UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2)
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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ViewCast.com, 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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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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(1)
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Title of each class of securities to which transaction applies:
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(2)
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Aggregate number of securities to which transaction applies:
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(3)
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Per unit price or other underlying value of transaction computed pursuant to Exchange Act
Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was
determined):
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(4)
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Proposed maximum aggregate value of transaction:
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(5)
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Total fee paid:
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Fee paid previously with preliminary materials.
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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.
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(1)
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Amount Previously Paid:
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(2)
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Form, Schedule or Registration Statement No.:
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(3)
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Filing Party:
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(4)
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Date Filed:
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October 31, 2011
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders of ViewCast.com, Inc.,
doing business as ViewCast Corporation (ViewCast), to be held on Wednesday, November 30, 2011, at
1:30 p.m. local time at our offices located at 3701 W. Plano Parkway, Suite 300, Plano, TX 75075.
At the meeting, you will be asked to consider and vote upon the following proposals:
(1) To elect four directors to serve for a one-year term or until their successors are duly
elected and qualified,
(2) To ratify the appointment of BKD, LLP as ViewCasts independent registered public
accounting firm for fiscal year 2011, and,
(3) To transact such other business as may properly come before the meeting and any
adjournment thereof.
After careful consideration, our Board of Directors has unanimously approved the proposals and
recommends that you vote FOR each of the proposals. Details of the proposals and business to be
conducted at the meeting can be found in the enclosed Notice of Meeting and Proxy Statement that
follow. In addition, we will report on the affairs of ViewCast and a discussion period will be
provided for questions and comments of general interest to stockholders.
Your vote is extremely important. Whether or not you are able to attend, your shares should
be represented and voted at this meeting. Accordingly, please complete, sign and date the enclosed
proxy card and mail it in the postage-paid return envelope provided at your earliest convenience.
Your prompt response is greatly appreciated.
Thank you for your consideration and support.
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Sincerely,
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John C. Hammock
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President and Chief Operating Officer
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ViewCast Corporation
Notice of Annual Meeting of Stockholders
November 30, 2011
TO THE STOCKHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of ViewCast.com, Inc., doing
business as ViewCast Corporation (ViewCast), a Delaware corporation, is scheduled to be held on
November 30, 2011 at 1:30 p.m., local time, at our offices located at 3701 W. Plano Parkway, Suite
300, Plano, TX 75075 for the following purposes:
1) To elect four directors to serve for a one-year term or until their successors are duly
elected and qualified;
2) To ratify the appointment of BKD, LLP as ViewCasts independent registered public
accounting firm for fiscal year 2011; and
3) To transact such other business as may properly come before the meeting and any adjournment
thereof.
Only stockholders of record at the close of business on October 12, 2011 are entitled to
notice of and to vote at the Annual Meeting and any adjournment or postponement thereof. All
stockholders are cordially invited to attend the Annual Meeting in person. To assure your
representation at the meeting, however, you are urged to complete, sign and date the enclosed form
of proxy and return it promptly in the envelope provided. Stockholders attending the meeting may
revoke their proxy and vote in person.
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FOR THE BOARD OF DIRECTORS
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John C. Hammock
President and Chief Operating Officer
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YOUR VOTE IS IMPORTANT!
Even if you plan to attend the meeting, please complete, sign and return promptly
the enclosed proxy card in the envelope provided to ensure that your vote will be
counted. You may vote in person at the meeting, if you so desire, even if you have
previously sent in your proxy.
If your shares are held in the name of a bank, brokerage firm or other nominee,
please contact the party responsible for your account and direct him or her to vote your
shares on the enclosed card.
TABLE OF CONTENTS
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Page
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1
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1
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10
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Previous Independent Registered Public Accounting Firm
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20
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20
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20
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ViewCast Corporation
PROXY STATEMENT
GENERAL INFORMATION
Proxy Solicitation
This Proxy Statement is furnished to the holders of common stock, $.0001 par value (the
Common Stock) and holders of Series E Convertible Redeemable Preferred Stock, $.0001 par value
(the Series E Preferred), (the Common Stock and Series E Preferred collectively, the Voting
Shares) of ViewCast.com, Inc., a Delaware corporation (ViewCast or the Company) in connection
with the solicitation by the Board of Directors of ViewCast of proxies for use at the Annual
Meeting of Stockholders to be held on Wednesday, November 30, 2011 (the Annual Meeting), or at
any adjournment or postponement thereof, pursuant to the accompanying Notice of Annual Meeting of
Stockholders. The purposes of the meeting and the matters to be acted upon are set forth in the
accompanying Notice of Annual Meeting of Stockholders. Stockholders do not have dissenters rights
of appraisal in connection with these proposals. The Board of Directors is not currently aware of
any other matters that will come before the Annual Meeting.
The Board of Directors of ViewCast is soliciting proxies for use at the Annual Meeting. These
proxy solicitation materials are first being mailed on or about October 31, 2011 to all
stockholders entitled to vote at the Annual Meeting. Proxies will be solicited chiefly by mail.
ViewCast will make arrangements with brokerage houses and other custodians, nominees and
fiduciaries to send proxies and proxy material to the beneficial owners of the Voting Shares and
will reimburse them for their expenses in so doing. Should it appear desirable to do so in order
to ensure adequate representation of Voting Shares at the Annual Meeting, officers, agents and
employees of ViewCast may communicate with stockholders, banks, brokerage houses and others by
telephone, facsimile or in person to request that proxies be furnished. ViewCast expects to spend
approximately $20,000.00 soliciting proxies for the Annual Meeting. All expenses incurred in
connection with this solicitation will be borne by ViewCast.
Revocability and Voting of Proxy
A form of proxy for use at the Annual Meeting and a return envelope for the proxy are
enclosed. Stockholders may revoke the authority granted by their execution of proxies at any time
before their effective exercise by filing with the Secretary of ViewCast a written notice of
revocation or a duly executed proxy bearing a later date, or by voting in person at the Annual
Meeting. Shares of ViewCasts Voting Shares represented by executed and unrevoked proxies will be
voted in accordance with the choice or instructions specified thereon. If no specifications are
given, the proxies intend to vote the shares represented thereby in favor of the matters as set
forth in the accompanying Notice of Annual Meeting of Stockholders and in accordance with their
best judgment on any other matters that may properly come before the Annual Meeting.
Voting Securities, Record Date and Voting Rights
Only holders of record of the Voting Shares at the close of business on October 12, 2011 are
entitled to notice of and to vote at the Annual Meeting. As of the record date, 55,699,005 shares
of Common Stock were issued and outstanding, excluding treasury stock. Each share of Common Stock
is entitled to one vote on all matters that may properly come before the Annual Meeting. As of the
record date, 80,000 shares of Series E Preferred were issued and outstanding. Each holder of
Series E Preferred is entitled to full voting rights and powers equal to the voting rights and
powers of the holders of the Common Stock. For each share of Series E Preferred held, the holder
thereof shall be entitled to the number of votes into which such share of Series E Preferred could
then be converted into Common Stock. The equivalent amount of Common Stock as of the record date
is 16,000,000 shares. Each holder of Series E Preferred shall be entitled to vote, together with
holders of the Common Stock, with respect to any question upon which holders of the Common Stock
have the right to vote. Fractional votes, however, are not permitted and any fractional voting
rights available on an as converted basis will be rounded to the nearest whole number (with
one-half being rounded upward).
The holders of a majority of the outstanding Voting Shares, present in person or by proxy,
will constitute a quorum at the Annual Meeting. Abstentions will be counted as present for
purposes of determining the presence or absence of a quorum. Broker non-votes are shares held by
brokers or nominees which are present in person or represented by proxy, but which are not voted on
a particular matter because the broker or nominee does not have discretionary voting authority for
that matter and instructions have not been received from the beneficial owner. Generally, broker
non-votes do not affect the determination of whether a quorum is present at the Annual Meeting
because, in most cases, some of the shares held in the brokers name have been voted and,
therefore, all of the shares held in the brokers name are considered present at the Annual
Meeting.
1
Directors will be elected by a plurality of the votes cast in person or by proxy at the Annual
Meeting. Accordingly, abstentions or non-votes will not affect the election of candidates
receiving the plurality of votes.
The ratification of the appointment of BKD, LLP as ViewCasts independent registered public
accounting firm for fiscal year 2011 and all other matters to come before the Annual Meeting
require the approval of the holders of a majority of the votes cast in person or by proxy at the
Annual Meeting. For this purpose and under applicable law, abstentions and broker non-votes will
be deemed shares not voted on such matters, will not count as votes for or against the proposals,
and will not be included in calculating the number of votes necessary for the approval of such
matters.
Inspectors of Election appointed by ViewCast will tabulate votes at the Annual Meeting.
Notice of Internet Availability of Proxy Materials
Important Notice Regarding the Availability of Proxy Material for the Stockholders Meeting to
be held on November 30, 2011.
The Proxy Statement and Annual Report are available at
http://www.proxydocs.com/vcst
.
2
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of September 30, 2011, based on information
obtained from public records and our books and records regarding the persons named below, with
respect to the beneficial ownership of shares of our Common Stock and Series E Preferred,
respectively, by: (i) each person or a group known by us to be the owner of more than five percent
(5%) of each class of our outstanding voting securities, (ii) each director, (iii) each executive
officer and (iv) all officers and directors as a group. Except as otherwise indicated, each person
shown in the table has voting and investment power with respect to the shares listed next to his or
her name. Except as otherwise indicated, the address for each person listed in the table below is
c/o ViewCast.com, Inc., 3701 W. Plano Parkway, Suite 300, Plano, TX 75075.
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Percentage of
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Percentage of
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Series E
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Common
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Shares of Series E
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Preferred
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Shares of Common
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Stock
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Preferred Stock
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Stock
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Name and Address of
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Stock Beneficially
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Beneficially
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Beneficially
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Beneficially
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Beneficial Owner
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Owned
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Owned (1), (2)
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Owned
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Owned
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Directors and Executive Officers
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JOSEPH AUTEM
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163,200
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(3)
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*
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DAVID W. BRANDENBURG
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4,609,934
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(4)
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8.26
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%
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ADRIAN GIUHAT
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102,778
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(5)
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*
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JOHN C. HAMMOCK
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52,778
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(6)
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*
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SHEREL D. HORSLEY
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150,000
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(7)
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*
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LAURIE L. LATHAM
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669,211
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1.19
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GEORGE C. PLATT
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757,194
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(9)
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1.35
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JOHN W. SLOCUM, JR.
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160,000
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(10)
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All executive officers and
directors as a group (eight (8)
persons)
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6,665,095
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(11)
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11.59
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%
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Certain Persons
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H.T. ARDINGER, JR.
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35,523,545
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(12)
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49.55
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80,000
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(14)
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100
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JOHN J. SCAMARDELLA
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3,208,347
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(13)
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5.76
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*
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Less than one percent (1%)
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1.
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A person is deemed to be the beneficial owner of securities that can be acquired by such
person within 60 days from September 30, 2011 upon the exercise of options or conversion of
shares of Series E Preferred Stock. Each beneficial owners percentage ownership is determined
by assuming that options that are held by such person (but not those held by any other person)
and which are exercisable within 60 days from September 30, 2011 have been exercised and that
shares of Series E Preferred Stock that are held by such person have been converted. Unless
otherwise indicated, we believe that all persons named in the table have sole voting and
investment power with respect to all shares of Common Stock beneficially owned by them.
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2.
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Based on a total of 55,699,005 shares issued and outstanding which excludes treasury stock,
plus, for each person listed, any Common Stock that person has the right to acquire within 60
days from September 30, 2011 pursuant to options or the conversion of shares of Series E
Preferred Stock.
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3.
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Includes the following shares issuable under the 1995 Directors Option Plan upon exercise of
options: (i) 10,000 shares issuable upon exercise at $0.26 per share, (ii) 10,000 shares
issuable upon exercise at $0.615 per share, and (iii) 10,000 shares issuable upon exercise at
$0.37 per share; includes under the 2005 Stock Incentive Plan (the
2005 Plan
): (i) 25,000
shares issuable upon exercise at $0.39 per share, (ii) 25,000 shares issuable upon exercise at
$0.42 per share, (iii) 25,000 shares issuable upon exercise at $0.475 per share, (iv) 25,000
shares issuable upon exercise at $0.17 per share, and (v) 25,000 shares issuable upon exercise
at $0.235 per share.
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4.
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Information is based on filings made with the SEC under Sections 13 or 16 of the Exchange Act
through September 30, 2011 and includes: (i) 934,717 shares held directly by Mr. Brandenburgs
spouse and (ii) the following shares issuable
under the 2005 Plan upon exercise of options: (i) 50,000 shares issuable upon exercise at $0.315
per share, (ii) 25,000 shares issuable upon exercise at $0.17 per share, and (iii) 25,000 shares
issuable upon exercise at $0.235 per share.
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5.
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Includes the following shares issuable under the 2005 Plan upon exercise of options: (i)
77,778 shares issuable upon exercise at $0.2645 per share.
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6.
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Includes the following shares issuable under the 2005 Plan upon exercise of options: (i)
52,778 shares issuable upon exercise at $0.17 per share.
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7.
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Includes the following shares issuable under the 2005 Plan upon exercise of options: (i)
50,000 shares issuable upon exercise at $0.20 per share, (ii) 25,000 shares issuable upon
exercise at $0.42 per share, (iii) 25,000 shares issuable upon exercise at $0.475 per share,
(iv) 25,000 shares issuable upon exercise at $0.17 per share, and (v) 25,000 shares issuable
upon exercise at $0.235 per share.
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8.
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Includes the following shares issuable under the 1995 Employee Stock Option Plan (the
1995
Employee Plan
) and the 2005 Plan upon exercise of options: (i) 107,639 shares issuable upon
exercise at $0.33 per share, (ii) 79,167 shares issuable upon exercise at $0.17 per share,
(iii) 60,000 shares issuable upon exercise at $0.485 per share, (iv) 50,000 shares issuable
upon exercise at $0.285 per share, (v) 62,500 shares issuable upon exercise at $0.42 per
share, and (vi) 250,000 shares issuable upon exercise at $0.48 per share.
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9.
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Includes the following shares issuable under the 1995 Employee Plan and the 2005 Plan upon
exercise of options: (i) 200,000 shares issuable upon exercise at $0.33 per share, (ii) 50,000
shares issuable upon exercise at $0.17 per share, (iii) 70,000 shares issuable upon exercise
at $0.485 per share, (iv) 70,000 shares issuable upon exercise at $0.285 per share, (v) 12,500
shares issuable upon exercise at $0.42 per share, and (vi) 130,000 shares issuable upon
exercise at $0.48 per share.
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10.
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Includes the following shares issuable under the 2005 Plan upon exercise of options: (i)
33,335 shares issuable upon exercise at $0.20 per share, (ii) 25,000 shares issuable upon
exercise at $0.42 per share, (iii) 25,000 shares issuable upon exercise at $0.475 per share,
(iv) 25,000 shares issuable upon exercise at $0.17 per share, and(v) 25,000 shares issuable
upon exercise at $0.235 per share.
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11.
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Includes an aggregate of 1,810,697 shares of our Common Stock issuable under the 1995
Directors Option Plan, 1995 Employee Plan and 2005 Plan, upon the exercise of stock options.
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12.
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Information is based on filings made with the SEC under Sections 13 or 16 of the Exchange Act
through September 30, 2011 and includes: (i) 181,501 shares owned by Mr. Ardingers spouse,
(ii) 5,562,687 shares owned by Ardinger LP, and (iii) 16,000,000 shares of Common Stock
reserved for issuance upon the conversion of $8,000,000 of Series E Convertible Redeemable
Preferred Stock to Common Stock at $0.50 per share owned by Ardinger LP.
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13.
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Based on filings made with the SEC under Sections 13 or 16 of the Exchange Act through
September 30, 2011.
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14.
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All 80,000 shares of Series E Preferred Stock are held directly by Ardinger LP.
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4
PROPOSAL 1
ELECTION OF DIRECTORS
General
At the 2011 Annual Meeting, four directors are to be elected. Unless otherwise specified, the
enclosed proxy will be voted in favor of the persons named below to serve until the next Annual
Meeting or until their successors are elected and qualified. Messrs. Platt, Autem, Horsley, Slocum
and Brandenburg currently serve as directors of ViewCast. Mr. Horsley has elected to not stand as
a director nominee at the next Annual Meeting. In the event any of these nominees is unable to
serve as a director, the shares represented by the proxy will be voted for the person, if any, who
is designated by the Board of Directors to replace the nominee. All nominees have consented to be
named and have indicated their intent to serve if elected. The Board of Directors has no reason to
believe that any of the nominees will be unable to serve or that any vacancy on the Board of
Directors will occur.
The Board of Directors recommends a vote FOR the election of the directors named on the
enclosed Proxy.
Directors
The names of the nominees for Director and certain other information about them as of
September 30, 2011 are set forth below.
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Name
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Age
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Director Since
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Position Held with Company
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George C. Platt
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71
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1999
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Chairman of the Board
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Joseph Autem
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53
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1999
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Director
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John W. Slocum, Jr.
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71
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2006
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Director
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David W. Brandenburg
|
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66
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|
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2008
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|
|
Director
|
George C. Platt
has served as a director since September 1999 and currently serves as Chairman
of the Board. On July 12, 2011, the Board named Mr. Platt as Executive Chairman. Mr. Platt joined
ViewCast as Chief Executive Officer and President in September 1999. In October 2005, he
relinquished the role of President, and he retired from the position of Chief Executive Officer in
July 2008. From 1991 through 1999, Mr. Platt was employed by Intecom, Inc., a Dallas-based
provider of multimedia telecommunications products and services, holding the positions of Chief
Executive Officer and President. Prior to his employment with Intecom, Inc., Mr. Platt was the
President of SRX, an entrepreneurial startup company. Before that, he was a Group Vice President
(Business Communications Group) at Rolm Corporation until its acquisition by International Business
Machines Corporation, or IBM, and prior to his employment at Rolm Corporation, Xerox employed him
for fifteen years, where he attained the position of Operations Manager, Southeast Region. Mr.
Platt holds an M.B.A. from the University of Chicago and a B.S. degree from Northwestern
University. For over a decade, Mr. Platt served as a director for Intervoice, Inc., a publicly
held company, until it was acquired by Convergys in the fall of 2008. During the most recent five
years he did not serve as a committee member after his son joined Intervoice as a senior executive.
Mr. Platt brings to the Board of Directors a broad base of experience including operations,
sales and business development and provides a senior management and public company board
perspective from his experience in various organizations. Further, his contacts domestically and
globally continue to be beneficial to ViewCast.
Joseph Autem
has served as a director since January 1999. He currently serves as a Managing
Director of CFO Partners since October 2009. Additionally, he is the general partner of Autem,
L.L.C., an investment company formed in May 1999. Previously, Mr. Autem was a director of
Broadcast.com, Inc. from September 1996 through August 1999. From July 1998 to the present he has
served as a consultant to various companies, including a prior role as the President and a Director
of Paralegals Plus, Inc. which filed for bankruptcy in November 2008. Mr. Autem was the Chief
Financial Officer of Luminant from January 1999 until July 1999. Mr. Autem previously served as
Senior Vice President and Chief Financial Officer of CS Wireless, Inc., a privately held company
that provides wireless video and high speed internet access, from June to July 1998 and as a
partner of Vision Technology Partners, a private investment company, from March 1997 to June 1998.
From July 1996 to December 1996, Mr. Autem served as Chief Financial Officer of Broadcast.com, Inc.
From 1992 to 1996, Mr. Autem served as Vice President of Finance, Secretary, Treasurer and Chief
Financial Officer of OpenConnect Systems, Inc., a
software company. Earlier in his career, Mr. Autem was in public practice with the national
accounting firm, Arthur Anderson. Mr. Autem holds a B.S. in Accounting from Pittsburg State
University. In the prior five years, Mr. Autem has not served as a director on a public company
board except for ViewCast.
5
Mr. Autem brings to the Board of Directors financial and accounting experience and insight
developed within the technology industry.
John W. Slocum, Jr.
has served as director since June 2006. Professor Slocum holds the title
of Professor Emeritus in the Cox School of Business, Southern Methodist University in Dallas,
Texas. Professor Slocum has taught on the faculties of the University of Washington, Pennsylvania
State University, Ohio State University, the International University of Japan, and the Tuck School
at Dartmouth College. He is the author of 28 books and currently serves as the co-editor of the
Journal of World Business
,
Organizational Dynamics
, and
Journal of Leadership and Organizational
Studies
. Professor Slocum has also served as a management consultant to organizations such as
ARAMARK, Lockheed Martin, Celanese, Prudential Bache Indonesia, among others. He is on the
executive development staff of programs for the Governors of Oklahoma and Texas, SMU, and the
University of North Texas Health Sciences, among others. Professor Slocum is currently on the
board of advisors for Kisco Senior Living, LLC of Carlsbad, California. In the prior five years,
Professor Slocum has not served as a director on a public company board except for ViewCast.
Professor Slocum brings to the Board of Directors a management and organizational perspective
developed during his academic years as a professor at a top business school along with his
experience from consulting with various organizations.
David W. Brandenburg
has served as director since December 2008. Mr. Brandenburg is a former
Chairman and Vice Chairman of the Board of Directors, Chief Executive Officer and President of
Intervoice, a publicly held company acquired by Convergys in the fall of 2008. Intervoice
developed and delivered enhanced services platforms to cellular service providers that enabled them
to provide voice, text and video messaging and other enhanced services to their customers.
Intervoice also provided Interactive Voice Response systems to Fortune 1000 and other companies.
Mr. Brandenburg first joined Intervoice in 1990 as Chief Operating Officer after having served as a
director since 1989. He was promoted to President of Intervoice in 1991 where he served until
December 1994 when he relinquished his position of President and assumed the position of Vice
Chairman of the Board until May 1995. He re-joined Intervoice as Chief Executive Officer in June
2000 and also served as Chairman of the Board from December 2000 until his retirement in November
2004. In June of 2007, Mr. Brandenburg re-joined the Intervoice Board of Directors as Chairman.
He served in this position until the company was acquired by Convergys in September 2008. Mr.
Brandenburg also served as President and Chief Executive Officer of AnswerSoft, Inc. a global
provider of call center software automation solutions from November 1997 to May 1998, at which time
it completed a merger with Davox Corporation. Davox subsequently changed its name to Concerto
Software, Inc. and, following a merger with Aspect Communications Corp., is now part of Aspect
Software, Inc., a privately-held company. Mr. Brandenburgs current principal occupation is
serving as a private, self-employed investor and philanthropist. He is Chairman and Chief
Executive Officer of the Brandenburg Life Foundation, a 501(c)(3) charitable foundation which he
founded with his wife in 1996. Mr. Brandenburg received a BSEE from the University of Michigan and
a MSEE from Southern Methodist University. In the prior five years, Mr. Brandenburg has served as
a director on a public company board as described above for ViewCast and Intervoice.
Mr. Brandenburg brings to the Board of Directors experience ranging from business operations
and strategy to public company boards along with a stockholder perspective from his experience as a
substantial investor in various organizations.
There are no family relationships among the directors, executive officers, or other
significant employees of ViewCast.
Executive Officers
The following table contains information as of September 30, 2011 regarding the executive
officers of ViewCast. Each holds the offices listed below and will hold such positions until the
next regular meeting of the Board of Directors to be held immediately following the Annual Meeting
of Stockholders or until their successors are chosen and qualified by the Board of Directors:
|
|
|
|
|
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Name
|
|
Age
|
|
Office Held with Company
|
|
John C. Hammock
|
|
|
48
|
|
|
President and Chief Operating Officer
|
Laurie L. Latham
|
|
|
55
|
|
|
Chief Financial Officer and Senior Vice President of Finance and
Administration
|
Adrian Guihat
|
|
|
52
|
|
|
Chief Technical Officer and Senior Vice President of Product Development
|
6
John C. Hammock
moved to his current position as President and Chief Operating Officer in July
2011. Mr. Hammock joined ViewCast as Vice President of Sales in February 2010. Prior to joining
ViewCast, Mr. Hammock was Vice President of Americas Sales for Kasenna Inc., a publicly-traded
provider of software to telecommunications, cable and consumer electronics manufacturers. From
2004 to 2006, he was Senior Vice President of Worldwide Sales for Austin, Texas based Voxpath
Networks, a provider of hosted voice over Internet protocol communications solutions for small
businesses. From 2000 to 2004, Mr. Hammock was Vice President of Major Accounts for Columbia,
MD-based Corvis Corporation, a publicly-traded optical network solutions provider that later became
Broadwing Corporation. In addition, Mr. Hammocks earlier career experience included various roles
within the global telecommunications, media and video markets in business development and sales.
Mr. Hammock holds a B.S. in Economics from Texas Christian University.
Laurie L. Latham
has served as Chief Financial Officer and Senior Vice President of Finance
and Administration of ViewCast since December 1999. From 1997 until she joined ViewCast, Ms.
Latham served as Senior Vice President and Chief Financial Officer of Perivox Corporation, an
interactive communications and direct marketing company. From 1994 through 1997, she was the Vice
President of Finance and Administration at Axis Media Corporation. Prior to joining Axis Media
Corporation, Ms. Latham had been in public practice with national and regional accounting firms,
including KPMG Peat Marwick, and was the Vice President of Finance and Administration for Medialink
International Corporation, a food industry technology company located in California. In addition,
Ms. Lathams earlier career experience included roles within the oil and gas, real estate and
agricultural industries. Ms. Latham received her B.B.A. from the University of Texas and is a
Certified Public Accountant.
Adrian Giuhat
serves as Chief Technical Officer and Senior Vice President of Product
Development, a recent role he began in September 2010. Prior to joining ViewCast, Mr. Giuhat was a
Senior Vice President and CTO of Nexstar Broadcasting Group, a public company that owns and
operates 62 TV stations in 14 U.S. states, from 2008 until joining ViewCast. From 2003 to 2008, he
was founder and CTO for AvantGuard Technologies a product development, data warehousing, technology
consulting company, which defined, developed, and marketed web based products used in video
distribution, print advertising and pre-sales lead management. During 2000 to 2003, Mr. Giuhat was
the Senior Vice President of Engineering for Digital Generation (DG) Systems (currently known as DG
FastChannel Inc.), a leader in content distribution of digital media to over 1,000 TV and 7,000
radio stations across the United States and Canada. Prior to 2000, Mr. Giuhat held senior level
product development and management roles with ADC-Teledata, an Israeli telecom company, and with
DSC-Alcatel USA, a multi-national telecom provider company. Early in his career, Mr. Giuhat held
management engineering roles with Nortel Networks-BNR and Olivetti International. Mr. Giuhat
received his M.Sc. and B.S. from the University of Bucharest and M.B.A. from Ottawa University.
Relationships and Related Transactions
Since October 1998, the Company has maintained a credit facility with the Ardinger Family
Partnership, LTD., an entity controlled by one of its principal stockholders, Mr. H.T. Ardinger.
Most recently, ViewCast.com, Inc., Osprey Technologies, Inc. and VideoWare, Inc. (jointly and
severally, the Borrower) amended the terms and conditions of the loan and security agreement with
the Ardinger Family Partnership, Ltd. effective March 31, 2011. Under the amended terms minimum
monthly principal payments of $21,422 will begin December 31, 2011 and any amount outstanding of
the primary principal and the secondary principal mature December 31, 2014, subject to certain
earlier payment conditions. The interest on the primary principal amount will accrue and be paid
monthly based on an interest rate per annum which is the greater of 5.0% or the effective prime
rate plus 0.75% (Effective rate of 5.00% as of December 31, 2010 and June 30, 2011). Interest on
the secondary principal shall accrue and be paid monthly based on the effective Applicable Federal
Rate, as defined in the agreement, (0.32% and 2.00% as of December 31, 2010 and June 30, 2011,
respectively). The amended note agreement is secured by all the assets of the Borrower. In the
event of default, the Ardinger Family Partnership, LTD. may exercise one or more of the following
rights and remedies (i) the entire unpaid balance of principal of the note, together with all
accrued but unpaid interest thereon, and all other indebtedness owing to the Ardinger Family
Partnership, LTD. or by the Company shall, at the option of the Ardinger Family Partnership, LTD.,
become immediately due and payable (ii) the Ardinger Family Partnership, LTD., may, at its option,
cease further advances.
On March 5, 2009, H.T. Ardinger and the Ardinger Family Partnership, Ltd. exercised the
outstanding warrant to purchase 2,500,000 shares of the Companys unregistered common stock at an
amended exercise price of $0.376 per share and the Company received proceeds of $940,000. On March
13, 2009, the Company completed the purchase of certain assets from Ancept Media Server, LLC
(Seller) related to the development and licensing of software products that provide the
management of the life cycle phases of digital media (the Ancept Assets) pursuant to the terms of
the Asset Purchase Agreement dated March 5, 2009, as amended, by and between the Company and Seller
(the Purchase Agreement). The source of a significant portion of the cash paid to Seller was
obtained by the Company pursuant to the warrant exercise by H.T. Ardinger and the Ardinger Family
Partnership, Ltd. on March 5, 2009.
7
On December 30, 2010, the Company received net proceeds of $745,000 from the private placement
of 2,950,847 shares of common stock. The purchase price per share of common stock was
approximately $0.2525, which was the weighted average closing price for the ten trading days
immediately prior to December 30, 2010. The investors included David W. Brandenburg, a principal
stockholder and member of the Board of Directors of the Company, and his spouse.
On May 4, 2011, the Company entered into a Preferred Stock Exchange Agreement (the Exchange
Agreement) with H.T. Ardinger Jr. (Ardinger), Ardinger Family Partnership, Ltd. (the Ardinger
Partnership), Adkins Family Partnership, Ltd. and RDB Limited, p/k/a Baker Family Partnership,
Ltd. to convert the outstanding shares of its Series B Convertible Preferred Stock (the Series B
Preferred Stock) and Series C Convertible Preferred Stock (the Series C Preferred Stock) and to
restructure Series E Convertible Redeemable Preferred Stock (the Series E Preferred Stock), and
collectively with the Series B Preferred Stock and Series C Preferred Stock, (the Preferred
Stock). The exchange agreement and all related changes to the Preferred Stock (collectively the
preferred stock redemption) have been accounted for as an extinguishment of Preferred Stock.
As of May 4, 2011, 800,000 shares of Series B Preferred Stock were outstanding at a stated
value of $10 per share. Ardinger, a principal stockholder of the Company, held 400,000 shares of
Series B Preferred Stock, with the remainder held by other existing stockholders. The Series B
Preferred Stock was convertible into common stock of the Company at a fixed price of $3.625 per
share, subject to certain requirements, which was modified under the Exchange Agreement to $0.60
per share of underlying Common Stock and was converted on May 4, 2011 into a total of 13,333,333
shares of Common Stock.
As of May 4, 2011, 200,000 shares of Series C Preferred Stock were outstanding at a stated
value of $10 per share held by Ardinger. The Series C Preferred Stock was convertible into common
stock of the Company at a fixed price of $0.60 per share, subject to certain requirements, which
remained the conversion price under the Exchange Agreement and was converted on May 4, 2011 into a
total of 3,333,333 shares of Common Stock.
Holders of Series B Preferred Stock and Series C Preferred Stock had no voting rights except
on amendments to the Companys Articles of Incorporation to change the authorized shares, or par
value, or to alter or change the powers or preferences of their respective preferred stock issues.
The Series B Preferred Stock and Series C Preferred Stock carried cumulative dividends of 8% and 9%
per year, respectively, and were generally payable semi-annually in arrears in cash or common stock
of the Company, at the Companys option. On May 4, 2011, under the Exchange Agreement, when the
Series B Preferred Stock and Series C Preferred Stock were converted into Common Stock, any and all
dividends, owed or owing on the Preferred Stock, were cancelled.
The Ardinger Family Partnership, Ltd. holds 80,000 shares of ViewCasts Series E Preferred
Stock with each share having a stated value of $100 with voting rights on an as converted basis
with the common stock and accrues no dividends. The liquidation preference on the Series E
Preferred Stock is the $100 per share stated value multiplied by 107% if the liquidation event
occurs after December 11, 2010.
Under the Exchange Agreement, until May 4, 2012 (the Temporary Conversion Period), each
outstanding share of Series E Preferred Stock shall be convertible, at the option of the holder of
such Series E Preferred Stock, into shares of Common Stock at a temporary conversion price of $0.50
per share of underlying Common Stock (the Temporary Conversion Price). If at any time during the
Temporary Conversion Period, the Company completes, in one transaction or a series of related
transactions, the placement(s) of Common Stock for total aggregate net proceeds of at least
$7,000,000 (a Securities Placement), each outstanding share of Series E Preferred Stock shall
automatically convert into the corresponding number of shares of Common Stock at the Temporary
Conversion Price. During the Temporary Conversion Period, if any shares of Series E Preferred
Stock are converted, all other outstanding shares of Series E Preferred Stock shall also
automatically convert at the Temporary Conversion Price. Upon a conversion of the shares of Series
E Preferred Stock during the Temporary Conversion Period, either voluntarily or as a result of a
Securities Placement, the Company shall issue 16,000,000 shares of Common Stock in exchange for the
80,000 outstanding shares of Series E preferred stock.
The Company has also agreed under the Exchange Agreement, among other things: (i) that the
definition of registrable securities under that certain Registration Rights Agreement, dated
December 11, 2006, between the Company and the Ardinger Partnership (the Registration Rights
Agreement) shall include any shares of Common Stock issued in exchange for the shares of Preferred
Stock previously held by Ardinger or the Ardinger Partnership, (ii) that Ardinger shall be a party
to the Registration Rights Agreement, and (iii) to use commercially reasonable efforts to: (a) meet
the applicable listing requirements of the NASDAQ Stock Market and (b) upon meeting such
requirements, list its Common Stock on the NASDAQ Stock Market.
8
Other than as permitted in the Exchange Agreement, from May 4, 2011 through July 31, 2011, the
holders of the shares of Common Stock issued pursuant to the Series B/C Conversion have agreed not
to sell or otherwise transfer such shares of Common Stock. Additionally, from August 1, 2011
through January 27, 2012, such holders have agreed to limit any sales or transfers of such Common
Stock in accordance with the volume limitations of Rule 144 of the Securities Act of 1933, as
amended (the Securities Act), as if such holders were affiliates of the Company. If during the
Temporary Conversion Period, a change in control of the Company occurs, these transfer restrictions
shall terminate.
Ardinger is the largest stockholder of the Company and the sole general partner of the
Ardinger Partnership. Immediately prior to the Series B/C Conversion, Ardinger: (i) directly
beneficially held (a) 400,000 shares of Series B Preferred Stock and (b) 200,000 shares of Series C
Preferred Stock and (ii) indirectly beneficially held, as sole general partner of the Ardinger
Partnership, 80,000 shares of Series E Preferred Stock.
Compliance with Section 16(a) Beneficial Ownership Reporting
Section 16(a) of the Exchange Act requires ViewCasts officers, directors and persons who
beneficially own more than 10% of a registered class of ViewCasts equity securities to file
reports of ownership and change in ownership with the SEC. Officers, directors and greater than
10% stockholders are required to furnish ViewCast with copies of Section 16(a) forms they file.
To ViewCasts knowledge, based solely on review of the copies of such reports furnished to
ViewCast, and written representations that no other reports were required during the year ended
December 31, 2010, all of ViewCasts officers, directors and greater than 10% beneficial owners
complied with the applicable Section 16(a) requirements, except that Mr. Brandenburg belatedly
reported five transactions. Mr. Brandenburg is now current in his Section 16(a) filings.
9
PROPOSAL NO. 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
General.
The Board of Directors has appointed the firm of BKD, LLP the independent registered public
accounting firm for ViewCast for 2011. A representative of BKD, LLP is expected to attend the
Annual Meeting. The representative will have the opportunity to make a statement, if he or she so
desires, and will be available to respond to appropriate questions from stockholders.
The Board of Directors recommends a vote FOR ratification of BKD, LLP as ViewCasts
independent registered public accounting firm for the 2011 fiscal year.
Audit and Audit Related Fees
Subject to ratification by the stockholders, the Board of Directors has appointed BKD, LLP as
our independent registered public accounting firm for the 2011 fiscal year. During the fiscal
years ended December 31, 2009 and December 31, 2010, the Company had retained BKD, LLP, to provide
audit and other services as follows:
|
|
|
|
|
|
|
|
|
|
|
2009
|
|
|
2010
|
|
Audit (1)
|
|
$
|
116,275
|
|
|
$
|
111,825
|
|
Audit Related Fees (2)
|
|
|
5,000
|
|
|
|
|
|
Tax Fees (3)
|
|
|
20,925
|
|
|
|
23,050
|
|
|
|
|
|
|
|
|
TOTAL
|
|
$
|
142,200
|
|
|
$
|
134,875
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Consists primarily of quarterly review and annual audit services
|
|
(2)
|
|
Consists primarily of review services for Form S-8
|
|
(3)
|
|
Consists primarily of Federal and State tax services
|
The Audit Committee does not have a policy for the pre-approval of non-audit services to be
provided by the Companys independent registered public accounting firm. Any such services would
be considered on a case-by-case basis. The Audit Committee approved the tax fees for services
provided by the independent auditors in fiscal years 2009 and 2010.
Audit Committee Report
The following is a report of the Audit Committee of the Board of Directors (the Audit
Committee) describing the policies applicable to the review of the Companys financial statements
and audit for the year ended December 31, 2010. The Audit Committee oversees the Companys
financial reporting process on behalf of the Board of Directors. Management has the primary
responsibility for the financial statements and the reporting process including the systems of
internal controls. In fulfilling its oversight responsibilities, the Audit Committee reviewed and
discussed the audited financial statements with management including a discussion of the quality,
not just the acceptability, of the accounting principles, the reasonableness of significant
judgments, and the clarity of disclosures in the financial statements.
The Audit Committee reviewed with the independent registered public accounting firm, which is
responsible for expressing an opinion on the conformity of those audited financial statements with
generally accepted accounting principles, their judgments as to the quality, not just the
acceptability, of the Companys accounting principles and such other matters as are required to be
discussed with the Audit Committee under generally accepted auditing standards. The Audit
Committee discussed with the independent registered public accounting firm the matters required to
be discussed by Statement of Auditing Standards No. 61. In addition, the Audit Committee has
received the written disclosures and the letter from the independent accountant required by
applicable requirements of the Public Company Accounting Oversight Board regarding the independent
accountants communications with the Audit Committee concerning independence, and has discussed
with the independent accountant the independent accountants independence.
The Audit Committee discussed with the Companys independent registered public accounting firm
the overall scope and plans for their audit. The Audit Committee meets with the independent
registered public accounting firm, with and without management present, to discuss the results of
their examinations, their evaluations of the Companys internal controls, and the overall quality
of the Companys financial reporting.
10
Based on the reviews and discussions referred to above, the Audit Committee recommended to the
Board of Directors (and the Board of Directors has approved) that the audited financial statements
be included in the Annual Report on Form 10-K and the amendment thereto for the year ended December
31, 2010 as filed with the Securities and Exchange Commission. The Audit Committee and the Board
have also recommended, subject to stockholder approval, the selection of the Companys independent
registered public accounting firm.
Submitted by the Audit Committee of ViewCast.com, Inc.
Joseph Autem, Chairman
Sherel D. Horsley
John W. Slocum, Jr.
Notwithstanding anything to the contrary set forth in any of the Companys previous filings under
the Securities Act of 1933, as amended, or the Exchange Act, that might incorporate future filings,
including this Proxy Statement, in whole or in part, the following Audit Committee Report is not
filed with the SEC and shall not be incorporated by reference into any such filings. This Audit
Committee Report is not soliciting material and is not subject to Regulation 14A or the
liabilities under Section 18 of the Exchange Act.
11
CORPORATE GOVERNANCE
Independence of Directors
The Board of Directors is comprised of a majority of directors who qualify as independent
according to NASDAQ Stock Market listing standards. Based upon the term independent as defined
by NASDAQ Stock Market listing standards, the Board of Directors has determined that four of our
five directors (Joseph Autem, Sherel D. Horsley, John W. Slocum, Jr. and David W. Brandenburg) are
independent. All members of each of the Audit Committee and the Compensation Committee are
independent directors.
Annually, the Board of Directors reviews the relationships that each director has with us and
our affiliates as well as the criteria and standards for determining independence. Upon review,
the Board of Directors affirmatively determines which directors are considered independent.
None of the executive officers of ViewCast served as a member of the board of directors or as
a member of the compensation committee or similar board committee of another entity during 2010,
which entity had an executive officer serving on the Board of ViewCast or its Compensation
Committee. Consequently, there are no interlocking relationships that might affect the
determination of the compensation of executive officers of ViewCast.
Board Leadership Structure
The positions of President and Chief Operating Officer are held by Mr. Hammock. In these
roles, Mr. Hammock has general charge, supervision and control of the business and affairs of
ViewCast and is responsible generally for assuring that policy decisions of the Board are
implemented as adopted. As part of his duties, Mr. Hammock is also responsible for planning
ViewCasts growth, for stockholder relations and relations with investment bankers and other
similar financial institutions and financial advisors, for exploring opportunities for mergers,
acquisitions and new business, and for performing such other duties as the Board may from time to
time assign. The position of Chairman of the Board is held by Mr. Platt who previously served as
President and Chief Executive Officer of ViewCast. As the Chairman of the Board, Mr. Platt
provides leadership to the Board and works with the Board to define its structure and activities in
the fulfillment of its responsibilities and to be a direct liaison and mentor to Mr. Hammock. We
believe this Board leadership structure is appropriate for our Company at this time, in that the
role of Chairman of the Board working with the President and Chief Operating Officer promotes
experience, leadership and direction for our Company.
The Board recognizes, however, that other leadership models may be appropriate, depending on
the circumstances, and that no single Board leadership model is most effective in all circumstances
for any company. For this reason, the Board periodically reviews its leadership structure to ensure
that the stockholders are best served thereby.
Oversight of Risk Management
The Boards role in the Companys risk oversight process includes receiving regular reports
from members of senior management regarding operational, financial, legal, regulatory and strategic
areas including possible areas of material risk to the Company. Both management and the Board have
responsibility for risk management though the Board has the ultimate oversight responsibility for
the risk process. The Audit Committee assists the Board in its oversight of the Companys risk
assessment and risk management policies. The Audit Committee focuses on financial risk, including
internal controls, and receives an annual risk assessment report prepared internally.
Code of Ethics
The Company has adopted a Corporate Compliance Program Guidelines and Ethics Policy that
applies to all employees and officers of the Company and its subsidiaries, including the principal
executive officer and principal financial and accounting officer. This policy meets the
requirements of a code of ethics as defined by Item 406 of Regulation S-K and was filed as
Exhibit 14.1 to the Companys report on Form 10-KSB for the fiscal year ended December 31, 2003.
The Code of Conduct and Ethics is available on our website at
www.viewcast.com
under the
Company Investor Relations. You may obtain a copy of the Code of Conduct and Ethics, free of
charge, by sending a request in writing to Cordia Leung at the following address: Cordia Leung,
ViewCast.com, Inc., 3701 W. Plano Parkway, Suite 300, Plano, TX 75075.
12
Stockholder Communications with the Board of Directors.
Stockholders may send written communications to our Board of Directors by delivering them to
The Board of Directors, Viewcast.com, Inc., at 3701 W. Plano Parkway, Suite 300, Plano, TX 75075.
All stockholder communications will be forwarded to the Chairman of the Board of Directors or, if
addressed to the Audit or Compensation Committee, forwarded to the appropriate committee chairman.
Meetings of the Board of Directors and Committees
Meetings
.
The Board of Directors held a total of six meetings during ViewCasts fiscal year
ended December 31, 2010. Each Director attended in person or telephonically at least 75% of the
meetings held by the Board of Directors and all committees thereof on which he served.
It is our policy that all directors and nominees should attend the annual meeting of
stockholders. All of our directors attended the 2010 Annual Meeting.
The Board of Directors has established two standing committees: the Audit and Compensation
Committees.
Audit Committee
.
The Audit Committee oversees and monitors ViewCasts financial reporting
process and internal control system, reviews and evaluates the audit performed by ViewCasts
independent registered public accounting firm and reports any substantive issues found during the
audit to the Board and reviews and evaluates the internal audit program. The Audit Committee is
directly responsible for the appointment, compensation and oversight of the work of our independent
registered public accounting firm. The Audit Committee will also review and approve all
transactions with affiliated parties. The Board of Directors has adopted a written charter for the
Audit Committee, which can be located in the investor relations section of our website at
www.viewcast.com.
Directors Autem, Horsley and Slocum serve as the members of the Audit Committee. All members
of the committee are independent directors as defined under the NASDAQ Stock Market listing
standards. The Audit Committee met four times in the 2010 fiscal year.
The Board of Directors has determined that Mr. Autem qualifies as an Audit Committee
Financial Expert as that term is defined by applicable SEC rules, and the Board of Directors has
designated him as such.
Nomination of Directors
. The Board of Directors currently does not have a standing nominating
committee and consequently has no nominating committee charter. The Board of Directors believes
that it is appropriate under existing circumstances for the Company not to have a nominating
committee because the Board is comprised of only six members, four of whom are independent as
defined under the NASDAQ Stock Market listing standards. Currently, each member of the Board of
Directors participates in the consideration of director nominees.
The Board of Directors does not have a formal policy with regard to the consideration of any
director candidates recommended by stockholders because the Board believes it can adequately
evaluate any such recommendation on a case-by-case basis. However, the Board of Directors would
consider for possible nomination, qualified nominees recommended by stockholders. Stockholders who
wish to propose a qualified candidate for consideration should submit complete information as to
the identity and qualifications of that person to the Secretary of the Company at 3701 W. Plano
Parkway, Suite 300, Plano, Texas 75075 sufficiently in advance of an annual meeting.
Absent special circumstances, the Board of Directors will continue to nominate qualified
incumbent directors whom the Board believes will continue to make important contributions to the
Board and the Company. The Board generally requires that nominees be persons of sound ethical
character, be able to represent all stockholders fairly, have demonstrated professional
achievement, have meaningful experience and have a general appreciation of the major business
issues facing ViewCast. The Board of Directors does not have a formal process for identifying and
evaluating nominees for director. However, the Board will evaluate all candidates, whether
recommended by stockholders or otherwise, in accordance with the above criteria.
Further, the Board strives to nominate directors who represent an appropriate mix of
backgrounds and experiences to best enhance the functions of the Board. The Board does not have a
formal diversity policy in place. However, it does consider diversity in the broadest sense when
seeking and reviewing potential Board nominees, thus including factors such as age, sex, race,
ethnicity and geographic location, as well as a variety of experience and educational backgrounds
(such as operations, finance, accounting and marketing experience and education).
13
Compensation Committee
.
The Compensation Committee reviews and approves salaries and bonuses
for all officers, administers options outstanding under ViewCasts stock incentive plans, provides
advice and recommendations to the Board regarding directors compensation and carries out the
responsibilities required by the rules of the SEC. The Compensation Committee believes that its
processes and oversight should be directed toward attracting, retaining and motivating employees
and non-employee directors to promote and advance the interests and strategic goals of the Company.
The Compensation Committee does not have any employee members. As requested by the Compensation
Committee, the Chief Executive Officer will provide information and may participate in discussion
regarding compensation for other executive officers. The Compensation Committee does not routinely
utilize outside compensation consultants but considers other general industry information and
trends if available. The Board of Directors has not adopted a written charter for the Compensation
Committee.
The Compensation Committee has relied on ViewCasts outside legal counsel for advice as to its
obligations under applicable corporate, securities, tax and employment laws, for assistance in
interpreting its obligations under compensation plans and agreements, and for drafting plans and
agreements to document business decisions. The Compensation Committee has the right to select other
legal counsel.
Directors Brandenburg, Horsley and Slocum serve as the members of the Compensation Committee,
with Mr. Slocum serving as Chairman. All members of the Compensation Committee are independent
directors as defined under the NASDAQ Stock Market listing standards. The Compensation Committee
met one time in the 2010 fiscal year.
14
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Executive Officer Compensation
The table below set forth for 2009 and 2010 the compensation of each of our named executive
officers.
SUMMARY COMPENSATION TABLE
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Option
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|
Incentive Plan
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|
All other
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|
|
|
|
|
|
|
|
|
Salary (1)
|
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|
Bonus (1)
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|
|
Awards (2)
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|
Compensation
|
|
|
Compensation (3)
|
|
|
Total
|
|
Name and Principal Positions
|
|
Year
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
$
|
|
|
David Stoner, CEO and President (4)
|
|
|
2010
|
|
|
|
198,875
|
|
|
|
4,031
|
|
|
|
28,742
|
|
|
|
|
|
|
|
|
|
|
|
231,648
|
|
|
|
|
2009
|
|
|
|
200,667
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|
|
|
|
|
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58,953
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|
|
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|
|
|
1,075
|
|
|
|
260,695
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|
Laurie Latham, CFO and Sr. VP
Finance and Administration
|
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|
2010
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171,125
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|
|
|
3,469
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|
|
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21,557
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|
|
|
|
|
|
|
|
|
|
|
196,151
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|
|
|
|
2009
|
|
|
|
172,667
|
|
|
|
|
|
|
|
36,846
|
|
|
|
|
|
|
|
925
|
|
|
|
210,438
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|
Adrian Giuhat, CTO and Sr. VP
Product Development (5)
|
|
|
2010
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|
|
59,564
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|
|
|
3,469
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|
|
|
43,660
|
|
|
|
|
|
|
|
|
|
|
|
106,693
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|
|
|
|
(1)
|
|
The figures shown for salary and bonus represent amounts earned for the fiscal year, whether
or not actually paid during such year, and include amounts deferred pursuant non-incentive
deferred compensation plans.
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(2)
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|
Represents the aggregate grant date fair value for options to purchase shares of
ViewCast.com, Inc. common stock granted to the named executive during the applicable year
calculated in accordance with FASB ASC Topic 718 for financial statement purposes. For more
information concerning the assumptions used for these calculations, please refer to the
discussion under the caption Stock-Based Compensation in the Managements Discussion and
Analysis and footnotes to the audited financial statements, included in our Annual Report on
Form 10-K for the year ended December 31, 2010.
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(3)
|
|
The named executive officers participate in certain group life, health, disability insurance
and medical reimbursement plans, not disclosed in the Summary Compensation Table, that are
generally available to salaries employees and do not discriminate in scope, terms and
operation. The figure shown for each named executive officer is for employer contributions to
a qualified deferred compensation plan (401(k) plan). Our 401(k) plan provides employees with
an opportunity to defer compensation for retirement. Employees may contribute up to 60% of
compensation, subject to IRS limits. ViewCast matches 50% of the first 4% of employee
contributions annually. The Company match was suspended on April 1, 2009 and was resumed
January 1, 2011.
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(4)
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Mr. Stoners employment ended in July 2011.
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(5)
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Mr. Giuhats employment began in September 2010.
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Compensation Plans
2005 Stock Incentive Plan.
In October 2005, the Company adopted the ViewCast 2005 Stock Incentive Plan (the 2005 Plan),
which replaced its expired stock option plans (the 1995 Employee Stock Option Plan (the 1995
Employee Plan) and the 1995 Director Stock Option Plan (the Director Plan) and became the sole
plan for providing equity-based incentive compensation to ViewCasts employees, non-employee
directors and other service providers. Options granted under the expired stock option plans will
continue to be subject to the terms of those plans in effect before the effective date of the 2005
Plan. The plan allows for the grant of stock options, restricted stock, restricted stock units,
stock appreciation rights, performance awards and other incentive awards to employees, non-employee
directors and other service providers of ViewCast and its affiliates who are in a position to make
a significant contribution to the success of ViewCast and its affiliates. The purposes of the plan
are to attract and retain individuals, further align employee and stockholder interests, and
closely link compensation with ViewCasts performance. The Compensation Committee of the Board of
Directors currently administers options outstanding under the 2005 Plan, the 1995 Employee Plan and
the Director Plan.
15
In October 2009, the Company adopted an amendment to the 2005 Plan to increase the number of
available shares under the 2005 Plan from 3,000,000 to 6,000,000 subject to any adjustments in
accordance with the previously approved 2005 Plan. As amended, the maximum number of shares
available for grant under the 2005 Plan is 6,000,000 shares of Common Stock, plus any shares of
Common Stock subject to outstanding awards under ViewCasts prior stock option plans as of the date
the 2005 Plan was approved by ViewCasts stockholders that later cease to be subject to such
awards for any reason other than such awards having been exercised or expired. Such shares shall,
as of the date such shares cease to be subject to such awards, cease to be available for grant
under the prior stock options plans, but shall be available for issuance under the 2005 Plan. The
number of shares available for award under the plan is subject to adjustment for certain corporate
changes in accordance with the provisions of the plan.
Employee Stock Purchase Plan.
In October 2005, the Company established the ViewCast 2005 Employee Stock Purchase Plan (the
ESPP) to provide employees of the Company with an opportunity to purchase common stock through
payroll deductions. The plan replaced the Companys 1995 employee stock purchase plan which
expired in April 2005. Under the ESPP, 1,000,000 shares of Common Stock have been reserved for
issuance, subject to certain anti-dilution adjustments. The ESPP is intended to qualify as an
employee stock purchase plan within the meaning of Section 423 of the Internal Revenue Code of
1986, as amended (the Code).
Under the ESPP, each ESPP offering is for a period of six months ending March 31 and September
30 of each year. Eligible employees may participate in the ESPP by authorizing payroll deductions
during an offering period within a percentage range determined by the Board of Directors.
Initially, the amount of authorized payroll deductions is not more than ten percent of an
employees cash compensation during an offering period, and not more than $25,000 per year.
Amounts withheld from payroll are applied at the end of each offering period to purchase shares of
Common Stock. Participants may withdraw their contributions at any time before stock is purchased,
and in the event of withdrawal such contributions will be returned to participants. The purchase
price of the Common Stock is equal to ninety-five percent (95%) of the market price of Common Stock
at the end of each offering period (the Exercise Date). The Purchase Price may be changed by the
Board of Directors or its committee but in any case shall never be lower than 85% of the fair
market value of a share of Common Stock on the Exercise Date. ViewCast pays all expenses incurred
in connection with the implementation and administration of the ESPP. In 2009 and 2010, Ms. Latham
participated in the ESPP.
16
Stock Awards and Stock Option Grants Outstanding
The following table set forth information regarding stock awards and similar equity
compensation outstanding at December 31, 2010, whether granted in 2010 or earlier, including awards
that have been transferred other than for value.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END TABLE
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Option Awards
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Equity Incentive
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Plan Awards:
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Number of
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Number of
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Securities
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Number of
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Securities
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Underlying
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Securities
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Underlying
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Unexercised
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Underlying
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Unexercised
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Option
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Options (#)
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Options (#)
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Unearned Options
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Option Exercise
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Expiration
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Name
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Exercisable
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Unexercisable
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(#)
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Price ($)
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Date
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David T. Stoner
|
|
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100,000
|
(1)
|
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|
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|
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|
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1.0940
|
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|
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2/28/2011
|
|
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60,000
|
(1)
|
|
|
|
|
|
|
|
|
|
|
0.4850
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|
|
7/03/2012
|
|
|
|
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50,000
|
(1)
|
|
|
|
|
|
|
|
|
|
|
0.2850
|
|
|
|
4/19/2015
|
|
|
|
|
62,500
|
(2)
|
|
|
|
|
|
|
|
|
|
|
0.4200
|
|
|
|
7/10/2014
|
|
|
|
|
70,833
|
(3)
|
|
|
4,167
|
|
|
|
|
|
|
|
0.4800
|
|
|
|
2/08/2015
|
|
|
|
|
187,500
|
(4)
|
|
|
|
|
|
|
|
|
|
|
0.4800
|
|
|
|
2/08/2015
|
|
|
|
|
111,111
|
(5)
|
|
|
88,889
|
|
|
|
|
|
|
|
0.3300
|
|
|
|
4/15/2016
|
|
|
|
|
|
|
|
|
200,000
|
(6)
|
|
|
|
|
|
|
0.1700
|
|
|
|
4/01/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Laurie L. Latham
|
|
|
100,000
|
(1)
|
|
|
|
|
|
|
|
|
|
|
1.0940
|
|
|
|
2/28/2011
|
|
|
|
|
60,000
|
(1)
|
|
|
|
|
|
|
|
|
|
|
0.4850
|
|
|
|
7/03/2012
|
|
|
|
|
50,000
|
(1)
|
|
|
|
|
|
|
|
|
|
|
0.2850
|
|
|
|
4/19/2015
|
|
|
|
|
62,500
|
(2)
|
|
|
|
|
|
|
|
|
|
|
0.4200
|
|
|
|
7/10/2014
|
|
|
|
|
59,028
|
(3)
|
|
|
3,472
|
|
|
|
|
|
|
|
0.4800
|
|
|
|
2/08/2015
|
|
|
|
|
187,500
|
(4)
|
|
|
|
|
|
|
|
|
|
|
0.4800
|
|
|
|
2/08/2015
|
|
|
|
|
69,444
|
(5)
|
|
|
55,556
|
|
|
|
|
|
|
|
0.3300
|
|
|
|
4/15/2016
|
|
|
|
|
|
|
|
|
150,000
|
(6)
|
|
|
|
|
|
|
0.1700
|
|
|
|
4/01/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adrian Giuhat
|
|
|
|
|
|
|
200,000
|
(7)
|
|
|
|
|
|
|
0.2645
|
|
|
|
9/08/2017
|
|
|
|
|
(1)
|
|
Fully vested on December 31, 2006.
|
|
(2)
|
|
Fully vested on July 10, 2008.
|
|
(3)
|
|
1/3
rd
vested on 2/8/2009; with 1/36
th
vesting each month thereafter.
|
|
(4)
|
|
Fully vested on December 31, 2010.
|
|
(5)
|
|
12/36
th
vested on 4/14/2010; with 1/36
th
vesting each month
thereafter.
|
|
(6)
|
|
12/36
th
will vest on 4/1/2011; with 1/36
th
vesting each month
thereafter.
|
|
(7)
|
|
12/36
th
will vest on 9/8/2011; with 1/36
th
vesting each month
thereafter.
|
Employment Agreements
ViewCast entered into employment agreements with Mr. Stoner and Ms. Latham. Effective
September 6, 2010, we have also entered into an employment agreement with Mr. Giuhat. These
employment agreements are currently in effect through August 2012 for Mr. Stoner and Ms. Latham and
March 2012 for Mr. Giuhat, and are renewed annually with ongoing automatic one- year renewals
unless ViewCast or the executive elects in advance not to renew the agreement. Each such
employment agreement provides for (i) annual base compensation ($215,000 for Mr. Stoner and
$185,000 for Ms. Latham and Mr. Giuhat); (ii) incentive compensation, at our Board of Directors
discretion, in an amount up to 30% of base salary at 100% achievement, increasing in a linear
fashion for performance in excess of 100%, with no limit, based 50% on meeting profitability goals
and 50% on meeting revenue growth targets and such other criteria as determined by the Board of
Directors, and (iii) for an eighteen month non-compete and non-solicitation period upon
termination. Mr. Stoner and Ms. Latham voluntarily reduced their cash compensation below that
provided under their agreements for part of the 2009 and 2010 calendar year.
17
Under the employment agreement, each executive will be entitled to (i) a lump sum amount equal
to six months of annual salary in effect on the date of termination, (ii) beginning six months
after termination, the continuation of salary for six months, and (iii) the reimbursement for six
months of COBRA premiums if employment is terminated by ViewCast without
cause or by the executive due to a significant change in the nature and scope of the
authority, powers, functions, benefits or duties attached to his or her position. In the event
ViewCast terminates employment following a change in control, the executive will be entitled to (i)
a lump sum amount equal to six months of annual salary in effect on the date of termination, and
(ii) beginning six months after termination, continuation of salary for six months.
In 2010, ViewCast had provided Mr. Stoner and Ms. Latham the incentive compensation
opportunities promised under their employment agreements by means of a 2010 Executive Incentive
Compensation Plan. Revenue goals under this plan were $4,200,000; $4,550,000; $4,750,000 and
$5,000,000 for the first through the fourth quarters of 2010, with a total annual goal of
$18,500,000. Profit goals under this plan, which requires a minimum of $100,000 profit for any
period, were $100,000; $100,000; $280,017 and $510,077 for the first through the fourth quarters of
2010, with a total annual goal of $743,065. In 2010, neither executive accrued a bonus under this
plan.
In 2009, ViewCast had provided Mr. Stoner and Ms. Latham the incentive compensation
opportunities promised under their employment agreements by means of a 2009 Executive Incentive
Compensation Plan. Revenue goals under this plan were $4,762,437; $5,261,705; $5,694,043 and
$6,031,815 for the first through the fourth quarters of 2009, for a total annual goal of
$21,750,000. Profit goals under this plan, which requires a minimum of $100,000 profit for any
period, were $100,000; $101,468; $234,896 and $517,180 for the first through the fourth quarters of
2009, for a total annual goal of $891,133. In 2009, neither executive accrued a bonus under this
plan.
On July 12, 2011, David T. Stoner resigned his position as a director of ViewCast and his
employment was terminated. ViewCast continued to pay Mr. Stoner his continued salary for a period
of 12 months under his employment agreement, for a total of approximately $215,000, as well as a
special bonus of approximately $11,400, which represents the amount of salary Mr. Stoner would have
earned for the period from July 13, 2011 through July 31, 2011. ViewCast also continued to pay Mr.
Stoners COBRA premiums for six months.
The Board named John C. Hammock as President and Chief Operating Officer of ViewCast effective
July 13, 2011 and entered into a letter agreement which provides for a base salary of $215,000 per
year. Mr. Hammocks letter agreement also provides for a bonus opportunity under the Companys
2011 Executive Incentive Compensation Plan for Mr. Hammock which the Company adopted effective July
13, 2011. This plan provides for ViewCast to pay Mr. Hammock 15% of base salary if quarterly
revenue and profit goals are met, and 15% of annual base salary if annual revenue and profit goals
are met for a projected annual bonus of $64,500 if 100% of target goals are met. If the target
goals are exceeded, the bonus is adjusted in a linear fashion for performance above 100%, with a
cap of 150% in the case of the profit component of the target. In order to receive these payments,
Mr. Hammock must be employed by ViewCast on the date paid. In addition, pursuant to this letter
agreement, on September 21, 2011, ViewCast granted Mr. Hammock stock options to purchase 100,000
shares of ViewCasts common stock at an exercise price of $0.21 per share, with one third to vest
12 months from the date of grant and the remainder to vest 1/36
th
each month thereafter.
The employment of all other ViewCast officers is at will and may be terminated by ViewCast
or the officer at any time, for any reason or no reason.
Director Compensation
In May 1995, ViewCast adopted a 1995 Director Option Plan (the Director Plan) under which
only outside directors were eligible to receive non-statutory stock options. The Director Plan
terminated on April 21, 2005. As amended and approved by stockholder vote during 2002, a total of
500,000 shares of Common Stock were authorized for issuance under the Director Plan. As of March
31, 2011, options to purchase an aggregate of 40,000 shares at exercise prices ranging from $0.26
to $0.755 per share had been granted and were outstanding under the Director Plan.
The exercise price of each option granted under the Director Plan is equal to the fair market
value of the Common Stock on the date of grant. Each share grant vests at the rate of 25% of the
option shares upon the first anniversary of the date of grant and one forty-eighth of the options
shares per month thereafter, unless terminated sooner upon termination of the optionees status as
a director or otherwise pursuant to the Director Plan. On December 22, 2005, the Board of
Directors of ViewCast approved accelerating the vesting of out-of-the-money unvested options
previously awarded to employees, officers and directors under ViewCasts stock option plans with an
exercise price greater than $0.30 per share. The number of out-of-the-money unvested options
under the Director Plan that were accelerated in 2005 and were held by directors as of August 31,
2010 are as follows: Joseph Autem 14,376 options. In the event of a merger of ViewCast with or
into another corporation or a consolidation, acquisition of assets or other change in control
transaction involving ViewCast, each option becomes exercisable unless assumed or an equivalent
option substituted by the successor corporation.
18
Except for the Chairman of the Board of the Company, Directors who are not independent
directors or employees currently receive no cash compensation for serving on the Board of Directors
other than reimbursement of reasonable expenses incurred in attending meetings. Following Mr.
Platts retirement on July 31, 2008 from the position of Chief Executive Officer of the Company, he
has continued as Chairman of the Board of the Company and effective July 12, 2011, as Executive
Chairman. For services rendered to ViewCast as Chairman of the Board, Mr. Platt receives annual
compensation of $65,000. Mr. Platt receives no additional cash compensation for serving as
Chairman other than reimbursement of reasonable expenses incurred in attending meetings. Mr. Platt
voluntarily reduced his cash compensation below $65,000 for part of the 2009 and 2010 calendar
year.
On June 20, 2006 and as subsequently modified on October 8, 2008, the Board of Directors of
ViewCast.com, Inc. approved the policy for the compensation of independent directors by
compensating such individuals with cash and equity designed to both reward such independent
directors for services rendered to the Corporation and to link a portion of their compensation to
the performance of the Corporation by means of equity grants as follows:
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Each independent director of the Corporation shall be paid a cash
retainer equal to $500 per month with an additional cash payment for each meeting of the
Board of Directors of the Corporation equal to $1,000 if attended in person and $250 if
attended by telephone; and
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Each independent director of the Corporation who has not previously
served on the Board of Directors of the Corporation shall be granted options under the
2005 Stock Incentive Plan, as described below, to acquire 50,000 shares of the Corporation
upon the appointment to the Board of Directors with such option grant to vest one year
from the date of grant; and
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Each independent director of the Corporation shall be granted options
under the 2005 Stock Incentive Plan to acquire 25,000 shares of the Corporation each year
immediately following the date of the Corporations annual meeting, provided that such
independent director shall have served as a director of the Corporation at least twelve
months prior to the date of such grant, with such option grant to vest one year from the
date of grant.
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The exercise price of each option granted to an independent director under the 2005 Plan is
equal to the fair market value of the Common Stock on the date of grant. As of March 31, 2011,
options to purchase an aggregate of 508,335 shares at an exercise price ranging from $0.17 to
$0.475 per share had been granted to independent directors and were outstanding under the 2005 Plan
and 16,665 options previously granted have been exercised at an exercise price of $0.20 per share.
The following table sets forth information regarding compensation earned by the non-employee
directors of ViewCast.com, Inc. during the last fiscal year ending December 31, 2010.
Director Compensation Table
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Fees Earned or Paid
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Option Awards ($)
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Name
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in Cash ($) (1)
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(2)
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Total ($)
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George C. Platt, Chairman
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60,125
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7,186
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67,311
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Joseph Autem
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10,400
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8,641
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19,041
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David W. Brandenburg
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10,475
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8,641
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19,116
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Sherel D Horsley
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11,150
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8,641
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19,791
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John W Slocum, Jr
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10,150
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8,641
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18,791
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(1)
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Includes meeting fees earned during the fiscal year, whether such fees were paid currently
or deferred.
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(2)
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Represents the aggregate grant date fair value for options to purchase shares of
ViewCast.com, Inc. common stock granted to the director during the applicable year calculated
in accordance with FASB ASC Topic 718 for financial statement purposes. For more information
concerning the assumptions used for these calculations, please refer to the discussion under
the caption Stock-Based Compensation in the Managements Discussion and Analysis and footnotes
to the audited financial statements, included in our Annual Report on Form 10-K for the year
ended December 31, 2010. As of December 31, 2010, the aggregate outstanding option awards to
each non-employee director were: Mr. Platt 732,500; Mr. Autem 165,000; Mr. Brandenburg
100,000; Mr. Horsley 150,000; Mr. Slocum 133,335.
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19
ADDITIONAL INFORMATION
Stockholder Proposals
Any shareholder proposal intended for inclusion in our proxy statement and proxy card relating
to our 2012 Annual Meeting of Shareholders must be received by us by July 2, 2012, pursuant to the
proxy solicitation regulations of the Securities and Exchange Commission. Nothing in this paragraph
shall be deemed to require ViewCast to include in its proxy statement and proxy card for such
meeting any shareholder proposal which does not meet the requirements of the Securities and
Exchange Commission in effect at the time. Any such proposal will be subject to 17 C.F.R. §
240.14a-8 of the rules and regulations promulgated by the Securities and Exchange Commission under
the Exchange Act.
Annual Report
A copy of ViewCasts Annual Report on Form 10-K for the year ended December 31, 2010,
including the financial statements and notes thereto, is being mailed to the stockholders of record
along with this Proxy Statement. The Annual Report on Form 10-K is not incorporated by reference
in this Proxy Statement and is not considered a part of the proxy materials.
Annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and
all amendments to those reports are available free of charge from ViewCasts internet site,
www.viewcast.com, by clicking on About Us located on the home page, proceeding to Investor
Relations and selecting Financial Filings.
ViewCast will furnish any or all of the non-confidential exhibits upon payment of a reasonable
fee. Please send request for exhibits and/or fee information to:
ViewCast Corporation
3701 W. Plano Parkway, Suite 300
Plano, TX 75075
Attn: Corporate Secretary
Householding of Annual Meeting Materials
Services that deliver our communications to stockholders that hold their stock through a bank,
broker or other nominee holder of record may deliver to multiple stockholders sharing the same
address a single copy of our Annual Report and Proxy Statement. We will promptly deliver upon
written or oral request a separate copy of the Annual Report and/or Proxy Statement to any
stockholder at a shared address to whom a single copy of the documents was delivered. Written
requests should be made to ViewCast.com, Inc., 3701 West Plano Parkway, Suite 300, Plano, Texas
75075, Attention: Corporate Secretarys Office, and oral requests may be made by calling our
Corporate Secretarys Office at 972-488-7200. Any stockholder who wants to receive separate copies
of the Proxy Statement or Annual Report in the future, or any stockholder who is receiving multiple
copies and would like to receive only one copy per household, should contact the stockholders
bank, broker or other nominee holder of record.
OTHER MATTERS
The Board of Directors knows of no other business matters to be acted upon at the Annual
Meeting other than those referred to in this Proxy Statement. If any other matters properly come
before the Annual Meeting, it is the intention of the persons named in the enclosed proxy to vote
the shares they represent as the Board of Directors may recommend.
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By Order of the Board of Directors
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John C. Hammock
Chief Operating Officer
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Date: October 31, 2011
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▼FOLD AND DETACH HERE AND READ THE REVERSE SIDE▼
VIEWCAST CORPORATION
3701 W. Plano Parkway, Suite 300
Plano, TX 75075
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints David W. Brandenburg and George C. Platt, and each of
them, agents with full power of substitution, to vote as proxy all the Voting Shares, as
defined in the Proxy Statement, of ViewCast.com, Inc. held of record by the undersigned on
October 12, 2011, at the Annual Meeting of Stockholders of ViewCast.com, Inc. to be held on
November 30, 2011, and at any adjournment or postponement thereof, in the manner indicated on
the reverse hereof and in their discretion on such other matters as may properly come before
said meeting or any adjournments thereof.
(continued and to be marked, dated and signed on reverse side)
▼FOLD AND DETACH HERE AND READ THE REVERSE SIDE▼
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THE PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE VOTED FOR ALL NOMINEES LISTED
BELOW FOR ELECTION AS DIRECTORS AND FOR PROPOSAL 2. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
PROPOSALS 1 AND 2.
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Please mark
your votes
like this
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x
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1.
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ELECTION OF DIRECTORS
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FOR
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WITHHELD
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FOR
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AGAINST
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ABSTAIN
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NOMINEES: (01) George C. Platt
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o
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o
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2.
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RATIFICATION OF THE APPOINTMENT OF BKD, LLP AS
VIEWCASTS INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM FOR THE 2011 FISCAL YEAR.
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o
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o
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o
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(02) Joseph Autem
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o
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o
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(03) David W. Brandenburg
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o
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(04) John W. Slocum, Jr.
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o
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o
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COMPANY ID:
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PROXY NUMBER:
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ACCOUNT NUMBER:
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Signature
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Signature (if held jointly)
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Dated:
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, 2011.
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When signing as Executor, Administrator, Trustee or the like, please give full title.
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