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¨ | Preliminary Proxy Statement |
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T | Definitive Proxy Statement |
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¨ | Soliciting Material Pursuant to § 240.14a-12 |
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Electing |
Considering and voting upon a proposal to ratify Freed Maxick & Battaglia, CPAs PC as the Company’s independent registered public accountants for the fiscal year ending December 31, |
Transacting such other business as may properly come before the meeting. |
Stockholders
Important Notice Regarding theInternet Availability of Proxy Materials for thewhich contains specific instructions on how to access Annual Meeting of Stockholdersmaterials via the Internet, as well as instructions on how to be held on May 28, 2009. This communication presents only an overview of the more completerequest paper copies. We believe this process should provide a convenient way to access your proxy materials that are available to you on the internet. We encourage you to access and review all of the important information contained in the proxy materials before voting.vote. The Company’s Annual Report on Form 10-K for fiscal year ended December 31, 20082009 (the “Annual Report”) and the proxy statement, along with any amendments to the foregoing materials that are required to be furnished to stockholders, are available online atwww.amstock.com/proxyservices/viewmaterial.asp?CoNumber=11989.11989. If you want to receive a paper or email copy of these documents, you must request one. There is no charge to you for requesting a copy. Please make your request for a copy as instructed below on or before May 18, 2009,28, 2010, to facilitate timely delivery.
You may request a copy of the Proxy Statement, Annual Report, and form of proxy relating to all of the future stockholder meetings and for this particular meeting to which the proxy materials being furnished related by either calling 1-800-574-1639 toll free, emailingsendmaterials@proxyvote.com, or submitting a request online atwww.proxyvote.com. If requesting materials by email send a blank email with the 12-digit control number provided.
Registered holders may vote:
By | ||
Robert Fagenson | ||
Chairman of the |
Beneficial Stockholders: If your shares are held in the name of a broker, bank or other holder of record, follow the voting instructions you receive from the holder of record to vote your shares.
Voting in any of these ways will not prevent you from attending or voting your shares at the meeting. Any proxy may be revoked at any time prior to its exercise at the Annual Meeting of Stockholders.
By Order of the Board of Directors
Rochester, New York
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we are sending these proxy materials directly to you. As the stockholder of record, you have the right to direct the voting of your shares by returning the enclosed proxy card to us or to vote in person at the annual meeting. Whether or not you plan to attend the annual meeting, please complete, date and sign the enclosed proxy card to ensure that your vote is counted.
— | as you instruct, and |
— | according to the best judgment of the proxies if a proposal comes up for a vote at the annual meeting that is not on the proxy card. |
If you return a signed card, but do not provide voting instructions, your shares will be voted:
If you return a signed card, but do not provide voting instructions, your shares will be voted: |
— | for the |
— | to approve the ratification of the Company’s independent registered public accountants for the fiscal year ending December 31, |
— | according to the best judgment of either Mr. Wicker or Mr. White, if a proposal comes up for a vote at the annual meeting that is not on the proxy card. |
— | sending a written notice to the Secretary of the Company stating that you would like to revoke your proxy of a particular date; |
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— | signing another proxy card with a later date and returning it before the polls close at the annual meeting; or |
— | attending the annual meeting and voting in person. |
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(1) | FOR the election of the persons named herein as nominees for directors of the Company, for a term expiring at the |
(2) | FOR ratification of Freed Maxick & Battaglia, CPAs, PC as the Company’s independent registered public accountants for the year ending December 31, |
(3) | According to their judgment, on the transaction of such other business as may properly come before the meeting or any adjournments thereof. |
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![]() | ![]() | ![]() | ||||||
Name | Common Stock Owned | Percentage of Outstanding Common Stock Owned(1) | ||||||
Patrick White c/o Document Security Systems 28 Main St. East, Suite 1525 Rochester, NY 14614 | 831,600 | (2) | 5.7 | % | ||||
Vera Neuman c/o Document Security Systems 28 Main St. East, Suite 1525 Rochester, NY 14614 | 1,000,000 | (3) | 6.9 | % | ||||
Robert B. Fagenson c/o Document Security Systems 28 Main St. East, Suite 1525 Rochester, NY 14614 | 1,045,500 | (4) | 7.2 | % | ||||
Martin Vegh c/o Document Security Systems 28 Main St. East, Suite 1525 Rochester, NY 14614 | 1,000,000 | (5) | 6.9 | % |
Percentage of Outstanding | ||||||||
Name | Common Stock Owned | Common Stock Owned (1) | ||||||
Robert B. Fagenson | 1,029,000 | (2) | 5.8 | % | ||||
c/o Document Security Systems | ||||||||
28 Main St. East, Suite 1525 | ||||||||
Rochester, NY 14614 | ||||||||
Martin Vegh | 1,000,000 | (3) | 5.6 | % | ||||
c/o Document Security Systems | ||||||||
28 Main St. East, Suite 1525 | ||||||||
Rochester, NY 14614 |
(1) | The calculations for these columns are based upon |
(2) | Includes |
Based solely on a Schedule 13G filed by Martin Vegh, filed September 17, 2002, Martin Vegh has sole voting and disposition power over the shares. |
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![]() | ![]() | ![]() | ||||||
Name | Common Stock Owned | Percentage of Outstanding Common Stock Owned(1) | ||||||
Patrick White | 831,600 | (2) | 5.7% | |||||
David Wicker | 201,500 | (3) | 1.4% | |||||
Philip Jones | 90,000 | (4) | Less than 1% | |||||
Timothy Ashman | 29,100 | (5) | Less than 1% | |||||
Robert B. Fagenson | 1,045,500 | (6) | 7.2% | |||||
Ira A. Greenstein | 36,500 | (7) | Less than 1% | |||||
Alan E. Harrison | 30,000 | (8) | Less than 1% | |||||
All Executive Officers and Directors (7 persons) as a Group | 2,264,200 | (9) | 15.3% |
Percentage of Outstanding | ||||||||
Name | Common Stock Owned | Common Stock Owned (1) | ||||||
Patrick White | 801,600 | 4.5 | % | |||||
David Wicker | 248,166 | (2) | 1.4 | % | ||||
Philip Jones | 112,333 | (3) | Less than 1 | % | ||||
Timothy Ashman | 34,100 | (4) | Less than 1 | % | ||||
Robert B. Fagenson | 1,029,000 | (5) | 5.8 | % | ||||
Ira A. Greenstein | 39,000 | (6) | Less than 1 | % | ||||
Alan E. Harrison | 40,000 | (7) | Less than 1 | % | ||||
Robert Bzdick | 735,437 | 4.1 | % | |||||
All Executive Officers and Directors (8 persons) as a Group | 3,039,636 | (8) | 16.8 | % |
(1) | The calculations for these columns are based upon the number of shares of Common Stock issued and outstanding on April |
(2) | Includes |
(3) | Includes |
Includes |
Includes |
Includes |
Includes 30,000 shares of common stock issuable upon the exercise of stock options exercisable within 60 days. |
Includes all shares of common stock and common stock issuable upon the exercise of stock options exercisable within 60 days held by the persons listed in the table above. |
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As of December 31, 2008, the Company had outstanding $450,000 under the White Credit Agreement, $1,833,000 under the Fagenson Credit Agreement. These amounts were each the largest amount of debt owed under the respective agreements in the fiscal year ending December 31, 2008. No amount of principal was paid under either agreement.
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![]() | ![]() | ![]() | ||
Name | Age | Positions | ||
Robert B. Fagenson | Chairman of the Board of Directors | |||
Patrick White | Chief Executive Officer and Director | |||
David Wicker | Vice President of Operations and Director | |||
Robert B. Bzdick | 55 | President, Chief Operating Officer and Director | ||
Timothy Ashman | Director | |||
Ira A. Greenstein | Director | |||
Alan E. Harrison | Director |
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Currently, Mr. Harrison is Sales Manager at United Business Systems.
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![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) | Option Awards(1) ($) | Non-Equity Incentive Plan Compensation ($) | Total ($) | |||||||||||||||
(a) | (b) | (c) | (d) | (e) | (h) | |||||||||||||||
Timothy Ashman | 12,000 | — | 22,140 | — | 34,140 | |||||||||||||||
Robert B Fagenson | 12,000 | — | 22,140 | — | 34,140 | |||||||||||||||
Ira A. Greenstein | 12,000 | — | 22,140 | — | 34,140 | |||||||||||||||
Alan E. Harrison | 12,000 | — | 24,600 | — | 36,600 |
Name | Fees Earned or Paid in Cash | Stock Awards | Option Awards (1) | Non-Equity Incentive Plan Compensation | Total | |||||||||||||||
($) | ($) | ($) | ($) | ($) | ||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (h) | |||||||||||||||
Timothy Ashman | 12,000 | - | 7,000 | - | 19,000 | |||||||||||||||
Robert B Fagenson | 3,500 | - | 7,000 | - | 10,500 | |||||||||||||||
Ira A. Greenstein | 12,000 | - | 7,000 | - | 19,000 | |||||||||||||||
Alan E. Harrison | 12,000 | - | 7,000 | - | 19,000 |
(1) |
The Board of Directors held 13 meetings in fiscal 2008.
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Resources Committee. The Company’sCompany's CEO should not attend any portion of a meeting where the CEO’sCEO's performance or compensation is discussed, unless specifically invited by the Compensation and Management Resources Committee.
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![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||||||||
Name and Principal Position | Year | Salary $ | Bonus $ | Stock Awards $ | Option Awards $(2) | All Other Compensation $(1) | Total $ | |||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (i) | (j) | |||||||||||||||||||||
Patrick White, Chief Executive Officer | 2008 | 199,650 | — | — | 8,700 | 30,435 | 238,785 | |||||||||||||||||||||
2007 | 199,650 | — | — | 17,664 | 217,314 | |||||||||||||||||||||||
Philip Jones Vice President of Finance and Treasurer | 2008 | 120,000 | — | — | 38,900 | — | 158,900 | |||||||||||||||||||||
2007 | 112,461 | — | — | 45,750 | 4,488 | 162,699 | ||||||||||||||||||||||
Peter Ettinger(3) President | 2008 | 72,250 | — | 269,250 | — | — | 341,500 | |||||||||||||||||||||
2007 | 176,538 | — | 179,500 | 81,280 | 8,082 | 445,400 |
Name and Principal Position | Year | Salary | Bonus | Stock Awards | Option Awards | All Other Compen- sation | Total | |||||||||||||||||||
($) | ($) | ($) | ($) | ($) | ($) | |||||||||||||||||||||
(2) | (1) | |||||||||||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | (i) | (j) | |||||||||||||||||||
Patrick White, Chief Executive Officer | 2009 | 200,129 | - | - | - | 35,190 | 235,319 | |||||||||||||||||||
2008 | 199,650 | - | - | - | 30,435 | 230,085 | ||||||||||||||||||||
Philip Jones Chief Financial Officer | 2009 | 113,100 | - | - | 20,500 | - | 133,600 | |||||||||||||||||||
2008 | 120,000 | - | - | - | - | 120,000 | ||||||||||||||||||||
Peter Ettinger (3) | ||||||||||||||||||||||||||
President | 2009 | - | - | - | - | - | - | |||||||||||||||||||
2008 | 72,250 | - | 212,000 | - | - | 284,250 |
(1) | The All Other Compensation column represents the value perquisites for interest payments on notes provided by Executive to the Company, |
(2) |
(3) | In May 2008, the Company entered into a Separation Agreement with |
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salary increase in 2008, and 2009 and agreed to a reduction in his base salary effective February 1, 2009 from $241,395 to $217,256. Mr. White agreed to a further salary reduction from $217,256 to $200,000 effective June 10, 2009 through June 10, 2010. The original term of the Agreement expires June 4, 2009. The Agreement provides for successive automatic one year renewal terms, provided that neither party gives notice of termination within sixty (60) days of the end of the then current term of the Agreement. AsThe original term of April 10, 2009, no such notice was given by either party. As a result, the Agreement willexpired June 4, 2009 but was automatically renewrenewed for a one (1) year term ending June 9, 2010 unless renewed again in accordance with its terms. The parties have agreed to forego the base salary increase to which Mr. White would otherwise be entitled effective January 1, 2010.
![]() | ![]() | ![]() | ||||||
Name | Change in Control ($) | Severance ($) | ||||||
Patrick White | $ | 299,475 | $ | 299,475 | ||||
Philip Jones | 312,500 | (1) | — |
Name | Change in Control | Severance | ||||||
($) | ($) | |||||||
Patrick White | $ | 299,475 | $ | 299,475 | ||||
Philip Jones | 312,500 | (1) | - |
(1) | Amount based on grant date fair value of 25,000 shares of restricted stock that vest only upon a change in control of the Company or certain other material events to the Company. |
Name | Grant Date | All Other Option Awards: | Exercise or Base Price of Option Awards | Grant Date | |||||||||||
(a) | (b) | Number of Shares Underlying Options | ($/Sh) | Fair Value of Stock and Option Awards | |||||||||||
(#) | (k) | ($) | |||||||||||||
(j) | (l) | ||||||||||||||
Philip Jones | 2/12/2009 | 50,000 | 4.00 | $ | 0.41 |
![]() | ![]() | ![]() | ![]() | ![]() | ![]() | |||||||||||||||
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Un-exercisable | Number of Securities Underlying Unearned Equity Awards (#) | Option Exercise Price ($) | Option Expiration Date | |||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | |||||||||||||||
Patrick White | 30,000 | — | — | 6.00 | 6/10/2009 | |||||||||||||||
Philip Jones | 30,000 | — | — | 6.00 | 7/14/2010 | |||||||||||||||
12,500 | 12,500 | (1) | — | 6.00 | 5/2/2012 | |||||||||||||||
25,000 | (2) | |||||||||||||||||||
Peter Ettinger | 40,000 | 10.19 | 11/1/2009 |
Name | Number of Securities Underlying Unexercised Options | Number of Securities Underlying Unexercised Options | Number of Securities Underlying Unearned Equity Awards | Option Exercise Price | Option Expiration Date | ||||||||||||
(#) | (#) | (#) | ($) | ||||||||||||||
Exercisable | Un-exercisable | ||||||||||||||||
(a) | (b) | (c) | (d) | (e) | (f) | ||||||||||||
Philip Jones | 30,000 | - | - | 6.00 | 7/14/2010 | ||||||||||||
25,000 | - | 6.00 | 5/2/2012 | ||||||||||||||
50,000 | (1) | 4.00 | 2/11/2014 | ||||||||||||||
25,000 | (2) |
(1) | Vest pro-ratably on |
(2) |
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![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||
![]() | ![]() | ![]() | ![]() | ![]() | ||||||||||||
Plan Category | Restricted Stock to Be Issued Upon Vesting | Number of Securities to Be Issued Upon Exercise of Outstanding Options, Warrants and Rights | Weighted Average Exercise Price of Outstanding Options, Warrants and Rights | Number of Securities Remaining Available for Future Issuance (Under Equity Compensation Plans (Excluding Securities Reflected in Column (a & b)) | ||||||||||||
(a) | (b) | (c) | (d) | |||||||||||||
Equity compensation plans approved by security holders | ||||||||||||||||
2004 Employee Stock Option Plan | 327,781 | 663,500 | $ | 7.27 | 603,127 | |||||||||||
2004 Non-Executive Director Plan | 115,750 | 7.99 | 84,250 | |||||||||||||
Equity compensation plans not approved by security holders | ||||||||||||||||
Contractual warrant grants for services | 161,760 | 12.61 | — | |||||||||||||
Total | 327,781 | 941,010 | $ | 8.28 | 687,377 |
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Restricted stock to be issued upon vesting | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance (under equity compensation Plans (excluding securities reflected in column (a & b)) | |||||||||||||
Plan Category | (a) | (b) | (c) | (d) | ||||||||||||
Equity compensation plans approved by security holders | ||||||||||||||||
2004 Employee Stock Option Plan | 85,000 | 639,000 | $ | 6.29 | 840,981 | |||||||||||
2004 Non-Executive Director Plan | 132,000 | 6.74 | 68,000 | |||||||||||||
Equity compensation plans not approved by security holders | ||||||||||||||||
Contractual warrant grants for services | 411,760 | 6.17 | - | |||||||||||||
Total | 85,000 | 1,182,760 | $ | 6.30 | 908,981 |
2010
2010.
2010.
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By Order of the Board of Directors | |
Robert Fagenson | |
Chairman of the Board |
I | Election of Directors |
FOR all Nominees listed below (except as marked to the contrary below) | WITHHOLD AUTHORITY to vote for all nominees listed below |
Patrick White | David Wicker | Robert B. Bzdick | |||
Timothy Ashman | Robert B. Fagenson | Ira A. Greenstein | Alan E. Harrison |
Dated: ______________________, 2010 | |
_______________________________ | |
Signature |
_______________________________ | |
Print Name |
Robert FagensonChairman ofDirectors. Please sign and return in the Board
Rochester, New Yorkenclosed envelope
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