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
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement
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14a-6(e)(2)).
|X| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
HOLLYWOOD MEDIA CORP.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|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:
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5) Total fee paid:
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|_| 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:
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4) Date Filed:
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Dear Fellow Shareholders:
Our focus at Hollywood Media is on creating value for shareholders by
leveraging our diversified assets to generate cash flow and by forming strategic
relationships that unlock the value of our media assets. We still have over $70
million remaining in non-cash CBS advertising and we are on track for a record
financial year.
Over the past year, Hollywood Media continued to strengthen its
position as a leading diversified media company with an expanding blue chip
client base. We currently provide our content to many of the leading
entertainment companies worldwide, including The New York Times and AOL Time
Warner. Our data is provided to seven of the top-10 most visited destinations on
the web, including Yahoo!, and is also available on wireless devices, including
AT&T Wireless, Verizon and Sprint PCS.
Sales of tickets on Broadway.com are trending very strong, with
ticket sales up considerably over last year. In addition, ticket sales via our
recently launched 1-800 BROADWAY phone service are above expectations, and could
even outpace online ticket sales in the future. Also, as part of New York City's
new "Paint the Town Red, White & Blue" promotional campaign, Theatre Direct
International, our Broadway ticket wholesale unit, began offering "NYC Freedom
Packages" that combine a hotel stay with a Broadway show, dining, cultural and
sightseeing options. We are the sole supplier of theatre tickets for this
campaign.
We also continue to witness strong growth at our MovieTickets.com
joint venture, which has sold approximately 3 million tickets since its launch
in Spring 2000. Sales are on the rise as evidenced by advance online ticket
sales for Harry Potter, which surpassed $1.3 million since tickets went on sale
October 31, 2001.
Our intellectual property division also continues to enhance our
bottom line. For example, our 51% owned Tekno Books division has enjoyed 28
consecutive profitable quarters with an exceptionally high profit margin. It is
on track to have over 120 of its developed books published in 2001, the largest
total in its history, including 19 books this year with New York Times
bestselling authors.
Our overall strategy is to capitalize on the increasing demand for
entertainment information and ticketing services online, especially as this
demand spreads via devices beyond the PC, including wireless phones. We seek to
leverage our entertainment content, showtime, and ticketing information and
services across a growing number of commercial and consumer outlets.
We invite you to attend our 2001 Annual Meeting of Shareholders at
3:00 p.m. on Thursday, December 20, 2001. At the meeting you will be asked to
vote on the election of eight directors nominated by our Board of Directors and
to ratify the selection of Arthur Andersen LLP as Hollywood Media's independent
public accountants for the year ending on December 31, 2001. The accompanying
Notice of Annual Meeting of Shareholders and Proxy Statement describe in further
detail the matters to be presented at the Annual Meeting. We encourage you to
read this entire Proxy Statement carefully.
Shareholders of record at the close of business on November 15, 2001
are entitled to notice of, and to vote at, the meeting or at any postponements
or adjournments of the meeting.
YOUR VOTE IS VERY IMPORTANT. Whether or not you plan to attend the
annual meeting, please take the time to vote by either (a) completing and
mailing the enclosed proxy card to us or (b) following the telephonic voting
instructions included on the enclosed proxy card. If you vote by telephone, you
should not return your proxy card. If you sign, date and mail your proxy card
without indicating how you want to vote, your vote will be counted as a vote in
favor of the proposals. If you fail to return your card or vote telephonically,
your shares will not be counted as present or voting, unless you attend and vote
in person.
You can obtain additional information about Hollywood Media Corp.
from documents we have filed with the Securities and Exchange Commission.
/s/ Mitchell Rubenstein
Mitchell Rubenstein
Chairman and Chief Executive Officer
This Proxy Statement is dated November 15, 2001 and is first being
mailed to shareholders on or about November 20, 2001.
HOLLYWOOD MEDIA CORP.
2255 GLADES ROAD, SUITE 237 WEST
BOCA RATON, FLORIDA 33431
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Date: December 20, 2001
Time: 3:00 p.m.
Place: 2255 Glades Road, Suite 228 West
Boca Raton, Florida 33431
Notice is hereby given that an Annual Meeting of Shareholders of
Hollywood Media Corp. will be held for the following purposes:
1. To consider and vote upon the election of eight directors
nominated by Hollywood Media's Board of Directors.
2. To consider and vote upon a proposal to ratify the selection
of Arthur Andersen LLP as Hollywood Media's independent public
accountants for the year ending on December 31, 2001.
3. Such other business as properly may be presented at the annual
meeting or any adjournments or postponements thereof.
You are cordially invited to attend the annual meeting. Whether or
not you plan to attend the annual meeting, to ensure that your shares are
represented at the meeting please either (a) sign, date and return the
accompanying proxy card or (b) vote telephonically by following the telephonic
voting instructions included on the enclosed proxy card. If you vote by
telephone, you should not return your proxy card. If you attend the annual
meeting, you may vote in person if you wish, whether or not you have executed
and returned your proxy card or voted telephonically. Your proxy may be revoked
at any time before it is voted. Please review the Proxy Statement accompanying
this notice for more complete information regarding the matters proposed for
your consideration at the annual meeting.
By Order of the Board of Directors
Laurie S. Silvers
President and Secretary
Boca Raton, Florida
November 15, 2001
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, WHETHER
OR NOT YOU PLAN TO BE PRESENT IN PERSON AT THE ANNUAL MEETING, PLEASE SIGN AND
DATE THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE OR FOLLOW THE
TELEPHONIC VOTING INSTRUCTIONS INCLUDED ON THE ENCLOSED PROXY.
TABLE OF CONTENTS
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING.................................................... 1
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENT......................................... 3
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT................................... 4
THE MEETING....................................................................................... 7
General................................................................................ 7
Matters To Be Considered At The Meeting ............................................... 7
Record Date; Quorum; Voting At The Meeting............................................. 7
Proxies ............................................................................... 8
ELECTION OF DIRECTORS............................................................................. 10
Nominees for Election to the Board of Directors........................................ 10
Meetings of the Board of Directors of Hollywood Media.................................. 12
Committees of the Board of Directors of Hollywood Media................................ 13
Compliance with Section 16(a) of the Securities Exchange Act of 1934................... 14
EXECUTIVE OFFICERS................................................................................ 14
EXECUTIVE COMPENSATION............................................................................ 15
Summary Compensation Table............................................................. 15
Employment Agreements.................................................................. 15
Option Grants in Last Fiscal Year...................................................... 17
Stock Option Exercises During 2000 and Stock Options Held at End of 2000............... 17
Stock Option Plans..................................................................... 18
Long-Term Incentive and Pension Plans.................................................. 19
Compensation of Directors.............................................................. 19
Compensation Committee Interlocks and Insider Participation............................ 20
Report of the Compensation Committee on Executive Compensation......................... 21
Report of the Audit Committee.......................................................... 23
Performance Graphs..................................................................... 24
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.................................................... 26
Transactions with Viacom Inc........................................................... 26
Transactions with Tribune Company...................................................... 30
Investments by Affiliate of the Simon Property Group................................... 31
Investment by Hollywood Media's Directors.............................................. 32
Consulting Agreement with Dr. Martin H. Greenberg...................................... 32
Line of Credit......................................................................... 33
PROPOSAL TO RATIFY THE SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS................................ 33
SUBMISSION OF FUTURE SHAREHOLDER PROPOSALS........................................................ 33
EXPERTS........................................................................................... 33
OTHER MATTERS..................................................................................... 34
WHERE YOU CAN FIND MORE INFORMATION............................................................... 34
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2001 ANNUAL MEETING OF SHAREHOLDERS
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PROXY STATEMENT
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QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING
Q: WHAT AM I BEING ASKED TO VOTE UPON?
A: You are being asked to vote in favor of the election of
eight directors nominated by our Board of Directors. You
are also being asked to ratify the selection of Arthur
Andersen LLP as Hollywood Media's independent public
accountants for 2001.
HOLLYWOOD MEDIA'S BOARD OF DIRECTORS HAS APPROVED EACH OF
THESE PROPOSALS AND RECOMMENDS THAT YOU VOTE FOR EACH
PROPOSAL.
Q: WHEN IS THE ANNUAL MEETING?
A: The annual meeting will be held on December 20, 2001 at
3:00 p.m., local time, at 2255 Glades Road, Suite 228
West, Boca Raton, Florida 33431.
Q: WHO IS ENTITLED TO NOTICE OF AND TO VOTE AT THE MEETING?
A: Only shareholders of record at the close of business on the
Record Date, November 15, 2001, are entitled to receive
notice of the annual meeting and to vote shares of
Hollywood Media common stock that they held on the Record
Date at the annual meeting, or any postponements or
adjournments of the annual meeting. Each outstanding share
of common stock entitles its holder to cast one vote on
each matter to be voted upon.
Q: WHO CAN ATTEND THE MEETING?
A: All shareholders as of the Record Date, November 15, 2001,
or their duly appointed proxies may attend the annual
meeting. However, please note that if you hold shares in
"street name" (that is, through a broker or other nominee),
you will need to bring a copy of a brokerage statement
reflecting your stock ownership as of the Record Date and a
proxy from the institution that holds such shares.
Q: WHAT SHOULD I DO NOW?
A: You should either mail your signed proxy card in the
enclosed postage paid envelope or vote via the telephone in
accordance with the telephonic voting instructions included
on the proxy card as soon as possible, so that your shares
will be represented at the annual meeting. If you vote by
telephone, you should not return your proxy card.
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Q: CAN I CHANGE MY VOTE AFTER I HAVE MAILED IN A SIGNED PROXY
CARD OR VOTED TELEPHONICALLY?
A: Yes. You can change your vote in one of the following ways
at any time before your proxy is voted at the annual
meeting. First, you can revoke your proxy by delivering a
written notice to the Secretary of Hollywood Media prior to
the time it is exercised. Second, you can submit a new,
later dated proxy card or change your telephonic proxy via
the telephonic voting instructions prior to the time the
initial proxy is exercised. Third, you can attend the
annual meeting and vote in person.
Q: WHOM SHOULD I CALL WITH QUESTIONS?
A: Hollywood Media Corp.
2255 Glades Road, Suite 237W
Boca Raton, Florida 33431
(561) 998-8000
Attention: Investor Relations Department
Q: WHERE CAN I FIND MORE INFORMATION ABOUT HOLLYWOOD MEDIA?
A: From various sources described under "Where You Can Find
More Information" on page 34 of this Proxy Statement.
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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
Certain statements in this Proxy Statement or that are otherwise made
by us or on our behalf about our financial condition, results of operations and
business constitute "forward-looking statements" within the meaning of federal
securities laws. Hollywood Media cautions readers that certain important factors
may affect our actual results, levels of activity, performance or achievements
and could cause such actual results, levels of activity, performance or
achievements to differ materially from any future results, levels of activity,
performance or achievements anticipated, expressed or implied by any
forward-looking statements that may be deemed to have been made in this Proxy
Statement or that are otherwise made by or on behalf of Hollywood Media. For
this purpose, any statements contained in this Proxy Statement that are not
statements of historical fact may be deemed to be forward-looking statements.
Without limiting the generality of the foregoing, "forward-looking statements"
are typically phrased using words such as "may," "will," "should," "expect,"
"believe," "anticipate," "intend," "could," "estimate," "pro forma" or
"continue" or the negative variations thereof or similar expressions or
comparable terminology. For those forward-looking statements, we claim the
protection of the safe harbor for forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995. Factors that may affect
Hollywood Media's results include, but are not limited to, our continuing
operating losses, negative cash flows from operations and accumulated deficit,
our limited operating history, the need for additional capital to finance our
operations, the need to manage our growth and integrate new businesses into
Hollywood Media, our ability to develop strategic relationships, our ability to
compete with other Internet companies, technology risks and the general risk of
doing business over the Internet, future government regulation, dependence on
our founders, the interests of our largest shareholder, Viacom Inc., accounting
considerations related to our strategic alliance with Viacom Inc., the
volatility of our stock price, and the effects of outstanding warrants that
include market-based adjustment features. Hollywood Media is also subject to
other risks detailed from time to time in Hollywood Media's filings with the
Securities and Exchange Commission.
Because these forward-looking statements are subject to risks and
uncertainties, we caution you not to place undue reliance on these statements,
which speak only as of the date of they are made. We do not undertake any
responsibility to review or confirm analysts' expectations or estimates or to
release publicly any revisions to these forward-looking statements to take into
account events or circumstances that occur after the date of this Proxy
Statement. As a result of the foregoing and other factors, no assurance can be
given as to the future results, levels of activity or achievements and neither
us nor any other person assumes responsibility for the accuracy and completeness
of such statements.
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SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the
beneficial ownership of the common stock of Hollywood Media as of the Record
Date by (1) each person known to beneficially own more than 5% of the
outstanding shares of the common stock, (2) each director and director nominee
of Hollywood Media, (3) Hollywood Media's Chief Executive Officer and four of
Hollywood Media's other most highly compensated executive officers whose total
annualized salary and bonus in 2000 was $100,000 or more and (4) all directors
and executive officers of Hollywood Media as a group. Except as otherwise
indicated, Hollywood Media believes that all beneficial owners named in the
table have sole voting and investment power with respect to all shares of common
stock beneficially owned by them. Hollywood Media is not aware of any beneficial
owner of more than five percent of the outstanding shares of common stock of
Hollywood Media other than as set forth in the following table.
NAME AND ADDRESS NUMBER OF SHARES BENEFICIALLY PERCENT OF
OF BENEFICIAL OWNER(1) OWNED CLASS
---------------------- ----- -----
Viacom Inc. 8,424,321 (2) 30.5%
J.P. Morgan Chase & Co. 2,508,743 9.2%
Tribune Company 2,452,623 9.0%
Mitchell Rubenstein 2,568,077 (3) 9.0%
Laurie S. Silvers 2,568,077 (3) 9.0%
GeoCapital, L.L.C. 1,669,300 6.1%
Dr. Martin H. Greenberg 430,609 (4) 1.6%
Jules L. Plangere, Jr. 112,743 (5) *
Deborah J. Simon 41,738 (6) *
Harry T. Hoffman 24,132 (7) *
Peter Glusker - *
Mitchell Semel - *
Robert E. McAllan 10,764 (8) *
W. Robert Shearer 122,968 (9) *
Nicholas G. Hall 40,264 (10) *
All directors and executive officers of 3,351,295 (11) 11.6%
Hollywood Media as a group (11 persons)
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- ----------------
* Less than 1%
(1) Except as noted in this footnote, the address of each beneficial
owner is in care of Hollywood Media Corp., 2255 Glades Road, Suite
237 West, Boca Raton, Florida 33431. The business address of Viacom
Inc. is 1515 Broadway, 52nd Floor, New York, NY 10036-5794, the
business address of J.P. Morgan Chase & Co. is 270 Park Ave., New
York, NY 10017, the business address of GeoCapital, L.L.C. is 825
Third Avenue, New York, NY 10022 and the business address of The
Tribune Company is 435 N. Michigan Ave., 6th floor, Chicago, Illinois
60611.
(2) Includes 262,973 shares of common stock issuable under a currently
exercisable warrant. This information is based on a Schedule 13D,
filed with the Securities and Exchange Commission on May 15, 2000,
which was jointly filed by Sumner M. Redstone and Viacom Inc.
Beneficial ownership of the shares of Hollywood Media common stock is
attributed to Sumner M. Redstone, as trustee of a trust that owns 66
2/3% of the issued and outstanding shares of capital stock of
National Amusements, Inc. ("NAI"). NAI owns 100% of the outstanding
capital stock of NAIRI, Inc., which in turn owns approximately 68% of
the voting stock of Viacom Inc. Each of Sumner M. Redstone and Viacom
Inc. has shared voting and dispositive power over the shares of
Hollywood Media common stock.
(3) Except for 100,000 shares owned individually by each of Mr.
Rubenstein and Ms. Silvers, all of such shares are held by Mr.
Rubenstein and Ms. Silvers jointly as tenants by the entireties.
Includes an aggregate of 1,194,224 shares of common stock issuable
pursuant to stock options granted to, and 15,000 shares of common
stock issuable pursuant to warrants purchased by, Mr. Rubenstein and
Ms. Silvers that are currently exercisable or exercisable within 60
days of the Record Date.
(4) Includes 91,667 shares of common stock owned by Dr. Greenberg's
spouse, 86,382 shares of common stock issuable pursuant to options
that are currently exercisable or exercisable within 60 days of the
Record Date, and 15,221 shares of common stock issuable under
currently exercisable warrants.
(5) Includes 14,645 shares of common stock issuable pursuant to options
that are currently exercisable and 28,334 shares of common stock
issuable under currently exercisable warrants.
(6) Includes 23,573 shares of common stock issuable pursuant to options
that are currently exercisable.
(7) Includes 22,532 shares of common stock issuable pursuant to options
that are currently exercisable and 400 shares of common stock
issuable under a currently exercisable warrant.
(8) Includes 9,764 shares of common stock issuable pursuant to options
that are currently exercisable.
(9) Includes 118,830 shares of common stock issuable pursuant to options
that are currently exercisable or exercisable within 60 days of the
Record Date.
(10) Represents 8,773 shares of common stock issuable pursuant to options
granted to Mr. Hall that are currently exercisable or exercisable
within 60 days of the Record Date and 31,491 shares of common stock
issuable pursuant to options granted to Mary Hall, Hollywood Media's
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Vice President of Operations and Mr. Hall's spouse, that are
currently exercisable or exercisable within 60 days of the Record
Date.
(11) Includes 1,510,174 shares of common stock issuable pursuant to
options that are currently exercisable or exercisable within 60 days
of the Record Date and 58,955 shares of common stock issuable under
currently exercisable warrants.
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THE MEETING
GENERAL
This Proxy Statement is being furnished to holders of shares of
common stock in connection with the solicitation of proxies by Hollywood Media's
Board of Directors for use at the annual meeting of shareholders (the "Meeting")
to be held at the offices of Hollywood Media, located at 2255 Glades Road, Suite
228 West, Boca Raton, Florida 33431, on December 20, 2001, convening at 3:00
p.m., local time, and at any adjournments or postponements thereof. This Proxy
Statement and the accompanying form of proxy are first being mailed to holders
of common stock on or about November 20, 2001. Shareholders should review the
information in this Proxy Statement together with Hollywood Media's Annual
Report to Shareholders for the year ended December 31, 2000 which accompanies
this Proxy Statement. A list of shareholders entitled to vote at the Meeting
will be available at Hollywood Media's principal executive offices, 2255 Glades
Road, Suite 237W, Boca Raton, Florida 33431, for a period of ten days prior to
the Meeting and at the Meeting itself for examination by any shareholder.
MATTERS TO BE CONSIDERED AT THE MEETING
At the Meeting, holders of shares of common stock will be requested
to consider and vote upon (1) the election of eight directors nominated by
Hollywood Media's Board of Directors and (2) a proposal to ratify the selection
of Arthur Andersen LLP as Hollywood Media's independent public accountants for
the year ending on December 31, 2001 and (3) such other business as properly may
be presented at the Meeting or any adjournments or postponements thereof.
HOLLYWOOD MEDIA'S BOARD OF DIRECTORS HAS APPROVED, AND RECOMMENDS
THAT HOLDERS OF COMMON STOCK VOTE IN FAVOR OF THE ELECTION OF THE NOMINEES TO
THE BOARD OF DIRECTORS OF HOLLYWOOD MEDIA AND THE RATIFICATION OF HOLLYWOOD
MEDIA'S CHOICE OF ARTHUR ANDERSEN LLP AS HOLLYWOOD MEDIA'S INDEPENDENT PUBLIC
ACCOUNTANTS.
RECORD DATE; QUORUM; VOTING AT THE MEETING
Hollywood Media's Board of Directors has fixed November 15, 2001 as
the Record Date. Accordingly, only holders of record of shares of common stock
at the Record Date will be entitled to notice of and to vote at the Meeting. At
the Record Date, there were 27,315,489 shares of common stock outstanding and
entitled to vote. Each holder of record of common stock on the Record Date is
entitled to cast one vote per share in respect of the proposals presented for
the vote of such holders, either in person or by proxy, at the Meeting. The
presence, in person or by proxy, of the holders of a majority of the voting
power of the outstanding shares of common stock entitled to vote at the Meeting
is necessary to constitute a quorum at the Meeting.
Under Florida law, nominees for director will be elected if they
receive the affirmative vote of a plurality of the votes of the shares of common
stock present in person or by proxy at the Meeting and entitled to vote on the
election of directors. The affirmative vote of the holders of a majority of the
shares of common stock represented in person or by proxy at the Meeting will be
required for any other matter that may be submitted to a vote of the
shareholders. If less than a majority of the outstanding shares entitled to vote
are represented at the Meeting, a majority of the shares so represented may
adjourn the Meeting to another date, time or place.
Prior to the Meeting, Hollywood Media will select one or more
inspectors of election for the Meeting. Such inspector(s) shall determine the
number of shares of common stock represented at the Meeting, the existence of a
quorum and the validity and effect of proxies, and shall receive, count and
tabulate ballots and votes and determine the results thereof. Abstentions will
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be considered as shares of common stock present and entitled to vote at the
Meeting and will be counted as votes cast at the Meeting, but will not be
counted as votes cast "for" or "against" any given matter. A broker or nominee
holding shares of common stock registered in its name, or in the name of its
nominee, which are beneficially owned by another person and for which it has not
received instructions as to voting from the beneficial owner, may have
discretion to vote the beneficial owner's shares with respect to the matters
addressed at the Meeting. The inspectors of election will treat shares referred
to as "broker or nominee non-votes" (shares held by brokers or nominees as to
which instructions have not been received from the beneficial owners or persons
entitled to vote and the broker or nominee does not have discretionary voting
power on a particular matter) as shares that are present and entitled to vote
for purposes of determining the presence of a quorum. For purposes of
determining the outcome of any matter as to which the proxies reflect broker or
nominee non-votes, shares represented by such proxies will be treated as not
present and not entitled to vote on that subject matter and therefore will not
be considered by the inspectors of election when counting votes cast on the
matter (even though those shares are considered entitled to vote for quorum
purposes and may be entitled to vote on other matters). Accordingly, broker or
nominee non-votes will not have the same effect as a vote against the election
of any director. Abstentions will not have the same effect as a vote against the
election of any director. Any such shares of common stock that are not
represented at the Meeting either in person or by proxy will not be considered
to have cast votes on any matters addressed at the Meeting.
As of the Record Date, the directors and executive officers of
Hollywood Media beneficially owned in the aggregate approximately 11.6% of the
outstanding shares of common stock.
PROXIES
This Proxy Statement is being furnished to holders of common stock in
connection with the solicitation of proxies by and on behalf of the Board of
Directors of Hollywood Media for use at the Meeting.
Shares of common stock represented by proxies received at or prior to
the Meeting that have not been revoked will be voted at the Meeting in
accordance with the instructions contained therein. Shares of common stock
represented by proxies for which no instruction is provided will be voted for,
the election of the nominees to the Board of Directors of Hollywood Media and
the ratification of Hollywood Media's choice of independent public accountants.
To ensure that their shares are voted, holders of common stock are requested to
complete, sign, date and return promptly the enclosed proxy card in the
postage-prepaid envelope provided for such purpose or to vote telephonically by
following the telephone voting instructions on the enclosed proxy card. Any
holder of common stock who so desires may revoke his, her or its proxy at any
time prior to the time it is exercised by (1) providing written notice to such
effect to the Secretary of Hollywood Media at our principal executive offices,
(2) duly executing a proxy bearing a date subsequent to that of a previously
furnished proxy or (3) attending the Meeting and voting in person. Attendance at
the Meeting will not in itself constitute a revocation of a previously furnished
proxy, and shareholders who attend the Meeting in person need not revoke their
proxy (if previously furnished) and vote in person.
If the Meeting is postponed or adjourned for any reason, at any
subsequent reconvening of the Meeting, all proxies will be voted in the same
manner as such proxies would have been voted at the initial convening of the
Meeting (except for any proxies that theretofore effectively have been revoked
or withdrawn), notwithstanding that they may have been effectively voted on the
same or any other matter at a previous meeting.
If any other matters properly are presented at the Meeting for
consideration, including consideration of a motion to adjourn the Meeting to
another time and/or place (including for the purpose of soliciting additional
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proxies), the persons named in the enclosed form of proxy and acting thereunder
will have discretion to vote on such matters in accordance with their best
judgment.
If any beneficial owner of common stock holds such stock in "street
name" and wishes to vote his or its stock at the Meeting, such owner must obtain
from the relevant nominee holding common stock a properly executed "legal proxy"
identifying the beneficial owner as a holder of common stock, authorizing the
beneficial owner to act on behalf of the nominee-record owner at the Meeting and
identifying the number of shares (and certificate numbers, if applicable) in
respect of which the authorization is granted.
Hollywood Media will pay the costs of soliciting proxies from the
holders of common stock, including the cost of printing, assembling and mailing
this Proxy Statement. In addition to solicitation by mail, directors, officers
and employees of Hollywood Media may solicit proxies by telephone, facsimile
transmission or otherwise. Such directors, officers and employees of Hollywood
Media will not be specially compensated for such solicitation, but may be
reimbursed for out-of-pocket expenses incurred in connection therewith.
Brokerage firms, fiduciaries and other custodians who forward soliciting
material to the beneficial owners of common stock held of record by them will be
reimbursed for their reasonable expenses incurred in forwarding such material.
Arrangements also will be made with custodians, nominees and fiduciaries for the
forwarding of proxy solicitation materials to beneficial owners of shares of
common stock held of record by such custodians, nominees and fiduciaries, and
Hollywood Media will reimburse such custodians, nominees and fiduciaries for
their reasonable out-of-pocket expenses incurred in connection therewith.
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ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
At the Meeting, eight directors will be elected by the shareholders
to serve until the next annual meeting of shareholders or until their successors
are elected and qualified. The accompanying form of proxy, when properly
executed and returned to Hollywood Media, will be voted FOR the election as
directors of the eight persons named below, unless the proxy contains contrary
instructions. Proxies cannot be voted for a greater number of persons than the
number of nominees named in this Proxy Statement. Management has no reason to
believe that any of the nominees is unable or unwilling to serve if elected. In
the event, however, that any of the nominees should become unable or unwilling
to serve as a director, the proxy will be voted for the election of such person
or persons as shall be designated by the Board of Directors.
The following table sets forth certain information concerning each
nominee as of the Record Date.
NAME AGE POSITION
---- --- --------
Mitchell Rubenstein 47 Chairman of the Board and Chief Executive
Officer
Laurie S. Silvers 49 Vice Chairman of the Board, President and
Secretary
Dr. Martin H. Greenberg 60 Director and Chief Executive Officer of
Tekno Books
Peter Glusker 39 Director
Harry T. Hoffman 74 Director
Robert E. McAllan 54 Director
Mitchell Semel 42 Director
Deborah J. Simon 45 Director
- ---------------
MITCHELL RUBENSTEIN is a founder of Hollywood Media and has served as
its Chairman of the Board and Chief Executive Officer since its inception in
January 1993. Mr. Rubenstein was a founder of the Sci-Fi Channel, a 24-hour
national cable television network that was acquired by USA Network in March
1992. Mr. Rubenstein served as President of the Sci-Fi Channel from January 1989
to March 1992 and served as Co-Vice Chairman of the Sci-Fi Channel from March
1992 to March 1994. Prior to founding the Sci-Fi Channel, Mr. Rubenstein
practiced law for 10 years, including as a partner with Rubenstein & Silvers, a
law firm that specialized in entertainment, cable television and broadcasting
law, from 1981 to 1989. Mr. Rubenstein also co-owned and served as an executive
officer of several cable television systems (including Flagship Cable Partners,
who owned a cable television system serving Boynton Beach and portions of Palm
Beach County, Florida) from 1983 to 1989. Mr. Rubenstein received a J.D. degree
from the University of Virginia School of Law in 1977 and a Masters in Tax Law
from New York University School of Law in 1979. He currently serves on the NYU
Tax Law Advisory Board and is a member of the Founders Society, New York
University, a member of the University of Virginia School of Law Business
Advisory Council, and a member of the Board of Trustees of Temple Beth El, Boca
Raton, Florida. Together with Ms. Silvers, Mr. Rubenstein was named Co-Business
Person of the Year, City of Boca Raton, Florida in 1992. Mr. Rubenstein is
married to Laurie S. Silvers.
10
LAURIE S. SILVERS is a founder of Hollywood Media and has served as
its Vice Chairman, President and Secretary since its inception in January 1993.
Ms. Silvers was a founder of the Sci-Fi Channel, of which she served as Chief
Executive Officer from January 1989 to March 1992 and Co-Vice Chairman from
March 1992 to March 1994. Prior to founding the Sci-Fi Channel, Ms. Silvers
practiced law for 10 years, including as a partner with Rubenstein & Silvers, a
law firm that specialized in entertainment, cable television and broadcasting
law, from 1981 to 1989. Ms. Silvers also co-owned and served as an executive
officer of several cable television systems (including Flagship Cable Partners,
which owned a cable television system serving Boynton Beach and portions of Palm
Beach County, Florida) from 1983 to 1989 and co-owned a television station from
1990 to 1991. Ms. Silvers received a J.D. degree from University of Miami School
of Law in 1977. Ms. Silvers serves on the University of Miami International
Advisory Board and the University of Miami School of Law Visiting Committee. Ms.
Silvers served on the Board of Directors of the Pine Crest Preparatory School,
Inc. from 1993 to 1999. She has been a member of the Pine Crest Preparatory
School, Inc. Board of Advisors (Boca Raton Campus) since 1987, and served as its
Chairman from 1995-1997. Ms. Silvers has served as a member of the executive
advisory board of the School of Business of Florida Atlantic University, and has
been a member of the Economic Council of Palm Beach since 1995. Together with
Mr. Rubenstein, Ms. Silvers was named Co-Business Person of the Year, City of
Boca Raton, Florida in 1992 and has been a keynote speaker at various business
symposia, including one held at Harvard Business School. Ms. Silvers is married
to Mitchell Rubenstein.
DR. MARTIN H. GREENBERG has served as a director of Hollywood Media
since July 1993, and as a consultant to Hollywood Media since February 1993.
Since December 1994, Dr. Greenberg has served as Chief Executive Officer of
Tekno Books, 51% of which is owned by Hollywood Media and 49% of which is owned
by Dr. Greenberg. Dr. Greenberg was President and a principal shareholder of
Tomorrow, Inc., a company engaged in book licensing and packaging, from 1990
until its acquisition by Hollywood Media in 1994. Dr. Greenberg is also
co-publisher of Mystery Scene Magazine, a mystery genre trade journal of which
Hollywood Media owns a majority interest. Dr. Greenberg is widely regarded as
the leading anthologist in trade publishing, and has served as editor or author
of more than 700 books. Dr. Greenberg also is the 1995 recipient of the Ellery
Queen Award, presented by the Mystery Writers of America for Lifetime
Achievement. Dr. Greenberg is a former Director of Graduate Studies at the
University of Wisconsin - Green Bay.
PETER GLUSKER has served as a director of Hollywood Media since
September 2001. Mr. Glusker has served as Senior Vice President of Viacom
Interactive Ventures, formerly CBS Internet Group, since February 2000. Prior to
this, from November 1999 through February 2000, Mr. Glusker was Managing Partner
of The Accelerator Group, LLC, an Internet investment company. From September
1998 to November 1999, Mr. Glusker was self-employed as an Internet industry
consultant. From February 1996 to September 1998, Mr. Glusker held a number of
positions with Prodigy Communications Corporation, an Internet service provider,
most recently Senior Vice President, Content and Business Development. Mr.
Glusker also serves on the board of MarketWatch.com, Inc. Mr. Glusker holds a
B.A. degree from Wesleyan University and an M.B.A. degree from Stanford
University.
HARRY T. HOFFMAN has served as a director of Hollywood Media since
July 1993. From 1979 to 1991, Mr. Hoffman served as President and Chief
Executive Officer of Waldenbooks, Inc., a leading national retailer of books,
magazines and related items. From 1968 to 1978, he served as President and Chief
Executive Officer of Ingram Book Company, a national book wholesaler.
ROBERT E. MCALLAN is presently a nominee to serve as a director of
Hollywood Media. Mr. McAllan is currently CEO of Press Communications, LLC,
which owns and operates broadcast properties. Mr. McAllan has been in the
commercial radio industry since 1964. Mr. McAllan began his career as a News
Director/Operations Manager at WADB FM where he won a national news award from
11
United Press International. Thereafter, Mr. McAllan became a talk show host for
the New Jersey Press' radio stations WJLK AM/FM, and through a series of rapid
promotions Mr. McAllan became the president of Press Broadcasting Company, the
broadcast division of The New Jersey Press and expanded the company by acquiring
several strategic television stations and radio acquisitions. At the time that
New Jersey Press' newspapers were acquired by Gannett, Mr. McAllan led a group
of key Press executives who acquired the broadcast division of the New Jersey
Press. Mr. McAllan has also held myriad directorships and officer positions for
several companies and associations, including but not limited to, The Asbury
Park Press, Inc., the second largest newspaper in New Jersey, New Jersey Press
Incorporated, a diversified media company which operated major daily newspapers,
television stations, radio stations and online media, Press Broadcasting
Company, the Florida Association of Broadcasters, Chairman of the National/New
Jersey Class A Broadcasters Association, Chairman of the National Independent
Television Committee, and Co-Chairman of the Coalition for Media Diversity.
MITCHELL SEMEL has served as a director of Hollywood Media since
December 1999. Mr. Semel has served as Senior Vice President, Programming, East
Coast for CBS Entertainment since April 1996, where he has been involved in the
production of the Late Show with David Letterman, the Late Late Show with Tom
Snyder and the Late Late Show with Craig Kilborn. From 1994 to 1996 he worked
with NBC Productions, Inc. as a consulting producer and as an executive producer
for various shows. Mr. Semel was Senior Vice President, Programming, Comedy
Central, New York from 1992 to 1994, and from 1991 to 1992, he was Vice
President, Programming, Public Broadcasting Service, Washington, D.C.
DEBORAH J. SIMON has served as a director of Hollywood Media since
November 1995. Ms. Simon has held the position of Senior Vice President of Simon
Property Group, an Indianapolis-based real estate development and management
firm that is listed on the New York Stock Exchange, since 1991. Prior to that,
Ms. Simon served as Vice President -- Western Region Leasing of the Simon
Property Group. She also has been an independent producer, with several
television credits to her name. She currently serves on the Board of Directors
of the Indianapolis Children's Museum, Indiana Repertory Theater, Indianapolis
Museum of Art and Chairperson of Simon Youth Foundation and Mercerburg Academy
Board of Regents.
See "Certain Relationships and Related Transactions" for a
description of the rights of each of Viacom Inc. and Tekno Simon LLC to nominate
individuals to serve as directors of Hollywood Media.
Hollywood Media's officers are elected annually by the Board of
Directors and serve at the discretion of the Board, subject to the terms and
conditions of each officer's employment agreement with Hollywood Media, if any.
Hollywood Media's directors hold office until the next annual meeting of
shareholders and until their successors have been duly elected and qualified.
THE BOARD OF DIRECTORS OF HOLLYWOOD MEDIA RECOMMENDS THAT HOLDERS OF
COMMON STOCK VOTE IN FAVOR OF THE PERSONS NOMINATED FOR ELECTION TO THE BOARD OF
DIRECTORS.
MEETINGS OF THE BOARD OF DIRECTORS OF HOLLYWOOD MEDIA
During the year ended December 31, 2000, Hollywood Media's Board of
Directors acted on eleven occasions, once by meeting and ten times by unanimous
written consent. During 2000, all incumbent directors attended at least
seventy-five percent (75%) or more of the combined total meetings of the Board
of Directors and the committees on which they served.
12
COMMITTEES OF THE BOARD OF DIRECTORS OF HOLLYWOOD MEDIA
The Board of Directors has established four committees: the
Compensation Committee, the Stock Option Committee, the Audit Committee and the
Nominating Committee, and may establish other committees from time to time as
the Board of Directors may determine.
COMPENSATION COMMITTEE. Harry T. Hoffman, Peter Glusker and Mitchell
Rubenstein are the current members of our Compensation Committee. The
Compensation Committee's responsibilities consist of recommending, reviewing,
and approving the salary and other benefits of Hollywood Media's officers and
employees, including compensation of executive officers of Hollywood Media. The
Compensation Committee did not meet or act by unanimous written consent during
the year ended December 31, 2000.
STOCK OPTION COMMITTEE. Harry T. Hoffman and Robert E.McAllan are the
current members of our Stock Option Committee. The Stock Option Committee
administers any and all present and future Stock Incentive Plans, including the
Director's Plan, the Hollywood Media Corp. 2000 Stock Incentive Plan and the
Hollywood Media Corp. 1993 Stock Option Plan, and is authorized, subject to the
provisions of the plans, to establish such rules and regulations as it deems
necessary for the proper administration of the plans and to make such
determinations and interpretations and to take such action in connection with
the plans and any benefits granted thereunder as it deems necessary or
advisable. In January 2001, the Stock Option Committee acted by unanimous
written consent on one occasion and granted stock options to a number of
employees based on their performance during the year 2000. During the year ended
December 31, 2000, the Stock Option Committee did not meet or act by unanimous
written consent on any occasion.
AUDIT COMMITTEE. Harry T. Hoffman, Robert McAllan and Deborah J.
Simon are the current members of our Audit Committee. The Board of Directors
adopted a formal written Audit Committee Charter on June 13, 2000, in compliance
with the Nasdaq Stock Market rules. The Audit Committee is responsible for
recommending auditors to be engaged by Hollywood Media, assisting with the
planning of the audit, reviewing the results from the audit and directing and
supervising investigations into matters relating to the audit. The purpose of
the Committee, as further set forth in the Audit Committee Charter, is to assist
the Board of Directors in fulfilling its responsibilities to oversee: (a) the
financial reports and other financial information provided by Hollywood Media to
any governmental or regulatory body, the public, or any other user of such
financial statements; (b) Hollywood Media's systems of internal accounting and
financial controls; (c) the independence and performance of Hollywood Media's
outside auditors; and (d) compliance by Hollywood Media with any legal
compliance and ethics programs as may be established by the Board of Directors
and Hollywood Media's management from time-to-time. Based on meetings held by
the Audit Committee with the independent auditors during February 2001 and March
2001, the Audit Committee recommended to the Board of Directors, and the Board
approved, that the audited financial statements be included in our Annual Report
on Form 10-K for the year ended December 31, 2000 for filing with the Securities
and Exchange Commission. The Audit Committee did not meet or act by unanimous
written consent during the year ended December 31, 2000.
NOMINATING COMMITTEE. Martin H. Greenberg, Mitchell Rubenstein and
Laurie S. Silvers are the current members of our Nominating Committee. The
Nominating Committee has responsibility for, and may exercise all the powers and
authority of the Board of Directors with respect to selecting, interviewing and
recommending to the full Board of Directors individuals to serve on the Board of
Directors. Generally, the Nominating Committee will not consider nominees
recommended by shareholders of Hollywood Media, however, the Nominating
Committee will consider director candidates recommended by shareholders if the
name, biographical data and qualifications of the candidates are timely
13
presented in writing to the Committee. The Nominating Committee did not meet or
act by unanimous written consent during the year ended December 31, 2000.
The Board of Directors does not have any other committees at this
time, although additional committees may be formed in the future.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires
Hollywood Media's directors, executive officers, and persons who own more than
10% of Hollywood Media's outstanding common stock, to file with the SEC initial
reports of ownership and reports of changes in ownership of common stock. Such
persons are required by SEC regulation to furnish Hollywood Media with copies of
all such reports they file.
To Hollywood Media's knowledge, based solely on a review of the
copies of such reports furnished to Hollywood Media or written representations
that no other reports were required, all Section 16(a) filing requirements
applicable to its executive officers, directors and greater-than-10% beneficial
owners for the year ended December 31, 2000 have been complied with, except that
each of Mitchell Rubenstein, Laurie Silvers and W. Robert Shearer filed certain
information on a Form 5 that should have been filed earlier on a Form 4.
EXECUTIVE OFFICERS
The following table sets forth certain information concerning each
executive officer of Hollywood Media as of the Record Date.
NAME AGE POSITION
---- --- --------
Mitchell Rubenstein 47 Chairman of the Board and Chief Executive Officer
Laurie S. Silvers 49 Vice Chairman of the Board, President and Secretary
Dr. Martin H. Greenberg 60 Chief Executive Officer of Tekno Books
W. Robert Shearer 31 Senior Vice President and General Counsel
Nicholas G. Hall 47 Chief Operating Officer
See "Election of Directors - Nominees for Election to the Board of
Directors" above for biographical information for Mitchell Rubenstein, Laurie S.
Silvers and Dr. Martin H. Greenberg.
W. ROBERT SHEARER joined Hollywood Media as Senior Vice President and
General Counsel in June 1999. From 1994 to May 1999, Mr. Shearer practiced law
with Weil, Gotshal & Manges LLP with an emphasis on mergers and acquisitions and
securities law. Mr. Shearer received a Bachelor of Business Administration
degree from the University of Texas in 1991 with high honors and a J.D. degree
from the University of Houston Law Center in 1994, magna cum laude. Mr. Shearer
served as the Editor in Chief of the University of Houston Law Review during
1993 and 1994.
NICHOLAS G. HALL joined Hollywood Media in August 2000, and is
responsible for overseeing and coordinating the activities and strategic growth
of Hollywood Media and its businesses. Mr. Hall serves as Hollywood Media's
Chief Operating Officer. With over 25 years of experience in financial and
operational management, Mr. Hall was formerly Vice President and Chief Financial
14
Officer of The Hair Club For Men from 1997 to 2000, where he was instrumental in
the company achieving its goal of profitability. Prior to this, from 1994 to
1997 Mr. Hall was Vice President and Chief Financial Officer of Allders
International USA, Inc., the U.S. division of the second largest duty-free
retailer in the world. Mr. Hall is a graduate of the Institute of Chartered
Secretaries and Administrators in London, England.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE. The following table sets forth the
aggregate compensation paid in 2000, 1999 and 1998 to the named executive
officers during such years.
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
-------------------------------------------- ------
RESTRICTED SHARES
OTHER ANNUAL STOCK UNDERLYING
NAME AND COMPENSATION AWARDS OPTIONS/SARS
PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) ($) ($) (#)
------------------ ---- ---------- --------- --- --- ---
Mitchell Rubenstein, (7) 2000 260,670 25,000 7,800 (1) -
Chief Executive Officer 1999 237,763 25,000 7,800 (1) - 450,000(4)
1998 235,793 67,572 7,800 (1) - -
306,200 (2)
Laurie S. Silvers, (7) 2000 260,670 25,000 7,800 (1) - -
President 1999 237,763 25,000 7,800 (1) - 450,000(4)
1998 235,793 67,572 7,800 (1) 306,200 (2) 37,500(4)
W. Robert Shearer(5) 2000 126,293 25,000 _ _ 50,000(4)
Senior Vice President and 1999 58,454 _ _ 46,250 (3) 87,500(4)
General Counsel
Nicholas G. Hall(6) 2000 42,577 _ _ _ 25,000(4)
Chief Operating Officer
- ------------------
(1) Represents a car allowance paid to the named executive officer.
(2) Represents the value on the issuance date of 100,000 shares of
restricted common stock granted to the named executive officers,
which vest equally over 36 months beginning July 1, 1998. The value
of the 100,000 shares of restricted common stock as of December 31,
1998 was $1,400,000.
(3) Represents the value on the issuance date of 2,500 shares of common
stock granted to Mr. Shearer. The value of the 2,500 shares of common
stock as of December 31, 1999 was $47,500.
(4) Represents options granted under Hollywood Media's 1993 Stock Option
Plan (the "1993 Plan").
(5) Mr. Shearer joined Hollywood Media on May 31, 1999.
(6) Mr. Hall joined Hollywood Media on August 23, 2000.
(7) Salaries in 2000 include salaries deferred in 1999 but paid in 2000.
EMPLOYMENT AGREEMENTS. Effective July 1, 1993, Hollywood Media
entered into five-year employment agreements with each of Mitchell Rubenstein,
Hollywood Media's Chairman and Chief Executive Officer, and Laurie S. Silvers,
Hollywood Media's Vice Chairman and President. Effective July 1, 1998, Hollywood
Media extended each of these employment agreements for an additional five-year
term. The terms of each of the employment agreements are automatically extended
for successive one-year terms unless Hollywood Media or the named executive
officer gives written notice to the other at least 90 days prior to the
15
then-scheduled expiration date. Each of the employment agreements provides for
an annual salary currently set at $237,000 (subject to automatic cost-of-living
increases), an annual bonus in an amount determined by the Board of Directors
(but not less than $25,000) and an automobile allowance of $650 per month.
Each employment agreement provides that each of Laurie S. Silvers and
Mitchell Rubenstein will continue to receive his or her salary until the
expiration of the term of the employment agreements if either of his or her
employment is terminated by Hollywood Media for any reason other than death,
disability or Cause (as defined in the employment agreements), or for a period
of 12 months after termination of the employment agreement as a result of the
disability of either Laurie S. Silvers or Mitchell Rubenstein, and that each of
their respective estate will receive a lump sum payment equal to one year's base
salary plus a pro rata portion of any bonus to which either Laurie S. Silvers or
Mitchell Rubenstein is entitled upon termination of the employment agreement by
reason of either of his or her death.
The term "Cause" is defined in the employment agreements to mean (a)
the named executive officer's act or omission which constitutes a willful and
material breach of such named executive officer's employment agreement which is
not cured within 30 days after such named executive officer's receipt of notice
of such breach, (b) a named executive officer's fraud, embezzlement or
misappropriation of Hollywood Media's assets or property, or (c) a named
executive officer's conviction for a criminal act that is a felony. A
termination by Hollywood Media of one of the named executive officer's
employment without Cause will constitute a termination without Cause of the
other named executive officer for purposes of the employment agreements. Each
employment agreement also prohibits the named executive officer from directly or
indirectly competing with Hollywood Media for one year after termination of the
employment agreement for any reason except Hollywood Media's termination of the
named executive officer's employment without Cause.
If a Change of Control (as defined in the employment agreements)
occurs, the employment agreements provide for the continued employment of the
named executive officers until the earlier of two years following the Change of
Control or the then-scheduled expiration date of the term of employment. The
term "Change of Control", as used in the employment agreements, is defined to
mean (a) any person's or group's acquisition of 20% or more of the combined
voting power of Hollywood Media's outstanding securities, or (b) in the event of
any cash tender or exchange offer, merger or other business combination, sale of
assets or contested election, the persons who were directors of Hollywood Media
prior to such transaction ceasing to constitute a majority of the Board of
Directors following the transaction. In addition, following a Change in Control,
if the named executive officer's employment is terminated by Hollywood Media
other than for Cause or by reason of the named executive officer's death or
disability, or by the named executive officer for certain specified reasons
(such as a reduction of the named executive officer's compensation or diminution
of the named executive officer's duties), the named executive officer will
receive a lump sum cash payment equal to three times the named executive
officer's then-existing base salary and most recent annual bonus. Mitchell
Rubenstein and Laurie S. Silvers agreed that the acquisition by Viacom Inc. of a
30% equity interest in Hollywood Media did not constitute a change of control
under the employment agreements.
Effective May 31, 1999, Hollywood Media entered into a four-year
employment agreement with W. Robert Shearer, Hollywood Media's Senior Vice
President and General Counsel. The agreement provides for an annual base salary
currently set at $160,000, increasing by 10% each year, and a minimum annual
bonus of $25,000. The agreement also provides for the issuance of 75,000 options
to purchase common stock of Hollywood Media upon the effective date of the
agreement and the issuance of at least 50,000 options to purchase common stock
of Hollywood Media on each one-year anniversary of the effective date. If the
executive's employment is terminated without cause at any time during the term,
16
Hollywood Media is required to pay to the executive an amount equal to the
greater of (a) the aggregate base salary that the executive would have received
for the remaining term of the agreement and (b) six months of executive's then
current salary. The term "cause" is defined in the agreement as (a) any act or
omission of the executive that constitutes a willful and material breach of the
agreement that is uncured at least 30 days' after notice thereof; (b) fraud,
embezzlement or misappropriation against Hollywood Media; or (c) conviction of
any criminal act that is a felony.
OPTION GRANTS IN LAST FISCAL YEAR. The following table sets forth
certain information with respect to grants of stock options under Hollywood
Media's 1993 Stock Option Plan and Hollywood Media's 2000 Stock Incentive Plan,
as amended to each of the named executive officers of Hollywood Media. In
addition, there are shown hypothetical gains or "option spreads" that could be
realized for the respective options, based on arbitrarily assumed rates of
annual compound stock price appreciation of 0 percent, 5 percent and 10 percent
from the date the options were granted over the full option terms.
STOCK OPTION GRANTS IN 2000
Individual Grants
---------------------------
Percent
Number of Of Total Potential Realizable Value at Assumed
shares Options Exercise or Market Annual Rates of Stock Price Appreciation
Underlying Granted to Base Price Price on For Option Terms (1)
Options Employees Per Date of Expiration --------------------
Granted In 2000 Share Grant Date 0% 5% 10%
-------- -------- ----- ----- ---- -- -- ---
W. Robert Shearer
Incentive Stock Options 50,000 6.49% $9.25 $9.25 06/02/10 $0 $205,644 $652,070
Nicholas G. Hall
Incentive Stock Options 25,000 3.25% $7.813 $7.813 08/24/05 $0 $66,429 $150,705
(1) These amounts represent certain assumed rates of appreciation only. There
can be no assurances that the amounts reflected will be achieved.
STOCK OPTION EXERCISES DURING 2000 AND STOCK OPTIONS HELD AT END OF
2000. The following table indicates that no named executive officers exercised
any stock options during 2000. The table also indicates the total number and
value of exercisable and unexercisable stock options held by each Named
Executive Officer as of December 31, 2000:
STOCK OPTION EXERCISES IN LAST YEAR AND YEAR-END OPTION VALUE
NUMBER OF NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED ON VALUE OPTIONS AT FISCAL YEAR END AT FISCAL YEAR END
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- -------- -------- ----------- ------------- ----------- -------------
Mitchell Rubenstein - $ - 447,500 187,500 - -
Laurie S. Silvers - $ - 447,500 187,500 - -
W. Robert Shearer - $ - 34,375 103,125 - -
Nicholas G. Hall - $ - - 25,000 - -
17
STOCK OPTION PLANS.
THE 1993 PLAN. Under the 1993 Plan, 3,000,000 shares of common stock
are reserved for issuance upon exercise of options. In addition, the 1993 Plan
provides that the number of shares reserved for issuance thereunder will
automatically be increased on the first day of each fiscal quarter of Hollywood
Media so that such number equals at least 12.5% of Hollywood Media's outstanding
Common Stock. The 1993 Plan is designed to serve as an incentive for retaining
qualified and competent consultants and employees. The Stock Option Committee of
Hollywood Media's Board of Directors (the "Committee") administers and
interprets the 1993 Plan and is authorized to grant options thereunder to all
eligible consultants and employees, including officers of Hollywood Media.
The 1993 Plan provides for the granting of both "incentive stock
options" (as defined in Section 422 of the Code) and nonqualified stock options.
Options are granted under the 1993 Plan on such terms and at such prices as
determined by the Committee. Each option is exercisable after the period or
periods specified in the option agreement, but no option can be exercised until
six months after the date of grant or more than 10 years from the date of grant.
Options granted under the 1993 Plan are not transferable other than by will or
by the laws of descent and distribution. The 1993 Plan also authorizes Hollywood
Media to make loans to optionees to enable them to exercise their options. Such
loans must provide for recourse to the optionee, be interest-bearing and be
secured by the shares of common stock purchased.
As of the Record Date, options to purchase 2,623,418 shares of common
stock were outstanding under the 1993 Plan and options to purchase 183,430
shares of common stock issued under the 1993 Plan had been exercised.
2000 STOCK INCENTIVE PLAN. In December 2000, the Board of Directors
and Hollywood Media's shareholders approved Hollywood Media's 2000 Stock
Incentive Plan (the "2000 Plan"). The purpose of the 2000 Plan is to advance the
interests of Hollywood Media by providing an additional incentive to attract,
retain and motivate highly competent persons as officers and key employees of,
and consultants to, Hollywood Media and its subsidiaries and affiliates and to
encourage stock ownership in Hollywood Media by such persons by providing them
opportunities to acquire shares of Hollywood Media's common stock, or to receive
monetary payments based on the value of such shares pursuant to the Benefits
described therein. Additionally, the 2000 Plan is intended to assist in further
aligning the interests of Hollywood Media's officers, key employees and
consultants to those of its other stockholders.
Under the 2000 Plan, 1,000,000 shares of common stock are reserved
for issuance upon exercise of Benefits granted under the 2000 Plan. In addition,
the 2000 Plan provides that the number of shares reserved for issuance
thereunder are automatically increased on the first day of each fiscal quarter
of Hollywood Media beginning on January 1, 2001, so that such number shall equal
the lesser of 2,000,000 shares of Common Stock (which number is subject to
adjustment in accordance with Section 13 thereof) or five percent (5%) of
Hollywood Media's outstanding common stock. The maximum number of shares of
Common Stock with respect to which Benefits may be granted or measured to any
individual participant under the Plan during the term of the Plan shall not
exceed 750,000; provided, however, that the maximum number of shares of Common
Stock with respect to which Stock Options and Stock Appreciation Rights may be
granted to an individual participant under the Plan during the term of the Plan
shall not exceed 750,000 (in each case subject to adjustments made in accordance
with Section 13 thereof). If any Benefit granted pursuant to the 2000 Plan
terminates, expires, or is canceled or surrendered, in whole or in part, shares
subject to the unexercised portion may again be issued pursuant to the 2000
Plan. The shares acquired upon exercise of Benefits granted under 2000 Plan will
be authorized and unissued shares of common stock. Hollywood Media's
shareholders do not have any preemptive rights to purchase or subscribe for the
shares reserved for issuance under the 2000 Plan.
18
The 2000 Plan is administered by the Stock Option Committee, which
has the right to determine, among other things, the persons to whom options are
granted, the number of shares of common stock subject to options, the exercise
price of options and the other terms and conditions thereof. The 2000 Plan
provides for the issuance of Incentive Stock Options and Nonqualified Stock
Options. An Incentive Stock Option is an option to purchase common stock that
meets the definition of "incentive stock option" set forth in Section 422 of the
Internal Revenue Code of 1986. A Nonqualified Stock Option is an option to
purchase common stock that meets certain requirements in the plan but does not
meet the definition of an "incentive stock option" set forth in Section 422 of
the Code. In addition, the Benefits under the Plan may be granted in any one or
a combination of Options, Stock Appreciation Rights, Stock Awards, Performance
Awards and Stock Units. Upon receiving grants of Benefits, each holder of a
Benefit must enter into a benefit agreement with Hollywood Media that contains
the appropriate terms and conditions as determined by the Stock Option
Committee.
As of the Record Date, options to purchase 998,500 shares of common
stock were outstanding under the 2000 Plan and options to purchase 5,020 shares
of common stock issued under the 2000 Plan had been exercised.
401(K) PLAN. Hollywood Media established a 401(k) Plan effective
January 1, 2001. All employees of Hollywood Media, meeting certain minimum
eligibility requirements, are eligible to participate in the 401(k) Plan. The
401(k) Plan provides that each participant may contribute up to 15% of his or
her pre-tax gross compensation (but not greater than a statutorily prescribed
annual limit). The percentage elected by certain highly compensated participants
may be required to be lower. The 401(k) Plan permits, but does not require,
additional contributions to the 401(k) Plan by Hollywood Media. All amounts
contributed by employee participants in conformance with Plan requirements and
earnings on such contributions are fully vested at all times. The Board of
Directors will determine on an annual basis whether a matching contribution will
be made and, if so, at what level of contribution.
LONG-TERM INCENTIVE AND PENSION PLANS. Hollywood Media does not have
any other long-term incentive or pension plans.
COMPENSATION OF DIRECTORS. Directors of Hollywood Media who are
neither employees nor consultants ("non-employee directors") are compensated at
the rate of $1,000 for each meeting of the Board of Directors attended in
person, and all directors are reimbursed for travel and lodging expenses in
connection with their attendance at meetings. Hollywood Media has established
for the non-employee directors the Director's Stock Option Plan (the "Directors
Plan"), which provides for automatic grants to each non-employee director of
options to purchase shares of common stock having a market value at the time of
grant equal to $25,000 (i) upon a person's election as a director and (ii) each
year thereafter upon such person's reelection as a director of Hollywood Media,
in both instances at an exercise price equal to the fair market value of the
common stock on the date of the grant. A total of 100,000 shares of common stock
have been reserved for issuance upon exercise of options granted under the
Directors Plan. Options to issue 69,172 shares of common stock have been issued
under the Directors Plan. Options granted under the Directors Plan become
exercisable six months after the date of grant and, except as otherwise approved
by the Board, expire five years after the date of grant. The Board of Directors,
in its discretion, may cancel all options granted under the Directors Plan that
remain unexercised on the date of consummation of certain corporate transactions
described in the Directors Plan. The Directors Plan will terminate in July 2003
unless sooner terminated under the provisions thereof.
19
As of the Record Date, options to purchase shares of common stock
have been issued to Hollywood Media's current directors under the Directors Plan
as follows:
NUMBER OF
SHARES SUBJECT EXERCISE EXPIRATION
NAME OF DIRECTOR TO OPTIONS PRICE GRANT DATE DATE
---------------- ---------- ----- ---------- ----
Harry T. Hoffman 3,125 $8.00 11/1/93 11/1/03
4,762 $5.25 8/23/96 8/23/01
4,107 $5.13 3/2/98 3/2/03
5,719 $5.0625 7/2/98 7/2/03
4,819 $5.188 12/15/00 12/15/10
Jules L. Plangere, Jr. 4,107 $5.13 3/2/98 3/2/03
5,719 $5.0625 7/2/98 7/2/03
4,819 $5.188 12/15/00 12/15/10
Deborah J. Simon 4,166 $6.00 11/8/95 11/8/05
4,762 $5.25 8/23/96 8/23/01
4,107 $5.13 3/2/98 3/2/03
5,719 $5.0625 7/2/98 7/2/03
4,819 $5.188 12/15/00 12/15/10
See "Certain Relationships and Related Transactions -- Consulting
Agreement with Dr. Martin H. Greenberg" for a description of the consulting
agreement between Hollywood Media and Dr. Greenberg.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION. All
compensation decisions during 2000 were made by the Compensation Committee,
which consisted of Mitchell Rubenstein, Russell I. Pillar and Harry T. Hoffman.
Harry T. Hoffman, Peter Glusker and Mitchell Rubenstein are the current members
of our Compensation Committee. Mr. Rubenstein is our Chairman and Chief
Executive Officer. Mr. Rubenstein does not participate in discussions or
decisions regarding his own compensation or performance appraisals.
20
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
Under the rules established by the Securities and Exchange
Commission, Hollywood Media is required to provide a report explaining the
rationale and considerations that led to fundamental compensation decisions
affecting Hollywood Media's executive officers (including the Named Executive
Officers) during the past fiscal year. The report of Hollywood Media's
Compensation Committee is set forth below.
Executive Compensation Objectives and Elements.
The Compensation Committee is responsible for determining and making
recommendations to the Board of Directors concerning executive compensation,
including base salaries, bonuses and the basis of their awards, stock options,
health insurance and other benefits. Hollywood Media's executive compensation
program, whose principal components consist of salary, bonus and stock options,
is designed to achieve the following objectives: (a) providing competitive base
pay to attract, retain and motivate qualified management; (b) delivering
performance-based bonuses when results, individual initiative and
accomplishments warrant; (c) generate outstanding returns to shareholders over
the long term; and (d) aligning management compensation with the achievement of
Hollywood Media's goals and performance. The Compensation Committee believes
that Hollywood Media's executive compensation program is competitive with those
of other media and Internet companies.
The Compensation Committee reviews, recommends and approves changes
to Hollywood Media's executive compensation program and policies, and otherwise
seeks to ensure that Hollywood Media's compensation philosophy and objectives
are consistent with its best interests and is properly implemented. Our
executive compensation strategy is for executives to receive a competitive base
salary, while being eligible for bonuses based on performance and stock option
grants to provide long-term incentive, and participation in benefit programs
available to other employees. In addition, the Compensation Committee may
recommend the grant of discretionary bonuses to Hollywood Media's executive
officers. During 2000, the Compensation Committee did not attempt to
specifically analyze compensation levels at comparable companies.
Executive Salaries.
During 2000, the executive officers were compensated in accordance
with their respective employment agreements, which agreements designate a
substantial portion of such executive's compensation. See "Executive
Compensation - Employment Agreements" above for a description of Hollywood
Media's agreements with Named Executive Officers related to compensation. The
Compensation Committee reviews the annual salary of the executive officers,
including the Chief Executive Officer. In determining appropriate executive
officer compensation, the Compensation Committee reviews and considers, among
other factors, each executive's scope of responsibility and commitment, level of
performance (with respect to specific areas of responsibility and on an overall
basis), past and present contribution to and achievement of goals and
performance, compensation levels at comparable companies and historical
compensation levels, and following consultation with and recommendation from
Hollywood Media's Chief Executive Officer.
Stock Option Grants.
Hollywood Media believes that long-term equity compensation is an
integral part of Hollywood Media's executive compensation program and serves to
provide important incentive to its executives. As such, generally it is
Hollywood Media's practice to set option exercise prices for executive officers
at not less than 100% of the fair market value of the common stock on the date
of the grant. Thus, the options have no monetary benefit to the executives
21
unless the market price of our common stock increases above the exercise price.
Moreover, options granted to executive officers generally provide that they are
not exercisable until either six months or one year after the date of grant, at
which time they become exercisable on a cumulative basis at an annual rate of
25% of the total number of shares underlying the option grant. We anticipate
that future option grants will be based in part on a subjective analysis of
various performance criteria.
Annual Cash Bonuses.
In addition to compensation through base salaries and stock option
grants, the Compensation Committee has the authority to issue performance-based
annual cash bonus awards. Bonus awards vary depending on the officer's base
salary and the Compensation Committee's review and consideration of the factors
noted above and the executive officer's contribution to Hollywood Media's
achievement of its goals.
Chief Executive Officer Compensation.
Mr. Rubenstein's 2000 compensation was paid pursuant to and in
accordance with Mr. Rubenstein's existing employment agreement with Hollywood
Media. The principal factors considered in evaluating the 2000 compensation for
Mr. Rubenstein included the factors described in the preceding paragraphs,
Hollywood Media's financial performance during 2000, and Mr. Rubenstein's
substantial contribution to, and integral role in, the completion of a number of
significant strategic alliances and acquisitions, the raising of funds for
working capital, and the successful recruiting and hiring of other key
employees. Based on such factors, Mr. Rubenstein received the compensation
described in "Executive Compensation" herein which was consistent and in
accordance with Mr. Rubenstein's employment agreement with Hollywood Media.
Policy on Deductability of Compensation.
Section 162(m) of the U.S. Internal Revenue Code generally limits
the tax deduction to public companies for compensation in excess of $1 million
paid to a corporation's chief executive officer and any other of its four most
highly compensated executive officers. However, compensation which qualifies as
"performance-based" is excluded from the $1 million limit if, among other
requirements, the compensation is payable only upon attainment of
pre-established, objective performance goals under a plan approved by
stockholders. The Compensation Committee does not presently expect total cash
compensation payable for salaries to exceed the $1 million limit for any
individual executive. The Compensation Committee will study the potential impact
of Section 162(m), and will, to the extent it deems appropriate, take reasonable
steps to minimize or eliminate any potential impact of Section 162(m) on
Hollywood Media, while at the same time preserving the objective of providing
appropriate incentive awards. The Compensation Committee believes that there are
no current executive compensation programs or outstanding awards that would be
impacted by Section 162(m). The Compensation Committee will continue to monitor
the compensation levels potentially payable under Hollywood Media's cash
compensation programs, but intends to retain the flexibility necessary to
provide total cash compensation in line with competitive practice, Hollywood
Media's compensation objectives and Hollywood Media's best interests.
Respectfully,
Members of the Compensation Committee
Harry T. Hoffman
Russell I. Pillar
Mitchell Rubenstein
22
REPORT OF THE AUDIT COMMITTEE
Our Board of Directors has appointed an Audit Committee consisting of
three directors. All of the members of the committee are "independent" of our
Company and management, as that term is defined in the Nasdaq listing standards.
The primary responsibility of the Audit Committee is to oversee our
company's financial reporting process on behalf of the Board of Directors.
Management has the primary responsibility for the financial statements and the
reporting process, including the systems of internal controls. The independent
auditors are responsible for auditing our financial statements and expressing an
opinion on the conformity of those audited financial statements with generally
accepted accounting principles.
In fulfilling its oversight responsibilities, the Audit Committee
reviewed our audited financial statements with management and the independent
auditors for the year ended December 31, 2000. The Audit Committee discussed
with the independent auditors the matters required to be discussed by Statement
of Auditing Standards No. 61. This included a discussion of the auditors'
judgments as to the quality, not just the acceptability, of our Company's
accounting principles and such other matters as are required to be discussed
with the Audit Committee under generally accepted auditing standards. In
addition, the Audit Committee received from the independent auditors written
disclosures and the letter required by Independence Standards Board Standard No.
1. The Audit Committee also discussed with the independent auditors the
auditors' independence from management and our Company, including the matters
covered by the written disclosures and letter provided by the independent
auditors.
The Audit Committee discussed with our Company's internal and
independent auditors the overall scope and plans for their respective audits.
The Audit Committee meets with the internal and independent auditors, with and
without management present, to discuss the results of their examinations, their
evaluations of our company, our internal controls, and the overall quality of
our financial reporting. The committee had a number of informal communications
during fiscal 2000.
Based on the reviews and discussions referred to above, and meetings
held by the committee with the independent auditors during February 2001 and
March 2001, the committee recommended to the Board of Directors, and the board
approved, that the audited financial statements be included in our Annual Report
on Form 10-K for the year ended December 31, 2000 for filing with the Securities
and Exchange Commission. The committee and the Board of Directors also have
recommended, subject to shareholder approval, the selection of our Company's
independent auditors. See "Proposal to Ratify the Selection of Independent
Public Accountants."
November 1, 2001
Harry T. Hoffman, Audit Committee Member
Jules L. Plangere, Jr., Audit Committee Member
Deborah Simon, Audit Committee Member
23
PERFORMANCE GRAPHS
The following graph compares, for the period from November 2, 1998
(the beginning of the period in which Hollywood Media entered the Internet
business) to December 31, 2000, the cumulative total shareholder return on our
common stock with:
o The Nasdaq Stock Market Index; and
o The Goldman Sachs Internet Index.
The graph assumes that $100 was invested on November 2, 1998 in our
common stock, the Nasdaq Stock Market Index and the Goldman Sachs Internet
Index. The stock price performance on the following graph is historical and not
necessarily indicative of future stock price performance.
DATE HOLLYWOOD MEDIA NASDAQ GOLDMAN SACHS
INTERNET INDEX
11/2/98 100 100 100
12/1/98 277 111 132
12/31/98 313 122 184
1/4/99 369 123 183
2/1/99 291 139 238
3/1/99 290 127 225
4/1/99 278 138 306
5/3/99 475 141 297
6/1/99 414 134 252
7/1/99 350 150 273
8/2/99 420 146 220
9/1/99 406 153 219
10/1/99 392 152 247
11/1/99 380 165 257
12/1/99 386 186 317
1/3/00 436 229 423
2/1/00 408 225 344
3/1/00 336 266 382
4/3/00 341 235 312
5/1/00 315 220 276
6/1/00 206 199 241
7/3/00 224 222 242
8/1/00 213 205 215
91/00 185 235 259
10/2/00 130 198 219
11/1/00 162 185 185
12/1/00 127 147 115
12/29/00 87 137 99
24
The following graph compares, for the period from December 31, 1996
to December 31, 2000, the cumulative total shareholder return on our common
stock with:
o The Nasdaq Stock Market Index; and
o The Standard & Poor's Entertainment and Leisure Composite
Index.
The graph assumes that $100 was invested on December 31, 1996 in our
common stock, the Nasdaq Stock Market Index and the Standard & Poor's
Entertainment and Leisure Composite Index. The stock price performance on the
following graph is historical and not necessarily indicative of future stock
price performance.
12/31/96 12/31/97 12/31/98 12/31/99 12/31/00
-------- -------- -------- -------- --------
HOLLYWOOD MEDIA 100.00 110 243 330 67
NASDAQ 100.00 122 170 315 191
S&P'S ENTERTAINMENT INDEX 100.00 132 175 194 166
25
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
TRANSACTION WITH VIACOM INC.
Hollywood Media entered into a strategic, seven-year relationship
with Viacom Inc. in January 2000 that provides for extensive promotion of
Hollywood.com and Broadway.com. In connection with our strategic relationship,
Viacom Inc. purchased 6,672,031 shares of our common stock, representing
approximately 30% of our outstanding common stock, in exchange for $5,303,030 in
cash and $100,000,000 of advertising, promotion, content and advertising sales
support over a seven-year term pursuant to an Advertising and Promotion
Agreement and a Content Agreement. Hollywood Media also issued to Viacom a
Warrant to purchase an additional 1,178,892 shares of our Common Stock for an
aggregate exercise price of $10,937,002. Viacom exercised the warrant in full
during March 2000. Half of the warrant exercise price was paid in cash and half
is payable in additional advertising and promotion under the Advertising and
Promotion Agreement and will be furnished to us during the 24-month period
following the exercise of the Warrant. Hollywood Media also entered into an
Investor's Rights Agreement, a Registration Rights Agreement and a Voting
Agreement with Viacom, which contain, among other things, transfer restrictions,
standstill provisions, pre-emptive rights, registration rights and voting
rights, some provisions of which are highlighted below.
ADVERTISING AND PROMOTION AGREEMENT. Viacom has agreed to provide us
an aggregate of $70 million in advertising and promotion of Hollywood.com and
Broadway.com over a seven-year term. In addition, we have the right to allocate
up to $30 million in value deliverable under the Content Agreement to additional
advertising and promotion under the Advertising and Promotion Agreement for a
total of up to $100 million in advertising and promotion. Viacom Inc. conducts
the advertising and promotion across its full range of CBS media properties,
including the CBS television network, CBS owned and operated television
stations, CBS cable networks, Infinity Broadcasting Corporation's radio stations
and outdoor billboards, CBS Internet sites and CBS syndicated television
programs. The advertising and promotion is provided pursuant to media plans
jointly developed each year by Viacom and us, which will provide broad-based
exposure for Hollywood.com, including prominent placements in conjunction with
appropriate entertainment-related events and programming. The value of all
advertising and promotion furnished by Viacom to us will be based on the average
unit price paid to Viacom by third parties for the particular media on which the
advertising and promotion occurs.
Viacom has the right to terminate its obligation to deliver
advertising and promotion under the Advertising and Promotion Agreement under a
number of circumstances, including, among others, if the Hollywood.com web site
contains, or links to, content that violates specified CBS license guidelines
and we fail to remove such content or links, we violate the terms of our other
agreements with Viacom or if certain defined competitors of Viacom acquire a
significant equity stake in Hollywood Media.
CONTENT LICENSE AGREEMENT. Viacom has agreed to provide us an
aggregate of $30 million in value over a seven-year term to be allocated in our
discretion to the license of content, advertising sales or advertising and
promotion. We will receive $4.3 million in value during each of the first six
years of the term and $4.2 million in value during the last year of the term.
License of Content. Viacom granted to us a license to use, distribute
and otherwise make available on Hollywood.com certain text, graphics,
photographs, video, audio and other information owned by Viacom and related to
the movie business or any particular motion picture. In addition, subject to
compliance by us with certain obligations, Viacom has the right to archive the
content on the Hollywood.com web site after expiration of the term of the
Content License Agreement.
26
Advertising Sales. We have the right to require Viacom to sell
advertisements on the Hollywood.com web site totaling gross advertising revenues
of up to $1.5 million per year and Viacom has agreed to include Hollywood.com in
all advertising sales programs and presentations that are appropriate for the
sale of advertising on the web site. We have agreed to pay to Viacom a
commission of 8% of gross advertising revenues generated by advertising sold by
Viacom on the Hollywood.com web site in excess of the portion of the $1.5
million guaranteed amount selected by us each year.
Advertising and Promotion. We have the right to allocate all or any
portion of the $30 million in value to additional advertising and promotion of
Hollywood.com and Broadway.com to be furnished by Viacom under the Advertising
and Promotion Agreement.
Viacom Inc. has the right to terminate its obligations under the
Content Agreement upon the occurrence of any of the events that permit it to
terminate its obligations under the Advertising and Promotion Agreement.
INVESTOR'S RIGHTS AGREEMENT. The Investor's Rights Agreement between
Hollywood Media and Viacom Inc. sets forth various rights and obligations of
Hollywood Media and Viacom related to Viacom's ownership of Hollywood Media's
common stock, including Viacom's registration rights with respect to the common
stock, Hollywood Media's right of first refusal with respect to transfers by
Viacom of the common stock, standstill provisions to which Viacom is bound, and
preemptive rights of Viacom with respect to certain issuances of common stock
and other securities by Hollywood Media.
Registration Rights. Viacom has the right to initiate up to four
registrations under the Securities Act of 1933 of the common stock that it
acquired from Hollywood Media. The Investor's Rights Agreement contains various
restrictions on the timing of such registrations. In addition, Viacom has
"piggyback" registration rights allowing it to include the shares of common
stock that it acquires from Hollywood Media in registrations of Hollywood
Media's common stock initiated by Hollywood Media or other shareholders.
Hollywood Media will pay all expenses associated with any such registrations
other than underwriters' fees or commissions relating to the sale of the common
stock.
Transfer Restrictions; Right of First Refusal. Viacom is not
permitted to transfer any shares of Hollywood Media's common stock prior to
January 3, 2001, except to certain affiliates of Viacom. If Viacom proposes to
transfer any shares of common stock during the six year period following January
3, 2001, other than to certain affiliates or in a bona fide public distribution
pursuant to an effective registration statement, Hollywood Media has the right
to purchase the shares on the same terms on which Viacom proposes to transfer
them to a third party. Hollywood Media's right of first refusal will terminate
(a) at such time as Mitchell Rubenstein, Hollywood Media's Chairman of the Board
and Chief Executive Officer, and Laurie S. Silvers, Hollywood Media's Vice
Chairman of the Board and President, have sold more than 60% of the common stock
owned by them as of the closing of the transaction or (b) at any time after the
second anniversary of the closing if Viacom owns less than 15% of Hollywood
Media's outstanding common stock (other than as a result of transfers by Viacom
of at least half of the common stock acquired by it from Hollywood Media).
Standstill Provisions. For a period of seven years ending in January
2007, Viacom agrees that, except as contemplated by the Investor's Rights
Agreement, it will not, directly or indirectly, do any of the following:
(1) acquire or propose to acquire any securities of Hollywood
Media if, after giving effect thereto, Viacom and its
affiliates beneficially own in excess of 34.8% of
Hollywood Media's outstanding common stock;
27
(2) solicit proxies or become a participant in a solicitation
of proxies or consents with respect to any securities of
Hollywood Media or initiate or encourage the submission of
any stockholder proposal or election contest with respect
to Hollywood Media;
(3) take any action for the purpose of convening a meeting of
the shareholders of Hollywood Media or initiate any
process to solicit or obtain consents of shareholders in
lieu of a meeting;
(4) except as may be required by applicable law, make any
public announcement or disclosure in respect in respect of
any plan, contract or arrangement relating to the
acquisition of capital stock of Hollywood Media or a
merger, sale of assets or other extraordinary corporate
transaction relating to Hollywood Media;
(5) deposit capital stock of Hollywood Media into a voting
trust or subject capital stock of Hollywood Media to
voting agreements, or grant a proxy or power-of-attorney
with respect to any capital stock of Hollywood Media to
any person not designated by Hollywood Media who is not an
officer, director or employee of Viacom or its affiliates;
(6) form or in participate in any group for the purpose of
acquiring, holding, voting or disposing of securities of
Hollywood Media; or
(7) disclose publicly any intention or arrangement
inconsistent with the foregoing or enter into any
discussions or understandings with any third party with a
view to encouraging any action prohibited with the
foregoing.
If Hollywood Media's Board of Directors approves or recommends to its
shareholders for approval any transaction in which a party (other than Company's
existing large shareholders) would acquire at least 50% of Hollywood Media's
outstanding common stock, then the restrictions described above would not apply
during the pendency of the transaction and would cease upon the consummation of
the transaction.
Preemptive Rights. During the seven-year period ending on January 3,
2007, Viacom has a preemptive right to purchase a pro rata portion of shares of
common stock or securities convertible into common stock issued by Hollywood
Media. The number of shares that Viacom is entitled to purchase is equal to the
total shares to be issued by Hollywood Media multiplied by a percentage
determined by dividing the number shares of Hollywood Media common stock then
owned by Viacom by the total shares of common stock outstanding. If Viacom
elects to exercise this right, it will purchase the shares for cash and
otherwise on the same terms as Hollywood Media has agreed to issue the shares.
This preemptive right does not apply to certain issuances of shares by Hollywood
Media, including issuances in connection with any merger, acquisition or similar
transaction by or involving Hollywood Media or issuances to directors, officers,
employees, contractors, advisors or consultants of Hollywood Media in the
ordinary course of business.
VOTING AGREEMENT. The Voting Agreement among Hollywood Media, Viacom
and certain shareholders of Hollywood Media contains agreements by such parties
with respect to nominating individuals to serve on Hollywood Media's Board of
Directors and the voting of the common stock owned by such parties in favor of
such nominees. Viacom has the right to nominate for election to Hollywood
Media's Board of Directors a number of individuals equal to the product of
Viacom's percentage ownership of Hollywood Media's common stock and the total
number of members of the Board of Directors (rounded down to the nearest whole
number). In addition, as long as the Promotion Agreement and the Content
28
Agreement remain in effect, Viacom shall have the right to designate at least
one nominee to the Board of Directors. In all elections for members of the Board
of Directors, each of the shareholders that is a party to the Voting Agreement
agrees to vote all shares beneficially owned by them in favor of the Viacom
designees. Each of Tribune Company, Mitchell Rubenstein, Laurie S. Silvers,
Martin H. Greenberg and Rosalind Greenberg are parties to the Voting Agreement.
As of the Record Date, those shareholders beneficially owned approximately 19.6%
of Hollywood Media's outstanding common stock. Viacom's current nominees to the
Board of Directors are Mitchell Semel and Peter Glusker.
In all elections for members of the Board of Directors, Viacom agrees
to vote all shares of common stock owned by it, or over which it has voting
control, in favor of (1) each individual nominated for election to the Board by
Hollywood Media, and (2) each individual nominated for election to the Board by
Tribune Company pursuant to the Shareholder Agreement between Hollywood Media
and Tribune Company.
Viacom's right to nominate directors for election to the Board will
terminate upon the acquisition by Viacom of an equity interest in excess of 15%
in any entity who owns, operates or controls a web site that is a competitor of
the Hollywood.com web site. The Voting Agreement contains a description of the
type of web site that will constitute a competitor of the Hollywood.com web
site.
MAY 2001 INVESTMENT BY VIACOM INC. In May 2001, Viacom Inc. made a
$1.4 million investment in Hollywood Media and a $1.6 million prepayment of
future cash advertising and promotion commitments to Hollywood Media.
Hollywood Media issued an aggregate of 310,425 shares of Hollywood
Media's common stock to Viacom Inc. at a purchase price of $4.51 per share for a
total purchase price of $1.4 million in cash. The purchase price per share
represents 105% of the "Market Price" of the common stock, which is defined as
the average volume weighted average price for the 20 business days prior to the
closing date. Viacom also received a series A warrant to acquire an aggregate of
162,973 shares of common stock at a price of $6.44 per share (150% of the Market
Price at closing). If on each of January 30, 2002 and April 30, 2002, Viacom
holds at least seventy-five percent of any of its shares of common stock issued
to it in the transaction, then the exercise price of the series A warrants will
be decreased to $5.37 per share and $4.51 per share, respectively, on such
dates. The series A warrants are exercisable by Viacom during the five-year
period ending on May 1, 2006.
Viacom also received a series B adjustment warrant to acquire
additional shares of common stock from time to time in amounts in proportion to
each of their respective investments. Viacom will be entitled to receive
additional shares of common stock upon exercise of the series B adjustment
warrant for no additional consideration if the "market price" of the common
stock as of October 30, 2001, January 30, 2002, April 30, 2002 or July 30, 2002
is less than $5.19 per share. The Series B warrant is exercisable for 15 trading
days following the last day of each twenty trading day period beginning on each
of these four dates. The "market price" of the common stock under the series B
warrant as of any date within each twenty trading day period is defined as the
lowest "average price" of the common stock during each twenty day period
preceding each such date. The "average price" is defined as the average of the
ten lowest closing sale prices of the common stock during each twenty trading
day period. The market price will in no event be less than $2.15. The number of
shares issuable upon exercise of the series B warrant on the first of these four
exercise dates is equal to (1) $5.19 minus the market price, divided by (2) the
market price, and multiplied by (3) 310,425. The number of shares issuable upon
exercise of the series B warrant on each of the subsequent three exercise dates
is equal to (1) the lower of $5.19 and the lowest market price as of any prior
exercise date minus the market price, divided by (2) the market price, and
multiplied by (3) 310,425.
29
In connection with this investment, Viacom also invested an
additional $1,600,000 in Hollywood Media as a prepayment of future cash
advertising and promotion commitments owing under the Advertising and Promotion
Agreement, dated as of January 3, 2000, between Hollywood Media and Viacom. This
payment reduces Viacom's annual promotional commitment under the Advertising and
Promotion Agreement by $1,500,000 for calendar year 2002 and by $1,500,000 for
calendar year 2003.
TRANSACTIONS WITH TRIBUNE COMPANY
In May 1999 Hollywood Media acquired hollywood.com, Inc. from Tribune
Company. Hollywood Media paid the purchase price for the acquisition by issuing
to Tribune Company 2,300,075 shares of common stock and an unsecured promissory
note for $1,928,138. The promissory note was repaid in full by the issuance of
152,548 shares of common stock to Tribune Company.
Hollywood Media and Tribune Company entered into several agreements
in connection with Hollywood Media's acquisition of hollywood.com, Inc., some of
which were amended in July 2001.
SHAREHOLDER AGREEMENT. Hollywood Media and Tribune Company entered
into a Shareholder Agreement, as amended in July 2001, containing various rights
and obligations associated with Tribune Company's ownership of the common stock.
Pursuant to the Shareholder Agreement, Tribune Company agreed to certain
standstill provisions, including that it will not acquire any additional equity
securities of Hollywood Media or solicit proxies or consents with respect to the
securities of Hollywood Media or initiate any shareholder proposal. In addition,
Tribune Company agreed that it will not transfer any common stock to any
transferee or group of related transferees of Hollywood Media that would, after
such transfer, hold more than 4.99% of the voting securities of Hollywood Media.
Tribune Company also agreed pursuant to the Shareholder Agreement
that for a period of three years after the closing of the acquisition it will
vote all shares of common stock owned by it in favor of the nominees for
election to Hollywood Media's Board of Directors recommended to Hollywood
Media's shareholders by the Board of Directors. In addition, with respect to all
other matters submitted to a vote of the shareholders of Hollywood Media (other
than certain transactions that would dilute its ownership of Company common
stock or result in a change of control of Hollywood Media), Tribune Company
agrees that for a period of three years it will vote all shares of Company
common stock owned by it in the same proportion as all other shareholders of
Hollywood Media vote on any such matter.
The original Shareholder Agreement allowed Tribune Company to
designate one person as a nominee for election to Hollywood Media's Board of
Directors. In accordance with the amendment of July 2001, Tribune Company no
longer has the right to designate a person as a nominee for election to
Hollywood Media's Board of Directors.
The standstill provisions of the Shareholder Agreement terminate upon
the earlier to occur of January 10, 2004 and the date of a change of control (as
defined) of Hollywood Media. The other provisions of the Shareholder Agreement
terminate on the earliest of these dates and the date on which Tribune Company
beneficially owns less than 5% of the voting securities of Hollywood Media.
REGISTRATION RIGHTS AGREEMENT. Hollywood Media and Tribune Company
entered into a Registration Rights Agreement upon the closing of the
acquisition, which provides Tribune Company with the right to require Hollywood
Media to register the common stock acquired by Tribune Company in the
acquisition under the Securities Act under certain conditions. Tribune Company
and its permitted transferees have the right on four separate occasions to
require Hollywood Media to effect a registration under the Securities Act of at
least 20% of the common stock acquired by Tribune Company in the acquisition to
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be sold in a firm commitment underwritten public offering for cash. In addition,
at any time when Hollywood Media proposes to register shares of common stock
under the Securities Act, for sale in an underwritten public offering, it will
give notice to Tribune Company and its permitted transferees of its intention to
do so and of the material terms of the proposed registration. Hollywood Media
will use its best efforts to include in the proposed registration all shares of
common stock that it is requested in writing by Tribune Company or its permitted
transferees to register. The permitted transferees of Tribune Company that are
entitled to the benefits of the Registration Rights Agreement include only
wholly owned subsidiaries of Tribune Company and certain charitable
organizations affiliated with Tribune Company.
NON-COMPETITION AGREEMENT. Hollywood Media and Tribune Company also
entered into a Non-Competition Agreement upon the closing of the acquisition.
Tribune Company agrees in the Non-Competition Agreement that for a period of
three years after the closing, it will not engage or participate in any business
or venture that operates as its primary focus a national- or
international-targeted web site dedicated to providing movie-going consumers
with movie-related information or offering for sale movie-themed merchandise or
tickets for movies (a "Competing Business"). In addition, Tribune Company agrees
that for a period of three years after the closing, it will not own, manage,
operate, promote, control, or be connected with as a stockholder (other than on
a passive basis with less than 5% of the equity of a publicly-traded company or
less than 10% of the equity of a privately-owned company), joint venturer or
partner in, any Competing Business. Notwithstanding the foregoing, certain
business ventures and activities of Tribune Company shall not be considered a
Competing Business, including, among others, the operation of the current web
sites operated by newspapers owned by Tribune Company to the extent the web
sites provide primarily local and regional movie information and movie-themed
merchandise and the licensing and syndication of movie information by the L.A.
Times Syndicate to third parties, which information is posted to such parties'
web sites.
INVESTMENTS BY AFFILIATE OF THE SIMON PROPERTY GROUP
Pursuant to a 1995 stock purchase agreement with Tekno Simon, an
affiliate of the Simon Property Group, and its Co-Chairman, Melvin Simon, Tekno
Simon invested $2,000,000 in shares of Hollywood Media's Series A Preferred
Stock and Series B Preferred Stock and $1,000,000 in shares of Hollywood Media's
common stock.
Under the original Simon Stock Purchase Agreement, the Series A
Preferred Stock and the Series B Preferred Stock were convertible at the option
of the holder, at any time prior to November 28, 1997, into shares of common
stock on a one-for-one basis.
In May 1999 Hollywood Media agreed to extend the conversion option
and allow Tekno Simon to convert the Series A and Series B Preferred Stock into
common stock. In exchange, Tekno Simon agreed to waive certain accrued dividends
payable on the Series A and Series B Preferred Stock. In May 1999 Tekno Simon
converted all of the Series A and Series B Preferred Stock into 300,631 shares
of common stock.
Pursuant to the Simon Stock Purchase Agreement, Tekno Simon has the
right to designate one nominee to Hollywood Media's Board of Directors until
such time as Tekno Simon holds less than 25% of the sum of (i) the shares of
common stock issued upon conversion of the Series A Preferred Stock, and (ii)
the shares of common stock purchased by Tekno Simon in 1995. Certain principal
shareholders of Hollywood Media, including Mitchell Rubenstein, Laurie S.
Silvers and Dr. Martin H. Greenberg, have agreed to vote their shares of common
stock in favor of the election of Tekno Simon's nominee to the Board of
Directors. Tekno Simon's current nominee on the Board of Directors is Deborah J.
Simon.
31
INVESTMENT BY HOLLYWOOD MEDIA'S DIRECTORS
In September 2000, Hollywood Media entered into definitive agreements
to issue a total of 733,696 shares of Hollywood Media's common stock to
investors for an aggregate purchase price of $4,250,000 in cash. The transaction
was structured as a private placement to accredited investors and Hollywood
Media agreed to register the shares for resale by the investors. As part of the
private placement, Mitchell Rubenstein, the Chairman and Chief Executive Officer
of Hollywood Media, purchased 125,001 shares of Hollywood Media's common stock
at a purchase price of $6.00 per share, the then current market price of the
stock.
In May 1999, Hollywood Media issued 569,820 shares of common stock in
a private placement at a purchase price of $21.25 per share. In addition,
Hollywood Media issued to the same investors warrants to purchase an aggregate
of 189,947 shares of common stock at an exercise price of $21.25 per share. Five
members of Hollywood Media's then current Board of Directors participated in the
private placement and purchased an aggregate of 35,700 shares of common stock
and received warrants to purchase an aggregate of 11,902 shares of common stock
on the same terms as the other investors in the private placement.
In July 1998, six members of Hollywood Media's then current Board of
Directors (including Mitchell Rubenstein, Hollywood Media's Chairman of the
Board and Chief Executive Officer, Laurie S. Silvers, Hollywood Media's Vice
Chairman and President, and Martin H. Greenberg, the Chief Executive Officer of
Tekno Books, Hollywood Media's 51%-owned subsidiary) purchased an aggregate of
187,442 shares of Hollywood Media's common stock for $5.00 per share, the then
current market price of the stock. In conjunction with the private placement of
these shares, the investors received five-year warrants to purchase an aggregate
of 93,721 shares of Hollywood Media's common stock at $5.00 per share.
CONSULTING AGREEMENT WITH DR. MARTIN H. GREENBERG
In 1993 Hollywood Media entered into a consulting agreement with Dr.
Martin H. Greenberg pursuant to which Dr. Greenberg agreed to render advisory
and consulting services to Hollywood Media, including identifying best-selling
authors to create intellectual properties for Hollywood Media and negotiating
agreements with such authors, arranging for the publication of prose novels and
anthologies for children and adults based on Hollywood Media's intellectual
properties, and attending trade shows and conventions on Hollywood Media's
behalf. The consulting agreement will expire in November 2003, unless terminated
earlier, which termination may take place only under certain conditions.
Pursuant to the consulting agreement, in November 1993 Dr. Greenberg began
receiving consulting fees of $30,000 per year and was granted an option to
purchase 6,250 shares of common stock at an exercise price of $8.00 per share.
In connection with the acquisition of Tekno Books, the consulting
agreement was amended on December 9, 1994 (1) to provide that Dr. Greenberg will
have the exclusive right to package novelizations based on Hollywood Media's
entertainment properties, and (2) in lieu of future annual stock option grants
to which Dr. Greenberg was entitled under the original agreement, to grant Dr.
Greenberg options to purchase 17,778 shares of common stock at an exercise price
of $8.4375 per share (the then approximate market price of the common stock).
Mr. Greenberg received the stock options and receives the consulting fees in
lieu of a base salary. Mr. Greenberg does not receive a salary for serving as
the Chief Executive Officer of Tekno Books.
32
LINE OF CREDIT
During the second quarter of 2000, Mitchell Rubenstein, the Chairman
of the Board and Chief Executive Officer of Hollywood Media, and Laurie S.
Silvers, the Vice Chairman, President and Secretary of Hollywood Media, advanced
a $2,050,000 unsecured line of credit facility to Hollywood Media. Hollywood
Media drew upon this line of credit in the second quarter of 2000 to enable
Hollywood Media to meet its obligation to lend to a former shareholder of
CinemaSource funds to pay a portion of the shareholder's taxes resulting from
the sale of CinemaSource to Hollywood Media, and again in the third quarter of
2000. The loans were repaid in full and there are no borrowings by Hollywood
Media under the line of credit as of the Record Date. In addition, in the event
that we require additional funding and cannot secure additional funding, Mr.
Rubenstein and Ms. Silvers, have indicated their intention to provide to
Hollywood Media, if required, with an amount not to exceed $6 million in order
to enable us to meet our working capital requirements during 2001; provided,
however, that the commitment will terminate to the extent that we raise no less
than $6 million from other sources and such additional funding is not expended
on acquisitions. During the first quarter 2001 we drew $500,000 of such funding,
which was repaid subsequent to March 31, 2001. As a result of recent financings,
the commitment is now $1.25 million.
PROPOSAL TO RATIFY THE SELECTION OF INDEPENDENT
PUBLIC ACCOUNTANTS
(PROPOSAL NO. 2)
The firm of Arthur Andersen LLP, independent public accountants,
served as Hollywood Media's independent public accountants for the fiscal year
ended December 31, 2000. Pursuant to the recommendation of the Audit Committee,
the Board of Directors has appointed Arthur Andersen LLP to serve as Hollywood
Media's independent public accountants for the current year ending December 31,
2001 and has directed that management submit such appointment for ratification
by the shareholders at the Meeting. One or more representatives of Arthur
Andersen LLP are expected to be present at the Meeting, will have the
opportunity to make a statement if they desire to do so, and are expected to be
available to respond to appropriate questions from shareholders.
SUBMISSION OF FUTURE SHAREHOLDER PROPOSALS
Pursuant to Rule 14a-8 promulgated by the SEC, a shareholder
intending to present a proposal to be included in Hollywood Media's proxy
statement for Hollywood Media's 2001 Annual Meeting of Shareholders must deliver
a proposal in writing to Hollywood Media's principal executive offices no later
than July 15, 2002. Such proposals also will need to comply with SEC regulations
regarding the inclusion of shareholder proposals in Company sponsored proxy
materials.
EXPERTS
The financial statements and schedules are incorporated by reference
in this Proxy Statement from Hollywood Media's Annual Report on Form 10-K/A for
the year ended December 31, 2000 and have been audited by Arthur Andersen LLP,
independent certified public accountants, as indicated in their reports with
respect thereto, and are incorporated in this Proxy Statement in reliance upon
the authority of said firm as experts in accounting and auditing in giving said
reports.
33
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors of
Hollywood Media does not intend to present, and have not been informed that any
other person intends to present, any matter for action at the Meeting, other
than as specifically discussed herein.
WHERE YOU CAN FIND MORE INFORMATION
The SEC allows us to "incorporate by reference" the information we
file with it, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this Proxy Statement, and later information that we
file with the SEC will automatically update and supersede this information. We
incorporate by reference the following filings and any filings made with the SEC
prior to the date of the Meeting under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934:
o Our Annual Report on Form 10-K/A for the year ended
December 31, 2000;
o Our Quarterly Report on Form 10-Q/A for the quarterly
period ended March 31, 2001;
o Our Quarterly Report on Form 10-Q for the quarterly period
ended June 30, 2001; and
o Our Quarterly Report on Form 10-Q for the quarterly period
ended September 30, 2001.
We will provide, without charge, to each person to whom a copy of
this Proxy Statement is delivered, upon request, a copy of any or all of the
information incorporated herein by reference. Exhibits to any of the documents,
however, will not be provided unless such exhibits are specifically incorporated
by reference into such documents. The requests should be addressed to: Investor
Relations Department, Hollywood Media Corp., 2255 Glades Road, Suite 237 West,
Boca Raton, Florida 33431, telephone number (561) 998-8000.
By Order of the Board of Directors
Laurie S. Silvers
President and Secretary
Boca Raton, Florida
November 15, 2001
34
HOLLYWOOD MEDIA CORP.
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF HOLLYWOOD MEDIA CORP.
The undersigned, a shareholder of HOLLYWOOD MEDIA CORP., a Florida
corporation, hereby appoints Mitchell Rubenstein and Laurie S. Silvers, and each
of them, as proxies for the undersigned, each with full power of substitution,
and hereby authorizes them to represent and to vote all of the shares of Common
Stock of Hollywood Media Corp. that the undersigned is entitled to vote at the
Annual Meeting of Shareholders of Hollywood Media Corp. to be held at 2255
Glades Road, Suite 228W, Boca Raton Florida 33431, on December 20, 2001 at 3:00
p.m., local time, and at any adjournments or postponements thereof, with all
powers the undersigned would possess if personally present, on the following
proposals as specified and, in their discretion, on such other matters as may
properly come before the Annual Meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE
VOTED "FOR" PROPOSALS 1 AND 2 AND IN THE DISCRETION OF THE PROXIES NOMINATED
HEREBY ON ANY OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING.
(TO BE SIGNED ON REVERSE SIDE)
ANNUAL MEETING OF SHAREHOLDERS OF
HOLLYWOOD MEDIA CORP.
Co. # _________ December 20, 2001 Acct #:_____________
-------------------------
PROXY VOTING INSTRUCTIONS
-------------------------
TO VOTE BY MAIL
- ---------------
PLEASE DATE, SIGN AND MAIL YOUR PROXY CARD IN THE ENVELOPE PROVIDED AS SOON AS
POSSIBLE.
TO VOTE BY TELEPHONE (TOUCH-TONE PHONE ONLY)
PLEASE CAL TOLL-FREE 1-800-PROXIES AND FOLLOW THE INSTRUCTIONS. HAVE YOUR
CONTROL NUMBER AND THE PROXY CARD AVAILABLE WHEN YOU CALL.
YOUR CONTROL NUMBER IS ____________________________________
The Board of Directors unanimously recommends a vote FOR the election
of all the director nominees listed in proposal 1 and FOR the approval of
proposal 2.
1. ELECTION OF DIRECTORS
NOMINEES: MITCHELL RUBENSTEIN LAURIE S. SILVERS DR. MARTIN H. GREENBERG
PETER GLUSKER HARRY T. HOFFMAN ROBERT MCALLAN
MITCHELL SEMEL DEBORAH J. SIMON
[ ] VOTE FOR all nominees listed, [ ] WITHHOLD AUTHORITY TO
except authority to vote VOTE for all nominees
withheld for the following
nominees (if any)
--------------------------------
2. Vote for the proposal to ratify the selection of Arthur Andersen LLP
as Hollywood Media Corp.'s independent public accountants for the
year ending on December 31, 2001.
[ ] VOTE FOR [ ] VOTE AGAINST [ ] ABSTAIN
3. Upon such other matters as may properly come before such Annual
Meeting or any adjournments or postponements thereof. In their
discretion, the proxies are authorized to vote in their discretion
upon such other business as may properly come before the Annual
Meeting and any adjournments or postponements thereof.
The undersigned hereby acknowledges receipt of (1) the Notice of
Annual Meeting and Proxy Statement for the 2001 Annual Meeting, and (2)
Hollywood Media Corp.'s 2000 Annual Report to Shareholders.
PLEASE MARK, SIGN, DATE AND MAIL THIS PROXY PROMPTLY USING THE ENVELOPE
PROVIDED. NO POSTAGE NECESSARY IF MAILED IN THE UNITED STATES.
_______________________________________ Dated: __________________, 2001
(Signature)
_______________________________________ Dated: __________________, 2001
(Signature, if held jointly)
IMPORTANT: Please sign exactly as your name appears hereon and mail it promptly
even though you now plan to attend the meeting. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as such. If
shares are registered in more than one name, the signatures of all such holders
are required. A corporation should sign in its full corporate name by a duly
authorized officer, stating such officer's title and official capacity, giving
the full title as such. A partnership should sign in the partnership name by an
authorized person, stating such person's title and relationship to the
partnership.
2