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 ý
Filed by
a Party other than the Registrant ¨
Check the
appropriate box:
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¨
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Preliminary
Proxy Statement
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¨
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Confidential, For Use of the
Commission Only (as permitted by Rule
14a-6(e)(2))
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ý
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Definitive
Proxy Statement
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¨
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Definitive
Additional Materials
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¨
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Soliciting
Material Pursuant to Rule 14a-12
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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):
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¨
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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(1)
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Title
of each class of securities to which transaction
applies:
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(2)
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Aggregate
number of securities to which transaction
applies:
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(3)
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Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11:
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(4)
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Proposed
maximum aggregate value of
transaction:
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¨
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Fee
paid previously with preliminary
materials:
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¨
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Check
box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its
filing.
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(1)
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Amount
Previously Paid:
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(2)
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Form,
Schedule or Registration Statement
No.:
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November
18, 2009
Dear
Fellow Shareholders:
We invite you to attend the 2009 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 21, 2009, 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 six directors
nominated by Hollywood Media’s Board of Directors, and to ratify the selection
of Kaufman Rossin & Co., P.A. as Hollywood Media’s independent registered
public accounting firm for 2009. 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 10, 2009 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.
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Sincerely, |
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Mitchell
Rubenstein
Chairman
and Chief Executive Officer
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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.
HOLLYWOOD
MEDIA CORP.
2255
Glades Road
Boca
Raton, Florida 33431
NOTICE
OF 2009 ANNUAL MEETING OF SHAREHOLDERS
Meeting
Date:
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December
21, 2009
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Meeting
Time:
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10:00
a.m., Eastern Time
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Meeting
Place:
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2255
Glades Road, Conference
Room 123A
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Boca
Raton,
Florida 33431
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Notice is
hereby given that an Annual Meeting of Shareholders of Hollywood Media Corp.
(“Hollywood Media”) will be held for the following purposes:
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1.
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To
consider and vote upon the election of six directors nominated by
Hollywood Media’s Board of
Directors;
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2.
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To
consider and vote upon a proposal to ratify the selection of Kaufman
Rossin & Co., P.A. as Hollywood Media’s independent registered public
accounting firm for the year ending December 31, 2009;
and
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3.
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Such
other business as properly may be presented at the annual meeting or any
adjournments or postponements
thereof.
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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, 2009
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.
Important Notice Regarding the
Availability of Proxy Materials for the Annual Meeting of Shareholders to be
held on December 21, 2009: The Notice of Annual Meeting and
Proxy Statement for Hollywood Media Corp.’s 2009 Annual Meeting and Hollywood
Media Corp.’s Annual Report on Form 10-K for the year ended December 31, 2008
are available in the “Investor Relations” section of Hollywood Media Corp.’s
corporate website at www.hollywoodmedia.com.
TABLE
OF CONTENTS
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Page:
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THE
MEETING
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2
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General
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2-3
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Questions
and Answers about the Meeting
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3
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Matters
To Be Considered At The
Meeting
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3
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Record
Date; Quorum; Voting At The
Meeting
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3
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Proxies
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4-5
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Conduct
of the
Meeting
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5
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Contact
Information; Sending Communications to the Board
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6
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ELECTION
OF DIRECTORS (Proposal No.
1)
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6
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Size
of Board; Majority of Independent
Directors
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6
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Nominees
and Members of the Board of Directors
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6-8
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CORPORATE
GOVERNANCE
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9
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Independent
Directors
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9
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Meetings
and Director Attendance
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9
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Committees
of the Board of
Directors
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9-11
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Director
Nomination
Process
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12-13
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Section
16(a) Beneficial Ownership Reporting Compliance
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13
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Code
of
Ethics
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13
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SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
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14-16
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EQUITY
COMPENSATION PLAN
INFORMATION
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17
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EXECUTIVE
OFFICERS
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18
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EXECUTIVE
COMPENSATION
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19
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Compensation
Discussion and Analysis
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19-23
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Compensation
Committee
Report
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23
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Summary
Compensation
Table
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24-25
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Grants
of Plan-Based
Awards
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26
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Employment
Agreements with Named Executive
Officers
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27-28
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Outstanding
Equity Awards at
Year-End
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29
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Option
Exercises and Stock
Vested
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29
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Pension
Benefits
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30
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Nonqualified
Deferred
Compensation
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30
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Potential
Payments Upon Termination or Change-in-Control
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30-32
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Director
Compensation
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33-34
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Compensation
Committee Interlocks and Insider Participation
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34
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AUDIT
MATTERS
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35
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Report
of the Audit
Committee
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35
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Appointment
of Independent Registered Public Accounting Firm; Attendance at
Meeting
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36
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Independent
Registered Public Accounting Firm’s Fees and Services
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36
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Audit
Committee Pre-Approval Policies and
Procedures
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37
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PROPOSAL
TO RATIFY THE SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM
(Proposal
No. 2)
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38
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TRANSACTIONS
WITH RELATED PERSONS
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39
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REVIEW,
APPROVAL OR RATIFICATION OF TRANSACTIONS WITH RELATED
PERSONS
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40
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SUBMISSION
OF FUTURE SHAREHOLDER PROPOSALS AND NOMINATIONS
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40-41
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OTHER
MATTERS
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42
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ANNUAL
REPORT
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42
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HOLLYWOOD
MEDIA CORP.
2009
ANNUAL MEETING OF SHAREHOLDERS
_______________________
PROXY
STATEMENT
_______________________
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 Media’s 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 21, 2009, 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 20, 2009. Shareholders
should review the information in this Proxy Statement together with Hollywood
Media’s Annual Report on Form 10-K for the year ended December 31, 2008 which
accompanies this Proxy Statement. A list of shareholders of record
entitled to vote at the Meeting will be available at Hollywood Media’s 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
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Q:
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What
am I being asked to vote upon?
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A:
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You
are being asked to vote in favor of the election of six directors
nominated by our Board of Directors. You are also being asked to ratify
the selection of Kaufman Rossin & Co., P.A. as Hollywood Media’s
independent registered public accounting firm for the year ending December
31, 2009. HOLLYWOOD
MEDIA’S BOARD OF DIRECTORS HAS APPROVED EACH OF THESE PROPOSALS AND
RECOMMENDS THAT YOU VOTE IN FAVOR OF EACH OF THE
PROPOSALS.
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Q:
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When
is the Meeting and where is it being
held?
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A:
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The
Meeting will be held on December 21, 2009, 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.
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Q:
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Who
is entitled to notice of and to vote at the
Meeting?
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A:
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Only
shareholders of record at the close of business on the Record Date,
November 10, 2009, 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.
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Q:
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Who
can attend the Meeting?
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A:
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All
shareholders as of the Record Date, November 10, 2009, 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.
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A:
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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.
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Q:
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Can
I change my vote after I have mailed in a signed proxy
card?
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A:
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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.
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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 six directors nominated by Hollywood Media’s Board
of Directors, as described in Proposal 1 below, (2) a proposal to ratify the
selection of Kaufman Rossin & Co., P.A. as Hollywood Media’s independent
registered public accounting firm for the year ending December 31, 2009, and (3)
such other business as properly may be presented at the Meeting or any
adjournments or postponements thereof. HOLLYWOOD MEDIA’S 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 MEDIA’S CHOICE OF KAUFMAN ROSSIN & CO., P.A. AS HOLLYWOOD MEDIA’S
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.
Record
Date; Quorum; Voting At The Meeting
Hollywood
Media’s Board of Directors has fixed November 10, 2009 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 10, 2009, there were 31,037,656 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 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 Media’s 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 Media’s 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 owner’s 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 Media’s 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 Media’s choice of
independent registered public accounting firm. To ensure that their shares are
voted, holders of common stock are requested to complete, sign, date and return
promptly the enclosed proxy card in the postage-prepaid envelope
provided. Any holder of common stock who so desires may revoke such
holder’s 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 Media’s 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.
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 Media’s 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 Media’s Board of Directors is
determined from time to time by the Board within the limits of Hollywood Media’s
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 seven directors and there is one vacancy on the Board;
however, the Board has approved a decrease in the number of directors to six,
effective as of the date of the upcoming 2009 Annual Meeting, December 21,
2009. 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. Stephen Gans, one of the Board’s
nominees referenced below, would constitute an independent director if he were
elected at the Meeting.
Nominees
and Members of the Board of Directors
At the
Meeting, six 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 six nominees named in the table
below for election as a director at the Meeting. Five of the six
nominees are currently members of Hollywood Media’s Board of Directors and were
duly elected by the shareholders at Hollywood Media’s 2008 Annual Meeting of
Shareholders, and one nominee, Mr. Stephen Gans, is not currently a
director. Mr. Robert E. McAllan is currently a director, although not
a nominee for reelection at the Meeting, and his term as a director will expire
upon the election of directors at the Meeting. The accompanying
form of proxy, when properly executed and returned to Hollywood Media, will be
voted FOR the election of the six 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. 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 SIX NOMINEES NAMED BELOW TO THE BOARD OF
DIRECTORS OF HOLLYWOOD MEDIA.
The
following table sets forth certain information concerning the six incumbent
Board members, five of which are nominees, and one other nominee as of the date
of this Proxy Statement.
Name
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Age
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Position and Nominee
Status
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Mitchell
Rubenstein
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55
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Chairman
of the Board and Chief Executive Officer, Nominee
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Laurie
S. Silvers
|
|
57
|
|
Vice
Chairman of the Board, President and Secretary, Nominee
|
|
|
|
|
|
Harry
T. Hoffman
|
|
82
|
|
Director
and Nominee
|
|
|
|
|
|
Robert
D. Epstein
|
|
65
|
|
Director
and Nominee
|
|
|
|
|
|
Spencer
Waxman
|
|
45
|
|
Director
and Nominee
|
|
|
|
|
|
Stephen
Gans
|
|
37
|
|
Nominee
|
|
|
|
|
|
Robert
E. McAllan
|
|
62
|
|
Director
|
_____________
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 also serves
on 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 and is a
member of its Executive Committee, 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 is Vice Chair of the Board of Directors of the Community Television
Foundation of South Florida (WPBT Channel 2, the PBS Station in 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 Media’s Compensation Committee, and also
serves on Hollywood Media’s Audit Committee, Stock Option Committee, and
Nominating Committee.
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, and has served as a local board member of the United States Selective
Service System for 20 years. Mr. Epstein serves on Hollywood Media’s
Compensation Committee and Nominating Committee.
Spencer Waxman has served as a
director of Hollywood Media since December 2008. 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. Mr.
Waxman is a graduate of Duke University.
Stephen Gans has been
nominated for election to Hollywood Media’s Board of Directors. Since March
2005, Mr. Gans has served as Managing Member of Gans Family Investments LLLP, an
investment firm focused on the technology, media and telecommunications
industries. Mr. Gans also served on the Board of Directors of City
National Bancshares, the holding company of City National Bank of Florida, from
January 2000 until November 2008. Mr. Gans received a B.A. in
Business and a Masters in Accounting from The University of Texas at Austin in
1994. If elected, Mr. Gans will serve on Hollywood Media’s Audit
Committee and Hollywood Media’s Stock Option 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 also held 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 Media’s Audit Committee, and also serves on Hollywood
Media’s Stock Option Committee.
CORPORATE
GOVERNANCE
Independent
Directors
Hollywood
Media’s 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, Robert D. Epstein and Spencer Waxman) 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 Ms. Deborah Simon, a member of the Board until her
resignation as a Director on June 11, 2009, was an independent director during
her term on the Board. The Board has also determined that Mr. Stephen
Gans, one of the Board’s 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. Gans 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, 2008, the Board of Directors held seven meetings and
acted three times by unanimous written consent. During 2008, each
incumbent director other than Ms. Simon attended at least seventy–five percent
of the combined total number of meetings of the Board and meetings of the
committees on which he or she served. Hollywood Media’s policy regarding the
attendance of the Board of Directors at annual meetings of Hollywood Media’s
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 Media’s six directors (over 80% of the Board) attended
Hollywood Media’s 2008 Annual Meeting of Shareholders held in December
2008.
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 Media’s Board of Directors. The Board may establish
other committees from time to time.
Audit Committee. The Audit
Committee of Hollywood Media’s 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 and
Robert E. McAllan, and Mr. McAllan serves as the Chairman of the Audit
Committee. Mr. McAllan is not a nominee for reelection at the Meeting, and
his term as a director and Chairman of the Audit Committee will expire upon the
election of directors at the Meeting. If elected, Stephen Gans
will serve on Hollywood Media’s Audit Committee. The Board has
determined that each of the current and prospective 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 individual’s financial sophistication, including being or having been a
chief executive officer, chief financial officer or other senior officer with
financial oversight responsibilities. During 2008, the Audit
Committee held three meetings and acted four 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 Media’s Board of Directors. The
Charter of the Audit Committee is available for review on Hollywood Media’s
internet web site, under the caption “Audit Committee Charter” at the following
address: http://www.hollywoodmedia.com/audit_charter.htm.
Hollywood Media’s 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 Committee’s
activities address various matters including items relating to (i) the selection
and engagement of Hollywood Media’s 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
Media’s financial statements, which are prepared by Hollywood Media’s
management, and the results of the independent registered public accounting
firm’s review and assessment activities. See “Audit Matters” below for
additional information relating to auditing of Hollywood Media’s financial
statements, including the Audit Committee’s report on its activities regarding
Hollywood Media’s financial statements for the 2008 fiscal year.
Compensation
Committee. The current members of the Compensation Committee
are Harry T. Hoffman and Robert Epstein, with Mr. Hoffman serving as
Chairman. The members of the Compensation Committee during 2008 were
Mr. Hoffman, Mr. Epstein and Deborah Simon. Ms. Simon was a member of
the Compensation Committee until her resignation as a Director on June 11, 2009.
Hollywood Media’s 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 2008, the Compensation Committee held two
meetings and acted four 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 does not have a charter.
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 Media’s executive officers and a defined set of other executives. The
Compensation Committee, with input from the Chief Executive Officer and/or other
executives, reviews 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 executive’s scope of responsibility and
commitment, level of performance (with respect to specific areas of
responsibility and on an overall basis), contributions to Hollywood Media’s
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 Media’s management and/or
other resources that the Committee may wish to access.
During
2008, 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 2008. These employment agreements have been
approved by the Compensation Committee. For additional information about the
2008 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 Media’s 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 Media’s 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, an independent third-party compensation consultant, to review the
compensation of the Company’s executive officers with an emphasis on the direct
elements of compensation, including salary, short-term incentives (bonus) and
long-term incentives (equity), and Pearl Meyer delivered their report to the
Compensation Committee on November 24, 2008. For additional
information about the Pearl Meyer report, see “Executive Compensation –
Compensation Discussion and Analysis” below.
Stock Option
Committee. The current members of the Stock Option Committee
are Harry T. Hoffman and Robert E. McAllan. Mr. McAllan is not a
nominee for reelection at the Meeting, and his term as a director and member of
the Stock Option Committee will expire upon the election of directors at the
Meeting. If elected, Stephen Gans will serve on Hollywood
Media’s Stock Option Committee. The Stock Option Committee administers Hollywood
Media’s 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 2008, 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 Robert Epstein. The members of the Nominating Committee
during 2008 were Mr. Hoffman and Deborah Simon. Ms. Simon was a
member of the Nominating Committee until her resignation as a Director on June
11, 2009, and Mr. Epstein became a member of the Nominating Committee following
Ms. Simon’s resignation. The Nominating Committee’s charter is available for
review on Hollywood Media’s internet web site, under the caption “Nominating
Committee Charter” at the following address: http://www.hollywoodmedia.com/nominating_committee.htm.
Hollywood Media’s 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 its
charter, the Nominating Committee’s authority and responsibilities include
evaluating and recommending persons for election or appointment to the Board, as
further described below. During 2008, the Nominating Committee held no meetings
and acted one time 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 Media’s 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 Media’s 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 Board’s 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 Committee’s 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. Stephen Gans 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 Media’s 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 Media’s 2010 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 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 year’s 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 Media’s Board of Directors, such submission and nomination
must comply with applicable requirements under Hollywood Media’s 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 Media’s directors, executive officers,
and persons who own more than 10% of Hollywood Media’s 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 Media’s 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, 2008 have been complied with, other than: one Form 4 to
report one transaction in June 2008 that was filed one day after the due date by
each of Mitchell Rubenstein and Laurie S. Silvers; and one Form 4 to report two
transactions in December 2008 that was filed one day after the due date by each
of Mitchell Rubenstein and Laurie S. 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 Media’s 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.
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 16, 2009 (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.
|
Name
and Address
of
Beneficial Owner(1)
|
|
|
Number
of Shares Beneficially Owned(2)
|
|
|
|
Percent
of Class(2)
|
|
Intana
Management, LLC
|
|
|
3,193,547 |
(3) |
|
|
10.29 |
% |
Shannon
River Fund Management Co. LLC
|
|
|
3,123,860 |
(4) |
|
|
10.07 |
% |
CCM
Master Qualified Fund, Ltd.
|
|
|
2,868,992 |
(5) |
|
|
9.24 |
% |
Morgan
Stanley
|
|
|
2,408,233 |
(6) |
|
|
7.76 |
% |
Gruber
and McBaine Capital Management, LLC
|
|
|
2,227,984 |
(7) |
|
|
7.18 |
% |
Mitchell
Rubenstein and Laurie S. Silvers
|
|
|
1,816,330 |
(8) |
|
|
5.85 |
% |
Potomac
Capital Management LLC
|
|
|
1,756,553 |
(9) |
|
|
5.66 |
% |
Dimensional
Fund Advisors, LP
|
|
|
1,656,229 |
(10) |
|
|
5.34 |
% |
Wellington
Management Company, LLP and Vanguard Explorer Fund
|
|
|
1,643,923 |
(11) |
|
|
5.30 |
% |
Stephen
Gans
|
|
|
1,620,425 |
(12) |
|
|
5.22 |
% |
Harry
T. Hoffman
|
|
|
83,254 |
(13) |
|
|
* |
|
Robert
E. McAllan
|
|
|
81,843 |
(14) |
|
|
* |
|
Scott
Gomez
|
|
|
54,986 |
(15) |
|
|
* |
|
Robert
D. Epstein
|
|
|
16,000 |
(16) |
|
|
* |
|
Spencer
Waxman
|
|
|
3,123,860 |
(17) |
|
|
10.07 |
% |
All
directors, director nominees and executive officers of Hollywood Media as
a group (8 persons)
|
|
|
6,796,698 |
(18) |
|
|
21.90 |
% |
_____________
* 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
person’s or group’s 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
31,037,656 outstanding shares of common stock as of November 16,
2009.
(3) Based
on a Schedule 13G filed with the SEC on November 12, 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.
(4) Based
on a Schedule 13D filed with the SEC on February 26, 2009, Shannon River Fund
Management Co. LLC, Shannon River Global Management LLC, Shannon River Partners,
LP, Shannon River Partners II, LP, Doonbeg Fund, LP 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 13D/A filed with the SEC on December 4, 2008, CCM Master Qualified
Fund, Ltd., Coghill Capital Management, L.L.C. and Clint D. Coghill have shared
voting and shared dispositive power with respect to such shares. The reported
business address for these holders is One North Wacker Drive, Suite 4350,
Chicago, IL 60606.
(6) Based
on a Schedule 13G/A filed with the SEC on February 17, 2009, 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.
(7) Based
on a Schedule 13G filed with the SEC on January 29, 2009, 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
1,413,602 shares, and each of Jon D. Gruber, J. Patterson McBaine and Eric B.
Swergold has sole voting and sole investment power over 549,997, 264,085 and 300
shares, respectively. The reported business address for these holders is 50
Osgood Place, Penthouse, San Francisco, CA 94133.
(8) Represents
1,122,790 outstanding shares of common stock which are owned by Mitchell
Rubenstein individually (including 13,560 shares held for his account in
Hollywood Media’s 401(k) plan) and 693,540 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 Media’s 401(k) plan).
(9) 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.
(10) Based
on a Schedule 13G filed with the SEC on February 9, 2009, Dimensional Fund
Advisors, LP beneficially owns such shares. The reported business
address for this holder is Palisades West, Building One, 6300 Bee Cave Road,
Austin, Texas, 78746.
(11) Based
on a Schedule 13G filed with the SEC on February 17, 2009 and a Schedule 13G/A
filed with the SEC on February 13, 2009, Wellington Management Company, LP, its
capacity as investment advisor, and Vanguard Explorer Fund beneficially own such
shares. The reported business addresses for these holders are 75
State Street, Boston, Massachusetts 02109 and 100 Vanguard Boulevard, Malvern,
Pennsylvania 19355, respectively.
(12) Based
on a Schedule 13G filed with the SEC on March 19, 2009, Mr. Gans beneficially
owns such shares. The reported business address for this holder is
1680 Michigan Avenue, Suite 1001, Miami Beach, Florida 33139.
(13) 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.
(14) 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.
(15) Represents
44,986 outstanding shares of common stock (including 4,986 shares held for Mr.
Gomez’s account in Hollywood Media’s 401(k) plan), and 10,000 shares of common
stock issuable pursuant to exercisable options, beneficially owned by Mr.
Gomez.
(16) 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.
(17) 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.
(18) Represents
an aggregate of 6,621,009 outstanding shares of common stock and 175,689 shares
of common stock issuable pursuant to exercisable options.
EQUITY
COMPENSATION PLAN INFORMATION
Securities authorized for issuance
under equity compensation plans. The following table sets
forth information as of December 31, 2008, 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, 2008
|
Number
of securities to be
issued
upon exercise
of
outstanding
options,
warrants
and
rights
|
Weighted
average
exercise
price per
share
of outstanding
options,
warrants
and
rights
|
Number
of securities
remaining
available for
future
issuance under
equity
compensation
plans(1)
|
(a)
|
(b)
|
(c)
|
Plan
Category:
|
|
|
|
Equity
compensation plans approved by security holders(2)
|
591,943
|
$5.24
|
512,370
|
Equity
compensation plans not approved by security holders(3)
|
1,989,985
|
$4.35
|
-
|
Total
|
2,581,928
|
|
512,370
|
(1) Excluding
securities reflected in column “(a).”
(2) Hollywood
Media has four shareholder-approved equity compensation plans: the 2004 Stock
Incentive Plan, 2000 Stock Incentive Plan, 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 or the Directors Stock Option Plan because the
periods for granting options under such plans expired in July 2003 and July
2008, respectively. 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, 2008, the
number of shares available for granting additional awards was 282,261 shares
under the 2004 Stock Incentive Plan and 226,052 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 Media’s 2008 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 Media’s 2008 Form 10-K filed with the
SEC.
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
|
|
55
|
|
Chairman
of the Board and Chief Executive Officer
|
|
|
|
|
|
Laurie
S. Silvers
|
|
57
|
|
Vice
Chairman of the Board, President and Secretary
|
|
|
|
|
|
Scott
A. Gomez
|
|
33
|
|
Chief
Accounting Officer
|
Hollywood
Media’s 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
officer’s 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.
EXECUTIVE
COMPENSATION
Compensation
Discussion and Analysis
Executive
Compensation Policies and Objectives
Hollywood
Media’s 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 Media’s 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 Media’s ability to attract and retain highly qualified executives who
are committed to Hollywood Media’s 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 Media’s Chief Executive
Officer on the compensation of the Company’s Chief Accounting Officer, including
assessments of the Chief Accounting Officer’s performance, particularly related
to Mr. Gomez’s contributions to Hollywood Media’s general revenue-generation and
cost-cutting efforts, and assistance with the negotiation of the terms of Mr.
Gomez’s employment agreement, including salary and bonuses. In
November 2008, the Compensation Committee engaged Pearl Meyer &
Partners, LLC, an independent third-party compensation consultant, to review the
compensation of the Company’s executive officers with an emphasis on the direct
elements of compensation, including salary, short-term incentives (bonus) and
long-term incentives (equity).
Setting
Executive Compensation
In
approving executive officer compensation, the Compensation Committee generally
reviews and considers, among other factors, each executive’s scope of
responsibility and commitment, level of performance (with respect to specific
areas of responsibility and on an overall basis), contributions to Hollywood
Media’s 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 Media’s 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 goals may vary from year to year, and from
individual to individual, and, in the past, have been negotiated on an arm’s
length basis at the time the executive was hired or upon contract
renewal. 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 Media’s executive officers is targeted to recognize
that officer’s unique value, experience, and actual and potential contribution
to Hollywood Media’s success. For 2008, 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 2008, 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 Media’s 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. This determination reflected the
Compensation Committee’s decision to take a more conservative stance, given the
general climate and concerns surrounding executive compensation at the time that
decision was made.
In
November 2008, the Compensation Committee engaged Pearl Meyer &
Partners, LLC, an independent third-party compensation consultant, to review the
compensation of the Company’s executive officers with an emphasis on the direct
elements of compensation, including salary, short-term incentives (bonus) and
long-term incentives (equity). A new study was delivered to the
Compensation Committee on November 24, 2008 and included a review of twelve
publicly traded companies with similar business models and median revenues of
$120 million, including Imax, CNET, Internet Brands, Inc., Knot Inc.,
TheStreet.com and Ediets.com Inc. Pearl Meyer determined that, while the
total compensation levels of the executive officers for 2008 were positioned
near the 25th
percentile of the market, the base salary levels were positioned near the
75th
percentile. Accordingly, Pearl Meyer recommended no adjustments to
base salary and the consideration of short term equity awards for 2008 and
long-term equity incentives beginning in 2009. In addition to the
Pearl Meyer study, the Compensation Committee also considered, among other
things, the qualifications and performance of Mr. Rubenstein and Ms. Silvers,
the value of their institutional knowledge, the Company’s revenues, results,
transactions and operations, the need for experienced management in a recession
economy as well as management’s positioning of the Company in advance of the
recession with significant cash on hand and, most importantly, given the credit
crisis, no long-term debt, the exercise of conservative inventory management in
the Company’s Broadway Ticketing business, the dividends received from
MovieTickets.com in the second quarter of 2008 and expected in the first quarter
of 2009 (which was subsequently received), significant cost-cutting implemented
by management in 2008, and the Company’s return of cash to shareholders through
the Company’s stock repurchase plan.
After
giving due consideration to the recommendations contained in the Pearl Meyer
study and the various factors discussed above, the Compensation Committee
determined that maintaining the base salary of the executive officers at current
levels and awarding short-term and long-term equity awards to the Company’s
Chief Executive Officer and President would provide a total compensation mix in
line with that of the market, at levels appropriate to retain the executive
officers, while more appropriately aligning their incentives with those of our
shareholders. For additional information about these equity awards,
see “Stock Option Grants and Equity-Based Compensation” and the “2008 Grants of
Plan-Based Awards Table” below.
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 Committee’s review and
consideration of the factors noted above including the executive officer’s
contribution to Hollywood Media’s achievement of its goals.
On April
14, 2008, Scott Gomez received a $25,000 cash bonus, payable in accordance with
the terms of his employment agreement. The Compensation Committee of
the Board of Directors did not award any discretionary cash bonuses to the Named
Executive Officers in 2008.
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 Media’s
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
Media’s stock price, the Compensation Committee did not grant stock options to
employees in 2008 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 Media’s 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, 2008, the Compensation Committee granted stock awards to Mr.
Rubenstein and Ms. Silvers on December 22, 2008. These grants of 100,000 fully
vested shares of common stock and 400,000 restricted shares of common stock were
made under Hollywood Media’s 2004 Stock Incentive Plan. In making its
assessments regarding these stock awards to Mr. Rubenstein and Ms. Silvers, the
Compensation Committee considered a variety of factors and performance measures,
including the overall performance and financial health of the Company.
Based on its overall assessment, the 100,000 fully vested shares were
awarded in recognition of their respective contributions to Hollywood Media’s
performance and their dedication and loyalty to Hollywood Media and the 400,000
restricted shares were intended to create forward-looking performance and
retention incentives beyond the grant date. In deciding to make the
long-term incentive grants, the Compensation Committee considered the fact
that the prior long-term incentive stock awards granted several years
ago recently became fully vested, thereby providing no further retention
strength. In determining the size of the grant, the Compensation
Committee considered a variety of factors, including the importance of
these executives to the near term and long-term success of
the Company, competitive market pay data provided by the Compensation
Committee’s independent compensation consultant, and the magnitude of incentive
being created to increase the value of the Company. In selecting the
design features of the grants, the Committee wanted to ensure a strong
linkage to Company performance and shareholder value creation. The
Compensation Committee ultimately determined to grant a lower aggregate number
of shares than the competitive market data suggested, reflecting their decision
to take a more conservative stance given the current economic
climate. The Compensation Committee also included more
performance-based criteria in the stock grants than the peer companies reviewed
in an effort to more appropriately align the incentives of the executives with
the Company’s shareholders.
Other
Benefits
Perquisites
Although
perquisites are not a primary aspect of Hollywood Media’s executive
compensation, Hollywood Media provided its Named Executive Officers with the
following perquisites during 2008:
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.
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.
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 Plan’s 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, 2008, Hollywood Media elected to make a matching contribution for
each participating employee equal to half of the first 8% of the employee’s
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 $1.0 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 $1.0 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 Media’s 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
Media’s compensation programs and arrangements, but also intends to retain the
flexibility necessary to provide cash and other compensation consistent with
Hollywood Media’s compensation objectives.
Compensation
Committee Report
Hollywood
Media’s 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
Robert
D. Epstein
Summary
Compensation Table
The
following table summarizes the total compensation paid to or earned by each of
Hollywood Media’s Named Executive Officers for each of the three fiscal years
ended December 31, 2008, 2007 and 2006, respectively:
Name
and
Principal Position
|
|
Year
|
|
Salary
|
|
|
Bonus
|
|
|
Stock
Awards
|
|
|
All
Other
Compensation
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mitchell
Rubenstein
|
|
2008
|
|
$ |
460,657 |
|
|
$ |
51,000 |
(1) |
|
$ |
243,750 |
(2) |
|
$ |
24,655 |
(3) |
|
$ |
780,062 |
|
Chief
Executive Officer
|
|
2007
|
|
$ |
382,413 |
(4)
|
|
|
- |
|
|
$ |
535,650 |
(5) |
|
$ |
22,580 |
(6) |
|
$ |
940,643 |
|
|
|
2006
|
|
$ |
424,356 |
|
|
$ |
250,000 |
|
|
$ |
325,000 |
(7) |
|
$ |
20,847 |
(8) |
|
$ |
1,020,203 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Laurie
S. Silvers
|
|
2008
|
|
$ |
403,075 |
|
|
$ |
51,000 |
(1) |
|
$ |
243,750 |
(2) |
|
$ |
32,511 |
(9) |
|
$ |
730,336 |
|
President
|
|
2007
|
|
$ |
334,612 |
(4) |
|
|
- |
|
|
$ |
439,900 |
(10) |
|
$ |
29,059 |
(11) |
|
$ |
803,571 |
|
|
|
2006
|
|
$ |
371,312 |
|
|
$ |
150,000 |
|
|
$ |
325,000 |
(7) |
|
$ |
26,555 |
(12) |
|
$ |
872,867 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scott
Gomez
|
|
2008
|
|
$ |
284,134 |
|
|
$ |
321,473 |
|
|
|
- |
|
|
$ |
20,123 |
(13) |
|
$ |
625,730 |
|
Chief
Accounting Officer
|
|
2007
|
|
$ |
217,308 |
|
|
$ |
125,000 |
|
|
$ |
76,600 |
(14) |
|
$ |
26,938 |
(15) |
|
$ |
446,846 |
|
|
|
2006
|
|
$ |
192,404 |
|
|
$ |
150,000 |
|
|
|
- |
|
|
|
- |
(16) |
|
$ |
342,404 |
|
(1)
|
Bonus
includes 50,000 shares awarded by the Compensation Committee on December
22, 2008 in recognition of the executives’ respective contributions to
Hollywood Media’s growth to date and their dedication and loyalty to
Hollywood Media, valued in accordance with FAS 123R at $51,000 based on
the $1.02 closing market price per share on the date of
grant.
|
(2)
|
Stock
awards include the vesting during the 2008 fiscal year of 75,000 shares of
restricted common stock originally granted in August 2004, valued in
accordance with FAS 123R at $243,750 based on the $3.25 closing market
price per share of Hollywood Media’s 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 vested 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. As of December 31, 2008, there were no unvested shares
remaining under this grant.
|
(3)
|
Represents
(a) a matching contribution under Hollywood Media’s 401(k) plan of $9,200,
consisting of 9,200 shares of common stock of Hollywood Media valued using
the closing market price per share as of the last trading day of 2008, (b)
an automobile allowance of $7,800 payable in accordance with the terms of
the executive’s employment agreement, and (c) $7,655 in medical, dental
and disability insurance premiums, provided in accordance with the terms
of the executive’s employment
agreement.
|
(4)
|
Excludes
$76,080 and $66,570 of base salary voluntarily forgone by Mr. Rubenstein
and Ms. Silvers, respectively, as previously announced on October 1,
2007.
|
(5)
|
Stock
awards include (a) 55,000 shares awarded by the Compensation Committee on
August 30, 2007 in recognition of the executive’s contribution to the sale
of the assets of Hollywood Media’s 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 as described in note 2 above,
valued in accordance with FAS 123R at $325,000 based on the $3.25 closing
market price per share of Hollywood Media’s common stock as of August 19,
2004, the date immediately preceding the grant
date.
|
(6)
|
Represents
(a) a matching contribution under Hollywood Media’s 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 executive’s employment agreement, and (c) $5,927 in medical, dental
and disability insurance premiums, provided in accordance with the terms
of the executive’s employment
agreement.
|
(7)
|
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 note 2 above, valued in accordance with FAS 123R at $325,000 based on
the $3.25 closing market price per share of Hollywood Media’s common stock
as of August 19, 2004, the date immediately preceding the grant
date.
|
(8)
|
Represents
(a) a matching contribution under Hollywood Media’s 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 executive’s employment agreement, and (c) $5,547 in medical, dental
and disability insurance premiums, provided in accordance with the terms
of the executive’s employment
agreement.
|
(9)
|
Represents
(a) a matching contribution under Hollywood Media’s 401(k) plan of $9,200,
consisting of 9,200 shares of common stock of Hollywood Media valued using
the closing market price per share as of the last trading day of 2008, (b)
an automobile allowance of $7,800 payable in accordance with the terms of
the executive’s employment agreement, and (c) $15,511 in medical, dental
and disability insurance premiums, provided in accordance with the terms
of the executive’s employment
agreement.
|
(10)
|
Stock
awards include (a) 30,000 shares awarded by the Compensation Committee on
August 30, 2007 in recognition of the executive’s 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 as described in note 2 above,
valued in accordance with FAS 123R at $325,000 based on the $3.25 closing
market price per share of Hollywood Media’s common stock as of August 19,
2004, the date immediately preceding the grant
date.
|
(11)
|
Represents
(a) a matching contribution under Hollywood Media’s 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 executive’s employment agreement, and (c) $12,464 in medical, dental
and disability insurance premiums, provided in accordance with the terms
of the executive’s employment
agreement.
|
(12)
|
Represents
(a) a matching contribution under Hollywood Media’s 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 executive’s employment agreement, and (c) $11,255 in medical, dental
and disability insurance premiums, provided in accordance with the terms
of the executive’s employment
agreement.
|
(13)
|
Represents
(a) a matching contribution under Hollywood Media’s 401(k) plan of $7,138,
consisting of 7,138 shares of common stock of Hollywood Media valued using
the closing market price per share as of the last trading day of 2008, and
(b) $12,985 in medical, dental and disability insurance premiums, provided
in accordance with the terms of the executive’s employment
agreement.
|
(14)
|
Stock
awards include 20,000 shares awarded by the Compensation Committee on
August 30, 2007 in recognition of the executive’s 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.
|
(15)
|
Represents
(a) a matching contribution under Hollywood Media’s 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 executive’s employment
agreement.
|
(16)
|
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
$10,000.
|
2008
Grants of Plan-Based Awards Table
The following table provides
information about grants of awards to Named Executive Officers during 2008 under
Hollywood Media’s shareholder-approved equity compensation plans:
|
|
|
|
|
Estimated
Future Payouts Under Equity Incentive Plan Awards
|
|
|
|
All Other Stock Awards: Number
of Shares of Stock or Units
|
|
|
|
Grant Date Fair Value of Stock
and Option Awards
|
|
Name
|
|
Grant
Date
|
|
|
Target
(#)
|
|
|
|
(#)
|
|
|
|
($)
|
|
Mitchell
Rubenstein
|
|
12/22/2008
|
|
|
-- |
|
|
|
50,000 |
(1) |
|
|
51,000 |
(1) |
|
|
12/22/2008
|
|
|
166,667 |
(2) |
|
|
83,333 |
(2) |
|
|
255,000 |
(2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Laurie
S. Silvers
|
|
12/22/2008
|
|
|
-- |
|
|
|
50,000 |
(1) |
|
|
51,000 |
(1) |
|
|
12/22/2008
|
|
|
100,000 |
(2) |
|
|
50,000 |
(2) |
|
|
153,000 |
(2) |
____________________
(1)
|
These
stock awards were grants of fully vested shares of common stock, which
were awarded by the Compensation Committee upon due consideration of the
recommendations of compensation consultants Pearl Meyer & Partners,
LLC in recognition of the executive’s contributions to Hollywood Media’s
growth to date and their dedication and loyalty to Hollywood
Media. The Grant Date Fair Value in the table was valued in
accordance with FAS 123R based on the $1.02 closing market price per share
on the date of grant.
|
(2)
|
These
stock awards were grants of restricted shares of common stock, which were
awarded by the Compensation Committee upon due consideration of the
recommendations of compensation consultants Pearl Meyer & Partners,
LLC. Neither executive shall sell, assign, exchange, transfer,
pledge, hypothecate or otherwise dispose of or encumber any of the
restricted shares granted to such executive until such shares have
vested. The restricted shares will vest as follows, provided
that the respective executive remains employed by Hollywood Media on such
vesting dates: (a) one-third of the issued shares will vest at the rate of
25% per year on each of the first through fourth anniversaries of the date
of grant, such that these shares will be fully vested on the fourth
anniversary of the date of grant, assuming continued employment of the
executives by Hollywood Media; (b) one-third of the issued shares will
vest if, at any time prior to the fourth anniversary of the date of grant,
Hollywood Media achieves EBITDA greater than zero for either (A) each
of two consecutive fiscal quarters or (B) any three quarters in any
15-month period, in each case beginning with the fourth fiscal quarter of
2008; and (c) one-third of the issued shares will vest if, at any time
prior to the fourth anniversary of the date of grant, the closing price of
Hollywood Media’s Common Stock exceeds $2.00 per share for at least 10
consecutive trading days after the date of grant. The Grant
Date Fair Value in the table was valued in accordance with FAS 123R based
on the $1.02 closing market price per share on the date of
grant. Notwithstanding the foregoing, with respect to each
executive, any unvested restricted shares granted to such executive shall
immediately vest in full upon a “Change of Control” of Hollywood Media (as
defined in the employment agreement between such executive and Hollywood
Media), or in the event that the employment of such executive is
terminated by Hollywood Media other than for “Cause” or by such executive
for “Good Reason” (in each case as such term is defined in the employment
agreement between such executive and Hollywood Media) at any time prior to
the fourth anniversary of the date of
grant.
|
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 and restated in December
2008. In deciding to renew the contracts of Mr. Rubenstein and Ms.
Silvers in December 2008, the Compensation Committee considered the compensation
study received from Pearl Meyer & Partners, LLC in November 2008 and, among
other things, the qualifications and performance of Mr. Rubenstein and Ms.
Silvers, the value of their institutional knowledge, the Company’s revenues,
results, transactions and operations, the need for experienced management in a
recession economy as well as management’s positioning of the Company in advance
of the recession with significant cash on hand and, most importantly, given the
credit crisis, no long-term debt, the exercise of conservative inventory
management in the Company’s Broadway Ticketing business, the dividends received
from MovieTickets.com in the second quarter of 2008 and expected in the first
quarter of 2009 (which was subsequently received), significant cost-cutting
implemented by management in 2008, and the Company’s return of cash to
shareholders through the Company’s stock repurchase plan.
Pursuant
to the amended and restated employment agreements dated December 2008, the terms
of both agreements were extended through December 31, 2010. 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 90 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), additional cash bonuses as determined by the Compensation
Committee or the Board of Directors from time to time at their discretion, and
an automobile allowance of $650 per month. Pursuant to the amended
and restated employment agreements dated December 2008, 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 Media’s 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 executive’s 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.
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
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 Media’s 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, which was extended by Hollywood Media to one year
following the date of the Change of Control in accordance with the terms of the
employment agreement (the “Required Employment Period”). During the
Required Employment Period, the base salary payable to Mr. Gomez in
accordance with the terms of the employment agreement shall be increased by
50%. If Mr. Gomez’s 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. Gomez’s 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. Gomez’s 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 Media’s 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: (i) Mr. Gomez received a
Change of Control Payment equal to $592,945, with 50% paid on August 21, 2008
and 50% paid on February 21, 2009; (ii) the annual salary rate paid to Mr. Gomez
during the Required Employment Period referenced above, which ran from August
21, 2008 through August 20, 2009, was increased by 50%; and (iii) the current
annual salary rate for Mr. Gomez is $275,000.
Additional
terms of the employment agreements with the Named Executive Officers are
described below under the caption “Potential Payments upon Termination or
Change-in-Control.” For additional information about the sale of the
Hollywood.com Business referenced above, see “Transactions with Related Persons”
below.
Outstanding
Equity Awards at 2008 Fiscal Year-End
The
following table sets forth information regarding outstanding option and stock
awards held by the Named Executive Officers at December 31, 2008:
|
|
Option
Awards
|
|
|
Stock
Awards
|
|
Name
|
|
Number
of Securities Underlying Unexercised Options (#) Exercisable
|
|
|
Number
of Securities Underlying Unexercised Options (#) Unexercisable
|
|
|
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised
Unearned Options (#)
|
|
|
Option
Exercise Price ($)
|
|
|
Option
Expiration Date
|
|
|
Number
of Shares or Units of Stock That Have Not
Vested (#)
|
|
|
Market
Value of Shares or Units of Stock That Have
Not Vested ($)
|
|
|
Equity
Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights
That
Have
Not Vested (#)
|
|
|
Equity
Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or
Other Rights That Have Not Vested
(#)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mitchell
Rubenstein
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
83,333 |
|
|
$ |
83,333 |
(1) |
|
|
166,667 |
|
|
$ |
166,667 |
(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Laurie
S. Silvers
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
50,000 |
|
|
$ |
50,000 |
(1) |
|
|
100,000 |
|
|
$ |
100,000 |
(1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scott
Gomez
|
|
|
25,000 |
|
|
|
- |
|
|
|
- |
|
|
$ |
4.44 |
|
|
5/19/2009
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
10,000 |
|
|
|
- |
|
|
|
- |
|
|
$ |
4.28 |
|
|
12/28/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The
market value of the unvested shares of Hollywood Media’s common stock is based
on the closing price per share as of December 31, 2008, which was
$1.00.
Option
Exercises and Stock Vested in 2008
The
following table sets forth information regarding each exercise of stock options
and vesting of restricted stock that occurred during 2008 for each of Hollywood
Media’s Named Executive Officers on an aggregated basis:
|
|
Option
Awards
|
|
|
Stock
Awards
|
|
Name
|
|
Number
of Shares
Acquired on Exercise (#)
|
|
|
Value
Realized
on Exercise ($)
|
|
|
Number
of Shares
Acquired on Vesting (#)
|
|
|
Value
Realized
on Vesting ($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mitchell
Rubenstein
|
|
|
81,000 |
|
|
|
82,620 |
(1) |
|
|
75,000 |
(2) |
|
$ |
197,000 |
(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Laurie
S. Silvers
|
|
|
- |
|
|
|
- |
|
|
|
75,000 |
(2) |
|
$ |
197,000 |
(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scott
Gomez
|
|
|
20,000 |
|
|
|
32,400 |
(4) |
|
|
- |
|
|
|
- |
|
(1) Represents
the difference between the market price of the underlying shares on the June 23,
2008 exercise date, based on the closing price per share of $2.32 as of such
date, and the $1.30 per share exercise price of the options.
(2) 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, 2008. As of December 31, 2008, there were no unvested
shares remaining under this issuance.
(3) The
aggregate dollar amount realized upon vesting is based on the closing price per
share of Hollywood Media’s common stock on the last trading date prior to each
of the vesting dates that occurred during the fiscal year ended December 31,
2008, as follows: (a) 25,000 shares vested on January 1, 2008, valued at $73,258
based on a closing price of $2.93 per share; (b) 25,000 shares vested on April
1, 2008, valued at $62,000 based on a closing price of $2.48 per share; and (c)
25,000 shares vested on July 1, 2008, valued at $61,750 based on a closing price
of $2.47 per share.
(4)
Represents the difference between the market price of the underlying shares on
the April 21, 2008 exercise date, based on the closing price per share of $2.50
as of such date, and the $0.88 per share exercise price of the
options.
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 Plan’s 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, 2008, Hollywood Media elected to make a matching contribution for
each participating employee equal to half of the first 8% of the employee’s
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.
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. Rubenstein’s employment by
Hollywood Media for Mr. Rubenstein’s disability or for any reason other than
death or “Cause” (as defined in the employment agreement) or upon a termination
of Mr. Rubenstein’s employment by Mr. Rubenstein for “Good Reason” (as defined
in the employment agreement), Mr. Rubenstein will be entitled to receive a lump
sum payment equal to his then current salary until the expiration of the then
current term of the employment agreement or for 12 months, whichever is
greater. 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. Rubenstein’s
death, Mr. Rubenstein’s estate will be entitled to receive a lump sum payment
equal to one year’s base salary plus a pro rata portion of any bonus to which
Mr. Rubenstein would have been entitled. Assuming that Mr.
Rubenstein’s employment was terminated by Hollywood Media on December 31, 2008
without Cause or as a result of Mr. Rubenstein’s disability, Mr. Rubenstein
would be entitled to receive a lump sum payment equal to $929,668 (representing
his then current salary through the December 31, 2010, the expiration of the
then current term) and approximately $15,310 in insurance coverage for
termination as a result of disability. Assuming that this agreement
was terminated on December 31, 2008 as a result of Mr. Rubenstein’s death, Mr.
Rubenstein’s estate would be entitled to receive a lump sum payment of
$464,834.
Under Mr.
Rubenstein’s current employment agreement, if Mr. Rubenstein is affiliated with
Hollywood Media on the date of a “Change of Control” (as defined in his
employment agreement), Mr. Rubenstein will receive a lump sum payment equal
to three times his “base period income,” to be paid within 5 days of the date of
the Change of Control. As defined in his employment agreement, “base
period income” shall be the sum of (i) the base salary paid or payable to Mr.
Rubenstein with respect to the last fiscal year ending before the date of the
Change of Control, and (ii) the greater of (x) Mr. Rubenstein’s bonus (both cash
and stock) for the last fiscal year ending before the date of the Change of
Control and (y) Mr. Rubenstein’s bonus (both cash and stock) for the second
fiscal year preceding such date. Assuming the occurrence of a Change
of Control on December 31, 2008, Mr. Rubenstein would be entitled to receive a
lump sum payment of $2,312,502.
Under Mr.
Rubenstein’s current employment agreement, a “Change of Control” shall be deemed
to have taken place if (i) any person, or more than one person acting as a group
as defined in Treas. Reg. section 1.409A-3(i)(5)(v)(B), acquires Hollywood Media
stock (or has acquired such stock within a 12-month period ending on the date of
the most recent acquisition by such person or persons) having 30% or more of the
combined voting power of the then outstanding stock of Hollywood Media (other
than as a result of an issuance of securities initiated by Hollywood Media, or
open market purchases approved by the Board, as long as the majority of the
Board approving the purchases is the majority at the time the purchases are
made), (ii) a majority of the persons who were directors of Hollywood Media
before such transactions shall be replaced by directors whose appointment was
not endorsed by the Board before such appointment, as the direct or indirect
result of or in connection with, any cash tender or exchange offer, merger or
other business combination, sale of assets or contested election, or any
combination of the foregoing transactions, or (iii) any one person, or more than
one person acting as a group as defined in Treas. Reg. section
1.409A-3(i)(5)(v)(B), acquires (or has acquired within the 12-month period
ending on the date of the most recent acquisition by such person or persons)
assets from Hollywood Media having a total gross fair market value equal to or
greater than 40% of the total gross fair market value of the assets of Hollywood
Media immediately before such acquisition or acquisitions.
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,
2008 without Cause or as a result of Ms. Silvers’ disability, Ms. Silvers would
be entitled to receive a lump sum payment equal to $813,460 (representing her
then current salary through the December 31, 2010, the expiration of the then
current term) and approximately $31,022 in insurance coverage for termination as
a result of disability. Assuming that this agreement was terminated
on December 31, 2008 as a result of Ms. Silvers’ death, Ms. Silvers’ estate
would be entitled to receive a lump sum payment of $406,730.
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, 2008, Ms. Silvers would be entitled to receive a lump sum payment
of $1,832,187.
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
Media’s divisions known as Broadway Ticketing, Data Business or
Hollywood.com. On August 21, 2008, a Change of Control occurred under
Mr. Gomez’s 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 was paid
on February 21, 2009.
As a
condition to receiving the second 50% of the Change of Control Payment, Mr.
Gomez was required to continue his employment through February 21,
2009. 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 was increased by 50%. If Mr. Gomez’s
employment was terminated without Cause or for Good Reason (as each term is
defined in the Employment Agreement) during the Required Employment Period, Mr.
Gomez would have been 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 on
August 21, 2009, Mr. Gomez’s employment continued under the terms of the
employment agreement without the 50% base salary increase, and he is not be
entitled to any termination payments if his employment is terminated without
Cause or for Good Reason. Assuming that Mr. Gomez’s employment was
terminated without Cause or for Good Reason on December 31, 2008 and that
Hollywood Media had not extended the Required Employment Period beyond February
21, 2009, Mr. Gomez would have been entitled to receive (less applicable payroll
deductions): (i) the remaining Change of Control Payment of $296,473; and (ii)
the increased salary of approximately $54,167 payable through February 21,
2009.
2008
Director Compensation
The
following table sets forth information regarding the compensation received by
each of Hollywood Media’s Directors during 2008:
Name
|
|
Fees
Earned or Paid in Cash
|
|
|
Stock
Awards
|
|
|
Option
Awards
|
|
|
Non-Equity
Incentive Plan Compensation
|
|
|
Change
in Pension Value and
Non-Qualified
Deferred Compensation Earnings
|
|
|
All
Other Compensation
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mitchell
Rubenstein,
Chairman(1)
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Laurie
S. Silvers,
Vice
Chairman(1)
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Harry
T. Hoffman
|
|
$ |
63,500 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
$ |
63,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert
E. McAllan
|
|
$ |
59,000 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
$ |
59,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deborah
J. Simon
|
|
$ |
29,500 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
$ |
29,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert
D. Epstein
|
|
$ |
36,500 |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
$ |
36,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Spencer
Waxman(2)
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
(1)
|
Ms.
Silvers and Mr. Rubenstein are executive officers and employees of
Hollywood Media, and their compensation is reported separately above in
this “Executive Compensation” portion of this Proxy Statement, prior to
this “Director Compensation”
discussion.
|
(2)
|
Mr.
Waxman first became a Director upon his election to the Board of Directors
at Hollywood Media’s Annual Meeting of Shareholders held on December 18,
2008.
|
The table
below shows the aggregate number of shares subject to all outstanding stock
options held by the named directors as of December 31, 2008, including options
granted during 2008 and prior years, all of which options were granted under the
Directors Stock Option Plan for non-employee directors (described
below).
Name |
|
Total
Options Held
at
12/31/2008
(# of
shares)
|
Harry
T. Hoffman
|
|
70,254
|
Robert
E. McAllan |
|
80,435
|
Deborah
J. Simon |
|
85,254
|
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 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
Media’s shareholder-approved Directors Stock Option Plan (the “Directors Plan”)
was initially adopted in 1993, was subsequently amended, and has been approved
by Hollywood Media’s 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 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 Media’s shareholders at which the director is
reelected. In December 2007, the Board of Directors elected to
temporarily suspend such annual option issuances until such time that the Board
determines to reserve additional shares of common stock for issuance upon
exercise of options granted under the Directors Stock Option
Plan. During the year ended December 31, 2008, no options were
granted, exercised, cancelled or expired under the Directors Stock Option
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, and options are
currently outstanding for an aggregate of 295,943 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 Media’s Compensation Committee are Harry T. Hoffman
and Robert D. Epstein. The members of the Compensation Committee
during 2008 were Mr. Hoffman, Mr. Epstein and Deborah Simon. Ms.
Simon was a member of the Compensation Committee until her resignation as a
Director on June 11, 2009. No member of the Compensation Committee
was at any time during the 2008 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 2008 fiscal year requiring disclosure under Item
404. In addition, none of Hollywood Media’s executive officers serves
(or served during the 2008 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 2008 fiscal year) as members of Hollywood Media’s Board of
Directors or Compensation Committee.
AUDIT
MATTERS
Report
of the Audit Committee
The
primary responsibility of the Audit Committee is to assist with oversight of
Hollywood Media’s financial reporting process on behalf of the Board of
Directors. Hollywood Media’s management is responsible for Hollywood Media’s
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 Media’s independent
registered public accounting firm is responsible for auditing Hollywood Media’s
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 Media’s 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 Media’s financial statements are presented in accordance
with generally accepted accounting principles or that the audit of Hollywood
Media’s 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 Media’s 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 firm’s
examinations and their evaluations of Hollywood Media’s internal controls. In
fulfilling its oversight responsibilities, the Audit Committee reviewed and
discussed Hollywood Media’s audited financial statements for the year ended
December 31, 2008 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 firm’s judgments as to the quality,
not just the acceptability, of Hollywood Media’s 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 firm’s
independence.
Based on
the reviews and discussions referenced above, the Audit Committee recommended to
the Board of Directors that Hollywood Media’s audited financial statements be
included in Hollywood Media’s Annual Report on Form 10-K for the year ended
December 31, 2008 for filing with the SEC.
Respectfully,
Members
of the Audit Committee
Robert
E. McAllan, Chairman
Harry
T. Hoffman
Appointment
of Independent Registered Public Accounting Firm; Attendance at
Meeting
The firm
of Kaufman Rossin & Co., P.A. (“Kaufman”) served as Hollywood Media’s
independent registered public accounting firm for the fiscal year ended December
31, 2008. Hollywood Media has reappointed Kaufman to serve as
Hollywood Media’s independent registered public accounting firm for the fiscal
year ending December 31, 2009. 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 Firm’s Fees and Services
The
following table shows fees billed to Hollywood Media by its independent
registered public accounting firm, Kaufman Rossin & Co., P.A., for each of
the two fiscal years ended December 31, 2008 and 2007, respectively, for
services rendered in the specified categories indicated below.
Type
of Fees
|
|
2008
|
|
|
2007
|
|
Audit
Fees
|
|
$ |
707,468 |
|
|
$ |
781,202 |
|
Audit-Related
Fees
|
|
|
81,475 |
|
|
|
3,660 |
|
Tax
Fees
|
|
|
-- |
|
|
|
-- |
|
All
Other Fees
|
|
|
-- |
|
|
|
-- |
|
|
|
|
|
|
|
|
|
|
Total
|
|
$ |
788,943 |
|
|
$ |
784,862 |
|
The fee
types referenced in the above table, are defined as follows:
“Audit Fees” are aggregate fees
billed by Hollywood Media’s principal auditing firm for professional services
for the audit of Hollywood Media’s consolidated financial statements included in
its Form 10-K, for the audit of management’s report on its assessment of the
effectiveness of Hollywood Media’s 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 fees
billed by Hollywood Media’s principal auditing firm for assurance and related
services that are reasonably related to the performance of the audit or review
of Hollywood Media’s financial statements. Such services include
principally services associated with reports related to regulatory filings, and
general accounting and reporting advice.
“Tax Fees” are fees billed by
Hollywood Media’s principal auditing firm for professional services for tax
compliance, tax advice, and tax planning.
“All Other Fees” are fees billed by
Hollywood Media’s principal auditing firm for any services not included in the
forgoing fee categories.
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, 2008 and 2007, respectively, 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 January 1, 2007 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.
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 Media’s independent
registered public accounting firm for the fiscal year ended December 31, 2008.
Pursuant to the prior approval of Hollywood Media’s Audit Committee, Kaufman
Rossin & Co., P.A. has been appointed to serve as Hollywood Media’s
independent registered public accounting firm for the current fiscal year ending
December 31, 2009, 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
MEDIA’S BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE IN FAVOR OF THE
PROPOSAL TO RATIFY THE SELECTION OF KAUFMAN ROSSIN & CO., P.A AS HOLLYWOOD
MEDIA’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING
DECEMBER 31, 2009.
TRANSACTIONS
WITH RELATED PERSONS
Scott Gomez has been an executive
officer of Hollywood Media since April 2003. Hollywood Media employed his
father, Jose Gomez, from December 2000 through March 2009 in information systems
and business development positions, not as an executive officer. Such employment
was pursuant to an employment agreement with Hollywood Media entered into
on December 13, 2005, as amended on February 7, 2007, which includes, among
other things, a term of employment through November 30, 2010 and salary at an
annual rate of $240,057. Total 2008 cash compensation (salary and
bonus) of Jose Gomez was $480,210, which includes the payment of a $240,000
severance payment in October 2008 which was paid in accordance with a transition
agreement entered into between Hollywood Media and Mr. Gomez that reduced the
severance payment that would have been payable by Hollywood Media under Mr.
Gomez’s employment agreement.
From April 2007 through March 2009,
Hollywood Media employed David Silvers, the son of Laurie S. Silvers and the
stepson of Mitchell Rubenstein, in business development and legal positions, not
as an executive officer. Mr. Silvers, who received a JD from the
University of Miami School of Law in 2004 and an MBA from the University of
Miami School of Business in 2005, was employed by Hollywood Media on an at will
basis at an 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 Media’s Chief Executive
Officer and Chairperson of the Board, and Laurie S. Silvers, Hollywood Media’s
President and Vice-Chairperson of the Board. Pursuant to the purchase
agreement, R&S Investments acquired Hollywood Media’s 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 included: (i) Hollywood Media’s Hollywood.com, Inc. subsidiary,
which owned the Hollywood.com website and related URLs and celebrity fan
websites. Hollywood.com features in-depth movie information including movie
showtimes listings, celebrity biographical data, and celebrity photos primarily
obtained by Hollywood.com through licenses with third party licensors which are
made available on the Hollywood.com website and mobile platform. Hollywood.com
also has celebrity fan sites and a library of feature stories and interviews
which incorporate photos and multimedia videos taken at entertainment events
including movie premiers and award shows; and (ii) Hollywood Media’s
Totally Hollywood TV, LLC subsidiary, which owned Hollywood.com Television, a
free video on demand service distributed pursuant to annual affiliation
agreements with certain cable operators for the distribution of movie trailers
to subscribers of those cable systems. 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 contractually obligated 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 prior to August 21, 2011, Hollywood Media
will also receive 5 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 up to a maximum of $2.6 million 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 an
agreement 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 such agreement, 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 such agreement is through November 21,
2009, but Hollywood Media substantially completed the transfer of all functions
covered by such agreement by December 31, 2008.
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 Media’s 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
Media’s 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 Media’s
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 discussed 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 Media’s Audit Committee or Compensation Committee. There are no
transactions since the beginning of 2008 required to be reported under paragraph
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
Shareholder
Proposals for Inclusion in Next Year’s Proxy Statement under SEC Rule
14a-8
Any
shareholder proposal sought to be included in Hollywood Media’s proxy materials
for the 2010 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, 2010, provided, however, that if the 2010
Annual Meeting is called for a date that is not within thirty days before or
after December 21, 2010, 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 2010 Annual Meeting. Such proposals must be
received at Hollywood Media’s 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 Year’s Annual Meeting
Under
applicable requirements, including Hollywood Media’s Bylaws, any shareholder
proposal that is not intended for inclusion in Hollywood Media’s proxy materials
(i.e., a shareholder proposal submitted outside the processes of Rule
14a-8), and all director nominations by shareholders, for Hollywood Media’s 2010
Annual Meeting of Shareholders must be received by Hollywood Media no later than
August 23, 2010 and no earlier than July 24, 2010, provided, however, that if
the 2010 Annual Meeting is called for a date that is not within thirty days
before or after December 21, 2010, 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 2010 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 Media’s 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 Media’s Bylaws referenced below. If the chairman of the 2010 Annual
Meeting determines that a shareholder proposal or director nomination was not
made in accordance with applicable requirements including Hollywood Media’s
Bylaws, then such proposal or nomination will not be presented for a vote of
shareholders at the 2010 Annual Meeting.
Advance
Notice Requirements for Proposals and Director Nominations by
Shareholders.
Hollywood
Media’s Bylaws and SEC rules contain certain requirements for shareholders to
provide advance written notice of proposals of business or director nominations
by Hollywood Media’s 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 Media’s
Bylaws which are filed as an exhibit to Hollywood Media’s Form 8-K report filed
with the SEC on September 5, 2006.
Notice of Shareholder Business At
Annual Meeting. Hollywood Media’s 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 shareholder’s 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 shareholder’s 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 Media’s 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 shareholder’s 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 first occurs. To be in
proper written form, a shareholder’s 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 Media’s Annual Report on Form 10-K (excluding exhibits) as filed with
the SEC for the fiscal year ended December 31, 2008 accompanies these proxy
materials. Copies of exhibits to the Form 10-K will be furnished on request,
upon payment of Hollywood Media’s 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, 2009
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 21, 2009 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)
Annual
Meeting of Shareholders of
HOLLYWOOD
MEDIA CORP.
December
21, 2009
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 T
1. ELECTION OF DIRECTORS:
£ FOR
ALL NOMINEES
£ WITHHOLD AUTHORITY
FOR ALL NOMINEES
£ FOR ALL EXCEPT
(See instructions below)
|
Nominees:
Mitchell Rubenstein
Laurie S. Silvers
Harry T. Hoffman
Robert
D. Epstein
Spencer
Waxman
Stephen
Gans
|
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, 2009:
|
FOR
AGAINST ABSTAIN
£
£ £
|
|
|
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 2009 Annual
Meeting, and (2) Hollywood
Media Corp.’s 2008 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.
|
£
|
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.
|
Important Notice Regarding the
Availability of Proxy Materials for the Annual Meeting of Shareholders to be
held on December 21, 2009: The Notice of Annual Meeting and
Proxy Statement for Hollywood Media Corp.’s 2009 Annual Meeting and Hollywood
Media Corp.’s Annual Report on Form 10-K for the year ended December 31, 2008
are available in the “Investor Relations” section of Hollywood Media Corp.’s
corporate website at www.hollywoodmedia.com.