hansil(1) ............. 4/23/96 20,833 $3.25 $4.80 $3.25 8.92 years
4/23/96 62,500 $3.25 $4.80 $3.25 8.92 years
4/23/96 15,000 $3.25 $5.75 $3.25 9.75 years
Ian Craven(1) ................. 4/23/96 3,125 $3.25 $4.80 $3.25 8.75 years
4/23/96 15,000 $3.25 $5.75 $3.25 9.75 years
Lance E. Kelson(1) ............ 4/23/96 3,125 $3.25 $4.80 $3.25 8.75 years
4/23/96 10,000 $3.25 $5.75 $3.25 9.75 years
Donald W. Petersen(1) ......... 4/23/96 20,833 $3.25 $4.80 $3.25 8.75 years
Vice President, Manufacturing 4/23/96 15,000 $3.25 $5.75 $3.25 9.75 years
<FN>
- --------------
(1) In order to reincentivize certain of its employees, in April 1996 the
Compensation Committee of the Board of Directors approved an option
exchange for all employees holding options with an exercise price in excess
of $3.25 entitling each such employee to cancel their outstanding options
in exchange for new options with an exercise price of $3.25 per share, the
fair market value of the Company's stock on the date of Board approval. The
new options were subject to the same vesting schedule as the canceled
options, including the same original vesting commencement date.
</FN>
</TABLE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The members of the Board of Directors, the executive officers of the Company
and persons who hold more than ten percent (10%) of the Company's outstanding
Common Stock are subject to the reporting requirements of Section 16(a) of the
Securities Exchange Act of 1934, which requires such individuals to file reports
with respect to their ownership of and transactions in the Company's securities.
Officers, directors and greater than ten percent (10%) stockholders are required
to furnish the Company with copies of all such reports they file.
Based upon the copies of those reports furnished to the Company and written
representations that no other reports were required to be filed, the Company
believes that all reporting requirements under Section 16(a) for the year ended
September 30, 1996 were met in a timely manner by executive officers, Board
members and greater than ten percent (10%) stockholders, except that Mr. Wilson
inadvertently was late to file a Form 4 after his marriage in June 1996 to
report the shares owned by his new wife.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
El Dorado Ventures, along with certain other stockholders, is entitled to
certain registration rights with respect to the Company's Common Stock owned
by such stockholders. See "Common Stock Ownership of Certain Beneficial
Owners and Management."
10
<PAGE>
<TABLE>
COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information known to the Company with
respect to the beneficial ownership of the Company's Common Stock as of November
30, 1996 by (i) all persons who are beneficial owners of five percent or more of
the Company's Common Stock, (ii) each director and nominee, (iii) each executive
officer of the Company named in the Summary Compensation Table above, and (iv)
all current directors and executive officers as a group. Except as otherwise
indicated, the Company believes that the beneficial owners of the Common Stock
listed below, and the information furnished by such owners, have sole investment
power with respect to such shares, subject to community property laws where
applicable.
<CAPTION>
PERCENT OF
SHARES SHARES
BENEFICIALLY BENEFICIALLY
NAME AND ADDRESS, IF REQUIRED, OF BENEFICIAL OWNER OWNED(1)(2) OWNED(1)(2)
- ------------------------------------------------------------------ -------------- --------------
<S> <C> <C>
El Dorado Ventures and affiliated entities(3) ..................... 1,416,543 21.6%
20300 Stevens Creek Boulevard
Suite 395
Cupertino, CA 95014
Gary W. Kalbach(4) ................................................ 1,429,459 21.7%
20300 Stevens Creek Boulevard
Suite 395
Cupertino, CA 95014
Junaid Sheikh(5) .................................................. 1,045,619 15.7%
1490 O'Brien Drive
Menlo Park, CA 94025
Wells Fargo & Company(6) .......................................... 510,000 7.8%
420 Montgomery Street
San Francisco, CA 94163
Integral Capital Partners, L.P. and affiliated entities(7) ....... 342,740 5.2%
2750 Sand Hill Road
Menlo Park, CA 94025
Lance E. Kelson(8) ................................................ 310,780 4.7%
Ian Craven(9) ..................................................... 298,437 4.5%
Robert L. Wilson(10) .............................................. 275,211 4.0%
Paul G. Hansil(11) ................................................ 98,333 1.5%
Lionel M. Allan(12) ............................................... 53,722 *
Donald W. Petersen(13) ............................................ 39,133 *
All executive officers and directors as a group (8 persons)(2)(14) 3,554,694 49.6%
<FN>
- -----------------------
* Less than one percent (1%).
(1) Except as indicated in the footnotes to this table and pursuant to
applicable community property laws, the persons named in the table have
sole voting and investment power with respect to all shares of Common
Stock.
(2) The number of shares of Common Stock beneficially owned includes the shares
issuable pursuant to stock options which may be exercised within 60 days
after November 30, 1996. Shares issuable pursuant to such options are
deemed outstanding for computing the percentage of the person holding such
options but are not outstanding for computing the percentage of any other
person.
(3) Includes 141,407 shares of Common Stock owned by El Dorado Technology II,
L.P.; 13,328 shares of Common Stock owned by El Dorado C&L Fund, L.P.;
7,441 shares of Common Stock owned by El Dorado Technology IV, L.P.;
583,474 shares of Common Stock owned by El Dorado Ventures; and 670,893
shares of Common Stock owned by El Dorado Ventures III, L.P.
11
<PAGE>
(4) Includes 12,916 shares issuable upon currently exercisable options held by
Mr. Kalbach, 5,208 of which shares are subject to a repurchase right of the
Company. Also includes 1,416,543 shares owned by entities affiliated with
El Dorado Ventures. See Footnote (3). Mr. Kalbach, a director of the
Company, is a General Partner of El Dorado Venture Partners, a California
general partnership, which is the general partner of El Dorado Ventures and
El Dorado Technology II, L.P. Mr. Kalbach is also a general partner of El
Dorado Venture Partners III, a California general partnership, which is the
general partner of El Dorado Ventures III, L.P., El Dorado C&L Fund, L.P.
and El Dorado Technology IV, L.P. Mr. Kalbach disclaims beneficial
ownership in the shares held by the entities affiliated with El Dorado
Ventures, except to the extent of his pecuniary interest arising from his
general partnership interests in El Dorado Venture Partners and El Dorado
Venture Partners III.
(5) Includes 87,286 shares issuable upon currently exercisable options held by
Mr. Sheikh, none of which shares are subject to a repurchase right of the
Company. Also includes 958,333 shares owned indirectly by Mr. Sheikh and
Mr. Sheikh's wife as Trustees of the Sheikh Revocable Trust.
(6) Such information is based upon the Company's knowledge after investigation,
but without independent confirmation from Wells Fargo & Company.
(7) Such stockholder has notified the Company that as of December 13, 1996, it
was no longer the beneficial owner of five percent or more of the Company's
Common Stock.
(8) Includes 13,125 shares issuable upon currently exercisable options held by
Mr. Kelson, none of which shares are subject to a repurchase right of the
Company.
(9) Includes 18,125 shares issuable upon currently exercisable options held by
Mr. Craven, none of which shares are subject to a repurchase right of the
Company.
(10) Includes 1,000 shares held by Mr. Wilson's wife. The remainder represents
shares issuable upon currently exercisable options held by Mr. Wilson,
99,997 of which shares are subject to a repurchase right of the Company.
(11) Represents shares issuable upon currently exercisable options held by Mr.
Hansil, 50,000 of which shares are subject to a repurchase right of the
Company.
(12) Includes 50,850 shares issuable upon currently exercisable options held by
Mr. Allan, 23,437 of which shares are subject to a repurchase right of the
Company. Also includes 2,456 shares owned indirectly by Mr. Allan as the
beneficiary of the Allan Advisors, Inc. Profit Sharing Plan FBO Lionel M.
Allan.
(13) Includes 35,833 shares issuable upon currently exercisable options held by
Mr. Petersen, 18,749 of which shares are subject to a repurchase right of
the Company.
(14) Includes 1,416,543 shares owned by entities affiliated with El Dorado
Ventures. See Footnotes (3) and (4). Also includes 590,679 shares issuable
upon currently exercisable options. See Footnotes (4), (5), (8), (9), (10),
(11), (12), and (13).
</FN>
</TABLE>
OTHER BUSINESS
The Board of Directors is not aware of any other matter which may be
presented for action at the Annual Meeting other than the matter set forth in
this Proxy Statement. Should any other matter requiring a vote of the
stockholders arise, it is intended that the persons named as proxy holders on
the enclosed proxy card will vote the shares represented thereby in accordance
with their best judgment in the interest of the Company. Discretionary authority
with respect to such other matters is granted by the execution of the enclosed
proxy.
STOCKHOLDER PROPOSALS
Under the present rules of the Securities and Exchange Commission, the
deadline for stockholders to submit proposals to be considered for inclusion in
the Company's Proxy Statement for the next year's Annual Meeting of Stockholders
is expected to be September 20, 1997. Such proposals may be included in next
year's Proxy Statement if they comply with certain rules and regulations
promulgated by the Commission.
12
<PAGE>
INCORPORATION BY REFERENCE
According to the provisions of Schedule 14A under the Securities Exchange Act
of 1934, the following document or portion thereof is incorporated by reference:
"Executive Officers of the Company" from Part I of the Company's Annual Report
on Form 10-K for the year ended September 30, 1996.
ADDITIONAL INFORMATION AVAILABLE
THE COMPANY WILL PROVIDE WITHOUT CHARGE, UPON WRITTEN REQUEST, A COPY OF THE
COMPANY'S ANNUAL REPORT ON FORM 10-K, INCLUDING FINANCIAL STATEMENTS, SCHEDULES
AND A LIST OF EXHIBITS. REQUEST SHOULD BE SENT TO THE ATTENTION OF ROBERT L.
WILSON, EXECUTIVE VICE PRESIDENT, CHIEF OPERATING OFFICER, AND CHIEF FINANCIAL
OFFICER AT ACCOM, INC., 1490 O'BRIEN DRIVE, MENLO PARK, CALIFORNIA 94025, OR
TELEPHONED TO (415) 328-3818.
By Order of the Board of Directors,
William W. Ericson
Secretary
Dated: January 20, 1997
13
<PAGE>
APPENDIX A
ACCOM, INC.
PROXY
ANNUAL MEETING OF STOCKHOLDERS, FEBRUARY 18, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF ACCOM, INC.
The undersigned revokes all previous proxies, acknowledges receipt of the
Notice of the Annual Meeting of Stockholders to be held on February 18, 1997 and
the Proxy Statement and appoints Junaid Sheikh and Robert L. Wilson, and each of
them, as the Proxy of the undersigned, with full power of substitution, to vote
all shares of Common Stock of Accom, Inc. (The "Company") which the undersigned
is entitled to vote, either on his or her own behalf or on behalf of any entity
or entities, at the Annual Meeting of Stockholders of the Company to be held at
the Company's facilities located at 1490 O'Brien Drive, Menlo Park, California
94025, on Tuesday, February 18, 1997 at 10:00 a.m. (the "Annual Meeting"), and
at any adjournment or postponement thereof, with the same force and effect as
the undersigned might or could do if personally present thereat. The shares
represented by this Proxy shall be voted in the following manner:
1. To elect the following directors to serve until the next annual meeting of
stockholders and until their successors are elected and qualified:
FOR WITHHOLD AUTHORITY TO VOTE
Junaid Sheikh [ ] [ ]
Robert L. Wilson [ ] [ ]
Lionel M. Allan [ ] [ ]
Gary W. Kalbach [ ] [ ]
2. To ratify the Board of Director's selection of Ernst & Young LLP to serve
as the Company's independent auditors for the fiscal year ending September
30, 1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To transact such other business as may properly come before the Annual
Meeting or any adjournment or postponement thereof.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued and to be signed on reverse side)
<PAGE>
(Continued from other side)
The Board of Directors recommends a vote FOR each of the directors listed
above and a vote FOR the other proposals. This Proxy, when properly executed,
will be voted as specified above. THIS PROXY WILL BE VOTED FOR THE ELECTION OF
THE DIRECTORS LISTED ABOVE AND FOR THE OTHER PROPOSALS IF NO SPECIFICATION IS
MADE.
Please print the name(s) appearing on
each share certificate(s) over which you
have voting authority:
----------------------------------------
(Print name(s) on certificate)
Please sign your name(s):
---------------
----------------------------------------
(Authorized Signature(s))
Date:
-----------------------------------
