SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant X
Filed by a Party other than the Registrant ___
Check the appropriate box:
___ Preliminary Proxy Statement ___ Confidential, For Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
X Definitive Proxy Statement
___ Definitive Additional Materials
___ Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
DATA BROADCASTING CORPORATION
(Name of Registrant as Specified in Its Charter)
Reed L. Benson, Secretary and General Counsel
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
X No fee required.
___ Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
_____________________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
_____________________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing
fee is calculated and state how it was determined):
_____________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
_____________________________________________________________________________
(5) Total fee paid:
_____________________________________________________________________________
___ Fee paid previously with preliminary materials:
_____________________________________________________________________________
___ Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
_____________________________________________________________________________
(2) Form, Schedule or Registration Statement no.:
_____________________________________________________________________________
(3) Filing Party:
(4) Date Filed:
_____________________________________________________________________________
PAGE
DATA BROADCASTING CORPORATION
3490 Clubhouse Drive, I-2
Jackson, Wyoming 83001
October 28, 1997
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
of Data Broadcasting Corporation, a Delaware corporation (the "Company"), to
be held at the Continental Insurance Building, 180 Maiden Lane, New York, New
York on December 9, 1997 at 10:00 a.m. EST. The meeting will take place in
the Ricker Auditorium on the Mezzanine Level.
The matters expected to be acted upon in the meeting are described in the
attached Notice of Annual Meeting of Stockholders and Proxy Statement. In
addition, we will report to you on the Company's progress during the past year
and receive your questions and comments concerning the Company.
It is important that your shares be represented at the meeting, whether
or not you are able to be present. Accordingly, we urge you to complete the
enclosed proxy and promptly return it to our vote tabulators in the postage
prepaid envelope provided. If you do attend the meeting and wish to vote in
person, you may withdraw your proxy at that time.
Alan J. Hirschfield Allan R. Tessler
Co-Chairman of the Board Co-Chairman of the Board
DATA BROADCASTING CORPORATION
3490 Clubhouse Drive, I-2
Jackson, Wyoming 83001
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON DECEMBER 9, 1997
TO THE STOCKHOLDERS OF DATA BROADCASTING CORPORATION:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Data
Broadcasting Corporation (the "Company") will be held on December 9, 1997 at
10:00 a.m. EST in the Ricker Auditorium on the Mezzanine level of the
Continental Insurance Building, 180 Maiden Lane, New York, New York for the
following purposes.
1. To elect nine directors to serve until the next annual meeting of
the Company or until their successors have been duly elected and
qualified;
2. To consider and vote on a proposal to ratify the appointment of
Price Waterhouse, LLP as the independent auditor of the Company
for the fiscal year ending June 30, 1998;
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
The Board of Directors has fixed the close of business on October 24,
1997 as the record date for the determination of stockholders entitled to
notice of and to vote at this Annual Meeting and at any adjournment thereof.
Representation of at least a majority of all outstanding shares of common
stock of the Company is required to constitute a quorum. Accordingly, it is
important that your stock be represented at the Annual Meeting.
Whether or not you plan to attend the meeting, please complete, date and
sign the enclosed proxy card and return it in the enclosed envelope. You may
revoke your proxy at any time before it is voted.
By Order of the Board of Directors
Reed L. Benson
Secretary and General Counsel
Jackson, Wyoming
October 28, 1997
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN
PERSON. WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE
COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN
ORDER TO ENSURE YOUR REPRESENTATION AT THE ANNUAL MEETING. A RETURN ENVELOPE
(WHICH IS POSTAGE PREPAID IF MAILED IN THE UNITED STATES) IS ENCLOSED FOR THAT
PURPOSE. EVEN IF YOU HAVE GIVEN YOUR PROXY, YOU MAY STILL VOTE IN PERSON IF
YOU ATTEND THE ANNUAL MEETING. PLEASE NOTE, HOWEVER, THAT IF YOUR SHARES ARE
HELD OF RECORD BY A BROKER, BANK OR OTHER NOMINEE AND YOU WISH TO VOTE AT THE
ANNUAL MEETING, YOU MUST BRING TO THE MEETING A LETTER FROM THE BROKER, BANK
OR OTHER NOMINEE CONFIRMING YOUR BENEFICIAL OWNERSHIP OF THE SHARES.
ADDITIONALLY, IN ORDER TO VOTE AT THE ANNUAL MEETING, YOU MUST OBTAIN FROM THE
RECORD HOLDER A PROXY ISSUED IN YOUR NAME.
PROXY STATEMENT
CONTENTS
INFORMATION CONCERNING VOTE. . . . . . . . . . . . . . . . . . . . . . . . .1
ELECTION OF BOARD OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . .1
SECURITY OWNERSHIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5
EXECUTIVE COMPENSATION AND OTHER INFORMATION . . . . . . . . . . . . . . . .7
REPORT OF THE COMPENSATION COMMITTEE AND THE STOCK OPTION COMMITTEE ON
EXECUTIVE OFFICERS' COMPENSATION . . . . . . . . . . . . . . . . . . 12
PERFORMANCE GRAPH . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
PROPOSAL TO RATIFY SELECTION OF AUDITOR . . . . . . . . . . . . . . . . . 13
CERTAIN RELATIONSHIPS AND OTHER TRANSACTIONS . . . . . . . . . . . . . . . 13
SOLICITATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
STOCKHOLDER PROPOSALS . . . . . . . . . . . . . . . . . . . . . . . . . . 14
STOCKHOLDER NOMINATION OF DIRECTORS . . . . . . . . . . . . . . . . . . . 14
OTHER MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
DATA BROADCASTING CORPORATION
3490 Clubhouse Drive, I-2
Jackson, Wyoming 83001
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD
ON DECEMBER 9, 1997
INFORMATION CONCERNING VOTE
General
The enclosed proxy is solicited on behalf of the Board of Directors of
Data Broadcasting Corporation, a Delaware Corporation ("DBC" or the
"Company"), for use at the annual meeting of stockholders to be held on
December 9, 1997 at 10:00 a.m. EST, or at any adjournment thereof (the "Annual
Meeting"), for the purposes set forth herein and in the accompanying Notice of
Annual Meeting of Stockholders. The Annual Meeting will be held at the
Continental Insurance Building, Ricker Auditorium - Mezzanine level, 180
Maiden Lane, New York, New York. The Company intends to mail this Proxy
Statement and accompanying proxy card on or about November 6, 1997 to all
stockholders entitled to vote at the Annual Meeting.
Voting Rights and Outstanding Shares
Only holders of record of common stock at the close of business on
October 24, 1997 will be entitled to notice of and to vote at the Annual
Meeting. At the close of business on October 24, 1997, the Company had
33,961,009 shares of common stock outstanding and entitled to vote. On all
matters to be voted upon at the Annual Meeting, each holder of record of
common stock on such date will be entitled to one vote for each share held.
Revocability of Proxies
Any person giving a proxy pursuant to this solicitation has the power to
revoke it at any time before it is voted. It may be revoked by filing with
the Secretary of the Company at the Company's principal executive office, 3490
Clubhouse Drive, I-2, Jackson, Wyoming 83001, a written notice of revocation
or a duly executed proxy bearing a later date, or it may be revoked by
attending the Annual Meeting and voting in person. Attendance at the Annual
Meeting will not, by itself, revoke a proxy.
Tabulation of Votes
All votes will be tabulated by the inspector of election appointed for
the Annual Meeting, who will separately tabulate affirmative and negative
votes, abstentions and broker non-votes. Abstentions and broker non-votes
will be counted as present in determining whether the quorum requirement is
satisfied. Abstentions will be counted towards the tabulation of votes cast
on proposals presented to the stockholders and will have the same effect as
negative votes. Broker non-votes are not counted for any purpose in
determining whether a matter has been approved.
ELECTION OF BOARD OF DIRECTORS
The Board of Directors has nominated nine persons for the Board
positions presently authorized in the Company's bylaws. Each director to be
elected will hold office until the next annual meeting of stockholders and
until his successor is elected and has qualified, or until such director's
earlier death, resignation or removal. All nominees listed below are
currently directors of the Company.
Shares represented by executed proxies will be voted, if authority to do
so is not withheld, for the election of the nine nominees named below. Shares
may not be voted cumulatively. In the event that any nominee should be
unavailable for election as a result of an unexpected occurrence, such shares
will be voted for the election of such substitute nominee as the Board of
Directors may propose. Each person nominated for election has agreed to serve
if elected, and the Company has no reason to believe that any nominee will be
unable to serve.
Pursuant to the Company's By-laws, the nine candidates receiving the
greatest number of votes shall be elected as directors. Pursuant to the
Company's By-laws, any record stockholder who desires to nominate candidates
for election to the Board must deliver written notice to the Secretary of the
Company no later than 60 days in advance of the Annual Meeting or 10 days
after the date on which notice of the Annual Meeting is given, whichever is
later.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THIS PROPOSAL
Nominees
The names of the nominees and certain information about them are set forth
below:
Director
Name Since Age(1) Office Held with the Company
Alan J. Hirschfield 1992 61 Co-Chairman of the Board, Co-CEO
Allan R. Tessler 1992 60 Co-Chairman of the Board, Co-CEO
Dwight H. Egan 1995 44 CEO of Broadcast International, Inc.
James A. Kaplan 1994 54 Vice Chairman of the Board and
President of CMS
Charles M. Diker 1993 62 Director
Donald P. Greenberg 1996 63 Director
David R. Markin 1992 66 Director
Herbert S. Schlosser 1995 71 Director
Carl Spielvogel 1996 68 Director
(1) As of September 15, 1997
ALAN J. HIRSCHFIELD and ALLAN R. TESSLER serve as Co-Chairmen of the Board and
Co-Chief Executive Officers of the Company.
Prior to becoming Co-Chief Executive Officer of the Company in June, 1992, Mr.
Hirschfield served as Managing Director of Schroder Wertheim & Co. Inc. and as
a consultant to the entertainment and media industry. He formerly served as
Chief Executive Officer of Twentieth Century Fox Film Corp. and Columbia
Pictures Inc. from 1980 to 1985 and 1973 to 1978, respectively. Mr.
Hirschfield currently serves on the boards of Cantel Industries, Inc.,
("Cantel") a distributor of medical and scientific equipment and Chyron
Corporation, ("Chyron") a supplier of graphics to the television industry.
In addition to serving as Co-Chief Executive Officer since June 1992, Mr.
Tessler has been Chairman of the Board and CEO of International Financial
Group, Inc., an international merchant banking firm, since 1987. He is also
Chairman of the Board of, Enhance Financial Services Group Inc. ("Enhance"), a
municipal bond reinsurer, and Jackpot Enterprises, Inc. ("Jackpot"), a gaming
machine route operator. From 1989 to 1996 he was Chairman of the Board
of Great Dane Holdings, Inc. ("Great Dane"), a diversified holding company.
From December 1991 through September 1993 Mr. Tessler was Chairman of the
Board and CEO of Ameriscribe Inc., a national provider of facilities
management services. Mr. Tessler also serves on the boards of The Limited,
Inc., Allis-Chalmers Corporation and New T&T DBC Limited, a joint-venture
between the Company and New T&T Hong Kong Limited, a wholly-owned subsidiary
of Wharf Communications Investments, Ltd.
DWIGHT H. EGAN is the President and Chief Executive Officer of Broadcast
International, Inc. ("BII"), a subsidiary of the Company. He has held these
positions since 1985. Acquired by DBC in 1995, BII supplies business
information, real-time financial market data and communications services to
retail, financial and other business customers. Mr. Egan also serves on the
Board of Directors of Gentner Communications, Inc., a manufacturer of
teleconferencing equipment.
JAMES A. KAPLAN is Vice Chairman of the Board and President and founder of
Capital Management Sciences ("CMS"), a division of the Company. He has held
this position since CMS was founded in 1979. Acquired by DBC in 1994, CMS
distributes fixed income portfolio analytics and information.
CHARLES M. DIKER is a non-managing principal with the investment management
company of Weiss, Peck & Greer, having been associated with that firm since
1976. He serves as Chairman of the Board of Cantel Industries, Inc. which
markets and manufactures medical diagnostic and infection control products.
Mr. Diker currently serves on the Board of Directors of BeautiControl
Cosmetics, a direct marketer of cosmetics, Chyron Corporation, and
International Specialty Products, a chemical company and AMF Group Inc.
DONALD P. GREENBERG has been a professor at Cornell University, Ithaca, New
York, for the past 30 years. He is the Jacob Gould Sherman professor of
computer graphics and director, program of computer graphics at Cornell
University, Ithaca, New York. In 1987, Dr. Greenberg received the ACM
SIGGRAPH Steven A. Coons award for outstanding creative contributions to
computer graphics and in 1991 was named a member of the National Academy of
Engineering. He is the founding director of the National Science Foundation's
Science and Technology Center for Computer Graphics and Scientific
Visualization.
DAVID R. MARKIN is Chief Executive Officer of Checker Holdings, Inc. and has
been the President and Chairman of the Board of Checker Motors Corporation, a
manufacturer, insurer, and operator of transportation equipment, since 1970
and was President of Great Dane from 1989 to 1996. Mr. Markin also serves as
a director of Jackpot and Enhance.
HERBERT S. SCHLOSSER has been Senior Advisor, Broadcasting and Entertainment,
of Schroder & Co. Inc., since 1986 and for almost 30 years was employed by
National Broadcasting Company, Inc. ("NBC") and RCA Corporation ("RCA") in
various capacities, including President and CEO of NBC and Executive Vice
President of RCA in charge of its entertainment group of activities other than
NBC. Mr. Schlosser is a member of the Board of Directors of U.S. Satellite
Broadcasting Company, Inc., a partner with DirecTV, a subsidiary of Hughes
Aircraft, in the first high-power DBS satellite launched in the U.S. and a
member of the Board of Directors of Central European Media Enterprises LTD.
He is Chairman of the Board of Trustees of the American Museum of the Moving
Image.
CARL SPIELVOGEL is Chairman and CEO of Carl Spielvogel Associates, Inc. and
until April 1997 he also served as the Chief Executive Officer of the United
Auto Group, Inc., a publicly traded operator of multiple-franchise auto
dealerships. Mr. Spielvogel was associated with Bates Worldwide, an
advertising and marketing communications company, from July 1987 until January
1, 1994. He served in various positions with Bates Worldwide, including
chairman and Chief Executive Officer. He was vice chairman and a member of
the board of directors of Interpublic Group of Companies, Inc. for
approximately 20 years. Mr. Spielvogel is a member of the boards of directors
of Hasbro, Inc., Alliant Food Service, Inc., (formerly Kraft Food Service,
Inc.), and Culligan Water Technologies, Inc.
There are no family relationships among the directors or executive officers of
the Company.
Board Committees and Meetings
During the fiscal year ended June 30, 1997, the Board of Directors held
five meetings and took one action by written consent. The Board has an Audit
Committee, Compensation Committee and Stock Option Committee.
The Audit Committee may take any and all actions which may be taken by
the Board of Directors of the Company to review and supervise the financial
controls of the Company, including recommending to the Board the selection of
the Company's independent auditors, reviewing the Company's financial
statements, reviewing the scope and results of external audits, acting upon
recommendations of the auditors, reviewing the Company's proposed budgets,
reporting to the Board any considerations or recommendations the Audit
Committee may have with respect to such matters and taking such further
actions as the Committee deems necessary. During fiscal 1997, the Audit
Committee, composed of Charles M. Diker, David R. Markin and Herbert S.
Schlosser, met once.
The Compensation Committee may take any and all actions which may be
taken by the Board of Directors of the Company to review and approve executive
and senior management compensation. During fiscal 1997, the Compensation
Committee, composed of Charles M. Diker, David R. Markin and Herbert S.
Schlosser, met once and its actions were subsequently ratified by the full
Board of Directors.
The Stock Option Committee was established to serve as Administrator of
the Company's Stock Option Plan. As Plan Administrator, the Stock Option
Committee has full and final authority to select employees to be granted
options and to determine the number of shares and terms of any options
granted. The Stock Option Committee also considers and recommends to the
Board whether grants to officers, directors and employees, other than pursuant
to the Stock Option Plan, should be made. During fiscal 1997, the Stock
Option Committee was composed of Alan J. Hirschfield and Allan R. Tessler, met
one time and took four actions by written consent.
All current nominees who were directors during the fiscal year ended
June 30, 1997, attended all meetings of the Board and all committees of the
Board of which they were members.
For information regarding compensation received by directors, see
"Executive Compensation and Other Information - Compensation of Directors".
SECURITY OWNERSHIP (1)
The following table sets forth the beneficial ownership of the common
stock of the Company, at October 8, 1997, by each director, nominee, executive
officer named in the Summary Compensation Table appearing below, and each
person who, to the knowledge of the Company, owned beneficially more than 5%
of the Company's common stock.
Beneficial Ownership
Amount and Nature of Percent of
Beneficial Owner Beneficial Ownership Total(2)
Robert Fleming, Inc. 2,809,430-Direct 8.64%
320 Park Avenue
New York, NY 10022
Alan J. Hirschfield(3)
Co-Chairman of the Board, Co-CEO 2,260,845-Indirect(4) 6.92%
Allan R. Tessler(3)
Co-Chairman of the Board, Co-CEO 2,382,059-Direct(5) 7.30%
Capital Research and 2,800,000-Direct 8.61%
Management, Inc.
333 South Hope Street
Los Angeles, CA 90071
Charles M. Diker 410,400-Direct(6) 1.59%
Director 107,227-Indirect(7)
Dwight H. Egan 475,791-Direct(8) 1.50%
Director, President and CEO of BII 17,911-Indirect(9)
James A. Kaplan 1,216,885-Direct 4.80%
Director, President of CMS 342,447-Indirect(10)
David R. Markin 570,000-Direct(11) 1.76%
Director 5,000-Indirect(12)
Herbert S. Schlosser 85,070-Direct(13) *
Director
Donald P. Greenberg 45,000-Direct(15) *
Director
Carl Spielvogel 48,000-Direct(14) *
Director
Mark F. Imperiale 133,334-Direct(15) *
President, Chief Operating Officer
and Chief Financial Officer
All current directors, nominees
and executive officers as a
group (10 persons) 8,099,969(16) 24.03%
* Less than one percent
(1) The table in this section is based upon information supplied by officers,
directors and principal stockholders and Schedules 13D and 13G, if any, filed
with the SEC. Unless otherwise indicated in the footnotes to the table and
subject to the community property laws where applicable, each of the
stockholders named in this table has sole voting and investment power with
respect to the shares shown as beneficially owned by him.
(2) Applicable percentage of ownership for the officers and directors is based
on 33,889,717 shares of common stock, which were outstanding on October 8,
1997, less 1,387,900 Treasury Shares.
(3) Owner's address is in care of the Company at 3490 Clubhouse Drive, I-2,
Jackson, Wyoming 83001.
(4) Held of record directly by AJH Company, an entity of which Mr. Hirschfield
is the beneficial owner. Includes 150,000 shares which may be acquired upon
exercise of presently exercisable options.
(5) Includes 150,000 shares which may be acquired upon exercise of presently
exercisable options.
(6) Includes 90,000 shares which may be acquired upon exercise of presently
exercisable options or options which may be exercised within 60 days of the
effective date of this table. See "Executive Compensation and Other
Information - Compensation of Directors," below.
(7) Includes 92,227 shares in investment accounts managed by Mr. Diker, over
which he exercises shared investment power. Includes 15,000 shares in an
investment account held by Mr. Diker's wife, over which he exercises shared
investment power.
(8) Includes 314,858 shares which may be acquired upon exercise of presently
exercisable options. See "Executive Compensation and Other Information -
Compensation of Directors," below.
(9) Includes 17,314 shares held in seven separate custodial accounts, the
sole custodian of each being Mr. Egan's wife. Includes 597 shares held by a
trust over which Mr. Egan exercises sole investment power.
(10) Represents shares held by a trust over which Mr. Kaplan exercises shared
investment power.
(11) Includes 190,000 shares which may be acquired upon exercise of presently
exercisable options or options which may be exercised within 60 days of the
effective date of this table. See "Executive Compensation and Other
Information - Compensation of Directors," below.
(12) Represents shares in an investment account held by Mr. Markin's wife,
over which he exercises shared investment power.
(13) Includes 80,000 shares which may be acquired upon exercise of presently
exercisable options or options which may be exercised within 60 days of the
effective date of this table. See "Executive Compensation and Other
Information - Compensation to Directors," below.
(14) Includes 45,000 shares which may be acquired upon exercise of presently
exercisable options or options which may be exercised within 60 days of the
effective date of this table. See "Executive Compensation and Other
Information - Compensation to Directors," below.
(15) Represents shares which may be acquired upon exercise of presently
exercisable options or options which may be exercised within 60 days of the
effective date of this table. See "Executive Compensation and Other
Information - Stock Option Grants" below.
(16) Includes 1,198,192 shares which may be acquired upon exercise of
presently exercisable options or options which may be exercised within 60 days
of the effective date of this table. See "Executive Compensation and Other
Information - Stock Option Grants" and "Executive Compensation and Other
Information - Compensation of Directors," below.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Summary of Cash and Certain Other Compensation
The following table sets forth certain summary information concerning
compensation paid or accrued to or on behalf of the Company's Co-Chief
Executive Officers and each of the four other most highly compensated
executive officers of the Company (determined as of the end of the last fiscal
year) for the three year period ended June 30, 1997.
Summary Compensation Table
Long Term
Compensation
Annual Compensation Awards
Name and All Other
Principal Options Compensation
Position Year Salary($) Bonus($) (#) ($)
Alan J. Hirschfield 1997 $324,984 $0 125,000 -
Co-Chairman of 1996 $315,000 $125,000 - $196,731(1)
the Board and 1995 $315,000 - - $396,341(1)
Co-Chief Executive
Officer
Allan R. Tessler 1997 $324,984 $0 125,000 -
Co-Chairman of the 1996 $315,000 $125,000 - $196,341(1)
Board and Co-Chief 1995 $315,000 - - $396,341(1)
Executive Officer
James A. Kaplan 1997 $475,008 - 100,000 $3,135(2)
President - CMS 1996 $454,168 - - $3,135(2)
1995 $429,299 $500(2)
Mark F. Imperiale 1997 $261,470 $125,000 100,000 $3,135(2)
President, Chief 1996 $250,008 $175,000 50,000 $4,008(2)
Operating Officer, 1995 $210,000 $125,000 100,000
and Chief Financial
Officer
Dwight H. Egan(3) 1997 $229,392 - $3,135(2)
President, Broadcast 1996 $214,258 150,000 $5,522(2)
International, Inc.
(1) Represents commissions paid pursuant to the contracts entered into in
1990 between Messrs. Hirschfield and Tessler and FNN to serve as FNN's
restructuring team. The amounts were based on the proceeds received
primarily from the sale of assets to the Consumer News and Business
Channel and the sale of other assets of FNN.
(2) Matching contribution to the Company's 401(k) plan.
(3) Mr. Egan was hired effective July 1, 1995, with the Company's acquisition
of Broadcast International.
Stock Option Grants
Set forth below is information on grants of stock options under the
Company's Stock Option Plan for the named executive officers for the period
July 1, 1996 to June 30, 1997:
Option Grants in Last Fiscal Year
Individual Grants Grant Value
% of Total
Options
Options Granted to Exercise Grant Date Grant Date
Granted Employees Price Stock Price Expiration Present
Name (#) in Fiscal Year ($ per share) ($ per share) Date Value
Alan J.
Hirschfield 125,000 18.87% $6.94 $6.94 1-2-07 $315,000
Allan R.
Tessler 125,000 18.87% $6.94 $6.94 1-2-07 $315,000
Mark F.
Imperiale 100,000 15.09% $6.94 $6.94 1-2-07 $252,000
James A.
Kaplan 100,000 15.09% $5.375 $5.375 4-1-07 $195,000
All options reported above were awarded under the Company's 1992
stockholder-approved Stock Option Plan, as amended (the "Option Plan"). The
Company has not granted any stock appreciation rights. Pursuant to the terms
of the Option Plan, the exercise price per share for all options is the
average of the high ask and low bid prices of the Company's common stock on
the date of grant.
The options reported above become exercisable in three equal
installments on the first, second and third anniversaries of the date the
option was granted. The exercisability of options is subject to acceleration
upon termination of the optionee's employment on account of disability or
without cause, and in any event the Stock Option Committee of the Board may
waive conditions to exercisability and accelerate the exercisability of the
options for other reasons, including upon a change in control of the Company.
The option exercise price and the income tax withholding amounts payable
upon any option exercise may be paid in cash or, in certain circumstances, by
the optionee delivering already owned shares of the Company's common stock or
the Company withholding a sufficient number of shares from the number of
shares issuable upon such exercise.
"Grant Date Present Value" is determined under the Black-Scholes pricing
model, a widely recognized method of determining the present value of options.
The actual value, if any, an executive officer may realize will depend on the
extent to which conditions to exercisability of the option are satisfied and
the excess of the stock price over the exercise price on the date the option
is exercised. It is highly unlikely that the value realized by the above
employees will be consistent with the value estimated by the Black-Scholes
model. The estimated values under that model are based on assumptions
regarding interest rates, stock price volatility and future dividend yield.
The model is used for valuing market traded options and is not directly
applicable to valuing stock options granted under the Company's stock option
plan which cannot be transferred.
Aggregated Stock Option Exercises
The following table provides information concerning the exercise of
stock options during the last fiscal year and unexercised stock options held
as of the end of the fiscal year by the named executive officers.
Aggregated Option Exercises in Last Fiscal Year
and FY-End Option Values
Dollar Value
Number of of Unexercised
Unexercised In-the-Money
Options at Options at
FY-End FY-End
Shares Dollar
Acquired Value Exer- Un-exer- Exer- Un-exer
Name on Exercise Realized cisable cisable cisable cisable
Alan J.
Hirschfield 0 0 150,000 125,000 $355,950 0
Allan R.
Tessler 0 0 150,000 125,000 $355,950 0
Dwight H. Egan 0 0 264,858 100,000 $204,970 0
James A. Kaplan 0 0 0 100,000 0 0
Mark F. Imperiale 0 0 116,666 133,334 0 0
The value of unexercised options at fiscal year-end is the difference
between the option exercise price and the average of the high ask and low bid
price for the Company's common stock as reported by the Nasdaq Stock Market's
National Market ("Nasdaq") for June 30, 1997, which was $4.81. These amounts
have not been, and may never be, realized. Actual amounts realized will
depend on the value of the Company's common stock if and when options become
exercisable and are exercised.
Compensation of Directors
During fiscal year 1997, all non-employee directors of the Company
received an annual fee of $5,000 and reimbursement for travel expenses for
service to the Board of Directors. All Audit Committee members also received
an annual fee of $1,250 as compensation for their service on the committee. No
employee director received compensation for service to the Board.
Each non-employee director of the Company holding such position on the
third business day after the Company publicly announces its summary fiscal
year-end statement of sales and earnings shall, at the discretion of the Stock
Option Committee, receive an option to acquire 10,000 shares of common stock
with an exercise price equal to the fair market value of the stock on such
date. On September 8, 1997, each non-employee director was granted options
for 10,000 shares of common stock at an exercise price of $5.31, which become
exercisable on the date of grant. Each option terminates, to the extent not
exercised prior thereto, upon the earlier of (i) the tenth anniversary of the
grant or (ii) the first anniversary of the cessation of the optionee's service
as a director of the Company.
Effective as of September 16, 1996, the Company entered into a consulting
agreement with Mr. Herbert S. Schlosser, a director of the Company. The
Consulting Agreement provides for: (i) a three-year term; (ii) payment for
consulting services of $250,000 payable in installments of approximately
$21,000 per quarter; and (iii) the grant of options to purchase 25,000 shares
of Company common stock. Aggregate consulting fee payments made by the
Company during the fiscal year ended June 30, 1997 was $62,500.
Employment Contracts and Termination of Employment and Change of Control
Arrangements
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT
The Company entered in employment agreements with Messrs. Hirschfield and
Tessler effective as of January 1, 1997 and continuing until December 31, 2000
unless extended by either the executive or the Company for successive one-year
terms. The agreement provides for a base salary of $325,000 with scheduled
increases in future years and a performance based bonus of up to 100% of the
base salary as determined by the Compensation Committee upon an evaluation of
the performance of the executive and the Company during the previous fiscal
year. In the event of certain involuntary terminations and in the event of a
change of control wherein the executive exercises his right to terminate the
agreement, he shall receive a lump sum payment equal to 150% of the base
salary for the greater of two years or the remainder of the employment term.
In addition, in the event of a change of control, the executive will receive
an amount equal to the price per share paid to the Company shareholders less
the pre-announcement share price multiplied by 125,000. Pursuant to the
agreement the executives were also granted options to purchase 125,000 shares
of Company stock.
The Company entered into an employment agreement with Mark F. Imperiale,
President, Chief Operating Officer and Chief Financial Officer, effective as
of January 1, 1997. The agreement provides for a four-year term, a base
salary of $275,000 with scheduled increases in future years, and a
performance-based bonus of up to 100% of the base salary as determined by the
Compensation Committee upon an evaluation of the performance of the executive
and the Company during the previous fiscal year. In the event of certain
involuntary terminations and in the event of a change of control wherein Mr.
Imperiale exercises his right to terminate the agreement, he shall receive a
lump sum payment equal to 150% of the base salary for the greater of two years
or the remainder of the employment term. In addition, in the event of a
change of control, he will receive an amount equal to the price per share paid
to the Company shareholders less the pre-announcement price multiplied by
100,000. Pursuant to the agreement Mr. Imperiale was also granted options to
acquire 100,000 shares of Company stock.
The Company entered into an employment agreement with Mr. Kaplan,
President of CMS, effective April 29, 1994. The agreement provided for a
three-year term of employment and base salaries in each of the years. The
agreement was extended in April of 1997 for one year from its scheduled
termination, but Mr. Kaplan is only required to be available 80% of his time
and was granted options to purchase 100,000 shares of Company common stock.
His salary is to remain at $475,000 for the extension year. The agreement
also provides for a subsequent three-year consultancy period during which Mr.
Kaplan will be paid $333,333 a year for part-time consulting services. Mr.
Kaplan is prohibited from competing with the Company during the entire term of
the agreement. Mr. Kaplan's right to receive the compensation specified in
the latter three-year period is subject only to his continuing compliance with
the non-compete restrictions.
Broadcast International, Inc. ("Broadcast") and Mr. Egan has entered
into a termination benefit agreement dated January 1, 1992. This agreement
provides that Mr. Egan is entitled to receive termination benefits if a change
in control of Broadcast occurs and, within three years thereafter, Broadcast
terminates his employment for any reason other than for "cause" (as defined in
the agreement). The change in control occurred upon the merger with the
Company. Pursuant to the agreement, the termination benefits generally
include a lump-sum payment of an amount equal to three times his average
annual compensation for the most recent five calendar years ending coincident
with or immediately before the change in control. The agreement also provides
that the Company is obligated to pay or reimburse up to $250,000 in legal
expenses incurred by him should the enforceability of such agreement be
challenged and other provisions typical for these types of termination
benefits.
The Company currently has no other compensation plan or arrangement with
respect to any of the executive officers named on the Summary Compensation
Table, which results or will result from the resignation, retirement, or other
termination of such individual's employment with the Company or from a change
in control of the Company or a change in the individual's responsibilities
following a change in control. However, as noted under the Stock Option Grant
Table above, the Stock Option Committee of the Board may accelerate the
exercisability of employee stock options granted under the Option Plan upon a
change in control of the Company.
Compensation Committee Interlocks and Insider Participation
During the past fiscal year, Messrs. Hirschfield and Tessler served on
the Stock Option Committee.
Mr. Markin, a member of the Company's Compensation Committee, was,
during the fiscal year, President of Great Dane, an entity which does not have
a compensation committee. Mr. Tessler, Co-Chief Executive Officer of the
Company, was a member and Chairman of Great Dane's board of directors.
REPORT OF THE COMPENSATION COMMITTEE
AND THE STOCK OPTION COMMITTEE
ON EXECUTIVE OFFICERS' COMPENSATION
Decisions regarding compensation of the Company's executive officers are
made by the Compensation Committee of the Board, except that decisions as to
the granting of options under the Company's Stock Option Plan are made by the
Stock Option Committee of the Board. In making decisions on compensation, the
Compensation Committee solicits and receives the recommendations of the Co-
Chief Executive Officers, with recommendations relating to the grant of
options being considered by the Compensation Committee prior to being referred
to the Stock Option Committee.
Compensation Policies For Executive Officers
The Compensation Committee desires to set compensation at levels and
through arrangements that will attract and retain managerial talent desired by
the Company, reward employees for past contributions and motivate managerial
efforts consistent with corporate growth, strategic progress and the creation
of stockholder value. The Compensation Committee believes that a mix of
salary, incentive bonus and stock options will achieve those objectives.
Relationship of Performance to Executive Compensation
The base salaries of Messrs. Kaplan and Imperiale were set by terms of
their employment agreements which were negotiated to attract and retain them.
The Compensation Committee believes these salaries are competitive and
represent a fair estimate of the value of the services rendered by Messrs.
Kaplan and Imperiale to the Company.
The Compensation Committee awarded Mr. Imperiale a bonus for the fiscal
year that was based upon the Company's results of operations, and the
assumption of additional duties and responsibilities as President and Chief
Operating Officer.
Options were awarded during the fiscal year to enhance Mr. Imperiale's
financial interest in the performance of the Company's stock and reward him
for the results of operations under his direction. These options seek to
promote Mr. Imperiale's long-term interest in the Company by vesting over a
three-year period and expiring in ten years.
The number of options awarded to Mr. Imperiale was based upon the
recommendation of the Co-Chief Executive Officers. This recommendation was
based upon the objectives of the Company during Mr. Imperiale's employment
period.
Mr. Egan's base salary was set coincident with the acquisition of BII
and a grant of options made at that time. His compensation package was
structured to induce him to remain with the Company following the acquisition.
Basis For the Compensation of the Co-Chief Executive Officers
The base salaries of the Co-Chief Executive Officers ("Co-CEOs") were
set at a level consistent with other chief executives at comparable companies
considering the financial performance of the Company. The Co-Chief Executive
Officers received no bonuses for fiscal year 1997.
Respectfully submitted,
Compensation Committee Stock Option Committee
David R. Markin, Chairman Alan J. Hirschfield, Co-Chairman
Herbert S. Schlosser Allan R. Tessler, Co-Chairman
Charles M. Diker
PERFORMANCE GRAPH
The graph presented below compares the cumulative total return of the
Company, the Nasdaq U.S. market index and the Nasdaq Non-Financial index from
June 30, 1992 through June 30, 1997. Total return is based on an assumed
investment of $100 on June 30, 1992 and reinvestment of dividends through June
30, 1997.
(GRAPHIC OMITTED)
6/92 6/93 6/94 6/95 6/96 6/97
DBC 100 200 256 300 468 241
Nasdaq U.S. 100 126 127 169 218 264
Nasdaq Non-
Financial 100 125 122 165 212 249
PROPOSAL TO RATIFY SELECTION OF AUDITOR
The Audit Committee has recommended, and the Board of Directors has
selected, the firm of Price Waterhouse LLP, independent certified public
accountants, to audit the financial statements of the Company for the fiscal
year ended June 30, 1998, subject to ratification by the shareholders. Price
Waterhouse has acted as independent auditor for the Company since fiscal year
1995. Representatives of Price Waterhouse LLP, which audited the Company's
1997 financial statements, are expected to be present at the Annual Meeting
with the opportunity to make a statement, if they so desire, and they are
expected to be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS APPROVAL OF THIS PROPOSAL
CERTAIN RELATIONSHIPS AND OTHER TRANSACTIONS
Compliance with Section 16(a) of the Exchange Act
Section 16 of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers, and any person who owns more
than 10% of a registered class of the Company's equity securities, to file
with the SEC and the Company, initial reports of ownership and reports of
changes in ownership of common stock and other equity securities of the
Company. Based upon the information supplied it by such persons, the Company
is required to report any known failure to file these reports within the
period specified by the instructions to the reporting forms. To the knowledge
of the Company, based upon a review of the Section 16(a) reports furnished to
the Company and the written representations of officers and directors, all
these filing requirements were satisfied by the Company's directors and
executive officers.
SOLICITATION
The Company will bear the entire cost of solicitation of proxies
including preparation, assembly, printing and mailing of this Proxy Statement,
the proxy and any additional information furnished to stockholders. Copies of
solicitation materials will be furnished to banks, brokerage houses,
fiduciaries and custodians holding in their names shares of common stock
beneficially owned by others to forward to such beneficial owners. The
Company may reimburse persons representing beneficial owners of common stock
for their costs of forwarding solicitation materials to such beneficial
owners. Original solicitation of proxies by mail may be supplemented by
telephone, telegram, facsimile or personal solicitation by directors, officers
or other regular employees of the Company. No additional compensation will be
paid to directors, officers or other regular employees for such services.
STOCKHOLDER PROPOSALS
Proposals of stockholders that are intended to be presented at the
Company's 1998 annual meeting of stockholders must be received by the Company
not later than June 30, 1998 in order to be included in the Proxy Statement
and proxy relating to that annual meeting. Pursuant to the Company's By-laws,
any record stockholder who desires to submit a proposal for the approval of
the stockholders of the Company must deliver written notice to the Secretary
of the Company no later than the close of business 60 days in advance of the
Annual Meeting or 10 days after the date on which notice of the Annual Meeting
is given, whichever is later.
STOCKHOLDER NOMINATION OF DIRECTORS
Nominations other than those made by the directors of the Company must
be in writing and be delivered to the Secretary of the Company not less than
ten days after the date on which notice of the annual meeting is first given
to the stockholders, or more than 60 days prior to any annual meeting,
whichever is later. Such nominations must include the information regarding
the person advancing the nomination as well as information about the nominee
as required by the Bylaws of the Company. Nominations not made according to
these procedures will be disregarded.
OTHER MATTERS
The Board of Directors knows of no other matters that will be presented
for consideration at the Annual Meeting. If any other matters are properly
brought before this meeting, it is the intention of the persons named in the
accompanying proxy to vote on such matters in accordance with their best
judgment.
By Order of the Board of Directors
Reed L. Benson
Secretary and General Counsel
Jackson, Wyoming
October 28, 1997