maindoc.htm
SCHEDULE
14A INFORMATION
Proxy
Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934
(Amendment
No. )
Filed by
the Registrant ý Filed by a
Party other than the Registrant o
Check the appropriate box:
o
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Preliminary
Proxy Statement
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o Confidential, for Use of the
Commission Only (as permitted by Rule 14a-6(e)(2))
o Definitive
Additional Materials
o Soliciting
Material Pursuant to Rule 14a-11(c) or Rule 14a-12
COLLECTORS
UNIVERSE, INC.
(Name
of Registrant as Specified In Its Charter)
(Name
of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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Payment
of Filing Fee (Check the appropriate
box):
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o Fee
computed on table below per Exchange Act Rules 14a-6(i)(4) 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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o
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Fee
paid previously with preliminary
materials.
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o
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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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October 28,
2009
Dear
Stockholders:
We are
pleased to invite you to attend the 2009 Annual Meeting of Stockholders of
Collectors Universe, Inc., which will be held on Tuesday, December 8, 2009
at 10:00 A.M., Pacific Time, at our principal offices, which are located at 1921
E. Alton Avenue, Santa Ana, California 92705.
You may
have noticed a significant change in the way we are providing proxy materials to
our stockholders for our Annual Meeting. We have elected to provide
our stockholders with access to our proxy materials over the Internet under the
Securities and Exchange Commission’s new “notice and access”
rules. These rules allow us to make our stockholders aware of the
availability of our proxy materials by sending a Notice of Internet Availability
of Proxy Materials, which provides instructions for how stockholders may access
the full set of proxy materials through the Internet or by requesting that
printed proxy materials be delivered to them by mail. We believe that
this process will enable us to provide our stockholders with the proxy materials
they need to make informed decisions, while lowering the costs of printing and
delivering those materials and, at the same time, significantly reducing the
environmental impact of our Annual Meeting.
Your vote is
important. Whether or not you plan to attend the Annual
Meeting, we hope you will vote as soon as possible using one of the voting
methods described in the Notice of Internet Availability of Proxy
Materials. You will be able to vote your shares over the Internet or,
if you requested that printed proxy materials be mailed to you, by completing
and returning, by mail, a proxy or voting instruction card. Please
review the instructions with respect to your voting options described in the
Notice of Internet Availability of Proxy Materials you received by mail as well
as in the accompanying Proxy Statement.
Also,
please let us know if you plan to attend our Annual Meeting at the time you vote
your shares over the Internet by indicating your plans when prompted to do so
or, if you requested to have printed proxy materials mailed to you, by marking
the appropriate box on the enclosed proxy card.
Thank you
for your ongoing support. We look forward to seeing you at our Annual
Meeting.
Sincerely,
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Michael
J. McConnell
Chief
Executive Officer
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COLLECTORS
UNIVERSE, INC.
1921
E. Alton Avenue
Santa
Ana, California 92705
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
To
be Held on Tuesday, December 8, 2009
_______________________
To the
stockholders of Collectors Universe, Inc.:
The 2009
Annual Meeting of Stockholders of Collectors Universe, Inc. will be held at our
principal offices, which are located at 1921 E. Alton Avenue, Santa Ana,
California 92705 on Tuesday, December 8, 2009, at 10:00 A.M., Pacific Time,
for the following purposes:
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(1)
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Election of
Directors. To elect the following seven nominees to
serve as directors until our 2010 Annual Meeting of Stockholders or until
their successors are elected and have
qualified:
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A.
Clinton Allen
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A.
J. “Bert” Moyer
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Deborah
A. Farrington
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Van
D. Simmons
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David
G. Hall
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Bruce
A. Stevens
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Michael
J. McConnell
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(2)
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Ratification of the
Appointment of our Independent Registered Public Accounting
Firm. To ratify the appointment of Grant Thornton LLP as
our independent registered public accounting firm for the fiscal year
ending June 30, 2010; and
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Other Business. To
transact such other business as may properly come before the Annual Meeting or
any adjournment or postponement thereof.
Our Board
of Directors recommends that you vote “FOR” the election of each of the seven
director nominees listed above and “FOR” the ratification of the appointment of
Grant Thornton LLP as our independent registered public accounting firm for the
fiscal year ending June 30, 2010.
Additional
information regarding these matters is contained in the accompanying Proxy
Statement, which stockholders are urged to read. Only stockholders of
record at the close of business on October 20, 2009 will be entitled to vote at
the Annual Meeting or any adjournment or postponement thereof.
By
Order of the Board of Directors
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A.
Clinton Allen
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Chairman
of the Board
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Santa
Ana, California
October 28,
2009
Your
vote is very important. Whether or not you plan to attend the
Annual Meeting, we encourage you to read this Proxy Statement and submit
your proxy or voting instructions as soon as possible. For
specific instructions on how to vote your shares, please refer to the
Notice of Internet Availability of Proxy Materials you received in the
mail and the section entitled “How May I Vote?” in this Proxy Statement
or, if you requested that printed proxy materials be mailed to you, to the
instructions on the proxy card enclosed with those printed proxy
materials. The approximate date of mailing of the Notice of
Internet Availability of Proxy Materials was October 28,
2009.
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COLLECTORS
UNIVERSE, INC.
1921
E. Alton Avenue
Santa
Ana, California 92705
_______________________
PROXY
STATEMENT
_______________________
ANNUAL
MEETING OF STOCKHOLDERS TO BE HELD DECEMBER 8, 2009
_______________________
INTRODUCTION
This
Proxy Statement is being furnished in connection with the solicitation of
proxies by the Board of Directors of Collectors Universe, Inc., a Delaware
corporation, for use at our 2009 Annual Meeting of Stockholders to be held on
Tuesday, December 8, 2009, at 10:00 A.M., Pacific Time, at our principal
offices, which are located at 1921 E. Alton Avenue, Santa Ana, California
92705. As a matter of convenience, in this Proxy Statement we will
refer to Collectors Universe, Inc. as the “Company,” “we,” “us” or “our” and our
2009 Annual Meeting of Stockholders as the “Annual Meeting” or the
“Meeting”.
YOUR
VOTE IS VERY IMPORTANT. WHETHER OR NOT YOU PLAN TO
ATTEND
THE
ANNUAL MEETING, WE ENCOURAGE YOU TO READ THIS PROXY STATEMENT
AND
PROVIDE US WITH YOUR PROXY OR VOTING INSTRUCTIONS AS SOON AS
POSSIBLE.
Some
stockholders may have their shares registered in different names or hold shares
in different capacities. For example, a stockholder may have some
shares registered in his or her name, individually, and others in his or her
capacity as a custodian for minor children or as a trustee of a
trust. If, in that
event, you want
all
of your votes to be
counted, please be sure to vote in each of those capacities.
Who
May Vote at the Annual Meeting?
The
shares of the Company’s common stock, $0.001 par value, constitute the only
outstanding class of voting securities of the Company. If you were a
stockholder on the records of the Company at the close of business on
October 20, 2009, which is referred to herein as the Record Date, you may
vote your shares at the Annual Meeting, and at any adjournments or postponements
thereof, either in person or by proxy. On that day, there were
7,661,101 shares of our common stock outstanding and entitled to be voted
at the Annual Meeting.
What
do I Need to Know if I Plan to Attend the Annual Meeting?
You are
entitled to attend the Annual Meeting only if you were a holder of our common
stock as of the Record Date, or hold a valid proxy for the Annual
Meeting. Since seating is limited, admission to the Annual Meeting
will be on a first-come, first-served basis. You should be prepared
to present photo identification for admittance. If you are not a
stockholder of record but hold shares through a broker, bank, trustee or nominee
(i.e., in “street name”), you should provide proof of your beneficial ownership
of shares of our common stock as of the Record Date, such as your most recent
account statement prior to the Record Date, a copy of the voting instruction
card provided by your broker, bank, trustee or nominee, or similar evidence of
ownership. If you do not provide photo identification or comply with
the other procedures outlined above, you will not be admitted to the Annual
Meeting.
Please
let us know if you plan to attend the Annual Meeting, in person, (i) by
marking the appropriate box on the enclosed proxy card if you requested proxy
materials to be mailed to you, or (ii) if you will be voting over the
Internet, by indicating your plans when prompted to do so.
How
Many Votes do I Have?
Each
share is entitled to one vote (a) in the election of each of the director
nominees, (b) on the proposal to ratify the appointment of Grant Thornton
as our independent registered public accounting firm for the fiscal year ended
June 30, 2010, and (c) on any other matter upon which a vote may properly
be taken at the Annual Meeting. In the election of directors, there
is no cumulative voting. As a result each stockholder will be
entitled, for each share of common stock that such stockholder owned as of the
Record Date, to cast one vote for a single nominee for each of the seven
positions on the Board of Directors.
In order
to vote, you must either designate a proxy to vote your shares on your behalf at
the Annual Meeting, or attend the Annual Meeting and vote your shares in
person. The Board of Directors requests your proxy so that your
shares will count toward a quorum and will be voted in accordance with your
voting instructions at the Annual Meeting. Even if you designate a proxy on your
behalf, you may attend the Annual Meeting and vote your shares in person,
including in a manner different than as set forth in your earlier
proxy. Accordingly, to ensure that your votes are counted, we
encourage you to vote your shares by proxy even if you plan to attend the
Meeting in person.
How
Will the Board Vote My Proxy?
A
properly executed proxy card, or properly voted proxy (in the case you are
voting over the Internet), received by us prior to the Annual Meeting, and not
revoked, will be voted in accordance with your voting instructions as set forth
on the proxy card or communicated over the Internet. If you provide
no specific instruction as to how you want your shares voted, your shares will
be voted “FOR” the
election of the each of the director nominees (Proposal No. 1), and “FOR” the ratification of the
approval of Grant Thornton as our independent registered public accounting firm
for the fiscal year ended June 30, 2010 (Proposal No. 2).
If any
other matter is presented at the Annual Meeting upon which a vote may properly
be taken, the shares represented by your proxy will be voted in accordance with
the judgment of the holders of the proxy.
However,
if your shares are held in a brokerage account or by a bank, trustee or nominee,
please read the information below under captions “How May I Vote?” and “What if
I Hold My Shares Through a Broker or Other Nominee?” regarding how your shares
may be voted.
What
is the “Important Notice Regarding the Availability of Proxy Materials” that I
Received in the Mail?
Under the
rules of the Securities and Exchange Commission, or the “SEC”, we are furnishing
proxy materials to our stockholders primarily via the Internet, instead of
mailing printed copies of those materials to each
stockholder. Accordingly, on October 28 2009, we mailed to
our stockholders (other than any stockholders who previously requested
electronic or paper delivery) a Notice of Internet Availability of Proxy
Materials, or the “Availability Notice”, containing instructions on how to
access our proxy materials, including our Proxy Statement and our Annual Report
for the fiscal year ended June 30, 2009, which are available at www.stocktrans.com/eproxy/collectorsuniverse2009. The
Availability Notice also instructs stockholders how to vote their shares via the
Internet or by mail.
This
process is designed to expedite our stockholders’ receipt of our proxy
materials, decrease the cost of our Annual Meeting, and help conserve natural
resources. However, if you would prefer to receive printed or e-mail
copies of our proxy materials, please follow the instructions included in the
Availability Notice. If you have previously elected to receive our
proxy materials electronically, you will continue to receive these materials
electronically unless you elect otherwise.
How
May I Vote?
Voting by
Internet. You can vote by proxy over the Internet by following
the instructions provided to you in the Availability Notice. If you
hold shares in “street name,” you also may vote by proxy over the Internet by
following the instructions provided in the Availability Notice or the proxy
card. Internet voting is available 24 hours a day and will be
accessible, until 11:59 P.M. Pacific Time on December 7, 2009, by visiting
www.votestock.com
and following the instructions. Our Internet voting procedures are
designed to authenticate stockholders by using individual control numbers, which
are located on the Availability Notice. If you vote by Internet, you do not
need to return your proxy card.
Voting by Mail. If
you request printed proxy materials to be mailed or emailed to you, you can vote
by mail pursuant to the instructions provided on the proxy card. If
you hold shares in “street name” and request to receive printed proxy materials
by mail, you can vote by mail by following the voting instruction card provided
to you by your broker, bank, trustee or nominee. In order to be
effective, completed proxy cards must be received by no later than 9:00 A.M.
Pacific Time on December 8, 2009. If you vote by mail, simply mark your
proxy, date and sign it, and return it in the business reply envelope provided
with the Proxy Statement.
Voting at the Annual
Meeting. Whichever voting method you use, you may still vote
at the Annual Meeting if you decide to attend in person. However, if
your shares are held in “street name,” you must obtain a proxy, executed in your
favor, from the holder of record to be able to vote in person at the Annual
Meeting. If you sign and return your proxy card but do not give
voting instructions, the shares represented by that proxy will be voted as
recommended by the Board of Directors.
Vote on Other
Matters. If other matters are properly presented at the Annual
Meeting for consideration, the persons named on the proxy card will have the
discretion to vote on those matters for you. As of the date this
Proxy Statement was first made available to our stockholders, we did not know of
any other matters to be voted upon at the Annual Meeting.
All
shares that are properly voted, whether over the Internet or by mail, and not
properly revoked will be voted at the Annual Meeting.
What
if I Hold My Shares of Common Stock Through a Broker or Other
Nominee?
If you
hold your shares of our common stock in “street name” you are considered to be
the “beneficial owner” of those shares. In order to vote your
shares, you must give voting instructions to the broker or other nominee that
holds your shares. Proxies that are sent to us by brokers or other
nominee holders on your behalf will count toward a quorum and will be voted in
accordance with the instructions that you have provided. If you fail
to provide voting instructions, your broker or other nominee will have
discretion to vote your shares for the election of each of our seven director
nominees and for the proposal to ratify the appointment of Grant Thornton LLP as
our independent registered public accounting firm for the fiscal year ending
June 30, 2010.
What
is the Quorum Requirement for the Annual Meeting?
The
presence, in person or by proxy, of the holders of a majority of the outstanding
shares of our common stock entitled to vote at the Annual Meeting is necessary
to constitute a quorum. Abstentions and broker non-votes are counted
as present and entitled to vote for purposes of determining a
quorum. Each holder of our common stock will be entitled to one vote
per share on all matters that are submitted to a vote by stockholders at the
Annual Meeting.
What
will be the Effect of Abstentions at the Annual Meeting?
When an
eligible voter attends the Annual Meeting but decides not to vote, his or her
decision not to vote is called an “abstention.” Properly executed proxy cards
that are marked “abstain” or “withhold authority” on any proposal will be
treated as abstentions for that proposal. We will treat abstentions
as follows:
·
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abstention
shares will be treated as not voting for purposes of determining the
outcome on any proposal for which the minimum vote required for approval
of the proposal is a majority (or some other proportion) of the votes
actually cast, and thus will have no effect on the outcome;
and
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·
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abstention
shares will have the same effect as votes against a proposal if the
minimum vote required for approval of the proposal is a majority (or some
other proportion) of (i) the shares present and entitled to vote, or (ii)
all shares outstanding and entitled to
vote.
|
What are Broker Non-Votes and How
Will They Affect the Voting at the Annual Meeting?
Broker
non-votes occur when shares of our common stock that are held of record by a
broker or other nominee for a beneficial owner are not voted with respect to a
particular proposal because (i) the broker does not receive voting
instructions from the beneficial owner, or (ii) the broker lacks
discretionary authority to vote the shares. Under the rules of the
Financial Industry Regulatory Authority, known as FINRA, member brokers
generally may not vote shares held by them in “street name” for their customers
unless the brokers are permitted to do so under the rules of any national
securities exchange of which they are a member. Under the rules of
the New York Stock Exchange, or the NYSE, a member broker who
holds
shares in “street name” for customers has the authority to vote on certain items
if it has transmitted proxy soliciting materials to the beneficial owner but has
not received instructions from that owner. We will treat broker
non-votes as follows:
·
|
broker
non-votes will not be counted as present and entitled to be voted for
purposes of any matter requiring the affirmative vote of a majority (or
another specified percentage) of the shares present and entitled to vote
(even though the broker non-votes will be counted as present for quorum
purposes and may be entitled to be counted on other
matters). Thus, a broker non-vote will not affect the outcome
of the voting on a proposal the approval of which requires the affirmative
vote of a majority (or some other proportion) of (i) the votes cast,
or (ii) the voting power present and entitled to vote on that
proposal; and
|
·
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broker
non-votes will be counted as a vote against a proposal the approval of
which requires an affirmative vote of the holders of a majority (or
another specified percentage) of the outstanding shares entitled to vote
on such proposal.
|
What
is the Required Vote to Approve the Proposals Being Considered at the Annual
Meeting?
Proposal
No. 1 - Election of Directors
Our Board
of Directors has adopted a majority voting standard for uncontested director
elections. This means that, in an uncontested election, for a
director to be elected, he or she must receive a majority of the shares cast
(that is, actually voted) in the election of directors. An
“uncontested election” is an election in which the number of nominees for
director is not greater than the number of directors to be
elected. Shares voted as “withhold authority” for a nominee for
director will count as votes cast. Any broker non-votes will not be
counted as votes cast and, therefore, will not affect the outcome of the
election of directors. In a contested election, directors will be
elected by a plurality of the votes cast by the shares entitled to vote in the
election of directors.
Prior to
each annual stockholders’ meeting at which directors are to be elected in an
uncontested election, each nominee will be required to deliver an offer of
resignation to the Board. If any nominee fails to receive a majority
of the votes cast in that election, the Board will have the right, in its
discretion, to accept or reject that nominee’s offer of
resignation. If the Board accepts the resignation, it may either
correspondingly reduce the authorized number of directors or appoint another
person to fill the vacancy created by the resignation. If the Board
decides, instead, to reject the resignation, then, the nominee would continue to
serve as a director until the next annual stockholders meeting and, in that
event, the Board would be required to publicly disclose the reasons why it
decided to reject the resignation of the nominee.
Proposal
No. 2 - Ratification of the Appointment of Our Independent Registered Public
Accounting Firm
The
affirmative vote of a majority of the votes cast for or against this Proposal by
stockholders entitled to vote at the Annual Meeting is required to ratify the
appointment of Grant Thornton LLP as our independent registered public
accounting firm for the fiscal year ending June 30, 2010. Abstentions
will have the same effect as votes against the Proposal. Any broker
non-votes will not be counted as votes cast on this Proposal and, therefore,
will not affect the outcome of this vote.
How
Can I Revoke My Proxy?
If you
are the record owner of your shares and, after you have returned your proxy, you
decide to change your vote, you may do so by taking any one of the following
actions:
·
|
Sending
a written notice that you are revoking your proxy addressed to: Corporate
Secretary, Collectors Universe, Inc., P.O. Box 6280 Newport Beach,
California 92658 and then voting again by one of the methods discussed
above. To be effective, the notice of revocation must be
received by the Company by no later than 9:00 A.M. Pacific Time on
December 8, 2009.
|
·
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Returning
a new proxy with a later date than your earlier proxy. To be
effective, that later dated proxy must be received by the Company by no
later than 9:00 A.M. Pacific Time on December 8,
2009.
|
·
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Attending
and voting in person or by proxy at the Annual Meeting in a manner
different than the instructions contained in your earlier
proxy.
|
However,
if your shares are held by a broker or other nominee, and you want to change the
voting instructions you have previously given to the broker or nominee, you will
need to contact your broker or nominee to ascertain the actions you will need to
take to change your previous voting instructions.
Who
Will Bear the Cost of this Proxy Solicitation?
The cost
of soliciting proxies from stockholders will be paid by us. In
addition, following the mailing of the Availability Notice, our directors,
officers and regular employees may solicit proxies by mail, telephone, e-mail or
in person, but will not receive any compensation from us for doing
so. Brokerage firms, banks, trustees and other nominees holding
shares of our common stock of record will be requested to forward proxy
soliciting materials to the beneficial owners of such shares and will be
reimbursed by us for their charges and expenses in connection
therewith. In addition, we may use the services of individuals or
companies we do not regularly employ in connection with the solicitation of
proxies if management determines that it is advisable to do so.
STOCK
OWNERSHIP OF PRINCIPAL STOCKHOLDERS AND MANAGEMENT
The
following table presents certain information, as of October 20, 2009,
regarding our shares of common stock beneficially owned by (i) persons
known by us to own beneficially more than 5% of our outstanding shares,
(ii) the incumbent directors and the nominees for election to the Board of
Directors at the upcoming Annual Meeting, (iii) the Company’s executive
officers, and (iv) all of the directors and executive officers as a
group.
|
|
Shares
Beneficially Owned(1)(2)
|
|
|
|
Number(3)
|
|
|
Percent
of
Class
|
|
|
|
|
|
|
|
|
Richard
Kenneth Duncan Sr.
|
|
|
1,345,982 |
|
|
|
17.6 |
% |
8435
Katy Freeway,
Houston,
Texas 77024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David
G. Hall
|
|
|
1,041,799 |
(4) |
|
|
13.2 |
% |
P.O.
Box 6280
Newport
Beach, CA 92658
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Special
Situations Cayman Fund, L.P.
|
|
|
854,107 |
(5) |
|
|
11.2 |
% |
Special
Situations Fund III QP, L.P.
Special
Situations Fund III, L.P.
Austin
W. Marxe and David M. Greenhouse
527 Madison Avenue, 26th floor,
New York, NY 10022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dimensional
Fund Advisors LP
|
|
|
594,255 |
(6) |
|
|
7.8 |
% |
1299
Ocean Avenue
Santa
Monica, CA 90401
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Van
D. Simmons
|
|
|
274,181 |
(7) |
|
|
3.5 |
% |
Michael
J. McConnell
|
|
|
188,930 |
(8) |
|
|
2.4 |
% |
A.
Clinton Allen
|
|
|
117,725 |
(9) |
|
|
1.5 |
% |
Joseph
J. Wallace
|
|
|
95,067 |
(10) |
|
|
1.2 |
% |
Deborah
A. Farrington
|
|
|
65,338 |
(9) |
|
|
* |
|
A.
J. Bert Moyer
|
|
|
65,338 |
(9) |
|
|
* |
|
Bruce
A. Stevens
|
|
|
18,588 |
(9) |
|
|
* |
|
All
Directors and Executive Officers, as a group (8 persons)
|
|
|
1,866,967 |
(11) |
|
|
23.7 |
% |
|
(1)
|
Beneficial
ownership is determined in accordance with the rules of the Securities and
Exchange Commission. Under those rules and for purposes of the
table above (a) if a person has decision making power over either the
voting or the disposition of any shares, that person is generally deemed
to be a beneficial owner of those shares; (b) if two or more persons
have decision making power over either the voting or the disposition of
any shares, they will be deemed to share beneficial ownership of those
shares, in which case the same shares will be included in share ownership
totals for each of those persons; and (c) if a person held options or
warrants to purchase shares that were exercisable on, or became
exercisable within 60 days of, October 20, 2009, that person will be
deemed to be the beneficial owner of those shares and those shares (but
not shares that are subject to options or warrants held by any other
stockholder) will be deemed to be outstanding for purposes of computing
the percentage of the outstanding shares that are beneficially owned by
that person.
|
|
(2)
|
Unless
otherwise indicated in the footnotes below, the persons named in the above
table have sole voting and dispositive power with respect to all shares
shown as beneficially owned by them, subject to community property laws
where applicable.
|
|
(3)
|
On
July 10, 2009, the Company repurchased a total of 1,749,828 shares of
its shares of common stock in a cash tender offer to its stockholders,
which has had the effect of reducing the number of shares outstanding to
7,661,101 at October 20, 2009.
|
|
(4)
|
Includes
(i) a total of 101,034 restricted shares of common stock which
will vest (that is, cease to be subject to the risk of forfeiture) if
certain contingencies, including a financial performance goal, are
satisfied, in three (3) annual installments of up to 50,516 shares, 25,258
shares and 25,260 shares, respectively, on July 31, 2010, June 30, 2011
and June 30, 2012; and (ii) 51,066 shares held in grantor trusts
established for Mr. Hall’s children (the “Trust
Shares”). Mr. Hall may, under limited circumstances,
exercise dispositive power (but he does not have voting power) over the
Trust Shares and, for that reason, may be deemed to share such dispositive
power with the trustees of those
trusts.
|
|
(5)
|
Based
on their most recent report on Schedule 13G filed with the SEC,
Messrs. Marxe and Greenhouse share voting and dispositive power over
all of these shares, which are comprised of: (i) 218,368
shares owned by Special Situations Cayman Fund, L.P.,
(ii) 599,999 shares owned by Special Situations Fund III QP,
L.P. and (iii) 35,740 shares owned by Special Situations Fund
III, L.P. Messrs. Marxe and Greenhouse attribute their beneficial
ownership of these shares to the fact that they are the controlling
principals of AWM Investment Company, Inc., which is the general partner
or investment advisor of these three
Funds.
|
|
(6)
|
Based
on its most recent report on Schedule 13G filed with the SEC,
Dimensional Fund Advisors LP (formerly, Dimensional Fund Advisors Inc.)
(“Dimensional”), an investment advisor registered under Section 203
of the Investment Advisors Act of 1940, furnishes investment advice to
four investment companies registered under the Investment Company Act of
1940, and serves as investment manager to certain other commingled group
trusts and separate accounts (the “Funds”). In its role as
investment advisor or manager, Dimensional possesses investment and/or
voting power over the shares of the Company’s common stock owned by the
Funds, and may be deemed to be the beneficial owner of such
shares. However, all shares of the Company’s common stock are
owned by the Funds. Dimensional disclaims beneficial ownership
of such shares.
|
|
(7)
|
Includes
17,022 of the shares held by the grantor trusts established by
Mr. Hall for his children that are referred to in footnote (4)
above, because Mr. Simmons is a trustee for certain of those
trusts. As trustee, he exercises voting power, and shares
dispositive power with Mr. Hall, with respect to those 17,022 shares
and, therefore, those shares are included in both of their respective
share ownership totals. Mr. Simmons does not have any
financial or pecuniary interest in any of the shares held in these
trusts. Also includes (i) 16,500 shares which
Mr. Simmons may purchase by exercising director options that were
exercisable on October 20, 2009 and (ii) 3,240 restricted
shares of common stock that are scheduled to vest on December 2,
2009.
|
|
(8)
|
Included
in the number of shares beneficially owned by Mr. McConnell, the
Company’s Chief Executive Officer, are (i) a total of 101,034
restricted shares of common stock which will vest (that is, cease to be
subject to the risk of forfeiture) if certain contingencies, including a
financial performance goal, are satisfied, in three (3) annual
installments of up to 50,516 shares, 25,258 shares and 25,260 shares,
respectively, on July 31, 2010, June 30, 2011 and June 30, 2012; and (ii)
a total of 3,240 share of restricted stock that are scheduled to vest
on December 2, 2009.
|
|
(9)
|
Includes
the following numbers of shares which may be purchased on exercise of
director stock options that were exercisable on or will become exercisable
within 60 days of October 20, 2009: Mr. Allen—89,375
shares; Ms. Farrington—45,650 shares; and Mr. Moyer—41,250
shares. The share totals of each of Ms. Farrington and
Messrs. Allen, Moyer and Stevens also include 3,240 restricted
shares of common stock that are scheduled to vest on December 2,
2009.
|
(10)
|
The
number of shares shown as beneficially owned by Mr. Wallace, the
Company’s Chief Financial Officer, include (i) a total of 37,888
restricted shares of common stock, which will vest and cease to be subject
to the risk of forfeiture if certain contingencies, including a financial
performance goal, are satisfied, in three (3) annual installments
12,629 shares, 12,629 shares and 12,630 shares, respectively, on
July 31, 2010, June 30, 2011 and June 30, 2012, and
(ii) 38,500 shares of common stock that may be purchased by
exercise of employee stock options on or within 60 days of
October 20, 2009.
|
(11)
|
Includes
a total of 231,275 shares which our directors and executive officers
have the right to acquire by exercise of stock options that were
exercisable on, or will become exercisable within 60 days of,
October 20, 2009 and the restricted shares of common stock set forth
in the footnotes above.
|
ELECTION
OF DIRECTORS
(Proposal
No. 1)
The
authorized number of the Company’s directors on the Board of Directors is
seven. Directors are elected to serve for a term of one year or until
their successors are elected and duly qualified. The Board of
Directors has nominated the seven nominees named below for election as directors
at the Annual Meeting. Unless authority to vote has been withheld,
the proxy holders named in the proxies voted by our stockholders intend to vote
the shares represented by those proxies at the Annual Meeting for the election
of all of the nominees named below.
All seven
nominees are presently directors of the Company and were elected to the Board of
Directors by the Company’s stockholders at the Company’s 2008 Annual Meeting of
Stockholders.
All of
the nominees have consented to serve, if elected. If any nominee
becomes unavailable for any reason before the election, the enclosed proxy will
be voted for the election of such substitute nominee or nominees, if any, as
shall be designated by the Board of Directors. The Board of Directors
has no reason to believe that any of the nominees will be unavailable to
serve.
Director
Nominees
The names
and certain information, as of October 20, 2009, concerning the nominees
for election as directors is set forth below.
THE
BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE
“FOR”
THE ELECTION OF THE DIRECTOR NOMINEES NAMED BELOW
Nominees
|
|
Age
|
|
Director
Since
|
|
Principal
Occupation
|
A. Clinton Allen
|
|
65
|
|
2001
|
|
Chief
Executive Officer of A. C. Allen & Company
|
Deborah A. Farrington
|
|
59
|
|
2003
|
|
General
Partner of StarVest Partners, L.P.
|
David
G. Hall
|
|
62
|
|
1986*
|
|
President
of the Company
|
Michael
J. McConnell
|
|
43
|
|
2007
|
|
Chief
Executive Officer of the Company
|
A.
J. “Bert” Moyer
|
|
65
|
|
2003
|
|
Business
Consultant and Private Investor
|
Van
D. Simmons
|
|
58
|
|
1986*
|
|
President
of DHRCC, Inc.
|
Bruce
A. Stevens
|
|
67
|
|
2006
|
|
Industry
Partner with Cordova, Smart & Williams,
LLC
|
|
*
|
Although
Collectors Universe was organized in February 1999, Messrs. Hall and
Simmons were both founders and served as directors of its predecessor
company, Professional Coin Grading Service, Inc. beginning in
1986.
|
A. Clinton Allen
has served as a Director of the Company since June 2001 and as Chairman
of the Board of Directors since December 2002. Mr. Allen is the
Chief Executive Officer of A. C. Allen & Company, a private investment
banking consulting firm. He is the Lead Director of Steinway Musical
Instruments, one of the world’s largest manufacturers of musical
instruments. He is also a member of the board of directors of Brooks
Automation, Inc., which provides integrated tool and factory automation
solutions for the global semiconductor and related industries, the board of
directors and Executive Committee of LKQ Corporation, the largest nationwide
provider of recycled OEM automotive parts and the board of directors of
Avantair, a fractional airplane provider. He served on the board of
directors of Blockbuster Entertainment Corporation from 1986 until its
acquisition by Viacom/Paramount in September 1994. Mr. Allen
graduated from Harvard University and serves on the Executive Committee of the
Friends of Harvard Football, as well as the Harvard Visiting Committee on
University Resources and the Harvard Major Gifts Committee. He is a
member of the board of directors and the President’s Council of the
Massachusetts General Hospital. Mr. Allen also is
the Founder and President of The Corporate Directors Group, an organization with
a membership of over 1,000 directors which is dedicated to furthering director
education and is accredited by RiskMetrics ISS as a director education
provider. Mr. Allen has earned an Advanced Professional Director
Certification from The Corporate Directors Group for meeting director
educational requirements established by that organization and director
educational standards of RiskMetrics ISS.
Deborah A.
Farrington is a founder and President of StarVest Management, Inc. and
is, and since 1999 has been, a general partner of StarVest Partners, L.P., a
venture capital fund which invests primarily in emerging software and business
services companies. From 1993 to 1997, Ms. Farrington was
President and Chief Executive Officer of Victory Ventures, LLC, a New York-based
private equity investment firm. Also during that period, she was a
founding investor and Chairman of the Board of Staffing Resources, Inc., a
diversified staffing company which grew from $17 million to $300 million in
annual revenues while she served on its board. Ms. Farrington
serves on the board of directors of NetSuite, Inc., a New York Stock
Exchange-listed company, and on the boards of directors of ComparisonMarket,
Inc., Fieldglass, Inc. and Perquest, Inc., all of which are private
companies. She also serves on the board of directors of Opportunity
International. She is a graduate of Smith College and received an MBA
from Harvard Business School. Ms. Farrington has earned a
Professional Director Certification from The
Corporate Directors Group for meeting director educational requirements
established by that organization and director educational standards of
RiskMetrics ISS.
David G. Hall
has served as President of Collectors Universe since October 2001 and as
a Director since its founding in February 1999. From April 2000 to
September 2001, Mr. Hall served as the Chief Executive Officer of the
Company and as Chairman of the Board from February 1999 to October
2001. Mr. Hall is a director of Professional Coin Grading
Service, Inc., the Company’s predecessor and now its wholly-owned subsidiary,
and was its Chief Executive Officer from 1986 to February 1999, when it was
acquired by the Company. Mr. Hall was honored in 1999 by COINage Magazine as
Numismatist of the Century, along with 14 other individuals. In 1990,
Mr. Hall was named Orange County Entrepreneur of the Year by INC. Magazine. In
addition, he has written A
Mercenary’s Guide to the Rare Coin Market, a book dedicated to coin
collecting.
Michael J.
McConnell has served as the Company’s Chief Executive Officer since March
2009. From 1998 to September 30, 2008, Mr. McConnell was a
Managing Director and a member of the Executive Committee of Shamrock Capital
Advisors, Inc., which is a manager of private equity, real estate and direct
investment funds, including the Shamrock Activist Value Funds. Prior
to joining Shamrock in 1994, Mr. McConnell held various positions at
PepsiCo, Merrill Lynch and Kidder Peabody. Mr. McConnell
formerly served on the boards of directors of Ansell Limited, Nuplex Industries,
Force Corporation, iPass, Inc. and Port-link
International. Mr. McConnell also serves on the Board of
Governors of Opportunity International. Mr. McConnell received
his B.A. in Economics from Harvard University and his MBA (with
distinction—Shermet Scholar) from the Darden School of the University of
Virginia.
A. J. “Bert”
Moyer, who is a business consultant and private investor, served from
March 1998 until February 2000 as Executive Vice President and Chief Financial
Officer for QAD, Inc., a leading provider of enterprise resource planning
software applications for global manufacturing companies. Between
September 2000 and February 2002, Mr. Moyer was engaged as a consultant to
QAD, Inc., assisting in the Sales Operations of the Americas
Region. He served as president of the commercial division of the
Profit Recovery Group International, Inc. from March until July
2000. Prior to joining QAD, Inc. in 1998, Mr. Moyer was Chief
Financial Officer of Allergan, a specialty pharmaceutical company based in
Irvine, California. Mr. Moyer serves on the boards of directors
of CalAmp Corp., Virco Manufacturing Corporation, Occam Networks, Inc. and
LaserCard Corporation, all of which are public
companies. Mr. Moyer received his Bachelor of Science degree in
Business Administration from Duquesne University and graduated from the Advanced
Management Program at the University of Texas, Austin. Mr. Moyer
has earned a Professional Director Certification from The Corporate Directors Group for meeting director educational
requirements established by that organization and director educational standards
of RiskMetrics ISS.
Van D.
Simmons is the President of DHRCC, Inc., a direct seller of rare
coins. He served as President of the Company’s David Hall Rare Coins
Division from October 2000 until March 2004, when we discontinued that
business. From July to October 2000, he served as Vice
President of Sales of the Company’s Bowers and Merena Division. From
1981 to 1997 he served as the President of DHRCC,
Inc. Mr. Simmons was a founding director of the Company in
February 1999 and was also a founder and served as a director of its predecessor
company, Professional Coin Grading Service, Inc., from 1986 to February
1999. He served as Chairman of the Board of David Hall’s North
American Trading, LLC, a retailer of rare coins, from February 1997 to July
2000.
Bruce A.
Stevens is an Industry Partner with Cordova, Smart & Williams, LLC, a
private equity firm that focuses its investments on lower middle market
companies that are engaged in businesses with which the partners of the firm
have had operating experience. From 1985 to January 2008, Mr. Stevens
was the President and Chief Executive Officer of Steinway & Sons, a wholly
owned subsidiary of Steinway Musical Instruments, Inc., which is the maker of
fine pianos with manufacturing operations in the United States and Germany and
operational facilities in China, Japan and the UK. He also served as
a member of the board of directors of Steinway Musical Instruments, Inc. from
1996 until his retirement in January 2008. Before joining Steinway
& Sons, Mr. Stevens was employed by Polaroid Corporation for nearly 18 years
where he held various positions in both its domestic and international
divisions. Mr. Stevens currently serves on the Board of Trustees at
the Manhattan School of Music in New York City. He also has served on
the boards of directors of numerous industry and music education organizations,
such as the Piano Manufacturers Association International, American Music
Conference, Music Teacher National Association, New England Conservatory,
Lincoln Park Performing Arts Center and Winchester Foundation for Educational
Excellence. Mr. Stevens earned a Bachelors Degree in Economics from
the University of Pennsylvania. Mr. Stevens also has earned a
Professional Director Certification from The Corporate Directors Group for meeting director educational
requirements established by that organization and director educational standards
of RiskMetrics ISS.
Family
Relationships
There are
no family relationships among any of the Company’s officers or
directors.
Resignation
of Michael R. Haynes
Effective
March 16, 2009, Michael R. Haynes resigned his position as Chief Executive
Officer of the Company, and, in conjunction therewith, resigned as a member of
the Board of Directors. Mr. Haynes’ resignations were not the result
of any disagreement with the Company on any matter relating to the Company’s
operations, policies or practices. Mr. McConnell was appointed
to serve as the Company’s Chief Executive Officer effective as of the same date
and will continue to serve in that position until the Company or
Mr. McConnell chooses to terminate his service with the Company as its
Chief Executive Officer.
THE
BOARD OF DIRECTORS
The
Role of the Board of Directors
In
accordance with Delaware law and the Bylaws of the Company, the Board of
Directors oversees the management of the business and affairs of the
Company. The members of the Board keep informed about our business
through discussions with senior management and other officers and managers of
the Company and its subsidiaries, by reviewing analyses and reports sent to them
by management and outside consultants, and by participating in Board and
committee meetings.
Attendance
at Meetings
Our Board
members are encouraged to prepare for and attend all meetings of the Board and
the Board committees of which they are members. During the fiscal
year ended June 30, 2009 (“fiscal 2009”), the Board of Directors of the Company
held a total of nine meetings and all of the directors attended at least 75% of
the total of those meetings and the meetings of the Board committees on which
they served during the respective periods they served as directors of the
Company during that year. In addition, all of the directors attended
the Company’s 2008 Annual Meeting of Stockholders.
Number
of Directors
The Board
of Directors currently consists of seven members. Our Bylaws provide
that the Board is authorized to change the authorized number of directors from
time to time, as it deems to be appropriate.
Term
of Office of Directors
The
Bylaws of the Company provide that directors are elected annually to serve for a
term of one year ending at the Company’s next Annual Meeting of Stockholders or
until their successors are elected and duly qualified. If a vacancy
occurs in any Board position between annual meetings, the Board may fill the
vacancy by electing a new director to that position. The Board of
Directors may also create a new director position and elect a new director to
hold that position for a term ending at the next annual meeting.
Annual
Election of Directors
Our Board
of Directors has adopted a majority voting standard for uncontested director
elections. This means that each director in an uncontested election
shall be elected by a “majority of the votes cast” by the shares entitled to
vote on the election of directors. An “uncontested election” is an
election in which the number of nominees for director is not greater than the
number of directors to be elected. A “majority of the votes cast”
means that the number of votes “FOR” a nominee for director must exceed 50% of
the votes cast. Shares voted as “withhold authority” for a nominee
for director will count as votes cast. In a contested election,
directors will be elected by a plurality of the votes cast by the shares
entitled to vote in the election of directors.
Since the
election of directors at the Annual Meeting will be uncontested, each director
nominee has delivered an offer of resignation to the Board. If any of
the nominees fails to receive a majority of the votes cast in the election of
directors at the Annual Meeting, the Board of Directors will have the right, in
its discretion, to accept or reject that nominee’s offer of
resignation. If the Board accepts the resignation, it may either
appoint another person to fill the vacancy created by the resignation or
correspondingly reduce the authorized number of directors. If the
Board decides, instead, to reject the resignation, then, the nominee would
continue to serve as a director until the next annual meeting; and, in that
event, the Board will be required to publicly disclose the reasons why it
decided to reject the resignation of the nominee.
Director
Independence
The Board
has determined, after careful review, that each member of the Board is
independent under the definition of independence set forth in the NASDAQ
Marketplace Rules that are applicable to companies with shares listed on the
NASDAQ Global Market (the “NASDAQ Listed Company Rules”), with the exception of
Messrs. McConnell and Hall, who are officers of the Company. In
reaching this conclusion, the Board considered all relevant facts and
circumstances with respect to any direct or indirect relationships between the
Company and each of the non-management directors. The Board
determined that any relationships that now exist, or may have existed in the
past, between the Company and any of the non-management directors have no
material effect on their independence.
In
accordance with the Board’s independence evaluation, five of seven of our
directors are independent directors. In addition, as required by the
NASDAQ Listed Company Rules, all of the members of the standing committees of
the Board are independent directors.
In
connection with Mr. McConnell’s appointment to serve as the Company’s Chief
Executive Officer in March 2009, he ceased to be a member of the Compensation
Committee and the Nominating and Governance Committee of the Board because he no
longer qualified as an independent director under the NASDAQ Listed Company
Rules.
Communications
with the Board
Stockholders
interested in communicating with the non-management directors as a group may do
so by writing to: Corporate Secretary, Collectors Universe, Inc., P.O. Box 6280,
Newport Beach, California 92658. The Corporate Secretary will review
and forward to the appropriate member or members of the Board copies of all such
correspondence that, in the opinion of the Corporate Secretary, deal with the
functions of the Board or its committees or that the Corporate Secretary
otherwise determines requires their attention. Concerns relating to
accounting, internal controls or auditing matters will be brought promptly to
the attention of the Chairman of the Audit Committee and will be handled in
accordance with procedures established by the Audit Committee.
Corporate
Governance Policies
Our Board
of Directors believes that sound governance practices and policies provide an
important framework to assist the Board in fulfilling its duties to the
Company’s stockholders. In September 2004, our Board of Directors
adopted the following governance policies, which include a number of policies
and practices under which our Board had operated for some time, together with
concepts suggested by various authorities in corporate governance and the
requirements of the NASDAQ Listed Company Rules and the Sarbanes-Oxley Act of
2002. Some of the principal subjects covered by those policies
include:
·
|
Director
qualifications, including measuring each candidate’s independence,
experience, knowledge, skills, expertise, integrity, ability to make
independent analytical inquiries; his or her understanding of our business
and the business environment in which we operate; and the candidate’s
ability and willingness to devote adequate time and effort to Board
responsibilities, taking into account the candidate’s employment and other
board commitments.
|
·
|
Responsibilities of
Directors, including acting in the best interests of all
stockholders; maintaining independence; developing and maintaining a sound
understanding of our business and the industry in which we operate;
preparing for and attending Board and Board committee meetings; and
providing active, objective and constructive participation at those
meetings.
|
·
|
Director access to management
and, as necessary and appropriate, independent advisors, including
encouraging presentations to the Board from the officers responsible for
functional areas of our business.
|
·
|
Maintaining adequate funding
to retain independent advisors for the Board, as the Board deems to
be necessary or appropriate, and also for its standing committees as the
members of those committees deem to be necessary or
appropriate.
|
·
|
Director orientation and
continuing education, including programs to familiarize new
directors with our business, strategic plans, significant financial,
accounting and risk management issues, compliance programs, conflicts
policies, code of business conduct and corporate governance
guidelines. In addition, each director is expected to
participate in continuing education programs relating to developments in
the Company’s business and in corporate
governance.
|
·
|
Annual performance evaluation
of the Board, including an annual self-assessment of the Board’s
performance as well as the performance of each of the Board’s standing
committees.
|
·
|
Regularly scheduled executive
sessions, without management, are held by the Board. In
addition, the Audit Committee meets separately with the Company’s outside
auditors.
|
Code
of Business and Ethical Conduct
We have
adopted a Code of Business and Ethical Conduct for our officers, employees and
directors, as well as specific ethical conduct policies and principles that
apply to our Chief Executive Officer, Chief Financial Officer and other key
accounting and financial personnel. A copy of our Code of Business
and Ethical Conduct is available at the Investor Relations Section of our
website at www.collectors.com. We
intend to disclose, at this location on our website, any amendments to our Code
of Business and Ethical Conduct and any waivers of the requirements of that Code
that may be granted to our Chief Executive Officer or Chief Financial
Officer. A copy of the Code of Business and Ethical Conduct will be
made available in print, without charge, to any stockholder upon
request. Stockholders who wish to do so should make a request to:
Corporate Secretary, Collectors Universe, Inc., P.O. Box 6280, Newport Beach,
California 92658.
Other
Governance Matters
In
addition to the governance policies discussed above, our Chief Executive Officer
and Chief Financial Officer have provided the certifications of our SEC filings
required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 each quarter
since the certification rules were adopted. We also have adopted
charters for our Board committees that comply with applicable NASDAQ Listed
Company Rules. You can access our Board Committee charters, as well
as news releases, SEC filings and other corporate governance materials by
visiting the Investor Relations Section of our website at www.collectors.com. Copies
of the charters for our Board committees will be made available in
print, without charge, to any stockholder upon request. Stockholders
who wish to do so should make a request to: Corporate Secretary, Collectors
Universe, Inc., P.O. Box 6280, Newport Beach, California 92658.
Committees
of the Board of Directors
The Board
has three standing committees: an Audit Committee, a Compensation
Committee and a Nominating and Governance Committee. Information
regarding the members of each of those Committees and their responsibilities and
the number of meetings held by those Committees during fiscal 2009 is set forth
below.
Audit
Committee
The
members of the Audit Committee are A. J. Bert Moyer, its Chairman, Deborah A.
Farrington and Bruce A. Stevens. All of the members of the Audit
Committee are independent within the meaning of the NASDAQ Listed Company Rules
and the enhanced independence requirements for audit committee members contained
in Rule 10A-3 under the Securities Exchange Act of 1934, as
amended. Our Board of Directors has determined that each of
Mr. Moyer, Ms. Farrington and Mr. Stevens meets the definition of
“audit committee financial expert” adopted by the Securities and Exchange
Commission (the “SEC”). The Audit Committee has a written charter
that specifies its responsibilities, which include oversight of the financial
reporting process and system of internal accounting controls of the Company, and
appointment and oversight of the independent registered public accountants
engaged to audit the Company’s financial statements. In accordance
with its Charter and to ensure independence, the Audit Committee meets
separately with our outside auditors and separately with members of
management. A copy of the Audit Committee Charter, which complies
with applicable NASDAQ Listed Company Rules, is accessible at the Investor
Relations Section of our website at www.collectors.com
and is available in print to those stockholders who request it as discussed
above. The Audit Committee held six meetings during fiscal
2009.
Compensation
Committee
The
members of the Compensation Committee are Deborah A. Farrington, its
Chairperson, A. Clinton Allen, and A. J. Bert Moyer, each of whom, along with
Michael J. McConnell, were appointed as members of the Committee in
December 2008. However, Mr. McConnell resigned from the
Committee concurrently with and as a result of his appointment as the Company’s
Chief Executive Officer in March 2009. All of the remaining members
of the Compensation Committee are independent within the meaning of the NASDAQ
Listed Company Rules. The Compensation Committee reviews and approves
the salaries and establishes incentive compensation and other benefit plans for
our executive officers. Our Board of Directors has adopted a charter
setting forth the role and responsibilities of the Compensation
Committee. A copy of that charter, which complies with applicable
NASDAQ Listed Company Rules, is accessible at the Investor Relations Section of
our website at www.collectors.com
and is available in print to those stockholders who request it as discussed
above. The Compensation Committee held six meetings during
fiscal 2009.
Nominating
and Governance Committee
The
members of the Nominating and Governance Committee are Bruce A. Stevens, its
Chairman and A. J. Bert Moyer, each of whom is independent within the meaning of
the NASDAQ Listed Company Rules. Michael J. McConnell was previously
a member of the Committee, but resigned concurrently with his appointment as the
Company’s Chief Executive Officer in March 2009. This Committee has a
written charter that specifies its responsibilities, which include identifying
and recommending nominees for election to the Board; making recommendations to
the Board regarding the directors to be appointed to each of its standing
Committees; reviewing the adequacy of and approving the compensation that is to
be paid to non-employee directors for their service as directors and as members
of Board Committees; developing and recommending corporate governance guidelines
for adoption by the Board of Directors; and overseeing the annual
self-assessments by the Company’s Directors of the performance of the Board of
Directors and its Committees. A copy of the Nominating and Governance
Committee’s charter is accessible at the Investor Relations Section of our
website at www.collectors.com and is available in print to those stockholders
who request it as discussed above. The Committee held a total
of five meetings during fiscal 2009.
The
Director Nominating Process
In
identifying new candidates for membership on the Board, the Nominating and
Governance Committee will seek recommendations from existing Board members and
executive officers. In addition, the Committee will consider any
candidates that may be recommended by any of the Company’s stockholders who
submit such recommendations to the Board in accordance with the procedures
described below. The Board also has the authority to engage an
executive search firm and other advisors as it deems appropriate to assist it in
identifying qualified Board candidates.
In
assessing and selecting new candidates for Board membership, the Nominating and
Governance Committee considers such factors, among others, as the candidate’s
independence, experience, knowledge, skills and expertise, as demonstrated by
past employment and board experience and the candidate’s reputation for
integrity. When selecting a nominee from among candidates being
considered by the Committee, it conducts background inquiries of and interviews
with the candidates that the Committee members believe are best qualified to
serve as directors. The factors that the Committee considers in
making its selection of a nominee from among those candidates include whether
the candidate has the ability, willingness and enthusiasm to devote the time and
effort required of members of the Board; the candidate’s independence, including
whether the candidate has any conflicts of interest or commitments that would
interfere with the candidate’s ability to fulfill the responsibilities of
directors of the Company, including membership on Board committees; whether the
candidate’s skills and experience would add to the overall competencies of the
Board; and whether the candidate has any special background or experience
relevant to the Company’s business.
Stockholder
Recommendations of Board Candidates
Any
stockholder desiring to submit a recommendation for consideration by the Board
of a candidate that the stockholder believes is qualified to be a Board nominee
at any upcoming stockholders meeting may do so by submitting that recommendation
in writing to the Board not later than 120 days prior to the first
anniversary of the date on which the proxy materials for the prior year’s annual
meeting were first sent to stockholders. However, if the date of the
upcoming annual stockholders meeting has been changed by more than 30 days
from the anniversary date of the prior year’s annual meeting, the recommendation
must be received within a reasonable time before the Company begins to print and
mail its proxy materials for the upcoming annual meeting. In
addition, the recommendation should be accompanied by the following
information: (i) the name and address of the nominating
stockholder and the person that the nominating stockholder is recommending for
consideration as a candidate for Board membership; (ii) the number of
shares of voting stock of the Company that are owned by the nominating
stockholder, his or her recommended candidate and any other stockholders known
by the nominating stockholder to be supporting the nomination of that candidate;
(iii) a description of any arrangements or understandings that relate to
the election of directors of the Company, between the nominating stockholder, or
any person that (directly or indirectly through one or more intermediaries)
controls, or is controlled by, or is under common control with, such
stockholder, on the one hand, and any other person or persons (naming such other
person or persons), on the other hand; (iv) such other information
regarding each recommended candidate as would be required to be included in a
proxy statement filed pursuant to the proxy rules of the SEC; and (v) the
written consent of the stockholder’s recommended candidate to be named as a
nominee and, if nominated and elected, to serve as a director. No
such recommendation was received from any stockholder with respect to the Annual
Meeting.
Stockholder
Nominations
Our
Bylaws provide that any stockholder also may nominate, at any annual meeting of
stockholders, one or more candidates for election to the Board of Directors, by
giving the Company written notice (addressed to the Secretary of the Company at
the Company’s principal offices) of such stockholder’s intention to do so not
later than 120 days prior to the first anniversary of the date on which the
proxy materials for the prior year’s annual meeting were first sent to
stockholders. Such notice must be accompanied by the same
information, described in the immediately preceding paragraph, regarding such
candidate or candidates to be nominated for election to the Board and the
nominating stockholder. Any stockholder nomination at any annual
meeting that does not comply with these Bylaw requirements shall be ineffective
and disregarded. No such notice was received from any stockholder
with respect to Annual Meeting and, therefore, the Board’s nominees will be the
sole candidates standing for election at the Annual Meeting and the election of
directors will be uncontested.
Compliance
with Section 16(a) of the Securities Exchange Act of 1934
Based
upon information made available to us, the Company believes that all filing
requirements under Section 16(a) of the Securities Exchange Act of 1934
applicable to its directors and officers were satisfied and timely made with
respect to the Company’s fiscal year ended June 30, 2009. We
have learned, however, that an Initial Statement of Beneficial Ownership on
Form 3 and a subsequent Statement of Changes in Beneficial Ownership on
Form 4 were inadvertently filed late by Richard Kenneth Duncan Sr., who
became the owner of more than 10% of our outstanding shares in
2009.
COMPENSATION
OF NAMED EXECUTIVE OFFICERS
Compensation
Philosophy and Objectives
We
believe that the success of our business and the creation of long term
stockholder value depend to a large extent on our ability to retain and to
attract superior management employees. Therefore, the Compensation
Committee’s primary objectives, when setting management compensation, are to
enable the Company to retain its existing and, when the need arises, to attract
new or additional executive officers and other key management employees, while
at the same time maintaining compensation expense at a level that reflects the
scope of our business and our revenues. To achieve these objectives,
during fiscal 2009, our Compensation Committee continued its practice
of:
·
|
Offering
competitive salaries and benefits to our executive officers, who are named
in the Summary Compensation Table below (collectively, our
“NEOs”);
|
·
|
Offering
our NEOs with the opportunity to earn additional compensation, in the form
of cash bonuses, based on the achievement of defined annual corporate
financial performance goals and individualized NEO performance
objectives;
|
·
|
Aligning
the financial interests of our NEOs with those of our stockholders,
primarily through the grant of shares of restricted stock to reward our
NEOs for improvements in the market performance of our common stock;
and
|
·
|
Providing,
generally, for stock-based compensation awards to our NEOs to become
exercisable or vest in annual installments over multi-year periods as a
means of creating incentives for our NEOs to focus on achieving longer
term corporate objectives and to remain employed by the
Company.
|
Significant
factors that affected the Committee’s determinations with respect to executive
compensation included (i) the competitive nature of the market for talented
and experienced individuals, nationally, and particularly in Southern California
where the Company is headquartered and where most of its operations are
conducted; and (ii) the very limited number of senior executives that have
knowledge and experience in the collectibles markets. Also, to ensure
that we are appropriately compensating our NEOs and that we have appropriate
human resources to execute on our business plans, in making its executive
compensation determinations our Compensation Committee obtains available
information relating to executive compensation, including peer group data, and
recommendations from independent compensation consultants. However,
no single factor is determinative and the Committee ultimately relies on the
experience and judgment of its members in making its executive compensation
decisions. The Compensation Committee also performs periodic reviews
of our executive compensation programs to evaluate their competitiveness and
consistency with our overall management compensation and our financial and
strategic objectives.
Replacement of Cash Bonus Plan with
a Stock Incentive Plan for Fiscal 2010. As a result of one of
those reviews, conducted in May 2009, the Compensation Committee decided that,
for the fiscal year ending June 30, 2010 (“fiscal 2010”), it would adopt a
stock incentive plan for its NEOs in place of a cash-based management bonus plan
of the type adopted by the Compensation Committee for prior fiscal years,
including fiscal 2009. As adopted, that stock incentive plan provides
for grants of shares of restricted stock to each of our NEOs that will vest in
installments over a three year period, provided that the Company achieves a
financial performance goal established for fiscal 2010 and the NEO remains in
the Company’s employ thereafter. The primary purposes of that plan
are (i) to establish incentives that will focus management on achieving a
turn-around in the Company’s financial performance in fiscal 2010, as well as
providing incentives for them to remain in the Company’s employ thereafter,
(ii) to reduce the maximum compensation that the Participants can earn in
fiscal 2010, as compared to fiscal 2009 and 2008, and (iii) to reduce cash
outflows by paying such incentive compensation in stock, rather than
cash.
Components
of Executive Compensation Paid in Fiscal 2009
NEO
compensation, in fiscal 2009 and in prior fiscal years, was comprised of three
major components: (i) base annual salaries;
(ii) performance-based compensation that was paid in cash; and
(iii) equity-based compensation that was designed, among other things, to
align the interests of our NEOs with those of our stockholders by rewarding them
for improvements in the market performance of our shares and providing
incentives for our NEOs to focus their efforts on achieving the Company’s longer
term strategic objectives and remaining in the Company’s employ.
The
Committee’s allocation of these three components of NEO compensation in fiscal
2009 was based on a number of factors, including competitive market conditions
and the positions of the management employees within our organization in terms
of their ability to influence our financial performance.
While
historically not a significant portion of the total compensation paid to our
NEOs, in addition to the three compensation categories discussed above, our
Compensation Committee does have the discretion to pay discretionary cash
bonuses to our NEOs if it deems appropriate under the
circumstances.
Fiscal
2009 Management Bonus Plan
The
purposes of the fiscal 2009 Management Bonus Plan were (i) to provide
meaningful incentives and financial awards to participants for making
significant contributions to the Company’s achievement of financial and
strategic goals and objectives, and (ii) to make a substantial portion of
each participant’s compensation for fiscal 2009 dependent on the Company’s
achievement of those goals and objectives.
Although
each of our three NEOs was eligible to participate in the 2009 Bonus Plan, only
Mr. Wallace, our Chief Financial Officer, elected to participate in that
Plan.
As was
the case in prior years, pursuant to the 2009 Bonus Plan, the Compensation
Committee established threshold, target and maximum revenue and pretax income
goals for fiscal 2009 and individualized performance goals for each
participant. A participant could earn a bonus award under that Plan
if the Company succeeded in achieving the threshold revenue or pretax earnings
goal or the participant met his individualized performance objectives in fiscal
2009 to earn bonus compensation under that Bonus Plan. In the case of
Mr. Wallace, his potential bonus compensation for fiscal 2009 was based
(i) 10% on the Company’s net revenue performance; (ii) 40% on the
Company’s pretax income performance, and (iii) 50% on his achievement of
his individualized performance objectives.
However,
because the Company failed to achieve the threshold revenue or pretax income
goals and incurred a substantial loss in fiscal 2009, no bonus compensation was
awarded by the Compensation Committee under the 2009 Bonus Plan.
Equity
Based Compensation
No equity
incentives were granted to any of our NEOs in fiscal 2009.
Also, as
a result of his resignation as our Chief Executive Officer in March 2009, all
restricted shares and options that had been granted to Michael Haynes in
previous years and had not yet vested were cancelled.
Perquisites
and Other Elements of Compensation
Mr. Haynes
received $9,000 during fiscal 2009 to defray the personal expenses he incurred
in using his own automobile on Company business. Subject to this one
exception, we did not provide any perquisites to any of our NEOs in fiscal
2009.
Employment
Arrangements with Named Executive Officers
Former Chief Executive
Officer. Mr. Haynes was employed as our Chief Executive
Officer under the terms of an employment agreement that was to have expired in
December 2009. That employment agreement terminated as a result of
Mr. Haynes’ resignation as Chief Executive Officer effective March 16,
2009. In connection with Mr. Haynes’ resignation, the Company
and Mr. Haynes entered into a Separation Agreement and Mutual General
Release pursuant to which the Company agreed to (i) pay severance
compensation to Mr. Haynes in the amount of $298,000 in installments over a
period of 12 months, (ii) pay his COBRA health insurance premiums for a
period of up to 18 months or, if sooner, until the earlier of the date he
ceases to be eligible for COBRA benefits or the date he obtains other employment
providing him with health insurance benefits, and (iii) reimburse him for
the costs, not to exceed $30,000, for outplacement services and up to $20,000 of
any out of pocket expenses he might incur in connection with his separation from
service. In addition, Mr. Haynes and the Company entered into a
general release of all claims that might have against each
other. Payments made to or on behalf of Mr. Haynes under the
Separation Agreement during fiscal 2009 totaled $98,414, of which $74,500
represented the initial installments of his severance
compensation. Also, as a result of Mr. Haynes’ resignation, all
of his stock options and restricted stock awards that had not vested as of
March 31, 2009 automatically were cancelled and ceased to be
outstanding.
Appointment of New Chief Executive
Officer. Concurrently with the resignation of Mr. Haynes, our
Board of Directors appointed Mr. McConnell to serve as our Chief Executive
Officer. He will continue to serve in that position until the Company
or Mr. McConnell elects to terminate his employment as the Company’s Chief
Executive Officer. Mr. McConnell also continues to serve as a
member of the Board of Directors, but resigned as a member of the Compensation
Committee and a member of the Nominating and Governance Committee of the Board
because, by reason of his appointment as Interim Chief Executive Officer, he no
longer qualified as an independent director under the NASDAQ Listed Company
Rules. The Company has agreed to pay Mr. McConnell a base salary
of $15,000 per month for his service as our Interim Chief Executive Officer and
to pay him an automobile allowance of $650 per month as reimbursement for
the costs he incurs in using his personal automobile on Company
business. He also continues to receive director fees, which currently
are $25,000 per year, and, if and to the extent granted to non-management
directors, also will be granted restricted shares, for his service on the
Board.
Other Named Executive
Officers. We do not have employment agreements, severance
agreements, change of control agreements or any other similar agreements with
our NEOs which provide for the payment of compensation or non-equity awards or
the provision of benefits on a termination of employment or as a result of a
change of control transaction, except for the continuation of health insurance
coverage as required under applicable federal law. Our stock
incentive plans provide that all unvested options and unvested restricted
shares, whether held by NEOs or other employees, will become vested on a change
of control of the Company unless the party acquiring control of the Company
agrees to assume, or substitute comparable equity incentives for, those
outstanding options and restricted shares on terms approved by the Compensation
Committee.
Summary
Compensation Table
The
following table sets forth the amounts and components of the compensation
received by each of our Named Executive Officers (“NEOs”) in the fiscal years
ended June 30, 2009, 2008 and 2007, respectively.
Name
and
Principal
Position
|
Year
|
|
Salary
($)
|
|
|
Bonus
($)
|
|
|
Incentive
Stock Awards
($)(3)
|
|
|
Non-Equity
Incentive Compensation
($)(4)
|
|
|
All
Other
Compensation
($)
|
|
|
Total
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael
J. McConnell(1)
|
2009
|
|
$ |
87,000 |
(2) |
|
$ |
- |
|
|
$ |
35,000 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
122,000 |
|
Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David
G. Hall
|
2009
|
|
$ |
300,000 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
300,000 |
|
President and
COO
|
2008
|
|
|
300,000 |
|
|
|
- |
|
|
|
- |
|
|
|
150,000 |
|
|
|
- |
|
|
|
450,000 |
|
|
2007
|
|
|
300,000 |
|
|
|
- |
|
|
|
- |
|
|
|
150,000 |
|
|
|
- |
|
|
|
450,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joseph
J. Wallace
|
2009
|
|
$ |
220,000 |
|
|
$ |
- |
|
|
$ |
41,958 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
261,958 |
|
Chief
Financial Officer
|
2008
|
|
|
212,391 |
|
|
|
- |
|
|
|
66,649 |
|
|
|
50,000 |
|
|
|
- |
|
|
|
329,040 |
|
|
2007
|
|
|
199,500 |
|
|
|
- |
|
|
|
49,622 |
|
|
|
40,000 |
|
|
|
- |
|
|
|
289,122 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael
R. Haynes
|
2009
|
|
$ |
255,000 |
|
|
$ |
54,000 |
(5) |
|
$ |
136,237 |
(6) |
|
$ |
- |
|
|
$ |
107,414 |
(7) |
|
$ |
552,651 |
|
Former Chief
|
2008
|
|
|
340,000 |
|
|
|
- |
|
|
|
375,555 |
|
|
|
100,000 |
|
|
|
12,000 |
(8) |
|
|
827,555 |
|
Executive Officer
|
2007
|
|
|
340,000 |
|
|
|
- |
|
|
|
319,715 |
|
|
|
100,000 |
|
|
|
12,000 |
(8) |
|
|
771,715 |
|
(1)
|
Mr. McConnell,
who, since 2007 has been and continues to be a member of our Board of
Directors, was appointed as our Chief Executive Officer effective as of
March 16, 2009. He was not an NEO prior to that
time. As a result, this table includes only the compensation
received by Mr. McConnell for the services that he rendered in all
capacities to the Company in fiscal
2009.
|
(2)
|
Mr. McConnell
is employed as our Chief Executive Officer at a base salary of $180,000
per year. His salary for fiscal 2009, as set forth in this
table, was comprised of (i) $52,500 of base salary paid to him for
his services as our Chief Executive Officer during the period from March
16, 2009, the date of his appointment as CEO, to June 30, 2009, and
(ii) $34,500 in director fees paid to Mr. McConnell for his
services as a member of our Board of Directors for the entirety of fiscal
2009, including the period subsequent to his becoming Interim Chief
Executive Officer, and for his services as a member of the Compensation
and the Nominating and Governance Committees of the Board during the
period from July 1, 2008 to the date of his appointment as our Chief
Executive Officer.
|
(3)
|
The
amounts set forth in this column represent compensation expense recognized
for financial reporting purposes in respect of incentive stock awards
granted to each of our NEOs during the fiscal years ended June 30, 2009,
2008 and 2007. Pursuant to SEC rules, such compensation expense
was determined in accordance with SFAS 123(R), without giving effect
to the impact of estimated forfeitures related to service-based vesting
conditions. Information regarding the assumptions on which such
compensation expense was determined is set forth under the caption
“Stock-Based Compensation” in Note 2 to the Company’s Consolidated
Financial Statements contained in our 2009 Annual Report to Stockholders
that accompanies this Proxy Statement. In the case of
Mr. McConnell, he received his stock award, in December 2008,
prior to his appointment as the Company’s Chief Executive Officer, for his
service as a member of our Board of
Directors.
|
(4)
|
Amounts
shown in this column are each NEO’s annual performance-based bonus awards
for fiscal 2008 and 2007, respectively. In fiscal 2009,
Mr. Wallace was the only NEO who participated in the fiscal 2009
Bonus Plan. However, no bonus was awarded for fiscal 2009 under
that Plan. The bonuses awarded to Messrs. Haynes, Hall and
Wallace for fiscal 2008 and 2007 by the Compensation Committee were based
on the extent to which the Company achieved its financial performance
goals and, in the case of Messrs. Haynes and Wallace, the extent to which
each of them achieved his individualized performance objectives in those
two fiscal years.
|
(5)
|
This
amount represents a discretionary bonus paid to Mr. Haynes for his
efforts in planning and implementing, and in recognition of certain costs
savings realized in connection with, the Company’s exit from its jewelry
grading businesses during the third quarter of fiscal
2009.
|
(6)
|
Net
of forfeitures that occurred as a result of Mr. Haynes’ resignation
as Chief Executive Officer in March
2009.
|
(7)
|
The
Company entered into a Separation Agreement and Mutual General Release
with Mr. Haynes in connection with his resignation as Chief Executive
Officer. That Agreement provided that Mr. Haynes would be
paid severance compensation totaling $298,000 in 12 monthly
installments during the period from April 2009 to
March 2010. Other Compensation in fiscal 2009 was
comprised of (i) installments, totaling $74,500, of his severance
compensation that we paid between April 2009 and June 30, 2009,
(ii) $20,000 that was paid for outplacement services,
(iii) payments totaling $9,000 to defray Mr. Haynes’ personal
expenses incurred in using his own automobile for Company business and
(iv) $3,914 in post-employment “Cobra” health insurance
premiums.
|
(8)
|
Payments
made to Mr. Haynes to defray his personal expenses incurred in using
his own automobile for Company
business.
|
|
Outstanding
Equity Awards at Fiscal Year End
|
The
following table sets forth information regarding options and restricted stock
awards that have been granted to our NEOs and that were outstanding as of the
end of fiscal 2009.
|
OPTION
AWARDS
|
|
|
STOCK
AWARDS
|
|
Names
|
Grant
Dates
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
Option
Exercise Price ($)(1)
|
|
|
Expiration
Dates
|
|
|
Number
of
Shares not yet Vested(#)
|
|
|
Market
Value
of
Shares
not
yet
Vested($)(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael
McConnell
|
12/02/08
|
|
|
- |
|
|
|
- |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
6,483 |
|
|
$ |
31,637 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joseph
J. Wallace
|
06/11/04
|
|
|
16,500 |
(3) |
|
|
- |
|
|
$ |
12.48 |
(3) |
|
06/11/14
|
|
|
|
- |
|
|
|
- |
|
|
06/09/05
|
|
|
5,500 |
(3) |
|
|
- |
|
|
$ |
14.17 |
(3) |
|
06/09/15
|
|
|
|
- |
|
|
|
- |
|
|
09/15/05
|
|
|
8,250 |
(3) |
|
|
2,750 |
(3) |
|
$ |
11.73 |
(3) |
|
09/15/15
|
|
|
|
- |
|
|
|
- |
|
|
11/14/07
|
|
|
2,750 |
(3) |
|
|
8,250 |
(3) |
|
$ |
13.18 |
(3) |
|
11/14/17
|
|
|
|
4,538 |
|
|
$ |
22,143 |
|
|
(1)
|
Each
option grant was made at an exercise price equal to 100% of the closing
price per share of our common stock on the date of grant as reported by
the NASDAQ Global Stock Market. The expiration date of all
option awards is ten years from the date of grant, subject to earlier
termination on cessation of the NEO’s service with the
Company.
|
|
(2)
|
The
market value of stock awards that have not yet vested was determined by
multiplying the number of shares subject to each award by the closing
price, as reported by the NASDAQ Global Stock Market, of the Company’s
common stock on June 30, 2009, which was the last trading day of
fiscal 2009.
|
|
(3)
|
Each
of these amounts have been adjusted to give effect to the 10% stock
dividend that was issued to our stockholders on November 3,
2008.
|
Director
Compensation
The
following table sets forth information regarding all cash and other compensation
earned by each of our non-management
directors for service on the Board and its Committees during the fiscal year
ended June 30, 2009.
Names
|
|
Fees
Earned
or
Paid
in
Cash($)(1)
|
|
|
Stock
Awards
($)(2)
|
|
|
Total($)
|
|
|
Stock
Options Outstanding at
June 30,
2009
(#)
|
|
|
Stock
Awards
Not
Yet Vested at
June
30, 2009
(#)
|
|
A.
Clinton Allen
|
|
$ |
92,500 |
|
|
$ |
35,000 |
|
|
$ |
127,500 |
|
|
|
89,375 |
|
|
|
6,483 |
|
Deborah
Farrington
|
|
|
57,500 |
|
|
|
35,000 |
|
|
|
92,500 |
|
|
|
45,650 |
|
|
|
6,483 |
|
A.
J. Bert Moyer
|
|
|
62,500 |
|
|
|
35,000 |
|
|
|
97,500 |
|
|
|
41,250 |
|
|
|
6,483 |
|
Van
D. Simmons
|
|
|
30,000 |
|
|
|
35,000 |
|
|
|
65,000 |
|
|
|
16,500 |
|
|
|
6,483 |
|
Bruce
A. Stevens
|
|
|
46,000 |
|
|
|
35,000 |
|
|
|
81,000 |
|
|
|
- |
|
|
|
6,483 |
|
|
(1)
|
This
column reports the amount of cash compensation earned in 2009 for Board
and Committee service.
|
|
(2)
|
Amounts
shown reflect the compensation expense recognized in fiscal 2009 with
respect to restricted stock awards granted during that year, as determined
in accordance with SFAS No. 123R. Information regarding
the assumptions on which such compensation expense was determined is set
forth under the caption “Stock-Based Compensation” in Note 2 to the
Company’s Consolidated Financial Statements contained in our 2009 Annual
Report to Stockholders that accompanies this Proxy
Statement.
|
Set forth
below is additional information regarding the compensation that we paid to our
non-management directors in fiscal 2009.
Compensation for Service on the
Board of Directors. As compensation for service on the Board
of Directors, each non-management director is paid an annual cash retainer the
amount of which, in years prior to 2009, was $35,000, and is granted $35,000 of
restricted shares of common stock (with the number of shares determined on the
basis of the closing per share price, as reported by the NASDAQ Global Stock
Market, of the Company’s common stock on the date of grant). For
fiscal 2009, however, each non-management director agreed to reduce the annual
cash retainer by $10,000, from $35,000 to $25,000, as a contribution to a
Company-wide cost reduction program implemented in 2009. Each
director’s restricted shares vest (that is cease to be subject to a risk of
cancellation) in four equal quarterly installments subject to the director’s
continued service on the Board.
Compensation for Service on Board
Committees. In addition, directors serving on the Audit
Committee, the Compensation Committee or the Nominating and Governance Committee
receive an annual retainer of $10,000, $7,500 and $1,000, respectively, for
their service on those Committees.
Additional Board and Committee
Service. The Chairman of the Board receives an additional
annual cash retainer of $55,000, and the Chairpersons of the Audit Committee,
Compensation Committee and Nominating and Governance Committee receive
additional annual cash retainers of $14,000, $10,000 and $5,000, respectively,
in each case for the additional services they render to the Company in those
capacities.
The
compensation paid to our non-management directors, as described above, was
determined on the basis of information provided and recommendations made to the
Compensation Committee in fiscal 2007 by its outside compensation consultant
regarding trends in director compensation. Based on a review of
updated information regarding compensation that is being paid by
comparably-sized service companies to their outside directors, the Nominating
& Governance Committee recommended that no changes be made to director
compensation in fiscal 2009. However, as noted above, each of our
non-management directors voluntarily elected to reduce the annual retainer for
their service on the Board by $10,000.
Certain
Transactions
During
fiscal 2009, a member of the immediate family of Mr. Hall, who is our
President, Chief Operating Officer and a member of our Board of Directors, paid
us $191,000 in fees for collectibles authentication and grading services
rendered to him during that year. Those authentication and grading
fees were comparable in amount to the fees which the Company charges, in the
ordinary course of its business, for similar services it renders to unaffiliated
persons.
On
October 8, 2008, the Company repurchased 120,010 shares of Company common
stock owned by Michael Haynes, who was then the Company’s Chief Executive
Officer, at a purchase price of $4.033 per share, which represented a 10%
discount from the then market price of the Company’s shares. To
reduce its cash outlay, the Company then sold, at the same per share price,
30,000 of those shares to Michael J. McConnell, who was then an outside
director, and 10,000 of those shares to David Hall, who is the President and
Chief Operating Officer and a director of the Company. The per share
price $4.033 that was paid by the Company for the shares it purchased from
Mr. Haynes, and that was paid to the Company for the shares it sold to
Messrs. McConnell and Hall, was determined on the basis of price
negotiations between Mr. McConnell, acting on his own behalf, and Mr.
Haynes, as seller of the shares (and not in his capacity as our
CEO).
The
Company did not engage in any other transaction or any series of related
transactions in amounts exceeding $120,000 in which a “related person” (as
defined in SEC rules) had a direct or indirect material interest in fiscal 2009
(“related party transactions”) and did not engage in any such related party
transactions in fiscal 2008.
The SEC
defines a “related person” as any director, nominee for director, executive
officer, or person controlling more than 5% percent of our outstanding voting
securities, and any immediate family member of any of such persons.
RATIFICATION
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
(Proposal
No. 2)
The Audit
Committee of our Board of Directors has selected Grant Thornton, LLP (“Grant
Thornton”) to serve as our independent registered public accounting firm for our
fiscal year ending June 30, 2010. Grant Thornton audited our
consolidated financial statements for the fiscal year ended June 30,
2009. We are submitting the selection of our independent registered
public accounting firm for fiscal 2010 to our stockholders for ratification at
the Annual Meeting.
Our
organizational documents do not require that our stockholders ratify the
selection of Grant Thornton as our independent registered public accounting
firm. However, we are doing so because we believe it is a matter of
good corporate practice. If our stockholders do not ratify the
selection, the Audit Committee will reconsider whether or not to retain Grant
Thornton, but may still retain them. Alternatively, even if the
selection is ratified, the Audit Committee, in its discretion, may change the
appointment at any time during the year if it determines that such a change
would be in our best interests and the best interests of our
stockholders.
A
representative of Grant Thornton is expected to be present at the Annual
Meeting, will have the opportunity to make a statement if he or she desires to
do so, and will be available to respond to appropriate questions from
stockholders.
THE
BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS
THAT YOU VOTE “FOR”
THE RATIFICATION OF THE
APPOINTMENT
OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Audit
and Non-Audit Services Pre-Approval Policy
The Audit
Committee Charter, provides that our Audit Committee will pre-approve all audit
and non-audit engagements of any independent registered public accounting firms,
including the nature of the services to be performed and the fees for such
services, either through specific approval of the Audit Committee or by its
Chairman pursuant to authority specifically delegated to him or her by the
Committee. Any engagement approved by the Chairman pursuant to
delegated authority is required to be reported to the Audit Committee at its
next meeting. Since the adoption of the Charter, all audit and
non-audit services provided by the Company’s independent registered accounting
firms have been pre-approved by the Audit Committee.
Audit
and Other Fees Paid in Fiscal 2009 and 2008
Audit
Services and Fees
With
respect to fiscal 2009, Grant Thornton rendered audit services to us that
consisted of the audit of our consolidated financial statements for the fiscal
year ended June 30, 2009 and reviews of our interim consolidated financial
statements included in our Quarterly Reports on Form 10-Q filed with the SEC for
the first three quarters of that year. Audit fees paid to Grant
Thornton for these services in fiscal 2009 totaled $285,106.
With
respect to fiscal 2008, Grant Thornton rendered audit services to us that
consisted of (i) the audit of our consolidated financial statements for the
fiscal year ended June 30, 2008 and reviews of our interim consolidated
financial statements included in our Quarterly Reports on Form 10-Q filed with
the SEC for the first three quarters of that year, (ii) an audit of the
effectiveness of our internal control over financial reporting as of
June 30, 2008, in accordance with Section 404 of the Sarbanes-Oxley
Act of 2002, and (iii) services required to enable Grant Thornton to
consent to the inclusion of their fiscal 2007 audit reports in a Registration
Statement filed by the Company on Form S-8 under the Securities Act of 1933 to
register shares for one of its stock incentive plans. Audit fees paid
to Grant Thornton for these services in fiscal 2008 totaled
$683,000.
Audit-Related
Fees
Grant
Thornton did not render any audit-related services with respect to fiscal 2009
or 2008.
Fees
for Tax Services
Grant
Thornton rendered tax planning and advisory services to us in fiscal 2009,
consisting primarily of (i) on-going federal and state income tax
compliance services, and (ii) assistance with an Internal Revenue Service
audit of our fiscal 2005, 2006 and 2007 tax returns. It received fees
totaling $82,511 for those services in fiscal 2009.
Grant
Thornton rendered tax planning and advisory services to us in fiscal 2008,
consisting primarily of (i) assistance with the calculation of our
accumulated earnings and profits for purposes of determining the taxability of
the cash dividends that we paid in calendar year 2007, and (ii) on-going
federal and state income tax compliance services. It received fees
totaling $148,000 for those services in fiscal 2008.
Other
Services
Grant
Thornton did not provide any consulting or other services to us with respect to
fiscal 2009 or 2008.
The Audit
Committee determined that the provision by Grant Thornton of tax related
services in each of 2009 and 2008, and the fees paid by the Company for those
services, were compatible with maintaining Grant Thornton’s
independence.
REPORT
OF THE AUDIT COMMITTEE
The
following is the report of the Audit Committee with respect to the Company’s
audited consolidated financial statements for the fiscal year ended
June 30, 2009 (the “2009 Financial Statements”).
The Audit
Committee of the Board of Directors is responsible for assisting the Board in
fulfilling its oversight responsibilities as they relate to the Company’s
financial reporting, internal financial and accounting systems and accounting
practices and policies. The Board of Directors has adopted an Audit
Committee Charter that sets forth the authority and responsibilities of the
Audit Committee. A copy of the Charter is accessible at the Investor
Relations section of our website at www.collectors.com.
In
discharging its responsibilities, the Audit Committee met and held discussions
with management and Grant Thornton, LLP, the Company’s independent registered
public accounting firm for the fiscal year ended June 30,
2009. Management represented to the Audit Committee that the
Company’s financial statements were prepared in accordance with generally
accepted accounting principles, and the Audit Committee has reviewed and
discussed the financial statements with management and Grant Thornton,
LLP. The Audit Committee also discussed with Grant Thornton, LLP the
matters required to be discussed by Statement on Auditing Standards No. 61,
as amended (AICPA, Professional Standards, Vol.
1. AU section 380).
The Audit
Committee has received from Grant Thornton the written disclosures and the
letter required by Independence Standards Board Standard No. 1
(Independence Standards Board Standard No. 1, Independence Discussions with Audit
Committees), as adopted by the Public Company Accounting Oversight Board
in Rule 3600T, and has discussed with them their independence with respect to
the Company and its management, and has considered whether Grant Thornton’s
provision of any non-audit services was compatible with maintaining their
independence.
Based on
the discussions and reviews referenced in the two preceding paragraphs, the
Audit Committee recommended that the Board of Directors approve the inclusion of
the Company’s 2009 Financial Statements in the Company’s Annual Report on Form
10-K for the year ended June 30, 2009 as filed with the SEC.
Management
is responsible for the Company’s financial reporting process, including its
system of internal controls, and for the preparation of consolidated financial
statements in accordance with generally accepted accounting
principles. The Company’s independent auditors are responsible for
auditing those financial statements. The Audit Committee’s
responsibility is to monitor and review these processes. It is not
the Committee’s duty or responsibility to conduct auditing or accounting reviews
or procedures. The members of the Audit Committee are not employees
of the Company and no member of the Committee is, nor does any member of the
Committee represent himself or herself to be or to serve as, accountants or
auditors by profession or experts in the fields of accounting or
auditing. Therefore, the Committee members have necessarily relied,
without independent verification, on management’s representation that the
financial statements have been prepared with integrity and objectivity and in
conformity with accounting principles generally accepted in the United States of
America and on the representations of the Company’s registered independent
public accounting firm included in their report on the Company’s 2009 Financial
Statements.
Respectfully
Submitted,
A. J. Bert Moyer
(Chairperson)
Deborah A.
Farrington
Bruce A.
Stevens
Notwithstanding
anything to the contrary set forth in the Company’s previous filings under the
Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as
amended, that might incorporate future filings, including this Proxy Statement,
in whole or in part, the foregoing Audit Committee Report shall not be
incorporated by reference into any such filings.
STOCKHOLDER
PROPOSALS
Under
Rule 14a-8 promulgated under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), any stockholder desiring to submit a proposal for
inclusion in our proxy materials for our 2010 Annual Meeting of Stockholders
must provide us with a written copy of that proposal by no later than 120 days
before the first anniversary of the release of our proxy materials for this
year’s Annual Meeting. However, if the date of our 2010 Annual
Meeting of Stockholders changes by more than 30 days from the date on which
the Annual Meeting is held, then the deadline will be a reasonable time before
we begin to print and mail our proxy materials for our 2010 Annual Meeting of
Stockholders. Matters pertaining to such proposals, including the
number and length of such proposals, the eligibility of persons entitled to have
such proposals included and other aspects are governed by the Exchange Act, the
rules of the SEC promulgated thereunder, and other laws and regulations to which
interested stockholders should refer.
AVAILABILITY
OF ANNUAL REPORT ON FORM 10-K
A copy of
our 2009 Annual Report to Stockholders accompanies this Proxy
Statement. If you and others who share your mailing address are
“beneficial owners” of our common stock that hold shares through a broker or
other nominee, you may have received a notice that your household will receive
only one Proxy Statement or Notice of Internet Availability of Proxy Materials,
as applicable, from each company whose stock is held in such
accounts. This practice, known as “householding”, is designed to
reduce the volume of duplicative information and reduce printing and postage
costs. Unless you responded that you did not want to participate in
householding, you were deemed to have consented to it, and a single copy of the
Notice (and/or a single copy of this Proxy Statement and the 2009 Annual Report)
have been sent to your address. Each stockholder receiving the Proxy
Statement by mail will continue to receive a separate voting instruction
form.
If you
are a beneficial owner of our common stock who hold shares through a broker or
other nominee and would like to revoke your consent to householding and in the
future receive your own Availability Notice (or your own set of proxy materials,
as applicable), or if your household is currently receiving multiple copies of
the same items and you would like in the future to receive only a single copy at
your address, please contact Broadridge, either by calling toll-free at
1-800-542-1061, or by writing to Broadridge, Householding Department,
51 Mercedes Way, Edgewood, NY 11717. When prompted, please
indicate your name, the name of each of your brokerage firms or banks where your
shares are held, and your account numbers. The revocation of a
consent to householding will be effective approximately 30 days following
its receipt. You will also have an opportunity to opt in or opt out
of householding by contacting your bank or broker.
If you
would like an additional copy of the 2009 Annual Report, this document is
available in electronic form for download or review by visiting the Investor
Relations Section of our website at www.collectors.com. Alternatively,
we will promptly send a copy of the Annual Report to you upon request to:
Corporate Secretary, Collectors Universe, Inc., P.O. Box 6280, Newport Beach,
California 92658.
OTHER
MATTERS
We are
not aware of any other matters to come before the Annual Meeting. If
any other matter not mentioned in this Proxy Statement is properly submitted to
a vote of stockholders at the Annual Meeting, the proxy holders named in the
enclosed proxies will have discretionary authority to vote all proxies they have
received with respect to such matter in accordance with their
judgment.
PROXY
COLLECTORS
UNIVERSE, INC.
1921
E. Alton Avenue
Santa
Ana, California 92705
THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS
OF COLLECTORS UNIVERSE, INC.
The
undersigned hereby revokes all previously granted proxies and appoints A.
Clinton Allen, Michael J. McConnell and David G. Hall, and each of them
individually, the attorney-in-fact, agent and proxy of the undersigned, with
full power of substitution, to vote all shares of stock of Collectors Universe,
Inc. which the undersigned is entitled to represent and vote at the 2009 Annual
Meeting of Stockholders to be held on
Tuesday, December 8, 2009 at 10:00 A.M., Pacific Time, at our principal offices,
which are located at 1921 E. Alton Avenue, Santa Ana, California
92705, and at any and all postponements or adjournments thereof, as
fully as if the undersigned were present and voting at the Annual Meeting, as
directed on this Proxy.
Your
vote is very important. Whether or not you plan to attend the Annual Meeting, we
encourage you to read the accompanying Proxy Statement and submit your proxy or
voting instructions as soon as possible.
THIS
PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED
COLLECTORS
UNIVERSE, INC.
2009
ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON DECEMBER 8, 2009
PROPOSAL
NO. 1: Election of
Directors:
FOR: o
The
Nominees Named Below
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WITHHOLD
AUTHORITY: o
To
Vote for All of the Nominees Named Below
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01. A.
Clinton Allen
04. Michael
J. McConnell
07. Bruce
A. Stevens
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02. Deborah A.
Farringon
05. A.J. “Bert”
Moyer
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03. David G.
Hall
06. Van D.
Simmons
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(Instruction: To
withhold authority to vote for any of the Nominees, print the name of each of
those Nominees for whom you would like to withhold authority to in the space
below):
Exceptions: ____________________________________________________________________________________________________________________________
PROPOSAL NO.
2:
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Ratification
of the appointment of Grant Thornton LLP as our Independent Registered
Public Accounting Firm for the fiscal year
ending June 30, 2010
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FOR: o
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AGAINST: o
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ABSTAIN: o
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IN
THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS
MAY PROPERLY COME BEFORE THE ANNUAL MEETING OR ANY AND ALL POSTPONEMENTS OR
ADJOURNMENTS THEREOF.
THE
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE
STOCKHOLDER. WHERE NO DIRECTION IS GIVEN, THOSE SHARES WILL BE VOTED
“FOR” THE
ELECTION OF EACH OF THE SEVEN DIRECTOR NOMINEES NAMED ON THIS PROXY AND “FOR” THE RATIFICATION
OF GRANT THORNTON LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR
THE FISCAL YEAR ENDING JUNE 30, 2010. IN ADDITION, THIS PROXY CONFERS
DISCRETIONARY AUTHORITY TO VOTE ON ALL OTHER MATTERS WHICH MAY COME BEFORE THE
ANNUAL MEETING.
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Yes
|
No
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Please
indicate if you plan to attend this meeting.
|
o
|
o
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Please
sign exactly as the name appears at the left. When shares are
held by joint tenants, both should sign. When signing as an
attorney, executor, administrator, trustee or guardian, please give full
title as such. If a corporation, please sign in full corporate
name by a duly authorized officer. If a partnership, please
sign in the partnership name by an authorized person.
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______________________________
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_____________
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_________________________________
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_________________
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Signature
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Date
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Signature
(Joint Owners)
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Date
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IMPORTANT NOTICE REGARDING INTERNET
AVAILABILITY OF PROXY MATERIALS
Our
Proxy Statement, 2009 Annual Report and Proxy Card are available
at:
www.stocktrans.com/eproxy/collectorsuniverse2009
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VOTE
BY INTERNET OR MAIL
24
HOURS A DAY, 7 DAYS A WEEK
INTERNET
VOTING IS AVAILABLE THROUGH 11:59 P.M.,
PACIFIC
TIME ON DECEMBER 7, 2009.
YOUR
INTERNET VOTE AUTHORIZES THE NAMED PROXIES TO VOTE THESE SHARES IN THE
SAME MANNER AS IF YOU MARKED, SIGNED AND RETURNED YOUR PROXY
CARD
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1921
E. ALTON AVENUE
SANTA
ANA, CALIFORNIA 92705
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VOTE
BY INTERNET:
Log-on
to www.votestock.com
Enter
your control number printed to the left
Vote
your proxy by checking the appropriate boxes Click on “Accept
Vote”
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YOUR
PROXY CONTROL NUMBER
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VOTE BY
MAIL: If you do not wish to vote over the Internet,
please complete, sign, date and return the accompanying proxy card in the
pre-paid envelope provided.
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IF
YOU VOTE YOUR PROXY BY INTERNET YOU DO NOT
NEED
TO MAIL BACK YOUR PROXY CARD.
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