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 addition materials
|_| Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
ACCOM, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
ACCOM, INC.
- --------------------------------------------------------------------------------
(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 transaction
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 17, 1998, 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 fiscal year ended September 30, 1998.
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, 1998, 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. 1997 Annual Report on Form 10-K 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 19, 1998
- --------------------------------------------------------------------------------
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.
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<PAGE>
ACCOM, INC.
-------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 17, 1998
-------------------------------------------------
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 17, 1998, 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, Lionel M. Allan, Thomas E. Fanella, and David
A. Lahar.
2. To ratify the appointment of Ernst & Young LLP as independent
auditors of the Company for the fiscal year ending September
30, 1998.
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 5,
1998. 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 19, 1998
<PAGE>
ACCOM, INC.
-------------------------------------------------
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 17, 1998 (the "Annual Meeting") and
at any adjournment or adjournments thereof.
These proxy materials were first mailed to stockholders on or about
January 21, 1998.
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 5, 1998 are
entitled to notice of and to vote at the Annual Meeting. As of the close of
business on such date, the Company had 6,669,671 shares of Common Stock
outstanding and entitled to vote and approximately 1,240 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, electronic means, 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.
<PAGE>
The Annual Report on Form 10-K of the Company for the year ended
September 30, 1997 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.
-------------------------------------------------
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
<TABLE>
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,
1997:
<CAPTION>
Nominees Position(s) with the Company Age
- -------- ---------------------------- ---
<S> <C> <C>
Junaid Sheikh.......................... Chairman of the Board; President; 44
Chief Executive Officer
Lionel M. Allan........................ Director 54
Thomas E. Fanella...................... Director 50
David A. Lahar......................... Nominee for Director 40
</TABLE>
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, a maker of on-line editing
systems, from May 1990 to October 1991.
Lionel M. Allan has served on the Company's Board of Directors since
April 1995. For more than the past five years, Mr. Allan has been President of
Allan Advisors, Inc., a legal consulting firm.
-2-
<PAGE>
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 Global Motorsport
Group, Inc., a motorcycle products company, and a director of Catalyst
Semiconductor, Inc., a semiconductor company.
Thomas E. Fanella has served on the Company's Board of Directors since
March 1997. Since August 1988, Mr. Fanella has been President and Chief
Executive Officer of KTEH Public Television Channel 54 in San Jose, California.
Mr. Fanella is also a director of the Catholic Television Network, the Pacific
Mountain Network and the Silicon Valley Forum.
David A. Lahar is standing for election to the Company's Board of
Directors. Since September 1992, Mr. Lahar has been a Managing Director of EOS
Capital, Inc., an investment, venture capital and consulting firm. From 1992 to
June 1996, Mr. Lahar was the President of Aurora Electronics, Inc. ("Aurora"), a
company which he co-founded and which is a provider of spare parts distribution
services and electronics recycling and recovery services to computer
manufacturers and field service providers. Mr. Lahar remains a director of
Aurora. From 1986 to 1992, Mr. Lahar was a Managing Director in the Investment
Banking Division of PaineWebber Incorporated.
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 nine meetings during the year
ended September 30, 1997. 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 Fanella, and if Mr. Lahar is elected to
the Board of Directors, it is expected that the Committee will consist of
Messrs. Lahar and Fanella. The Audit Committee held two meetings during the
fiscal year ended September 30, 1997.
-------------------------------------------------
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, 1997. 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
-3-
<PAGE>
the Company for the year ending September 30, 1998, 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.
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 for the Company or the executive
and (iii) long-term stock-based incentive awards that 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 has responsibility, the compensation levels at companies that compete
with the Company for business and executive talent, and the incentives necessary
to attract and retain qualified management. Base salary is reevaluated 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.
-4-
<PAGE>
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 the Stock Option Plan 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 interests with those of the Company's
stockholders. Factors considered in making such awards include the individual's
position in the Company, his performance and responsibilities, and internal
comparability considerations. In addition, the Board of Directors takes into
account each individual's position with the Company and his existing holdings of
unvested options.
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 officer's continued employment with the Company. Accordingly, the
option will provide a return to the executive officer only if he 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 1997 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 February 1997, the Board of Directors 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.
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 Board of Directors 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 Board thus concluded that such option grants
seriously undermined the specific objectives of the Stock Option Plan and should
properly be repriced. In making this decision, the Board also considered the
fairness of such a determination in relation to other stockholders. In the
opinion of the Board, the stockholders' long-term best interests were clearly
served by the retention and motivation of optionees.
-5-
<PAGE>
In this context, the Board decided that effective February 18, 1997
(the "Grant Date") all optionees 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 $1.3125 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
canceled options. The exchange was completed in March 1997.
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
Lionel M. Allan
Thomas E. Fanella
Robert L. Wilson
Compensation Committee Interlocks and Insider Participation
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. Mr.
Sheikh, Chairman of the Board of Directors, is also President and Chief
Executive Officer of the Company. Mr. Wilson was until April 1997 the Company's
Executive Vice President, Chief Operating Officer and Chief Financial Officer.
Both Mr. Sheikh and Mr. Wilson participated in deliberations of the Company's
Board of Directors concerning executive officer compensation.
-6-
<PAGE>
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, 1997.
[The following descriptive data is supplied in accordance with Rule 304(d) of
Regulation S-T]
9/26/95 9/30/95 9/30/96 9/30/97
------- ------- ------- -------
Accom, Inc. $100 $ 97.22 $ 22.22 $ 29.17
NASDAQ Total Return Index $100 $100.55 $119.31 $163.79
Hambrecht & Quist Technology Index $100 $101.14 $111.02 $165.53
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.
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, 1997 was in excess of $100,000 (collectively, the "Named Officers") for
services rendered in all capacities to the Company for that fiscal year.
-7-
<PAGE>
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Annual Long-Term
Compensation Compensation
-------------------------- ----------- ---------------
Fiscal
Year Securities
Ended Underlying All Other
Name and Present Principal Position Sept. 30 Salary($) Bonus($)(1) Options(#)* Compensation($)
- ----------------------------------- -------- --------- ----------- ----------- ---------------
<S> <C> <C> <C> <C> <C>
Junaid Sheikh .................................. 1997 $149,220 $ 0 87,286(2) $ 866(3)
President, Chief Executive 1996 $159,644 $ 0 137,286(4) $ 2,266(3)
Officer and Chairman of the Board 1995 $154,992 $ 14,499 4,166 $ 909(3)
Paul G. Hansil (5) ............................. 1997 $140,400 $ 23,000 138,333(6) $ 351(7)
Senior Vice President, Sales 1996 $140,436 $ 0 113,333(8) $ 369(7)
and Marketing 1995 $102,917 $ 19,500 62,500 $47,970(9)
Ian Craven ..................................... 1997 $130,000 $ 5,000 58,125(10) $ 351(3)
Senior Vice President, Engineering 1996 $129,000 $ 0 33,125(11) $ 1,203(3)
1995 $125,000 $ 12,500 3,125 $ 610(3)
Donald Petersen ................................ 1997 $111,416 $ 5,000 75,833(12) $ 330(7)
Vice President, Manufacturing 1996 $105,502 $ 0 50,833(13) $ 347(7)
1995 $100,869 $ 10,087 20,833 $ 334(7)
Lance E. Kelson ................................ 1997 $114,400 $ 12,000 33,125(15) $ 381(3)
Former Vice President, Virtual Studios (14) 1996 $113,300 $ 0 23,125(16) $ 981(3)
1995 $108,334 $ 10,833 3,125 $ 536(3)
<FN>
- -----------
* Includes options repriced in the fiscal years ending September 30, 1996 and
1997.
(1) Represents bonus compensation earned in such fiscal year.
(2) Represents options to purchase 87,286 shares of the Company's Common Stock
that were canceled on February 18, 1997 and repriced to $1.3125 per share.
See "Option Grants in Last Fiscal Year" below.
(3) Represents standard life insurance and key man insurance premiums paid by
the Company for the benefit of the Named Officer.
(4) Includes options to purchase 54,166 shares of the Company's Common Stock
that were canceled on April 23, 1996 and repriced to $3.25 per share.
(5) Mr. Hansil joined the Company in April 1995.
(6) Includes options to purchase 98,333 shares of the Company's Common Stock
that were canceled on February 18, 1997 and repriced to $1.3125 per share.
See "Option Grants in Last Fiscal Year" below.
(7) Represents standard life insurance premiums paid by the Company for the
benefit of the Named Officer.
(8) Includes options to purchase 98,333 shares of the Company's Common Stock
that were canceled on April 23, 1996 and repriced to $3.25 per share.
(9) Represents $334 in standard life insurance premiums paid by the Company for
the benefit of the Named Officer and $47,636 in relocation expenses.
-8-
<PAGE>
(10) Includes options to purchase 18,125 shares of the Company's Common Stock
that were canceled on February 18, 1997 and repriced to $1.3125 per share.
See "Option Grants in Last Fiscal Year" below.
(11) Includes options to purchase 18,125 shares of the Company's Common Stock
that were canceled on April 23, 1996 and repriced to $3.25 per share.
(12) Includes options to purchase 35,833 shares of the Company's Common Stock
that were canceled on February 18, 1997 and repriced to $1.3125 per share.
See "Option Grants in Last Fiscal Year" below.
(13) Includes options to purchase 35,833 shares of the Company's Common Stock
that were canceled on April 23, 1996 and repriced to $3.25 per share.
(14) Prior to August 1996, Mr. Kelson served as Vice President, Product
Planning. Mr. Kelson left the Company in October 1997.
(15) Includes options to purchase 13,125 shares of the Company's Common Stock
that were canceled on February 18, 1997 and repriced to $1.3125 per share.
See "Option Grants in Last Fiscal Year" below.
(16) Includes options to purchase 13,125 shares of the Company's Common Stock
that were canceled on April 23, 1996 and repriced to $3.25 per share.
</FN>
</TABLE>
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<PAGE>
Option Grants
<TABLE>
The following table provides information with respect to the stock
option grants made during the year ended September 30, 1997 under the Company's
1995 Stock Option/Stock Issuance Plan to the Named Officers. No stock
appreciation rights were granted to these individuals during such fiscal year.
OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
Potential Realizable
Value at Assumed Annual
Rate of Stock
Price Appreciation
Individual Grants for Option Term
-------------------------------------------------------- ------------------------
% of Total
Options
Granted to
Employees Exercise
Options in Price (2) Expiration
Name Granted(1) Fiscal Year ($/share) Date 5% ($)(3) 10% ($)(3)
- ---- ---------- ----------- --------- ---- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Junaid Sheikh 4,166(4) N/A $1.3125 2/18/07 3,445 8,694
50,000(4) N/A $1.3125 2/18/07 41,345 104,345
33,120(4) N/A $1.3125 2/18/07 27,387 69,118
Donald Petersen 40,000 5.5% $1.25 3/14/07 31,500 79,500
20,833(4) N/A $1.3125 2/18/07 17,227 43,476
15,000(4) N/A $1.3125 2/18/07 12,404 31,304
Paul G. Hansil 40,000 5.5% $1.25 3/14/07 31,500 79,500
15,000(4) N/A $1.3125 2/18/07 12,404 31,304
20,833(4) N/A $1.3125 2/18/07 17,227 43,476
62,500(4) N/A $1.3125 2/18/07 51,681 130,431
Ian Craven 40,000 5.5% $1.25 3/14/07 31,500 79,500
3,125(4) N/A $1.3125 2/18/07 2,584 6,522
15,000(4) N/A $1.3125 2/18/07 12,404 31,304
Lance E. Kelson 20,000 2.7% $1.25 3/14/07 15,750 39,750
3,125(4) N/A $1.3125 2/18/07 2,584 6,522
10,000(4) N/A $1.3125 2/18/07 8,269 20,869
<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,
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<PAGE>
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) Disclosure of the 5% and 10% assumed annual rates of compounded stock price
appreciation is 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 option term will be at the assumed 5% and 10% levels or at any
other defined level. Unless the market price of the Company's Common Stock
appreciates over the option term, no value will be realized from the option
grants made to the executive officers.
(4) Represents option granted in February 1997 in connection with the
cancellation of an existing outstanding option with an exercise price in
excess of $1.3125 per share. See "Ten-Year Option/SAR Repricings" below.
</FN>
</TABLE>
Option Exercises and Holdings
<TABLE>
The table below sets forth information concerning the exercise of
options during the fiscal year ended September 30, 1997 and unexercised options
held as of the end of such year by the Named Officers. No stock appreciation
rights were exercised during such fiscal year or outstanding as of the end of
that fiscal year.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<CAPTION>
Number
of Value of
Securities Underlying Unexercised
Unexercised In-the-Money
Shares Aggregate Options at Options at
Acquired On Value Realized Fiscal Year End Fiscal Year End (1)
Name Exercise ($) Exercisable/Unexercisable Exercisable/Unexercisable
- ---- ----------------- ------------------ ------------------------------ ------------------------------
<S> <C> <C> <C> <C>
Junaid Sheikh 0 $0 87,286/0 $114,781/$0
Donald Petersen 16,666 $33,665 77,916/0 $106,517/$0
Paul G. Hansil 0 $0 138,333/0 $184,062/$0
Ian Craven 0 $0 58,125/0 $ 75,527/$0
Lance E. Kelson 0 $0 33,125/0 $ 44,727/$0
-11-
<PAGE>
<FN>
(1) Market price at fiscal year end ($2.625) less exercise price. For purposes
of this calculation, the fiscal year end market price of the shares is
deemed to be the closing sale price of the Company's Common Stock as
reported on the NASDAQ Stock Market on September 30, 1997.
</FN>
</TABLE>
Ten-Year Option/SAR Repricings
<TABLE>
The following table sets forth certain information as of September 30,
1997 with respect to the repricing of certain stock options held by the
Company's executive officers.
<CAPTION>
Number of Market Length of
Securities price of Exercise original
underlying stock at price at option term
options time of time of New remaining at
repriced or repricing or repricing or exercise date of
amended amendment amendment price repricing or
Name Date (#) ($) ($) ($) amendment
- ------------------------------------- ------------ --------------- --------------- -------------- ----------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Junaid Sheikh (1).................. 2/18/97 4,166 $1.3125 $3.25 $1.3125 9.2 years
President, Chief Executive 2/18/97 50,000 $1.3125 $3.25 $1.3125 9.2 years
Officer and Chairman 2/18/97 33,120 $1.3125 $1.88 $1.3125 9.2 years
of the Board 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
Paul G. Hansil (1)................. 2/18/97 20,833 $1.3125 $3.25 $1.3125 9.2 years
Senior Vice President, 2/18/97 62,500 $1.3125 $3.25 $1.3125 9.2 years
Sales and Marketing 2/18/97 15,000 $1.3125 $3.25 $1.3125 9.2 years
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)..................... 2/18/97 3,125 $1.3125 $3.25 $1.3125 9.2 years
Senior Vice President, 2/18/97 15,000 $1.3125 $3.25 $1.3125 9.2 years
Engineering 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)................ 2/18/97 3,125 $1.3125 $3.25 $1.3125 9.2 years
Former Vice President, 2/18/97 10,000 $1.3125 $3.25 $1.3125 9.2 years
Virtual Studios 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) ............ 2/18/97 20,833 $1.3125 $3.25 $1.3125 9.2 years
Vice President, Manufacturing 2/18/97 15,000 $1.3125 $3.25 $1.3125 9.2 years
4/23/96 20,833 $3.25 $4.80 $3.25 8.75 years
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 the Committee's
approval. Similarly, in February 1997, in order to reincentivize its
employees after a
-12-
<PAGE>
restructuring in January 1997, the Board of Directors approved an option
exchange for all employees holding options with an exercise price in excess
of $1.3125 entitling each such employee to cancel their outstanding options
in exchange for new options with an exercise price of $1.3125 per share,
the fair market value of the Company's stock on the date of Board approval.
In both the April 1996 and February 1997 repricings, 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, 1997 were met in a timely manner by executive officers,
Board members and greater than ten percent (10%) stockholders.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
El Dorado Ventures is entitled to certain registration rights with
respect to the Company's Common Stock owned by it. See "Common Stock Ownership
of Certain Beneficial Owners and Management."
The Company's Certificate of Incorporation limits the liability of
directors to the maximum extent permitted by the Delaware General Corporation
Law. The Company's Bylaws also provide that the Company shall indemnify its
directors, officers, employees and agents in such circumstances. In addition,
the Company has entered into indemnification agreements with its officers and
directors.
-13-
<PAGE>
COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
<TABLE>
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
December 17, 1997 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, and (iv) all current directors and
executive officers as a group.
<CAPTION>
Name and Address,
if Required, of Shares Percent of Shares
Beneficial Owner Beneficially Owned (1)(2) Beneficially Owned (1)(2)
---------------- ------------------------- -------------------------
<S> <C> <C>
El Dorado Ventures and affiliated entities (3)............ 1,322,061 19.9%
20300 Stevens Creek Boulevard
Suite 395
Cupertino, CA 95014
Junaid Sheikh (4)......................................... 997,619 14.8%
1490 O'Brien Drive
Menlo Park, CA 94025
AWM Investment Company and affiliates (5) ................ 742,100 11.2%
153 East 53rd Street, 51st Floor
New York, NY 10022
Lance E. Kelson (6)....................................... 270,780 4.1%
Ian Craven (7)............................................ 133,781 2.0%
Cal R. Hoagland (8)....................................... 70,000 1.0%
Paul G. Hansil (9)........................................ 138,333 2.0%
Donald G. Petersen (10)................................... 77,916 1.2%
Lionel M. Allan (11)...................................... 66,222 *
Thomas E. Fanella (12).................................... 10,000 *
David A. Lahar............................................ 0 *
Robert L. Wilson (13)..................................... 156,214 2.2%
All executive officers and directors as a group
(8 persons) (14)...................................... 1,629,985 22.5%
<FN>
- ----------
* Less than one percent (1%).
(1) Except as indicated in the footnotes to this table and pursuant to
applicable community property laws, the Company believes that persons named
in the table have sole voting and investment power with respect to all
shares of Common Stock held by such person.
-14-
<PAGE>
(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 December 17, 1997. 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) Reflects share ownership as of December 23, 1997, based on the Company's
records. Includes 73,621 shares of Common Stock owned by El Dorado
Technology II, L.P.; 13,050 shares of Common Stock owned by El Dorado C&L
Fund, L.P.; 7,281 shares of Common Stock owned by El Dorado Technology IV,
L.P.; 571,138 shares of Common Stock owned by El Dorado Ventures; and
656,971 shares of Common Stock owned by El Dorado Ventures III, L.P. Such
information is based upon the Company's knowledge after investigation, but
without independent confirmation from such entities.
(4) Includes 87,286 shares issuable upon currently exercisable options held by
Mr. Sheikh, 42,499 of which shares are currently subject to a repurchase
right of the Company. Also includes 910,333 shares owned indirectly by Mr.
Sheikh and Mr. Sheikh's wife as Trustees of the Sheikh Revocable Trust.
(5) Such shares are beneficially owned by AWM Investment Company ("AWM") and
Austin W. Marxe, the primary owner of and the President and Chief Executive
Officer of AWM. Austin W. Marxe is principally responsible for the
selection, acquisition and disposition of the portfolio securities by AWM.
Such information is based upon the Company's knowledge after investigation,
but without independent confirmation from AWM or Mr. Marxe.
(6) Includes 33,125 shares issuable upon currently exercisable options held by
Mr. Kelson, 29,875 of which shares are currently subject to a repurchase
right of the Company.
(7) Includes 58,125 shares issuable upon currently exercisable options held by
Mr. Craven, 53,875 of which shares are currently subject to a repurchase
right of the Company.
(8) Represents 70,000 shares issuable upon currently exercisable options held
by Mr. Hoagland, all of which shares are currently subject to a repurchase
right of the Company.
(9) Represents shares issuable upon currently exercisable options held by Mr.
Hansil, 89,500 of which shares are currently subject to a repurchase right
of the Company.
(10) Represents 77,916 shares issuable upon currently exercisable options held
by Mr. Petersen, 60,332 of which shares are subject to a repurchase right
of the Company.
(11) Includes 53,350 shares issuable upon currently exercisable options held by
Mr. Allan, 23,749 of which shares are subject to a repurchase right of the
Company. Also includes 12,456 shares owned indirectly by Mr. Allan as the
beneficiary of the Allan Advisors, Inc. Profit Sharing Plan FBO Lionel M.
Allan.
(12) Represents shares issuable upon currently exercisable options held by Mr.
Fanella, all of which shares are currently subject to a repurchase right of
the Company.
(13) Includes 136,314 shares issuable upon currently exercisable options held by
Mr. Wilson, none of which are subject to a repurchase right of the Company.
Also includes 1,000 shares held by Mr. Wilson's wife.
(14) Includes 641,124 shares issuable upon currently exercisable options. See
Footnotes (4), (6) - (13).
</FN>
</TABLE>
-15-
<PAGE>
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 21, 1998. Such proposals may be included in next
year's Proxy Statement if they comply with certain rules and regulations
promulgated by the Commission.
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, 1997.
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 CAL
HOAGLAND, VICE PRESIDENT, FINANCE, AND CHIEF FINANCIAL OFFICER AT ACCOM, INC.,
1490 O'BRIEN DRIVE, MENLO PARK, CALIFORNIA 94025, OR TELEPHONED TO (650)
328-3818.
By Order of the Board of Directors,
William W. Ericson
Secretary
Dated: January 19, 1998
-16-
<PAGE>
Appendix A
PROXY
ACCOM, INC.
Annual Meeting of Stockholders, February 17, 1998
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 17, 1998
and the Proxy Statement and appoints Junaid Sheikh and Cal R. Hoagland, 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 17, 1998 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 personnaly
present thereat. The shares represented by this Proxy shall be voted in the
following matter:
1. To elect the following directors to serve until the next annual meeting of
stockholders and until their successors are elected and qualified:
[ ] FOR all the nominees listed below (except as indicated).
[ ] WITHHOLD authority to vote for all nominees listed below.
If you wish to withhold authority to vote for any individual nominee, strike a
line through that nominee's name in the list below:
JUNAID SHEIKH, LIONEL M. ALLAN, THOMAS E. FANELLA, DAVID A. LAHAR
2. To ratify the Board of Directors' selection of Ernst & Young LLP to serve
as the Company's independent auditors for the fiscal year ending September
30, 1998.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued and to be signed on reverse side)
<PAGE>
(Continued from other side)
3. To transact such other business as may properly come before the Annual
Meeting or any adjournment or postponement thereof.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
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: __________________________________
