Confidential,
for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
T
Definitive
Proxy Statement
£
Definitive
Additional Materials
£
Soliciting
Material under Rule 14a-12
LIVEDEAL,
INC.
(Name of
Registrant as Specified In Its Charter)
(Name of
Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
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fee required.
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Fee
computed below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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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.
The 2009
Annual Meeting of Stockholders of LiveDeal, Inc. (“LiveDeal”) will be held at
795 Folsom Street, San Francisco, California94107, on February 26, 2009,
beginning at 8:00 a.m. local time. The Annual Meeting is being held
to:
1.
elect
seven directors to our Board of
Directors;
2.
approve
an amendment to our Amended and Restated 2003 Stock Plan primarily to (i)
provide for the grant of stock options under the plan and (ii) increase
the number of shares available for issuance under the plan from 800,000
shares to 1,400,000 shares;
3.
ratify
the appointment of Mayer Hoffman McCann P.C. as LiveDeal’s independent
registered public accounting firm for the fiscal year ending September 30,2009; and
4.
transact
such other business that may properly come before the meeting and any
adjournments thereof.
Only
stockholders of record at the close of business on January 21, 2009 are entitled
to receive notice of and to vote at the meeting or any adjournment
thereof. Your vote is important. Note that we have
enclosed with this notice (i) our Annual Report to Stockholders, which includes
our Annual Report on Form 10-K for the fiscal year ended September 30, 2008 and
(ii) a Proxy Statement.
Your
proxy is being solicited by LiveDeal’s Board of Directors. All
stockholders are cordially invited to attend our Annual Meeting and vote in
person. In order to assure your representation at the Annual Meeting,
however, we urge you to complete, sign and date the enclosed proxy as promptly
as possible and return it to us either (i) via facsimile to the attention of
Rajeev Seshadri at (702) 939-0246, or (ii) in the enclosed postage-paid
envelope. If you attend the Annual Meeting in person, you may vote in
person even if you previously have returned a proxy.
This
Proxy Statement relates to the 2009 Annual Meeting of Stockholders of LiveDeal,
Inc. (“LiveDeal” or the “Company”). The Annual Meeting will be held
on February 26, 2009 at 8:00 a.m. local time, at 795 Folsom Street, SanFrancisco, California94107, or at such other time and place to which the Annual
Meeting may be adjourned or postponed. The enclosed proxy is
solicited by our Board of Directors. The proxy materials relating to
the Annual Meeting are first being mailed to stockholders entitled to vote at
the meeting on or about February 2, 2009.
At the
Annual Meeting, stockholders will act upon the matters outlined in the
accompanying Notice of Annual Meeting and this Proxy Statement, including (i)
the election of seven directors to our Board; (ii) a proposal to amend our
Amended and Restated 2003 Stock Plan (the “2003 Stock Plan”) primarily to (A)
provide for the grant of stock options under the plan and (B) increase the
number of shares authorized for issuance under the plan from 800,000 shares to
1,400,000 shares; and (iii) the ratification of the appointment of our
independent registered public accounting firm. In addition,
management will report on our most recent financial and operating results and
respond to questions from stockholders.
Who
is entitled to attend and vote at the Annual Meeting?
Only
stockholders of record at the close of business on the record date, January 21,2009, or their duly appointed proxies, are entitled to receive notice of the
Annual Meeting, attend the meeting and vote the shares that they held on that
date at the meeting or any postponement or adjournment of the
meeting. At the close of business on January 21, 2009, there were
issued, outstanding and entitled to vote 6,195,682 shares of our common stock,
par value $.001 per share, each of which is entitled to one vote. You
may not cumulate votes in the election of directors.
How
do I vote?
You may
vote on matters to come before the meeting in two ways: (i) you can attend the
meeting and cast your vote in person; or (ii) you can vote by completing,
signing and dating the enclosed proxy card and returning it to us via mail or
facsimile. If you do so, you will authorize the individuals named on
the proxy card, referred to as the proxy holders, to vote your shares according
to your instructions or, if you provide no instructions, according to the
recommendations of our Board of Directors.
You may
revoke your proxy at any time before it is exercised by either (i) filing with
our Corporate Secretary a notice of revocation; (ii) sending in another duly
executed proxy bearing a later date; or (iii) attending the meeting and casting
your vote in person. Your last vote will be the vote that is
counted.
What
are the Board’s recommendations?
Unless
you give other instructions on your proxy card, the persons named on the proxy
card will vote in accordance with the recommendations of our Board of
Directors. Our Board’s recommendations are set forth together with a
description of such items in this Proxy Statement. In summary, our
Board recommends a vote FOR election of the nominated slate of directors; FOR
the proposed amendment of our 2003 Stock Plan; and FOR the ratification of our
independent registered public accounting firm.
With
respect to any other matter that properly comes before the meeting, the proxy
holders will vote as recommended by our Board of Directors or, if no
recommendation is given, in their own discretion.
What
constitutes a quorum?
The
presence at the Annual Meeting, in person or by proxy, of the holders of a
majority of the issued and outstanding shares on the record date will constitute
a quorum, permitting us to conduct our business at the Annual
Meeting. Proxies received but marked as abstentions and broker
non-votes (defined below) will be included in the calculation of the number of
shares considered to be present at the meeting for purposes of determining
whether a quorum is present.
What
vote is required to approve each item?
Election of
Directors. Election of a director requires the affirmative
votes of the holders of a plurality of the shares for which votes are cast at a
meeting at which a quorum is present. The seven persons receiving the
greatest number of votes will be elected as directors. Since only
affirmative votes count for this purpose, a properly executed proxy marked
“WITHHOLD AUTHORITY” with respect to the election of one or more directors will
not be voted with respect to the director or directors indicated, although it
will be counted for purposes of determining whether there is a
quorum. Stockholders may not cumulate votes in the election of
directors.
Amendment to our 2003 Stock
Plan. The
approval of the proposed amendment to our 2003 Stock Plan will require the
affirmative vote of a majority of the shares for which votes are cast at a
meeting at which a quorum is present. A properly executed proxy
marked “ABSTAIN” with respect to any such matter will not be voted, although it
will be treated as a vote cast and will be counted for purposes of determining
whether a quorum is present. Accordingly, an abstention will have the
effect of a vote against the proposal to amend our 2003 Stock
Plan. Brokers are not entitled to use their discretion to vote
uninstructed proxies with respect to approval of the proposed amendment to our
2003 Stock Plan and are not deemed a vote cast.
Ratification of
Auditors. The ratification of the appointment of Mayer Hoffman
McCann P.C. as our independent registered public accounting firm will require
the affirmative vote of the holders of a majority of the shares for which votes
are cast at a meeting at which a quorum is present. A properly
executed proxy marked “ABSTAIN” with respect to any such matter will not be
voted, although it will be treated as a vote cast and will be counted for
purposes of determining whether a quorum is present. Accordingly, an
abstention will have the effect of a negative vote. Brokers are
entitled to use their discretion to vote uninstructed proxies with respect to
ratification of our independent auditors.
Effect of Broker
Non-Votes. If your shares are held by your broker in “street
name,” you are receiving a voting instruction form from your broker or the
broker’s agent asking you how your shares should be voted. Please
complete the form and return it in the envelope provided by the broker or
agent. No postage is necessary if mailed in the United
States. If you do not instruct your broker how to vote, your broker
may vote your shares at its discretion or, on some matters, may not be permitted
to exercise voting discretion. Votes that could have been cast on the
matter in question if the brokers have received their customers’ instructions,
and as to which the broker has notified us on a proxy form in accordance with
industry practice or has otherwise advised us that it lacks voting authority,
are referred to as “broker non-votes.” Thus, if you do not give your
broker or nominee specific instructions, your shares may not be voted on those
matters and will not be counted as a vote cast in determining the number of
shares necessary for approval. Shares represented by such “broker
non-votes,” however, will be counted in determining whether there is a
quorum.
Can
I dissent or exercise rights of appraisal?
Under
Nevada law, holders of our common stock are not entitled to dissenters’ rights
in connection with any of the proposals to be presented at the Annual Meeting or
to demand appraisal of their shares as a result of the approval of any of the
proposals.
Who
pays for this proxy solicitation?
The
Company will bear the entire cost of this proxy solicitation, including the
preparation, assembly, printing, and mailing of this Proxy Statement, the proxy
card and any additional solicitation materials furnished to the
stockholders. Copies of solicitation materials will be furnished to
brokerage houses, fiduciaries and custodians holding shares in their names that
are beneficially owned by others so that they may forward the solicitation
material to such beneficial owners.
LiveDeal’s
Amended and Restated Bylaws provide that our Board of Directors shall consist of
not less than three nor more than nine directors (with the precise number of
directors to be established by resolution of the Board), each of whom is elected
annually. Currently, there are nine members of our Board of
Directors. Our Board, on the recommendation of our Corporate
Governance and Nominating Committee, has determined that seven directors will be
elected at the 2009 Annual Meeting, and has nominated seven of the nine
incumbent directors for re-election. Each director is to be elected
to hold office until the next annual meeting of stockholders or until his or her
successor is elected and qualified. If a director resigns or
otherwise is unable to complete his or her term of office, the Board may elect
another director for the remainder of the departing director’s
term.
The Board
has no reason to believe that the nominees will not serve if elected, but if
they should become unavailable to serve as a director, and if the Board
designates a substitute nominee, the persons named as proxies will vote for the
substitute nominee designated by our Board.
If a
quorum is present and voting, the seven nominees receiving the highest number of
votes will be elected to our Board of Directors.
Nominees
for Director
The
Board’s nominees are listed below. The Board recommends that you vote
FOR each of Mr. Navar, Ms. Bolton, Mr. Butler, Mr. Clarke, Mr. Edelhart, Mr.
LeClaire and Mr. Sommer.
Rajesh
Navar
Mr.
Navar has served as the Chairman of our Board of Directors since May 22,2008 and as a director of our Company since June 2007, when the Company
acquired LiveDeal, Inc., a California entity that Mr. Navar
founded. Mr. Navar was also our President until May 13,2008. Prior to founding LiveDeal, Mr. Navar joined eBay in
1998, a start-up at that time, as a senior member of the engineering
team. Mr. Navar founded and built eBay’s search technology,
helping build eBay into one of the world’s most successful and profitable
e-commerce companies. In September 2005, Mr. Navar was
honored among Silicon Valley Business Journal’s chronicle of “40 under 40”
people to watch. Mr. Navar holds a Master’s in Business
Management (Sloan Fellow) from Stanford University’s Graduate School of
Business, a M.S. in Electrical Engineering from Iowa State University and
a Bachelor of Engineering in Electronics Engineering from Bangalore
University in Bangalore, India. Age: 41.
Sheryle
Bolton
Ms.
Bolton has served as a director of our Company since October 1,2008. She is currently a director of Austhink Software, a
private company that produces decision support software. From
November 2007 to September 2008, Ms. Bolton served as a director of Bridge
Capital Holdings (NASDAQ: BBNK), a commercial bank holding
company. From 2005 to 2007, she was the founder and CEO of
QUIXIT, Inc., an online gaming company. From 1996 to 2002, Ms.
Bolton was Chairman and Chief Executive Officer of Scientific Learning
Corporation (NASDAQ: SCIL), a company that produces educational software
designed to accelerate learning, which she led from start-up to IPO to
sustainable growth. Ms. Bolton has also been President of The
Indian Creek Group, a consulting firm that advises clients on domestic and
international business strategy, and a director of several other public
and private companies and mutual funds. After she took
Scientific Learning Corporation public, SpringBoard Women’s Venture
Capital Forum named Ms. Bolton to the first All Women’s IPO Class as one
of 11 women who successfully took companies public in 1998 and
1999. Ms. Bolton holds a Bachelor’s Degree in English and a
Master’s Degree in Linguistics from the University of Georgia and an MBA
from Harvard Business School. Age:
62.
Mr.
Butler has served as a director of our Company since August
2006. He is a veteran savings and loan and mortgage
banking executive, co-founder and major shareholder of Aspen Healthcare,
Inc. and Ref-Razzer Corporation, former CEO of Mt. Whitney Savings Bank,
CEO of First Federal Mortgage Bank, CEO of Trafalgar Mortgage, and
Executive Officer & Member of the President's Advisory Committee at
State Savings /American Savings & Loan Association. Mr. Butler
attended Bowling Green University in Ohio, San Joaquin Delta College in
California and Southern Oregon State College. Age:
59.
Thomas
J. Clarke, Jr.
Mr.
Clarke has served as a director of our Company since November
2007. Mr. Clarke is currently the Chief Executive Officer of
TheStreet.com (NASDAQ: TSCM). Prior to joining that company in
1999, Mr. Clarke was Chief Executive Officer of Thomson Financial Investor
Relations. At that company, Mr. Clarke oversaw the sale of what
was then Technimetrics Inc. from Knight-Ridder to Thomson Corporation in
1998. Mr. Clarke has also held management positions at
companies such as McAuto Systems Corp. and Media
Records. Additionally, Mr. Clarke serves as a business
information advisor for Plum Holdings L.P., an institutional venture
capital firm specializing in early stage investments in media
companies. He serves on the University of Albany’s executive
advisory board of the Center for Comparative Functional Genomics, and on
the board of Standing Stone, Inc., developers of disease state management
solutions. Mr. Clarke holds an MBA from Hofstra University
and a Bachelor’s Degree in Marketing from St.
John’s University. Age: 52.
Michael
Edelhart
Mr.
Edelhart has served as a director of our Company since May 22, 2008 and as
our Chief Executive Officer since June 1, 2008. Mr. Edelhart
was previously Managing Director of First30 Services, LLC, a consulting
firm that he founded to serve new companies in their early stages, from
February 2008 until his appointment as the Company’s CEO. Mr.
Edelhart has also served as an advisor to Infovell, Inc., a technology
company, and chairman of the board of Olive Software, Inc., an XML
software developer. Previously, Mr. Edelhart was Chief
Executive Officer of Zinio Systems, Inc., which produces and distributes
magazines in digital form, from January 2002 until June
2004. Mr. Edelhart has also served as a senior director of an
investment company, editor of various technology magazines and Internet
strategies consultant to such companies as Bloomberg, Reuters and
AARP. Mr. Edelhart has also authored more than 25 books, and he
holds a Bachelor of Science degree in journalism (summa cum laude) from
the University of Northern Colorado. Age:
57.
Mr.
LeClaire has served as a director of our Company since May 22, 2008. Mr. LeClaire
has been Chief Financial Officer and Corporate Secretary of ClearOne
Communications, Inc. (NASDAQ: CLRO), a manufacturer and marketer of audio
conferencing and related products, since September 2006. From
April 2006 until August 2006, Mr. LeClaire served as Vice President –
Finance and Administration for LiveDeal, Inc., the Internet classifieds
company that the Company acquired in 2007. Prior to that, Mr.
LeClaire was Vice President and Chief Financial Officer of Utah Medical
Products, Inc. (NASDAQ: UTMD), a multi-national medical device
corporation. Mr. LeClaire has significant experience in the
areas of finance and accounting, SEC reporting, Sarbanes-Oxley compliance,
budgeting and financial management. He holds a Master of
Science degree in management from Stanford University’s Graduate School of
Business and a Bachelor of Science degree in accounting from the
University of Utah. Age: 39.
Richard
F. Sommer
Mr.
Sommer has been a director of our Company since June 2,2008. Mr. Sommer is a former Chief Executive Officer of
ZipRealty and served on the Board of Directors of ZipRealty from September
2006 until December 15, 2008. Prior to joining ZipRealty, Mr.
Sommer was the Chief Executive Officer of HomeGain.com. In
addition to his leadership of HomeGain, Mr. Sommer served as Senior Vice
President of Business Development for the mortgage banking division of
IndyMac Bank. He also served as President and Managing Director
of international real estate operations for Realtor.com. Mr.
Sommer also co-founded and was President and Chief Executive Officer of
Accordus, a technology infrastructure company serving the health care
products industry. From 1988 until 1998, Mr. Sommer was
founder, President and Chief Executive Officer of De La Cruz Occupational
Healthcare. He began his career with McKinsey &
Co. He graduated cum laude in 1983 from Princeton University
with a degree in politics and was a Rhodes Scholar at Oxford University,
where he earned a Master’s Degree in international political
economy. In 1990, he earned a law degree from the Stanford Law
School. Age: 46.
Our
Board of Directors recommends a vote FOR the election of each of the director
nominees.
Our Board
of Directors met 10 times during fiscal 2008, either telephonically or in
person, and acted a number of times by written consent. None of
our directors attended fewer than 75% of the meetings of the Board held during
the director’s service or of any committee on which the director served during
fiscal 2008.
Our Board
has affirmatively determined that five of the seven current directors who have
been nominated for re-election at the 2009 Annual Meeting are “independent” as
such term is defined under NASDAQ Marketplace Rule 4200(a)(15) and the related
rules of the SEC, with Ms. Bolton, Mr. Butler, Mr. Clarke, Mr. LeClaire and Mr.
Sommer being determined to be independent. The Company’s independent
directors conduct executive sessions at regularly scheduled meetings as required
by NASDAQ Marketplace Rule 4350(c)(2).
How
can our stockholders communicate with the Board of Directors?
Stockholders
and other parties interested in communicating with the Board of Directors may do
so by writing to Board of Directors, LiveDeal, Inc., 2490 East Sunset Road,
Suite 100, Las Vegas, Nevada89120.
What
committees has the Board established?
Our Board
of Directors has a Corporate Governance and Nominating Committee, a Compensation
Committee, and an Audit Committee, each of which is a standing committee of the
Board.
Corporate Governance and Nominating
Committee. The purpose of the Corporate Governance and
Nominating Committee is to (i) identify individuals who are qualified to become
members of our Board of Directors, consistent with criteria approved by the
Board, and to select, or to recommend that the Board select, the director
nominees for the next annual meeting of stockholders or to fill vacancies on the
board; (ii) develop and recommend to the Board a set of corporate governance
principles applicable to our Company; and (iii) oversee the evaluation of the
Board and our Company’s management. Messrs. Clarke (Chairman),
LeClaire and Sommer currently serve on the Corporate Governance and Nominating
Committee. Each member of the committee satisfies the independence
standards specified in Rule 4200(a)(15) of the NASDAQ Marketplace Rules and the
related rules of the SEC. Our Board of Directors has adopted a
charter for the Corporate Governance and Nominating Committee, a copy of which
is posted on our website at www.livedeal.com. The committee met once
during fiscal 2008.
Compensation
Committee. The purpose of the Compensation Committee is to
discharge the Board’s responsibilities relating to compensation of the Company’s
directors and executives, to produce an annual report on executive compensation
for inclusion in the Company’s proxy statement, as necessary, and to oversee and
advise the Board on the adoption of policies that govern the Company’s
compensation programs including stock and benefit plans. Messrs.
Sommer (Chairman), Clarke and LeClaire currently serve on the Compensation
Committee. Each member of the committee satisfies the independence
standards specified in Rule 4200(a)(15) of the NASDAQ Marketplace Rules and the
related rules of the SEC. Each of the current members of the
Compensation Committee is a “non-employee director” under Section 16 of the
Exchange Act and an “outside director” for purposes of Section 162(m) of the
Code. Our Board of Directors has adopted a charter for the
Compensation Committee, a copy of which is posted on our website at
www.livedeal.com. The committee met four times during fiscal
2008.
Audit
Committee. The purpose of the Audit Committee is to assist our
Board of Directors in overseeing (i) the integrity of our Company’s accounting
and financial reporting processes, the audits of our financial statements, as
well as our systems of internal controls regarding finance, accounting, and
legal compliance; (ii) our Company’s compliance with legal and regulatory
requirements; (iii) the qualifications, independence and performance of our
independent public accountants; (iv) our Company’s financial risk; and (v) our
Company’s internal audit function. In carrying out this purpose, the
Audit Committee maintains and facilitates free and open communication between
the Board, the independent public accountants, and our
management. Mr. LeClaire (Chairman), Mr. Butler and Ms. Bolton
currently serve on the Audit Committee. Each member of the committee
satisfies the independence standards specified in Rule 4200(a)(15) of the NASDAQ
Marketplace Rules and the related rules of the SEC and has been determined by
the Board of Directors to be “financially literate” with accounting or related
financial management experience. The Board has also determined that
Mr. LeClaire is an “audit committee financial expert” as defined under SEC rules
and regulations, and qualifies as a financially sophisticated audit committee
member as required under Rule 4350(d)(2)(A) of the NASDAQ Marketplace
Rules. Our Board of Directors has adopted a charter for the Audit
Committee, a copy of which is posted on our website at
www.livedeal.com. The Audit Committee met seven times during fiscal
2008.
Compensation Committee Interlocks
and Insider Participation. There were no interlocking
relationships between our Company and other entities that might affect the
determination of the compensation of our executive officers.
What
are the procedures of the Corporate Governance and Nominating Committee in
making nominations?
The
Corporate Governance and Nominating Committee establishes and periodically
reviews the criteria and qualifications for board membership and the selection
of candidates to serve as directors of our Company. In determining
whether to nominate a candidate for director, the Corporate Governance and
Nominating Committee considers the following criteria, among
others:
·
the
candidate’s integrity and ethical
character;
·
whether
the candidate is “independent” under applicable SEC, NASDAQ and other
rules;
·
whether
the candidate has any conflicts of interest that would materially impair
his or her ability to exercise independent judgment as a member of our
Board or otherwise discharge the fiduciary duties owed by a director to
LiveDeal and our stockholders;
·
the
candidate’s ability to represent all of our stockholders without favoring
any particular stockholder group or other constituency of
LiveDeal;
·
the
candidate’s experience (including business experience relevant to LiveDeal
and/or its industry), leadership qualities and commitment to devoting the
amount of time required to be an active member of our Board and its
committees; and
·
the
committee’s desire to nominate directors from diverse business and
personal backgrounds.
The
committee has the authority to retain a search firm to identify director
candidates and to approve any fees and retention terms of the search firm’s
engagement, although the committee has not recently engaged such a
firm.
Although
the committee has not specified any minimum criteria or qualifications that each
director must meet, the committee conducts its nominating process in a manner
designed to ensure that the Board continues to meet applicable requirements
under SEC and NASDAQ rules (including, without limitation, as they relate to the
composition of the Audit Committee).
Our Board
of Directors is of the view that the continuing service of qualified incumbents
promotes stability and continuity in the boardroom, giving our Company the
benefit of the familiarity and insight into our Company’s affairs that its
directors have accumulated during their tenure, while contributing to the
Board’s ability to work as a collective body. Accordingly, the
process of the Corporate Governance and Nominating Committee for identifying
nominees reflects the practice of re-nominating incumbent directors who continue
to satisfy the committee’s criteria for membership on the Board, who the
committee believes will continue to make important contributions to the Board,
and who consent to continue their service on the Board.
What
are our policies and procedures with respect to director candidates who are
nominated by security holders?
The
Corporate Governance and Nominating Committee will consider director candidates
recommended by our stockholders under criteria similar to those used to evaluate
candidates nominated by the committee (including those listed
above). In considering the potential candidacy of persons recommended
by stockholders, however, the committee may also consider the size, duration and
any special interest of the recommending stockholder (or group of stockholders)
in LiveDeal’s common stock.
Stockholders
who desire to recommend a nominee for election to our Board must follow the
following procedures:
·
Recommendations
must be submitted to the Company in writing, addressed to our Chief
Financial Officer at the Company’s principal
headquarters.
·
Recommendations
must include all information reasonably deemed by the recommending
stockholder to be relevant to the committee’s consideration, including (at
a minimum):
o
the
name, address and telephone number of the potential
candidate;
o
the
number of shares of LiveDeal’s common stock owned by the recommending
stockholder (or group of stockholders), and the time period for which such
shares have been held;
o
if
the recommending stockholder is not a stockholder of record according to
the books and records of the Company, a statement from the record holder
of the shares (usually a broker or bank) verifying the holdings of the
stockholder;
o
a
statement from the recommending stockholder as to whether s/he has a good
faith intention to continue to hold the reported shares through the date
of LiveDeal’s next annual meeting (at which the candidate would be elected
to the Board);
o
with
respect to the recommended nominee:
§
the
information required by Item 401 of Regulation S-K (generally providing
for disclosure of the name, address, any arrangements or understandings
regarding the nomination and the five-year business experience of the
proposed nominee, as well as information about the types of legal
proceedings within the past five years involving the
nominee);
§
the
information required by Item 403 of Regulation S-K (generally providing
for disclosure regarding the proposed nominee’s ownership of securities of
LiveDeal); and
§
the
information required by Item 404 of Regulation S-K (generally providing
for disclosure of transactions in which LiveDeal was or is to be a
participant involving more than $120,000 and in which the nominee had or
will have any direct or indirect material interest and certain other types
of business relationships with
LiveDeal);
a
description of all relationships between the proposed nominee and the
recommending stockholder and any arrangements or understandings between
the recommending stockholder and the nominee regarding the
nomination;
o
a
description of all relationships between the proposed nominee and any of
LiveDeal’s competitors, customers, suppliers, labor unions or other
persons with special interests regarding
LiveDeal;
o
a
description of the contributions that the nominee would be expected to
make to the Board and the governance of LiveDeal;
and
o
a
statement as to whether, in the view of the stockholder, the nominee, if
elected, would represent all stockholders and not serve for the purpose of
advancing or favoring any particular stockholder or other constituency of
LiveDeal.
·
The
nominating recommendation must be accompanied by the consent of the
proposed nominee to be interviewed by the Corporate Governance and
Nominating Committee and other Board members and, if elected, to serve as
a director of LiveDeal.
·
A
stockholder nomination must be received by LiveDeal, as provided above,
not later than 120 calendar days prior to the first anniversary of the
date of the proxy statement for the prior annual
meeting.
·
If
a recommendation is submitted by a group of two or more stockholders, the
information regarding the recommending stockholders must be submitted with
respect to each stockholder in the group (as the term group is defined
under SEC regulations).
What
is our policy on director attendance at our Annual Meetings?
The Board
does not have a formal policy regarding director attendance at the Company’s
annual meeting of stockholders, but all directors are encouraged to
attend. All of our directors attended our 2008 Annual
Meeting. All directors standing for re-election anticipate attending
the 2009 Annual Meeting.
How
are directors compensated?
Our
directors receive a base fee of $36,000 per year for their service on the Board,
which is payable in monthly installments. Additionally, committee
chairpersons are paid an additional $10,000 per year, payable
monthly. Upon election to the Board, directors are generally awarded
10,000 shares of restricted common stock.
We have
adopted a code of ethics that applies to all directors, officers, and employees
of our Company, including the Chief Executive Officer, Chief Financial Officer
and Chief Operating Officer. We have filed our code of ethics as an
exhibit to our quarterly report on Form 10-QSB for the period ended March 31,2004. In addition, our code of ethics is posted under “Investor
Relations” on our Internet website at www.livedeal.com. We will mail
a copy of our code of ethics at no charge upon request submitted to LiveDeal,
Inc., Attention: Investor Relations, 2490 East Sunset Road, Suite 100, LasVegas, Nevada89120. If we make any amendment to, or grant any
waivers of, a provision of the code of ethics that applies to our principal
executive officer, principal financial officer, principal accounting officer or
controller where such amendment or waiver is required to be disclosed under
applicable SEC rules, we intend to disclose such amendment or waiver and the
reasons therefor on Form 8-K or on our Internet website at www.livedeal.com.
Certain
Legal Proceedings Involving Directors and/or Officers of the
Company
On July16, 2008, Mr. Cunningham, the former Chairman of our Board of Directors and the
Company’s Audit Committee who remains a director of the Company as of the date
of this Proxy Statement, filed a complaint with the U.S. Department of Labor’s
Occupational Safety and Health Administration (“OSHA”) alleging that the Company
and certain members of our Board of Directors had engaged in discriminatory
employment practices in violation of the Sarbanes-Oxley Act of 2002’s statutory
protections for corporate whistleblowers when the Board removed him as Chairman
on May 22, 2008. In his complaint, Mr. Cunningham asked OSHA to order
his appointment as Chief Executive Officer of the Company or, in the
alternative, to order his reinstatement as Chairman of the Board. Mr.
Cunningham also sought back pay, special damages and litigation
costs. As previously disclosed by the Company, at the time we
received the notice, our Board of Directors had already formed a Special
Committee to investigate the matters raised by Mr. Cunningham in a preliminary
draft of his OSHA complaint, which his attorney provided to the Company on June26, 2008. OSHA’s and the Special Committee’s investigations are
ongoing as of the date of this Proxy Statement.
We are
asking our stockholders to approve an amendment to our 2003 Stock Plan, which
would (i) provide for the grant of stock options under the plan, (ii) increase
the number of shares authorized for issuance under the plan from 800,000 shares
to 1,400,000 shares, and (iii) ensure the plan’s technical compliance with
Section 409A of the Code (collectively, the “Amendment”). As of
January 21, 2009, 214,808 shares remained available for future grants under
the 2003 Stock Plan. In January 2009, the Board of Directors,
acting as the Plan Committee, approved the Amendment, subject to
stockholder approval at the 2009 Annual Meeting. The Amendment will
not be effective unless and until stockholder approval is
obtained. If our stockholders approve the Amendment, the amendments
to our 2003 Stock Plan set forth therein will be effective as of September 19,2008 (the “Effective Date”).
The Board
of Directors believes that the Company’s ability to grant awards (including
stock options) under the 2003 Stock Plan, and as amended by the Amendment, will
promote the success and enhance the value of the Company by linking the personal
interest of participants to those of the Company’s stockholders and by providing
participants with an incentive for outstanding performance. The Board
of Directors believes that the 2003 Stock Plan helps the Company attract, retain
and motivate employees, officers and directors. In addition, the
Board of Directors believes that increasing the number of shares available for
issuance under the 2003 Stock Plan is appropriate in light of the fact that the
Company has repurchased and retired 465,824 shares of its common stock since
October 1, 2007. The resulting decrease in the number of shares of
our common stock that are issued and outstanding will mitigate any dilutive
impact on current stockholders that this proposal would otherwise
have. For those reasons, the Board of Directors believes that an
increase in the number of shares available for issuance in future years, as
proposed, is in the best interests of the Company and its
stockholders.
The 2003
Stock Plan currently provides for the grant of restricted stock, performance
share awards and performance-based awards to eligible individuals. If
the Amendment is approved, the Company will also be able to grant incentive and
non-qualified stock options to eligible individuals under the 2003 Stock Plan
from and after the Effective Date. A summary of the principal
provisions of the 2003 Stock Plan, as the plan is proposed to be amended, is set
forth below. The summary of the provisions set forth in the Amendment
is qualified by reference to the full text of the Amendment, which is included
as Appendix A to this Proxy Statement.
The 2003
Stock Plan is administered by a committee of the Board of Directors (the
“Committee”). If the Board does not appoint a Committee, the 2003
Stock Plan is administered by the Board of Directors and all references in the
2003 Stock Plan to the Committee shall refer to the Board. The
Committee has the exclusive authority to administer the 2003 Stock Plan,
including the power to determine eligibility; the types and sizes of awards; the
price and timing of awards; and any schedule for lapse of forfeiture
restrictions or restrictions on the exercisability of an award, and
accelerations or waivers thereof.
Eligibility
Persons
eligible to participate in the 2003 Stock Plan include all employee and
non-employee service providers of the Company or any of our subsidiaries, as
determined by the Committee.
Limitation
on Awards and Shares Available
An
aggregate of 1,400,000 shares of our common stock would be available for
grant under the 2003 Stock Plan, as amended (of which, 585,192 shares have
been granted as of January 21, 2009). Currently, 800,000 shares of
our common stock are available for grant under the plan. The maximum
number of shares of common stock payable in the form of performance-based awards
to any one participant for a performance period is 100,000 shares, or in
the event the performance-based award is paid in cash, the maximum is determined
by multiplying 100,000 by the fair market value of one share of stock as of the
date of grant of the performance-based award.
Awards
The 2003
Stock Plan provides for the grant of restricted stock, performance shares and
performance-based awards. If the Amendment is approved, the Company
will also be able to grant incentive and non-qualified stock options to eligible
individuals under the 2003 Stock Plan from and after the Effective
Date. No determination has been made as to the types or amounts of
future awards that will be granted to specific individuals under the 2003 Stock
Plan.
A
restricted stock award is the grant of shares of common stock at a price
determined by the Committee (including zero), that is nontransferable and
subject to substantial risk of forfeiture until specific conditions are
met. Conditions may be based on continuing employment or achieving
performance goals. During the period of restriction, participants
holding shares of restricted stock may have full voting and dividend rights with
respect to such shares. The restrictions will lapse in accordance with a
schedule or other conditions determined by the Committee. A grant of
performance shares gives the recipient rights that are valued and payable to or
exercisable by the recipient as established by the Committee upon the grant or
thereafter.
Grants of
performance-based awards under the 2003 Stock Plan enable the Committee to treat
restricted stock awards and performance share awards granted under the 2003
Stock Plan as “performance-based compensation” under Section 162(m) of the
Code and preserve the deductibility of these awards for federal income tax
purposes. Because Section 162(m) of the Code only applies to
those employees who are “covered employees,” as defined in Section 162(m)
of the Code, only individuals who are, or could be, covered employees are
eligible to receive performance-based awards.
Participants
are only entitled to receive payment for a performance-based award for any given
performance period to the extent that pre-established performance goals set by
the Committee for the period are satisfied. These pre-established
performance goals must be based on one or more of the following performance
criteria: pre- or after-tax net earnings, sales or revenue, operating earnings,
operating cash flow, return on net assets, return on shareholders’ equity,
return on assets, return on capital, shareholder returns, gross or net profit
margin, earnings per share, price per share, and market share. These
performance criteria may be measured in absolute terms or as compared to any
incremental increase or as compared to results of a peer group. With
regard to a particular performance period, the Committee shall have the
discretion to select the length of the performance period, the type of
performance-based awards to be granted, and the goals that will be used to
measure the performance for the period. In determining the actual
size of an individual performance-based award for a performance period, the
Committee may reduce or eliminate (but not increase) the award. Generally, a
participant will have to be employed on the date the performance-based award is
paid to be eligible for a performance-based award for that period.
If the
Amendment is approved by our stockholders, the Committee would be authorized to
grant stock options to participants in the 2003 Stock Plan. Such
stock options could be in the form of “incentive stock options” (“ISOs”)
(meaning an option that is intended to meet the requirements of Section 422 of
the Code) or “non-qualified stock options” (meaning an option that is not
intended to be an incentive stock option). In no event will the
exercise price per share of our common stock under any option granted be less
than the fair market value of such share of common stock as of the date of
grant. The Committee will generally have broad discretion to
determine the terms and conditions of grants of stock options, including the
exercise period (subject to a limit of 10 years).
To the
extent that any stock options were granted under the 2003 Stock Plan prior to
our stockholders approval of the Amendment, such awards are expressly
conditioned upon stockholder approval.
Amendment
and Termination
The
Committee, subject to approval of the Board of Directors, may terminate, amend,
or modify the 2003 Stock Plan at any time; provided, however, that stockholder
approval must be obtained for any amendment to the extent necessary to comply
with any applicable law, regulation or stock exchange rule.
Federal
Income Tax Consequences
The
information set forth above is a summary only and does not purport to be
complete. In addition, the information is based upon current federal
income tax rules and therefore is subject to change when those rules change.
Moreover, because the tax consequences to any recipient may depend on his
particular situation, each recipient should consult the recipient’s tax adviser
regarding the federal, state, local and other tax consequences of the grant or
exercise of an award or the disposition of stock acquired as a result of an
award. The 2003 Stock Plan is not qualified under the provisions of
Section 401(a) of the Code and is not subject to any of the provisions of
the Employee Retirement Income Security Act of 1974.
Generally,
there is no taxation upon the grant of a nonqualified stock option. On
exercise, an optionee will recognize ordinary income equal to the excess, if
any, of the fair market value on the date of exercise of the stock over the
exercise price. If the optionee is our employee or an employee of an
affiliate, that income will be subject to withholding tax. The optionee’s
tax basis in those shares will be equal to their fair market value on the date
of exercise of the option, and the optionee’s capital gain holding period for
those shares will begin on that date.
Subject
to the requirement of reasonableness, the provisions of Section 162(m) and
the satisfaction of a tax reporting obligation, we will generally be entitled to
a tax deduction equal to the taxable ordinary income realized by the
optionee.
Incentive Stock
Options
Under the
Code, an optionee generally is not subject to ordinary income tax upon the grant
or exercise of an ISO. In addition, if the optionee holds a share received
on exercise of an ISO for at least two years from the date the option was
granted and at least one year from the date the option was exercised, which we
refer to as the “Required Holding Period,” the difference, if any, between the
amount realized on a sale or other taxable disposition of that share and the
holder’s tax basis in that share will be long-term capital gain or
loss.
If,
however, an optionee disposes of a share acquired on exercise of an ISO before
the end of the Required Holding Period, which we refer to as a “Disqualifying
Disposition,” the optionee generally will recognize ordinary income in the year
of the Disqualifying Disposition equal to the excess, if any, of the fair market
value of the share on the date the ISO was exercised over the exercise price.
However, if the sales proceeds are less than the fair market value of the
share on the date of exercise of the option, the amount of ordinary income
recognized by the optionee will not exceed the gain, if any, realized on the
sale. If the amount realized on a Disqualifying Disposition exceeds the
fair market value of the share on the date of exercise of the option, that
excess will be short-term or long-term capital gain, depending on whether the
holding period for the share exceeds one year.
For
purposes of the alternative minimum tax, the amount by which the fair market
value of a share of stock acquired on exercise of an ISO exceeds the exercise
price of that option generally will be an adjustment included in the optionee’s
alternative minimum taxable income for the year in which the option is
exercised. If, however, there is a Disqualifying Disposition of the share
in the year in which the option is exercised, there will be no adjustment for
alternative minimum tax purposes with respect to that share. If there is a
Disqualifying Disposition in a later year, no income with respect to the
Disqualifying Disposition is included in the optionee’s alternative minimum
taxable income for that year. In computing alternative minimum taxable
income, the tax basis of a share acquired on exercise of an ISO is increased by
the amount of the adjustment taken into account with respect to that share for
alternative minimum tax purposes in the year the option is
exercised.
We are
not allowed an income tax deduction with respect to the grant or exercise of an
incentive stock option or the disposition of a share acquired on exercise of an
incentive stock option after the Required Holding Period. However, if
there is a Disqualifying Disposition of a share, we are allowed a deduction in
an amount equal to the ordinary income includible in income by the optionee,
provided that amount constitutes an ordinary and necessary business expense for
us and is reasonable in amount, and either the employee includes that amount in
income or we timely satisfy our reporting requirements with respect to that
amount.
Generally,
the recipient of a stock award will recognize ordinary compensation income at
the time the stock is received equal to the excess, if any, of the fair market
value of the stock received over any amount paid by the recipient in exchange
for the stock. If, however, the stock is not vested when it is received
(for example, if the employee is required to work for a period of time in order
to have the right to sell the stock, as is the case with our grant of shares of
restricted stock), the recipient generally will not recognize income until the
stock becomes vested, at which time the recipient will recognize ordinary
compensation income equal to the excess, if any, of the fair market value of the
stock on the date it becomes vested over any amount paid by the recipient in
exchange for the stock. A recipient may, however, file an election with
the Internal Revenue Service, within 30 days of his or her receipt of the
stock award, to recognize ordinary compensation income, as of the date the
recipient receives the award, equal to the excess, if any, of the fair market
value of the stock on the date the award is granted over any amount paid by the
recipient in exchange for the stock.
The
recipient’s basis for the determination of gain or loss upon the subsequent
disposition of shares acquired as stock awards will be the amount paid for such
shares plus any ordinary income recognized either when the stock is received or
when the stock becomes vested. Subject to the requirement of
reasonableness, the provisions of Section 162(m) and the satisfaction of a
tax reporting obligation, we will generally be entitled to a tax deduction equal
to the taxable ordinary income realized by the recipient of the stock
award.
Section 162
Limitations
Section 162(m)
denies a deduction to any publicly-held corporation for compensation paid to
certain “covered employees” in a taxable year to the extent that compensation to
such covered employee exceeds $1 million. It is possible that
compensation attributable to stock awards, when combined with all other types of
compensation received by a covered employee from us, may cause this limitation
to be exceeded in any particular year. For purposes of
Section 162(m), the term “covered employee” means our principal executive
officer and our three highest compensated officers as of the end of a taxable
year as disclosed in our filings with the SEC. Certain kinds of
compensation, including qualified “performance-based” compensation, are
disregarded for purposes of the Section 162(m) deduction limitation. In
accordance with Treasury regulations issued under Section 162(m),
compensation attributable to certain stock awards will qualify as
performance-based compensation if the award is granted by a committee of the
Board of Directors consisting solely of “outside directors” and the stock award
is granted (or exercisable) only upon the achievement (as certified in writing
by the committee) of an objective performance goal established in writing by the
committee while the outcome is substantially uncertain, and the material terms
of the plan under which the award is granted is approved by stockholders.
A stock option may be considered “performance-based” compensation as
described in previous sentence or by meeting the following requirements: the
incentive compensation plan contains a per-employee limitation on the number of
shares for which stock options may be granted during a specified period, the
material terms of the plan are approved by the stockholders, and the exercise
price of the option or right is no less than the fair market value of the stock
on the date of grant.
The
regulations under Section 162(m) require that the directors who serve as
members of the Committee must be “outside directors.” This limitation
would exclude from the Committee directors who are (i) our current
employees or those of one of our affiliates, (ii) our former employees or
those of one of our affiliates who is receiving compensation for past services
(other than benefits under a tax-qualified pension plan), (iii) our current
and former officers or those of one of our affiliates, (iv) directors
currently receiving direct or indirect remuneration from us or one of our
affiliates in any capacity other than as a director, and (v) any other
person who is not otherwise considered an “outside director” for purposes of
Section 162(m). The definition of an “outside director” under
Section 162(m) is generally narrower than the definition of a “non-employee
director” under Rule 16b-3 of the Exchange Act.
Benefits
granted to our employees and other eligible persons under the 2003 Stock Plan
are made on a discretionary basis by the Committee. Accordingly, it
is not possible to determine the benefits that will be received by our executive
officers and other plan participants in fiscal 2009. As of the date
of this Proxy Statement, no awards have been granted under the 2003 Stock Plan
on the basis of the share increase provided for in the Amendment.
Stock
Options and Restricted Stock
The table
below shows, as to our Named Executive Officers (as defined elsewhere in this
Proxy Statement) and the other individuals and groups indicated, the (i) grants
of restricted stock and (ii) number of shares of common stock subject to option
grants made under the 2003 Stock Plan, for our 2008 fiscal year, together with
the weighted average exercise price payable per share in the case of the stock
options.
Plan
Benefits
2003
Stock Plan
Name and Position
Restricted
Stock Grants
Number
of Shares Underlying Option Awards
Weighted
Average Exercise Price
Michael
Edelhart, Chief Executive Officer
10,000
150,000
$1.90
Daniel
L. Coury, Sr., Former Chief Executive Officer
Approval
of the Amendment requires the affirmative vote of a majority of the shares for
which votes are cast, in person or by valid proxy, at a meeting at which a
quorum is present.
Our
Board of Directors recommends a vote FOR the proposal to amend our 2003 Stock
Plan.
RATIFICATION OF OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
Our Audit
Committee, pursuant to authority granted to it by our Board of Directors, has
selected Mayer Hoffman McCann P.C., certified public accountants, as independent
auditors to examine our annual consolidated financial statements for the fiscal
year ending September 30, 2009. Our Board is submitting this proposal
to the vote of the stockholders in order to ratify the Audit Committee’s
selection. If stockholders do not ratify the selection of Mayer
Hoffman McCann P.C., the Audit Committee will reconsider its selection of our
independent registered public accounting firm for fiscal 2009, although the
Audit Committee will be under no obligation to change its
selection.
Audit
and Other Fees
We have
paid or expect to pay the following fees to our independent registered public
accounting firm for work performed in 2008 and 2007 or attributable to the audit
of our 2008 and 2007 consolidated financial statements:
2008
2007
Audit
Fees
$
149,800
$
135,150
Audit-Related
Fees
9,250
73,500
Tax
Fees
24,375
16,800
All
Other Fees
26,500
2,500
Total
209,925
227,950
Each
year, the Audit Committee approves the annual audit engagement in
advance. The Audit Committee also has established procedures to
pre-approve all non-audit services provided by the Company’s independent
registered public accounting firm. All 2008 and 2007 non-audit
services listed above were pre-approved.
Audit Fees: This
category includes the audit of our annual financial statements and review of
financial statements included in our annual and period reports that are filed
with the SEC. This category also includes advice on audit and
accounting matters that arose during, or as a result of, the audit or the review
of interim financial statements, and the preparation of an annual “management
letter” on internal control and other matters.
Audit-Related
Fees: This category consists of assurance and related services
that are reasonably related to the performance of the audit or review of our
financial statements and are not reported above under “Audit Fees.”
Tax Fees: This
category consists of professional services rendered by Mayer Hoffman McCann P.C.
for tax compliance and tax advice. The services for the fees
disclosed under this category include technical tax advice.
All Other Fees: In
fiscal 2007, these fees were related to the Company’s transition from Moss Adams
to Mayer Hoffman McCann P.C. In fiscal 2008, these fees were related
to preparing the Company’s response to a comment letter dated April 17, 2008
that it received from the SEC in connection with certain of the Company’s past
filings with the SEC. All of the SEC’s comments have been resolved as
of the date of this Proxy Statement.
Attendance
of Mayer Hoffman McCann P.C. at 2009 Annual Meeting
Representatives
of Mayer Hoffman McCann P.C. are not expected to be present at the 2009 Annual
Meeting.
Vote
Required to Ratify Appointment of Mayer Hoffman McCann P.C.
The
affirmative vote of a majority of the shares for which votes are cast, in person
or by valid proxy, at the Annual Meeting is required to ratify the selection of
Mayer Hoffmann McCann P.C. as the Company’s independent registered public
accounting firm for fiscal 2009. An abstention counts as a vote cast
and, therefore, effectively counts as a vote against this proposal.
Our
Board of Directors recommends a vote FOR ratification of
Mayer
Hoffman McCann P.C.
as
our independent registered public accounting firm for fiscal 2009.
Our
executive management consists of the following personnel:
Michael
Edelhart
Chief
Executive Officer
Mr.
Edelhart has served as a director of our Company since May 22, 2008 and as
our Chief Executive Officer since June 1, 2008. Mr. Edelhart
was previously Managing Director of First30 Services, LLC, a consulting
firm that he founded to serve new companies in their early stages, from
February 2008 until his appointment as the Company’s CEO. Mr.
Edelhart has also served as an advisor to Infovell, Inc., a technology
company, and chairman of the board of Olive Software, Inc., an XML
software developer. Previously, Mr. Edelhart was Chief
Executive Officer of Zinio Systems, Inc., which produces and distributes
magazines in digital form, from January 2002 until June
2004. Mr. Edelhart has also served as a senior director of an
investment company, editor of various technology magazines and Internet
strategies consultant to such companies as Bloomberg, Reuters and
AARP. Mr. Edelhart has also authored more than 25 books, and he
holds a Bachelor of Science degree in journalism (summa cum laude) from
the University of Northern Colorado. Age:
57.
Mr.
Seshadri has served as our Chief Financial Officer since January 9,2009. From 2002 until 2008, Mr. Seshadri, was CFO of UFC, Inc.,
a participant in the perimeter security industry. Mr. Seshadri
participated in leading UFC, Inc. from a start-up company to generating
more than $25 million in annual sales through strategic acquisitions and
organic growth. Previously, Mr. Seshadri served twice as a
principal of Chestnut Associates, a management services company, from
2000-2002 and 1991-1996; as CFO of Cybercsi.com, an Internet services
company, from 1999-2000; and as CEO and CFO of Chinese Media Group, a
media and publishing company, from 1996-1999. Mr. Seshadri has
extensive experience in administration, operations, marketing, corporate
finance and mergers and acquisitions. He was nominated for the
Entrepreneur of the Year award in 1990 by Ernst & Young, Merrill Lynch
and INC. magazine. Mr. Seshadri holds an MBA degree, with
distinction, from the University of Michigan (Ann Arbor), and a B.Tech.
degree in Mechanical Engineering from IIT, Kanpur in India. He
is also a member of several professional organizations. Age:
57.
The
purpose of this Compensation Discussion and Analysis (“CD&A”) is to provide
material information about the Company’s compensation philosophy, objectives and
other relevant policies and to explain and put into context the material
elements of the disclosure that follows in this Proxy Statement with respect to
the compensation of our Named Executive Officers. For fiscal 2008,
the Company’s Named Executive Officers were:
Michael
Edelhart, Chief Executive Officer (from and after June 1, 2008);
Daniel L.
Coury, Sr., Chief Executive Officer (until May 19, 2008);
Gary L.
Perschbacher, Chief Financial Officer; and
John
Raven, President (from and after May 13, 2008) and Chief Operating
Officer.
The
Compensation Committee
The
Compensation Committee annually reviews the performance and compensation of the
Chief Executive Officer and the Company’s other executive
officers. Additionally, the Compensation Committee reviews
compensation of outside directors for service on the Board and for service on
committees of the Board, and administers the Company’s stock plans.
Role
of Executives in Determining Executive Compensation
The Chief
Executive Officer provides input to the Compensation Committee regarding the
performance of the other Named Executive Officers and offers recommendations
regarding their compensation packages in light of such
performance. The Compensation Committee is ultimately responsible,
however, for determining the compensation of the Named Executive Officers,
including the Chief Executive Officer.
The
Compensation Committee and the Board of Directors believe that the Company’s
compensation programs for its executive officers should reflect the Company’s
performance and the value created for its stockholders. In addition,
we believe the compensation programs should support the goals and values of the
Company and should reward individual contributions to the Company’s
success. Specifically, the Company’s executive compensation program
is intended to:
·
attract
and retain the highest caliber executive
officers;
·
drive
achievement of business strategies and
goals;
·
motivate
performance in an entrepreneurial, incentive-driven
culture;
·
closely
align the interests of executive officers with the interests of the
Company’s stockholders;
·
promote
and maintain high ethical standards and business practices;
and
·
reward
results and the creation of stockholder
value.
Factors
Considered in Determining Compensation; Components of Compensation
The
Compensation Committee makes executive compensation decisions on the basis of
total compensation, rather than on separate freestanding
components. We attempt to create an integrated total compensation
program structured to balance both short and long-term financial and strategic
goals. Our compensation should be competitive enough to attract and
retain highly skilled individuals. In this regard, we utilize a
combination of between two to four of the following types of compensation to
compensate our executive officers:
·
base
salary, which increases by 10% each year during the term of their
employment agreement;
·
performance
bonuses, which may be earned annually depending on the Company’s
achievement of pre-established
goals;
·
cash
bonuses given at the discretion of the Board;
and
·
equity
compensation, consisting of restricted stock and/or stock
options.
The
Compensation Committee periodically reviews each executive officer’s base salary
and makes appropriate recommendations to the Board of
Directors. Salaries are based on the following factors:
·
the
Company’s performance for the prior fiscal years and subjective evaluation
of each executive’s contribution to that
performance;
·
the
performance of the particular executive in relation to established goals
or strategic plans; and
·
competitive
levels of compensation for executive positions based on information drawn
from compensation surveys and other relevant
information.
Performance
bonuses and equity compensation are awarded based upon the recommendation of the
Compensation Committee. Restricted stock is granted under the 2003
Stock Plan and is priced at 100% of the closing price of the Company’s common
stock on the date of grant. Subject to stockholder approval as
discussed elsewhere in this Proxy Statement, incentive and/or non-qualified
stock options are generally granted under the 2003 Stock Plan, as well, with the
exercise price of such options set at 100% of the closing price of the Company’s
common stock on the date of grant. These grants are made with a view
to linking executives’ compensation to the long-term financial success of the
Company.
Use
of Benchmarking and Compensation Peer Groups
The
Compensation Committee did not utilize any benchmarking measure in fiscal 2008
and traditionally has not tied compensation directly to a specific profitability
measurement, market value of the Company’s common stock or benchmark related to
any established peer or industry group. Salary increases are based on
the terms of the Named Executive Officers’ employment agreements and correlated
with the Board’s and the Compensation Committee’s assessment of each Named
Executive Officer’s performance. The Company also generally seeks to
increase or decrease compensation, as appropriate, based upon changes in an
executive officer’s functional responsibilities within the
Company. Historically, the Compensation Committee has not used
outside consultants in determining the compensation of the Company’s Named
Executive Officers, and no such consultants were engaged during fiscal
2008.
Compensation
of Chief Executive Officer
As Chief
Executive Officer of the Company, Mr. Edelhart’s compensation is based on his
employment agreement with the Company, which provides for a minimum base salary,
the minimum benefits to which he is entitled under the compensation plans
available to the Company’s senior executive officers and payments or other
benefits he is entitled to receive upon termination of his
employment. Mr. Edelhart employment agreement, as described more
fully below, was entered into on October 1, 2008.
Other
Compensation Policies and Considerations
The
intention of the Company has been to compensate the Named Executive Officers in
a manner that maximizes the Company’s ability to deduct such compensation
expenses for federal income tax purposes. However, the Compensation
Committee has the discretion to provide compensation that is not
“performance-based” under Section 162(m) of the Code it determines that such
compensation is in the best interests of the Company and its
stockholders. For fiscal 2008, the Company expects to deduct all
compensation expenses paid to the Named Executive Officers.
Change in Pension Value and Nonqualified Deferred
Compensation Earnings
($)
All
Other
Compensation
($)
Total
($)
Michael
Edelhart, Chief Executive Officer (2)
2008
2007
70,000
-
(2)
-
-
27,500
-
(3)
10,155
-
(4)
-
-
-
-
-
-
107,655
-
Daniel
L. Coury, Sr., Former Chief Executive Officer (5)
2008
2007
292,304
458,931
150,000
150,000
301,501
88,000
-
-
-
-
-
-
559,969
90,284
(6)
(7)
1,303,774
787,215
Rajesh
Navar, Former President (8)
2008
2007
128,217
92,750
(10)
-
-
-
-
-
-
-
-
-
-
21,783
-
(9)
150,000
92,750
Gary
L. Perschbacher, Chief Financial Officer
2008
2007
187,160
203,052
(12)
4,250
-
-
-
-
-
-
-
-
-
17,047
-
(11)
208,457
203,052
John
Raven, President and Chief Operating Officer
2008
2007
230,831
244,808
5,000
5,000
-
-
-
-
-
-
-
-
24,200
-
(13)
268,781
249,808
_______________
(1)
The
amounts reflect the dollar amount recognized for financial statement
reporting purposes for the fiscal year ended September 30, 2008, in
accordance with Financial Accounting Standards Board Statement 123(R)
(“FAS 123(R)”), of restricted stock awards issued pursuant to the 2003
Stock Plan (i.e., grant date fair value amortized over the requisite
service period, but disregarding any estimate of forfeitures relating to
service based vesting conditions). For restricted stock awards,
fair value is calculated using the closing price on the grant date as if
these awards were vested and issued on the grant date. These
amounts reflect LiveDeal’s accounting expense for these awards, and do not
correspond to the actual value that may be recognized by the Named
Executive Officers.
(2)
Mr.
Edelhart was appointed Chief Executive Officer of the Company effective as
of June 1, 2008 at an initial base salary of $250,000 per
year.
(3)
Restricted
stock granted to Mr. Edelhart in connection with his election to the
Company’s Board of Directors on May 22, 2008. Vests in three
equal installments on the first, second and third anniversaries of the
date of grant. Amount based on the per share closing price
($2.75) of the Company’s common stock, as reported on the NASDAQ Capital
Market, on the date of grant.
(4)
Option
granted to Mr. Edelhart in connection with his appointment as the
Company’s Chief Executive Officer on June 1, 2008. The option
was fully vested as of September 30, 2008. Amount based on the
dollar amount recognized by the Company for financial statement reporting
purposes in accordance with FAS 123(R), which was computed using the Black
Scholes option pricing model assuming 95.9% volatility, a risk-free
interest rate of 2.2% and an expected term of 5.0
years.
(5)
Mr.
Coury employment as Chief Executive Officer of the Company was terminated
on May 19, 2008.
(6)
Includes
a lump-sum severance payment of $496,000 and a $63,969 payment for accrued
but unused vacation in connection with Mr. Coury’s termination as Chief
Executive Officer of the Company on May 19,2008.
This
amount represents the fair market value of an automobile that was provided
to Mr. Coury in part because of his role in facilitating the Company’s
Attorneys’ General Settlement.
Includes
a $17,047 payment for accrued but unused
vacation.
(12)
Of
this amount, $168,049 was paid to Mr. Perschbacher directly and $35,003
was paid to Tatum LLC, an executive services and consulting firm in which
Mr. Perschbacher is a partner.
(13)
Includes
a $24,200 payment for accrued but unused
vacation.
The
following table sets forth information regarding grants of plan-based awards to
the Named Executive Officers during the fiscal year that ended on September 30,2008, all of which were made under the Company’s 2003 Stock Plan.
Estimated
Future Payouts Under
Non
Equity
Incentive Plan Awards
Estimated
Future Payouts Under
Equity
Incentive Plan Awards
All Other
Stock
Awards: Number
All Other
Option
Awards: Number
Grant Date
Fair
of
Shares
of
Shares
Exercise
Price
Value
of
Name
and Principal
Position
Grant
Date
Threshold
($)
Target
($)
Maximum
($)
Threshold
(#)
Target
(#)
Maximum
(#)
of
Stock
or Units (#)
of
Stock
or Units (#)
of
Option
Award
Option
or
Stock
Awards
Michael
Edelhart,
Chief
Executive Officer
5/22/08
-
-
-
-
-
-
10,000
(1)
-
-
$
27,500
(2)
Daniel
L. Coury,
Sr.,
Former Chief Executive Officer
-
-
-
-
-
-
-
-
-
-
-
Rajesh
Navar,
Former
President
-
-
-
-
-
-
-
-
-
-
-
Gary
L. Perschbacher,
Chief
Financial Officer
-
-
-
-
-
-
-
-
-
-
-
John
Raven,
President
and Chief Operating Officer
-
-
-
-
-
-
-
-
-
-
-
_______________
(1)
Restricted
stock granted to Mr. Edelhart in connection with his election to the
Company’s Board of Directors. Vests in three equal installments
on the first, second and third anniversaries of the date of
grant.
(2)
Based
on the per share closing price ($2.75) of the Company’s common stock, as
reported on the NASDAQ Capital Market, on the date of
grant.
Mr.
Edelhart was hired by the Company to serve as its interim Chief Executive
Officer for an initial term of three months (subject to review on a quarterly
basis), effective as of June 1, 2008. Mr. Edelhart and the Company
entered into an employment agreement on that date, which was subsequently
amended on July 1, 2008 (extending the term for an additional month) and amended
and restated on October 1, 2008. Mr. Edelhart’s restated employment
agreement provides for a three-year term (from October 1, 2008), a base salary
of $250,000 per year, and annual cash bonus eligibility of $60,000 if the
Company achieves certain performance objectives established by the Company’s
Board of Directors and/or its Compensation Committee.
Mr.
Edelhart also received an option to purchase 150,000 shares of the Company’s
common stock under the Company’s 2003 Stock Plan. The option grant,
which is subject to stockholder approval as described elsewhere in this Proxy
Statement, vests in 48 equal monthly installments. Mr. Edelhart’s
options would immediately accelerate and vest upon any change of control of the
Company (if Mr. Edelhart’s employment was terminated from and after such change
of control). Finally, the restated employment agreement provides that
the Company will reimburse Mr. Edelhart for reasonable business expenses and
allow him to participate in its regular benefit programs.
Daniel
L. Coury, Sr.
On
September 19, 2006, we entered into an employment agreement with Mr. Coury,
which provided for his service as the Company’s Chief Executive
Officer. Pursuant to his employment agreement, Mr. Coury received a
base salary of $420,000, plus 10% annual salary increases, beginning with the
Company’s 2008 fiscal year; a $150,000 annual bonus, provided the Company
achieves certain performance measures as established by the Company’s Board of
Directors; a one-time bonus of $150,000 upon the Company’s listing on a national
securities exchange; and a grant of 10,000 shares of restricted stock of the
Company (“Restricted Shares”), which was scheduled to vest upon the earlier to
occur of three years or a “change of control” (as defined in the Company’s 2003
Stock Plan); provided, however, that Mr. Coury was obligated to return one-third
of the Restricted Shares at the end of each fiscal year unless certain
performance targets are reached for that fiscal year.
Additionally,
in the event that Mr. Coury terminated his employment for “good reason” or the
Company terminated his employment other than for “Cause” or on account of his
death or “disability,” as each of those terms was defined in the employment
agreement, Mr. Coury would receive 12 months of continuing salary, and all
restricted stock granted to Mr. Coury prior to the employment agreement and the
portion of the Restricted Shares that remained unvested and for which the annual
risk of forfeiture has lapsed due to annual performance targets being achieved
would be immediately accelerated.
The
Company terminated Mr. Coury’s employment as our Chief Executive Officer on and
as of May 19, 2008, at which point the employment agreement was also
terminated. In accordance with the agreement’s terms (pertaining to a
termination other than for Cause), the Company paid Mr. Coury (i) his earned but
unpaid salary and vacation through May 19, 2008 and (ii) a one-time lump sum
payment of $496,000 (equal to 12 months of his then current salary) in
connection with his departure. Of the 155,000 shares of restricted
stock of the Company that Mr. Coury held as of the date of his termination,
111,667 shares immediately vested and the remaining 43,333 shares were forfeited
and cancelled. The Company agreed to maintain Mr. Coury on its
health, dental and disability benefit plans for a period of 12
months. As required under the employment agreement, Mr. Coury
provided the Company with a general release of any and all claims relating to
his employment and/or the termination thereof in consideration of the payments
described above.
In
connection with the Company’s acquisition of LiveDeal, Inc. on June 6, 2007, the
Company entered into a three-year employment agreement with Mr.
Navar. The agreement provided for a base salary of $300,000 per year
plus participation in the Company’s health, disability and dental benefits,
insurance programs, pension and retirement plans, and all other employee benefit
and compensation arrangements available to other senior officers of the
Company. Commencing in the second year, Mr. Navar’s annual salary was
to be increased on an annual basis at a rate of at least 10% of the preceding
year’s annual salary. The Company also reimbursed Mr. Navar for reasonably
business expenses incurred by him in connection with his employment with the
Company.
The
agreement also provided that, if Mr. Navar’s employment was terminated as a
result of his death, disability, for Cause (as defined in the agreement), the
agreement otherwise expired, or for any reason other than Good Reason (as
defined in the agreement), Mr. Navar or his estate, conservator or designated
beneficiary, as the case may be, would be entitled to payment of any earned but
unpaid annual salary for the year in which Mr. Navar’s employment was terminated
through the date of termination, as well as any accrued but unused vacation,
reimbursement of expenses, and vested benefits to which Mr. Navar was entitled
in accordance with the terms of each applicable benefit plan. In the
event Mr. Navar’s employment was terminated for any other reason or if Mr. Navar
terminated his own employment for Good Reason on or before the expiration of the
Agreement, and provided that Mr. Navar executed a valid release of any and all
claims that Mr. Navar may have relating to his employment against the Company,
Mr. Navar was to be entitled to receive any earned but unpaid annual salary for
the year, any accrued but unused vacation, reimbursement of expenses and vested
benefits to which Mr. Navar was entitled in accordance with the terms of each
applicable benefit plan, plus a lump sum amount equal to three months of annual
salary that Mr. Navar would receive under the agreement if his employment with
the Company had not been terminated.
In
addition, in the event Mr. Navar’s employment was terminated as a result of his
death, Mr. Navar’s estate, conservator or designated beneficiary, as the case
may be, would be entitled to receive, in addition to Mr. Navar’s accrued salary
and benefits through the date of death, a lump sum payment equivalent to three
months of Mr. Navar’s annual salary in effect at the time of death.
Mr.
Navar’s employment agreement was terminated in connection with his resignation
as our President on and as of May 13, 2008. Other than amounts owed
to Mr. Navar through such date and COBRA benefits, Mr. Navar did not receive any
severance payments or other compensation from the Company in connection with his
departure.
Gary
L. Perschbacher
On March31, 2006, the Company entered into an employment agreement with Mr. Perschbacher
to serve as our Chief Financial Officer. On September 19, 2006, we
amended Mr. Perschbacher’s employment agreement. The terms of the
agreement provide for an extension of the term until September 20, 2009 and a
base salary of $200,000. Salary for subsequent years, beginning with
the Company’s 2008 fiscal year, will be determined by the Compensation
Committee, but in no event will be less than 110% of the prior year’s
salary. Mr. Perschbacher also received a grant of 10,000 shares of
restricted stock of the Company pursuant to the Company’s 2003 Stock
Plan.
Subsequent
to the end of the Company’s fiscal year, LiveDeal terminated Mr. Perschbacher’s
employment as our Chief Financial Officer on and as of January 9,2009. Mr. Perschbacher’s employment agreement was also terminated on
and as of that date, and Mr. Perschbacher received a lump-sum severance payment
equal to three months of his base salary.
Mr.
Raven’s employment agreement with the Company, which was initially entered into
on September 21, 2004, was renewed and extended as of February 6, 2006 and again
as of September 20, 2006. His current agreement provides for a term
ending September 20, 2009 and a base salary of $220,000. Salary for
subsequent years, beginning with the Company’s 2008 fiscal year, will be
determined by the Compensation Committee, but in no event will be less than 110%
of the prior year’s salary. Mr. Raven has received cash bonuses for
his performance under his employment agreement. Additionally, Mr.
Raven is to receive a bonus of 15,000 shares of restricted stock under the 2003
Stock Plan either upon change of control as defined in the plan or when the when
the Company’s stock trades at $20.00 per share, whichever occurs
first.
Subsequent
to the end of the Company’s fiscal year, Mr. Raven announced his resignation as
President and Chief Operating Officer of the Company, effective on and as of
February 15, 2009. Mr. Raven’s employment agreement will also
terminate on and as of that date, and Mr. Raven will receive a lump-sum
severance payment equal to three months of his base salary.
As
discussed above, we have employment agreements with certain of our Named
Executive Officers that provide severance benefits to the Named Executive
Officers upon termination in connection with a change in control or without
cause. In the table below, we summarize the estimated payments that
will be made to our current Named Executive Officer upon a termination of
employment without cause or in connection with a change in control of
LiveDeal. The major assumptions that we used in creating the table
are set forth directly below. The table includes an estimate of the
compensation that would accrue for each executive if the triggering event
occurred on September 30, 2008 (LiveDeal’s fiscal year-end) and, unless
otherwise noted, is based on the executive’s compensation on that
date. Calculations requiring a per share stock price are made on the
basis of the closing price of $1.50 per share of our common stock on the NASDAQ
Capital Market on September 30, 2008.
Change
in Control
No cash
payment will be made solely because of a Change in Control (as that term is
defined in the 2003 Stock Plan). The cash payments described under
the table heading “Change in Control” will be triggered upon a termination in
connection with a Change in Control. The Company typically makes
payments of this type in a lump sum following termination, but the employment
agreement enables the Company to continue paying salary in the ordinary course
for the three months following a termination (either in connection with a Change
in Control or without Cause).
Acceleration
of Equity Awards upon a Change in Control
Under the
2003 Stock Plan, the committee administering the plan and/or the Board has the
discretion to remove all restrictions on restricted stock awards that remain
outstanding at the time of any Change in Control. For purposes of the
“Restricted Stock Award” column, we have assumed the acceleration of the
restricted stock awards for Mr. Edelhart. Mr. Edelhart also holds
options to purchase 155,000 shares of the Company’s common stock, which will
partially accelerate in connection with any Change in Control.
The table
below does not discuss certain medical, disability or outplacement services
benefits that may be payable on termination to our current Named Executive
Officer. We also do not include any amounts payable on termination
that are generally available to all employees on a non-discriminatory
basis. In addition, this table does not include specific treatment of
a normal retirement.
Release
The
payment of the severance benefits summarized below is subject to the current
Named Executive Officer signing a general release acceptable to LiveDeal in
order for such severance benefits to take effect.
Name and Principal Position
Triggering Event
Severance
Payments ($)
Restricted
Stock Awards ($)
Potential
/ Total
Value ($)
Michael
Edelhart,
Chief
Executive Officer
Change
in Control
62,500
(1)
15,000
(2)
77,500
Without
Cause
62,500
(1)
15,000
(2)
77,500
_______________
(1)
Amount
equal to three months of Mr. Edelhart’s $250,000 annual base
salary.
(2)
Based
on full and immediate vesting of the shares of restricted stock granted to
Mr. Edelhart on May 22, 2008 in connection with his election to the
Company’s Board of Directors.
Based
on the closing price per share ($1.50) of the Company’s common stock, as
reported on the NASDAQ Capital Market, on September 30,2008.
(2)
Equal
to the fair market value of such shares on and as of the date of grant
(June 1, 2008), as determined by our Board of Directors based on the per
share closing price of the Company’s common stock, as reported on the
NASDAQ Capital Market, on the trading day immediately preceding the date
of grant.
(3)
Granted
to Mr. Edelhart on May 22, 2008 in connection with his election to the
Company’s Board of Directors.
The
following table sets forth information with respect to shares of LiveDeal common
stock acquired through exercises of stock options and vesting of restricted
shares and the number of shares acquired the value realized on exercise or
vesting by the Named Executive Officers.
Option Awards
Stock Awards
Name and Position
Number
of Shares Acquired on Exercise
(#)
Value
Realized on Exercise
($)
Number
of Shares Acquired on Vesting
(#)
Value
Realized on Vesting
($)(1)
Michael
Edelhart,
Chief
Executive Officer
-
-
-
-
Daniel
L. Coury, Sr.,
Former
Chief Executive Officer
-
-
111,667
(1)
328,301
(2)
Rajesh
Navar,
Former
President
-
-
-
-
Gary
L. Perschbacher,
Chief
Financial Officer
-
-
-
-
John
Raven,
President
and Chief Operating Officer
-
-
2,500
(3)
8,750
(4)
_______________
(1)
In
connection with the Company’s termination of Mr. Coury’s employment as our
Chief Executive Officer on May 19, 2008, 111,667 shares of restricted
stock held by Mr. Coury immediately vested as of such
date.
(2)
Based
on the closing price per share ($2.94) of the Company’s common stock, as
reported on the NASDAQ Capital Market, on the date of
vesting.
(3)
On
April 1, 2008, 2,500 shares of restricted stock held by Mr. Raven vested
according to the regular vesting schedule of a grant that was originally
made on April 1, 2005.
(4)
Based
on the closing price per share ($3.50) of the Company’s common stock, as
reported on the NASDAQ Capital Market, on the date of
vesting.
Employee
directors do not receive any separate compensation for their Board
activities. Non-employee directors each receive a $36,000 annual
retainer, as discussed above. Committee chairpersons receive an
additional annual retainer of $10,000. We reimburse directors for
reasonable expenses related to their Board service.
The
following table summarizes compensation paid to each of our non-employee
directors who served in such capacity during fiscal 2008.
Name
Fees
Earned or
Paid
in
Cash
($)
Option
Awards
($)
Stock
Awards
($)
Non-Equity
Incentive Plan Compensation
($)
Change
in Pension Value and Nonqualified Deferred Compensation Earnings
All
Other
Compensation
($)
Total ($)
Sheryle
Bolton (1)
-
-
20,000
(2)
-
-
-
20,000
Richard
D. Butler, Jr.
49,333
-
(3)
-
-
-
49,333
Thomas
J. Clarke, Jr. (4)
30,000
-
37,500
(5)
-
-
-
67,500
Joseph
F. Cunningham, Jr.
59,129
-
(6)
-
-
-
59,129
John
Evans
-
-
(7)
-
-
190,000
(8)
190,000
Greg
A. LeClaire (9)
16,398
-
27,500
(10)
-
-
-
43,898
Benjamin
Milk (11)
32,000
-
(11)
-
-
-
32,000
Richard
F. Sommer (12)
18,667
-
27,800
(13)
-
-
-
46,467
_______________
(1)
Ms.
Bolton was appointed to our Board of Directors on September 23,2008.
(2)
Based
on the closing price per share ($2.00) of the Company’s common stock, as
reported on the NASDAQ Capital Market, on the date of
grant. Award of 10,000 shares of restricted stock vests in
three equal installments on the first, second and third anniversaries of
the date of grant. This represents the only award outstanding
held by Ms. Bolton as of September 30,2008.
(3)
As
of September 30, 2008, Mr. Butler held 10,000 shares of restricted
stock, none of which were vested, via stock awards
outstanding.
(4)
Mr.
Clarke was initially appointed to our Board of Directors on November 20,2007, and was re-elected at our 2008 Annual
Meeting.
(5)
Based
on the closing price per share ($3.75) of the Company’s common stock, as
reported on the NASDAQ Capital Market, on the date of
grant. Award of 10,000 shares of restricted stock vests in
three equal installments on the first, second and third anniversaries of
the date of grant. This represents the only award outstanding
held by Mr. Clarke as of September 30,2008.
(6)
As
of September 30, 2008, Mr. Cunningham held 25,500 shares of restricted
stock, 250 of which were vested, via stock awards
outstanding.
(7)
As
of September 30, 2008, Mr. Evans held 20,000 shares of restricted
stock, none of which were vested, via stock awards
outstanding.
(8)
Includes
$175,000 in aggregate fees paid to entities with which Mr. Evans is
affiliated, Rubicon Capital Partners and Petrus Capital Partners, for
investor relations and related services provided by Mr. Evans to
LiveDeal. Also includes a $15,000 bonus paid to Mr. Evans
during fiscal 2008 in connection with the Company’s listing on the NASDAQ
Capital Market.
Mr.
LeClaire was appointed to our Board of Directors on May 22,2008.
(10)
Based
on the closing price per share ($2.75) of the Company’s common stock, as
reported on the NASDAQ Capital Market, on the date of
grant. Award of 10,000 shares of restricted stock vests in
three equal installments on the first, second and third anniversaries of
the date of grant. This represents the only award outstanding
held by Mr. LeClaire as of September 30,2008.
(11)
Mr.
Milk resigned from our Board of Directors on June 24, 2008 (effective as
of July 1, 2008). Upon his resignation, all 10,000 shares of
restricted stock then held by Mr. Milk were immediately forfeited and
cancelled.
(12)
Mr.
Sommer was appointed to our Board of Directors on May 22, 2008, and his
appointment became effective eon June 2,2008.
(13)
Based
on the closing price per share ($2.78) of the Company’s common stock, as
reported on the NASDAQ Capital Market, on the date of
grant. Award of 10,000 shares of restricted stock vests in
three equal installments on the first, second and third anniversaries of
the date of grant. This represents the only award outstanding
held by Mr. Sommer as of September 30,2008.
The
following table summarizes securities available for issuance under LiveDeal’s
equity compensation plans as of September 30, 2008:
Plan
Category
Number
of securities to be issued upon exercise of outstanding options, warrants
and rights
(a)
Weighted-average
exercise price of outstanding options, warrants and rights
(b)
Number
of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in column
(a))
(c)
Equity
compensation plans approved by security holders (1)
586,192
(2)
-
213,808
Equity
compensation plans not approved by security holders
-
-
-
Total
-
-
213,808
_______________
(1)
Includes
the 2003 Stock Plan.
(2)
This
number represents the number of shares of restricted stock that have been
granted to eligible participants under our 2003 Stock Plan. As of
September 30, 2008, 381,267 of these shares were vested and 204,925
remained restricted.
2003
Stock Plan
During
the fiscal year ended September 30, 2002, our stockholders approved the 2002
Employees, Officers & Directors Stock Option Plan (the “2002 Plan”), which
was intended to replace our 1998 Stock Option Plan (the “1998
Plan”). The 2002 Plan was never implemented, however, and no options,
shares or any other securities were issued or granted under the 2002
Plan. There were 300,000 shares of our common stock authorized for
issuance under the 2002 Plan. On June 30, 2003 and July 21, 2003,
respectively, our Board of Directors and a majority of our stockholders
terminated both the 1998 Plan and the 2002 Plan and approved our 2003 Stock
Plan. The 300,000 shares of common stock previously allocated to the
2002 Plan were re-allocated to the 2003 Stock Plan.
In April
2004, our stockholders and our Board of Directors approved an amendment to the
2003 Stock Plan to increase the aggregate number of shares available there under
by 200,000 shares in order to have an adequate number of shares available for
future grants. At our 2007 Annual Meeting, our stockholders approved
an amendment that increased the aggregate number of shares available for
issuance under the 2003 Stock Plan to 800,000 shares. At the 2008
Annual Meeting, our stockholders rejected an amendment that would have increased
the number of shares available for issuance from 800,000 shares to 1,100,000
shares. Subject to the approval of Proposal 2 discussed elsewhere in
this Proxy Statement, the number of shares available for issuance will be
increased by 600,000 shares, to 1,400,000 shares in the aggregate.
The
following Compensation Committee report does not constitute soliciting material
and should not be deemed filed or incorporated by reference into any Company
filing under the Securities Act of 1933, as amended (the “Securities Act”), or
the Securities Exchange Act of 1934, as amended (the “Exchange Act”), except to
the extent the intention to do so is expressed indicated.
The
Compensation Committee has reviewed and discussed with management the
Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K
and, based on such review and discussions, the Compensation Committee
recommended to the Board of Directors that the Compensation Discussion and
Analysis be included in this Proxy Statement.
The SEC
rules require us to include in our Proxy Statement a report from the Audit
Committee of our Board of Directors. The following report concerns
the Audit Committee’s activities regarding oversight of our financial reporting
and auditing process and does not constitute soliciting material and should not
be deemed filed or incorporated by reference into any other filing that we make
under the Securities Act of 1933 or the Securities Exchange Act of 1934, except
to the extent we specifically incorporate this report in such
filings.
It is the
duty of the Audit Committee to provide independent, objective oversight of our
accounting functions and internal controls. The Audit Committee acts
under a written charter that sets forth the audit-related functions we are
expected to perform. Our functions are to:
·
serve
as an independent and objective party to monitor LiveDeal, Inc.’s
financial reporting process and system of internal control
structure;
·
review
and appraise the audit efforts of LiveDeal, Inc.’s independent registered
public accounting firm; and
·
provide
an open avenue of communication among the independent auditors, financial
and senior management, and the Board of
Directors.
We meet
with management periodically to consider the adequacy of the Company’s internal
controls and the objectivity of its financial reporting. We discuss
these matters with the Company’s independent auditors and with appropriate
financial personnel. We regularly meet privately with the independent
auditors, who have unrestricted access to the Audit Committee. We
also recommend to the Board the appointment of the independent auditors and
review periodically their performance and independence from
management. Toward that end, we have considered whether the non-audit
related services provided by LiveDeal, Inc.’s independent auditors are
compatible with their independence. In addition, we review our
financing plans and report recommendations to the full Board for approval and to
authorize action.
Management
of LiveDeal, Inc. has primary responsibility for the Company’s financial
statements and the overall reporting process, including its system of internal
control structure. The independent auditors (a) audit the annual
financial statements prepared by management, (b) express an opinion as to
whether those financial statements fairly present LiveDeal, Inc.’s financial
position, results of operations, and cash flows in conformity with generally
accepted accounting principles, and (c) discuss with the Company any issues they
believe should be raised. Our responsibility is to monitor and review
these processes.
It is not
our duty or responsibility to conduct auditing or accounting reviews or
procedures. We are not employees of LiveDeal, Inc. while serving on
the Audit Committee. We are not and we may not represent ourselves to
be or to serve as accountants or auditors by profession or experts in the fields
of accounting and auditing. Therefore, we have relied, without
independent verification; on management’s representation that the financial
statements have been prepared with integrity and objectivity and in conformity
with accounting principles generally accepted in the United States of America
and on the representations of the independent auditors included in their report
on LiveDeal, Inc.’s consolidated financial statements. Our oversight
does not provide us with an independent basis to determine that management has
maintained appropriate accounting and financial reporting principles or
policies, or appropriate internal controls and procedures designed to assure
compliance with accounting standards and applicable laws and
regulations. Furthermore, our considerations and discussions with
management and the independent auditors do not assure that the Company’s
consolidated financial statements are presented in accordance with accounting
principles generally accepted in the United States of America, that the audit of
the Company’s consolidated financial statements has been carried out in
accordance with generally accepted auditing standards or that LiveDeal, Inc.’s
independent accountants are, in fact, “independent.”
This
year, we reviewed LiveDeal, Inc.’s audited consolidated financial statements and
met with both management and Mayer Hoffman McCann P.C., LiveDeal, Inc.’s
independent auditors, to discuss those consolidated financial
statements. Management has represented to us that the consolidated
financial statements were prepared in accordance with accounting principles
generally accepted in the United States of America. We have received
from and discussed with Mayer Hoffman McCann P.C. the written disclosure and the
letter required by Independence Standards Board Standard No. 1 (Independence
Discussions with Audit Committees). These items relate to that firm’s
independence from LiveDeal, Inc. We also discussed with Mayer Hoffman
McCann P.C. any matters required to be discussed by Statement on Auditing
Standards No. 61, as amended (Communication with Audit Committees).
In
reliance on the reviews and discussions referred to above, we recommended to the
Board that LiveDeal, Inc.’s audited consolidated financial statements should be
included in LiveDeal, Inc.’s Annual Report on Form 10-K for the fiscal year
ended September 30, 2008.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The
following table sets forth information regarding the beneficial ownership of our
common stock as of January 21, 2009, with respect to (i) each Named Executive
Officer and each director of our Company; (ii) all Named Executive Officers and
directors of our Company as a group; and (iii) each person known to our Company
to be the beneficial owner of more than five percent of our common
stock. We deem shares of our common stock that may be acquired by an
individual or group within 60 days of January 21, 2009, pursuant to the exercise
of options or warrants or conversion of convertible securities, to be
outstanding for the purpose of computing the percentage ownership of such
individual or group, but these shares are not deemed to be outstanding for the
purpose of computing the percentage ownership of any other person shown in the
table. Percentage of ownership is based on 6,195,682 shares of common
stock outstanding on January 21, 2009. The information as to
beneficial ownership was either (i) furnished to us by or on behalf of the
persons named or (ii) determined based on a review of the beneficial owners’
Schedules 13D/G and Section 16 filings with respect to our common
stock. Unless otherwise indicated, the business address of each
person listed is 2490 East Sunset Road, Suite 100, Las Vegas, Nevada89120.
Name of Beneficial Owner
Amount
and Nature of Beneficial
Ownership
Percentage
of Class
Rajesh
Navar (1)
814,756
13.2%
Daniel
L. Coury, Sr. (2)
143,417
2.3%
Michael
Edelhart (3)
30,625
*
Joseph
Cunningham (4)
25,500
*
John
Evans (5)
20,000
*
John
Raven (6)
15,000
*
Sheryle
Bolton (7)
10,000
*
Richard
D. Butler, Jr. (8)
10,000
*
Thomas
J. Clarke, Jr. (9)
10,000
*
Greg
A. LeClaire (10)
10,000
*
Richard
F. Sommer (11)
10,000
*
Gary
L. Perschbacher (12)
10,000
*
All
executive officers and directors as a group (12 persons)
1,109,298
17.9%
Joseph
R. Huber (13)
1,712,199
27.6%
Rajesh
Navar and Arati Navar, Co-Trustees of the Rajesh & Arati Navar Living
Trust dated 9/23/2002 (14)
668,385
10.8%
Torstar
Corporation (15)
475,718
7.7%
_________________________
*Represents
less than one percent of our issued and outstanding common stock.
(1)
Mr.
Navar is the Chairman of our Board of Directors. Mr. Navar owns
146,371 shares directly and 668,385 shares indirectly in his capacity as a
co-trustee and co-beneficiary of the Rajesh & Arati Navar Living Trust
dated 9/23/2002.
Mr.
Coury was our Chief Executive Officer until May 19, 2008, and a director
of the Company until May 23, 2008. In connection with his
departure as CEO, 43,333 shares of our restricted common stock formerly
held by Mr. Coury were immediately forfeited and cancelled. Of
the number shown, (i) 6,250 shares are owned by Children’s Management
Trust (the “Coury Trust”), of which Mr. Coury is a co-trustee, and (ii)
1,009 shares are owned by DLC & Associates Business Consulting, Inc.
(“DLC”), of which Mr. Coury is the President. Mr. Coury
disclaims beneficial ownership of the shares owned by the Coury Trust and
DLC except to the extent of his proportionate interest therein, if
any.
(3)
Mr.
Edelhart is our Chief Executive Officer and a director of the
Company. The number shown includes (i) 10,000 shares of
restricted common stock that Mr. Edelhart was granted upon his election to
our Board of Directors on May 22, 2008, (ii) a fully-vested option to
purchase 5,000 shares of our common stock that Mr. Edelhart was granted
upon his appointment as our CEO, which became effective on June 1, 2008,
and (iii) that portion of the option to purchase 150,000 shares of our
common stock, which Mr. Edelhart was granted under our 2003 Stock Plan on
October 3, 2008, that will be vested within 60 days of January 21, 2009
(i.e., 15,625 shares). Mr. Edelhart’s right to exercise the
October 3, 2008 option is subject to our stockholders’ approval of the
amendment of our 2003 Stock Plan described elsewhere in this Proxy
Statement.
(4)
Mr.
Cunningham is a director of the
Company.
(5)
Mr.
Evans is a director of the Company. Mr. Evans owns 10,000
shares directly and 10,000 shares indirectly as a co-owner of Rubicon
Capital Partners (“Rubicon”). Mr. Evans disclaims beneficial
ownership of the shares owned by Rubicon except to the extent of his
proportionate interest therein, if
any.
(6)
Mr.
Raven is our President and Chief Operating
Officer.
(7)
Ms.
Bolton is a director of the
Company.
(8)
Mr.
Butler is a director of the
Company.
(9)
Mr.
Clarke is a director of the
Company.
(10)
Mr.
LeClaire is a director of the
Company.
(11)
Mr.
Sommer is a director of the
Company.
(12)
Mr.
Perschbacher was our Chief Financial Officer until January 9,2009.
(13)
According
to a Form 4 filed by Mr. Huber on January 13, 2009. Mr. Huber
owns 1,676,425 shares directly and 35,774 shares indirectly (4,700 as
custodian of a custodial account for the benefit of his child; 5,561
through his spouse; and 25,513 as portfolio manager of an investment
company for which Mr. Huber’s employer serves as the investment
advisor). Address is 10940 Wilshire Boulevard, Suite 925, LosAngeles, California90024.
Section
16(a) of the Securities Exchange Act of 1934, as amended, requires our executive
officers, directors, and persons who own more than ten percent of a registered
class of our equity securities to file reports of ownership and changes in
ownership with the Securities and Exchange Commission (“SEC”).
Based
solely on our review of the copies of such forms filed with the SEC and on
written representations that no other reports were required, all Section 16(a)
filing requirements applicable to our directors, executive officers and our ten
percent or greater stockholders were complied with during the fiscal year that
ended September 30, 2008, with the exception of the Form 3 and Form 4 that were
required to be filed by Ms. Bolton upon her election to our Board of Directors
and grant of 10,000 shares of our restricted common stock in connection
therewith, respectively.
During
fiscal 2008, the Company paid aggregate consulting fees of $175,000 to Rubicon
Capital Partners and Petrus Capital Partners for investor relations and related
services provided by John Evans to the Company. Mr. Evans, who is a
director of the Company, is affiliated with both entities and is entitled to the
full amount of such consulting fees for purposes of the disclosure required
pursuant to Item 404 of Regulation S-K. The consulting arrangement
described above was entered into before Mr. Evans was appointed to the Company’s
Board on June 7, 2007.
In
accordance with its charter, the Audit Committee of the Company’s Board reviews
and recommends for approval all related party transactions (as such term is
defined for purposes of Item 404 of Regulation S-K). Because the
arrangement described above was entered into before Mr. Evans was a related
person for these purposes, it was not approved by the Audit Committee at that
time. The Board continues to believe that Mr. Evan’s services are
valuable to the Company and its stockholders, and that the Company’s costs
pursuant to the arrangement are reasonable. Accordingly, the Board
has continued the consulting arrangement since Mr. Evans’ appointment to the
Board. Mr. Evans is not considered an independent director of the
Company under SEC and NASDAQ rules, and he is not among the incumbents nominated
for re-election at the 2009 Annual Meeting.
To be
considered for inclusion in our proxy materials relating to our 2010 Annual
Meeting, stockholder proposals must be received at our principal executive
offices by October 5, 2009, which is 120 calendar days prior to the anniversary
of the mailing date of the Company’s 2009 Proxy Statement. Any notice
of a stockholder proposal submitted outside of the process prescribed by Rule
14a-8 of the Securities Exchange Act of 1934 after October 5, 2009 will be
considered untimely. All stockholder proposals must be in compliance
with applicable laws and regulations in order to be considered for possible
inclusion in the proxy statement and form of proxy for the 2010 Annual
Meeting.
As of the
date of this Proxy Statement, our Board of Directors does not intend to present
at the Annual Meeting any matters other than those described herein and does not
presently know of any matters that will be presented by other
parties. If any other matter is properly brought before the meeting
for action by stockholders, proxies in the enclosed form returned to us will be
voted in accordance with the recommendation of the Board of Directors or, in the
absence of such a recommendation, in accordance with the judgment of the proxy
holder.
ELECTRONIC DELIVERY OF FUTURE ANNUAL MEETING
MATERIALS
We are
offering our stockholders the opportunity to consent to receive our future proxy
materials and annual reports electronically by providing the appropriate
information when voting via the Internet. Electronic delivery could
save us a significant portion of the costs associated with printing and mailing
Annual Meeting materials, and we hope that our stockholders find this service
convenient and useful. If you consent and we elect to deliver future
proxy materials and/or annual reports to you electronically, then we will send
you a notice (either by electronic mail or regular mail) explaining how to
access these materials but will not send you paper copies of these materials
unless you request them. We may also choose to send one or more items
to you in paper form despite your consent to receive them
electronically. Your consent will be effective until you revoke it by
terminating your registration at the websitewww.investordelivery.com if you
hold shares at a brokerage firm or bank participating in the ADP program, or by
contacting our transfer agent, Registrar and Transfer Company, if you hold
shares in your own name.
By
consenting to electronic delivery, you are stating to us that you currently have
access to the Internet and expect to have access in the future. If
you do not have access to the Internet, or do not expect to have access in the
future, please do not consent to electronic delivery because we may rely on your
consent and not deliver paper copies of future Annual Meeting
materials. In addition, if you consent to electronic delivery, you
will be responsible for your usual Internet charges (e.g., online fees) in
connection with the electronic delivery of the proxy materials and annual
report.
The
Company is subject to the informational requirements of the Securities Exchange
Act of 1934, as amended. The Company files reports, proxy statements
and other information with the SEC. The public may read and copy any
materials that we file with the SEC at the SEC’s Public Reference Room at 100 F
Street, N.E., Washington, D.C. 20549. The public may obtain
information on the operation of the Public Reference Room by calling
1-800-SEC-0330. The statements and forms we file with the SEC have
been filed electronically and are available for viewing or copy on the SEC
maintained Internet site that contains reports, proxy, and information
statements, and other information regarding issuers that file electronically
with the SEC. The Internet address for this site can be found at:
www.sec.gov.
A copy of
our Annual Report on Form 10-K for the fiscal year ended September 30, 2008 has
been mailed to you with this Proxy Statement. The Annual Report is
not incorporated into this Proxy Statement and is not to be considered a part of
these proxy soliciting materials or subject to Regulations 14A or 14C or to the
liabilities of Section 18 of the Securities Exchange Act of 1934. The
information contained in the “Audit Committee Report,”“Compensation Committee
Report,” and “Performance Graph” shall not be deemed “filed” with the Securities
and Exchange Commission or subject to Regulations 14A or 14C or to the
liabilities of Section 18 of the Exchange Act. We will provide upon
written request, without charge to each stockholder of record as of the record
date, a copy of our Annual Report on Form 10-K for the fiscal year ended
September 30, 2008, as filed with the SEC. Any exhibits listed in the
Form 10-K report also will be furnished upon request at the actual expense
incurred by us in furnishing such exhibits. Any such requests should
be directed to our Corporate Secretary at our principal executive offices at
2490 East Sunset Road, Suite 100, Las Vegas, Nevada89120.
STOCKHOLDERS
ARE URGED TO IMMEDIATELY MARK, DATE, SIGN AND RETURN THE ENCLOSED PROXY VIA
FACSIMILE TO THE ATTENTION OF RAJEEV SESHADRI AT (702) 939-0246 OR IN THE
ENCLOSED POSTAGE-PAID ENVELOPE. YOUR VOTE IS IMPORTANT.
LiveDeal,
Inc. (the “Company”) hereby amends the LiveDeal, Inc. Amended and Restated 2003
Stock Plan (the “Plan”), pursuant to Section 12.1 of the Plan, as
follows:
1.
Article 2 of the Plan is hereby amended by adding the following new Section
2.2:
2.2 EXPIRATION
DATE. The Plan will expire on and no Award may be granted
under the Plan after the tenth anniversary of the Effective Date. Any
Awards that are outstanding on the tenth anniversary of the Effective Date shall
remain in force according to the terms of the Plan and the Award
Agreement.
2. Section
3.1(a) of the Plan is hereby amended in its entirety to read as
follows:
(a) “Award”
means any Restricted Stock Award, Performance Share Award, Performance-Based
Award or Option granted to a Participant under the Plan.
3. Section
3.1(e) of the Plan is hereby amended by adding the following new sentence to the
end thereof:
For any
Award subject to the requirements of Section 409A of the Code, the Award
Agreement for such Award may prescribe a different definition of the term
“Change of Control” that will apply for purposes of such Award and that complies
with the requirements of Section 409A of the Code.
4. Section
3.1(i) of the Plan is hereby amended in its entirety to read as
follows:
(i) “Disability”
or “Disabled” means a Participant is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
which can be expected to result in death or which has lasted or can be expected
to last for a continuous period of not less than 12 months. A
Participant will be considered Disabled under the Plan only when he or she
furnishes proof acceptable to the Committee of the existence of such
Disability.
5.
Section 3.1(k)(2) of the Plan is hereby amended in its entirety to read as
follows:
(2) In
the absence of an established market for the Stock of the type described in (1)
above, the Fair Market Value shall be determined by the Committee in accordance
with the requirements set forth in Treasury Regulation Section
1.409A-1(b)(5)(iv)(B) or any successor provision thereof.
6.
Section 3.1 of the Plan is hereby amended by adding the following new paragraphs
to the end thereof:
(v) “Incentive
Stock Option” means an Option that is intended to meet the requirements of
Section 422 of the Code and any successor provision thereto.
(w) “Non-Qualified
Stock Option” means an Option that is not intended to be an Incentive Stock
Option.
(x) “Option”
means a right granted to a Participant under Article 14 of the Plan to purchase
Stock at a specified price during specified time periods. An Option
may be either an Incentive Stock Option or a Non-Qualified Stock
Option.
7.
Section 4.3(k) of the Plan is hereby amended by adding the following sentence to
the end thereof:
Notwithstanding
any provision to the contrary, the Committee shall not take any action or fail
to take any action with respect to the operation of the Plan or any Award
Agreement that would cause all or part of the payment under any Award to be
subject to the additional tax under Section 409A of the Code.
8.
Section 5.1 of the Plan is hereby amended in its entirety to read as follows,
which amendment shall be effective as of the Effective Date, subject to approval
by the Company’s Stockholders:
5.1 NUMBER OF
SHARES. Subject to adjustment provided in Section 11.1, the
aggregate number of shares of Stock reserved and available for grant under the
Plan shall be 1,400,000.
9.
Section 10.2 of the Plan is hereby amended in its entirety to read as
follows:
10.2 EXCHANGE
PROVISIONS. The Committee may, at any time, offer to exchange
or buy out any previously granted Award for a payment in cash, Stock or another
Award (subject to Section 10.1), based on the terms and conditions the Committee
determines and communicates to the Participant at the time the offer is
made. Notwithstanding the foregoing, if an Award is subject to
Section 409A of the Code, the Committee will not take any action pursuant to
this Section that would result in an impermissible acceleration or further
deferral of such Award or that would otherwise cause such Award to be subject to
additional tax under Section 409A of the Code.
10. Section
10.3 of the Plan is hereby amended in its entirety to read as
follows:
10.3 TERM OF
AWARD. The term of each Award shall be for the period as
determined by the Committee, provided that in no event will the term of any
Option exceed a period of ten years from the date of its grant.
11. Section
10.4 of the Plan is hereby amended by adding the following sentence to the end
thereof:
Notwithstanding
the foregoing, if an Award is subject to Section 409A of the Code, the Committee
will specify the form of payment for such Award (i.e. single payment or
installments) in the Award Agreement and any subsequent change to the form of
payment for such Award will be made in accordance with Treasury Regulation
Section 1.409A-2(b).
12. Section
11.1 of the Plan is hereby amended by adding the following sentence to the end
thereof:
Any
substitution made pursuant to this Section shall be made in such a manner that
is consistent with the requirements of Section 409A of the Code and that will
not affect the status of any Award intended to qualify as an Incentive Stock
Option under Section 422 of the Code or as “performance based compensation”
under Section 162(m) of the Code.
13. Section
12.1 of the Plan is hereby amended by adding the following sentence to the end
thereof:
In
addition, except as otherwise provided in Article 11.1 related to changes in
capital structure, the terms of outstanding Awards may not be amended to reduce
the exercise price of outstanding Options or to cancel outstanding Options in
exchange for cash, other Awards or Options with an exercise price that is less
than the exercise price of the original Options without stockholder
approval.
14. The
Plan is hereby amended by adding the following new Section 13.14:
13.14. COMPLIANCE WITH SECTION 409A
OF THE CODE. Some
of the Awards that may be granted pursuant to the Plan (including Performance
Shares) may be considered to be “non-qualified deferred compensation” subject to
Section 409A of the Code. If an Award is subject to Section 409A of
the Code, the Award Agreement and this Plan are intended to comply fully with
and meet all of the requirements of Section 409A of the Code. The
Award Agreement shall include such provisions as may be necessary to assure
compliance with Section 409A of the Code. An Award subject to
Section 409A of the Code also shall be administered in good faith
compliance with the provisions of Section 409A of the Code as well as
applicable guidance issued by the Internal Revenue Service and the Department of
Treasury. To the extent necessary to comply with Section 409A of
the Code, any Award that is subject to Section 409A of the Code may be
modified, replaced or terminated in the discretion of the
Committee. Notwithstanding any provision of this Plan or any Award
Agreement to the contrary, in the event that the Committee determines that any
Award is or may become subject to Section 409A of the Code, the Company may
adopt such amendments to the Plan and the related Award Agreements, without the
consent of the Participant, or adopt other policies and procedures (including
amendments, policies and procedures with retroactive effective dates), or take
any other action that the Committee determines to be necessary or appropriate to
either comply with Section 409A of the Code or to exclude or exempt the
Plan or any Award from the requirements of Section 409A of the
Code.
15. The
Plan is hereby amended by adding the following new Article 14, which amendment
shall be effective as of the Effective Date, subject to approval by the
Company’s Stockholders:
ARTICLE
14
STOCK
OPTIONS
14.1 GENERAL. The
Committee is authorized to grant Options to Participants (other than to
Non-Employee Directors) on the following terms and conditions:
(a) EXERCISE
PRICE. The exercise price per share of Stock under an Option
will be determined by the Committee and set forth in the Award Agreement;
provided that the exercise price for any Option will not be less than the Fair
Market Value as of the date of grant.
(b) TIME AND CONDITIONS OF
EXERCISE. The Committee will determine the time or times at
which an Option may be exercised in whole or in part. The Committee
may also determine the performance or other conditions, if any, that must be
satisfied before all or part of an Option may be exercised.
(c) LAPSE OF
OPTION. An Option will lapse under the following
circumstances:
(1) The
Option will lapse ten years from the date it is granted, unless an earlier time
is set in the Award Agreement;
(2) Unless
otherwise provided in the Award Agreement, the vested portion of the Option will
lapse upon the earlier of (i) the Option’s expiration date or (ii) 90 days after
a Participant’s termination of employment or service for any reason other than
the Participant’s death or Disability. Upon a Participant’s
termination of employment or service with the Company or any Subsidiary, the
non-vested portion of the Option will lapse upon the date of such
termination. To the extent that any portion of an Incentive Stock
Option is exercised more than 90 days after the date the Participant ceases to
be an employee of the Company for any reason (other than death or Disability),
the exercise of such portion will be considered the exercise of a Non-Qualified
Stock Option; and
(3) Unless
otherwise provided in the Award Agreement, if the Participant terminates
employment or service on account of Disability or death before the Option lapses
pursuant to paragraph (1) or (2) above, the vested portion of the Option will
lapse on the earlier of (i) the Option’s expiration date, or (ii) one year after
the date the Participant terminates employment on account of Disability or
death. Upon a Participant’s termination of employment or service with
the Company or any Subsidiary, the non-vested portion of the Option will lapse
upon the date of such termination. Upon the Participant’s Disability
or death, any Options exercisable at the Participant’s Disability or death may
be exercised by the Participant’s legal representative or representatives, by
the person or persons entitled to do so under the Participant’s last will and
testament, or, if the Participant fails to make testamentary disposition or dies
intestate, by the person or persons entitled to receive the Option under the
applicable laws of descent and distribution. To the extent that any
portion of an Incentive Stock Option is exercised more than 12 months after the
date the Participant ceases to be an employee of the Company on account of
Disability, the exercise of such portion will be considered the exercise of a
Non-Qualified Stock Option.
(d) PAYMENT. The
Committee will determine the methods by which the exercise price of an Option
may be paid, the form of payment, including, without limitation, cash, shares of
Stock that have been held by the Participant for at least six months (through
actual tender or by attestation), promissory note, or other property (including
broker-assisted arrangements), and the methods by which shares of Stock will be
delivered or deemed to be delivered to a Participant.
(e) EVIDENCE OF
GRANT. All Options will be evidenced by an Award Agreement
between the Company and the Participant. The Award Agreement will
include such additional provisions as may be specified by the
Committee.
14.2 INCENTIVE STOCK
OPTIONS. Incentive Stock Options will be granted only to
employees of the Company and any Subsidiary and the terms of any Incentive Stock
Options granted under the Plan must comply with the following additional
rules.
(a) EXERCISE
PRICE. The exercise price per share of Stock will be set by
the Committee, provided that the exercise price for any Incentive Stock Option
may not be less than the Fair Market Value as of the date of the
grant.
(b) EXERCISE. In
no event may any Incentive Stock Option be exercisable for more than ten years
from the date of its grant.
(c) INDIVIDUAL DOLLAR
LIMITATION. The aggregate Fair Market Value (determined as of
the time an Award is made) of all shares of Stock with respect to which
Incentive Stock Options are first exercisable by a Participant in any calendar
year may not exceed $100,000.00 or such other limitation as imposed by Section
422(d) of the Code, or any successor provision. If for any reason
Incentive Stock Options are first exercisable by a Participant in excess of such
limitation, the excess will be considered Non-Qualified Stock
Options.
(d) TEN PERCENT
OWNERS. An Incentive Stock Option will be granted to any
individual who, at the date of grant, owns Stock possessing more than ten
percent of the total combined voting power of all classes of Stock of the
Company only if such Option is granted at a price that is not less than 110% of
Fair Market Value on the date of grant and the Option is exercisable for no more
than five years from the date of grant.
(e) EXPIRATION OF INCENTIVE
STOCK OPTIONS. No Award of an Incentive Stock Option may be
made pursuant to this Plan after the tenth anniversary of the Effective
Date.
(f) RIGHT TO
EXERCISE. During a Participant’s lifetime, an Incentive Stock
Option may be exercised only by the Participant.
16. Any
Awards of Options granted prior to approval of this First Amendment by the
Company’s Stockholders shall be expressly conditioned upon Stockholder approval
of this First Amendment.
17. Except
as otherwise set forth herein, this Amendment shall be effective as of September19, 2008 (the “Effective Date”), provided, however, that the Plan has been
operated in good faith compliance with Section 409A of the Code for period
beginning January 1, 2005 through the Effective Date.
18. This
First Amendment shall amend only the provisions of the Plan as set forth herein,
and those provisions not expressly amended hereby shall be considered in full
force and effect.
IN
WITNESS WHEREOF, the Company has caused this First Amendment to be executed by
its duly authorized representative on this 23rd day of October,
2008.
The
undersigned revokes all previous proxies, acknowledges receipt of the Notice of
the Annual Meeting of Stockholders to be held on February 26, 2009 and the Proxy
Statement and appoints Michael Edelhart and Rajeev Seshadri (or either of them),
the proxy of the undersigned, with full power of substitution to vote all shares
of common stock of LiveDeal, Inc. (the “Company”) that the undersigned is
entitled to vote, either on his or her own behalf of any entity or entities, at
the Annual Meeting of Stockholders of the Company to be held on February 26,2009 at 8:00 a.m. local time, at 795 Folsom Street, San Francisco, California94107, and at any adjournment or postponement thereof, with the same force and
effect as the undersigned might or could do if personally present
thereat. The shares represented by this proxy shall be voted in the
manner set forth on the reverse side.
Please be
sure to sign and date this Proxy in the box below.
Date
__________________________
______________________________
______________________________
Stockholder
(sign above)
Co-holder
(if any) (sign above)
PLEASE MARK VOTES AS IN THIS
EXAMPLE:
ý
PROPOSAL
NO. 1 – ELECTION OF DIRECTORS
For
Withhold
Sheryle
Bolton
¨
¨
Richard
D. Butler, Jr.
¨
¨
Thomas
J. Clarke, Jr.
¨
¨
Michael
Edelhart
¨
¨
Greg
A. LeClaire
¨
¨
Rajesh
Navar
¨
¨
Richard
F. Sommer
¨
¨
PROPOSAL
NO. 2 – AMENDMENT TO 2003 STOCK PLAN
For
Against
Abstain
To
amend the LiveDeal, Inc. Amended and Restated 2003 Stock Plan primarily to
(i) provide for the grant of stock options under the plan and (ii)
increase the number of shares available for issuance under the plan from
800,000 shares to 1,400,000 shares
£
£
£
PROPOSAL
NO. 3 – RATIFICATION OF AUDITORS
For
Against
Abstain
To
ratify the appointment of Mayer Hoffman McCann P.C. as LiveDeal’s
independent registered public accounting firm for the fiscal year ending
September 30, 2009
In
his discretion, the Proxy is authorized to vote upon such other matters as
may properly come before the meeting.
£
£
Please
disregard the following if you have previously provided your consent
decision:
£ By checking
the box to the left, I consent to future delivery of annual reports, proxy
statements, prospectuses, other materials, and shareholder communications
electronically via the Internet at a website that will be disclosed to
me. I understand that the Company may no longer distribute printed
materials to me regarding any future stockholder meeting until such consent is
revoked. I understand that I may revoke my consent at any time by
contacting the Company’s transfer agent, Registrar and Trust Company, 10
Commerce Drive, Cranford, New Jersey07016, and that costs normally associated
with electronic delivery, such as usage and telephone charges as well as any
costs I may incur in printing documents, will be my responsibility.
IF YOU
RETURN YOUR PROPERLY EXECUTED PROXY, WE WILL VOTE YOUR SHARES AS YOU
DIRECT. IF YOU DO NOT SPECIFY ON YOUR PROXY HOW YOU WANT TO VOTE YOUR
SHARES, WE WILL VOTE THEM FOR PROPOSALS 1, 2, AND 3 IN THE DISCRETION OF THE
PROXY ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY
ADJOURNMENTS THEREOF.
^
Detach above card, sign, date and mail in postage paid envelope provided.
^
LIVEDEAL,
INC.
Please
sign EXACTLY as your name appears hereon. When signing as
attorney, executor, administrator, trustee or guardian, please give your
full title as such. If more than one trustee, all should
sign. If shares are held jointly, both owners must
sign.
THIS
PROXY CARD IS VALID WHEN SIGNED AND DATED.
MAIL
YOUR PROXY CARD TODAY.
IF YOUR
ADDRESS HAS CHANGED, PLEASE CORRECT THE ADDRESS IN THE SPACE PROVIDED BELOW AND
RETURN THIS PORTION WITH THE PROXY IN THE ENVELOPE PROVIDED.
______________________________
______________________________
______________________________
Dates Referenced Herein and Documents Incorporated by Reference