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þ | No fee required. | |
o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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2. | To ratify the appointment of KPMG LLP as independent auditor for the Company for the fiscal year ending December 31, 2006 (Item 2 on the proxy card). |
PLEASE EXECUTE, DATE AND RETURN PROMPTLY THE ENCLOSED
PROXY CARD IN THE POSTAGE-PAID ENVELOPE PROVIDED OR
VOTE VIA THE INTERNET OR TOUCH-TONE TELEPHONE.
• | vote FOR the election of the Company’s Class I nominee; and | |
• | vote FOR the ratification of KPMG LLP as the Company’s independent auditor. |
• | Election of Director. The affirmative vote of the holders of a majority of the shares represented in person or by proxy at the meeting and entitled to vote will be required for the election of one Class I director. A properly executed proxy marked “WITHHOLD” with respect to the election of a director will not be voted with respect to the director indicated, although it will be counted for purposes of determining whether there is a quorum. | |
• | Ratification of Auditors. The affirmative vote of the holders of a majority of the shares represented in person or by proxy at the meeting and entitled to vote will be required for the ratification of KPMG as the Company’s independent auditor. The Company’s By-Laws do not require the Company to submit this proposal to the stockholders; however, the Board believes that it is of sufficient importance to seek ratification. If the proposal is defeated, the Board will reconsider its selection of KPMG. | |
• | Other Items. For each other item which properly comes before the meeting, the affirmative vote of the holders of a majority of the shares represented in person or by proxy at the meeting and entitled to vote on the item will be required for approval. |
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Term Expiring at the Annual Meeting in 2009
Common | Options | Total | Percentage of | |||||||||||||
Shares | Exercisable | Beneficial | Outstanding | |||||||||||||
Name | Owned | Within 60 Days | Ownership | Stock | ||||||||||||
Don R. Kornstein | 0 | 0 | 0 | — |
Term Expiring at the Annual Meeting in 2007
Common | Options | Total | Percentage of | |||||||||||||
Shares | Exercisable | Beneficial | Outstanding | |||||||||||||
Name | Owned | Within 60 Days | Ownership | Stock | ||||||||||||
Eric Langshur | 0 | 0 | 0 | * |
Term Expiring at the Annual Meeting in 2008
Common | Options | Total | Percentage of | |||||||||||||
Shares | Exercisable | Beneficial | Outstanding | |||||||||||||
Name | Owned | Within 60 Days | Ownership | Stock | ||||||||||||
Charles J. Burdick | 0 | 0 | 0 | — | ||||||||||||
Barry R. Elson | 0 | 0 | 0 | — |
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Common | Options | Total | Percentage of | |||||||||||||
Shares | Exercisable | Beneficial | Outstanding | |||||||||||||
Beneficial Owner | Owned | Within 60 Days | Ownership | Stock* | ||||||||||||
Marc D. Bassewitz | 130,000 | 24,335 | 154,335 | ** | ||||||||||||
Ronald G. Eidell | 0 | 0 | 0 | — | ||||||||||||
William Fanelli | 40,222 | 256,667 | 296,889 | ** | ||||||||||||
Harold Morgan | 55,921 | 233,334 | 289,255 | ** | ||||||||||||
John H. Wildman | 60,000 | 238,334 | 298,334 | ** | ||||||||||||
Charles J. Burdick | 0 | 0 | 0 | — | ||||||||||||
Barry R. Elson | 0 | 0 | 0 | — | ||||||||||||
Eric Langshur | 0 | 0 | 0 | — | ||||||||||||
Don R. Kornstein | 0 | 0 | 0 | — | ||||||||||||
John W. Rogers, Jr. | 10,000 | 0 | 10,000 | ** | ||||||||||||
Steven S. Rogers | 0 | 1,667 | 1,667 | ** | ||||||||||||
All directors and executive officers as a group (15 persons) | 540,493 | 949,673 | 1,490,166 | 3.6 | % |
* | Based on 41,286,512 shares of common stock outstanding. | |
** | Less than 1% of the outstanding common stock. |
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Total Beneficial | Percent of | |||||||
Name and Address of Beneficial Owner | Ownership | Outstanding Stock(1) | ||||||
Pardus Capital Management L.P.(2)(3) | 6,105,500 | 14.8 | % | |||||
1001 Avenue of the Americas, Suite 1100 | ||||||||
New York, New York 10018 | ||||||||
Emanuel R. Pearlman(2)(4) | 4,619,450 | 11.2 | % | |||||
Liberation Investment Group LLC(2)(4) | ||||||||
Liberation Investments, Ltd.(2)(4) | ||||||||
Liberation Investments, L.P.(2)(4) | ||||||||
11766 Wilshire Blvd. Suite #870 | ||||||||
Los Angeles, CA 90025 | ||||||||
Mark J. Wattles(2)(5) | 3,825,100 | 9.3 | % | |||||
Wattles Capital Management, LLC(2)(5) | ||||||||
7945 W. Sahara #205 | ||||||||
Las Vegas, NV 89117 | ||||||||
Dimensional Fund Advisors Inc.(2)(6) | 3,113,500 | 7.5 | % | |||||
1299 Ocean Ave, 11th Flr, | ||||||||
Santa Monica, CA 90401 | ||||||||
S.A.C. Capital Advisors LLC(2)(7) | 2,439,200 | 5.9 | % | |||||
72 Cummings Point Road | ||||||||
Stamford, CT 06902 | ||||||||
Everest Capital Limited(2) (8) | 2,414,778 | 5.8 | % | |||||
The Bank of Butterfield Building | ||||||||
65 Front Street, 6th Floor, | ||||||||
P.O. Box HM2458 | ||||||||
Hamilton HMJX Bermuda |
(1) | The Company had 41,286,512 common shares outstanding as of October 31, 2006. The “Percent of Outstanding Stock” was calculated by using the disclosed number of beneficially owned shares by the applicable beneficial owner and related entities, as a group, as the numerator and the number of the Company’s outstanding common shares as of October 31, 2006 as the denominator. | |
(2) | Represents a beneficial owner of more than 5% of the common stock based on the owner’s reported ownership of shares of common stock in filings made with the Securities and Exchange Commission pursuant to Section 13(d), 13(g) and 16(a) of the Securities Exchange Act of 1934, as amended and the attendant regulations. Information with respect to each beneficial owner is generally as of the date of the most recent filing by the beneficial owner with the SEC and is based solely on information contained in such filings. | |
(3) | Pardus European Special Opportunities Master Fund L.P., a limited partnership formed under the laws of the Cayman Islands (the “Fund”), is the holder of 6,105,500 shares of common stock. Pardus Capital Management, L.P. (“PCM”), a Delaware limited partnership, serves as the investment manager of the Fund and possesses sole power to vote and direct the disposition of all the shares held by the Fund. PCM is deemed to beneficially own 6,105,500 shares of common stock. | |
(4) | Liberation Investments, L.P. (“LILP”), a Delaware limited partnership, is the beneficial owner of 2,978,213 shares of common stock. Liberation Investments, Ltd. (“LILtd”), a private offshore investment corporation, is the beneficial owner of 1,606,237 shares of common stock. Mr. Pearlman is the direct beneficial owner of 35,000 shares of common stock, which vested upon the acquisition by Liberation of in excess of 10% of the common stock of the Company on May 4, 2005. Liberation Investment Group LLC (“LIG”), the general partner of LILP and discretionary investment adviser to LILtd, and Mr. Pearlman, the General Manager, Chief |
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Investment Officer and majority member of LIG, are indirect beneficial owners of the shares held by LILP and LILtd. | ||
(5) | Mark J. Wattles is the sole member and manager of Wattles Capital Management, LLC, a Delaware limited liability company, and owns 100% of its membership interests. | |
(6) | Dimensional Fund Advisors Inc. (“Dimensional”), an investment advisor registered under Section 203 of the Investment Advisors Act of 1940, furnishes investment advice to four investment companies registered under the Investment Company Act of 1940, and serves as investment manager to certain other commingled group trusts and separate accounts. These investment companies, trusts and accounts are the “Funds”. In its role as investment advisor or manager, Dimensional possesses votingand/or investment power and may be deemed to be the beneficial owner of the shares. Dimensional disclaims beneficial ownership of such securities. | |
(7) | S.A.C. Capital Advisors, LLC (“SAC Capital Advisors”) has shared voting power and shared investment power with respect to 2,439,200 shares of common stock; S.A.C. Capital Advisors, S.A.C. Capital Management, LLC (“SAC Capital Management”), and Mr. Steven Cohen do not directly own any shares. Pursuant to investment agreements, each of SAC Capital Advisors and SAC Capital Management share all investment and voting power with respect to the securities held by S.A.C. Capital Associates, LLC, S.A.C. Meridian Fund, LLC and S.A.C. MultiQuant Fund, LLC. Mr. Cohen controls each of SAC Capital Advisors and SAC Capital Management. Each of SAC Capital Advisors, SAC Capital Management and Mr. Cohen may be deemed to own beneficially 2,439,200 shares. Each of SAC Capital Advisors, SAC Capital Management, and Mr. Cohen disclaim beneficial ownership of any of these securities. | |
(8) | Everest Capital Limited is a Bermuda company. |
Number of Securities | ||||||||||||
Number of Securities | Remaining Available for | |||||||||||
to be Issued Upon | Weighted-average | Future Issuance Under | ||||||||||
Exercise of Outstanding | Exercise Price of | Equity Compensation Plans | ||||||||||
Options, Warrants and | Outstanding Options, | (Excluding Securities | ||||||||||
Rights | Warrants and Rights | Reflected in Column (a)) | ||||||||||
Plan Category | (a) | (b) | (c) | |||||||||
Plans approved by stockholders(1) | 3,985,514 | $ | 13.63 | 358,965 | ||||||||
Plans not approved by stockholders(2) | 153,000 | $ | 3.66 | 62,000 | ||||||||
Total | 4,138,514 | $ | 13.26 | 420,965 | ||||||||
(1) | The number of securities remaining for future issuance at December 31, 2005 consisted of 283,965 shares issuable under the Company’s 1996 Long-Term Incentive Plan (the “Incentive Plan”) and 75,000 shares under the Company’s 1996 Non-Employee Directors’ Stock Option Plan (which plans expired on January 3, 2006). In November 1997, June 1999, December 2000 and June 2002, the Incentive Plan was amended to increase the aggregate amount of shares outstanding that may be granted to an aggregate of 8,600,000. The Company’s stockholders approved the first two amendments, which increased the number of shares subject to the plan by a total of 2,500,000. There have been no grants or awards under these plans since December 31, 2005. | |
(2) | The number of securities remaining for future issuance at December 31, 2005 consisted of 62,000 shares issuable under the Company’s Inducement Award Equity Incentive Plan (the “Inducement Plan”). Since December 31, 2005, a total of 19,500 options have been granted under the Inducement Plan. |
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AND CERTAIN COMMITTEES OF THE BOARD
Nominating and | ||||||||||||
Corporate | ||||||||||||
Audit | Compensation | Governance | ||||||||||
Director | Committee | Committee | Committee | |||||||||
Barry Deutsch | x | x | x | |||||||||
Eric Langshur | x | *(1) | x | |||||||||
J. Kenneth Looloian | x | *(2) | x | x | ||||||||
James F. McAnally, M.D. | x | x | x | * | ||||||||
Adam Metz | x | (3) | ||||||||||
John W. Rogers, Jr. | x | * | x | (4) | ||||||||
Steven S. Rogers | x | (5) | x | (5) | ||||||||
Marilyn Seymann | x | (6) | ||||||||||
Stephen Swid | x | (7) | x | (7) | ||||||||
Number of Meetings Held in 2005 | 42 | 8 | 10 |
(1) | Eric Langshur was elected Chairman on November 10, 2005. | |
(2) | J. Kenneth Looloian served as Chairman until November 10, 2005. | |
(3) | Adam Metz joined the Committee on December 1, 2005. | |
(4) | John W. Rogers, Jr. joined the Committee on September 29, 2005. | |
(5) | Steven S. Rogers joined the Committee on December 1, 2005. | |
(6) | Marilyn Seymann joined the Committee on May 12, 2005 and resigned on August 12, 2005. | |
(7) | Stephen Swid resigned on August 24, 2005. | |
* | Committee Chairman |
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Nominating and | ||||||||||||
Corporate | ||||||||||||
Audit | Compensation | Governance | ||||||||||
Director | Committee | Committee | Committee | |||||||||
Charles J. Burdick | X | (1) | X | (1) | X | (1)(13)* | ||||||
Barry Deutsch | x | (2) | x | (2) | x | (9) | ||||||
Barry R. Elson | x | (10) | ||||||||||
Don R. Kornstein | X | (3) | X | *(6) | X | (11) | ||||||
Eric Langshur | X | * | x | (7) | ||||||||
J. Kenneth Looloian | x | (4) | x | (4) | x | (4) | ||||||
James F. McAnally, M.D. | x | (8) | x | *(8) | ||||||||
Adam Metz | x | (5) | x | (12) | ||||||||
John W. Rogers, Jr. | x | (14) | x | (14) | ||||||||
Steven S. Rogers | X | X | ||||||||||
Number of Meetings Held in 2006 | 39 | 16 | 8 |
(1) | Charles J. Burdick joined the Committee when his Board term began on February 9, 2006. | |
(2) | Barry Deutsch resigned on September 14, 2006. | |
(3) | Don R. Kornstein joined the Committee on September 26, 2006. | |
(4) | J. Kenneth Looloian served on the Committee until January 25, 2006. | |
(5) | Adam Metz resigned on February 8, 2006. | |
(6) | Don R. Kornstein joined the Committee when his Board term began on February 9, 2006. | |
(7) | Eric Langshur served on the Committee until January 25, 2006. | |
(8) | James F. McAnally, M.D. resigned on August 24, 2006. | |
(9) | Barry Deutsch served on the Committee until January 25, 2006. | |
(10) | Barry Elson joined the Committee on February 9, 2006 and resigned from the Committee on August 11, 2006 upon being appointed Acting Chief Executive Officer of the Company. | |
(11) | Don R. Kornstein joined the Committee on August 23, 2006. | |
(12) | Adam Metz joined the Committee on January 25, 2006 and resigned on February 8, 2006. | |
(13) | Charles Burdick was elected Chairman of the Committee on August 30, 2006. | |
(14) | John W. Rogers, Jr. resigned on November 16, 2006. | |
* | Committee Chairman | |
X | Current Committee member |
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• | evaluating the performance of the CEO and other senior executives in light of the approved performance goals and objectives; | |
• | setting the compensation of the CEO and other senior executives based upon the evaluation of the performance of the CEO and the other senior executives, respectively; and | |
• | making recommendations to the Board with respect to compensation, incentive compensation plans and equity-based compensation plans for other Company officers. |
• | wisdom, capability and integrity within their field or profession; | |
• | broad business, managementand/or public service experience; | |
• | general understanding of marketing, finance and other elements necessary to the success of a publicly held company; | |
• | practical and mature business judgment; | |
• | represents no specific constituency other than the stockholders generally; | |
• | no conflicts of interest or legal impediments that might preclude service as a director; |
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• | ability and willingness to devote the time required to serve effectively as a director and as a member of one or more committees of the Board; and | |
• | diversity, experience or skills complementary to those of other Board members. |
Annual Board/ | Board | Committee | ||||||||||||||||||
Committee | Meeting | Meeting | 2005 | |||||||||||||||||
Director | Retainers(1) | Special Retainer | Stipends | Stipends | Total | |||||||||||||||
Barry Deutsch | $ | 33,911 | $ | 50,000 | $ | 56,000 | $ | 44,000 | $ | 183,911 | ||||||||||
Eric Langshur | 44,072 | 50,000 | 66,000 | 57,000 | 217,072 | |||||||||||||||
J. Kenneth Looloian | 45,992 | 50,000 | 28,000 | 19,000 | 142,992 | |||||||||||||||
James F. McAnally, M.D. | 38,492 | 50,000 | 68,000 | 27,000 | 183,492 | |||||||||||||||
Adam Metz | 2,583 | — | 6,000 | — | 8,583 | |||||||||||||||
John W. Rogers, Jr. | 37,903 | 50,000 | 68,000 | 30,000 | 185,903 | |||||||||||||||
Steven S. Rogers | 2,667 | — | 8,000 | — | 10,667 | |||||||||||||||
Marilyn Seymann | 12,008 | — | 16,000 | — | 28,008 | |||||||||||||||
Stephen Swid | 24,000 | — | 22,000 | — | 46,000 | |||||||||||||||
Total | $ | 241,628 | $ | 250,000 | $ | 338,000 | $ | 177,000 | $ | 960,628 | ||||||||||
(1) | Includes fees associated with chairing a Board Committee. |
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Annual Board/ | Board | Committee | Cash Payment in | |||||||||||||||||||||
Committee | Special | Meeting | Meeting | Lieu of Equity | 2006 | |||||||||||||||||||
Director | Retainers(1)(2) | Retainers | Stipends | Stipends(2) | Compensation | Total | ||||||||||||||||||
Charles J. Burdick | $ | 32,135 | $ | 60,000 | $ | 36,000 | $ | 46,000 | $ | — | $ | 174,135 | ||||||||||||
Barry Deutsch | 49,817 | 56,000 | 32,000 | 35,000 | 14,300 | 187,117 | ||||||||||||||||||
Barry R. Elson | 45,064 | 40,000 | 24,000 | 13,000 | — | 122,064 | ||||||||||||||||||
Don R. Kornstein | 103,564 | 57,500 | 42,000 | 30,500 | — | 233,564 | ||||||||||||||||||
Eric Langshur | 57,317 | 99,000 | 54,000 | 38,000 | 16,500 | 264,817 | ||||||||||||||||||
J. Kenneth Looloian | 2,750 | — | — | — | 3,396 | 6,146 | ||||||||||||||||||
James F. McAnally, M.D. | 30,750 | 65,000 | 38,000 | 14,000 | 2,704 | 150,454 | ||||||||||||||||||
Adam Metz | 3,358 | — | 12,000 | 3,000 | 10,350 | 28,708 | ||||||||||||||||||
John W. Rogers, Jr. | 149,500 | 92,500 | 54,000 | 30,000 | 26,100 | 352,100 | ||||||||||||||||||
Steven S. Rogers | 57,250 | 40,000 | 44,000 | 29,000 | — | 170,250 | ||||||||||||||||||
Total | $ | 531,505 | $ | 510,000 | $ | 336,000 | $ | 238,500 | $ | 73,350 | $ | 1,689,355 | ||||||||||||
(1) | Includes fees associated with chairing a Board Committee and serving as Lead Director. | |
(2) | Includes fees paid to members of the Strategic Alternatives Committee (“SAC”) for service from February 1, 2006 through June 2006. Stipends were $15,000 per month for each Co-Chairman and $5,000 per month for each other member of SAC during this period. Per meeting fees were $1,500 for each Co-Chairman and $1,000 for each other member. On August 6, 2006, the Board approved payments to each Co-Chairman in the amount of $17,500 for each of the third and fourth quarters of 2006. In addition, the Board eliminated stipends for each member of SAC and reduced the per meeting fee from $1,500 to $1,000. As the SAC was disbanded in August 2006, no payments with respect to the fourth quarter will be made. |
• | $40,000 to each director; | |
• | $35,000 to each of the Lead Director and the Audit Committee Chairman; | |
• | $25,000 to each of the Compensation Committee Chairman and Nominating and Corporate Governance Committee Chairman (though that payment was not made to the current Compensation Committee Chairman since he was also then the Lead Director); | |
• | $17,500 to each Co-Chairman of the Strategic Alternatives Committee; and | |
• | an additional $1,000 per-meeting stipend to Audit Committee members for meetings attended from January 1, 2006 to June 30, 2006 (increasing the per-meeting stipend for Audit Committee meetings during that period from $1,000 to $2,000). |
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Long-Term | ||||||||||||||||||||||||||||
Compensation Awards | ||||||||||||||||||||||||||||
Annual Compensation | Restricted | Securities | ||||||||||||||||||||||||||
Other Annual | Stock | Underlying | All Other | |||||||||||||||||||||||||
Salary | Bonus | Compensation | Awards | Options | Compensation | |||||||||||||||||||||||
Year | ($) | ($)(1) | ($)(2) | ($)(3) | (#) | ($)(4) | ||||||||||||||||||||||
Paul A. Toback(5) | 2005 | 575,000 | 900,000 | 874,471 | 1,365,000 | 232,000 | 3,071 | |||||||||||||||||||||
Chairman, President and | 2004 | 575,000 | 400,000 | 43,103 | — | — | — | |||||||||||||||||||||
Chief Executive Officer | 2003 | 475,000 | 300,000 | 22,555 | 1,206,000 | 200,000 | 14,915 | |||||||||||||||||||||
Marc D. Bassewitz | 2005 | 350,000 | 225,000 | 31,769 | 770,000 | 73,000 | 5,232 | |||||||||||||||||||||
Senior Vice President, | 2004 | — | — | — | — | — | — | |||||||||||||||||||||
Secretary and | 2003 | — | — | — | — | — | — | |||||||||||||||||||||
General Counsel | ||||||||||||||||||||||||||||
William G. Fanelli(6) | 2005 | 325,000 | 115,000 | (7) | 24,187 | 385,000 | 80,000 | 1,000 | ||||||||||||||||||||
Senior Vice President, | 2004 | 325,000 | 200,000 | (7) | 23,291 | — | — | 25,077 | ||||||||||||||||||||
Corporate | 2003 | 325,000 | 138,125 | 21,474 | 361,800 | 120,000 | 21,500 | |||||||||||||||||||||
Development | ||||||||||||||||||||||||||||
Harold Morgan | 2005 | 350,000 | 195,000 | 328,078 | 577,500 | 103,000 | 1,000 | |||||||||||||||||||||
Senior Vice President, | 2004 | 300,000 | 175,000 | 26,218 | — | — | 1,000 | |||||||||||||||||||||
Chief Administrative Officer | 2003 | 300,000 | 146,250 | 23,528 | 361,800 | 120,000 | 1,000 | |||||||||||||||||||||
John H. Wildman | 2005 | 325,000 | 225,000 | 24,681 | 525,000 | 85,000 | — | |||||||||||||||||||||
Senior Vice President, | 2004 | 325,000 | 175,000 | 23,743 | — | — | — | |||||||||||||||||||||
Chief Operating Officer | 2003 | 325,000 | 138,125 | 21,700 | 361,800 | 120,000 | — |
(1) | The 2005 bonus represents the bonus earned in 2005 and paid in March 2006, other than $200,000 of Mr. Toback’s bonus, which was paid upon the filing of the Company’s 2005 Annual Report onForm 10-K. The 2004 bonus represents the bonus earned in 2004 and paid in March 2005. The 2003 bonus represents the bonus earned in 2003 and paid in April 2004. |
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(2) | Other Annual Compensation for 2005 consists of the items set forth in the table below: |
Financial Planning; | ||||||||||||||||||||
Executive | Executive | Home Security; | ||||||||||||||||||
Tax | Auto | Medical Plan | Disability | Miscellaneous | ||||||||||||||||
Reimbursement* | Allowance | Premiums | Insurance | Compensation | ||||||||||||||||
Paul A. Toback | $ | 838,777 | $ | 20,000 | $ | 6,833 | $ | 4,411 | ** | |||||||||||
Marc D. Bassewitz | — | $ | 17,165 | $ | 4,556 | $ | 3,130 | ** | ||||||||||||
William G. Fanelli | — | $ | 15,000 | $ | 6,833 | $ | 2,353 | ** | ||||||||||||
Harold Morgan | $ | 296,641 | $ | 17,454 | $ | 6,833 | $ | 4,481 | ** | |||||||||||
John Wildman | — | $ | 15,000 | $ | 6,833 | $ | 2,823 | ** |
* | The tax reimbursement for Messrs. Toback and Morgan related to the vesting of restricted stock under the Company’s 1996 Long-Term Incentive Plan. | |
** | Less than $10,000 in aggregate. | |
(3) | This number is calculated by multiplying the closing price of a Bally common share on the date of grant less consideration paid by the executive by the number of shares awarded. These restricted shares were issued in the respective recipient’s name and are held by Bally until the restrictions lapse. Bally has not paid cash dividends, however, were we to do so, we would pay dividends on restricted shares at the same rate paid on all other Bally common shares. The restrictions on these shares lapse four years after the date of issuance, upon a change in control (as defined in the 1996 Plan) of Bally, or the respective recipient’s death or termination of employment other than for cause. During 2005, the acquisitions of Bally common stock by each of Liberation Investment Group LLC, Liberation Investments, Ltd., Liberation Investments, L.P. and Emanuel R. Pearlman (“Liberation”) and Pardus Capital Management L.P. to levels in excess of 10% of Bally’s outstanding common stock constituted a “change in control” under the 1996 Long-Term Incentive Plan and the Inducement Plan, resulting in the lapse of the restrictions on all shares of restricted stock issued prior to October 2005. See “Election of Directors and Security Ownership — Stockholders Who Own at Least 5% of Bally Common Stock.” The restricted stock issued to the Named Executive Officers on November 29, 2005 continues to be subject to the restrictions under the 1996 Long-Term Incentive Plan. | |
On December 31, 2005, the Named Executive Officers owned the number of restricted shares set forth in the table below. The market value is based on the closing price of a Bally common share of $6.28 on December 30, 2005, the last trading day prior to the end of the 2005 fiscal year, less the par value of $.01 paid by such executives. |
Mr. Toback | Mr. Bassewitz | Mr. Fanelli | Mr. Morgan | Mr. Wildman | ||||||||||||||||
Number of shares | 135,000 | 55,000 | 40,000 | 55,000 | 60,000 | |||||||||||||||
Market value | $ | 846,450 | $ | 344,850 | $ | 250,800 | $ | 344,850 | $ | 376,200 |
(4) | Represents (i) amounts matched by Bally in connection with participation in Bally’s savings plans,and/or (ii) amounts paid by Bally for executive life insurance premiums. | |
(5) | On August 11, 2006, Mr. Toback resigned as Chairman, President and Chief Executive Officer of the Company. See “Compensation of Executive Officers — Employment Agreements — Employment Agreement with the former Chairman, President and Chief Executive Officer.” | |
(6) | From April 2004 until March 2005, William G. Fanelli served as Acting Chief Financial Officer. From March 2005 to October 2006, Mr. Fanelli served as Senior Vice President, Planning and Development. | |
(7) | Includes a $25,000 bonus for serving as Acting Chief Financial Officer. |
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Individual Grants | ||||||||||||||||||||||||
Number of | Potential Realizable Value at Assumed | |||||||||||||||||||||||
Securities | Percent of Total | Annual | ||||||||||||||||||||||
Underlying | Options Granted | Exercise or | Rates of Stock Price Appreciation for | |||||||||||||||||||||
Options | to Employees in | Base Price | Options Term | |||||||||||||||||||||
Name | Granted (#)(1) | Fiscal Year | ($/Sh) | Expiration Date | 5% ($) | 10% ($) | ||||||||||||||||||
Paul A. Toback(2) | 170,000 | 15.25 | % | 4.21 | 3/8/2015 | 256,261 | 831,986 | |||||||||||||||||
62,000 | 5.56 | % | 7.01 | 11/29/2015 | 273,330 | 692,672 | ||||||||||||||||||
Marc D. Bassewitz | 25,000 | 2.24 | % | 4.21 | 3/8/2015 | 37,686 | 122,351 | |||||||||||||||||
25,000 | 2.24 | % | 3.51 | 3/8/2015 | 55,186 | 139,851 | ||||||||||||||||||
23,000 | 2.06 | % | 7.01 | 11/29/2015 | 101,397 | 256,959 | ||||||||||||||||||
William G. Fanelli | 60,000 | 5.38 | % | 4.21 | 3/8/2015 | 90,445 | 293,642 | |||||||||||||||||
20,000 | 1.79 | % | 7.01 | 11/29/2015 | 88,171 | 223,443 | ||||||||||||||||||
Harold Morgan | 80,000 | 7.18 | % | 4.21 | 3/8/2015 | 120,594 | 391,523 | |||||||||||||||||
23,000 | 2.06 | % | 7.01 | 11/29/2015 | 101,397 | 256,959 | ||||||||||||||||||
John H. Wildman | 60,000 | 5.38 | % | 4.21 | 3/8/2015 | 90,445 | 293,642 | |||||||||||||||||
25,000 | 2.24 | % | 7.01 | 11/29/2015 | 110,214 | 279,303 |
(1) | Subject to the specific terms of the grant, these options become exercisable generally in three equal annual installments commencing one year from the date of grant. Options granted prior to May 4, 2005 vested upon the acquisition by Liberation of in excess of 10% of the common stock of the Company. See “Compensation of Executive Officers — Summary Compensation Table” at Note 3. | |
(2) | On August 11, 2006, Mr. Toback resigned as Chairman, President and Chief Executive Officer of the Company. See “Compensation of Executive Officers — Employment Agreements — Employment Agreement with the former Chairman, President and Chief Executive Officer.” |
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Option Values at End of Last Fiscal Year
Number of Securities | Value of Unexercised | |||||||||||||||||||||||
Shares | Underlying Unexercised | In-the-Money Options | ||||||||||||||||||||||
Acquired on | Value | Options at December 31, 2005 | at December 31, 2005(1) | |||||||||||||||||||||
Exercise (#) | Realized ($) | Exercisable (#) | Unexercisable (#) | Exercisable ($) | Unexercisable ($) | |||||||||||||||||||
Paul A. Toback(2) | 0 | 0 | 253,334 | 298,666 | 16,000 | 359,890 | ||||||||||||||||||
Marc D. Bassewitz | 0 | 0 | 0 | 73,000 | — | 121,000 | ||||||||||||||||||
William G. Fanelli | 25,000 | 48,319 | 190,000 | 120,000 | 7,200 | 129,000 | ||||||||||||||||||
Harold Morgan | 36,000 | 99,243 | 159,000 | 143,000 | 9,360 | 170,400 | ||||||||||||||||||
John H. Wildman | 35,000 | 85,730 | 170,000 | 125,000 | 9,600 | 129,000 |
(1) | Based on the closing price of common stock on the New York Stock Exchange on December 30, 2005, which was $6.28 per share. | |
(2) | On August 11, 2006, Mr. Toback resigned as Chairman, President and Chief Executive Officer of the Company. See “Compensation of Executive Officers — Employment Agreements — Employment Agreement with the former Chairman, President and Chief Executive Officer.” |
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25
Charles J. Burdick
Don R. Kornstein
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Charles J. Burdick
Don R. Kornstein
Steven S. Rogers
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* | $100 invested on 12/31/00 in stock or index-including reinvestment of dividends. Fiscal year ending December 31. |
Cumulative Total Return | ||||||||||||||||||||||||||||
12/00 | 12/01 | 12/02 | 12/03 | 12/04 | 12/05 | 10/06 | ||||||||||||||||||||||
BALLY TOTAL FITNESS HOLDING CORPORATION | 100.00 | 63.65 | 20.93 | 20.66 | 12.52 | 18.54 | 8.30 | |||||||||||||||||||||
S & P 500 INDEX | 100.00 | 88.12 | 68.64 | 88.33 | 97.94 | 102.75 | 115.15 | |||||||||||||||||||||
RUSSELL 2000 CONSUMER DISCRETIONARY INDEX | 100.00 | 119.32 | 97.48 | 138.45 | 165.19 | 166.45 | 185.71 |
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2005 | 2004 | |||||||
Audit fees(1) | $ | 5,141,300 | $ | 7,988,800 | ||||
Audit-related fees(2) | 10,000 | 37,750 | ||||||
Total audit and audit-related fees | $ | 5,151,300 | $ | 8,026,550 | ||||
Tax fees(3) | 60,000 | 0 | ||||||
All other fees | 0 | 0 | ||||||
Total fees | $ | 5,211,300 | $ | 8,026,550 | ||||
(1) | Audit fees include work performed in connection with the audit of the 2005 consolidated financial statements, the reports on management’s assessment regarding the effectiveness of internal control over financial reporting and the effectiveness of internal control over financial reporting, and the reviews of the financial statements included in our 2005Forms 10-Q. It also includes fees for professional services that are normally provided by our registered public accounting firm in connection with statutory and regulatory filings. | |
(2) | Audit related fees include work performed in connection with separate audits of subsidiaries and affiliated entities not required by statute or regulation. | |
(3) | Tax fees include services performed in connection with the Company’s assessment of the implications of an ownership change for purposes of Internal Revenue Code Section 382. |
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THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31, 2006
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November 20, 2006
the enclosed proxy card in the
postage-paid envelope provided or
vote via the internet or touch-tone telephone.
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PROXY
BALLY TOTAL FITNESS HOLDING CORPORATION
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Marc D. Bassewitz and Ronald G. Eidell, or either of them, proxies of the undersigned, each with full power of substitution, to vote all shares of the undersigned at the annual meeting of stockholders of Bally Total Fitness Holding Corporation to be held at 9:00 a.m. (local time) on December 19, 2006 at the Renaissance Chicago O’Hare Hotel, 8500 West Bryn Mawr Avenue, Chicago, Illinois, or at any postponement(s) or adjournment(s) thereof.
The Board of Directors recommends a vote FOR proposals number 1 and 2. |
This proxy, when properly executed, will be voted in the manner directed herein by the undersigned stockholder. If no direction is made, this proxy will be voted as follows: for proposals number 1 and 2. SEE REVERSE SIDE.
(Comments/ Change of Address) | |
(If you have written in the above space, please mark the corresponding box on the reverse side.) |
................................................................................................................................................................ ...................................................
ENTRANCE PASS — ANNUAL MEETING OF STOCKHOLDERS
This is an entrance pass for the Annual Meeting
Control Number |
The Board of Directors recommends a vote FOR the below nominee. | For | Withhold | ||||
1. Election of the following Class I Director nominee for a three-year term expiring in 2009: Don R. Kornstein |
The Board of Directors recommends a vote FOR the ratification of the appointment of KPMG LLP. | For | Against | Abstain | |||
2. Ratification of the appointment of KPMG LLP as independent auditor for the Company for the fiscal year ending December 31, 2006 |
Comments/ Change of Address | o | |||
Date | ||||
Signature | ||||
Title or Authority | ||||
Signature (if held jointly) | ||||
Note: Please sign as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee, or guardian, please give full title as such. |
................................................................................................................................................................ ...................................................
BALLY TOTAL FITNESS HOLDING CORPORATION
Your vote is important. Casting your vote in one of the three ways described on this instruction card votes all shares of Common Stock of Bally Total Fitness Holding Corporation that you are entitled to vote.
Please consider the issues discussed in the proxy statement and cast your vote by:
VIA INTERNET | • Accessing the World Wide Web site http://www.eproxyvote.com/bft and follow the instructions to vote via the internet. | |||
BY PHONE | • Using a touch-tone telephone to vote by phone toll free from the U.S. or Canada. Simply dial 1-866-207-3912 and follow the instructions. When you are finished voting, your vote will be confirmed, and the call will end. | |||
BY MAIL | • Completing, dating, signing and mailing the proxy card in the postage-paid envelope included with the proxy statement. |
You can vote by phone or via the internet any time prior to 11:59 p.m. Eastern Time, December 18, 2006. You will need the control number printed at the top of this instruction card to vote by phone or via the internet. If you do so, you do not need to mail in your proxy card.