DEF 14A
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
Proxy Statement
Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
|
o |
|
Preliminary Proxy Statement |
|
o |
|
Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
|
þ |
|
Definitive Proxy Statement |
|
o |
|
Definitive Additional Materials |
|
o |
|
Soliciting Material Pursuant to Rule 14a-12 |
Hollywood Media Corp.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|
þ |
|
No fee required. |
|
|
o |
|
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
|
(1) |
|
Title of each class of securities to which transaction
applies: |
|
(2) |
|
Aggregate number of securities to which transaction applies: |
|
(3) |
|
Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11: |
|
(4) |
|
Proposed maximum aggregate value of transaction: |
|
o |
|
Fee paid previously with preliminary materials: |
|
o |
|
Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid previously.
Identify the previous filing by registration statement number, or the Form or Schedule
and the date of its filing. |
|
(1) |
|
Amount Previously Paid: |
|
(2) |
|
Form, Schedule or Registration Statement No.: |
November 18, 2008
Dear Fellow Shareholders:
We invite you to attend the 2008 Annual Meeting of Shareholders of Hollywood Media Corp.
(Hollywood Media). The annual meeting will be held at 10:00 a.m., Eastern time, on December
18, 2008, at 2255 Glades Road, Conference Room 123A, Boca Raton, Florida 33431. Conference
Room 123A is on the first floor of the building in the Atrium.
At the annual meeting you will be asked to vote on the election of seven directors nominated
by Hollywood Medias Board of Directors, and to ratify the selection of Kaufman Rossin & Co., P.A.
as Hollywood Medias independent registered public accounting firm for 2008. The accompanying
Notice of Annual Meeting of Shareholders and Proxy Statement describe in further detail the
matters to be presented at the annual meeting.
Shareholders of record at the close of business on November 17, 2008 are entitled to notice
of, and to vote at, the annual meeting or at any postponements or adjournments of the annual
meeting.
Your Vote Is Very Important. Whether or not you plan to attend the annual meeting, we ask you
to please vote by completing and mailing the enclosed proxy card. If you attend the annual
meeting, you may vote in person if you wish, whether or not you have executed and returned your
proxy card.
|
|
|
|
|
Sincerely, |
|
|
|
|
|
|
|
|
|
|
|
Mitchell Rubenstein |
|
|
Chairman and Chief Executive Officer |
Annual Meeting Guidelines and Procedures. At the annual meeting we will distribute
copies of our customary annual meeting guidelines and procedures to be followed by persons
attending the annual meeting. These rules include the following, among other things: (i)
attendance is limited to (a) shareholders of record as of the record date, (b) beneficial or
street owners having written evidence of ownership as of the record date, (c) authorized proxies
of such shareholders presenting written evidence of such authorization, and (d) invited guests of
management; and (ii) the use of cameras, sound recording equipment, communication devices, or any
other similar equipment is prohibited.
[This Page Intentionally Left Blank]
HOLLYWOOD MEDIA CORP.
2255 Glades Road
Boca Raton, Florida 33431
NOTICE OF 2008 ANNUAL MEETING OF SHAREHOLDERS
|
|
|
Meeting Date:
|
|
December 18, 2008 |
Meeting Time:
|
|
10:00 a.m., Eastern Time |
Meeting Place:
|
|
2255 Glades Road, Conference Room 123A |
|
|
Boca Raton, Florida 33431 |
Notice is hereby given that an Annual Meeting of Shareholders of Hollywood Media Corp.
(Hollywood Media) will be held for the following purposes:
|
1. |
|
To consider and vote upon the election of seven directors nominated by
Hollywood Medias Board of Directors; |
|
|
2. |
|
To consider and vote upon a proposal to ratify the selection of Kaufman Rossin
& Co., P.A. as Hollywood Medias independent registered public accounting firm for the
year ending December 31, 2008; and |
|
|
3. |
|
Such other business as properly may be presented at the annual meeting or any
adjournments or postponements thereof. |
You are cordially invited to attend the annual meeting. Whether or not you plan to attend the
annual meeting, to ensure that your shares are represented at the annual meeting we ask you to
please sign, date and return the accompanying proxy card. If you attend the annual
meeting, you may vote in person if you wish, whether or not you have executed and returned your
proxy card. Your proxy may be revoked at any time before it is voted. Please review the Proxy
Statement accompanying this notice for more complete information regarding the matters proposed for
your consideration at the annual meeting.
|
|
|
|
|
By Order of the Board of Directors |
|
|
|
|
|
Laurie S. Silvers
President and Secretary |
Boca Raton, Florida
November 18, 2008
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, WHETHER OR NOT YOU PLAN TO BE
PRESENT IN PERSON AT THE ANNUAL MEETING, PLEASE SIGN AND DATE THE ENCLOSED PROXY CARD AND RETURN IT
IN THE ENCLOSED ENVELOPE.
TABLE OF CONTENTS
|
|
|
|
|
|
|
Page: |
|
|
|
2 |
|
|
|
|
2 |
|
|
|
|
2 |
|
|
|
|
3 |
|
|
|
|
3 |
|
|
|
|
4 |
|
|
|
|
5 |
|
|
|
|
6 |
|
|
|
|
|
|
|
|
|
6 |
|
|
|
|
6 |
|
|
|
|
6 |
|
|
|
|
|
|
|
|
|
9 |
|
|
|
|
9 |
|
|
|
|
9 |
|
|
|
|
10 |
|
|
|
|
12 |
|
|
|
|
13 |
|
|
|
|
13 |
|
|
|
|
|
|
|
|
|
14 |
|
|
|
|
|
|
|
|
|
16 |
|
|
|
|
|
|
|
|
|
17 |
|
|
|
|
|
|
|
|
|
18 |
|
|
|
|
18 |
|
|
|
|
21 |
|
|
|
|
22 |
|
|
|
|
23 |
|
|
|
|
24 |
|
|
|
|
26 |
|
|
|
|
27 |
|
|
|
|
27 |
|
|
|
|
27 |
|
|
|
|
28 |
|
|
|
|
31 |
|
|
|
|
32 |
|
|
|
|
|
|
|
|
|
33 |
|
|
|
|
33 |
|
|
|
|
34 |
|
|
|
|
34 |
|
|
|
|
35 |
|
|
|
|
|
|
|
|
|
36 |
|
|
|
|
|
|
|
|
|
37 |
|
|
|
|
|
|
|
|
|
38 |
|
|
|
|
|
|
|
|
|
38 |
|
|
|
|
|
|
|
|
|
40 |
|
|
|
|
|
|
|
|
|
40 |
|
HOLLYWOOD MEDIA CORP.
2008 ANNUAL MEETING OF SHAREHOLDERS
THE MEETING
General
As further described in this Proxy Statement below, this Proxy Statement is being furnished to
holders of shares of common stock in connection with the solicitation of proxies by Hollywood
Medias Board of Directors for use at the annual meeting of shareholders (the Meeting) to
be held at 2255 Glades Road, Conference Room 123A, Boca Raton, Florida 33431, on December 18, 2008,
convening at 10:00 a.m., Eastern time, and at any adjournments or postponements thereof. This Proxy
Statement and the accompanying form of proxy are anticipated to be first mailed to holders of
common stock on or about November 21, 2008. Shareholders should review the information in this
Proxy Statement together with Hollywood Medias Annual Report on Form 10-K for the year ended
December 31, 2007 which accompanies this Proxy Statement. A list of shareholders of record
entitled to vote at the Meeting will be available at Hollywood Medias principal executive offices,
2255 Glades Road, Boca Raton, Florida 33431, for a period of ten days prior to the Meeting and at
the Meeting itself for examination by any shareholder.
Questions and Answers about the Meeting
|
|
|
Q:
|
|
What am I being asked to vote upon? |
|
|
|
A:
|
|
You are being asked to vote in favor of the election of seven directors
nominated by our Board of Directors. You are also being asked to ratify the selection
of Kaufman Rossin & Co., P.A. as Hollywood Medias independent registered public
accounting firm for the year ending December 31, 2008. HOLLYWOOD MEDIAS BOARD OF
DIRECTORS HAS APPROVED EACH OF THESE PROPOSALS AND RECOMMENDS THAT YOU VOTE IN FAVOR OF
EACH OF THE PROPOSALS. |
|
|
|
Q:
|
|
When is the Meeting and where is it being held? |
|
|
|
A:
|
|
The Meeting will be held on December 18, 2008, at 10:00 a.m., Eastern Time, at
2255 Glades Road, Conference Room 123A, Boca Raton, Florida 33431. Conference Room 123A
is on the first floor of the building in the Atrium. |
|
|
|
Q:
|
|
Who is entitled to notice of and to vote at the Meeting? |
|
|
|
A:
|
|
Only shareholders of record at the close of business on the Record Date,
November 17, 2008, are entitled to receive notice of the Meeting and to vote shares of
Hollywood Media common stock that they held on the Record Date at the Meeting or any
postponements or adjournments of the Meeting. Each outstanding share of common stock
entitles its holder to cast one vote on each matter to be voted upon. |
2
|
|
|
Q:
|
|
Who can attend the Meeting? |
|
|
|
A:
|
|
All shareholders as of the Record Date, November 17, 2008, or their duly
appointed proxies may attend the Meeting. However, please note that if you hold shares
in street name (that is, through a broker or other nominee), you will need to bring a
copy of a brokerage statement reflecting your stock ownership as of the Record Date and
a proper proxy from the institution that holds such shares granting you authority to
vote the shares at the Meeting. See Meeting Guidelines and Procedures on the front
cover page of this Proxy Statement. |
|
|
|
Q:
|
|
What should I do now? |
|
|
|
A:
|
|
You should mail your signed proxy card in the enclosed postage paid envelope as
soon as possible, so that your shares will be represented at the Meeting. |
|
|
|
Q:
|
|
Can I change my vote after I have mailed in a signed proxy card? |
|
|
|
A:
|
|
Yes. You can change your vote in one of the following ways at any time before
your proxy is voted at the Meeting. First, you can revoke your proxy by delivering a
written notice to the Secretary of Hollywood Media (at 2255 Glades Road, Suite 221A,
Boca Raton, Florida 33431) prior to the time it is exercised. Second, you can submit a
new, later dated proxy card prior to the time the initial proxy is exercised. Third,
you can attend the Meeting and vote in person. |
Matters To Be Considered At The Meeting
At the Meeting, holders of shares of common stock will be requested to consider and vote upon
(1) the election of seven directors nominated by Hollywood Medias Board of Directors, as described
in Proposal 1 below, (2) a proposal to ratify the selection of Kaufman Rossin & Co., P.A. as
Hollywood Medias independent registered public accounting firm for the year ending December 31,
2008, and (3) such other business as properly may be presented at the Meeting or any adjournments
or postponements thereof. HOLLYWOOD MEDIAS BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE IN
FAVOR OF THE ELECTION OF THESE NOMINEES TO THE BOARD OF DIRECTORS OF HOLLYWOOD MEDIA, AND IN FAVOR
OF THE RATIFICATION OF HOLLYWOOD MEDIAS CHOICE OF KAUFMAN ROSSIN & CO., P.A. AS HOLLYWOOD MEDIAS
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.
Record Date; Quorum; Voting At The Meeting
Hollywood Medias Board of Directors has fixed November 17, 2008 as the Record Date for the
Meeting. Accordingly, only holders of record of shares of common stock at the Record Date will be
entitled to notice of and to vote at the Meeting. As of November 17, 2008, there were 31,614,274
shares of common stock outstanding and entitled to vote. Each holder of record of common stock on
the Record Date is entitled to cast one vote per share in respect of the proposals presented for
the vote of such holders, either in person or by proxy, at the Meeting. The presence, in person or
by proxy, of the holders of a majority of the voting power of the outstanding shares of common
stock entitled to vote at the Meeting is necessary to constitute a quorum at the Meeting. If less
than a majority of the outstanding shares entitled to vote is represented at the Meeting, a
majority of the shares so represented may adjourn the Meeting to another date, time or place.
Nominees for director will be elected if they receive the affirmative vote of a plurality of
the votes of the shares of common stock present in person or by proxy at the Meeting and entitled
to vote on the election of directors. A plurality for election of directors means that the director
nominee receiving the
3
most votes for a particular seat on the Board is elected to that seat. The enclosed proxy
card can be marked to vote for or to withhold authority to vote for all or any selected
individual or group of nominees. Withheld votes will not affect the outcome of the votes cast for
the election of directors.
Any matters that may be submitted to a vote of the shareholders, other than the election of
directors, will be approved if the number of shares of common stock voted in favor of the matter
exceeds the number of shares of common stock voted against the matter, unless the matter is one for
which a greater vote is required by law or Hollywood Medias Articles of Incorporation or Bylaws.
Abstentions occur when a shareholder entitled to vote and present in person or represented by proxy
at the Meeting affirmatively votes to abstain instead of voting for or against a matter.
Abstentions will be considered as shares of common stock present and entitled to vote at the
Meeting and will be counted as votes cast at the Meeting, but will not be counted as votes cast
for or against any given matter. The enclosed proxy card can be marked to vote for or
against or to abstain from voting on the proposal to ratify the selection of Kaufman Rossin &
Co., P.A. as Hollywood Medias independent registered public accounting firm. Abstentions will not
have the same effect as a vote against the proposal to ratify the selection of Kaufman Rossin &
Co., P.A.
A broker or nominee holding shares of common stock registered in its name, or in the name of
its nominee, which are beneficially owned by another person and for which it has not received
instructions as to voting from the beneficial owner, might have discretion to vote the beneficial
owners shares with respect to the matters addressed at the Meeting. The inspectors of election
will treat shares referred to as broker or nominee non-votes (shares held by brokers or nominees
as to which instructions have not been received from the beneficial owners or persons entitled to
vote and such broker or nominee does not have discretionary voting power on a particular matter) as
shares that are present and entitled to vote for purposes of determining the presence of a quorum
at the Meeting. However, for purposes of determining the outcome of any matter as to which the
proxies reflect broker or nominee non-votes, shares represented by such proxies will be treated as
not voted and not present and not entitled to vote on that subject matter and therefore will not be
considered by the inspectors of election when counting votes cast on the matter (even though those
shares are considered entitled to vote for quorum purposes and may be entitled to vote on other
matters). Accordingly, broker or nominee non-votes will not have the same effect as a vote against
the proposal to ratify the selection of Kaufman Rossin & Co., P.A. as Hollywood Medias independent
registered public accounting firm. Broker or nominee non-votes will not affect the outcome of the
votes cast for the election of directors.
Prior to the Meeting, Hollywood Media will select one or more inspectors of election for the
Meeting. Such inspector(s) shall determine the number of shares of common stock represented at the
Meeting, the existence of a quorum and the validity and effect of proxies, and shall receive, count
and tabulate ballots and votes and determine the results thereof. The inspector(s) will rely on
the proxy tabulation and voting reports of American Stock Transfer & Trust Company, which has been
engaged by Hollywood Media to receive and tabulate proxies for the Meeting.
Proxies
This Proxy Statement is being furnished to holders of common stock in connection with the
solicitation of proxies by and on behalf of the Board of Directors of Hollywood Media for use at
the Meeting.
Shares of common stock represented by proxies received at or prior to the Meeting that have
not been revoked will be voted at the Meeting in accordance with the instructions contained
therein. Shares of common stock represented by proxies for which no instruction is provided will
be voted for the election of the nominees in this Proxy Statement to the Board of Directors of
Hollywood Media, and will be voted for the ratification of Hollywood Medias choice of
independent registered public accounting firm. To ensure that their shares are voted, holders of
common stock are requested to complete, sign, date
4
and return promptly the enclosed proxy card in the postage-prepaid envelope provided. Any
holder of common stock who so desires may revoke such holders proxy prior to the time it is
exercised by (1) providing written notice to such effect to the Secretary of Hollywood Media at our
principal executive offices, (2) duly executing a proxy bearing a date subsequent to that of a
previously furnished proxy and properly submitting it prior to the time the initial proxy is
exercised or (3) attending the Meeting and voting in person. Attendance at the Meeting will not in
itself constitute a revocation of a previously furnished proxy.
If the Meeting is postponed or adjourned for any reason, at any subsequent reconvening of the
Meeting, all proxies will be voted in the same manner as such proxies would have been voted at the
initial convening of the Meeting (except for any proxies that theretofore effectively have been
revoked or withdrawn), notwithstanding that they may have been effectively voted on the same or any
other matter at a previous meeting.
If any other matters are properly presented at the Meeting for consideration, including
consideration of a motion to adjourn the Meeting to another time and/or place (including for the
purpose of soliciting additional proxies), the persons named in the enclosed form of proxy and
acting thereunder will have discretion to vote on such matters in accordance with their best
judgment.
If any beneficial owner of shares of Hollywood Medias common stock holds such shares in
street name and wishes to vote the shares at the Meeting, such owner must obtain from the
relevant nominee holding common stock a properly executed legal proxy identifying the beneficial
owner as a holder of common stock, authorizing the beneficial owner to act on behalf of the
nominee-record owner at the Meeting and identifying the number of shares (and certificate numbers,
if applicable) in respect of which the authorization is granted.
Hollywood Media will pay the costs of soliciting proxies from the holders of common stock,
including the cost of printing, assembling and mailing this Proxy Statement. In addition to
solicitation by mail, directors, officers and employees of Hollywood Media may solicit proxies by
telephone, facsimile transmission or otherwise. Such directors, officers and employees of
Hollywood Media will not be specially compensated for such solicitation, but may be reimbursed for
out-of-pocket expenses incurred in connection therewith. Brokerage firms, fiduciaries and other
custodians who forward soliciting material to the beneficial owners of common stock held of record
by them will be reimbursed for their reasonable expenses incurred in forwarding such material.
Arrangements also will be made with custodians, nominees and fiduciaries for the forwarding of
proxy solicitation materials to beneficial owners of shares of common stock held of record by such
custodians, nominees and fiduciaries, and Hollywood Media will reimburse such custodians, nominees
and fiduciaries for their reasonable out-of-pocket expenses incurred in connection therewith.
Hollywood Media has engaged a proxy solicitation firm, W.F. Doring & Co., to assist in the
distribution and solicitation of proxies for the Meeting. The cost of such services is estimated to
be less than $5,000.
Conduct of the Meeting
The Chairman presiding at the Meeting has broad authority to conduct the Meeting in an orderly
and timely manner. The Chairman may also exercise broad discretion in recognizing shareholders who
wish to speak and in determining the extent of discussion on each item of business. In light of the
need to conclude the Meeting within a reasonable period of time, we cannot assure that every
shareholder who wishes to speak on an item of business will be able to do so.
5
Contact Information; Sending Communications to the Board
If you have questions or need more information about the Meeting, you may write to:
Secretary
Hollywood Media Corp.
2255 Glades Road, Suite 221A
Boca Raton, Florida 33431
or call our Investor Relations Department at (561) 998-8000.
A shareholder who wishes to send communications to Hollywood Medias Board of Directors or to
a particular director may address correspondence to the Board or to a director in care of Hollywood
Media Corp. at the address given above. If no particular director is named, letters will be
forwarded, depending on the subject matter, to the Audit, Compensation, Nominating, or Stock Option
Committee, or to the entire Board.
However, if a shareholder desires to recommend or to nominate a director candidate, or desires
to submit a proposal of business to be transacted at a meeting of shareholders, such communications
must satisfy certain requirements, as applicable, described in this Proxy Statement below (see
Director Nomination Process and Submission of Future Shareholder Proposals and Nominations
below).
ELECTION OF DIRECTORS
(Proposal No. 1)
Size of Board; Majority of Independent Directors
The number of directors constituting Hollywood Medias Board of Directors is determined from
time to time by the Board within the limits of Hollywood Medias Articles of Incorporation and
Bylaws. The Board has authority to increase the size of the Board and to appoint additional
directors or allow shareholders to elect directors to fill the resulting vacancies, to hold office
until the next shareholders meeting at which directors are elected. The current size of the Board
of Directors is six directors and there are no vacancies on the Board; however, the Board has
approved an increase in the number of directors to seven, effective as of the date of the Meeting,
December 18, 2008, and the Board has nominated a candidate, Mr. Spencer Waxman, to be elected by
shareholders to fill that vacancy at the Meeting as further described below. The Board has
determined that a majority of the current members of the Board are independent directors of
Hollywood Media as defined under the Securities Exchange Act of 1934 and rules thereunder and under
the listing rules of the Nasdaq Stock Market, and that Mr. Waxman would constitute an independent
director if he were elected at the Meeting.
Nominees and Members of the Board of Directors
At the Meeting, seven directors will be elected by the shareholders to serve until the next
annual meeting of shareholders and until their successors are elected and qualified. Upon the
recommendation of the Nominating Committee of the Board, the Board of Directors has nominated each
of the seven nominees named in the table below for election as a director at the Meeting. Six of
the seven nominees are currently members of Hollywood Medias Board of Directors and were duly
elected by the shareholders at Hollywood Medias 2007 Annual Meeting of Shareholders, and one
nominee, Mr. Spencer Waxman, is not currently a director. The accompanying form of proxy, when
properly executed and returned to Hollywood Media, will be voted FOR the election of the seven
nominees named below as directors of Hollywood Media, unless the proxy contains contrary
instructions. Proxies cannot be voted for a greater number of persons than the number of nominees
named in this Proxy Statement.
6
Management has no reason to believe that any of the nominees will be unable or unwilling to
serve if elected. In the event, however, that any nominee should become unable or unwilling to
serve as a director, the proxies may be voted for the election of such person or persons as may be
designated by the Board of Directors.
THE BOARD OF DIRECTORS OF HOLLYWOOD MEDIA RECOMMENDS THAT SHAREHOLDERS VOTE IN FAVOR OF THE
ELECTION OF EACH OF THE SEVEN NOMINEES NAMED BELOW TO THE BOARD OF DIRECTORS OF HOLLYWOOD MEDIA.
The following table sets forth certain information concerning the six incumbent Board members,
and one other nominee as of the date of this Proxy Statement.
|
|
|
|
|
|
|
Name |
|
Age |
|
Position and Nominee Status |
Mitchell Rubenstein
|
|
|
54 |
|
|
Chairman of the Board and Chief Executive
Officer, Nominee |
|
|
|
|
|
|
|
Laurie S. Silvers
|
|
|
56 |
|
|
Vice Chairman of the Board, President and
Secretary, Nominee |
|
|
|
|
|
|
|
Harry T. Hoffman
|
|
|
81 |
|
|
Director and Nominee |
|
|
|
|
|
|
|
Robert E. McAllan
|
|
|
61 |
|
|
Director and Nominee |
|
|
|
|
|
|
|
Deborah J. Simon
|
|
|
52 |
|
|
Director and Nominee |
|
|
|
|
|
|
|
Robert D. Epstein
|
|
|
64 |
|
|
Director and Nominee |
|
|
|
|
|
|
|
Spencer Waxman
|
|
|
44 |
|
|
Nominee |
Mitchell Rubenstein is a founder of Hollywood Media and has served as its Chairman of the
Board and Chief Executive Officer since its inception in January 1993. Mr. Rubenstein was a founder
of the Sci-Fi Channel, a cable television network that was acquired from Mr. Rubenstein and Laurie
Silvers by USA Network in March 1992. Mr. Rubenstein served as President of the Sci-Fi Channel from
January 1989 to March 1992 and served as Co-Vice Chairman of the Sci-Fi Channel from March 1992 to
March 1994. Prior to founding the Sci-Fi Channel, Mr. Rubenstein practiced law for 10 years. Mr.
Rubenstein received a J.D. degree from the University of Virginia School of Law in 1977 and a
Masters in Tax Law (LL.M.) from New York University School of Law in 1979. He currently serves on
the NYU Tax Law Advisory Board and is a member of the Founders Society, New York University, and is
a member of the University of Virginia School of Law Business Advisory Council. He is also Chairman
of the Board of Advisors of Jewish Life at Duke University, which includes the Freeman Center for
Jewish Life at Duke and the Rubenstein-Silvers Hillel at Duke. Together with Ms. Silvers, Mr.
Rubenstein was named Co-Business Person of the Year, City of Boca Raton, Florida in 1992. Mr.
Rubenstein is married to Laurie S. Silvers.
Laurie S. Silvers is a founder of Hollywood Media and has served as its Vice-Chairman,
President and Secretary since its inception in January 1993. Ms. Silvers was a founder of the
Sci-Fi Channel, of which she served as Chief Executive Officer from January 1989 to March 1992 and
Co-Vice Chairman from March 1992 to March 1994. Prior to founding the Sci-Fi Channel, Ms. Silvers
practiced law for 10 years. Ms. Silvers received a J.D. degree from University of Miami School of
Law in 1977. Ms. Silvers serves on the Board of Trustees of the University of Miami, the Board of
Directors of the Economic Council of Palm Beach County, Florida (of which she is Chair-Elect), the
Board of Trustees of the Kravis Center of the Performing Arts in West Palm Beach, Florida and the
Board of Directors of the
7
Community Television Foundation of South Florida (WPBT Channel 2 Miami, Florida). She is a
mentor for at-risk teenage girls with the Women of Tomorrow organization.
Harry T. Hoffman has served as a director of Hollywood Media since July 1993. From 1979 until
his retirement in 1991, Mr. Hoffman served as President and Chief Executive Officer of Waldenbooks,
Inc., then a leading national retailer of books, magazines and related items. From 1968 to 1978, he
served as President and Chief Executive Officer of Ingram Book Company, a national book wholesaler.
Mr. Hoffman serves as the Chairman of Hollywood Medias Compensation Committee, and also serves on
Hollywood Medias Audit Committee, Stock Option Committee, and Nominating Committee.
Robert E. McAllan has served as a director of Hollywood Media since December 2001. Since 1997,
Mr. McAllan has served as the CEO of Press Communications, LLC, which owns and operates broadcast
properties. Mr. McAllan has been in the commercial radio industry since 1964. Mr. McAllan began his
career as a News Director/Operations Manager at WADB FM where he won a national news award from
United Press International. Thereafter, Mr. McAllan became a talk show host for the New Jersey
Press radio stations WJLK AM/FM, and through a series of rapid promotions Mr. McAllan became the
president of Press Broadcasting Company, the broadcast division of The New Jersey Press and
expanded the company by acquiring several television and radio stations. At the time that New
Jersey Press newspapers were acquired by Gannett, Mr. McAllan led a group of key Press executives
who acquired the broadcast division of the New Jersey Press. Mr. McAllan has also held myriad
directorships and officer positions for several companies and associations, including The Asbury
Park Press, Inc., which owned the second largest newspaper in New Jersey, New Jersey Press
Incorporated, a diversified media company which operated major daily newspapers, television
stations, radio stations and online media, the Florida Association of Broadcasters, Chairman of the
New Jersey Broadcasters Association, Chairman of the National Independent Television Committee, and
Co-Chairman of the Coalition for Media Diversity. Mr. McAllan serves as the Chairman of Hollywood
Medias Audit Committee, and also serves on Hollywood Medias Stock Option Committee.
Deborah J. Simon has served as a director of Hollywood Media since November 1995. Ms. Simon
held the position of Senior Vice President of Simon Property Group, a company that owns, develops
and manages regional malls and other retail real estate and is listed on the New York Stock
Exchange, from 1991 to 1996, and she currently serves as the Chairperson of the Simon Youth
Foundation, a non-profit organization. Ms. Simon also serves on the Advisory Board for The
Childrens Museum of Indianapolis, on the Board of Trustees for the Indianapolis Museum of Art and
on the Board of Regents for Mercersburg Academy. She also has been an independent producer, with
several television credits to her name. Ms. Simon serves on Hollywood Medias Audit Committee,
Compensation Committee, and Nominating Committee.
See Investments by Affiliate of the Simon Property Group; Right to Designate Board Nominee
below, for a description of the rights of Tekno Simon LLC, which is controlled by Melvin Simon
(Deborah J. Simons father), to nominate one individual to serve as a director of Hollywood Media.
Tekno Simons current nominee on the Board of Directors is Deborah J. Simon.
Robert D. Epstein has served as a director of Hollywood Media since December 2007. Mr.
Epstein, an attorney, founded the Epstein and Frisch law firm in Indianapolis, Indiana in 1972,
which became an association of lawyers practicing as Epstein, Cohen, Donahoe & Mendes in 2004. Mr.
Epstein specializes in a variety of areas of law, including media law and mergers and acquisitions.
Prior to beginning his private law practice, Mr. Epstein worked in the legal department of Melvin
Simon & Associates. He received a J.D. degree from Indiana University School of Law in 1970 and a
B.A. degree from Franklin College of Indiana in 1967. Mr. Epstein currently serves as a board
member of the Indianapolis Hebrew Congregation Foundation and the Community Music School in
Sarasota, Florida,
8
and has served as a local board member of the United States Selective Service System for 20
years. Mr. Epstein serves on Hollywood Medias Compensation Committee.
Spencer Waxman has been nominated for election to Hollywood Medias Board of Directors. Since
2003, Mr. Waxman has served as Managing Partner of Shannon River Capital Management, an investment
firm focused on the technology media and telecommunications industries. Mr. Waxman currently sits
on the boards of several not for profit organizations, including the Samuel Waxman Cancer Research
Foundation and the Board of Jewish Education of New York. Mr. Waxman also serves on the Board of
Advisors of Jewish Life at Duke University, on which Board Mr. Rubenstein serves as Chairman. Mr.
Waxman is a graduate of Duke University.
Investments by Affiliate of the Simon Property Group; Right to Designate Board Nominee
Pursuant to a 1995 stock purchase agreement with Tekno Simon LLC, a business entity and
affiliate of the Simon Property Group and its Co-Chairman, Melvin Simon, Tekno Simon LLC purchased
shares of Hollywood Medias Series A Preferred Stock, Series B Preferred Stock and common stock. In
May 1999, Tekno Simon LLC converted all of the Series A and Series B Preferred Stock into 300,631
shares of common stock. Pursuant to such stock purchase agreement, Tekno Simon LLC has the right
to designate one nominee to Hollywood Medias Board of Directors until such time as Tekno Simon LLC
holds less than 25% of the sum of (i) the shares of common stock issued upon conversion of the
Series A Preferred Stock, and (ii) the shares of common stock purchased by Tekno Simon LLC in 1995.
Certain shareholders of Hollywood Media, including Mitchell Rubenstein, Laurie S. Silvers and Dr.
Martin H. Greenberg, have agreed to vote their shares of common stock in favor of the election of
Tekno Simon LLCs nominee to Hollywood Medias Board of Directors. Tekno Simon LLCs current
nominee on the Board of Directors is Deborah J. Simon.
CORPORATE GOVERNANCE
Independent Directors
Hollywood Medias Board of Directors currently consists of six directors. The Board has
determined that a majority of the current members of the Board (Harry T. Hoffman, Robert E.
McAllan, Deborah J. Simon, and Robert D. Epstein) are independent directors of Hollywood Media as
defined under the Securities Exchange Act of 1934 and rules thereunder and under the listing rules
of the Nasdaq Stock Market, and that Mr. Ira A. Rosenberg, a member of the Board until the
expiration of his term as a Director on December 18, 2007, was an independent director during his
term on the Board. The Board has also determined that Mr. Spencer Waxman, one of the Boards
nominees referenced above, would constitute an independent director if he were elected at the
Meeting. In making this determination, the Board has concluded that none of these independent
Board members nor Mr. Waxman had or has a relationship which, in the opinion of the Board, would
interfere with the exercise of independent judgment in carrying out the responsibilities of a
director.
Meetings and Director Attendance
During the year ended December 31, 2007, the Board of Directors held eleven meetings and acted
eight times by unanimous written consent. During 2007, each incumbent director other than Ms.
Simon attended at least seventyfive percent of the combined total number of meetings of the Board
and meetings of the committees on which he or she served. Hollywood Medias policy regarding the
attendance of the Board of Directors at annual meetings of Hollywood Medias shareholders is that
each director is invited to attend the annual meeting. The Chairman or Vice Chairman of the Board
usually presides over the annual meeting. Five of Hollywood Medias six directors (over 80% of the
Board) attended Hollywood Medias 2007 Annual Meeting of Shareholders held in December 2007.
9
Committees of the Board of Directors
The Board of Directors currently has four standing committees: the Audit Committee, the
Compensation Committee, the Stock Option Committee and the Nominating Committee. Each member of
these committees is an independent director on Hollywood Medias Board of Directors. The Board may
establish other committees from time to time.
Audit Committee. The Audit Committee of Hollywood Medias Board of Directors has been
established in accordance with section 3(a)(58)(A) of the Securities Exchange Act of 1934, as
amended. The current members of the Audit Committee are Harry T. Hoffman, Robert E. McAllan and
Deborah J. Simon, with Mr. McAllan serving as Chairman. The Board has determined that each of the
current members of the Audit Committee meet the audit committee independence standards under the
listing rules of the Nasdaq Stock Market. The Board has further determined that the Audit
Committee meets the Nasdaq listing requirement that at least one member of the Audit Committee has
such experience or background which results in the individuals financial sophistication, including
being or having been a chief executive officer, chief financial officer or other senior officer
with financial oversight responsibilities. During 2007, the Audit Committee held four meetings and
acted five times by unanimous written consent.
We currently do not have a designated Audit Committee Financial Expert (as defined in Item
407 of SEC Regulation S-K rules) on our audit committee. Although we had discussions with several
potential candidates prior to 2006 and again in 2007, we did not ultimately reach mutual interest
in proceeding to nominate any candidate for election to the Board. We do not currently have any
candidates under consideration, but the Board would consider candidates that our Nominating
Committee deems qualified and recommends for nomination.
The Audit Committee assists the Board in connection with its responsibility for oversight of
the financial reporting process pursuant to the Charter of the Audit Committee adopted by Hollywood
Medias Board of Directors. The Charter of the Audit Committee is available for review on
Hollywood Medias internet web site, under the caption Audit Committee Charter at the following
address: http://www.hollywoodmedia.com/audit_charter.htm. Hollywood Medias internet website and
any other website mentioned in this Proxy Statement, and the information contained or incorporated
therein, are not intended to be incorporated into this Proxy Statement. The Audit Committees
activities address various matters including items relating to (i) the selection and engagement of
Hollywood Medias independent registered public accounting firm and approval of services provided,
and (ii) the review and discussion, with management and the independent registered public
accounting firm, of Hollywood Medias financial statements, which are prepared by Hollywood Medias
management, and the results of the independent registered public accounting firms review and
assessment activities. See Audit Matters below for additional information relating to auditing of
Hollywood Medias financial statements, including the Audit Committees report on its activities
regarding Hollywood Medias financial statements for the 2007 fiscal year.
Compensation Committee. The current members of the Compensation Committee are Harry T.
Hoffman, Deborah J. Simon and Robert Epstein, with Mr. Hoffman serving as Chairman. The members of
the Compensation Committee during 2007 were Mr. Hoffman, Ms. Simon and Ira A. Rosenberg. Mr.
Rosenberg was a member of the Compensation Committee until the expiration of his term as a Director
on December 18, 2007, and Mr. Epstein first became a Director and a member of the Compensation
Committee upon his election to the Board of Directors on December 18, 2007. Hollywood Medias
processes and procedures for the consideration and determination of executive and director
compensation are described below, and additional information is included below under the caption
Compensation Discussion and Analysis. During 2007, the Compensation Committee held one meeting
and acted seven times by unanimous written consent. The directors on the Committee and the Chief
Executive Officer discuss compensation matters from time to time without a formal Committee
meeting, including discussions in connection with preparing the terms of written consents.
The Compensation Committee of the Board of Directors of Hollywood Media is responsible for
approving, determining and/or making recommendations to the Board of Directors concerning the
principal components of compensation, including base salaries, bonuses, and stock options and other
equity awards, for Hollywood Medias executive officers and a defined set of other executives. The
Compensation Committee, with input from the Chief Executive Officer and/or other executives,
reviews
10
the compensation of executives periodically, typically on a case by case basis, to assess and
determine compensation under applicable considerations, including the compensation policies and
objectives noted in the Compensation Discussion and Analysis below. In approving executive officer
compensation, the Compensation Committee generally reviews and considers, among other factors, the
executives scope of responsibility and commitment, level of performance (with respect to specific
areas of responsibility and on an overall basis), contributions to Hollywood Medias achievement of
goals and performance, compensation levels at comparable companies and historical compensation
levels, and the recommendations, analysis and other relevant information provided by Hollywood
Medias management and/or other resources that the Committee may wish to access.
During 2007, Hollywood Media had three executive officers: Mitchell Rubenstein, its Chairman
and Chief Executive Officer; Laurie S. Silvers, its President; and Scott Gomez, its Chief
Accounting Officer. Mr. Rubenstein, Ms. Silvers and Mr. Gomez had preexisting employment
agreements specifying salary and certain other compensation for 2007. These employment agreements
have been approved by the Compensation Committee. For additional information about the 2007
compensation of these officers and their employment agreements, see Executive Compensation below.
The Compensation Committee has the authority to grant discretionary cash bonus awards, and may
approve compensation plans or agreements to grant bonuses based on specified terms and conditions.
The Compensation Committee and the Stock Option Committee act as the administrators of Hollywood
Medias equity compensation plans for executives and other employees, which plans include the 2000
Stock Incentive Plan and the 2004 Stock Incentive Plan. The Committees functions include, among
other things: (i) selecting plan participants; (ii) determining the timing of any awards under the
plans; (iii) determining the types of awards to be granted under the plans; (iv) determining the
amount of awards to be granted to each participant under the plans; and (v) determining the
exercise price, vesting and other terms of the awards granted under the plans.
The compensation arrangements for Hollywood Medias non-employee directors are reviewed and
determined from time to time by the Board of Directors, and the Board may receive and consider
input from the Chairman and Chief Executive Officer in connection with such matters. In recent
years this review has occurred less frequently than annually, with the last review occurring in
2007. For additional information regarding director compensation, see Executive Compensation
Director Compensation below.
In
November 2008, the Compensation Committee engaged Pearl Meyer & Partners, LLC to review the
compensation of the Companys executive officers and is currently in discussions with them
regarding the nature and scope of their review. The Compensation Committee does not have a
charter.
Stock Option Committee. The current members of the Stock Option Committee are Harry T.
Hoffman and Robert E. McAllan. The Stock Option Committee administers Hollywood Medias stock
incentive plans with respect to stock options and other awards not governed by the Compensation
Committee. The Stock Option Committee is authorized, subject to the provisions of the plans, to
establish such rules and regulations as it deems necessary for the proper administration of the
plans and to make such determinations and interpretations and take such action in connection with
the plans and benefits granted thereunder as it deems necessary or advisable. During 2007, no stock
options were granted by the Stock Option Committee and the Stock Option Committee held no meetings.
Nominating Committee. The current members of the Nominating Committee are Harry T. Hoffman
and Deborah J. Simon. The Nominating Committees charter is available for review on Hollywood
Medias internet web site, under the caption Nominating Committee Charter at the following
address: http://www.hollywoodmedia.com/nominating_committee.htm. Hollywood Medias internet website
and any other website mentioned in this Proxy Statement, and the information contained or
incorporated therein, are not intended to be incorporated into this Proxy Statement. As provided
under
11
its charter, the Nominating Committees authority and responsibilities include evaluating and
recommending persons for election or appointment to the Board, as further described below. During
2007, the Nominating Committee held no meetings and acted three times by unanimous written consent.
Director Nomination Process
When seeking candidates for election to the Board, Hollywood Media desires to identify and
nominate candidates of integrity and sound ethical character, who have demonstrated professional
achievement, have meaningful management, advisory or policy making experience, have a general
appreciation of major aspects of Hollywood Medias businesses, and are willing to devote time to
service on the Board. Hollywood Media also requires that the members of its Board of Directors have
qualifications that satisfy applicable SEC and Nasdaq Stock Market requirements, including the
requirement that a majority of directors be independent in accordance with applicable rules.
In selecting candidates to be nominated for election at an annual meeting of Hollywood Medias
shareholders, the Nominating Committee considers qualified incumbent directors who desire to
continue their service on the Board. Hollywood Media is of the view that the continuing service of
qualified incumbents promotes stability and continuity on the Board, giving Hollywood Media the
benefit of the familiarity, knowledge and insight into its affairs that its directors have
accumulated during their tenure, while contributing to the Boards ability to work as a collective
body. Accordingly, it is the general policy of the Nominating Committee, absent special
circumstances, to nominate qualified incumbent directors who continue to satisfy the Committees
criteria for membership on the Board, whom the Committee believes will continue to be able to make
important contributions to the Board and who consent to stand for reelection and, if reelected, to
continue their service on the Board.
If a new candidate is to be sought for election to the Board, the Nominating Committee will
solicit recommendations for nominees from persons whom the Nominating Committee believes are likely
to be familiar with qualified candidates, including recommendations from members of the Board and
senior management, and will consider candidates recommended by shareholders under the procedures
described below. The Committee may also engage a search firm to assist in identifying qualified
candidates. The Committee will review and evaluate each candidate whom it believes merits serious
consideration, taking into account the information obtained concerning the candidate, the
qualifications for Board membership established by the Committee and/or the Board, the existing
composition and mix of talent and expertise on the Board, and other factors that it deems relevant.
In conducting its review and evaluation, the Nominating Committee may solicit the views of
management and other members of the Board, and may in its discretion conduct interviews of
potential nominees. In the case of candidates recommended by shareholders, the Committee may also
consider the size and duration of the interest of the recommending shareholder or shareholder group
in the equity of the Company. Mr. Spencer Waxman is one of the nominees named in this Proxy
Statement for election at the Meeting, and his nomination was recommended to the Nominating
Committee by Hollywood Medias Chairman of the Board and Chief Executive Officer (who is also a
shareholder).
Shareholder Recommendations. Recommendations from shareholders of director candidates for
election at Hollywood Medias 2009 annual meeting of shareholders, properly submitted in writing,
will be referred to the Nominating Committee for consideration. The Nominating Committee will
consider such recommendations on a case-by-case basis depending on various factors which may
include, among other things, whether a vacancy on the Board exists at the time the recommendation
is made and other factors referenced herein.
All recommendations from shareholders must include the name, biographical data and
qualifications of the candidate; identification of the shareholder or group of shareholders making
the recommendation; and a description of any relationships between the recommending shareholder or
shareholders and the candidate. The recommendation must also be accompanied by the consent of the
candidate to be nominated if selected for nomination, to serve as a director if elected, and to be
contacted
12
by the Nominating Committee if the Committee decides in its discretion to do so, and such
consent must be in proper form under applicable SEC rules. Submissions recommending candidates for
election at an annual meeting of shareholders must be received no later than 120 calendar days
prior to the first anniversary of the date of the proxy statement for the prior years annual
meeting of shareholders. If the date of the next annual meeting of shareholders changes more than
30 days from the first anniversary date of the annual meeting of shareholders for the prior year
(or if no annual meeting was held in the prior year), the submission must be made a reasonable time
before Hollywood Media begins to print and send its proxy statement for the annual meeting.
Recommendations should be submitted to: Nominating Committee, c/o Laurie S. Silvers, Secretary,
Hollywood Media Corp., 2255 Glades Road, Suite 221A, Boca Raton, Florida 33431.
Nominations by Shareholders. If a shareholder desires to submit a proposed nomination of a
candidate for election to Hollywood Medias Board of Directors, such submission and nomination must
comply with applicable requirements under Hollywood Medias Bylaws and SEC rules, including the
requirements described in this Proxy Statement below under the caption Advance Notice Requirements
for Proposals and Director Nominations by Shareholders.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires Hollywood Medias directors,
executive officers, and persons who own more than 10% of Hollywood Medias outstanding common stock
to file with the SEC initial reports of ownership and reports of changes in ownership of common
stock. Such persons are required by SEC regulation to furnish Hollywood Media with copies of all
such reports they file.
To Hollywood Medias knowledge, based solely on a review of the copies of such reports
furnished to Hollywood Media or written representations that no other reports were required, all
Section 16(a) filing requirements applicable to its executive officers, directors and
greater-than-10% beneficial owners for the year ended December 31, 2007 have been complied with,
other than: one Form 4 to report one transaction that was filed eight days after the due date by
each of Mitchell Rubenstein and Laurie Silvers; one Form 4 to report one transaction that was filed
one day after the due date by Scott Gomez; and one Form 4 to report two transactions that was filed
one day after the due date by each of Mitchell Rubenstein and Laurie Silvers.
Code of Ethics
Hollywood Media has adopted a Code of Professional Conduct that applies to all of its
officers, directors and employees. This Code of Professional Conduct is available for viewing on
our internet website at http://www.hollywoodmedia.com/code_of_conduct.htm under the caption Code
of Professional Conduct. Hollywood Medias internet website and any other website mentioned in
this Proxy Statement, and the information contained or incorporated therein, are not intended to be
incorporated into this Proxy Statement.
13
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial ownership of the
common stock of Hollywood Media as of November 17, 2008 (or other date as indicated in the
footnotes below) by:
|
|
|
each person or group known by Hollywood Media to beneficially own more than 5%
of the outstanding shares of common stock of Hollywood Media; |
|
|
|
|
each director and director nominee of Hollywood Media; |
|
|
|
|
each executive officer of Hollywood Media; and |
|
|
|
|
all of the current directors and executive officers of Hollywood Media as a
group. |
|
|
|
|
|
|
|
|
|
|
|
Number of |
|
|
|
|
Shares |
|
|
Name and Address |
|
Beneficially |
|
Percent of |
of Beneficial Owner(1) |
|
Owned(2) |
|
Class(2) |
CCM Master Qualified Fund, Ltd. |
|
|
3,368,992 |
(3) |
|
|
10.66 |
% |
Shannon River Fund Management Co. LLC |
|
|
3,123,860 |
(4) |
|
|
9.88 |
% |
Morgan Stanley |
|
|
2,904,233 |
(5) |
|
|
9.19 |
% |
Gruber and McBaine Capital Management, LLC |
|
|
2,614,049 |
(6) |
|
|
8.27 |
% |
Potomac Capital Management LLC |
|
|
1,756,553 |
(7) |
|
|
5.53 |
% |
Intana Management, LLC |
|
|
1,622,956 |
(8) |
|
|
5.13 |
% |
Mitchell Rubenstein and Laurie S. Silvers |
|
|
1,381,330 |
(9) |
|
|
4.37 |
% |
Deborah J. Simon |
|
|
103,419 |
(10) |
|
|
* |
|
Harry T. Hoffman |
|
|
83,254 |
(11) |
|
|
* |
|
Robert E. McAllan |
|
|
81,843 |
(12) |
|
|
* |
|
Scott Gomez |
|
|
79,986 |
(13) |
|
|
* |
|
Robert D. Epstein |
|
|
16,000 |
(14) |
|
|
* |
|
Spencer Waxman |
|
|
3,123,860 |
(15) |
|
|
9.88 |
% |
All directors, director nominees and
executive officers of Hollywood Media as
a group (8 persons) |
|
|
4,869,692 |
(16) |
|
|
15.27 |
% |
|
|
|
* |
|
Less than 1% |
|
(1) |
|
Except as otherwise noted in the footnotes below, the address of each beneficial owner is in
care of Hollywood Media Corp., 2255 Glades Road, Boca Raton, Florida 33431. |
|
(2) |
|
For purposes of this table, beneficial ownership is determined in accordance with Rule 13d-3
under the Securities Exchange Act of 1934, pursuant to which a persons or groups ownership is
deemed to include any shares of common stock that such person has the right to acquire within 60
days. For purposes of computing the percentage of outstanding shares of common stock held by each
person or group of persons named above, any shares which such person or persons has the right to
acquire within 60 days are deemed to be outstanding, but such shares are not deemed to be
outstanding for the purpose of computing the percentage ownership of any other person. Hollywood
Media had 31,614,274 outstanding shares of common stock as of November 17, 2008. |
|
(3) |
|
Based on a Schedule 13D filed with the SEC on December 17, 2007, CCM Master Qualified Fund,
Ltd., Coghill Capital Management, L.L.C. and Clint D. Coghill have shared voting and shared
dispositive power with |
14
|
|
|
|
|
respect to such shares. The reported business address for these holders is One North Wacker Drive,
Suite 4350, Chicago, IL 60606. |
|
(4) |
|
Based on a Schedule 13G/A filed with the SEC on May 13, 2008, Shannon River Fund Management Co.
LLC, Shannon River Global Management LLC, Shannon River Partners, LP, Shannon River Partners II,
LP, Doonbeg Fund, LP, Atlas Master Fund, Ltd., FNY Managed Accounts LLC, and Shannon River Partners
LTD, beneficially own, in the aggregate, such shares. The reported business address for these
holders is 800 Third Avenue, 30th Floor, New York, New York 10022. |
|
(5) |
|
Based on a Schedule 13G/A filed with the SEC on April 3, 2008, and a subsequent Form 4 filed
with the SEC on April 9, 2008, Morgan Stanley and Morgan Stanley Capital Services Inc. beneficially
own such shares. The reported business address for these holders is 1585 Broadway, New York, NY
10036. |
|
(6) |
|
Based on a Schedule 13G filed with the SEC on January 29, 2008, Gruber and McBaine Capital
Management, LLC, Jon D. Gruber, J. Patterson McBaine and Eric B. Swergold have shared voting and
shared dispositive power with respect to 1,786,317 shares, and each of Jon D. Gruber, J. Patterson
McBaine and Eric B. Swergold has sole voting and sole investment power over 562,597, 264,835 and
300 shares, respectively. The reported business address for these holders is 50 Osgood Place,
Penthouse, San Francisco, CA 94133. |
|
(7) |
|
Based on a Schedule 13G filed with the SEC on August 29, 2008, Potomac Capital Management LLC,
Potomac Capital Management Inc. and Paul J. Solit beneficially own such shares, which include an
aggregate of 150,000 shares issuable pursuant to exercisable warrants. The reported business
address for these holders is 825 Third Avenue, 33rd Floor, New York, New York 10022. |
|
(8) |
|
Based on a Schedule 13G filed with the SEC on July 25, 2008, Intana Management, LLC and Intana
Capital Master Fund, Ltd. beneficially own such shares. The reported business address for these
holders is 505 Park Avenue, 3rd Floor, New York, New York 10022. |
|
(9) |
|
Represents 845,487 outstanding shares of common stock which are owned by Mitchell Rubenstein
individually (including 13,560 shares held for his account in Hollywood Medias 401(k) plan),
493,540 outstanding shares of common stock which are owned individually by Laurie S. Silvers, his
wife (including 13,540 shares held for her account in Hollywood Medias 401(k) plan), and 42,303
outstanding shares of common stock held by Mr. Rubenstein and Ms. Silvers jointly as tenants by the
entireties. |
|
(10) |
|
Represents 18,165 outstanding shares of common stock, and 85,254 shares of common stock
issuable pursuant to exercisable options, beneficially owned by Ms. Simon. |
|
(11) |
|
Represents 13,000 outstanding shares of common stock, and 70,254 shares of common stock
issuable pursuant to exercisable options, beneficially owned by Mr. Hoffman. |
|
(12) |
|
Represents 1,408 outstanding shares of common stock, and 80,435 shares of common stock
issuable pursuant to exercisable options, beneficially owned by Mr. McAllan. |
|
(13) |
|
Represents 44,986 outstanding shares of common stock (including 4,986 shares held for Mr.
Gomezs account in Hollywood Medias 401(k) plan), and 35,000 shares of common stock issuable
pursuant to exercisable options, beneficially owned by Mr. Gomez. |
|
(14) |
|
Represents 1,000 outstanding shares of common stock, and 15,000 shares of common stock
issuable pursuant to exercisable options, beneficially owned by Mr. Epstein. |
|
(15) |
|
Represents shares beneficially owned by Shannon River Fund
Management Co. LLC and affiliated entities as described in footnote 4 above. Mr. Waxman is the Managing Partner of Shannon River
Fund Management Co. LLC. |
|
(16) |
|
Represents an aggregate of 4,583,749 outstanding shares of common stock and 285,943 shares of
common stock issuable pursuant to exercisable options. |
15
EQUITY COMPENSATION PLAN INFORMATION
Securities authorized for issuance under equity compensation plans. The following table sets
forth information as of December 31, 2007, regarding compensation plans under which equity
securities of Hollywood Media are authorized for issuance, aggregated by Plan Category as
indicated in the table:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AS OF DECEMBER 31, 2007 |
|
|
Number of |
|
|
|
|
|
Number of |
|
|
securities to be |
|
Weighted average |
|
securities remaining |
|
|
issued upon |
|
exercise price per |
|
available for future |
|
|
exercise of |
|
share of |
|
issuance under |
|
|
outstanding |
|
outstanding |
|
equity |
|
|
options, warrants |
|
options, warrants |
|
compensation |
|
|
and rights |
|
and rights |
|
plans(1) |
|
|
(a) |
|
(b) |
|
(c) |
Plan Category: |
|
|
|
|
|
|
|
|
|
|
|
|
Equity compensation plans
approved by security
holders(2) |
|
|
753,943 |
|
|
$ |
4.54 |
|
|
|
951,370 |
|
Equity compensation plans
not approved by security
holders(3) |
|
|
1,982,485 |
|
|
$ |
4.36 |
|
|
|
|
|
Total |
|
|
2,736,428 |
|
|
$ |
4.43 |
|
|
|
951,370 |
|
|
|
|
(1) |
|
Excluding securities reflected in column (a). |
|
(2) |
|
Hollywood Media has four shareholder-approved equity compensation plans: the 2004 Stock
Incentive Plan, the 2000 Stock Incentive Plan, the 1993 Stock Option Plan and the Directors Stock
Option Plan. No additional grants of stock options may be made under the 1993 Stock Option Plan
because the period for granting options under that plan expired in July 2003. In addition to stock
options, each of the 2004 Stock Incentive Plan and the 2000 Stock Incentive Plan permit the
granting of stock awards and other forms of equity compensation and, as of December 31, 2007, the
number of shares available for granting additional awards was 756,261 shares under the 2004 Stock
Incentive Plan and 191,052 shares under the 2000 Stock Incentive Plan. Additional information
about such plans and awards is provided in Note (3) and other Notes to the Consolidated Financial
Statements included in Item 8 of Hollywood Medias 2007 Form 10-K filed with the SEC. |
|
(3) |
|
Equity compensation not approved by security holders consists primarily of warrants or
other equity purchase rights granted to non-employees of Hollywood Media. Additional information
about such equity compensation is provided in Note (3) and other Notes to the Consolidated
Financial Statements included in Item 8 of Hollywood Medias 2007 Form 10-K filed with the SEC. |
16
EXECUTIVE OFFICERS
The following table sets forth certain information concerning each executive officer of
Hollywood Media as of the date of this Proxy Statement.
|
|
|
|
|
|
|
Name |
|
Age |
|
Position |
Mitchell Rubenstein
|
|
|
54 |
|
|
Chairman of the Board and Chief Executive Officer |
|
|
|
|
|
|
|
Laurie S. Silvers
|
|
|
56 |
|
|
Vice Chairman of the Board, President and Secretary |
|
|
|
|
|
|
|
Scott A. Gomez
|
|
|
32 |
|
|
Chief Accounting Officer |
Hollywood Medias executive officers are elected by the Board of Directors and serve at the
discretion of the Board, subject to the terms and conditions of each officers employment agreement
with Hollywood Media, if any.
Mitchell Rubenstein. See Election of Directors Nominees and Members of the Board of
Directors above for biographical information about Mitchell Rubenstein.
Laurie S. Silvers. See Election of Directors Nominees and Members of the Board of
Directors above for biographical information about Laurie S. Silvers.
Scott A. Gomez joined Hollywood Media in April 2003 as Vice President of Finance and
Accounting, and was appointed Chief Accounting Officer in May 2005. Mr. Gomez is responsible for
accounting, financial and tax matters for Hollywood Media and its subsidiaries, including cash
management, preparation of financial statements, and SEC reporting. Prior to joining Hollywood
Media, Mr. Gomez was a Senior Accountant for Klein & Barreto, P.A., a public accounting firm, from
July of 2001 to April of 2003. During his tenure with Klein & Barreto, Mr. Gomez worked closely
with Hollywood Media on various matters including taxes. Previously, Mr. Gomez was a Senior Auditor
with Arthur Andersen LLP, then a public accounting firm, and held other prior positions with such
firm, during the period from August of 1999 to July of 2001. Mr. Gomez graduated from the
University of Florida with a Masters of Accounting degree and is a Certified Public Accountant.
17
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Executive Compensation Policies and Objectives
Hollywood Medias executive compensation program, whose principal components generally consist
of salary, bonus, and stock options and other stock incentive awards, is designed to achieve the
following policies and objectives:
|
(a) |
|
providing competitive base pay to attract, retain and motivate qualified management; |
|
|
(b) |
|
delivering performance-based bonuses when results, individual initiative and
accomplishments warrant; |
|
|
(c) |
|
generating returns to shareholders over the long term; and |
|
|
(d) |
|
aligning management compensation with the achievement of Hollywood Medias
goals and performance. |
Management believes that its focus on these policies and objectives will benefit Hollywood
Media, and ultimately its shareholders, in the long-term by facilitating Hollywood Medias ability
to attract and retain highly qualified executives who are committed to Hollywood Medias long-term
success.
Role of the Compensation Committee
The Compensation Committee of the Board of Directors of Hollywood Media is responsible for
approving, determining and/or making recommendations to the Board of Directors concerning the
principal components of executive compensation, including base salaries, bonuses and stock options
and other equity awards, for a defined set of upper level executives, including the Chief Executive
Officer and the other named executive officers listed in the Summary Compensation Table below
(collectively, the Named Executive Officers), including base salaries, bonuses, and stock options
and other equity awards. The Compensation Committee reviews the compensation of executive officers
periodically, typically on a case by case basis, to assess and determine compensation under
applicable considerations, including the compensation policies and objectives noted above. The
Compensation Committee has received input in the past from Hollywood Medias Chief Executive
Officer on the compensation of the Companys Chief Accounting Officer, including assessments of the
Chief Accounting Officers performance, particularly related to
his contributions to Hollywood Medias general revenue-generation
and cost-cutting efforts, and assistance with the negotiation of the terms of his
employment agreement, including salary and bonuses. In November 2008, the Compensation Committee engaged Pearl Meyer & Partners, LLC to review the
compensation of the Companys executive officers and is currently in discussions with them
regarding the nature and scope of their review.
Setting Executive Compensation
In approving executive officer compensation, the Compensation Committee generally reviews and
considers, among other factors, each executives scope of responsibility and commitment, level of
performance (with respect to specific areas of responsibility and on an overall basis),
contributions to Hollywood Medias achievement of goals and performance, compensation levels at
comparable companies and historical compensation levels, and the recommendations, analysis and
other relevant information provided by Hollywood Medias management and/or other resources that the
Committee may wish to access. In setting particular compensation levels, the Compensation Committee
seeks an appropriate combination of short-term and long-term compensation to provide the executive
with retention incentives and motivation for strong future performance. The appropriate mix to
meet these
18
goals may vary from year to year, and from individual to individual, and, in the past, have
been negotiated on an arms length basis at the time the executive was hired. In making
compensation decisions or recommendations, the Compensation Committee does not generally apply any
specific (formulaic) relationship between objective measures of corporate performance (such as
stock price or financial results) to executive compensation, although the Compensation Committee
may from time to time approve compensation arrangements or plans containing a quantitative formula
for calculating a bonus or other aspects of compensation, as may be contained in the terms of an
employment agreement or other compensation plan, award or arrangement.
Elements of Compensation
Base Salary
The base salary for each of Hollywood Medias executive officers is targeted to recognize that
officers unique value, experience, and actual and potential contribution to Hollywood Medias
success. For 2007, Hollywood Media had three Named Executive Officers: Mitchell Rubenstein, its
Chairman and Chief Executive Officer; Laurie S. Silvers, its President; and Scott Gomez, its Chief
Accounting Officer. During 2007, the Named Executive Officers had preexisting employment
agreements specifying salary and other compensation, and received salaries as provided in their
respective employment agreements. The Compensation Committee previously approved these existing
employment agreements. For additional information about these agreements, see Employment
Agreements with Named Executive Officers below.
The current salary structure for Mr. Rubenstein and Ms. Silvers, including their base salaries
and provisions for annual cost-of-living adjustments, were established in 2003 pursuant to
amendments to their then current employment agreements. In connection with approving the 2003
amendments, the Compensation Committee considered, among other things, the following factors: (i)
various financial and operational achievements of Hollywood Media (and the efforts of Mr.
Rubenstein and Ms. Silvers to facilitate such achievements), including but not limited to the
launch of Hollywood Medias digital cable television network and the successful launch and
continued growth of MovieTickets.com; (ii) levels of compensation paid to CEOs, Presidents and
other executive officers of approximately twenty-two industry competitors and similarly sized
companies from entertainment related industries, including Ticketmaster, Imax, Tickets.com,
iVillage and TheStreet.com; and (iii) the personal cash flow assistance that Mr. Rubenstein and Ms.
Silvers provided Hollywood Media, including, among other things, making available from their
personal funds a line of credit for Hollywood Media to draw upon, and personally guaranteeing
surety bonds on behalf of Hollywood Media. The Compensation Committee determined to increase the
combined salary and annual bonuses for the Chief Executive Officer and President at a level
approximately 10% below the market median benchmark for comparable positions among the industry
competitors reviewed.
The current salary structure for Scott Gomez, including his base salary and predetermined
annual raises, was established in 2005 pursuant to the terms of his existing employment agreement,
which was approved by the Compensation Committee upon the recommendation of the Chief Executive
Officer, who assisted with the negotiation of the terms of the agreement with Mr. Gomez.
Cash Bonuses
In addition to compensation through base salaries, the Compensation Committee has the
authority to grant cash bonus awards and may approve compensation plans or agreements to grant
bonuses based on specified terms. Discretionary bonus awards vary depending on the Compensation
Committees review and consideration of the factors noted above including the executive officers
contribution to Hollywood Medias achievement of its goals.
19
On April 14, 2007, Scott Gomez received a $25,000 cash bonus, payable in accordance with the
terms of his employment agreement. On August 30, 2007, the Compensation Committee of the Board of
Directors approved the payment of a cash performance bonus in the amount of $100,000 to Scott Gomez
in recognition of his contribution to the sale of the assets of Hollywood Medias wholly-owned
subsidiary Showtimes.com, Inc. on August 24, 2007. When considering and approving this
discretionary bonus, the Compensation Committee did not apply any specific quantitative
relationship between objective measures of corporate performance and such compensation.
Stock Option Grants and Equity-Based Compensation
Management believes that stock options and other equity-based compensation is an important
part of its executive compensation program as it serves to provide significant performance
incentives to the executive officers and to align the interests of the executive officers with the
interests of Hollywood Medias stockholders. The Compensation Committee has historically granted
stock options to employees upon the commencement of their employment, as deemed appropriate.
However, due to the increased volatility of Hollywood Medias stock price, the Compensation
Committee did not grant stock options to employees in 2007 and has not awarded stock options to an
executive officer since December 2005, but may reconsider doing so in the future.
The Compensation Committee and the Stock Option Committee act as the administrators of
Hollywood Medias equity compensation plans for executives and other employees, which plans include
the 2000 Stock Incentive Plan and the 2004 Stock Incentive Plan. The Committees functions
include, among other things: (i) selecting plan participants; (ii) determining the timing of any
awards under the plans; (iii) determining the types of awards to be granted under the plans; (iv)
determining the amount of awards to be granted to each participant under the plans; and (v)
determining the exercise price, vesting and other terms of the awards granted under the plans.
As further described in the compensation tables below, during the fiscal year ended December
31, 2007, the Compensation Committee granted stock awards to the Named Executive Officers on August
30, 2007 in recognition of the executives contribution to the sale of the assets of Hollywood
Medias wholly-owned subsidiary Showtimes.com, Inc. on August 24, 2007. These grants of fully
vested shares of common stock were made under Hollywood Medias 2004 Stock Incentive Plan.
Other Benefits
Perquisites
Although perquisites are not a primary aspect of Hollywood Medias executive compensation,
Hollywood Media provided its Named Executive Officers with the following perquisites during 2007:
Automobile Allowance. The employment agreement between Hollywood Media and Mitchell
Rubenstein provides that Mr. Rubenstein is entitled to an automobile allowance of $650 per month.
In addition, the employment agreement between Hollywood Media and Laurie S. Silvers provides that
Ms. Silvers is entitled to an automobile allowance of $650 per month.
Transportation. During the first two quarters of 2007, Hollywood Media provided temporary
ground transportation for Scott Gomez between his home and Hollywood Medias Boca Raton offices at
a cost of $10,320.
Insurance Coverage. Hollywood Media provides the Named Executive Officers and their
dependants with medical, dental, disability and life insurance coverage at the sole expense of
Hollywood Media.
20
401(k) Plan
Hollywood Media maintains a 401(k) retirement savings plan (the Plan) for all of its full
time employees, including the Named Executive Officers, who have completed six (6) months of
employment with Hollywood Media or any of its subsidiaries. Each participant may contribute to the
Plan up to a specified portion of his or her pre-tax gross compensation in accordance with the
Plans limitations (but not greater than the statutorily prescribed limit). Amounts contributed by
employee participants in accordance with the Plan requirements and earnings on such contributions
are fully vested. The contributions by employees to the Plan may be invested in such investments as
selected by each participant from the investment choices provided under the Plan (but may not be
invested in securities of Hollywood Media).
The Plan permits, but does not require, Hollywood Media to make additional contributions on
behalf of the participating employees in the form of cash and/or property (including without
limitation shares of common stock of Hollywood Media), as determined by Hollywood Media in its
discretion. Hollywood Media will determine on an annual basis whether a matching contribution will
be made and, if so, at what level of contribution. For the fiscal year ended December 31, 2007,
Hollywood Media elected to make a matching contribution for each participating employee equal to
half of the first 8% of the employees deferral, payable in shares of common stock of Hollywood
Media. The matching contributions vest 25% per year of employment of the participating employee,
with such employee becoming fully vested in any matching contributions after four years of
employment.
Policy on Deductibility of Compensation
Section 162(m) of the U.S. Internal Revenue Code generally limits the tax deduction to public
companies for annual compensation in excess of $1 million paid to an executive who is the chief
executive officer or who is one of its other four most highly compensated executive officers.
However, compensation which qualifies as performance-based is excluded from the $1 million limit
if, among other requirements, the compensation is payable upon attainment of pre-established,
objective performance goals under a plan approved by stockholders (stock options often qualify for
such exclusion). It is the policy of Hollywood Medias management and the Compensation Committee to
consider potential adverse impact of Section 162(m) on Hollywood Media in connection with
structuring executive compensation and, if and to the extent deemed necessary and appropriate under
the circumstances, take steps intended to limit such adverse impact, while at the same time
preserving the objective of providing compensation including incentive or equity-based awards as
deemed appropriate by the Committee. The Compensation Committee intends to coordinate with
management in evaluating the applicability and implications of Section 162(m) to Hollywood Medias
compensation programs and arrangements, but also intends to retain the flexibility necessary to
provide cash and other compensation consistent with Hollywood Medias compensation objectives.
Compensation Committee Report
Hollywood Medias Compensation Committee has reviewed and discussed the above Compensation
Discussion and Analysis with management and, based on such review and discussion, has recommended
to the Board of Directors that the Compensation Discussion and Analysis be included in this Proxy
Statement on Schedule 14A.
Harry T. Hoffman, Chairman
Deborah J. Simon
Robert D. Epstein
21
Summary Compensation Table
The following table summarizes the total compensation paid to or earned by each of Hollywood
Medias Named Executive Officers for each of the two fiscal years ended December 31, 2007 and
December 31, 2006, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Value |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and Non- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity |
|
Qualified |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive |
|
Deferred |
|
|
|
|
Name and |
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock |
|
Option |
|
Plan |
|
Compensation |
|
All Other |
|
|
Principal Position |
|
Year |
|
Salary |
|
Bonus |
|
Awards |
|
Awards |
|
Compensation |
|
Earnings |
|
Compensation |
|
Total |
Mitchell Rubenstein |
|
|
2007 |
|
|
$ |
382,413 |
(1) |
|
|
|
|
|
$ |
535,650 |
(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
22,580 |
(3) |
|
$ |
940,643 |
|
Chief Executive Officer |
|
|
2006 |
|
|
$ |
424,356 |
|
|
$ |
250,000 |
|
|
$ |
325,000 |
(4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
20,847 |
(5) |
|
$ |
1,020,203 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Laurie S. Silvers |
|
|
2007 |
|
|
$ |
334,612 |
(1) |
|
|
|
|
|
$ |
439,900 |
(6) |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
29,059 |
(7) |
|
$ |
803,571 |
|
President |
|
|
2006 |
|
|
$ |
371,312 |
|
|
$ |
150,000 |
|
|
$ |
325,000 |
(8) |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
26,555 |
(9) |
|
$ |
872,867 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scott Gomez |
|
|
2007 |
|
|
$ |
217,308 |
|
|
$ |
125,000 |
|
|
$ |
76,600 |
(10) |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
26,938 |
(11) |
|
$ |
446,846 |
|
Chief Accounting
Officer |
|
|
2006 |
|
|
$ |
192,404 |
|
|
$ |
150,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(12) |
|
$ |
342,404 |
|
|
|
|
(1) |
|
Excludes $76,080 and $66,570 of base salary voluntarily forgone by Mr. Rubenstein and Ms.
Silvers, respectively, as previously disclosed in Hollywood Medias Form 8-K report filed with
the SEC on October 4, 2007. |
|
(2) |
|
Stock awards include (a) 55,000 shares awarded by the Compensation Committee on August 30,
2007 in recognition of the executives contribution to the sale of the assets of Hollywood
Medias wholly-owned subsidiary Showtimes.com, Inc. on August 24, 2007 (the Showtimes
Sale), valued in accordance with FAS 123R at $210,650 based on the $3.83 closing market
price per share on the date of grant and (b) the vesting during the 2007 fiscal year of
100,000 shares of restricted common stock originally granted in August 2004, valued in
accordance with FAS 123R at $325,000 based on the $3.25 closing market price per share of
Hollywood Medias common stock as of August 19, 2004, the date immediately preceding the grant
date. A total of 400,000 shares of restricted common stock were granted to the executive on
August 20, 2004, which shares vest over four years at the rate of 25,000 shares (or 6.25%) per
calendar quarter, commencing with the first vesting on October 1, 2004. These shares were
fully vested as of July 1, 2008. |
|
(3) |
|
Represents (a) a matching contribution under Hollywood Medias 401(k) plan of $8,853,
consisting of 3,053 shares of common stock of Hollywood Media valued using the closing market
price per share as of the last trading day of 2007, (b) an automobile allowance of $7,800
payable in accordance with the terms of the executives employment agreement, and (c) $5,927
in medical, dental and disability insurance premiums, provided in accordance with the terms of
the executives employment agreement. |
|
(4) |
|
Stock awards include the vesting during the 2006 fiscal year of 100,000 shares of restricted
common stock originally granted in August 2004 as described in footnote 2 above, valued in
accordance with FAS 123R at $325,000 based on the $3.25 closing market price per share of
Hollywood Medias common stock as of August 19, 2004, the date immediately preceding the grant
date. |
|
(5) |
|
Represents (a) a matching contribution under Hollywood Medias 401(k) plan of $7,500,
consisting of 1,786 shares of common stock of Hollywood Media valued using the closing market
price per share as of the last trading day of 2006, (b) an automobile allowance of $7,800
payable in accordance with the terms of the executives employment agreement, and (c) $5,547
in medical, dental and disability insurance premiums, provided in accordance with the terms of
the executives employment agreement. |
|
(6) |
|
Stock awards include (a) 30,000 shares awarded by the Compensation Committee on August 30,
2007 in recognition of the executives contribution to the Showtimes Sale, valued in
accordance with FAS 123R at $114,900 based on the $3.83 closing market price per share on the
date of grant and (b) the vesting during the 2007 fiscal year of 100,000 shares of restricted
common stock originally granted in August 2004, valued in accordance with FAS 123R at $325,000
based on the $3.25 closing market price per share of Hollywood Medias common stock as of
August 19, 2004, the date immediately preceding the grant date. A total of 400,000 shares of
restricted common stock were granted to the executive on August 20, 2004, |
22
|
|
|
|
|
which shares vest over four years at the rate of 25,000 shares (or 6.25%) per calendar
quarter, commencing with the first vesting on October 1, 2004. |
|
(7) |
|
Represents (a) a matching contribution under Hollywood Medias 401(k) plan of $8,795,
consisting of 3,033 shares of common stock of Hollywood Media valued using the closing market
price per share as of the last trading day of 2007, (b) an automobile allowance of $7,800
payable in accordance with the terms of the executives employment agreement, and (c) $12,464
in medical, dental and disability insurance premiums, provided in accordance with the terms of
the executives employment agreement. |
|
(8) |
|
Stock awards include the vesting during the 2006 fiscal year of 100,000 shares of restricted
common stock originally granted in August 2004 as described in footnote 6 above, valued in
accordance with FAS 123R at $325,000 based on the $3.25 closing market price per share of
Hollywood Medias common stock as of August 19, 2004, the date immediately preceding the grant
date. |
|
(9) |
|
Represents (a) a matching contribution under Hollywood Medias 401(k) plan of $7,500,
consisting of 1,786 shares of common stock of Hollywood Media valued using the closing market
price per share as of the last trading day of 2006, (b) an automobile allowance of $7,800
payable in accordance with the terms of the executives employment agreement, and (c) $11,255
in medical, dental and disability insurance premiums, provided in accordance with the terms of
the executives employment agreement. |
|
(10) |
|
Stock awards include 20,000 shares awarded by the Compensation Committee on August 30, 2007
in recognition of the executives contribution to the Showtimes Sale, valued in accordance
with FAS 123R at $76,600 based on the $3.83 closing market price per share on the date of
grant. |
|
(11) |
|
Represents (a) a matching contribution under Hollywood Medias 401(k) plan of $7,106,
consisting of 2,450 shares of common stock of Hollywood Media valued using the closing market
price per share as of the last day of 2007, (b) an transportation allowance of $10,320 paid by
Hollywood Media on behalf of the executive during the first two quarters of 2007, and (c)
$9,512 in medical, dental and disability insurance premiums, provided in accordance with the
terms of the executives employment agreement. |
|
(12) |
|
As permitted under Item 402 of Regulation S-K, perquisites and other personal benefits less
than the applicable reporting threshold have been excluded. Such amounts may be excluded
under the rule if the aggregate amount of such compensation is less than $10,000. |
Grants of Plan-Based Awards in 2007
Hollywood Media maintains the 2004 Stock Incentive Plan and the 2000 Stock Incentive Plan
pursuant to which grants may be made to the Named Executive Officers. The following table provides
information about grants of awards to Named Executive Officers during 2007 under Hollywood Medias
shareholder-approved equity compensation plans.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other |
|
All Other Option |
|
|
|
|
|
|
|
|
|
|
Stock Awards: |
|
Awards: Number |
|
Exercise or |
|
Grant Date Fair |
|
|
|
|
|
|
Number of |
|
of Securities |
|
Base Price of |
|
Value of Stock |
|
|
|
|
|
|
Shares of Stock |
|
Underlying |
|
Option |
|
and Option |
|
|
|
|
|
|
or Units |
|
Options |
|
Awards |
|
Awards |
Name |
|
Grant Date |
|
(#) (1) |
|
(#) |
|
($/Sh) |
|
($) (1) |
|
Mitchell Rubenstein |
|
|
8/30/2007 |
|
|
|
55,000 |
|
|
|
|
|
|
|
|
|
|
|
210,650 |
|
|
Laurie S. Silvers |
|
|
8/30/2007 |
|
|
|
30,000 |
|
|
|
|
|
|
|
|
|
|
|
114,900 |
|
|
Scott Gomez |
|
|
8/30/2007 |
|
|
|
20,000 |
|
|
|
|
|
|
|
|
|
|
|
76,600 |
|
|
|
|
(1) |
|
These stock awards were grants of fully vested shares of common stock, which
were awarded by the Compensation Committee in recognition of the executives
contribution to the sale of the assets of Hollywood Medias wholly-owned subsidiary
Showtimes.com, Inc. on August 24, 2007. The Grant Date Fair Value in the table was
valued in accordance with FAS 123R based on the $3.83 closing market price per share
on the date of grant. |
23
Employment Agreements with Named Executive Officers
Employment Agreements with Chief Executive Officer and President. In 1993, Hollywood Media
entered into employment agreements with each of Mitchell Rubenstein, to serve as Chairman and Chief
Executive Officer, and Laurie S. Silvers, to serve as Vice Chairman and President. The current
terms of these agreements, as amended, are described below. These agreements were last amended in
August 2008.
Pursuant to amendments made in August 2008 to these employment agreements, the terms of both
agreements were extended through December 31, 2009. The terms of each of the employment agreements
are automatically extended for successive one-year terms unless Hollywood Media or the executive
officer gives written notice to the other at least 30 days prior to the then-scheduled expiration
date. Each of the employment agreements provides for an annual salary (subject to automatic
cost-of-living increases based on changes in the consumer price index), an annual bonus in an
amount determined by the Board of Directors at its discretion, and an automobile allowance of $650
per month. Pursuant to amendments made in 2003, the agreements provide for annual salaries
commencing July 1, 2003 of $400,000 for Mr. Rubenstein and $350,000 for Ms. Silvers. After giving
effect to annual cost-of-living adjustments, the current annual salary rates are $464,834 for Mr.
Rubenstein and $406,730 for Ms. Silvers.
Pursuant to amendments made in 2004 to these employment agreements, the Chief Executive
Officer and the President were each granted 400,000 shares of restricted common stock of Hollywood
Media, issued under Hollywood Medias shareholder-approved 2000 Stock Incentive Plan, which shares
vest over the course of four years at the rate of 25,000 shares (or 6.25%) on the first day of each
calendar quarter until fully vested, commencing in the fourth quarter of 2004, subject to
accelerated vesting upon certain events including a Change of Control, the termination of the
executives employment without cause, or the resignation of the executive within 60 days after the
occurrence of Good Reason (as defined in the employment agreements). These shares were fully
vested as of July 1, 2008.
Pursuant to amendments made in 2003 to these employment agreements, the employment agreements
provided for Hollywood Media to make certain payments to Mr. Rubenstein and Ms. Silvers in the
event that Hollywood Media or its subsidiaries or affiliates enter into agreements to carry
Hollywood.com Television with (a) two additional Multiple System Operators (MSOs) that are among
the largest eight MSOs (excluding Cox Communications and Cablevision Systems Corp.), or (b) with
Comcast Corporation. This condition was subsequently satisfied and, as a result, the amendments
provided that each such executive officer were entitled to payments equivalent to five percent of
the net income (as determined in accordance with GAAP) generated operationally by each of the
Hollywood.com, Inc. and Totally Hollywood TV, LLC subsidiaries (collectively, the Hollywood.com
Business) and, if all or any portion of the Hollywood.com Business were to be sold by Hollywood
Media, the executives could elect to receive five percent of the net sale proceeds generated from
such sale in lieu of the net income payments continuing after the sale. On August 21, 2008,
Hollywood Media sold Hollywood.com Business to an entity wholly-owned by Mr. Rubenstein and Ms.
Silvers. Accordingly, the foregoing provisions were deleted pursuant to the 2008 amendments to
these employment agreements. Mr. Rubenstein and Ms. Silvers did not receive any payments under
these provisions.
Employment Agreement with Chief Accounting Officer. On May 19, 2005, Hollywood Media entered
into an employment agreement with Scott Gomez, the Chief Accounting Officer of Hollywood Media.
The term of employment expires on April 13, 2010, unless terminated earlier, subject to automatic
extensions for additional one-year periods unless any party gives notice of termination at least
thirty days prior to the expiration date. Compensation under the agreement includes annual base
salary of $175,000 effective as of April 14, 2005, subject to annual salary increases of $25,000, a
$25,000 cash
24
bonus within ten days of the signing of the agreement as well as annual $25,000 cash bonuses
on each anniversary date of his employment with Hollywood Media, and a grant of options to purchase
25,000 shares of Hollywood Medias common stock at a price equal to the closing sale price of the
common stock on the trading day immediately preceding the date of the employment agreement. The
options were fully vested on the date of grant and have a five-year term.
On August 9, 2006, Hollywood Media and Mr. Gomez amended and restated the original five-year
employment agreement. In addition to the terms of the original employment agreement, the amended
and restated employment agreement provides that, if a Change of Control (which is defined in the
employment agreement) occurs during the term of employment, then Mr. Gomez will be entitled to
receive a cash payment equal to the salary and annual bonuses payable to Mr. Gomez under the
agreement for the two year period following the date of such Change of Control (the Change of
Control Payment), with 50% of the Change of Control Payment payable upon the date of the Change of
Control and 50% of the Change of Control Payment to be paid to Mr. Gomez six months after the date
of the Change of Control. As a condition to receiving the second 50% of the Change of Control
Payment, Mr. Gomez is required to continue his employment during a period of at least six months
following the date of the Change of Control irrespective of the length of time remaining on the
term of the agreement (the Required Employment Period); provided, that the Required Employment
Period may be extended by Hollywood Media up to an additional six months. During the Required
Employment Period and any extension thereof, the base salary payable to Mr. Gomez in accordance
with the terms of the employment agreement shall be increased by 50%. If Mr. Gomezs employment is
terminated without Cause or for Good Reason during the Required Employment Period, Mr. Gomez would
be entitled to receive a lump sum payment equal to (a) any unpaid portion of the Change of Control
Payment plus (b) the unpaid portion of the aggregate increased base salary that would have been
payable to him during the Required Employment Period if such termination had not occurred. Upon
the expiration of the Required Employment Period, Mr. Gomezs employment will continue under the
terms of the employment agreement without the 50% base salary increase, and he will not be entitled
to any termination payments if his employment is terminated without Cause or for Good Reason.
As defined in Mr. Gomezs employment agreement, a Change of Control includes, among other
factors, the sale of 50% or more of the stock or assets of any two of Hollywood Medias divisions
known as Broadway Ticketing, Data Business or Hollywood.com. On August 21, 2008, payment of the
Change of Control Payment was triggered upon the sale of the Hollywood.com Business, which followed
the previous sale by Hollywood Media of its Data Business (comprised of the sales of the Baseline
StudioSystems and Showtimes businesses in August 2006 and August 2007, respectively). Accordingly,
the current annual salary rate for Mr. Gomez is $375,000, reflecting the 50% increase required
during the Required Employment Period referenced above.
Additional terms of the employment agreements with the Named Executive Officers are described
below under the caption Potential Payments upon Termination or Change-in-Control. For additional
information about the sale of the Hollywood.com Business referenced above, see Transactions with
Related Persons below.
25
Outstanding Equity Awards at 2007 Fiscal Year-End
The following table sets forth information regarding outstanding option and stock awards held
by the Named Executive Officers at December 31, 2007, including the number of shares underlying
both exercisable and unexercisable portions of each stock option as well as the exercise price and
expiration date of each outstanding option.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards |
|
Stock Awards |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive |
|
Equity Incentive |
|
|
|
|
|
|
|
|
|
|
IncentivePlan |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan Awards: |
|
Plan Awards: |
|
|
|
|
|
|
|
|
|
|
Awards: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of |
|
Market or |
|
|
Number of |
|
Number of |
|
Number of |
|
|
|
|
|
|
|
|
|
Number of |
|
|
|
|
|
Unearned |
|
Payout Value of |
|
|
Securities |
|
Securities |
|
Securities |
|
|
|
|
|
|
|
|
|
Shares or |
|
Market Value |
|
Shares, Units |
|
Unearned |
|
|
Underlying |
|
Underlying |
|
Underlying |
|
|
|
|
|
|
|
|
|
Units of |
|
of Shares or |
|
or Other |
|
Shares, Units or |
|
|
Unexercised |
|
Unexercised |
|
Unexercised |
|
Option |
|
Option |
|
Stock That |
|
Units of Stock |
|
Rights That |
|
Other Rights |
|
|
Options (#) |
|
Options (#) |
|
Unearned |
|
Exercise |
|
Expiration |
|
Have Not |
|
That Have |
|
Have Not |
|
That Have Not |
Name |
|
Exercisable |
|
Unexercisable |
|
Options(#) |
|
Price ($) |
|
Date |
|
Vested (#) |
|
Not Vested ($) |
|
Vested (#) |
|
Vested (#) |
Mitchell Rubenstein |
|
|
81,000 |
|
|
|
|
|
|
|
|
|
|
$ |
1.30 |
|
|
|
7/01/2008 |
|
|
|
75,000 |
|
|
$ |
217,500 |
(1) |
|
|
|
|
|
|
|
|
|
Laurie S. Silvers |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
75,000 |
|
|
$ |
217,500 |
(1) |
|
|
|
|
|
|
|
|
|
Scott Gomez |
|
|
20,000 |
|
|
|
|
|
|
|
|
|
|
$ |
0.88 |
|
|
|
4/21/2008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,000 |
|
|
|
|
|
|
|
|
|
|
$ |
4.44 |
|
|
|
5/19/2009 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000 |
|
|
|
|
|
|
|
|
|
|
$ |
4.28 |
|
|
|
12/28/2010 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The market value of the unvested shares of Hollywood Medias common stock is based on the
closing price per share as of December 31, 2007, which was $2.90. |
26
Option Exercises and Stock Vested in 2007
The following table sets forth information regarding each exercise of stock options and
vesting of restricted stock that occurred during 2007 for each of Hollywood Medias Named Executive
Officers on an aggregated basis:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards |
|
Stock Awards |
|
|
Number of Shares |
|
Value Realized |
|
Number of Shares |
|
Value Realized |
Name |
|
Acquired on Exercise (#) |
|
on Exercise ($) |
|
Acquired on Vesting (#) |
|
on Vesting ($) |
Mitchell Rubenstein |
|
|
|
|
|
|
|
|
|
|
100,000 |
(1) |
|
$ |
412,000 |
(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Laurie S. Silvers |
|
|
|
|
|
|
|
|
|
|
100,000 |
(1) |
|
$ |
412,000 |
(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scott Gomez |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Represents the portion of the 400,000 shares of restricted common stock that were granted to
the named officer on August 20, 2004 that vested during the fiscal year ended December 31, 2007. |
|
(2) |
|
The aggregate dollar amount realized upon vesting is based on the closing price per share of
Hollywood Medias common stock on the last trading date prior to each of the vesting dates that
occurred during the fiscal year ended December 31, 2007, as follows: (a) 25,000 shares vested on
January 1, 2007, valued at $105,000 based on a closing price of $4.20 per share; (b) 25,000 shares
vested on April 1, 2007, valued at $109,750 based on a closing price of $4.39 per share; (c) 25,000
shares vested on July 1, 2007, valued at $109,000 based on a closing price of $4.36 per share; and
(d) 25,000 shares vested on October 1, 2007, valued at $88,250 based on a closing price of $3.53
per share. |
Pension Benefits
Hollywood Media does not provide pension arrangements or post-retirement health coverage for
its executives or employees. It does provide a 401(k) retirement savings plan (the Plan) for all
of its full time employees, including the Named Executive Officers, who have completed six (6)
months of employment with Hollywood Media or any of its subsidiaries. Each participant may
contribute to the Plan up to a specified portion of his or her pre-tax gross compensation in
accordance with the Plans limitations (but not greater than the statutorily prescribed limit).
Amounts contributed by employee participants in accordance with the Plan requirements and earnings
on such contributions are fully vested. The contributions by employees to the Plan may be invested
in such investments as selected by each participant from the investment choices provided under the
Plan (but may not be invested in securities of Hollywood Media).
The Plan permits, but does not require, Hollywood Media to make additional contributions on
behalf of the participating employees in the form of cash and/or property (including without
limitation shares of common stock of Hollywood Media), as determined by Hollywood Media in its
discretion. Hollywood Media will determine on an annual basis whether a matching contribution will
be made and, if so, at what level of contribution. For the fiscal year ended December 31, 2007,
Hollywood Media elected to make a matching contribution for each participating employee equal to
half of the first 8% of the employees deferral, payable in shares of common stock of Hollywood
Media. The matching contributions vest 25% per year of employment of the participating employee,
with such employee becoming fully vested in any matching contributions after four years of
employment.
Nonqualified Deferred Compensation
Hollywood Media does not provide any nonqualified defined contribution or other deferred
compensation plans.
27
Potential Payments Upon Termination or Change-in-Control
Mitchell Rubenstein Chief Executive Officer
Pursuant to the current employment agreement between Hollywood Media and Mitchell Rubenstein,
discussed under the caption Employment Agreements with Named Executive Officers above, upon a
termination of Mr. Rubensteins employment by Hollywood Media for any reason other than death,
disability or Cause (as defined in the employment agreement), Mr. Rubenstein will continue to
receive his salary until the expiration of the then current term of the employment agreement. For
purposes of this agreement, a termination by Hollywood Media of Laurie S. Silvers employment
without Cause will constitute a termination without Cause of Mr. Rubenstein. In the event of a
termination of employment by Hollywood Media as a result of Mr. Rubensteins disability, Mr.
Rubenstein will continue to receive his salary and benefits (to the extent permissible by law) for
a period of 12 months after such termination. Finally, in the event of a termination of employment
by Hollywood Media as a result of Mr. Rubensteins death, Mr. Rubensteins estate will be entitled
to receive a lump sum payment equal to one years base salary plus a pro rata portion of any bonus
to which Mr. Rubenstein would have been entitled. Assuming that Mr. Rubensteins employment was
terminated by Hollywood Media on December 31, 2007 without Cause or as a result of Mr. Rubensteins
disability, Mr. Rubenstein would be entitled to receive $456,480 in salary through December 31,
2008, the expiration of the then current term and the 12 month period following termination, plus
$7,800 in automobile allowance and approximately $5,927 in insurance coverage for termination as a
result of disability. Assuming that this agreement was terminated on December 31, 2007 as a result
of Mr. Rubensteins death, Mr. Rubensteins estate would be entitled to receive a lump sum payment
of $456,480.
Under Mr. Rubensteins current employment agreement, if a Change of Control (as defined in
the employment agreement) occurs during the term of employment, the employment agreement provides
for the continued employment of Mr. Rubenstein until the earlier of two years following the Change
of Control or the then-scheduled expiration date of the term of employment. Assuming the
occurrence of a Change of Control on December 31, 2007, Mr. Rubenstein would be entitled to receive
$456,480 in salary for his continued employment through December 31, 2008, the expiration of the
then current term. In addition, following a Change of Control, if (a) Mr. Rubensteins employment
is terminated by Hollywood Media during the term of the agreement, (b) there is a material
reduction in Mr. Rubensteins compensation or benefits, or a material change in his working
conditions, management responsibilities or title, and Mr. Rubenstein terminates his employment
within 60 days of any such occurrence, or (c) Mr. Rubenstein terminates his employment within sixty
days following the Change of Control for any reason, Mr. Rubenstein will receive a lump sum payment
equal to three times the base salary and bonuses paid or payable to him during or with respect to
the 12 month period preceding the date of termination, to be paid within 15 business days of the
date of termination. Assuming the occurrence of a Change of Control and the termination of Mr.
Rubensteins employment for any of the aforementioned reasons on December 31, 2007, Mr. Rubenstein
would be entitled to receive a lump sum payment of $2,001,390.
Under Mr. Rubensteins current employment agreement, the term Change of Control is defined
to mean (i) any persons or groups acquisition of 20% or more of the combined voting power of
Hollywood Medias outstanding securities (other than as a result of an issuance of securities
initiated by Hollywood Media, or open market purchases approved by the Board of Directors of
Hollywood Media, as long as the majority of the Board approving the purchases is the majority at
the time the purchases are made), (ii) in the event of any cash tender or exchange offer, merger or
other business combination, sale of assets or contested election, the persons who were directors of
Hollywood Media prior to such transaction ceasing to constitute a majority of the Board of
Directors following the transaction, or (iii) the sale or transfer of Hollywood Media in its
entirety or all or substantially all of its assets through any structure or form of transaction,
including, but not limited to, a direct or indirect acquisition, merger, consolidation,
restructuring, liquidation or any similar or related transaction.
28
Laurie S. Silvers President
The current employment agreement between Hollywood Media and Laurie S. Silvers, discussed
under the caption Employment Agreements with Named Executive Officers above, contains termination
provisions that are identical to the termination provisions described above for Mr. Rubenstein.
Assuming that Ms. Silvers employment was terminated by Hollywood Media on December 31, 2007
without Cause or as a result of Ms. Silvers disability, Ms. Silvers would be entitled to receive
$399,420 in salary through December 31, 2008, the expiration of the then current term and the 12
month period following termination, plus $7,800 in automobile allowance and approximately $12,464
in insurance coverage for termination as a result of disability. Assuming that this agreement was
terminated on December 31, 2007 as a result of Ms. Silvers death, Ms. Silvers estate would be
entitled to receive a lump sum payment of $399,420.
Ms. Silvers current employment agreement also contains Change of Control provisions that are
identical to the Change of Control provisions described above for Mr. Rubenstein. Assuming the
occurrence of a Change of Control on December 31, 2007, Ms. Silvers would be entitled to receive
$399,420 in salary for her continued employment through December 31, 2008, the expiration of the
then current term. Assuming the occurrence of a Change of Control and the termination of Ms.
Silvers employment on December 31, 2007 for any of the reasons described for Mr. Rubenstein above,
Ms. Silvers would be entitled to receive a lump sum payment of $1,542,960.
Scott Gomez Chief Accounting Officer
Pursuant to the current employment agreement between Hollywood Media and Scott Gomez,
discussed under the caption Employment Agreements with Named Executive Officers above, a Change
of Control is defined to include, among other factors, the sale of 50% or more of the stock or
assets of any two of Hollywood Medias divisions known as Broadway Ticketing, Data Business or
Hollywood.com. On August 21, 2008, a Change of Control occurred under Mr. Gomezs employment
agreement as a result of the sale of the Hollywood.com Business, which followed the previous sale
by Hollywood Media of its Data Business (comprised of the sales of the Baseline StudioSystems and
Showtimes businesses in August 2006 and August 2007, respectively). (For additional information
about the sale of the Hollywood.com Business, see Transactions with Related Persons below.)
Accordingly, Mr. Gomez was owed a Change of Control Payment of $592,945, which in accordance with
the terms of the employment agreement was equal to the salary and annual bonuses payable to Mr.
Gomez under the agreement for the two year period following the date of the Change of Control. In
accordance with the terms of the employment agreement, 50% of the Change of Control Payment (less
applicable payroll deductions) was paid to Mr. Gomez on August 21, 2008, and the remaining 50% of
the Change of Control Payment will be paid to Mr. Gomez six months after the date of the Change of
Control.
As a condition to receiving the second 50% of the Change of Control Payment, Mr. Gomez is
required to continue his employment during the Required Employment Period; provided, that the
Required Employment Period may be extended by Hollywood Media up to an additional six months.
During the Required Employment Period and any extension thereof, the base salary payable to Mr.
Gomez in accordance with the terms of the employment agreement shall be increased by 50%. If Mr.
Gomezs employment is terminated without Cause or for Good Reason (as each term is defined in the
Employment Agreement) during the Required Employment Period, Mr. Gomez would be entitled to receive
a lump sum payment equal to (a) any unpaid portion of the Change of Control Payment plus (b) the
unpaid portion of the aggregate increased base salary that would have been payable to him during
the Required Employment Period if such termination had not occurred. Upon the expiration of the
Required Employment Period, Mr. Gomezs employment will continue under the terms of the employment
agreement without the 50% base salary increase, and he will not be entitled to any termination
payments if his employment is terminated without Cause or for Good Reason. Assuming that Mr.
Gomezs employment is terminated without Cause or for Good Reason on November 21, 2008 and that
Hollywood
29
Media has not extended the Required Employment Period beyond six months, Mr. Gomez will be
entitled to receive (less applicable payroll deductions): (i) the remaining Change of Control
Payment of $296,473; and (ii) the increased salary of $93,750 payable over the remaining three
months of the Required Employment Period.
30
2007 Director Compensation
The following table sets forth information regarding the compensation received by each of
Hollywood Medias Directors during 2007:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in Pension |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value and |
|
|
|
|
|
|
Fees |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Qualified |
|
|
|
|
|
|
Earned |
|
|
|
|
|
|
|
|
|
Non-Equity |
|
Deferred |
|
|
|
|
|
|
or Paid |
|
Stock |
|
Option |
|
Incentive Plan |
|
Compensation |
|
All Other |
|
|
Name |
|
in Cash |
|
Awards |
|
Awards |
|
Compensation |
|
Earnings |
|
Compensation |
|
Total |
Mitchell Rubenstein, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chairman(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Laurie S. Silvers, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vice Chairman(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Harry T. Hoffman |
|
$ |
10,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
10,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert E. McAllan |
|
$ |
7,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
7,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deborah J. Simon |
|
$ |
4,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
4,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ira A. Rosenberg(2) |
|
$ |
5,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
5,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert D. Epstein(2) |
|
$ |
2,500 |
|
|
|
|
|
|
$ |
29,850 |
(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
32,350 |
|
|
|
|
(1) |
|
Ms. Silvers and Mr. Rubenstein are executive officers and employees of Hollywood Media, and
their compensation is reported separately above in the Executive Compensation portion of this
Proxy Statement, prior to this Director Compensation discussion. |
|
(2) |
|
During 2007, Mr. Rosenberg was a member of the Board until the expiration of his term as a
Director on December 18, 2007, and Mr. Epstein first became a Director upon his election to the
Board of Directors at Hollywood Medias Annual Meeting of Shareholders held on December 18, 2007. |
|
(3) |
|
Represents the grant date fair value of the 15,000 options granted to the director on December
18, 2007, with an exercise price of $2.50 per share, using the Black-Scholes option valuation model
(which uses various assumptions in the calculation of the fair value). |
The table below shows the aggregate number of shares subject to all outstanding stock options held
by the named directors as of December 31, 2007, including options granted during 2007 and prior
years, all of which options were granted under the Directors Stock Option Plan for non-employee
directors (described below):
|
|
|
|
|
|
|
Total Options Held |
|
|
at 12/31/2007 |
Name |
|
(# of shares) |
Harry T. Hoffman |
|
|
70,254 |
|
|
Robert E. McAllan |
|
|
80,435 |
|
|
Deborah J. Simon |
|
|
85,254 |
|
|
Ira A. Rosenberg |
|
|
30,000 |
|
|
Robert D. Epstein |
|
|
15,000 |
|
Retainer and Meeting Fees
Directors of Hollywood Media who are neither employees nor consultants (non-employee
directors) are compensated at the rate of $2,500 for each meeting of the Board of Directors
attended in person, $500 for each meeting of the Board attended by telephone, and $500 for each
committee meeting attended. Directors are reimbursed for travel and lodging expenses in connection
with their attendance at meetings. In addition, commencing January 1, 2008, non-employee directors
are paid $25,000 per year of
31
service on the Board, and the chairman of any committee of the Board is paid an additional
$25,000 per year of service as chairman. The current committee chairmen are Robert McAllan who is
Chairman of the Audit Committee, and Harry Hoffman who is Chairman of the Compensation Committee.
Directors Stock Option Plan
Hollywood Medias shareholder-approved Directors Stock Option Plan (the Directors Plan) was
initially adopted in 1993, was subsequently amended, and has been approved by Hollywood Medias
shareholders. No stock options may be granted under the Directors Plan after July 1, 2008. The
Directors Plan continues in effect until all options granted thereunder have expired or been
exercised, unless the Directors Plan is terminated at an earlier time.
The Directors Plan provides for automatic grants of stock options, subject to availability of
shares under the plan, to each non-employee director, as follows: (1) an initial grant of an
option to purchase 15,000 shares of common stock at the time such person first becomes appointed to
the Board, and (2) an annual grant of an option to purchase 15,000 shares of common stock on the
date of each annual meeting of Hollywood Medias shareholders at which the director is reelected.
During 2007, the only options granted under the plan were 15,000 options granted to Director
Epstein upon his initial election to the Board, as indicated in the table above; the other eligible
Directors did not receive grants when they were re-elected to the Board in 2007 because there
werent enough shares available under the plan.
The maximum aggregate number of shares of common stock that may be issued pursuant to options
granted under the Directors Plan is 300,000, of which only 15,000 shares have been issued over the
life of the plan to date, and options are currently outstanding for an aggregate of 280,943 shares.
The exercise price per share of any option granted under the Directors Plan is the Fair
Market Value per share of common stock (based on the prevailing stock market price per share of
common stock, as defined in the Directors Plan) on the date preceding the date the option is
granted. These options become exercisable six months after the date of grant and expire ten years
after the date of grant, subject to earlier termination upon certain conditions as provided in the
plan. The Board of Directors, in its discretion, may cancel all options granted under the Directors
Plan that remain unexercised on the date of consummation of certain corporate transactions
described in the Directors Plan.
Compensation Committee Interlocks and Insider Participation.
The current members of Hollywood Medias Compensation Committee are Harry T. Hoffman, Deborah
J. Simon and Robert D. Epstein. During 2007, Mr. Rosenberg was a member of the Compensation
Committee until the expiration of his term as a Director on December 18, 2007, and Mr. Epstein
first became a Director and a member of the Compensation Committee upon his election to the Board
of Directors at Hollywood Medias Annual Meeting of Shareholders held on December 18, 2007. No
member of the Compensation Committee was at any time during the 2007 fiscal year or at any other
time an officer or employee of Hollywood Media. No member of the Compensation Committee had any
relationship during the 2007 fiscal year requiring disclosure under Item 404. In addition, none of
Hollywood Medias executive officers serves (or served during the 2007 fiscal year) as a member of
the board of directors or compensation committee (or other board committee performing equivalent
functions) of any entity that has one or more executive officers serving (or who served during the
2007 fiscal year) as members of Hollywood Medias Board of Directors or Compensation Committee.
32
AUDIT MATTERS
Report of the Audit Committee
The primary responsibility of the Audit Committee is to assist with oversight of Hollywood
Medias financial reporting process on behalf of the Board of Directors. Hollywood Medias
management is responsible for Hollywood Medias financial reporting process including its system of
internal control, and for the preparation of consolidated financial statements in accordance with
generally accepted accounting principles. Hollywood Medias independent registered public
accounting firm is responsible for auditing Hollywood Medias financial statements and expressing
an opinion, based on the audit, as to the conformity of those audited financial statements with
generally accepted accounting principles. The members of the Audit Committee are not professionally
engaged in the practice of accounting or auditing. The Audit Committee relies on information
provided to us by Hollywood Medias management and the independent registered public accounting
firm, including representations of management and the opinion of the independent registered public
accounting firm that such financial statements have been prepared in conformity with generally
accepted accounting principles. Our oversight does not provide us with an independent basis to
determine that management has maintained appropriate accounting and financial reporting principles
or policies, or appropriate internal controls and procedures designed to assure compliance with
accounting standards and applicable laws and regulations. Furthermore, our considerations and
discussions with management and the independent registered public accounting firm do not assure
that Hollywood Medias financial statements are presented in accordance with generally accepted
accounting principles or that the audit of Hollywood Medias financial statements has been carried
out in accordance with the standards of the Public Company Accounting Oversight Board (United
States).
The Audit Committee meets with Hollywood Medias independent registered public accounting firm
and management to discuss the overall scope and plans for the audit, and to discuss the results of
the independent registered public accounting firms examinations and their evaluations of Hollywood
Medias internal controls. In fulfilling its oversight responsibilities, the Audit Committee
reviewed and discussed Hollywood Medias audited financial statements for the year ended December
31, 2007 with management and the independent registered public accounting firm. The Audit Committee
discussed with the independent registered public accounting firm the matters required to be
discussed by the Statement on Auditing Standards No. 61, as amended. This included a discussion of
the independent registered public accounting firms judgments as to the quality, not just the
acceptability, of Hollywood Medias accounting principles and such other matters as are required to
be discussed with the Audit Committee under the standards of the Public Company Accounting
Oversight Board (United States). In addition, the Audit Committee received from the independent
registered public accounting firm written disclosures and the letter required by Independence
Standards Board Standard No. 1. The Audit Committee also discussed with the independent registered
public accounting firm the auditors independence from management and Hollywood Media, including
the matters covered by the written communications provided by the independent registered public
accounting firm. The Audit Committee has also considered whether the provision of non-audit
services provided by the independent registered public accounting firm, if any, is compatible with
maintaining the independent registered public accounting firms independence.
Based on the reviews and discussions referenced above, the Audit Committee recommended to the
Board of Directors that Hollywood Medias audited financial statements be included in Hollywood
Medias Annual Report on Form 10-K for the year ended December 31, 2007 for filing with the SEC.
Respectfully,
Members of the Audit Committee
Harry T. Hoffman
Robert E. McAllan
Deborah J. Simon
33
Appointment of Independent Registered Public Accounting Firm; Attendance at Meeting
The firm of Kaufman Rossin & Co., P.A. (Kaufman) served as Hollywood Medias independent
registered public accounting firm for the fiscal year ended December 31, 2007. Hollywood Media has
reappointed Kaufman to serve as Hollywood Medias independent registered public accounting firm for
the fiscal year ending December 31, 2008. See Proposal to Ratify the Selection of Independent
Registered Public Accounting Firm below. Representatives of Kaufman are not expected to be
present at the Meeting, and therefore will not make a statement or be available to respond to
questions.
Independent Registered Public Accounting Firms Fees and Services
The following table shows fees billed to Hollywood Media by Kaufman for each of the two fiscal
years ended December 31, 2007 and December 31, 2006 for services rendered in the specified
categories indicated below.
|
|
|
|
|
|
|
|
|
Type of Fees |
|
2007 |
|
2006 |
Audit Fees |
|
$ |
781,202 |
|
|
$ |
969,232 |
|
|
|
|
|
|
|
|
|
|
Audit-Related Fees |
|
|
3,660 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax Fees |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other Fees |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
784,862 |
|
|
$ |
969,232 |
|
The fee types referenced in the above table are defined as follows:
Audit Fees are the aggregate fees billed by Hollywood Medias principal auditing firm
for professional services rendered for the audit of Hollywood Medias consolidated financial
statements included in its Form 10-K, for the audit of managements report on its assessment
of the effectiveness of Hollywood Medias internal controls over financial reporting
included in its Form 10-K, for review of financial statements included in its Forms 10-Q, or
for services that are normally provided by the accountant in connection with statutory and
regulatory filings or engagements.
Audit-Related Fees are the aggregate fees billed by Hollywood Medias principal
auditing firm for assurance and related services that are reasonably related to the
performance of the audit or review of Hollywood Medias financial statements. Such services
include principally services associated with reports related to regulatory filings, and
general accounting and reporting advice.
Tax Fees are the aggregate fees billed by Hollywood Medias principal auditing firm
for professional services rendered for tax compliance, tax advice, and tax planning.
All Other Fees are the aggregate fees billed by Hollywood Medias principal auditing
firm for any services not included in the forgoing fee categories.
34
Audit Committee Pre-Approval Policies and Procedures
SEC rules require that audit services and permitted non-audit services provided by our
principal auditing firm be pre-approved by our Audit Committee. Such rules permit such
pre-approval to be given either through explicit approval by the Audit Committee on a case-by-case
basis, or pursuant to pre-approval policies and procedures as may be established by the Audit
Committee from time to time.
For each of the two fiscal years ended December 31, 2007 and December 31, 2006 and through the
date of this Proxy Statement, the Audit Committee has not adopted pre-approval policies covering
such periods or future periods. Accordingly, any services provided by our principal auditing firm
during the period beginning January 1, 2006 through the date of this Proxy Statement were approved
by the Audit Committee on a case-by-case basis. However, in the future the Audit Committee may
adopt pre-approval policies and procedures in accordance with applicable rules.
35
PROPOSAL TO RATIFY THE SELECTION OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
(Proposal No. 2)
The firm of Kaufman Rossin & Co., P.A. served as Hollywood Medias independent registered
public accounting firm for the fiscal year ended December 31, 2007. Pursuant to the prior approval
of Hollywood Medias Audit Committee, Kaufman Rossin & Co., P.A. has been appointed to serve as
Hollywood Medias independent registered public accounting firm for the current fiscal year ending
December 31, 2008, and such appointment has been proposed by the Board for ratification by vote of
the shareholders at the Meeting. If the shareholders do not ratify the appointment, the Audit
Committee will consider whether it should appoint another independent registered public accounting
firm.
HOLLYWOOD MEDIAS BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE IN FAVOR OF THE
PROPOSAL TO RATIFY THE SELECTION OF KAUFMAN ROSSIN & CO., P.A AS HOLLYWOOD MEDIAS INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2008.
36
TRANSACTIONS WITH RELATED PERSONS
Scott Gomez has been an executive officer of Hollywood Media since April 2003. Hollywood Media
has employed his father, Jose Gomez, since December 2000 in information systems and business
development positions, not as an executive officer. Such employment is currently pursuant to an
employment agreement with Hollywood Media entered into in December 13, 2005, as amended on February
7, 2007, which includes, among other things, a term of employment through November 30, 2010 and
current salary at an annual rate of $240,057. Total 2007 cash compensation (salary and bonus) of
Jose Gomez was $260,092, which reflects the period from February 1, 2007 through July 31, 2007 when
Mr. Gomezs salary was reduced by agreement to fifty percent, during which time the services
provided by Mr. Gomez were curtailed by fifty percent as agreed.
Since April 2007, Hollywood Media has employed David Silvers, the son of Laurie S. Silvers
(Hollywood Medias Vice Chairman, President and Secretary) and the stepson of Mitchell Rubenstein
(Hollywood Medias Chairman and Chief Executive Officer), in business development and legal
positions, not as an executive officer. Mr. Silvers, who received a J.D. degree from the
University of Miami School of Law in 2004 and an MBA from the University of Miami School of
Business in 2005, is employed by Hollywood Media on an at will basis at a current annual salary of
$95,000.
Sale of Hollywood.com Business Unit to R&S Investments LLC
On August 21, 2008, Hollywood Media entered into a definitive purchase agreement with R&S
Investments, LLC, an entity wholly-owned by Mitchell Rubenstein, Hollywood Medias Chief Executive
Officer and Chairperson of the Board, and Laurie S. Silvers, Hollywood Medias President and
Vice-Chairperson of the Board. Pursuant to the purchase agreement, R&S Investments acquired
Hollywood Medias subsidiaries Hollywood.com, Inc. and Totally Hollywood TV, LLC (collectively, the
Hollywood.com Business) for a potential purchase price of $10.0 million, which includes $1.0
million in cash that was paid to Hollywood Media at closing and potential earn-out payments of up
to $9.0 million. The Hollywood.com Business includes the Hollywood.com website and related URLs
and celebrity fan websites and Hollywood.com Television, a free video on demand service. The
purchase price was determined by an arms-length negotiation between a Special Committee of
independent and disinterested directors of Hollywood Media on the one hand and R&S Investments on
the other hand.
Beginning in September 2009, R&S Investments will be required to make periodic earn-out
payments equal to the greater of (i) 10 percent of gross revenue and (ii) 90 percent of EBITDA (as
defined in the purchase agreement) for the Hollywood.com Business until the full earn-out is paid.
If a change of control of Hollywood.com occurs before the earn-out is fully paid, the remaining
portion of the earn-out would be payable immediately upon such a change of control, up to the
amount of consideration received by R&S Investments less related expenses. If the consideration in
such a change of control is less than the remaining balance of the earn-out, then the subsequent
buyer will be obligated to pay the difference in accordance with the same earn-out terms. In
addition, if Hollywood.com is resold within three years, Hollywood Media will also receive five
percent of any proceeds above $10.0 million. Pursuant to the purchase agreement, Hollywood Media
was required to place $2.6 million into an escrow account to fund any negative EBITDA of the
Hollywood.com Business through August 21, 2010.
In connection with the transaction, in order to provide for an efficient and orderly
transition of the Hollywood.com Business, Hollywood Media and the Hollywood.com Business entered
into a Transition Services Agreement (TSA) to provide certain temporary administrative services,
which Hollywood Media did solely to provide for an efficient and orderly transition. Hollywood
Media is reimbursed by the Hollywood.com Business for out of pocket costs and incremental expenses
incurred in providing services under the TSA, including, but not limited to, payments of any pro
rata portions of any applicable employee salaries and benefits. In addition, Hollywood Media
continues to process cash receipts for outstanding receivables where vendors have not yet changed
the remittance name. The term of the TSA is through November 21, 2009, but Hollywood
37
Media has substantially completed the transfer of all functions covered by the TSA with the
exception of contract review and information technology support.
REVIEW, APPROVAL OR RATIFICATION OF TRANSACTIONS WITH RELATED PERSONS
The matters disclosed above under the caption Transactions with Related Persons are
disclosed pursuant to Item 404(a) of SEC Regulation S-K. This paragraph is provided under Item
404(b) of SEC Regulation S-K to describe Hollywood Medias policies and procedures for the review,
approval, or ratification of transactions required to be reported under Item 404(a) of SEC
Regulation S-K. Hollywood Medias policy is and has been to comply with the requirements of Nasdaq
corporate governance rule 4350(h), which requires review and approval of related party
transactions required to be disclosed pursuant to Item 404 of SEC Regulation S-K and that such
approval be made by the audit committee or another independent body of the board of directors.
Hollywood Medias directors have been made aware of the Nasdaq rule 4350(h) requirements from time
to time pursuant to notice provided in written actions of the Board and/or Committees of the Board
as well as discussions in Board and/or Committee meetings, and in addition such approval
requirements are recognized in the Charter of the Audit Committee; however, as of the date of this
Proxy Statement Hollywood Media has not implemented written policies designating specified
procedures or standards for compliance with Nasdaq rule 4350(h). Item 404 transactions are
generally reviewed and approved or ratified on a case-by-case basis by a committee of independent
directors by meeting or written consent, usually by Hollywood Medias Audit Committee or
Compensation Committee. There are no transactions since the beginning of 2007 required to be
reported under Item 404(a) of SEC Regulation S-K that did not require review, approval or
ratification or as to which such approval requirements were not followed.
SUBMISSION OF FUTURE SHAREHOLDER PROPOSALS AND NOMINATIONS
Shareowner Proposals for Inclusion in Next Years Proxy Statement under SEC Rule 14a-8
Any shareholder proposal sought to be included in Hollywood Medias proxy materials for the
2009 Annual Meeting of Shareholders pursuant to Rule 14a-8 under the Securities Exchange Act of
1934, as amended, must be in writing and received by Hollywood Media
no later than July 21, 2009,
provided, however, that if the 2009 Annual Meeting is called for a date that is not within thirty
days before or after December 18, 2009, then notice by the shareholder in order to be timely must
be received a reasonable time before Hollywood Media begins to print and send its proxy materials
for the 2009 Annual Meeting. Such proposals must be received at Hollywood Medias principal
executive offices at the following address: Hollywood Media Corp., 2255 Glades Road, Suite 221A,
Boca Raton, Florida 33431, Attention: Secretary. Such proposals must also comply with the rules of
the Securities and Exchange Commission relating to Rule 14a-8 shareholder proposals and may be
omitted if not in compliance with applicable requirements.
Other Shareholder Proposals for Presentation at Next Years Annual Meeting
Under applicable requirements, including Hollywood Medias Bylaws, any shareholder proposal
that is not intended for inclusion in Hollywood Medias proxy materials (i.e., a shareholder
proposal submitted outside the processes of Rule 14a-8), and all director nominations by
shareholders, for Hollywood Medias 2009 Annual Meeting of Shareholders must be received by
Hollywood Media no later than August 20, 2009 and no earlier than July 21, 2009, provided, however,
that if the 2009 Annual Meeting is called for a date that is not within thirty days before or after
December 18, 2009, then notice by the shareholder in order to be timely must be received not later
than the close of business on the 10th day following the day on which notice of the date of the
2009 Annual Meeting is mailed or publicly announced by Hollywood Media, whichever first occurs.
Such shareholder proposals and director nominations must be written and delivered to or mailed and
received at Hollywood Medias principal executive offices at the following address: Hollywood Media
Corp., 2255 Glades Road, Suite 221A, Boca Raton, Florida 33431, Attention: Secretary. The written
notice must also contain specified information and conform to certain requirements as set forth in
Hollywood Medias Bylaws referenced below. If the chairman of the 2009 Annual Meeting determines
that a shareholder proposal or director
38
nomination was not made in accordance with applicable requirements including Hollywood Medias
Bylaws, then such proposal or nomination will not be presented for a vote of shareholders at the
2009 Annual Meeting.
Advance Notice Requirements for Proposals and Director Nominations by Shareholders.
Hollywood Medias Bylaws and SEC rules contain certain requirements for shareholders to
provide advance written notice of proposals of business or director nominations by Hollywood
Medias shareholders. Certain material features of these requirements are summarized below,
however, the statements below concerning the terms and provisions of these notice requirements are
summaries only and do not purport to be complete. The descriptions of such Bylaw requirements below
are qualified in their entirety by reference to the full text of Hollywood Medias Bylaws which are
filed as an exhibit to Hollywood Medias Form 8-K report filed with the SEC on September 5, 2006.
Notice of Shareholder Business At Annual Meeting. Hollywood Medias Bylaws provide that
business to be transacted at an annual meeting of shareholders may not be proposed by a shareholder
unless the shareholder complies with the required notice procedures described below. In addition to
any other applicable requirements, for business to be properly brought before an annual meeting by
a shareholder, such shareholder must have given timely notice thereof in proper written form to the
Secretary of Hollywood Media. To be timely, a shareholders notice must be delivered to Hollywood
Media not less than 120 days nor more than 150 days prior to the anniversary date of the
immediately preceding annual meeting of shareholders; provided, however, that in the event that the
annual meeting is called for a date that is not within 30 days before or after such anniversary
date, notice by the shareholder in order to be timely must be so received not later than the close
of business on the 10th day following the day on which notice of the date of the annual meeting was
mailed or public announcement of the date of the annual meeting was made by Hollywood Media,
whichever first occurs. To be in proper written form, a shareholders notice must set forth as to
each matter such shareholder proposes to bring before the annual meeting (i) a brief description of
the business desired to be brought before the annual meeting and the reasons for conducting such
business at the annual meeting, (ii) the name and record address of such shareholder, (iii) the
class or series and number of shares of capital stock of Hollywood Media which are owned
beneficially or of record by such shareholder, (iv) a description of all arrangements or
understandings between such shareholder and any other person or persons (including their names) in
connection with the proposal of such business by such shareholder and any material interest of such
shareholder in such business, (v) a representation by the notifying shareholder that such
shareholder intends to appear in person or by proxy at the annual meeting to bring such business
before the meeting, and (vi) any other information relating to such shareholder and/or proposed
business that would be required to be disclosed in a proxy statement (or other filings required to
be made) in connection with solicitations of proxies for approval of such a proposal pursuant to
Section 14 of the Securities Exchange Act of 1934 and the rules thereunder (the Exchange Act)
(this clause (vi) applies whether or not a proxy statement is filed).
Shareholder Nomination of Directors. Hollywood Medias Bylaws provide that a shareholder may
not nominate a candidate for election to the Board of Directors at any annual meeting of
shareholders, or at any special meeting of shareholders called for the purpose of electing
directors, unless the shareholder complies with the required notice procedures described below. In
addition to any other applicable requirements, for a nomination to be made by a shareholder, such
shareholder must have given timely notice thereof in proper written form to the Secretary of
Hollywood Media. To be timely, a shareholders notice must be delivered to Hollywood Media: (i) in
the case of an annual meeting, not less than 120 days nor more than 150 days prior to the
anniversary date of the immediately preceding annual meeting of shareholders (provided, however,
that in the event that the annual meeting is called for a date that is not within 30 days before or
after such anniversary date, notice by the shareholder in order to be timely must be so received
not later than the close of business on the 10th day following the day on which notice of the date
of the annual meeting was mailed or public announcement of the date of the annual meeting was made
by Hollywood Media, whichever first occurs); and (ii) in the case of a special meeting of
shareholders called for the purpose of electing directors, not later than the close of business on
the 10th day following the day on which notice of the date of the special meeting was mailed or
public announcement of the date of the special meeting was made by Hollywood Media, whichever
39
first occurs. To be in proper written form, a shareholders notice must set forth: (i) as to
each person whom the shareholder proposes to nominate for election as a director (A) the name, age,
business address and residence address of the person, (B) the principal occupation or employment of
the person, (C) the class or series and number of shares of capital stock of Hollywood Media which
are owned beneficially or of record by the person and (D) any other information relating to the
person that would be required to be disclosed in a proxy statement or other filings required to be
made in connection with solicitations of proxies for election of directors pursuant to Section 14
of the Exchange Act; and (ii) as to the shareholder giving the notice (A) the name and record
address of such shareholder, (B) the class or series and number of shares of capital stock of
Hollywood Media which are owned beneficially or of record by such shareholder, (C) a description of
all arrangements or understandings between such shareholder and each proposed nominee and any other
person or persons (including their names) in connection with the nomination(s) or pursuant to which
the nomination(s) are to be made by such shareholder, (D) a representation by the notifying
shareholder to Hollywood Media that such shareholder intends to appear in person or by proxy at the
meeting to nominate the persons named in its notice and (E) any other information relating to such
shareholder and/or such nominee(s) that would be required to be disclosed in a proxy statement (or
other filings required to be made) in connection with solicitations of proxies for election of
directors pursuant to Section 14 of the Exchange Act (this clause (E) applies whether or not a
proxy statement is filed). Such notice must be accompanied by a written consent of each proposed
nominee to being named as a nominee and to serve as a director if elected.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors of Hollywood Media does not
intend to present, and Hollywood Media has not been informed that any other person intends to
present, any matter for action at the Meeting, other than as specifically discussed herein.
ANNUAL REPORT
A copy of Hollywood Medias Annual Report on Form 10-K (excluding exhibits) as filed with the
SEC for the fiscal year ended December 31, 2007 accompanies these proxy materials. Copies of
exhibits to the Form 10-K will be furnished on request, upon payment of Hollywood Medias expenses
in furnishing requested exhibits. Any request for exhibits should be addressed to: Investor
Relations Department, Hollywood Media Corp., 2255 Glades Road, Suite 221A, Boca Raton, Florida
33431, telephone number (561) 998-8000.
By Order of the Board of Directors
Laurie S. Silvers
President and Secretary
Boca Raton, Florida
November 18, 2008
40
Annual Meeting of Shareholders of
HOLLYWOOD MEDIA CORP.
December 18, 2008
Please date, sign and mail your proxy card in the envelope provided as soon as possible.
Please detach along the perforated line and mail in the envelope provided.
The Board of Directors unanimously recommends a vote FOR the election of all director nominees
listed in Proposal No. 1 and FOR the approval of Proposal 2.
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE
OR BLACK INK AS SHOWN HERE x
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FOR
|
|
AGAINST
|
|
ABSTAIN |
1. ELECTION OF DIRECTORS:
o FOR ALL NOMINEES
o WITHHOLD AUTHORITY
FOR ALL NOMINEES
o FOR ALL EXCEPT
(See instructions below) |
|
Nominees:
Mitchell Rubenstein
Laurie S. Silvers
Harry T. Hoffman
Robert E. McAllan
Deborah J. Simon
Robert D. Epstein
Spencer Waxman
|
|
2. Vote for the proposal to ratify the selection of Kaufman Rossin &
Co., P.A. as Hollywood Media Corp.s independent registered public
accounting firm for the year ending December 31, 2008: |
|
o
|
|
o
|
|
o
|
|
INSTRUCTION: To withhold authority to vote for any individual
nominee(s), mark FOR ALL EXCEPT and write the name of the
nominee(s) on the lines below.
|
|
3. Upon such other matters as may properly come before such Annual Meeting or
any adjournments or postponements thereof. The proxies are authorized to vote
in their discretion upon such other business as may properly come before the
Annual Meeting and any adjournments or postponements thereof. |
The undersigned hereby acknowledges receipt of (1) the Notice of Annual Meeting and Proxy Statement for Hollywood Media Corp.s 2008 Annual Meeting, and
(2) Hollywood Media Corp.s 2007 Annual Report on Form 10-K.
PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY PROMPTLY USING THE ENVELOPE PROVIDED. NO POSTAGE NECESSARY IF MAILED IN THE UNITED STATES.
|
New Address:
|
|
To change the address on your account, please check the box at right and
indicate your new address in the address space above. Please note that
changes to the registered name(s) on the account may not be submitted
via this method.
|
|
o |
Signature of Shareholder:
Date:
Signature of Shareholder:
Date:
|
Note: Please sign exactly as your name or names appear
on this Proxy. When shares are held jointly, each holder
should sign. When signing as executor,
administrator, attorney, trustee or guardian, please
give full title as such. If the signer is a corporation,
please sign full corporate name by duly authorized officer,
giving full title as such. If signer is a partnership,
please sign in partnership name by authorized person.
|
HOLLYWOOD MEDIA CORP.
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF HOLLYWOOD MEDIA CORP.
The undersigned, a shareholder of HOLLYWOOD MEDIA CORP., a Florida corporation, hereby
appoints Mitchell Rubenstein and Laurie S. Silvers, and each of them, as proxies for the
undersigned, each with full power of substitution, and hereby authorizes them to represent and to
vote all of the shares of Common Stock of Hollywood Media Corp. that the undersigned is entitled to
vote at the Annual Meeting of Shareholders of Hollywood Media Corp. to be held at 2255 Glades Road,
Conference Room 123A, Boca Raton, Florida 33431, on December 18, 2008 at 10:00 a.m., Eastern time,
and at any adjournments or postponements thereof, with all powers the undersigned would possess if
personally present, on the following proposals as specified and, in their discretion, on such other
matters as may properly come before the Annual Meeting and any adjournments or postponements
thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED
SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR ALL NOMINEES IN PROPOSAL 1,
FOR PROPOSAL 2 AND VOTED IN THE DISCRETION OF THE PROXIES APPOINTED HEREBY ON ANY OTHER BUSINESS
AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING.
(Continued and to be signed on the reverse side)