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
[ ] Confidential, for Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Soliciting Material Pursuant to Section 240.14a-11(c)
or Section 240.14a-12
EDT LEARNING, INC.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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EDT LEARNING, INC.
2999 NORTH 44TH STREET, SUITE, 650
PHOENIX, ARIZONA
July 25, 2002
TO THE STOCKHOLDERS OF EDT LEARNING, INC.
You are cordially invited to attend the 2002 Annual Meeting of Stockholders (the
"Meeting") of EDT Learning, Inc. (the "Company"), to be held on August 16, 2002,
at 9:00 a.m., local time, at the Company's offices, 2999 North 44th Street,
Suite 650, Phoenix, Arizona 85018.
Please read the enclosed 2002 Annual Report to Stockholders and Proxy Statement
for the Meeting. Whether or not you plan to attend the Meeting, please sign,
date and return the proxy card in the enclosed envelope to Continental Stock
Transfer & Trust Company as soon as possible so that your vote will be recorded.
If you attend the Meeting having already returned the proxy card, you may
withdraw your proxy and vote your shares in person. Since we are a small public
company, we urge you to take the time to return your proxy card.
Very truly yours,
By: /s/ James M. Powers, Jr.
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Name: James M. Powers Jr.
Title: Chairman of the Board and
Chief Executive Officer
EDT LEARNING, INC.
2999 NORTH 44TH STREET, SUITE 650
PHOENIX, ARIZONA
NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS
TO BE HELD AUGUST 16, 2002
TO OUR STOCKHOLDERS:
The 2002 Annual Meeting of Stockholders (the "Meeting") of EDT Learning, Inc., a
Delaware corporation ("EDT" or the "Company"), will be held on August 16, 2002
at 9:00 a.m., local time, at the Company's offices, 2999 North 44th Street,
Suite 650, Phoenix, Arizona 85018, for the following purposes:
(1) to elect two Class A directors to serve for a term of three years or until
their successors are duly elected and qualified;
(2) to consider and vote for a proposal to approve and ratify the appointment
of PricewaterhouseCoopers LLP, as the Company's independent accountants for
the fiscal year ending March 31, 2003; and,
(3) to consider such other matters as may properly come before the Meeting and
at any and all adjournments thereof.
Only stockholders of record at the close of business on July 1, 2002 are
entitled to notice of and to vote at the Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
s/ James M. Powers, Jr.
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Name: James M. Powers Jr.
Title: Chairman of the Board and
Chief Executive Officer
Phoenix, Arizona
July 25, 2002
A PROXY CARD IS ENCLOSED. YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU
OWN. TO ASSURE THAT YOUR SHARES WILL BE VOTED AT THE MEETING, PLEASE COMPLETE
AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED, POSTAGE
PREPAID, ADDRESSED ENVELOPE TO CONTINENTAL STOCK TRANSFER & TRUST COMPANY. NO
ADDITIONAL POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES. RETURNING YOUR
PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND THE MEETING.
EDT LEARNING, INC.
2999 NORTH 44TH STREET, SUITE 650
PHOENIX, ARIZONA
PROXY STATEMENT
GENERAL INFORMATION
The enclosed proxy is solicited by and on behalf of the Board of Directors of
EDT Learning, Inc., ("EDT" or the "Company"), for use at the Company's 2002
Annual Meeting of Stockholders (the "Meeting" or the "Annual Meeting") to be
held at 9:00 a.m., local time, on August 16, 2002, at 2999 North 44th Street,
Suite 650, Phoenix, Arizona 85018, and at any and all adjournments thereof. This
Proxy Statement and the accompanying form of proxy are first being mailed or
given to the stockholders of the Company on or about July 25, 2002.
The Company is mailing its 2002 Annual Report to Stockholders, including
consolidated financial statements, simultaneously with this Proxy Statement to
all stockholders of record as of the close of business on July 1, 2002. That
report does not constitute a part of this proxy solicitation material.
INFORMATION CONCERNING SOLICITATION AND VOTING
All voting rights are vested exclusively in the holders of the Company's common
stock, par value $0.001 per share. Each share of the Company's common stock is
entitled to one vote. Cumulative voting in the election of directors is not
permitted. Holders of a majority of shares entitled to vote at the Meeting, when
present in person or by proxy constitute a quorum. On July 1, 2002, the record
date for stockholders entitled to vote at the Meeting, 16,634,096 shares of the
Company's common stock were issued and outstanding.
Proxies in the enclosed form will be effective if properly executed and returned
prior to the Meeting in the enclosed envelope either to Continental Stock
Transfer & Trust Company, Proxy Department, 2 Broadway, New York, New York
10275-0491 or the Company at 2999 N. 44th Street, Suite 650, Phoenix, AZ 85018.
The Company's common stock represented by each effective proxy will be voted at
the Meeting in accordance with the instruction on the proxy. If no instructions
are indicated on a proxy, all common stock represented by such proxy will be
voted (a) FOR election of the two nominees named in the proxy as Class A
directors; (b) FOR approval and ratification of the appointment of
PricewaterhouseCoopers LLP as the Company's independent accountants for the
fiscal year 2003; and (c) as to any other matters of business which properly
come before the Meeting, by the named proxies at their discretion.
Any stockholder signing and mailing the enclosed proxy may revoke it at any time
before it is voted by giving written notice of the revocation to the Company, by
voting in person at the Meeting or by filing at the Meeting a later executed
proxy.
When a quorum is present, in the election of directors, the nominees having the
highest number of votes cast in favor of their election will be elected to the
Company's Board of Directors. With respect to the proposal to ratify the
appointment of PricewaterhouseCoopers LLP as the Company's independent
accountants for the fiscal year 2003, the affirmative vote of a majority of the
shares present or represented by proxy at the meeting is required. With respect
to any other matter which may properly come before the Meeting, unless a greater
number of votes is required by law or by the Company's restated certificate of
incorporation, a matter will be approved by the stockholders if the votes cast
in favor of the matter exceed the votes cast in opposition.
Abstentions, broker non-votes (i.e., shares held by brokers or nominees as to
which the broker or nominee indicates on a proxy that it does not have
discretionary authority to vote) and any other shares not voted will be treated
as shares that are present and entitled to vote for purposes of determining the
presence of a quorum. Broker non-votes and abstentions which may be specified on
the proposal to ratify the appointment of PricewaterhouseCoopers LLP as the
Company's independent accountants for the fiscal year 2003, will have the same
effect as a vote against that proposal. For purposes of determining the outcome
of the election of the directors, or of any other matter which properly may come
before the Meeting, abstentions, broker non-votes will not be considered as
votes cast for the matter. Thus, abstentions and broker non-votes will have no
impact in the election of the two Class A directors, or any other matter which
properly may come before the Meeting so long as a quorum is present.
The Company will pay the cost of soliciting proxies in the accompanying form.
The Company has retained the services of Continental Stock Transfer & Trust
Company to assist in distributing proxy materials to brokerage houses, banks,
custodians and other nominee holders. The estimated cost of such services is
approximately $1,000 plus out-of-pocket expenses. Although there are no formal
agreements to do so, proxies may be solicited by officers and other regular
employees of the Company by telephone, telegraph or by personal interview for
which employees will not receive additional compensation. Arrangements also may
be made with brokerage houses and other custodians, nominees and fiduciaries to
forward solicitation materials to beneficial owners of the shares held of record
by such persons, and the Company may reimburse such persons for reasonable
out-of-pocket expenses incurred by them in so doing.
PROPOSAL ONE: ELECTION OF DIRECTORS
GENERAL
The Company's restated certificate of incorporation provides for the
classification of the Company's Board of Directors into three classes. The term
of office of the Class A directors expires at this Annual Meeting; the term of
office of the Class B directors expires at the Company's 2003 Annual Meeting of
Stockholders and the term of office of the Class C directors expires at the
Company's 2004 Annual Meeting of Stockholders. Two Class A nominees are proposed
to be elected at this Annual Meeting to serve for a three-year term to last
until the 2005 Annual Meeting of Stockholders or until their successors are duly
elected and have been qualified. The directors whose term will expire at this
Annual Meeting have been nominated for re-election as Class A directors.
Nominees for Class A directors will be elected by a plurality of the votes cast,
assuming a quorum is present at the Annual Meeting. Accordingly, abstentions and
broker non-votes will have no effect on the election of directors.
Proxies cannot be voted for a greater number of persons than the number of
nominees named therein. Unless authority to vote is withheld, the persons named
in the enclosed form of proxy will vote the shares represented by such proxy for
the election of the nominees for director named below. If, at the time of the
Meeting, any of the nominees shall have become unavailable for any reason for
election as a director, the persons entitled to vote the proxy will vote for
such substitute nominee, if any, as they determine in their discretion.
Management is currently unaware of any circumstances likely to render any of the
nominees unavailable for election or unable to serve.
NOMINEES FOR ELECTION AT THE ANNUAL MEETING
The Board of Directors unanimously recommends that the stockholders vote FOR
election of the following nominees as Class A directors of the Company.
DIRECTOR
NAME AGE POSITION SINCE
---- --- -------- -----
James M. Powers, Jr. 46 Chairman of the Board, 1998
President and Chief
Executive Officer
Preston A. Zuckerman 56 Director 2001
CONTINUING DIRECTORS
The persons named below will continue to serve as directors of the Company until
the annual meeting of stockholders in the year indicated below and until their
successors are elected and take office. Stockholders are not voting on the
election of the Class B and Class C directors. The following table shows the
names, ages and positions of each continuing director.
DIRECTOR
NAME AGE POSITION CLASS - TERM SINCE
---- --- -------- ------------ -----
James H. Collins 55 Director Class B - Expires 2003 2000
David A. Little, D.D.S. 44 Director Class B - Expires 2003 1999
Daniel T. Robinson, Jr. 41 Director Class B - Expires 2003 2000
George M. Siegel 64 Director Class C - Expires 2004 1998
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The following table sets forth certain information concerning EDT's directors
and nominees to become a director (ages are as of March 31, 2002):
NAME AGE POSITION
---- --- --------
James M. Powers, Jr. 46 Chairman of the Board, President
and Chief Executive Officer and
Director Nominee
James H. Collins 55 Director
David A. Little, D.D.S. 44 Director
Daniel T. Robinson, Jr. 41 Director
George M. Siegel 64 Director
Preston A. Zuckerman 56 Current Director and Director Nominee
JAMES M. POWERS, JR. has served as Chairman, President and CEO of the Company
since December 1998. Dr. Powers guided the Company through its initial growth
and acquisition phase and subsequent transformation from a dental practice
management company to a leading provider of e-Learning solutions. Dr. Powers
joined the Company through the merger with Liberty Dental Alliance, Inc., a
Nashville based company where he was the founder, Chairman and President from
1997 to 1998. Dr. Powers was a founder and Chairman of Clearidge, Inc., a
privately held bottled water company in Nashville, Tennessee from 1993 to 1999.
Dr. Powers led Clearidge through 13 acquisitions over three years to become one
of the largest, independent bottlers in the Southeast. Dr. Powers also is a
founder and Director of Barnhill's Country Buffet, Inc., a chain of 43
restaurants in the Southeast. He received a Doctor of Dental Surgery Degree from
The University of Tennessee and received his MBA from Vanderbilt University's
Owen Graduate School of Management.
JAMES H. COLLINS has served as a corporate executive in financial/operational
management for over fifteen years completing seven corporate
turnarounds/restructurings and five start-ups, and as an investment banker for
ten years in the public/private capital markets and five years with an
international accounting firm. Mr. Collins is Chairman and CEO of Vindrauga
Corporation, a private equity and financial services firm. From 1998 until 2000,
Mr. Collins served as President, COO, CFO and Director of Scripps Clinic, La
Jolla, California. Additionally, since 1997, Mr. Collins has served as Chairman
and CEO of All Post, Inc., a postproduction company and Cinetech, Inc., a film
restoration and preservation company. Industry experience includes technology,
consumer electronics, financial services, healthcare, food products, real
estate, construction, entertainment and gaming. He serves as a Director of The
John Tracy Clinic, a non-profit organization serving hearing-impaired children
worldwide. Mr. Collins is a Certified Public Accountant and a NASD General
Securities Principal. He received his B.S. and M.B.A. degrees from the
University of Southern California.
DAVID A. LITTLE, D.D.S. has been engaged in the private practice of dentistry in
San Antonio, Texas since 1984 and is president of David A. Little, D.D.S., P.C.,
one of the Company's affiliated practices. Dr. Little is a member of the
American Dental Association, the Texas Dental Association, the Academy of
General Dentistry, and the American Academy of Cosmetic Dentistry. Dr. Little is
a Fellow in both the American College of Dentists and the International College
of Dentists. He frequently lectures to dentists and their staffs on various
aspects of dental practice management as well as cosmetic, restorative and
implant dentistry. Dr. Little received his B.A. degree from St. Mary's
University and his Doctor of Dental Surgery from the University of Texas Health
Science Center Dental School in 1984.
DANIEL T. ROBINSON, JR. has served as an attorney with The Bogatin Law Firm, PLC
in Memphis, Tennessee from 2000 to the present, and has been engaged as an
investor and principal advisor in private ventures since 1995. He currently is
an owner, officer and director in several closely held businesses. Mr. Robinson
also serves as the Chief Manager of several limited liability companies that are
principal investors and advisors in private equity projects. In addition to his
work as an attorney focusing on mergers and acquisitions, Mr. Robinson has been
engaged in merchant banking, software development and the foodservice
industries. Mr. Robinson holds a B.B.A. in finance, and an M.B.A. and J.D. from
the University of Memphis. He is a member of the Tennessee Bar Association.
GEORGE M. SIEGEL is the founder and President of RideAmerica Transportation
Group, Inc. Until recently, he served as Chairman of the Board of Directors of
BrightStar Information Technology Group, Inc. since its inception. BrightStar is
a public company (NASDAQ:BTSR.OB) of which he is a co-founder. He also served as
Chairman of the Board of BrightStar's Singapore Joint Venture. Mr. Siegel is a
co-founder and Director of EDT Learning, Inc. In 1995 Mr. Siegel co-founded
MindWorks Professional Education Group, Inc. In 1990 he founded Parcelway
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Courier Systems, Inc., publicly traded under Dynamex (AMEX:DDN) and served as
its President and Chief Executive Officer until 1995. Mr. Siegel received his
B.S. in Business Administration and Marketing from Roosevelt University,
Chicago, Illinois.
PRESTON A. ZUCKERMAN assumed the role of Senior Vice President and Chief
e-Learning Architect for the Company in September, 2001 when EDT acquired
Learning-Edge, Inc. Mr. Zuckerman founded Learning-Edge in 1988 as one of the
first custom e-Learning development companies in the U.S. He served as its CEO
and Chief e-Learning Architect from that time. He has been a leader in the
training and communication fields for many years, and Learning-Edge received
numerous awards for its work. Prior to founding Learning-Edge, he spent 16 years
directing the training and publications departments for Four-Phase Systems
(currently Motorola Computer Group) and ITT Corporation. During that period, he
successfully introduced criterion-referenced, self-paced, and media-based
instruction within both organizations. Mr. Zuckerman started his career as a
Computer Specialist and Instructor in the U.S. Navy where he served for seven
years.
PROPOSAL TWO: APPROVAL AND RATIFICATION OF INDEPENDENT ACCOUNTANTS
The Audit Committee of the Board of Directors has selected the firm of
PricewaterhouseCoopers LLP as independent accountants of the Company for the
fiscal year ended March 31, 2003, subject to the approval and ratification of
the Company's stockholders. The Board of Directors unanimously recommends that
stockholders vote to approve and ratify the appointment of
PricewaterhouseCoopers LLP as the Company's independent accountants for the
fiscal year 2003. PricewaterhouseCoopers LLP has served as the independent
accountants of the Company since the Company's formation in February of 1997.
Representatives of PricewaterhouseCoopers LLP are expected to be present at the
Meeting, will have an opportunity to make a statement if they desire, and will
be available to respond to appropriate questions.
THE AFFIRMATIVE VOTE OF THE HOLDERS OF A MAJORITY OF THE SHARES PRESENT OR
REPRESENTED AT THE MEETING AND ENTITLED TO VOTE IS NEEDED TO RATIFY THE
APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS INDEPENDENT ACCOUNTANTS OF THE
COMPANY FOR THE FISCAL YEAR 2003. IF THE APPOINTMENT IS NOT APPROVED, THE MATTER
WILL BE REFERRED TO THE AUDIT COMMITTEE FOR FURTHER REVIEW. THE BOARD OF
DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" RATIFICATION OF THE
APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY'S INDEPENDENT
ACCOUNTANTS FOR THE FISCAL YEAR 2003.
PricewaterhouseCoopers LLP are the principal accountants of the Company.
PricewaterhouseCoopers LLP also provides tax advice to the Company. The Audit
Committee of the Board of Directors has considered whether the provision of
non-audit services is compatible with maintaining PricewaterhouseCoopers LLP's
independence.
AUDIT FEES
PricewaterhouseCoopers LLP billed the Company and its subsidiaries approximately
$162,000 for the following professional services: audit of the annual financial
statements of the Company for the fiscal year ended March 31, 2002, and review
of the interim financial statements included in quarterly reports on Form 10-Q
for the periods ended June 30, September 30, and December 31, 2001. Subsequent
to the filing of the 2001 Proxy Statement, Pricewaterhouse Coopers, LLP billed
the Company and its subsidiaries $30,000 for professional services related to
the audit of the annual financial statements of the Company for the fiscal year
ended March 31, 2001.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
The Company did not engage PricewaterhouseCoopers LLP to provide services to the
Company regarding financial information systems design and implementation during
the fiscal year ended March 31, 2002.
ALL OTHER FEES
PricewaterhouseCoopers LLP billed the Company and its subsidiaries approximately
$124,000 for other services for the fiscal year ended March 31, 2002 primarily
for work on the Company's acquisitions of Learning-Edge, Inc. and ThoughtWare
Technologies, Inc. and the related required filing with the Securities and
Exchange Commission (the "SEC").
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table shows, as of May 31, 2002, the "beneficial ownership" of the
EDT common stock of (i) each director and nominee to become a director, (ii)
each executive officer, (iii) all executive officers and directors of EDT as a
group and (iv) each person who owns more than 5% of the outstanding common
stock. Except as otherwise indicated, the address of each person in the table is
c/o EDT Learning, Inc., 2999 N. 44th Street, Suite 650, Phoenix, Arizona 85018.
PERCENT(1) NUMBER
---------- ------
James M. Powers, Jr. 10.3% 1,542,152 (2)
Preston A. Zuckerman 10.5% 1,477,536 (3)
Charles Sanders 2.1% 303,958 (4)
James L. Dunn, Jr. 1.0% 147,983 (5)
George M. Siegel * 129,180 (6)
David A. Little * 102,307 (7)
James H. Collins * 65,000 (8)
Daniel T. Robinson, Jr. * 49,215 (9)
Barry Blank 13.9% 2,262,400 (10)
Renaissance Capital Growth & Income Fund III, Inc. 6.8% 1,031,600 (11), (12), (13)
Renaissance US Growth and Income Trust PLC 6.6% 1,000,000 (11), (12), (13)
BFS US Special Opportunities Trust PLC 7.9% 1,200,000 (11), (12), (13)
ALL EXECUTIVE OFFICERS AND DIRECTORS AS A GROUP (EIGHT PERSONS) 24.9% 3,817,331
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* LESS THAN 1%
(1) CALCULATIONS ARE MADE IN ACCORDANCE WITH SECURITIES EXCHANGE ACT RULE
13D-3.
(2) INCLUDES 280,573 SHARES THAT MAY BE ACQUIRED UPON THE EXERCISE OF STOCK
OPTIONS AND 10,857 SHARES THAT MAY BE ACQUIRED UPON THE CONVERSION OF A
CONVERTIBLE PROMISSORY NOTE. INCLUDES A RESTRICTED STOCK AWARD FOR 450,000
SHARES ACQUIRED AS A PART OF A STOCK GRANT UNDER THE 1997 STOCK
COMPENSATION PLAN. THE AWARD HAS A TERM OF TEN YEARS AND PROVIDES FOR
VESTING OF 150,000 OF THOSE SHARES IF THE COMPANY'S STOCK PRICE EXCEEDS
$4.50 PER SHARE, 150,000 IF THE COMPANY'S STOCK PRICE EXCEEDS $8.50 PER
SHARE, AND THE REMAINING 150,000 IF THE COMPANY'S STOCK PRICE EXCEEDS
$12.50 PER SHARE. ALSO INCLUDES A TOTAL OF 100,000 SHARES THAT MAY BE
ISSUED ON EXERCISE OF WARRANTS OR CONVERSION OF CONVERTIBLE NOTES HELD BY
DR. POWERS AND AN IRA FOR THE BENEFIT OF DR. POWERS' WIFE.
(3) INCLUDES 6,250 SHARES THAT MAY BE ACQUIRED UPON THE EXERCISE OF STOCK
OPTIONS THAT SHALL VEST ON OR BEFORE JULY 30, 2002.
(4) INCLUDES 103,658 SHARES THAT MAY BE ACQUIRED UPON THE EXERCISE OF STOCK
OPTIONS THAT SHALL VEST ON OR BEFORE JULY 30, 2002.
(5) INCLUDES 94,958 SHARES THAT MAY BE ACQUIRED UPON THE EXERCISE OF STOCK
OPTIONS THAT SHALL VEST ON OR BEFORE JULY 30, 2002.
(6) INCLUDES 7,500 SHARES THAT MAY BE ACQUIRED UPON THE EXERCISE OF STOCK
OPTIONS THAT SHALL VEST ON OR BEFORE JULY 30, 2002.
(7) INCLUDES 2,500 SHARES THAT MAY BE ACQUIRED UPON THE EXERCISE OF STOCK
OPTIONS THAT SHALL VEST ON OR BEFORE JULY 30, 2002 AND A TOTAL OF 50,000
SHARES THAT MAY BE ISSUED ON EXERCISE OF WARRANTS AND CONVERSION OF A
CONVERTIBLE NOTE.
(8) INCLUDES 5,000 SHARES THAT MAY BE ACQUIRED UPON THE EXERCISE OF STOCK
OPTIONS THAT SHALL VEST ON OR BEFORE JULY 30, 2002 AND A TOTAL OF 50,000
SHARES THAT MAY BE ISSUED ON EXERCISE OF WARRANTS AND CONVERSION OF A
CONVERTIBLE NOTE HELD FOR THE BENEFIT OF HIS DAUGHTER.
(9) INCLUDES 5,000 SHARES THAT MAY BE ACQUIRED UPON THE EXERCISE OF STOCK
OPTIONS THAT SHALL VEST ON OR BEFORE JULY 30, 2002 AND A TOTAL OF 25,000
SHARES THAT MAY BE ISSUED ON EXERCISE OF WARRANTS AND CONVERSION OF A
CONVERTIBLE NOTE.
(10) MR. BLANK'S ADDRESS IS C/O MURPHY & DURIEU, 1661 EAST CAMELBACK ROAD, SUITE
201, PHOENIX, ARIZONA 86016. INCLUDES 1,000,000 SHARES THAT MAY BE ISSUED
ON EXERCISE OF WARRANTS AND 1,000,000 SHARES THAT MAY BE ISSUED UPON
CONVERSION OF CONVERTIBLE NOTES. ALSO INCLUDES 190,000 SHARES THAT MAY BE
ISSUED ON EXERCISE OF WARRANTS RECEIVED AS COMMISSION IN HIS CAPACITY AS AN
AFFILIATE OF THE PLACEMENT AGENT, MURPHY & DURIEU. DOES NOT INCLUDE AN
AGGREGATE 200,000 SHARES THAT MAY BE ISSUED ON EXERCISE OF WARRANTS AND
CONVERSION OF CONVERTIBLE NOTES HELD BY HIS MOTHER AND DAUGHTER, WITH
RESPECT TO WHICH MR. BLANK DISCLAIMS BENEFICIAL OWNERSHIP.
(11) THE ADDRESS OF EACH OF THESE ENTITIES IS 8080 NORTH CENTRAL EXPRESSWAY,
SUITE 210-LB 59, DALLAS, TX 75206-1857.
(12) INCLUDES 500,000 SHARES THAT MAY BE ISSUED ON EXERCISE OF WARRANTS AND
500,000 SHARES THAT MAY BE ISSUED UPON CONVERSION OF CONVERTIBLE NOTES.
(13) NUMBERS ARE BASED ON A SCHEDULE 13D DATED MARCH 29, 2002 FILED JOINTLY BY
THESE ENTITIES.
-5-
There has been no change in control of the Company since the beginning of its
last fiscal year, and there are no arrangements known to the Company, including
any pledge of securities of the Company, the operation of which may at a
subsequent date result in a change in control of the Company.
BOARD ORGANIZATION AND MEETINGS
During the fiscal year 2002, the Board of Directors of the Company (the "Board")
held four (4) regular meetings and two (2) special called meetings and acted by
unanimous written consent on three (3) occasions.
The Board has an Audit Committee, a Compensation Committee and a Nominating
Committee each of which was initially constituted on March 30, 1998. During the
fiscal year 2002, each director attended at least seventy-five percent (75%) of
the aggregate of the total number of Board meetings and of meetings of
committees of the Board on which he served. The members of the Audit and
Compensation Committees are not employees of the Company.
AUDIT COMMITTEE
The Audit Committee recommends the independent public accountants to be selected
by the Board for stockholder approval each year and acts on behalf of the Board
in reviewing with the independent public accountants, the chief financial
officer and other corporate officers, various matters relating to the adequacy
of the Company's accounting policies and procedures and financial controls and
the scope of the annual audits by the independent public accountants. The Audit
Committee consists of Mr. Collins (Chairman), Mr. Siegel and Mr. Robinson.
During the fiscal year 2002, the Audit Committee held four (4) meetings. The
Audit Committee operates under a written charter adopted by the Board of
Directors. The members of the Audit Committee are independent within the meaning
of Section 121(A) of the American Stock Exchange's listing standards.
COMPENSATION COMMITTEE
The Compensation Committee is authorized to establish the general compensation
policy for the officers and directors of the Company and annually reviews and
establishes or makes recommendations to the entire Board regarding officers'
salaries and participation in benefit plans, prepares reports required by the
SEC and approves the directors' compensation. The Compensation Committee
consists of Mr. Siegel (Chairman), and Mr. Collins. During the fiscal year 2002,
the Compensation Committee held six (6) meetings.
NOMINATING COMMITTEE
The Nominating Committee is authorized to develop policies on the size and
composition of the Board and criteria relating to candidate selection, propose
to the Board a slate of director nominees for election at annual meetings of
stockholders, propose candidates to fill vacancies on the Board; and, recommend
board members to serve on the various committees of the Board. The members of
the Nominating Committee are Dr. Powers (Chairman), Mr. Robinson and Dr. Little.
During the fiscal year 2002, the Nominating Committee held one (1) meeting.
DIRECTOR COMPENSATION
Directors who are employees of EDT do not receive additional compensation for
serving as directors. Each director who is not an employee of EDT receives a fee
of $1,500 for attendance at each Board meeting and $750 for each committee
meeting (unless held on the same day as a Board meeting). All directors of EDT
are reimbursed for out-of-pocket expenses incurred in attending meetings of the
Board or committees thereof, and for other expenses incurred in their capacity
as directors of EDT. In addition, under the Company's 1997 Stock Compensation
Plan (the "Stock Plan"), each such director has been granted nonqualified
options to purchase 10,000 shares of EDT common stock. In addition, each newly
elected nonemployee director automatically will be granted nonqualified options
to purchase 10,000 shares of EDT common stock on the date that the person first
becomes a nonemployee director of the Company. Thereafter, each nonemployee
director automatically will be granted nonqualified options to purchase 15,000
shares of EDT common stock on the date of the Company's annual meeting of
stockholders. Each option will have an exercise price per share equal to the
fair market value of the Company's common stock on the date of grant. All the
options granted to the nonemployee directors have a term of ten years, and
become exercisable as to follows: one half on the first anniversary of the date
of grant and one half on the second anniversary of the date of grant.
-6-
EXECUTIVE COMPENSATION
The following table sets forth each component of compensation paid or awarded
to, or earned by, each person who served as Chief Executive Officer of EDT
during the fiscal year ended March 31, 2002, the two other most highly
compensated executive officers serving as of March 31, 2002 whose aggregate cash
compensation exceeded $100,000 during the fiscal year 2002 and one former
executive officer of the Company who would have been one of the four most highly
compensated executive officers had such officer been serving as such at the end
of the Company's last fiscal year (collectively, the "Named Executive Officers")
for the fiscal years indicated. There were no other highly compensated executive
officers whose aggregate cash compensation exceeded $100,000 during the fiscal
year 2002.
RESTRICTED SECURITIES
OTHER STOCK UNDERLYING ALL OTHER
NAME AND PRINCIPAL FISCAL SALARY BONUS COMPENSATION AWARDS OPTIONS COMPENSATION
POSITION YEAR $ $ $ ($) (#) ($)*
- ------------------ ------ ------ ----- ------------ ---------- ---------- ------------
James M. Powers, Jr. (1) 2002 225,372 39,375 179,000 405,000(2) 30,000 9,000
Chairman of the Board 2001 205,776 -- 23,742 180,156 9,000
President and Chief 2000 199,999 -- 52,773 105,000 6,000
Executive Officer
Charles Sanders 2002 175,314 21,875 -- 20,000 --
Sr. Vice President, 2001 175,000 -- -- 45,000 --
Chief Financial
Officer and Chief
Operating Officer
James L. Dunn, Jr. 2002 150,257 21,094 -- 20,000 --
Sr. Vice President, 2001 147,780 -- -- 85,000 --
General Counsel and 2000 125,624 -- 1,557 35,000 --
Chief Development
Officer
Glenn J. Bonagura 2002 106,607 -- -- 2,400
Former Sr. Vice 2001 145,032 -- -- 120,000 5,100
President of Marketing
- ----------
(1) THE AMOUNT SET FORTH AS OTHER COMPENSATION IN FISCAL YEARS 2001 AND 2000
REPRESENTS THE EXPENSES PAID BY EDT IN CONNECTION WITH THE NAMED EXECUTIVE
OFFICER'S RELOCATION TO PHOENIX, ARIZONA AND THE PAYMENT OF TAXES
ASSOCIATED WITH A LOAN BY THE COMPANY. THE AMOUNT SET FORTH AS OTHER
COMPENSATION IN FISCAL YEAR 2000 REPRESENTS A LOAN TO THEEXECUTIVE OFFICER
RELATED TO THE FEDERAL INCOME TAX CONSEQUENCES OF A RESTRICTED SHARES
GRANT.
(2) IN DECEMBER 2001 THE BOARD, BASED ON THE RECOMMENDATION OF THE COMPENSATION
COMMITTEE, APPROVED THE GRANT TO THE COMPANY'S CHIEF EXECUTIVE OFFICER OF
450,000 RESTRICTED SHARES OF COMMON STOCK. THE SHARES VEST IN FULL ON THE
TENTH ANNIVERSARY OF THE DATE OF GRANT. VESTING ACCELERATES BASED ON THE
TRADING PRICE FOR THE COMPANY'S COMMON STOCK AS FOLLOWS:
PERFORMANCE CRITERIA SHARES VESTED
-------------------- -------------
SHARE PRICE TRADES FOR $5.50 PER SHARE FOR 20 CONSECUTIVE DAYS 150,000 SHARES
SHARE PRICE TRADES FOR $8.50 PER SHARE FOR 20 CONSECUTIVE DAYS 150,000 SHARES
SHARE PRICE TRADES FOR $12.50 PER SHARE FOR 20 CONSECUTIVE DAYS 150,000 SHARES
THE $405,000 REFLECTS THE MARKET PRICE OF THE COMMON STOCK AT THE DATE OF
GRANT. AT MARCH 31, 2002, 450,000 UNVESTED RESTRICTED SHARES REMAINED
OUTSTANDING. BASED ON THE MARKET PRICE OF $1.00 PER COMMON SHARE ON MARCH
31, 2002, THE RESTRICTED SHARES HAD A VALUE OF $450,000. THE COMPANY'S
CHIEF EXECUTIVE OFFICER HAS THE RIGHT TO VOTE THE RESTRICTED SHARES. THE
RESTRICTED SHARES SHARE IN DIVIDENDS ON THE COMPANY'S COMMON STOCK TO THE
EXTENT ANY DIVIDENDS ARE DECLARED BY THE BOARD.
* THE RULES CALL FOR A FOOTNOTE EXPLAINING WHAT "ALL OTHER COMPENSATION" IS
COMPRISED OF. (SEE ITEM 402 OF REGULATION S-K.)
-7-
OPTION GRANTS
The following table provides information on stock option grants to the Named
Executive Officers in the fiscal year ended March 31, 2002 under the Stock Plan.
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
NUMBER OF
SECURITIES
UNDERLYING
OPTIONS % OF TOTAL
GRANTED OPTIONS GRANTED GRANT PRESENT
DURING TO EMPLOYEES IN EXERCISE PRICE EXPIRATION VALUE
FISCAL YEAR FISCAL YEAR ($/SH.) DATE ($)(3)
----------- ----------- ------- ---- ------
James M. Powers, Jr. 7,500(1) 1.5% .50 8/2/11 2,558
22,500(2) 4.4% .50 8/2/11 7,673
Charles Sanders 5,000(1) 1.0% .50 8/2/11 1,705
15,000(2) 2.9% .50 8/2/11 5,115
James L. Dunn, Jr. 5,000(1) 1.0% .50 8/2/11 1,705
15,000(2) 2.9% .50 8/2/11 5,115
Glenn J. Bonagura -- -- -- --
- ----------
(1) VESTED 100% ON APRIL 1, 2002.
(2) VEST MONTHLY OVER THREE (3) YEARS IN 1/36 INCREMENTS BEGINNING MAY 1, 2002.
(3) CALCULATED USING THE FOLLOWING WEIGHTED-AVERAGE ASSUMPTIONS: DIVIDEND YIELD
OF 0%, EXPECTED VOLATILITY OF 75%, RISK-FREE INTEREST RATE OF 3.87% AND
EXPECTED LIFE OF SIX (6) YEARS.
-8-
The following table sets forth certain information with respect to unexercised
options to purchase EDT common stock held by the Named Executive Officers at
March 31, 2002. (None of the Named Executive Officers exercised options in the
fiscal year 2002.)
YEAR-END 2002 OPTION VALUES
NUMBER OF SHARES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN THE MONEY
OPTIONS HELD AT OPTIONS HELD AT
MARCH 31, 2002 MARCH 31, 2002
EXERCISABLE UNEXERCISABLE EXERCISABLE (1) UNEXERCISABLE (1)
----------- ------------- --------------- -----------------
James M. Powers, Jr. 236,198 229,375 $35,391 $69,688
Charles Sanders 68,958 121,042 $ 9,479 $23,021
James L. Dunn, Jr. 74,625 98,708 $16,979 $35,521
Glenn J. Bonagura -- -- -- --
- ----------
(1) VALUE OF UNEXERCISED IN-THE-MONEY OPTIONS IS CALCULATED BASED UPON THE
DIFFERENCE, IF ANY, BETWEEN THE OPTION EXERCISE PRICE AND THE CLOSING PRICE
OF THE COMMON STOCK AT YEAR-END, MULTIPLIED BY THE NUMBER OF SHARES
UNDERLYING THE OPTIONS. THE CLOSING PRICE PER SHARE OF EDT COMMON STOCK AS
REPORTED ON THE AMEX ON MARCH 31, 2002 WAS $1.00. THE EXERCISE PRICES FOR
THE OPTIONS PREVIOUSLY GRANTED TO THE NAMED EXECUTIVE OFFICERS RANGE FROM
$0.50 TO $8.50 PER SHARE.
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with Dr. Powers, Mr. Sanders,
Mr. Dunn and Mr. Zuckerman. Each of these agreements provides for an annual base
salary in an amount not less than the initial specified amount and entitles the
employee to participate in all EDT's compensation plans in which other executive
officers of EDT participate. Dr. Powers' original employment agreement provided
that he serve as the Chairman, President and Chief Executive Officer of EDT for
a term of two years commencing on November 13, 1998. Dr. Powers' subsequent
employment agreement, effective on November 12, 2000, provides an annual base
salary of $225,000 per annum, has a continuous two-year term and is subject to
the right of EDT to terminate his employment at any time. Mr. Sanders' current
agreement, executed on February 15, 2001, has a continuous two-year term with an
annual base salary of $175,000 and is subject to the right of EDT to terminate
his employment at any time. Mr. Dunn's current agreement, executed on February
15, 2001, has a continuous two-year term with an annual base salary of $150,000
and is subject to the right of EDT to terminate his employment at any time. Mr.
Zuckerman's current agreement, effective on September 12, 2001, has a continuous
three-year term with an annual base salary of $150,000 and is subject to the
right of EDT to terminate his employment at any time. Dr. Powers, Mr. Sanders,
Mr. Dunn and Mr. Zuckerman are eligible to receive an annual cash bonus in
accordance with the Company's bonus plan, which provides for a bonus of up to
35%, 25% and 25% respectively of base salary. For purposes of determining the
applicable year's earnings per share change, the cash bonuses payable under all
other employment agreements between EDT and its officers will be taken into
account.
Under each of the referenced employment agreements, if EDT terminates the
employee's employment without cause (as therein defined), Dr. Powers, Mr.
Sanders, Mr. Dunn and Mr. Zuckerman will be entitled to a payment equal to 12
months' salary. Additionally, Dr. Powers, Mr. Sanders, Mr. Dunn, and Mr.
Zuckerman's employment agreements provide for a severance payment equal to one
(1) year's compensation in the event of termination of employment following a
change in control of the Company (as defined therein). Each of the foregoing
agreements also contains a covenant limiting competition with EDT for one year
following termination of employment.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No executive officer of the Company currently serves as a member of the board of
directors or compensation committee of any entity that has one or more executive
officers serving as a member of the Board of directors or as an executive
officer of the Company. See "Director and Executive Compensation" and "Certain
Transactions" for a description of any transactions between the Company and
members of the Board of directors.
-9-
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
OVERVIEW
The Compensation Committee is responsible for establishing a general
compensation policy for officers and employees of the Company, preparing any
reports that may be required relating to officer compensation and approving any
increases in director's fees. The Compensation Committee consists of Mr. Siegel,
and Mr. Collins. In the fiscal year 2002, the Compensation Committee approved,
or in some cases recommended to the Board for the Board's approval, remuneration
arrangements and compensation plans involving the Company's directors, executive
officers and certain other employees whose compensation exceeds specified
levels. The Compensation Committee also acts on the granting of stock options to
executive officers under the Stock Plan.
The Company's executive compensation program has been designed to assist the
Company in attracting, motivating and retaining the executive talent necessary
for the Company to maximize its return to stockholders. To this end, this
program provides competitive compensation levels and incentive pay levels that
vary based on corporate and individual performance.
The Company's compensation program for executives consists of three key
elements: a base salary; a performance-based annual bonus; and periodic grants
of stock options.
The Compensation Committee believes that this three-part approach best serves
the interests of the Company and its stockholders. It enables the Company to
meet the requirements of the highly competitive environment in which the Company
operates while ensuring that executive officers are compensated in a way that
advances both the short-term and long-term interests of its stockholders. Under
this approach, compensation for these officers involves a high proportion of pay
that is dependent on maximizing long-term returns to stockholders. The annual
bonus payable for the fiscal year 2003 will depend on the Company's operational
performance in the fiscal year 2003.
BASE SALARY
Base pay is designed to be competitive with salary levels for comparable
executive positions at other companies and the Compensation Committee reviews
such comparable salary information as one factor to be considered in determining
the base pay for the Company's executive officers. Other factors the
Compensation Committee considers in determining base pay for each of the
executive officers are that officer's responsibilities, experience, leadership,
potential future contribution and demonstrated individual performance. The
Company has employment agreements with its Chief Executive Officer, the other
Named Executive Officers in the Summary Compensation Table and certain of its
other officers. These agreements provide for minimum base annual salaries the
Company may increase, but cannot decrease. Any increases in these base salaries,
the base salaries of the Company's other executive officers and any changes in
those salaries will be based on recommendations by the Company's Chief Executive
Officer, taking into account such factors as competitive industry salaries, a
subjective assessment of the nature of the position and the contribution and
experience of the officer. Performance for base salary purposes will be assessed
on a qualitative, rather than a quantitative, basis. No specific performance
formula or weighting of factors will be used in determining base salary levels.
ANNUAL BONUS
For the fiscal year 2002, the Company determined that it was their preference to
compensate the executive officers both with cash bonuses and in the form of
long-term, equity-based compensation through the award of stock options. The
Compensation Committee expects to base future annual bonuses on the Company's
financial performance and the individual performance of the awardees, and
intends to use qualitative, rather than quantitative, factors for this purpose.
STOCK PLAN
The objectives of the Stock Plan are to (i) attract and retain superior
personnel for positions of substantial responsibility and (ii) provide
employees, nonemployee directors and advisors with an additional incentive to
contribute to the success of the Company.
Stock options align the interests of employees and stockholders by providing
value to option holders through stock price appreciation only. The Compensation
Committee expects that it will make future stock option or other long-term
equity-based incentive awards periodically at its discretion based on
recommendations of the Chief Executive Officer. Stock option grant sizes, in
general, will be evaluated by regularly assessing competitive market practices,
the overall performance of the Company the, size of previous grants and the
-10-
number of options held. In addition, the Compensation Committee may consider
factors including that executive's current ownership stake in the Company, the
degree to which increasing that ownership stake would provide the executive with
additional incentives for future performance, the likelihood that the grant of
those options would encourage the executive to remain with the Company and the
value of the executive's service to the Company. This posture with regard to
stock options is intended to focus management's efforts on maximizing
stockholder returns. The number of options granted to a particular participant
will also be based on the Company's historical financial success, its future
business plans and the individual's position and level of responsibility within
the Company, but these factors will be assessed subjectively and not weighted.
FISCAL YEAR 2002 CHIEF EXECUTIVE OFFICER PAY
As described above, the Compensation Committee considers several factors in
developing an executive compensation package. For the Chief Executive Officer,
these factors will include competitive market pay practices, performance level,
experience, contributions toward achievement of strategic goals and the overall
financial and operations success of the Company.
The Company entered into an initial employment agreement with Dr. Powers, the
Company's Chief Executive Officer, in November 1998. The Company entered into a
subsequent employment with Dr. Powers in November 2000 upon expiration of the
initial agreement. That agreement has a continuous two-year term at an initial
base compensation rate of $225,000 per annum. Dr. Powers is eligible to receive
an annual cash bonus in an amount up to 35% of his base salary upon achievement
of certain performance targets. In August 2001, the Compensation Committee
approved the grant to Dr. Powers of options to purchase a total of 30,000 shares
of common stock at a price of $0.50 per share. Options to purchase 7,500 shares
vested April 1, 2002. Options to purchase the remaining 22,500 shares vest in 36
equal monthly increments beginning May 1, 2002. In December 2001, the Board,
based on the recommendation of the Compensation Committee, approved the grant to
Dr. Powers of 450,000 restricted shares of common stock. The shares vest in
their entirety on the tenth anniversary of the date of grant. Vesting
accelerates based on the trading price of the Company's common stock as follows:
PERFORMANCE CRITERIA SHARES VESTED
-------------------- -------------
SHARE PRICE TRADES FOR $5.50 PER SHARE FOR 20 CONSECUTIVE DAYS 150,000 SHARES
SHARE PRICE TRADES FOR $8.50 PER SHARE FOR 20 CONSECUTIVE DAYS 150,000 SHARES
SHARE PRICE TRADES FOR $12.50 PER SHARE FOR 20 CONSECUTIVE DAYS 150,000 SHARES
The purpose of the foregoing grants was to align Dr. Powers' interest with those
of the Company's stockholders. The Compensation Committee believes the terms of
this agreement and the foregoing option award and restricted share grant were
appropriate. Executive compensation is an evolving field. The Compensation
Committee monitors trends in this area, as well as changes in law, regulation
and accounting practices, that may affect either its compensation practices or
its philosophy. Accordingly, the Committee reserves the right to alter its
approach in response to changing conditions. This report will not be deemed
incorporated by reference by any general statement incorporating this Proxy
Statement by reference into any filing under the Securities Act of 1933, as
amended (the "Securities Act"), or under the Exchange Act of 1934, as amended
(the "Exchange Act") and will not be deemed filed under either of such statutes
except to the extent that the Company specifically incorporates this information
by reference. The Compensation Committee:
George M. Siegel, Chairman
James H. Collins
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In March 2002 in connection with a private placement conducted by the Company,
Dr. Powers, an IRA for the benefit of Dr. Powers' wife and Dr. Powers' father
purchased for a total purchase price of $100,000, $100,000 in aggregate
principal amount of the Company's convertible subordinated notes and warrants to
purchase an aggregate of 100,000 shares of the Company's common stock. These
purchases were made on the same basis available to other investors in the
private placement.
In December 2001 in connection with the grant of restricted shares of common
stock to Dr. Powers, the Company loaned to Dr. Powers $179,000 related to
federal income tax liability incurred by Dr. Powers in connection with the
restricted shares grant. The entire principal balance of the loan remains
outstanding. The loan bears interest at the rate of 5.62% per annum. All
principal and accrued, but unpaid interest shall be due and payable on April 12,
2012. No interim payments on principal or interest are required. The loan and
-11-
the obligations arising thereunder are secured by a first lien security interest
in and to the 450,000 shares of EDT's common stock granted to Dr. Powers in his
Restricted Stock Award Agreement dated December 3, 2001.
PERFORMANCE GRAPH
The following line graph compares the percentage change from date of public
offering (March 30, 1998) through March 31, 2002 for (i) the EDT common stock,
(ii) a peer group (the "Peer Group") of companies selected by the Company that
are e-Learning companies located in the United States, (iii) the AMEX Composite
Index and (iv) a peer group of companies engaged in EDT's former business,
dental practice management (the "Old Peer Group"). The companies in the Peer
Group are Click2Learn, Digital Think, Docent, Learn2, Mentergy, Saba Software,
Skillsoft, and Smart Force. The companies in the Old Peer Group are
predominately dental management companies located in the United States. The
companies in the Old Peer Group are Interdent, Inc., Castle Dental Centers,
Inc., Coast Dental Services Inc. and Monarch Dental Corp.
THE FOLLOWING TABLE WAS REPRESENTED BY A LINE GRAPH IN THE PRINTED MATERIAL
Comparison of Total Returns*
March 30, March 31, March 31, March 31, March 31, March 31,
Description 1998 1998 1999 2000 2001 2002
- ----------- --------- --------- --------- --------- --------- ---------
EDT, Inc. $100 $103 $ 20 $ 18 $ 5 $ 12
AMEX Composite Index $100 $101 $ 96 $136 $119 $127
Peer Group $100 $100 $ 48 $213 $117 $ 77
Old Peer Group $100 $ 97 $ 38 $ 23 $ 3 $ 10
* Total return based on $100 initial investment. The graph is presented in
accordance with SEC requirements. Stockholders are cautioned against drawing any
conclusions from the data contained therein, as past results are not necessarily
indicative of future financial performance. The total return on investment for
the period shown for the Company, the AMEX Composite Index and the Peer Group is
based on the stock price or composite index at March 30, 1998. The performance
graph appearing above will not be deemed incorporated by reference by any
general statement incorporating this Proxy Statement by reference into any
filing under the Securities Act, or under the Exchange Act and will not be
deemed filed under either of those Acts except to the extent that the Company
specifically incorporates this information by reference.
-12-
REPORT OF THE AUDIT COMMITTEE
OF THE BOARD OF DIRECTORS
The Audit Committee hereby reports as follows:
1. The Audit Committee has reviewed and discussed the audited financial
statements with the Company's management.
2. The Audit Committee has discussed with PricewaterhouseCoopers LLP, the
Company's independent accountants, the matters required to be
discussed by SAS 61 (Communication with Audit Committees).
3. The Audit Committee has received the written disclosures and the
letter from PricewaterhouseCoopers LLP required by Independence
Standards Board Standard No. 1 (Independence Discussions with Audit
Committees), and has discussed with PricewaterhouseCoopers LLP their
independence.
4. Based on the review and discussion referred to in paragraphs (1)
through (3) above, the Audit Committee recommended to the Board, and
the Board has approved, that the audited financial statements be
included in the Company's Annual Report on Form 10-K for the fiscal
year ended March 31, 2002, for filing with the SEC.
James H. Collins, Chairman
Daniel T. Robinson, Jr.
George Seigel
SECTION 16 REPORTS
Section 16(a) of the Exchange Act requires directors, executive officers and
beneficial owners of more than 10% of the outstanding shares of the Company to
file with the SEC reports regarding changes in their beneficial ownership of
shares in the Company. There were no beneficial owners of EDT, Inc. at March 31,
2002 with more than 10% ownership.
Based solely on a review of the copies of such reports furnished to the Company
and written representations that no other reports were required, the Company
believes that all its directors and executive officers during the fiscal year
2002 complied on a timely basis with all applicable filing requirements under
Section 16(a) of the Exchange Act.
STOCKHOLDER PROPOSALS
Under the rules of the SEC, Stockholder proposals for inclusion in the Company's
proxy materials relating to the next annual meeting of stockholders must be
received by the Company on or before March 18, 2003.
In addition, a stockholder may bring business before the 2003 annual meting or
may submit nominations for election as a director at that meeting if the
stockholder complies with the requirements specified in EDT's bylaws. The
requirements include: (i) providing written notice to EDT's principal executive
offices at least 90 and not more than 180 days prior to the annual meeting or
the corresponding date for the 2002 Annual Meeting; and (ii) supplying the
additional information listed in Article II, Section 11 of EDT's bylaws (in the
case of stockholder proposes) and Article II, Section 12 of EDT's Bylaws in the
case of director nominations).
2002 ANNUAL REPORT ON FORM 10-K
THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED MARCH 31, 2002 WAS
FILED ELECTRONICALLY WITH THE SEC. STOCKHOLDERS WHO WISH TO OBTAIN, WITHOUT
CHARGE, A COPY OF THE COMPANY'S ANNUAL REPORT (WITHOUT EXHIBITS) ON FORM 10-K
SHOULD ADDRESS A WRITTEN REQUEST TO CHARLES SANDERS, SENIOR VICE PRESIDENT -
CHIEF FINANCIAL OFFICER, EDT LEARNING, INC., 2999 N. 44TH STREET, SUITE 650,
PHOENIX, ARIZONA, 85018. THE COMPANY WILL PROVIDE COPIES OF THE EXHIBITS TO THE
FORM 10-K UPON PAYMENT OF A REASONABLE FEE.
-13-
OTHER BUSINESS
As of the date of this Proxy Statement, management was not aware of any business
not described above would be presented for consideration at the Meeting. If any
other business properly comes before the Meeting, it is intended that the shares
represented by proxies will be voted in respect thereto in accordance with the
judgment of the persons voting them.
The above Notice and Proxy Statement are sent by order of the Board.
/s/ Charles Sanders
- --------------------------------------------
Charles Sanders
Sr. Vice President - Chief Financial Officer
Phoenix, Arizona
-14-
EDT LEARNING, INC.
2999 NORTH 44TH STREET, SUITE 650
PHOENIX, ARIZONA
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD AUGUST 16, 2002
The undersigned hereby appoints James M. Powers, Jr. and James L. Dunn, Jr., or
either of them, proxies for the undersigned, each with full power of
substitution, to vote all shares of Common Stock of EDT Learning, Inc. which the
undersigned is entitled to vote, at the Annual Meeting of Stockholders (the
"Meeting") to be held on August 16, 2002, at 9:00 a.m., local time, at the
Company's offices, 2999 N. 44th Street, Suite 650, Phoenix, Arizona 85018 and at
any and all adjournments thereof for the following purposes:
(1) Election of Class A Directors:
[ ] FOR the nominees listed below (except as marked to the contrary below)
[ ] WITHHOLD AUTHORITY to vote for the nominees listed below
Nominees: James M. Powers, Jr. and Preston A. Zuckerman
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THE NOMINEE'S NAME ON THE LINE IMMEDIATELY BELOW.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(2) Approval and Ratification of the Appointment of PricewaterhouseCoopers LLP
as the Company's Independent Accountants for Fiscal 2003.
[ ] FOR
[ ] AGAINST
[ ] ABSTAIN
(3) In their discretion, the proxies are authorized to vote upon such other
business as properly may come before the Meeting.
[ ] FOR
[ ] AGAINST
[ ] ABSTAIN
-15-
PLEASE DATE AND SIGN ON REVERSE SIDE.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER(S). IF NO DIRECTION IS INDICATED, THE SHARES
REPRESENTED BY THIS PROXY WILL BE VOTED AT THE MEETING "FOR" ELECTION OF THE
NOMINEES FOR DIRECTOR AS SELECTED BY THE BOARD OF DIRECTORS AND "FOR" APPROVAL
AND RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP, AS THE
COMPANY'S INDEPENDENT ACCOUNTANTS.
The undersigned hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders and the Proxy Statement furnished therewith. The undersigned hereby
revokes any proxies given prior to the date reflected below.
-----------------------
Date
---------------------------------------
Signature(s) of stockholders(s)
Please complete, date and sign exactly as your name appears
herein. If shares are held jointly, each holder should sign.
When signing as attorney, executor, administrator, trustee,
guardian or corporate official, please add your title.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. PLEASE SIGN AND
RETURN THIS PROXY IN THE ENCLOSED, SELF-ADDRESSED ENVELOPE TO CONTINENTAL STOCK
TRANSFER & TRUST COMPANY AS AGENT FOR THE COMPANY. THE GIVING OF A PROXY WILL
NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND THE MEETING.
-16-