Great Hill Investors DFAN14A Additional proxy materials by non-management

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

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Securities Exchange Act of 1934

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¨ Definitive Consent Statement

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¨ Soliciting Material Pursuant to §240.14a-12

VITACOST.COM, INC.

(Name of Registrant as Specified in its Charter)

GREAT HILL INVESTORS, LLC

GREAT HILL EQUITY PARTNERS III, L.P.

GREAT HILL EQUITY PARTNERS IV, L.P.

CHRISTOPHER S. GAFFNEY

MICHAEL A. KUMIN

(Name of Person(s) Filing Consent Statement, if Other Than the Registrant)

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(1) Amount Previously Paid:

(2) Form, Schedule or Registration Statement No.:

(3) Filing Party:

(4) Date Filed:

The

Case

for

Change

at

Vitacost.com,

Inc.

(NASDAQ:

VITC)

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2

Executive Summary

On

March

23,

2010,

Great

Hill

Equity

Partners

IV,

LP

and

certain

of

its

affiliates

(“Great

Hill”)

acquired

5.4

million

shares

of

common

stock

of

Vitacost.com,

Inc.

(the

“Company”

or

“Vitacost”),

amounting

to

a

19.7%

stake.

Great

Hill

purchased the shares at a price of $11.25 per share through three separately negotiated transactions, allowing the

Company’s co-founder and former CEO, as well as two other shareholders, to divest their stake in Vitacost

Great Hill is:

–

Two investment professionals employed by Great Hill with collectively over 35 years of experience

creating equity value for growth-oriented investors, particularly in the eCommerce, direct marketing and

Internet sectors; and

–

Two

candidates

with

significant

CEO-

and

Chairman

of

the

Board-level

experience

operating

and

growing

Internet companies

Our nominees will seek to enhance the Company’s management oversight, 

Board-level effectiveness, and corporate governance practices to improve

operational performance and enhance shareholder value

•

Soliciting consents in favor of the removal of four existing directors and the appointment of four new, highly-

qualified candidates to Vitacost’s Board of Directors

•

Proposing a number of voluntary self-restrictions, in addition to the restrictions that already prohibit an

acquisition of Vitacost by Great Hill without a supermajority vote of Vitacost’s outstanding stock (through March

2013), to demonstrate Great Hill’s clear alignment with fellow shareholders and to remove any concern that

Great Hill is attempting to acquire Vitacost without paying a control premium

3

Why Vitacost

needs better strategic oversight

Operational underperformance since going public

•

Manufacturing

problem

in

Q1

2010

during

the

Company’s

seasonally

strongest

quarter

and

only

months

after

the

IPO

(1,2)

•

Inability

to

manage

shipping

logistics

/

costs

(split-shipping

items

to

customers)

(3)

•

Significantly

higher

incidences

of

back-order

volume

vs.

historical

norms

(2)

•

Mix

shift

away

from

high-margin

proprietary

products

to

third-party

branded

products

(3)

High turnover in the critically important yet underperforming manufacturing department

•

Eigerwand

Bjornstad,

Vice

President

of

Manufacturing,

resigned

in

December

2009;

Company

announced

hiring

of

John

Young,

Director

of

Manufacturing,

on

January 5, 2010 and terminated his employment shortly thereafter

•

No

replacement

found

to

date;

CEO,

who

has

no

manufacturing

experience,

now

directly

responsible

for

Vitacost’s

vital

manufacturing

operations

Poor Board-level governance to date

•

Current members of the Board of Directors lack any relevant prior public company director experience and have no direct experience operating Internet,

eCommerce

or direct marketing businesses

•

Board

of

Directors

approved

the

adoption

of

a

shareholder

rights

plan

(“poison

pill”)

on

March

24,

2010

without

seeking

shareholder

approval

and

will

not

submit

it

for shareholder approval until 2012 at the earliest, if at all

Company over-promised and under-delivered

•

Communicated a “growth strategy”

(4)

to market prior to IPO, then subsequently issued revenue guidance for Q4 2009 that implied flat quarter-over-quarter growth

•

Raised outlook for Q1 2010 and then reduced outlook only 2 months later

–

Revised Q1 2010 outlook to $57.0-$57.5 million in revenue and $0.08-$0.09 in EPS from $58.0-$60.0 million and $0.14-$0.15, respectively

–

Revised FY 2010 outlook to $235-$245 million in revenue and $0.40-$0.50 in EPS from $245-$255 million and $0.56-$0.63, respectively

The results speak for themselves

This

is

a

critical

year

for

Vitacost

as

it

is

in

the

middle

of

a

plan

to

expand

and

further

automate

a

distribution

center,

expand

its

SKU

count

by

almost

3x

and

bring

more

proprietary

production

in-house.

(5)

Vitacost

needs an experienced Board of Directors capable of helping management execute on its

strategic and operational plans 

(1)

Benchmark Capital, April 21, 2010

(2)

Needham & Company, April 21, 2010

(3)

Roth Capital Partners, April 21, 2010

(4)

Vitacost.com, Inc. Prospectus, September 23, 2009

(5)

Jefferies & Company, Inc., April 21, 2010

4

Relative to the Boards of Directors at comparable companies, Vitacost’s

Board lacks relevant experience

Total Board Members

7

8

6

Prior public or private company Board

experience

0.0%

(0 of 7)

87.5%

(7 of 8)

100.0%

(6 of 6)

Prior eCommerce

experience

0.0%

(0 of 7)

62.5%

(5 of 8)

83.3%

(5 of 6)

Prior marketing experience

0.0%

(0 of 7)

37.5%

(3 of 8)

16.7%

(1 of 6)

Source: SEC filings for Vitacost.com, Inc., Blue Nile, Inc. and drugstore.com, inc.

Note: Percentages reflect number of Board Members that fulfill the appropriate qualification

REPRESENTATIVE EXAMPLES

5

Stock price performance since IPO

Note: Data from September 24, 2009 to May 24, 2010

November 4, 2009: Issued

Q4 2009 revenue guidance

of $48.0-$49.0 million,

implying flat growth on a

sequential basis

February 18, 2010:

Provided strong Q1

2010 and FY 2010

guidance

March 24, 2010:

Board of Directors

approved the

adoption of

“poison pill”

April 21, 2010: Revised

Q1 2010 and FY 2010

guidance significantly

downward

6

Consent solicitation

Vitacost

shareholders are permitted to act by written consent

Great Hill is asking shareholders to consent to the following proposals:

•

Proposal 1:

amend Vitacost’s

bylaws to allow shareholders to fill vacancies on the Board

•

Proposal

2:

remove

four

current

directors

(Eran

Ezra,

Stewart

L.

Gitler,

David

N.

Ilfeld

and

Lawrence

A.

Pabst) 

•

Proposal

3:

elect

Great

Hill’s

four

nominees

(Christopher

S.

Gaffney,

Mark

A.

Jung,

Michael

A.

Kumin

and

Jeffrey

M.

Stibel)

Proposal 2 and Proposal 3 are contingent upon the adoption of Proposal 1

Under Delaware law, each Proposal will become effective when written consents from shareholders holding a majority of the 

outstanding shares (approximately 13.8 million shares) are delivered to the Company

Great Hill has 60 days from the date of the earliest dated consent to deliver sufficient consents

Consents

must

be

signed

and

dated

to

be

valid

7

Great Hill’s nominees for Vitacost’s

Board of Directors

(1)

Assumes total invested capital of ~$150 million and total return

to shareholders of ~$650 million

(2)

From July 28, 2005, the date on which Mr. Stibel

was hired by Interland, until September 30, 2009, the

date on which he resigned from Web.com

Group, Inc.

respectively;

sold

company

to

News

Corp.

for

$650

million,

creating

$500

million

of

value

in

24

months

(1)

capitalization

increased

approximately

400%

under

his

management

(2)

;

Web.com,

Inc.

(NASDAQ:

WWWW),

which

was

Christopher Gaffney

•

Co-Founder and Managing Partner, Great Hill Partners

•

Private equity investor since 1986; over 20 years experience

•

Has delivered approximately $1 billion in sales proceeds to investors on Internet sector investments since 2005, specifically

•

Current Board participation: LECG Corporation (NASDAQ: XPRT); Jobing, Inc.; Central Security Group, Inc.; and Dental

Economics, LLC

•

Has served on boards of over 25 public and private companies to date, including BuscaPé.com, Inc., IGN Entertainment, Inc.

and SmartMail, LLC

Mark Jung

•

Prior CEO of VUDU, Inc., a digital technology and services provider; subsequently acquired by Wal-Mart Stores Inc.

•

Prior CEO of IGN Entertainment, Inc. where he helped to grow revenue and EBITDA approximately 300% and 1,000%, 

•

Current board participation: Pioneers of the Inevitable (dba Songbird) (open-source customizable music player); Playhaven

(mobile gaming community); 3PAR (NYSE: PAR) (computer information storage manufacturer); and Metacafe (online short-

form original content video site)

Michael Kumin

•

Partner, Great Hill Partners; private equity investor with over 11 years experience

•

Has delivered approximately $1 billion in sales proceeds to investors on Internet sector investments since 2005, specifically

•

Formerly with Apollo Management, a $10 billion private investment partnership, and Goldman Sachs

•

Current board participation: Spark Networks, Inc. (online consumer subscription services company; AMEX: LOV); Evolve

Media (privately held online consumer media services company); and Jobing, Inc. (provider of online recruitment services)

•

Former Board member of BuscaPé.com, Inc. and IGN Entertainment, Inc.

Jeffrey Stibel

•

Senior executive-level experience at numerous public companies, including Interland (NASDAQ: INLD), where market 

acquired by Website Pros (NASDAQ: WSPI) for $127 million; and United Online (NASDAQ: UNTD), where revenue grew

approximately 700% during his tenure

•

Founded and subsequently sold Simpli.com, a search engine marketing company, to NetZero for $24 million

•

Current board participation: Autobytel (NASDAQ: ABTL); BrainGate; The Search Agency; and EdgeCast Networks, Inc.

8

Great Hill’s nominees will seek to:

Ensure that Vitacost’s growth and expansion plans are effectively implemented by management

•

Further automate distribution centers

•

Expand SKU count

•

Manufacture a higher proportion of products in-house

•

Integrate ERP system with existing software infrastructure

•

Identify new key leadership to manage critical manufacturing function

•

Maintain existing customer relationships and optimize new customer acquisition through targeted direct

marketing campaigns

Provide management with appropriate Board-level input going forward, leveraging the nominees’

expertise

•

Great Hill’s nominees have relevant experience operating, managing and advising private and publicly-traded

eCommerce, direct marketing, and branded consumer retail businesses

•

Great Hill’s nominees have a strong track record of building strategic assets through organic growth initiatives

and accretive acquisitions, driving improved operating performance, both in terms of revenue growth and

profitability, and ultimately creating shareholder value

Redeem the Company’s poison pill

•

Prevents long-term, growth-oriented investors such as Great Hill from purchasing additional

shares to support

the stock

9

Great Hill is not seeking control of Vitacost

Great

Hill

is

subject

to

Delaware’s

“interested

stockholder”

statute

(DGCL

Section

203)

Upon the election of Great Hill’s four nominees to the Board of Directors, Great Hill will voluntarily enter into a

standstill agreement with the following provisions:

Voting Restriction:

Affiliate Transactions:

Great Hill only wants to be a partner with Vitacost, its management and its

shareholders to grow Vitacost

and to enhance value for all shareholders

•

Until

March

23,

2013,

Great

Hill

cannot

acquire

Vitacost

without

the

approval

of

Vitacost’s

Board

and

66²/3%

of

the outstanding stock which is not owned by Great Hill

•

Non-waivable; Great Hill has no ability to render these restrictions inapplicable

•

For

three

years,

if

Great

Hill

acquires

more

than

30%

of

Vitacost’s

stock,

Great

Hill

will

agree

to

vote

all

shares

in excess of such amount in proportion to the votes cast by those shareholders not affiliated with Great Hill

•

Great Hill will agree to an indefinite prohibition against affiliate transactions unless approved by a majority of

Vitacost’s

independent board members, excluding those nominated by Great Hill

10

Profile of Great Hill Partners

About Great Hill Partners

Overview

Boston-based private equity firm

$2.7 billion under management

20 investment professionals

Long-term, growth oriented

Research driven strategy

Target Investment Size

$50-$150 million in equity

Areas of Focus

Business Services

Consumer Services

eCommerce

Education

Financial Services

Financial Technology

Healthcare

Internet

Logistics

Media/Communications

Online Services

Software

Technology Services

Transaction Processing

Deal Characteristics

Market or niche leader

Recurring revenue

Operating leverage

Experienced management

Transaction Types

Growth Equity

Recapitalizations

Consolidations

Buyouts

Great Hill Partners Funds

2008

Great Hill Equity Partners IV, LP

$1.1 billion

2006

Great Hill Equity Partners III, LP

$750 million

2001

Great Hill Equity Partners II, LP

$460 million

1999

Great Hill Equity Partners, LP

$330 million

Representative Investments

Experience

80+ Portfolio Company Investments

$5B+ Raised in 100+ Debt Transactions

250+ Consolidating Acquisitions

BillMatrix

Corporation

Latisys

Corp.

BuscaPé.com, Inc.*

Passport Health

CAM Commerce Solutions

PayChoice

Custom House

Prommis Solutions

Global Tower Partners

SmartMail, LLC*

GMT Group

SecureWorks, Inc.

IGN Entertainment, Inc.*

Spark Networks

Jobing, Inc.

*details follow

11

Great Hill Partners’

Representative Past Investments: BuscaPé.com, Inc.

Latin American online

comparison shopping

Acquired by

Naspers Limited

$374,000,000

•

BuscaPé.com, Inc., (“BuscaPé.com”) founded in 1999 in São Paulo, is the leading

eCommerce

platform

in

Latin

America,

providing

online

comparison

shopping

services,

free classifieds,

lead

generation,

electronic

payments,

eCommerce

anti-fraud

solutions

and market research

•

Great Hill invested in BuscaPé.com

in December 2005 and Board members Michael

Kumin

and Christopher Gaffney helped the company to capitalize on and

to extend its

leading brand in Brazil through organic growth and acquisitions,

enabling the company to

increase revenue over 400%

-

Positioned BuscaPé.com

to acquire its leading competitor, Bondfaro

-

Extended the company’s leadership across Latin America through the introduction

of local shopping sites in Argentina, Chile, Colombia and Mexico

-

Broadened portfolio of services to include, among others, QueBarato, the leading

free-classifieds network in Latin America; Lomadee, an affiliate advertising

network; Pagamento

Digital, a provider of electronic payments solutions; and eBit,

an eCommerce

research business

-

Augmented management team by filling open positions with select senior hires

(CFO, COO and VP of Financial Services, among others)

•

Based on the strength of BuscaPé.com’s

competitive positioning in Latin America,

Naspers Limited (JSE: NPN; LSE: NPSN), the global media conglomerate, acquired the

Company for $374 million in September 2009.  Great Hill netted a cash-on-cash return

of approximately 7.8x and an internal rate of return of more than 70%

12

Great Hill Partners’

Representative Past Investments: IGN Entertainment, Inc.

Online destination for

video game enthusiasts

Acquired by

News Corporation

$650,000,000

•

IGN Entertainment, Inc. (“IGN”) is the Internet's leading information, entertainment and

eCommerce destination for video game enthusiasts, providing both

free and paid content

and services

•

Great Hill invested in IGN in August 2003, and Board members Michael Kumin and

Christopher Gaffney helped the company to capitalize on its position as a leader in a

niche online sector and to serve as a platform for accretive acquisitions

-

Investment positioned IGN to acquire its primary competitor, GameSpy, as well as

a number of other strategic online brands, including Rotten Tomatoes, an online

destination for movie enthusiasts, and AskMen.com, a leading male lifestyle

website

-

Launched Direct-to-Drive, the company’s fast-growing eCommerce website

-

Increased scale with continued profitability enhancement

-

Augmented management team with select senior hires (CFO, President and VP of

Business Development, among others)

•

During Great Hill’s two year investment, revenue and EBITDA grew approximately 300%

and 1,000%, respectively

•

News Corp. pre-empted an imminent IPO with the acquisition of the business for $650

million

•

The $650 million sale resulted in over $500 million of value creation in just 24

months for shareholders, including Great Hill, the company’s lead shareholder. 

Great Hill realized a cash-on-cash return of approximately 10.5x and an internal

rate of return of approximately 230%

13

Great Hill Partners’

Representative Past Investments: SmartMail, LLC

Delivery network

for small parcels

Acquired by

Deutsche Post

Global Mail USA

$390,000,000

•

SmartMail, LLC (“SmartMail”) is a leading provider of expedited shipping services for

lightweight packages (less than 5 lbs.) and flat-sized mail. The company's logistics

services allow business shippers to save up to 75% relative to comparable USPS and

UPS shipping rates 

•

Great Hill invested in SmartMail in August 1999 and Board member

Christopher Gaffney

supported the management team as it went to work implementing the vision of building a

national shipping network, recruiting management, implementing logistics systems, and

opening new locations

-

Developed new service offerings, including deferred shipping, parcel delivery and

international shipping

-

Expanded the size and enhanced the quality of the salesforce

-

Augmented management team with select senior hires (EVP of Sales

and

Marketing and EVP of Operations, among others)

-

Positioned the company to acquire the number two player in the market,

DropShip, which solidified SmartMail as the market leader in its

sector

•

During Great Hill’s investment period, revenue and EBITDA increased approximately

300% and 2,500%, respectively, attracting the attention of Wall Street and strategic

acquirors

•

SmartMail was positioned for an IPO in May 2004 before Deutsche Post USA (DHL)

acquired the business for $390 million, resulting in a cash-on-cash return of

approximately 8.3x and an internal rate of return of approximately 59% for Great

Hill

14

History of Great Hill’s involvement with Vitacost

•

Great Hill had several discussions with the management team of Vitacost and completed substantial due diligence of the

Company in early-2008 when the Company was exploring a potential recapitalization and funding of an initial manufacturing

in-sourcing initiative

•

Great Hill continued to track the Company’s progress through its IPO in September 2009

•

Subsequently met with Company management to evaluate potential opportunities to purchase shares from a number of large

inside shareholders and smaller investors

•

Great Hill engaged Wayne Gorsek, co-founder of Vitacost, in late-January 2010 regarding the potential sale of his ~17%

stake in the Company; Great Hill subsequently identified two additional shareholders interested in liquidating their positions

•

Great Hill engaged in a series of discussions with Vitacost management and select Board members detailing ways in which

Great Hill could work with the Company to effectuate a large block purchase of secondary shares and participate

on the Company’s Board of Directors.  These conversations did not result in any agreement on how to structure a transaction

•

On March 23, 2010, Great Hill acquired a 19.7% ownership stake in Vitacost from three selling shareholders, including

Wayne Gorsek; as part of transaction, Great Hill received a perpetual release and standstill from Mr. Gorsek that protects the

Company

•

On March 24, 2010, Vitacost announced that its Board of Directors approved the adoption of a poison pill; subsequently, on

March 25, 2010, Michael Kumin had a conversation with Vitacost’s CEO to discuss Great Hill’s surprise and

disappointment with the Board of Directors’ decision to adopt a poison pill and not engage in any conversations with Great Hill

•

On April 20, 2010, after a series of requests by Great Hill to engage with the Company, Michael Kumin and Christopher

Gaffney met with Ira Kerker and Stewart Gitler to discuss the Company’s poison pill, the issues surrounding the Company’s

revised downward guidance for Q1 2010 and FY 2010 and Great Hill’s interest in enhancing the current Board of Directors;

since that meeting, the Company has been largely unresponsive to Great Hill’s attempts to discuss significant Board

representation

•

Great Hill would have preferred a consensual resolution to our concerns, but after being rebuffed by Vitacost on multiple

occasions, we felt it necessary to take action to protect our investment

15

($ in millions)

Company

Share

Price

(1)

Market

Capitalization

Firm Value

CY2009A-10E

Revenue

Growth (%)

(2)

CY2010E

EBITDA

(2)

Firm Value /

CY2010E EBITDA

Amazon

$122.12

$54,425.4

$50,091.8

35.0%

$2,598.0

19.3x

Vistaprint

$44.71

$1,955.5

$1,860.5

25.5%

$156.6

11.9x

Blue Nile

$47.11

$683.3

$659.9

15.2%

$32.4

20.4x

Vitamin Shoppe

$23.44

$632.4

$777.0

10.3%

$79.1

9.8x

Drugstore.com

$3.16

$334.3

$318.4

16.3%

$18.0

17.7x

Median

$683.3

$777.0

16.3%

$79.1

17.7x

Average

$11,606.2

$10,741.5

20.5%

$576.8

15.8x

Vitacost

$9.59

$263.6

$237.4

23.7%

$26.6

8.9x

The “opportunity cost”

of shareholder inaction

“While we continue to believe VITC is well positioned and its business model is sound, our

confidence in management’s ability to execute has clearly been shaken.  Thus, given our

lack of visibility into the ultimate resolution of these issues and their impact on VITC’s

reputation, we are hard pressed to recommend the stock”-

Leading Analyst

(5)

(1)

As of May 24, 2010

(2)

Based on Bloomberg consensus estimates as of  

May 24, 2010

(3)

As of March 31, 2010, per Vitacost.com

Inc. 10-Q

•

Vitacost

currently

trades

at

a

significant

discount

to

its

peers

based

on

a

Firm

Value

/

CY2010E

EBITDA

trading

multiple

(8.9x vs. peer median multiple of 17.7x)

•

Assuming Vitacost

were to trade at the median peer multiple of 17.7x, that would imply a share price of $17.47, which is

82.2% higher than the closing share price of $9.59 on May 24, 2010

(4)

Assumes 2.2 million options exercisable; as of

March 31, 2010

(5)

Oppenheimer & Co. Inc.; permission to quote

neither sought nor obtained

Vitacost

CY2010E EBITDA

$26.6

Median Peer Multiple

17.7x

Implied Firm Value

$471.2

Less: Debt (3)

($9.6)

Plus: Cash and ST investments (3)

44.3

Plus: Option Strike Proceeds (4)

12.3

Equity Value

$518.2

Total Fully Diluted Shares Outstanding (4)

29.7

Implied Share Price

$17.47

Premium to current (%)

82.2%

16

Appendix

Detailed

profiles

of

Great

Hill’s

nominees

•

Christopher Gaffney (page 17)

•

Mark Jung (page 18)

•

Michael Kumin

(page 19)

•

Jeffrey Stibel

(page 20)

17

Nominee profile: Christopher Gaffney

Christopher Gaffney is one of the co-founders of Great Hill Partners, a Boston-based

private equity firm with $2.7 billion under management focused on growth companies

under

$1 billion in enterprise value.  As a Managing Partner, he shares responsibility for

the general management, investment policy, fund raising and investor relations at Great

Hill Partners.  He also continues to actively pursue new investments and manage

portfolio companies.

Chris’s investing experience includes companies serving business services, online

services, financial services, consumer services, publishing and information, IT services,

telecommunications, logistics, education, insurance, cable and broadcasting.  He

currently serves as a director for a diverse set of portfolio companies, including: LECG

Corporation (NASDAQ: XPRT); Jobing, Inc.; Central Security Group, Inc.; and Dental

Economics, LLC.  Chris has served on the boards of numerous public and private

companies including Great Hill Partners’

portfolio companies: SmartMail, LLC;

BuscaPé, Inc.; and IGN Entertainment, Inc.  He has participated in the private equity

business since 1986, serving as an Associate, Principal, and General Partner for

Media/Communications Partners, a predecessor organization to Great Hill.  Chris began

his career as a commercial lending officer for the First National Bank of Boston in the

specialized media lending unit.

Chris has a degree in Accounting and Economics summa cum laude from Boston

College.

Chris

currently

serves

on

the

Board

of

Trustees

at

The

Wolf

School,

a

special

needs secondary school in Rhode Island.

•

Co-Founder and Managing

Partner, Great Hill Partners

•

Private equity investor since

1986; over 20 years

experience

•

Has delivered

approximately $1 billion in

sales proceeds to investors

on Internet sector

investments since 2005

•

Has served on Boards of

over 25 public and private

companies to date

•

Current board participation:

LECG Corporation

(NASDAQ: XPRT); Jobing,

Inc.; Central Security

Group, Inc.; and Dental

Economics, LLC

18

Nominee profile: Mark Jung

•

Prior CEO of VUDU, Inc.;

prior CEO of IGN

Entertainment, Inc; sold

company to News Corp. for

$650 million, creating $500

million of value in 24 months

•

Current board participation:

Pioneers of the Inevitable

(dba

Songbird) (open-source

customizable music player);

Playhaven

(mobile gaming

community); 3PAR (NYSE:

PAR) (computer information

storage manufacturer); and

Metacafe

(online short-form

original content video site)

Mark recently served as the CEO of VUDU, Inc., a privately-held Internet digital

entertainment company that was subsequently acquired by Wal-Mart Stores, Inc.

(NYSE: WMT).  Prior to joining VUDU, Inc., Mark served as the Chief Executive Officer

of IGN Entertainment, Inc. (NASDAQ: IGNX), an information, entertainment and

eCommerce

destination for videogame and entertainment markets. From 2003 to 2005,

Mark grew IGN’s

revenue and EBITDA approximately 300% and 1,000%, respectively.

In 2005, IGN Entertainment was acquired by News Corp. (NASDAQ: NWSA) for $650

million.

After

the

acquisition,

Mark

joined

the

Fox

Interactive

Media

unit

of

News

Corp.,

serving as Chief Operating Officer.  Mark began his career at McKinsey & Company in

1983.

Mark currently serves as the Chairman of the Board of Pioneers of the Inevitable (dba

Songbird) and Playhaven.  He serves on the board of directors of 3PAR (NYSE: PAR),

Metacafe,

League

of

American

Orchestras

and

Right

To

Play.

Mark

is

also

a

member

of the Board of Governors of the San Francisco Symphony and a member of the

Golden Gate Chapter of Young Presidents Organization.

Mark received a Bachelor of Science in Electrical Engineering from Princeton University

and an MBA from Stanford University. 

19

Nominee profile: Michael Kumin

Michael Kumin

is a partner at Great Hill Partners, a Boston-based private equity firm

with $2.7 billion under management focused on growth companies under $1 billion in

enterprise

value.

Michael

focuses

on

originating

and

evaluating

investment

opportunities

in

the

media,

Internet,

software,

and

business

and

consumer

services

sectors.

Michael

currently

serves

on

the

Board

of

Directors

for

Spark

Networks,

Inc.

(AMEX: LOV), a publicly-traded company, Evolve Media and Jobing, Inc.  Michael's

prior board seats include BuscaPé.com, Inc., IGN Entertainment, Inc. and Action Media

Holdings, LLC.

Prior to joining Great Hill, Michael served as a co-founder and Executive Vice President

of Creative Planet, Inc., a venture-backed information and technology company

targeting the entertainment industry. Prior to forming Creative Planet, he served as an

Associate

at

Apollo

Management,

a

$10

billion

private

investment

partnership,

where

he

worked with companies in a wide range of industries including media and

communications, financial services and healthcare. He began his investing career as an

analyst with Goldman Sachs' Whitehall funds, focusing on real estate and

restructurings.

Michael received his Bachelor of Arts with honors from the Woodrow Wilson School of

Public & International Affairs at Princeton University.

•

Partner, Great Hill Partners

•

Has delivered approximately

$1 billion in sales proceeds to

investors on Internet sector

investments since 2005

•

Began private equity career in

1994; formerly with Apollo

Management, a $10 billion

private investment partnership,

and Goldman Sachs

•

Current board participation:

Spark Networks, Inc. (online

consumer subscription

services company; AMEX:

LOV); Evolve Media (privately-

held online consumer media

services company); and

Jobing, Inc. (online

recruitment)

20

Nominee profile: Jeffrey Stibel

Jeffrey

Stibel

currently

serves

as

the

CEO

of

the

consulting

firm

Stibel

Solutions.

Jeffrey

is an entrepreneur and business executive that has helped to start and to grow a

number of publicly-traded and private companies.  He was previously CEO of Interland

(NASDAQ: INLD), where he successfully grew the company’s market capitalization

approximately 400%.  Interland changed its name to Web.com, Inc.

(NASDAQ:

WWWW) in 2006,

and was later acquired by Website Pros (NASDAQ: WSPI; now

known as Web.com Group, Inc. trading on the NASDAQ under the symbol WWWW) in

September 2007 for $127 million. 

Prior

to

Web.com,

Inc.,

Jeffrey

was

General

Manager

and

SVP

at

United

Online

(NASDAQ: UNTD), a technology company that owns and operates leading web

services, including NetZero, Juno, and Classmates.com.  During his tenure, United

Online

grew

revenue

approximately

700%.

Prior

to

United

Online,

Stibel

founded

Simpli.com,

a

search

engine

marketing

company

he

sold

to

NetZero

for

$24

million

and

which is currently owned by ValueClick (NASDAQ: VCLK).

Jeffrey

currently

serves

on

the

board

of

directors

for

Autobytel

(NASDAQ:

ABTL),

an

automotive marketing services company, and several private companies, including

BrainGate, a technology company; The Search Agency, an Internet company; and

EdgeCast

Networks,

Inc.,

an

Internet

company.

He

also

serves

on

the

Board

of

Brown

University’s Entrepreneurship Program and Tufts University’s Gordon Center for

Leadership.

Jeffrey currently writes for Harvard Business School Publishing and has authored

numerous articles and books on a variety of subjects.  In 2009, Jeffrey authored his first

book,

Wired

for

Thought,

which

was

recently

published

by

Harvard

Business

School

Press. He is the named inventor on the U.S. patent for search engine interfaces.  Jeffrey

studied business at MIT’s Sloan School and received his Master's degree from Brown

University where he was the recipient of the Brain and Behavior Fellowship.

•

Executive-level

experience at

numerous public

companies, including

Interland, Web.com,

Inc. and United Online

•

Founded and

subsequently sold

Simpli.com, a search

engine marketing

company to NetZero for

$24 million

•

Current board

participation: Autobytel

(NASDAQ: ABTL);

BrainGate; The Search

Agency; and EdgeCast

Networks, Inc.