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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
|X| Preliminary proxy statement |_| Confidential, for Use of the
Commission Only
|_| Definitive proxy statement (as permitted by Rule 14a-6(e)(2))
|_| Definitive additional materials
|_| Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
ACCESSITY CORP.
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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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction 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:
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ACCESSITY CORP.
12514 WEST ATLANTIC BLVD
CORAL SPRINGS, FLORIDA 33071
NOVEMBER 17, 2003
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
Accessity Corp. to be held at 10:30 A.M. Florida time on December 15, 2003, at
the Coral Springs Marriott Hotel, Golf Club and Convention Center, 11775 Heron
Bay Boulevard, Coral Springs, FL 33076
At the annual meeting, our shareholders will be voting on proposals to do
the following:
o to elect Barry Siegel as a member of our Board of Directors;
o To approve the grant of discretionary authority to Accessity's Board
of Directors to amend Accessity's Certificate of Incorporation to
effect a reverse stock split of Accessity's common stock equal to a
ratio no greater than one-for-five;
o to ratify our Board of Directors' selection of Nussbaum Yates &
Wolpow, P.C. to audit our financial statements for the fiscal year
ending December 31, 2003; and
o to transact such other business as may properly come before the annual
meeting and any one or more adjournments thereof.
These proposals are more fully described in the enclosed proxy statement.
OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE IN FAVOR OF EACH OF
THEM.
To ensure that you are represented at the annual meeting, whether or not
you plan to attend, please read carefully the enclosed proxy statement, which
describes the matters to be voted upon, and COMPLETE, SIGN, DATE THE ENCLOSED
PROXY CARD AND RETURN IT AS SOON AS POSSIBLE IN THE ACCOMPANYING POSTAGE-PREPAID
RETURN ENVELOPE. If you receive more than one proxy card because your shares are
registered in different names or with addresses, please return each of them to
ensure that all your shares are voted. If you hold your shares in street name
and decide to attend the annual meeting and vote your shares in person, please
notify your broker to obtain a ballot so that you may vote your shares. If you
are a holder of record of Accessity shares and submit the enclosed proxy card
and then vote by ballot, your proxy vote will be revoked automatically and only
your vote by ballot will be counted. Your prompt return of your proxy card will
assist us in preparing for the annual meeting.
By Order of the Board of Directors,
Barry Siegel
Chief Executive Officer
Coral Springs, Florida
ACCESSITY CORP.
12514 WEST ATLANTIC BLVD
CORAL SPRINGS, FLORIDA 33071
PROXY STATEMENT
FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 15, 2003
GENERAL INFORMATION FOR SHAREHOLDERS
We are soliciting proxies on behalf of the Board of Directors of Accessity
Corp., a New York corporation, for use at the Annual Meeting of Shareholders to
be held at 10:30 A.M. Florida time on December 15, 2003, at the Coral Springs
Marriott Hotel, Golf Club and Convention Center, 11775 Heron Bay Boulevard,
Coral Springs, FL 33076 and at any adjournment. This proxy statement is being
first sent to our shareholders on or about November 17, 2003.
RECORD DATE AND VOTING
The proposals to be voted on at the annual meeting are described in detail
in this proxy statement. Shareholders of record at the close of business on
November 7, 2003, are entitled to notice of, and to vote at, the annual meeting.
At the close of business on that date, there were outstanding and entitled to
vote 11,122,065 shares of our common stock. Each holder of common stock is
entitled to one vote for each share of common stock held by that shareholder on
the record date.
If a choice as to the matters coming before the annual meeting has been
specified by a shareholder on a returned proxy card, the shares will be voted
accordingly. IF NO CHOICE IS SPECIFIED, THE SHARES WILL BE VOTED IN FAVOR OF THE
PROPOSALS DESCRIBED IN THE NOTICE OF ANNUAL MEETING SENT TO SHAREHOLDERS AND IN
THIS PROXY STATEMENT.
Abstentions and broker non-votes (that is, shares voted by means of a proxy
card submitted by a broker or nominee that specifically indicates the lack of
discretionary authority to vote on the proposals) are counted for purposes of
determining the presence or absence of a quorum at the annual meeting. For
purposes of determining whether a majority of votes present at the annual
meeting have approved a given proposal, abstentions will have the same effect as
negative votes, whereas broker non-votes will not be counted.
To ensure that your shares are voted at the annual meeting, please
complete, date, and sign the enclosed proxy card and return it as soon as
possible in the accompanying postage-prepaid return envelope.
REVOCABILITY OF PROXIES
Any shareholder giving a proxy pursuant to this solicitation may revoke it
at any time before it is exercised. A shareholder may revoke a proxy either by
filing with our corporate secretary at our principal executive offices at 12514
West Atlantic Blvd, Coral Springs, Florida 33071, a duly executed proxy card
bearing a later date or by attending the annual meeting and voting that
shareholder's shares in person. Persons who hold shares of our common stock in
street name may revoke their proxy by contacting their broker to obtain a legal
ballot and filing that ballot bearing a later date with our corporate secretary
at our principal executive offices or by attending the annual meeting and voting
that ballot in person.
SOLICITATION
We will pay all expenses related to soliciting proxies in connection with
the annual meeting, including the cost of preparing, assembling, printing, and
mailing all materials being sent to our shareholders. We will furnish copies of
those materials to any brokerage house, fiduciary, or custodian holding in its
name shares that are beneficially owned by others so that they may forward those
materials to the beneficial owners. To ensure that a quorum is present in person
or by proxy at the annual meeting, it may be necessary for certain of our
officers, directors, employees, or other agents to solicit proxies by telephone,
facsimile, or other means. Currently we do not intend to solicit proxies other
than by mail.
SHAREHOLDER PROPOSALS
If you wish to present a shareholder proposal at the next meeting of
shareholders that we hold after the meeting to be held on December 15, 2003, you
must send us that proposal by October 1, 2004. If, however, the date of the next
annual meeting is changed by more than 30 days from December 15, 2004, then the
deadline is a reasonable time before we begin to print and mail our proxy
materials.
ADDITIONAL MATERIALS
We are mailing with this proxy statement a copy of our 2002 Annual Report.
These documents are incorporated in, and constitute a part of this proxy
statement.
OTHER MATTERS
Other than the proposals described in this proxy statement, we know of no
matters that will be presented for consideration at the annual meeting. If any
other matters properly come before the annual meeting, it is the intention of
the persons named in the enclosed form of proxy to vote as our Board of
Directors recommends the shares they represent by signing and returning the
enclosed proxy card, you are granting the named persons discretionary authority
with respect to such other matters.
PROPOSALS TO BE CONSIDERED AT THE ANNUAL MEETING
PROPOSAL 1
ELECTION OF DIRECTORS
NOMINEES FOR ELECTION
Our By-laws provide that our Board of Directors must be divided into three
classes as nearly equal in size as possible, with the term of office of one
class expiring each year. Accordingly, in any given year only those directors
belonging to one class may be changed and it would take elections in three
consecutive years to change the entire Board of Directors. At the upcoming
annual meeting, one Class I director will be elected to serve a three-year term
(until the third succeeding annual meeting, in 2006) and until their respective
successors are duly elected and qualified. The Class I director's term expires
in 2006. Unless authority to vote for the election of directors is withheld, the
enclosed proxy will be voted FOR the election of the nominee named below.
While our By-laws provide for a seven-person board of directors, upon the
election of Barry Siegel our Board of Directors will have four members. Our
board has determined that it is in our best interest that at this time no
additional directors be nominated to fill the remaining three vacancies, as
retaining these vacancies will give our board greater flexibility to seek and
appoint one or two appropriate directors in the future.
Barry Siegel will be elected to our Board of Directors if the number of
votes cast at the annual meeting in favor of his respective election exceeds the
number of votes cast to withhold authority in connection with their respective
election.
INFORMATION CONCERNING DIRECTORS AND OFFICERS
You will find below background information with respect to the nominee for
election and the directors whose terms of office will continue after the
upcoming annual meeting. See "Security Ownership of Certain Beneficial Owners
and Management" for information regarding their holdings of our common stock.
NOMINEE WHOSE TERM EXPIRES IN 2003 (CLASS I)
Barry Siegel, 52, has served as one of our directors and our secretary
since we were incorporated. He has served as our treasurer from 1987 to 2002 and
as our chief executive officer and chairman of the board since November 1997.
Previously, he served as our chairman of the board, co-chief executive officer,
treasurer, and secretary from August 1997 through November 1997. From October
1987 through August 1997, he served as our co-chairman of the board, co-chief
executive officer, treasurer, and secretary.
2
OUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR ELECTION OF THE NOMINEE
NAMED ABOVE.
DIRECTOR WHOSE TERMS EXPIRE IN 2005 (CLASS II)
Barry J. Spiegel, 54, has served as president of our Affinity Services
Division since September 1996. He served as president of American International
Insurance Associates, Inc. from January 1996 through August 1996. For more than
five years prior to August 1996, Mr. Spiegel served as senior vice president at
American Bankers Insurance Group, Inc.
Kenneth J. Friedman, 50, has served as one of our directors since October
1998. Mr. Friedman has for more than five years served as president of the
Primary Group, Inc., an executive search and consulting firm.
DIRECTOR WHOSE TERM EXPIRES IN 2004 (CLASS III)
Bruce S. Udell, 52, was first elected by our Board of Directors to be a
member of the Board of Directors in September 2002. Since 1976, Mr. Udell has
served as President and Chief Executive Officer of Udell Associates, a financial
planning firm specializing in life insurance and estate planning. Additionally,
since 1998, he has served as President of Asset Management Partners, a
registered investment advisor.
DIRECTOR (CLASS III)
John M. McIntyre, 48, was elected our President on July 15, 2002 and was
elected to our Board of Directors on December 4, 2001. Mr. McIntyre resigned as
President and Chief Operating Officer of the Company effective July 15, 2003 and
resigned from the Board of Directors on August 24, 2003. He has spent the last
20 years working in the auto repair industry. In 1981, he founded Apple Auto
Body Incorporated, a privately held, multiple-location group of auto repair
shops based in Massachusetts, and since 1981 has acted as its president. In 1989
he co-founded Trust Group Inc., a privately held property and casualty insurer
based in Massachusetts.
RELATIONSHIPS
There are no family relationships among the executive officers or directors
of Accessity, except that Lisa Siegel, who previously served as our
vice-president-administration, is the wife of Barry Siegel, our chief executive
officer and chairman of the board.
BOARD OF DIRECTORS AND COMMITTEES
Our Board of Directors serves as the representative of our shareholders.
The board establishes broad corporate policies and oversees our overall
performance. The board is not, however, involved in day-to-day operating
details. Members of the board are kept informed of our business activities
through discussion with the chief executive officer, by reviewing analyses and
reports sent to them by management, and by participating in board meetings.
During 2002, our board held three meetings attended by members of the board
either in person or via telephone, and on twelve occasions approved resolutions
by unanimous written consent in lieu of a meeting.
Our board currently has one standing committee, the Audit Committee. The
members of the Audit Committee in 2002 were Kenneth J. Friedman, Barry J.
Spiegel and Bruce S. Udell. Neither Mr. Friedman nor Mr. Udell is currently an
officer of Accessity or any of its subsidiaries, and both are "independent"
under the Nasdaq listing requirements as currently in effect. The Audit
Committee did not meet in 2002. The Audit Committee operates pursuant to a
charter approved by our Board of Directors.
COMPENSATION OF DIRECTORS
We do not pay our directors for serving on our board. Our 1995 Incentive
Stock Plan (the "Plan") does, however, provide that when they are elected to the
board and every anniversary thereafter as long as they serve, our non-employee
directors are granted a non-statutory stock option to purchase up to 50,000
shares of our common stock. Prior to February 4, 2002, directors received 15,000
shares as the annual stock option grant.
3
AUDIT COMMITTEE REPORT
In fulfilling its oversight duties, the Audit Committee reviewed and
discussed with management and our independent auditors, Nussbaum Yates & Wolpow,
P.C., our audited financial statements for the fiscal year ended December 31,
2002. The Audit Committee also discussed with our auditors the matters required
to be discussed by Statement on Auditing Standards No. 61 (Communications with
Audit Committees). These matters include the independent auditors' judgments as
to the quality, not just the acceptability, of our accounting principles, as
well as such other matters as our auditors are required to discuss with the
Audit Committee under generally accepted auditing standards. The Audit Committee
received the written disclosures and letter from our auditors required by
Independence Standards Board Standard No. 1 (Independence Discussion with Audit
Committees) and discussed with our auditors their independence.
Nussbaum Yates & Wolpow, P.C. billed us an aggregate of $29,000 in fees for
professional services rendered for the audit of our annual financial statements
for fiscal year 2002, $34,679 in fees for professional services rendered for
reviews of the financial statements included in our Forms 10-QSB for 2002 and
$2,763 in fees for professional services rendered regarding other matters.
Based upon the above review and discussions with management and our
independent auditors, the Audit Committee recommended to our Board of Directors
that our audited financial statements be included in our Annual Report on Form
10-KSB for the fiscal year ended December 31, 2002, for filing with the SEC. The
Audit Committee and our Board of Directors have also recommended, subject to
shareholder ratification, selection of Nussbaum Yates & Wolpow, P.C. as our
independent auditors for fiscal year 2003 (see Proposal 3).
Respectfully submitted,
THE AUDIT COMMITTEE
Kenneth J. Friedman
Bruce S. Udell
Barry J. Spiegel
The foregoing report of the Audit Committee may not be deemed incorporated
by reference in any previous or future documents filed by us with the SEC under
the Securities Act or the Securities Exchange Act, except to the extent we
specifically incorporates it by reference in any such document.
COMPENSATION OF DIRECTORS
We do not pay our directors for serving on our Board of Directors. However,
under our 1995 Stock Incentive Plan we issue to each of our directors upon their
initial election to the board, and on each anniversary thereafter as long as
they serve, options to acquire 15,000 shares of our common stock. On February 4,
2002, the Company amended our 1995 Stock Incentive Plan whereby non-employee
directors will receive a non-statutory stock option grant upon their initial
election to the Board and upon each succeeding anniversary thereafter for as
long as they serve, with the right to acquire up to 50,000 shares of our common
stock for a term of five years. The option will become exercisable in one third
increments upon the one year anniversary of the initial grant date and each
succeeding anniversary thereafter.
OTHER EXECUTIVE OFFICERS
Gerald M. Zutler, 64, was appointed our president and chief operating
officer in March 1998. His employment with the Company terminated in August
2002. Between 1997 and 1998, Mr. Zutler was a private consultant. From 1993
through 1996, Mr. Zutler was president of Lockheed Martin Canada.
Philip B. Kart, 52, has served as Senior Vice President, Treasurer and
Chief Financial Officer of the Company since February 2002, and Chief Financial
Officer since October 2000. From February 1998 through September 2000, he was
vice president and chief financial officer of Forward Industries, Inc., a Nasdaq
SmallCap listed company, and prior to that, from March 1993 to December 1997,
chief financial officer of Ongard Systems, Inc. Mr. Kart has also held financial
management positions with Agrigenetics Corporation and Union Carbide and was
with the accounting firm PriceWaterhouseCoopers. Mr. Kart is a CPA.
4
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
We are party to an employment agreement with Barry Siegel that commenced on
January 1, 2002, and expires on December 31, 2004. Mr. Siegel's annual salary is
$300,000, and he has been granted stock options, under the Company's 1995
Incentive Stock Option Plan ("the Plan"), providing the right to purchase
300,000 shares of the Company's common stock. His employment agreement provides
that following a change of control (as defined in the agreement), we will be
required to pay Mr. Siegel (1) a severance payment of 300% of his average annual
salary for the past five years, less $100, (2) the cash value of his outstanding
but unexercised stock options, and (3) other perquisites should he be terminated
for various reasons specified in the agreement. The agreement specifies that in
no event will any severance payments exceed the amount we may deduct under the
provisions of the Internal Revenue Code. In recognition of the sale of the fleet
services business, Mr. Siegel was also awarded a $250,000 bonus, which was paid
in February 2002, and an additional grant of 250,000 options.
We are party to an employment agreement with Gerald M. Zutler that
commenced on January 1, 2002, and expires on December 31, 2004. Mr. Zutler's
annual salary is $190,000, and he has been granted stock options, under the
Company's 1995 Incentive Stock Option Plan ("the Plan"), providing the right to
purchase 200,000 shares of the Company's common stock. His employment agreement
contains a change in control provision that mirrors that in Mr. Siegel's
employment agreement, except that the applicable percentage for severance
payment purposes is 100%. Mr. Zutler also participates in our Corporate
Compensation Program. Mr. Zutler's employment with the Company terminated in
August 2002.
We are party to an employment agreement with Barry J. Spiegel that
commenced on January 1, 2002, and expires on December 31, 2004. Mr. Spiegel's
annual salary is $175,000 per annum and he has been granted stock options, under
the Company's 1995 Incentive Stock Option Plan ("the Plan"), providing the right
to purchase 250,000 shares of the Company's common stock, and the applicable
percentage for severance payment purposes is 100%. Mr. Spiegel also participates
in our Corporate Compensation Program. His employment agreement provides that
following a change in control (as defined in the agreement), all stock options
previously granted to him will immediately become fully exercisable. Mr.
Spiegel's employment agreement was terminated on August 1, 2003.
We are party to an employment agreement with Philip B. Kart that commenced
on January 1, 2002, and expires on December 31, 2004. Mr. Kart's annual salary
is $155,000 per annum and he has been granted stock options, under the Company's
1995 Incentive Stock Option Plan ("the Plan"), providing the right to purchase
150,000 shares of the Company's common stock and the applicable percentage for
severance payment purposes is 100%. Mr. Kart also participates in our Corporate
Compensation Program. His employment agreement provides that following a change
in control (as defined in the agreement), all stock options previously granted
to him will immediately become fully exercisable.
In early 1999, each of the above-mentioned executives, except for Mr. Kart
who was not employed by the Company at the time, voluntarily agreed to a
reduction in his annual salary, with the other terms of his employment agreement
remaining unaffected. Mr. Siegel's salary was reduced by $100,000, Mr. Zutler's
by $15,000, and Mr. Spiegel's by $30,000. In consideration for these salary
reductions, we granted Mr. Siegel, Mr. Zutler, and Mr. Spiegel options to
purchase 100,000, 15,000, and 30,000 shares of our common stock, respectively.
In 2000, the salaries of the above-mentioned executives were returned to their
original levels.
Under an agreement with our wholly owned subsidiary, Sentaur, Corp., we are
party to an employment agreement with Steven DeLisi that commenced on September
3, 2002, and expires on December 31, 2004. Mr. DeLisi's annual salary is
$175,000 per annum and he has been granted stock options, under the Company's
1995 Incentive Stock Option Plan ("the Plan"), providing the right to purchase
250,000 shares of the Company's common stock, in addition to certain other
perquisites, and the applicable percentage for severance payment purposes is
100%. Mr. DeLisi also participates in a bonus program established for his
business that provides a bonus of 50% of his salary upon the achievement of
$25,000 in profits for three consecutive months. He receives an interim bonus of
$5,000 for each signed contract, which is offset against his first year's bonus.
His employment agreement provides that following a change in control (as defined
in the agreement), all stock options previously granted to him will immediately
become fully exercisable.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities and Exchange Act of 1934 requires our
directors and officers and persons who own more than 10% of any class of our
equity securities to file with the SEC reports of their ownership of our
securities and any changes in ownership. The SEC also requires us to identify in
this proxy statement any person who failed to file any such report on a timely
basis. We are not aware of any officer or director that did not comply with
Section 16(a) of the Securities Exchange Act of 1934 during the fiscal year
ended December 31, 2002, except for Kenneth J. Friedman who filed his Form 5
late that was due forty-five days following the end of the fiscal year.
5
EXECUTIVE COMPENSATION
Summary Compensation
The following table summarizes the compensation we paid or compensation
accrued for services rendered for the years ended December 31, 2000, 2001 and
2002, for our Chief Executive Officer and each of the other most highly
compensated executive officers who earned more than $100,000 in salary (there
were no bonus payments during the years 2000 and 2001) for the year ended
December 31, 2002:
SUMMARY COMPENSATION TABLE
SALARY SECURITIES
------- UNDERLYING
NAME AND POSITION(S) YEAR ($) OPTIONS (#) BONUS($)
-------------------- ---- ------- ------- -------
Barry Siegel
Chairman of the Board of 2002 300,000 550,000 250,000 (a)
Directors, Treasurer, 2001 285,000 0
Secretary and Chief 2000 276,492 200,000
Executive Officer
Gerald Zutler (b)
President and Chief 2002 138,191 200,000
Operating Officer 2001 149,525 0
2000 145,540 150,000
Barry J. Spiegel (c)
President, DriverShield 2002 175,000 250,000
ADS Corp. 2001 129,525 0
2000 122,154 150,000
-----------------
(a) Excludes $12,500 paid to Mr. Siegel for costs incurred in connection with
his relocation.
(b) Mr. Zutler's employment terminated in August 2002.
(c) Mr. Spiegel's employment terminated in August 2003.
STOCK OPTIONS
We did not make any awards of stock options during the last fiscal year to
the executive officers named in the summary compensation table.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUE TABLE
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES ACQUIRED ($) UNDERLYING UNEXERCISED IN-THE-MONEY
ON VALUE OPTIONS/SARS AT FY-END OPTIONS/SARS FY-END
NAME EXERCISE (#) REALIZED (EXERCISABLE/UNEXERCISABLE) (EXERCISABLE/UNEXERCISABLE)
---- ------------ -------- --------------------------- ---------------------------
Barry Siegel None 0 500,000/550,000 $0/0
Gerald M. Zutler None 0 0/0 $0/0
Barry J. Spiegel None 0 316,666/250,000 $0/0
Philip B. Kart None 0 158,334/216,666 $0/0
6
PRINCIPAL SHAREHOLDERS
The following tables provide information about the beneficial ownership of
our common stock as of November 5, 2003. We have listed each person who
beneficially owns more than 5% of our outstanding common stock, each of our
directors and executive officers identified in the summary compensation table,
and all directors and executive officers as a group. Unless otherwise indicated,
each of the listed shareholders has sole voting and investment power with
respect to the shares beneficially owned.
SECURITY OWNERSHIP OF MANAGEMENT
AMOUNT AND
TITLE NAME AND ADDRESS OF NATURE OF PERCENTAGE OF
OF CLASS BENEFICIAL OWNER BENEFICIAL OWNER COMMON STOCK (1)
------------ ----------------- ---------------- ----------------
Common stock Barry Siegel 2,121,030 (2)(3) 18.7%
c/o Accessity Corp.
12514 West Atlantic Blvd
Coral Springs, Florida 33071
Common stock Gerald M. Zutler 201,000 1.8%
c/o Accessity Corp.
12514 W. Atlantic Blvd
Coral Springs, FL 33071
Common stock Barry J. Spiegel 1,580,961 14.2%
c/o Accessity Corp.
12514 W. Atlantic Blvd
Coral Springs, FL 33071
Common stock Philip B. Kart 275,000 (4) 2.4%
c/o Accessity Corp.
12514 W. Atlantic Blvd
Coral Springs, FL 33071
Common stock Kenneth J. Friedman 186,665 (5) 1.7%
c/o Accessity Corp.
12514 W. Atlantic Blvd
Coral Springs, FL 33071
Common stock John M. McIntyre 98,333 (6) .9%
c/o Accessity Corp.
12514 W. Atlantic Blvd
Coral Springs, FL 33071
Common Stock Bruce S. Udell 33,750 (7) .3%
c/o Accessity Corp.
12514 W. Atlantic Blvd
Coral Springs, FL 33071
Common stock All directors & officers 11,790,397 38.2%
as a group
7
(1) The percentages have been calculated in accordance with Instruction 3 to
Item 403 of Regulation S-B. Percentage of beneficial ownership is
calculated assuming 11,122,065 shares of common stock were outstanding on
November 3, 2003.
(2) Includes 3,334 shares held by Barry Siegel as custodian for two nephews and
67 shares held directly by Barry Siegel's wife, Lisa Siegel. Both Barry and
Lisa Siegel disclaim beneficial ownership of shares held by the other.
(3) Includes options to purchase 216,667 shares of common stock exercisable
within 60 days of November 5, 2003.
(4) Includes options to purchase 275,000 shares of common stock exercisable
within 60 days of November 5, 2003.
(5) Includes options to purchase 61,666 shares of common stock exercisable
within 60 days of November 5, 2003.
(6) Includes options to purchase 98,333 shares of common stock exercisable
within 60 days of November 5, 2003.
(7) Includes options to purchase 16,666 shares of common stock exercisable
within 60 days of November 5, 2003.
PROPOSAL 2
APPROVAL OF GRANT OF DISCRETIONARY AUTHORITY TO ACCESSITY'S BOARD OF DIRECTORS
TO AMEND ACCESSITY'S CERTIFICATE OF INCORPORATION TO EFFECT A REVERSE STOCK
SPLIT OF ACCESSITY'S COMMON STOCK EQUAL TO A RATIO NO GREATER THAN ONE-FOR-FIVE
AT ANY TIME WITHIN 90 DAYS AFTER STOCKHOLDER APPROVAL OF THIS PROPOSAL.
GENERAL
The Board of Directors has unanimously approved a proposal to amend the
Company's Certificate of Incorporation to implement a reverse stock split of the
Company's Common Stock equal to a ratio no greater than one-for-five ("Reverse
Split"), at any time within 90 days after stockholder approval of this proposal
is obtained at the Annual Meeting, with the timing and exact ratio to be
determined in the sole discretion of the Board of Directors. This means that as
few as two shares or as many as five shares of Common Stock would be combined
into one New Share (defined below). The Board of Directors also may choose not
to implement the Reverse Split at all in its sole discretion.
After the filing of an amendment to the Certificate of Incorporation
("Amendment") with the New York Secretary of State, the Reverse Split will be
effective ("Effective Date"), and each stock certificate representing shares of
Common Stock outstanding immediately prior to the Reverse Split ("Old Shares")
will be deemed automatically, without any action on the part of the
stockholders, to represent a fraction of such number of shares of Common Stock
after the Reverse Split ("New Shares"). No fractional New Shares will be issued
as a result of a Reverse Split. In lieu thereof, each stockholder whose Old
Shares are not evenly divisible will receive one additional New Share for the
fractional New Share that such stockholder would otherwise be entitled to
receive as a result of a Reverse Split. After the Reverse Split becomes
effective, stockholders will be asked to surrender certificates representing Old
Shares in accordance with the procedures set forth in a letter of transmittal to
be sent by the Company. Upon such surrender, a certificate representing the New
Shares will be issued and forwarded to the stockholders; however, each
certificate representing Old Shares will continue to be valid and represent New
Shares equal to a fraction of the number of Old Shares (plus one additional New
Share where such Old Shares are not evenly divisible).
The number of shares of capital stock authorized by the Certificate of
Incorporation will not change as a result of the proposed Reverse Split. The
Common Stock issued pursuant to the Reverse Split will be fully paid and
nonassessable. The voting and other rights that presently characterize the
Common Stock will not be altered by the Reverse Split.
PURPOSES OF A REVERSE SPLIT
The Board of Directors believes that the Reverse Split is desirable for
several reasons:
8
o On October 21, 2003, the Company was advised by Nasdaq that the
closing bid price for the Company's Common Stock was less than $1.00
for 30 consecutive trading days and the Common Stock was subject to
delisting from the Nasdaq SmallCap Market if the closing bid price did
not reach $1.00 for ten consecutive trading days by January 20, 2004.
The Board of Directors expects the Reverse Split will help the Company
satisfy the minimum $1.00 per share requirement. A range for the
Reverse Split is being proposed instead of a specific ratio since the
price at which the Common Stock trades may fluctuate between now and
early January 2004, at which time the Reverse Split is expected to be
implemented.
o The Reverse Split also should enhance the acceptability of the Common
Stock by the financial community and investing public. The reduction
in the number of issued and outstanding shares of Common Stock caused
by the Reverse Split is expected to increase the market price of the
Common Stock. A variety of brokerage house policies and practices tend
to discourage individual brokers within those firms from dealing with
lower priced stocks. Some of those policies and practices pertain to
time-consuming procedures that function to make the handling of lower
priced stocks economically unattractive to brokers. In addition, the
structure of trading commissions also tends to have an adverse impact
upon holders of lower priced stock because the brokerage commission on
a sale of lower priced stock generally represents a higher percentage
of the sales price than the commission on a relatively higher priced
issue. A Reverse Split should result in a price level for the Common
Stock that will reduce, to some extent, the effect of the
above-referenced policies and practices of brokerage firms and
diminish the adverse impact of trading commissions on the market for
the Common Stock. The expected increased price level also may
encourage interest and trading in the Common Stock and possibly
promote greater liquidity for the Company's stockholders, although
such liquidity could be adversely affected by the reduced number of
shares of Common Stock outstanding after the Effective Date.
However, there can be no assurance that any or all of these results will
occur. If, for example, a one-for-five Reverse Split is implemented, there can
be no assurance that the market price per New Share after the Reverse Split will
be five times the market price per Old Share before the Reverse Split, or that
such price will either exceed or remain in excess of the current market price.
Further, there can be no assurance that the market for the Common Stock will
improve. Stockholders should note that the Board of Directors cannot predict
what effect a Reverse Split will have on the market price of the Common Stock.
The Board of Directors will determine the exact ratio for the Reverse Split
based upon the market price of the Common Stock at the time of implementation.
It can be anticipated that management will select a ratio that will result in a
new market price that is sufficiently in excess of the $1.00 minimum bid price
required by Nasdaq, so that a decrease in the bid price for the Common Stock
would not cause the Common Stock to be delisted from Nasdaq. On the other hand,
if the bid price of the Common Stock is maintained above $1.00 without the
Reverse Split, the Board of Directors may determine not to implement the Reverse
Split at all.
CERTAIN RISKS ASSOCIATED WITH THE REVERSE STOCK SPLIT
THERE CAN BE NO ASSURANCE THAT THE TOTAL MARKET CAPITALIZATION OF ACCESSITY'S
COMMON STOCK AFTER THE PROPOSED REVERSE SPLIT WILL BE EQUAL TO OR GREATER THAN
THE TOTAL MARKET CAPITALIZATION BEFORE THE PROPOSED REVERSE SPLIT OR THAT THE
PER SHARE MARKET PRICE OF ACCESSITY'S COMMON STOCK FOLLOWING THE REVERSE SPLIT
WILL EITHER EXCEED OR REMAIN HIGHER THAN THE CURRENT PER SHARE MARKET PRICE.
There can be no assurance that the market price per new share of Accessity
common stock (the "New Shares") after the Reverse Split will rise or remain
constant in proportion to the reduction in the number of old shares of Accessity
common stock (the "Old Shares") outstanding before the Reverse Split. For
example, based on the market price of Accessity's common stock on November 6,
2003 of $0.63 per share, if the Board of Directors decided to implement the
Reverse Split and selects a reverse stock split ratio of one-for-five, there can
be no assurance that the post-split market price of Accessity's common stock
would be $3.15 per share or greater.
Accordingly, the total market capitalization of Accessity's common stock
after the proposed Reverse Split may be lower than the total market
capitalization before the proposed Reverse Split and, in the future, the market
price of Accessity's common stock following the Reverse Split may not exceed or
remain higher than the market price prior to the proposed Reverse Split. In many
cases, the total market capitalization of a company following a Reverse Split is
lower than the total market capitalization before the Reverse Split.
THERE CAN BE NO ASSURANCE THAT THE REVERSE SPLIT WILL RESULT IN A PER SHARE
PRICE THAT WILL ATTRACT INSTITUTIONAL INVESTORS AND BROKERS.
While the Board of Directors believes that a higher stock price may help
generate investor interest, there can be no assurance that the Reverse Split
will result in a per share price that will attract institutional investors and
brokers.
THERE CAN BE NO ASSURANCE THAT THE REVERSE SPLIT WILL RESULT IN A PER SHARE
PRICE THAT WILL INCREASE ACCESSITY'S ABILITY TO ATTRACT AND RETAIN EMPLOYEES.
9
While the Board of Directors believes that a higher stock price may help
Accessity attract and retain employees who are less likely to work for a company
with a low stock price, there can be no assurance that the Reverse Split will
result in a per share price that will increase Accessity's ability to attract
and retain employees and other service providers.
A DECLINE IN THE MARKET PRICE FOR ACCESSITY'S COMMON STOCK AFTER THE REVERSE
SPLIT MAY RESULT IN A GREATER PERCENTAGE DECLINE THAN WOULD OCCUR IN THE ABSENCE
OF A REVERSE SPLIT, AND THE LIQUIDITY OF ACCESSITY'S COMMON STOCK COULD BE
ADVERSELY AFFECTED FOLLOWING A REVERSE SPLIT.
The market price of Accessity's common stock will also be based on
Accessity's performance and other factors, some of which are unrelated to the
number of shares outstanding. If the Reverse Split is effected and the market
price of Accessity's common stock declines, the percentage decline as an
absolute number and as a percentage of Accessity's overall market capitalization
may be greater than would occur in the absence of a reverse stock split. In many
cases, both the total market capitalization of a company and the market price of
a share of such company's common stock following a reverse stock split are lower
than they were before the reverse stock split. Furthermore, the liquidity of
Accessity's common stock could be adversely affected by the reduced number of
shares that would be outstanding after the reverse stock split.
EFFECT OF A REVERSE SPLIT
A Reverse Split will be effected by means of filing the Amendment with the
New York Secretary of State. The Company is authorized to issue 30,000,000
shares of Common Stock. The par value of the Company's Common Stock will remain
unchanged at $.015 per share and the number of authorized shares of the
Company's Common Stock will remain unchanged. As of November 7, 2003, the record
date of the Annual Meeting, there were 11,122,065 Old Shares issued and
outstanding.
Because the Reverse Split would apply to all issued and outstanding shares
of the Company's Common Stock and outstanding rights to purchase the Company's
Common Stock or to convert other securities into the Company's Common Stock, the
proposed Reverse Split would not alter the relative rights and preferences of
existing stockholders. The Reverse Split would, however, effectively increase
the number of shares of the Company's Common Stock available for future
issuances by the Board of Directors.
If the proposed Reverse Split is approved at the Annual Meeting and
effected by the Board of Directors, some stockholders may consequently own less
than one hundred shares of the Company's Common Stock. A purchase or sale of
less than one hundred shares (an "odd lot" transaction) may result in
incrementally higher trading costs through certain brokers, particularly "full
service" brokers. Therefore, those stockholders who own less than one hundred
shares following implementation of a Reverse Split may be required to pay higher
transaction costs should they subsequently determine to sell their shares of
Common Stock.
If a Reverse Split is approved by the requisite vote of the stockholders,
stockholders have no right under New York law or the Company's Certificate of
Incorporation or By-laws to dissent from a reverse stock split or to dissent
from the payment of cash in lieu of issuing fractional shares.
EXCHANGE OF STOCK CERTIFICATES
As soon as practicable after the Effective Date of a Reverse Split, the
Company will send a letter of transmittal to each holder of record of Old Shares
outstanding on the Effective Date. The letter of transmittal will contain
instructions for the surrender of certificate(s) representing such Old Shares to
North American Transfer Co., the Company's exchange agent ("Exchange Agent").
Upon proper completion and execution of the letter of transmittal and return
thereof to the Exchange Agent, together with the certificate(s) representing Old
Shares, a stockholder will be entitled to receive a certificate representing the
number of New Shares into which his Old Shares have been reclassified and
changed as a result of the Reverse Split. Shareholders should not submit any
certificates until requested to do so. No new certificate will be issued to a
stockholder until he has surrendered his outstanding certificate(s) together
with the properly completed and executed letter of transmittal to the Exchange
Agent.
FEDERAL INCOME TAX CONSEQUENCES
The following summary of the federal income tax consequences of a Reverse
Split is not, and should not be relied on as, a comprehensive analysis of the
tax issues arising from or relating to the proposed Reverse Split. ACCORDINGLY,
SHAREHOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS FOR AN ANALYSIS OF THE
EFFECT OF THE TRANSACTION CONTEMPLATED BY THE PROPOSED AMENDMENT ON THEIR
RESPECTIVE TAX SITUATIONS.
10
The transactions contemplated by the Amendment constitute a
"recapitalization" of the Company within the meaning of Section 368(a)(1)(E) of
the Internal Revenue Code. Therefore, neither the Company nor its stockholders
will recognize any gain or loss for federal income tax purposes to the extent
that issued shares of Common Stock are exchanged for a reduced number of shares
of Common Stock.
The shares of Common Stock to be issued to each stockholder will have an
aggregate basis, for computing gain or loss, equal to the aggregate basis of the
shares of Common Stock held by such stockholder immediately prior to the
Effective Date. A stockholder's holding period for the shares of Common Stock to
be issued will include the holding period for the shares of Common Stock held
thereby immediately prior to the Effective Date provided that such shares of
Common Stock were held by the stockholder as capital assets on the Effective
Date.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE PROPOSAL TO
GRANT DISCRETIONARY AUTHORITY TO ACCESSITY'S BOARD OF DIRECTORS TO AMEND
ACCESSITY'S CERTIFICATE OF INCORPORATION TO EFFECT A REVERSE STOCK SPLIT OF
ACCESSITY'S COMMON STOCK EQUAL TO A RATIO NO GREATER THAN ONE-FOR-FIVE AT ANY
TIME WITHIN 90 DAYS AFTER STOCKHOLDER APPROVAL OF THIS PROPOSAL.
PROPOSAL 3
RATIFICATION OF SELECTION
OF INDEPENDENT ACCOUNTANTS
Our board has appointed the firm of Nussbaum Yates & Wolpow, P.C.,
independent certified public accountants, to audit our financial statements for
the year ending December 31, 2003, and is asking the shareholders to ratify this
appointment. Nussbaum Yates & Wolpow, P.C. has audited our financial statements
for the past ten fiscal years. Nussbaum Yates & Wolpow, P.C. has advised us that
neither the firm nor any of its associates has any material relationship with
Accessity or any of its subsidiaries.
If our shareholders fail to ratify appointment of Nussbaum Yates & Wolpow,
P.C., the board will reconsider its selection. Even if the selection is
ratified, the board in its discretion may direct the appointment of a different
independent auditing firm at any time during the year if the board believes that
such a change would be in the best interests of Accessity and its shareholders.
No representative of Nussbaum Yates & Wolpow, P.C. will be present at the
annual meeting.
The affirmative vote of a majority of all shares present at the annual
meeting, whether in person or by proxy, is required to approve this proposal.
AUDIT FEES
Nussbaum Yates & Wolpow, P.C. billed us an aggregate of $29,000 in fees for
professional services rendered for the audit of our annual financial statements
for fiscal year 2002, $34,679 in fees for professional services rendered for
reviews of the financial statements included in our Forms 10-QSB for 2002 and
$2,763 in fees for professional services rendered regarding other matters.
OUR BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE IN FAVOR OF
RATIFICATION OF THE SELECTION OF NUSSBAUM YATES & WOLPOW, P.C. TO SERVE AS
ACCESSITY'S INDEPENDENT AUDITORS FOR THE YEAR ENDED DECEMBER 31, 2003.
OTHER MATTERS
We know of no other matters that will be presented for consideration at the
annual meeting. If any other matters properly come before the annual meeting or
any adjournment or postponement, it is the intention of the persons named in the
enclosed form of proxy card to vote the shares they represent as the board may
recommend.
11
FORWARD-LOOKING STATEMENTS
Many statements made in this proxy statement are forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934 and are not based on historical facts.
The words "expects," "anticipates," "believes," and similar expressions are
intended to identify forward-looking statements. You should be aware that actual
results may differ materially from our expressed expectations because of risks
and uncertainties inherent in our business, particularly those risks identified
in the "Forward-Looking Statements--Cautionary Factors" section of our Annual
Report on Form 10-KSB for the year ended December 31, 2002, and you should not
rely unduly on these forward looking statements.
THE BOARD OF DIRECTORS
Dated: November 17, 2003
12
PROXY CARD
ACCESSITY CORP.
ANNUAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS
The undersigned shareholder of Accessity Corp. hereby (1) revokes all
previous proxies that the undersigned has granted with respect to the
undersigned's shares of Accessity Corp. capital stock, (2) acknowledges receipt
of the notice of Annual Meeting of Shareholders to be held at 10:30 A.M. Florida
time on December 15, 2003, at the Coral Springs Marriott Hotel, Golf Club and
Convention Center, 11775 Heron Bay Boulevard, Coral Springs, FL 33076 and at any
adjournments thereof, the related proxy statement and the 2002 Annual Report of
Accessity Corp., and (3) appoints each of Barry Siegel and Barry J. Spiegel and
as proxies of the undersigned, with full power of substitution to vote all
shares of common stock of Accessity Corp. that the undersigned is entitled to
vote at the Annual Meeting of Shareholders. The shares represented by the proxy
may only be voted on the following proposals in the manner specified below.
1. To elect Barry Siegel as a member of our Board of Directors
FOR |_| TO WITHHOLD AUTHORITY |_|
2. To approve the grant of discretionary authority to Accessity's Board
of Directors to amend Accessity's Certificate of Incorporation to
effect a reverse stock split of Accessity's common stock equal to a
ratio no greater than one-for-five.
FOR |_| AGAINST |_| ABSTAIN |_|
3. To ratify our Board of Directors' selection of Nussbaum Yates &
Wolpow, P.C. to audit our financial statements for the fiscal year
ending December 31, 2003.
FOR |_| AGAINST |_| ABSTAIN |_|
4. To transact such other business as may properly come before the annual
meeting and any one or more adjournments thereof.
THE BOARD OF DIRECTORS RECOMMENDS YOU VOTE FOR THE ABOVE PROPOSALS.
THIS PROXY, WHEN PROPERLY, EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
ABOVE. IN THE ABSENCE OF DIRECTION FOR THE ABOVE PROPOSALS, THIS PROXY WILL BE
VOTED FOR THE PROPOSALS.
(Continued on the other side.)
PLEASE DATE, SIGN AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
Please print the shareholder name exactly as it appears on your stock
certificate. If the shares are registered in more than one name, the signature
of each person in whose name the shares are registered is required. A
corporation should sign in its full corporate name, with a duly authorized
officer signing on behalf of the corporation and stating his or her title.
Trustees, guardians, executors, and administrators should sign in their official
capacity, giving their full title as such. A partnership should sign in its
partnership name, with an authorized person signing on behalf of the
partnership.
Dated: , 2003
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(Print Name)
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(Authorized Signature)