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
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
SPORTSLINE.COM, INC.
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(Name of Registrant as Specified In Its Charter)
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(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)(4) and 0-11.
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
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[LOGO]
2200 West Cypress Creek Road
Fort Lauderdale, Florida 33309
August 3, 2001
Dear Stockholder:
You are cordially invited to attend our 2001 Annual Meeting of Stockholders,
which will be held at 10:00 a.m. on Tuesday, September 25, 2001, at our offices
located at 2200 West Cypress Creek Road, Fort Lauderdale, Florida 33309.
At the Annual Meeting, our stockholders will be asked to elect four persons
to the Board of Directors. The accompanying Notice of Annual Meeting of
Stockholders and Proxy Statement describe in more detail the matters to be
presented at the Annual Meeting.
The Board of Directors recommends that you vote in favor of the election of
the nominated directors.
Please take this opportunity to become involved in the affairs of your
company. Whether or not you expect to be present at the meeting, please
complete, date, sign and mail the enclosed proxy card in the envelope provided.
Returning the proxy card does NOT deprive you of your right to attend the
meeting and vote your shares in person. If you attend the meeting, you may
withdraw your proxy and vote your own shares.
Sincerely,
Michael Levy
Chairman of the Board,
President and Chief Executive Officer
SPORTSLINE.COM, INC.
_________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held on September 25, 2001
_________________________
To our Stockholders:
The 2001 annual meeting of stockholders of SportsLine.com, Inc. will be
held at 10:00 a.m., local time, on Tuesday, September 25, 2001, at our offices
located at 2200 West Cypress Creek Road, Fort Lauderdale, Florida 33309 for the
purpose of considering and acting upon the following:
1. Election of four members to our board of directors to hold office
until our 2004 annual meeting or until their successors are duly
elected and qualified; and
2. Any other matters that properly come before the meeting.
The Board of Directors is not aware of any other business scheduled for the
annual meeting. Any action may be taken on the foregoing proposals at the annual
meeting on the date specified above, or on any date or dates to which the annual
meeting may be adjourned.
Stockholders of record at the close of business on July 30, 2001 are
entitled to notice of, and to vote at, the meeting or at any postponements or
adjournments of the meeting.
By Order of the Board of Directors,
/s/ KENNETH SANDERS
Kenneth W. Sanders
Secretary
Fort Lauderdale, Florida
August 3, 2001
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YOUR VOTE IS IMPORTANT
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, WHETHER OR
NOT YOU EXPECT TO ATTEND THE MEETING IN PERSON, PLEASE SIGN, DATE AND RETURN THE
ENCLOSED PROXY OR PROXIES, AS THE CASE MAY BE, AS SOON AS POSSIBLE IN THE
ENCLOSED POSTAGE PRE-PAID ENVELOPE.
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TABLE OF CONTENTS
Page
About the Meeting.....................................................................................1
What is the purpose of the annual meeting?.......................................................1
Who is entitled to notice of and to vote at the meeting?.........................................1
Who can attend the meeting?......................................................................1
What constitutes a quorum?.......................................................................1
How do I vote?...................................................................................2
Can I vote by telephone or electronically?.......................................................2
Can I change my vote after I return my proxy card?...............................................2
What are the Board's recommendations?............................................................2
What vote is required to approve each item?......................................................2
Who pays for the preparation of the proxy?.......................................................3
Can I see a List of the Stockholders Entitled to Vote??..........................................3
Stock Ownership.......................................................................................4
Who are the largest owners of our stock and how much stock do our directors and executive
officers own?...................................................................................4
Section 16(a) Beneficial Ownership Reporting Compliance..........................................5
Election of Directors.................................................................................6
Directors Standing for Election..................................................................6
Directors Continuing in Office...................................................................7
How are directors compensated?...................................................................8
How often did the board meet during 2000?........................................................8
What committees has the board established?.......................................................8
Report of the Audit Committee....................................................................9
Management...........................................................................................10
Executive Officers..............................................................................10
Executive Compensation and Other Information.........................................................12
Executive Compensation..........................................................................12
Summary Compensation Table......................................................................12
Stock Option Information........................................................................12
Report of the Compensation Committee............................................................14
Compensation Committee Interlocks and Insider Participation.....................................15
Employment Agreements...........................................................................15
Performance Graph....................................................................................17
Certain Transactions.................................................................................18
CBS Agreement...................................................................................18
Planned Licensing Agreement.....................................................................18
Relationships with Independent Public Accountants....................................................19
Fees Paid to Our Independent Auditors................................................................19
Audit Fees......................................................................................19
Financial Information Systems Design and Implementation Fees....................................19
All Other Fees..................................................................................19
Other Business.......................................................................................19
Shareholder Proposals for the 2002 Annual Meeting....................................................19
i
[LOGO]
2001 ANNUAL MEETING OF STOCKHOLDERS
___________________________________
PROXY STATEMENT
___________________________________
This proxy statement contains information related to our annual meeting of
stockholders to be held on Tuesday, September 25, 2001, beginning at 10:00 a.m.
local time, at our offices located at 2200 West Cypress Creek Road, Fort
Lauderdale, Florida 33309 and at any adjournments or postponements thereof. The
approximate date that this proxy statement, the accompanying notice of annual
meeting and the enclosed form of proxy are first being sent to stockholders is
August 13, 2001. You should review this information in conjunction with our 2000
Annual Report to Stockholders which accompanies this proxy statement.
ABOUT THE MEETING
What is the purpose of the annual meeting?
At the annual meeting, stockholders will act upon the matters outlined in
the accompanying notice of meeting, including the election of four directors. In
addition, our management will report on our performance during 2000 and respond
to questions from our stockholders.
Who is entitled to notice of and to vote at the meeting?
Only stockholders of record at the close of business on the record date,
July 30, 2001, are entitled to receive notice of the annual meeting and to vote
shares of our common stock that they held on that date at the meeting, or any
postponements or adjournments of the meeting. Each outstanding share of common
stock entitles its holder to cast one vote on each matter to be voted upon.
Who can attend the meeting?
All stockholders as of the record date, or their duly appointed proxies,
may attend. 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.
What constitutes a quorum?
The presence at the meeting, in person or by proxy, of the holders of a
majority of all of the shares of common stock outstanding on the record date
will constitute a quorum, permitting the meeting to conduct its business. As of
the record date, 27,531,149 shares of our common stock were outstanding. Proxies
received but marked as abstentions and broker non-votes will be included in the
calculation of the number of shares considered to be present at the meeting but
will not be counted as votes cast "for" or "against" any given matter.
If less than a majority of outstanding shares entitled to vote are
represented at the meeting, a majority of the shares present at the meeting,
either in person or by proxy, may adjourn the meeting to another date, time or
place, and notice need not be given of the new date, time or place if the new
date, time or place is announced at the meeting before an adjournment is taken.
How do I vote?
If you complete and properly sign the accompanying proxy card and return it
to us, it will be voted as you direct. If you are a registered stockholder and
you attend the meeting, you may deliver your completed proxy card in person.
"Street name" stockholders who wish to vote at the meeting will need to obtain a
proxy from the institution that holds their shares.
Can I vote by telephone or electronically?
If you are a registered stockholder (that is, if you hold your stock in
certificate form), you may vote by completing, signing and returning your proxy
card to us in the enclosed postage-paid envelope.
If your shares are held in "street name," you may vote by proxy card,
telephone or electronically through the Internet by following the instructions
included on your proxy card.
The deadline for voting by telephone or electronically is 11:59 p.m. on
September 24, 2001.
Can I change my vote after I return my proxy card?
Yes. Even after you have submitted your proxy card, you may change your
vote at any time before the proxy is exercised by filing with our Secretary
either a notice of revocation or a duly executed proxy bearing a later date. The
powers of the proxy holders will be suspended if you attend the meeting in
person and so request, although attendance at the meeting will not by itself
revoke a previously granted proxy.
What are the Board's recommendations?'
Unless you give other instructions on your proxy card, the persons named as
proxy holders on the proxy card will vote in accordance with the recommendations
of our board of directors. The board recommends a vote for the election of the
nominated slate of directors. See "Election of Directors," page 6.
The board does not know of any other matters that may be brought before the
meeting nor does it foresee or have reason to believe that the proxy holders
will have to vote for substitute or alternate board nominees. In the event that
any other matter should properly come before the meeting or any board nominee is
not available for election, the proxy holders will vote as recommended by the
board of directors or, if no recommendation is given, in accordance with their
best judgment.
What vote is required to approve each item?
Election of Directors. The affirmative vote of a plurality of the votes
cast at the meeting (either in person or by proxy) is required for the election
of directors. A properly executed proxy marked "WITHHOLD AUTHORITY" with respect
to the election of one or more directors will not be voted with respect to the
director or directors indicated, although it will be counted for purposes of
determining whether there is a quorum. Stockholders do not have the right to
cumulate their votes for directors.
Other Items. In the event other items are properly brought before the
stockholders at the meeting, the affirmative vote of a majority of the votes
cast at the meeting (either in person or by proxy) will be required for
approval. A properly executed proxy marked "ABSTAIN" with respect to any such
matter will not be voted, although it will be counted for purposes of
determining whether there is a quorum. Accordingly, an abstention will have the
effect of a negative vote.
If you hold your shares in "street name" through a broker or other nominee,
your broker or nominee may not be permitted to exercise voting discretion with
respect to some of the matters to be acted upon. Thus, if you do not give your
broker or nominee specific instructions, your shares may not be voted on those
matters and will not be
2
counted in determining the number of shares necessary for approval. Shares
represented by such "broker non-votes" will, however, be counted in determining
whether there is a quorum.
Who pays for the preparation of the proxy?
We will pay the cost of preparing, assembling and mailing the proxy
statement, notice of meeting and enclosed proxy card. In addition to the use of
mail, our employees may solicit proxies personally and by telephone. Our
employees will receive no compensation for soliciting proxies other than their
regular salaries. We may request banks, brokers and other custodians, nominees
and fiduciaries to forward copies of the proxy material to the beneficial owners
of our common stock and to request authority for the execution of proxies and we
may reimburse such persons for their expenses incurred in connection with these
activities.
Can I See a List of the Stockholders Entitled to Vote?
Any stockholder of record as of the record date may look at the complete
list of the stockholders that are entitled to vote at the annual meeting so long
as it is for a purpose germane to the annual meeting. A list of stockholders
entitled to vote at the annual meeting will be available in these circumstances,
during normal business hours, at our offices located at 2200 West Cypress Creek
Road, Fort Lauderdale, Florida 33309, for a period of ten days prior to the
meeting and at the meeting itself.
3
STOCK OWNERSHIP
Who are the largest owners of our stock and how much stock do our directors and
executive officers own?
The following table shows the amount of common stock beneficially owned as
of June 30, 2001 by (a) each of our directors and nominees for director, (b)
each of our executive officers named in the Summary Compensation Table below,
(c) all of our directors and executive officers as a group and (d) each person
known by us to beneficially own more than 5% of our outstanding common stock.
Unless otherwise provided, the address of each holder is c/o SportsLine.com,
Inc., 2200 W. Cypress Creek Road, Fort Lauderdale, Florida 33309.
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Outstanding
Shares Acquirable Total Number
Beneficially Within of Shares Percentage
Owned 60 Days Beneficially Owned of Shares
Name (a) (b) (columns (a)+(b)) Outstanding (%)
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CBS Broadcasting, Inc. (1)
Westinghouse CBS Holding Company, Inc. (1)
Viacom Inc. (2)
NAIRI, Inc. (3)
National Amusements, Inc. (3)
Sumner Redstone (3)............................. 4,540,000 680,000 5,220,000 (4) 18.6
Massachusetts Financial Services Company (5).... 3,502,744 - 3,502,744 12.8
Bear Stearns Asset Management Inc. (6).......... 2,952,000 - 2,952,000 10.8
AT&T Corp. (7)
MediaOne Group, Inc. (8)
MedaOne of Colorado, Inc. (8)
MediaOne Interactive Services, Inc. (8)......... 1,595,852 - 1,595,852 (9) 6.1
Michael Levy.................................... 1,060,292 528,020 1,588,312 (10) 5.7
Kenneth W. Sanders.............................. 5,130 224,165 229,295 *
Mark J. Mariani................................. 6,796 221,623 228,419 *
Andrew S. Sturner............................... 1,636 219,427 221,063 *
Joseph Lacob.................................... 188,574 15,000 203,574 (11) *
James C. Walsh.................................. 125,000 23,375 168,375 (12) *
Daniel L. Leichtenschlag........................ 11,469 139,060 150,529 (13) *
Gerry Hogan..................................... - 57,375 57,375 *
Richard B. Horrow............................... 19,750 24,875 44,625 *
Michael P. Schulhof............................. - 35,958 35,958 *
Andrew Nibley................................... - 17,375 17,375 *
Thomas Cullen................................... 800 15,000 15,800 *
Sean McManus.................................... - - - *
Russell I. Pillar............................... - - - *
All directors and executive officers as a group
(15 persons)................................... 1,719,782 1,532,481 3,252,263 11.3%
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* Represents less than 1% of our outstanding common stock.
4
(1) The address for CBS Broadcasting Inc. ("CBSBI") and Westinghouse CBS
Holding Company, Inc. ("W/ CBS HCI") is 51 West 52nd Street, New York,
New York 10019.
(2) The address for Viacom Inc. ("Viacom") is 1515 Broadway, New York, New
York 10036.
(3) The address for NAIRI, Inc. ("NAIRI"), National Amusements, Inc.
("NAI") and Mr. Redstone is 200 Elm Street, Dedham, Massachusetts
02026.
(4) This information is based on a Schedule 13D, filed with the Securities
and Exchange Commission on May 15, 2000, which was jointly filed by
CBSBI, W/ CBS HCI, Viacom, NAIRI, NAI and Sumner M. Redstone
(collectively, the "Viacom Reporting Persons"). The shares are
indirectly held by W/ CBS HCI thorough its ownership of 100% of the
outstanding stock of CBSBI and are indirectly held by Viacom through
its ownership of 100% of the outstanding stock of W/ CBS HCI.
Approximately 68% of Viacom's voting stock is owned by NAIRI, which in
turn is a wholly owned subsidiary of NAI. Beneficial ownership is
attributed to Mr. Redstone as Mr. Redstone is the Chairman of the
Board and the beneficial owner of a controlling interest in NAI. Each
of the Viacom Reporting Persons has shared dispositive and voting
power over all of the shares.
(5) The address for Massachusetts Financial Services Company ("MFS") is
500 Boylston Street, Boston, Massachusetts 02116. This information is
based on a Schedule 13G/A filed with the Securities and Exchange
Commission on February 12, 2001. MFS has sole voting power of
3,120,464 shares and sole dispositive power of 3,502,744. All of such
shares are also beneficially owned by certain other non-reporting
entities.
(6) The address for Bear Stearns Asset Management Inc. is 575 Lexington
Avenue, New York, New York 10022.
(7) The address for AT&T Corp. ("AT&T") is 32 Avenue of the Americas, New
York, New York 10013.
(8) The address for MediaOne Group, Inc. ("MediaOne Group"), MediaOne of
Colorado, Inc. ("MediaOne of Colorado and MediaOne Interactive
Services, Inc. ("MediaOne Interactive Services") is 188 Inverness
Drive West, 6th Floor, Englewood, Colorado 80112.
(9) This information is based on a Schedule 13G, filed with the Securities
and Exchange Commission on February 14, 2001, which was jointly filed
by AT&T, MediaOne Group, MediaOne of Colorado and MediaOne Interactive
Services (collectively, the "MediaOne Reporting Persons"). Each of the
MediaOne Reporting Persons may be deemed the beneficial owner of the
shares owned directly by MediaOne Interactive Services. MediaOne
Interactive Services is a wholly-owned subsidiary of MediaOne of
Colorado, MediaOne of Colorado is a wholly-owned subsidiary of
MediaOne Group and MediaOne Group is a wholly-owned subsidiary of
AT&T. Each of the MediaOne Reporting Persons has shared dispositive
and voting power over all of the shares.
(10) Includes 60,000 shares of common stock held of record by a charitable
non-profit corporation of which Mr. Levy is a director and the
president.
(11) Includes 9,281 shares of common stock held of record by a trust for
the benefit of Mr. Lacob's children for which Mr. Lacob disclaims
beneficial ownership.
(12) Includes 6,000 shares of common stock held of record by the children
of Mr. Walsh.
(13) Includes 5,707 shares of common stock held of record by Mr.
Leichtenschlag's wife.
Section 16(a) Beneficial Ownership Reporting Compliance
To our knowledge, based solely on a review of the copies of filings
furnished to us and written or oral representations that no other reports were
required, we believe that all of our directors and executive officers complied
during 2000 with the reporting requirements of Section 16(a) of the Securities
Exchange Act of 1934, as amended, with the exception of a Form 4 for Richard
Horrow reporting certain transactions in December 2000 which was inadvertently
filed late.
5
ELECTION OF DIRECTORS
Directors Standing for Election
Our Board of Directors is divided into three classes and each class of
directors serves for a three-year term, or until successors of that class have
been elected and qualified. At the annual meeting, the stockholders will elect
four directors, each of whom will serve for a term expiring at the 2004 annual
meeting of stockholders, or until his successor has been duly elected and
qualified.
The board has no reason to believe that any nominee will refuse or be
unable to serve if elected. However, if any of them should become unavailable to
serve as director, the Board may designate a substitute nominee or the number of
directors may be reduced in accordance with our By-laws. If the board designates
a substitute nominee, the persons named as proxies will vote for the substitute
nominee designated by the Board.
The directors standing for re-election are:
. Michael Levy
Michael Levy, 54, has served as the Chairman of the Board, President
and Chief Executive Officer of the Company since its inception in
February 1994. From 1979 through March 1993, Mr. Levy served as
President, Chief Executive Officer and as a director of Lexicon
Corporation, a high technology company specializing in data
communications and signal processing technology. From January 1988 to
June 1993, Mr. Levy also served as Chairman of the Board and Chief
Executive Officer of Sports-Tech International, Inc., a company
engaged in the development, acquisition, integration and sale of
computer software, equipment and computer-aided video systems used by
professional, collegiate and high school sports programs. Between June
1993 and February 1994, Mr. Levy was a private investor.
. Joseph Lacob
Joseph Lacob, 45, was appointed as a director in May 1995. He has
served as a general partner of Kleiner Perkins Caufield & Byers, a
venture capital partnership, since May 1987. Mr. Lacob also serves on
the Board of Directors of Corixa, Inc. and Align Technology, Inc., as
well as several privately held ventures in the medical and sports
media businesses.
. Andrew Nibley
Andrew Nibley, 49, was appointed as a director in March 1996. He has
served as President and Chief Executive Officer of GetMusic, LLC since
October 1999. From January 1998 to September 1999, he served as
President of Reuters NewMedia, Inc. and had been a director of Reuters
NewMedia, Inc. since January 1994. From January 1994 to January 1998,
Mr. Nibley was the Editor and Executive Vice President of Reuters
NewMedia, Inc. From January 1989 to January 1994, Mr. Nibley was the
Editor, America for Reuters America, Inc.
. James C. Walsh
James C. Walsh, 60, was appointed as a director in August 1994. He is
an attorney who has been engaged in the private practice of law since
1968. Mr. Walsh has also served as the President of Namanco
Productions, Inc., a sports marketing and management firm, since 1969.
Namanco Productions, Inc. is the agent and manager of NFL Hall of Fame
quarterback Joe Namath. Mr. Walsh is a director of Vestin Group, Inc.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF ALL NOMINEES
NAMED ABOVE.
6
Directors Continuing in Office
The terms of the following directors expire at the annual meeting of
stockholders in 2002:
. Thomas Cullen
Thomas Cullen, 42, was appointed as a director in April 1997. He has
been a Managing Partner of LoneTree Capital, a private equity
investment firm based in Denver Colorado, since September 2000.
Previously, he served as President of MediaOne Ventures, Inc.
(formerly U S WEST, Inc. Media Group's Interactive Services Division)
from April 1997 until its purchase by AT&T Corp. in June 2000. From
1981 through 1997, Mr. Cullen held various positions with U S WEST,
including Vice President, Business Development for U S WEST Media
Group's Interactive Services Division from April 1992 to April 1997.
. Richard B. Horrow
Richard B. Horrow, 46, was appointed as a director in September 1994.
He is an attorney and sports development consultant and has served as
President of Horrow Sports Ventures, Inc., a sports consulting firm,
since its inception in May 1988. Mr. Horrow also currently serves as a
consultant for various sports-related matters to the National Football
League, International Speedway Corporation, the PGA TOUR, the
Baltimore Orioles, Major League Soccer and the cities of Norfolk and
Richmond, Virginia; Birmingham, Alabama; Wilmington, North Carolina;
and Wichita, Kansas. Mr. Horrow is a visiting expert on sports law at
the Harvard Law School and is the sports business, law and marketing
expert for One-on-One Sports on The Sporting News Radio.
. Russell I. Pillar
Russell I. Pillar, 36, was appointed as a director in March 2000. He
has served as President and Chief Executive Officer of Viacom
Interactive Ventures and its predecessor company, CBS Internet Group,
since its formation in January 2000. Mr. Pillar also has served as
Managing Partner of Critical Mass Ventures LLC, an Internet-focused
venture capital firm, since October 1991. From November 1998 to
January 2000, Mr. Pillar served as President and Chief Executive
Officer and a director of Richard Branson's Virgin Entertainment
Group, Inc., a diversified international entertainment content
retailer. From September 1997 to August 1998, Mr. Pillar served as
President and Chief Executive Officer of Prodigy Internet, an internet
service provider, and served as a member of Prodigy's board of
directors, including serving as its Vice Chairman, from October 1996
to February 2000. From December 1993 to September 1996, Mr. Pillar
served as President, Chief Executive Officer, and a Director of
Precision Systems, Inc., an international telecommunications software
provider. In addition to his service on a number of boards of private
emerging media and technology companies, Mr. Pillar serves as a
director of Marketwatch.com, Inc. and Hollywood Media Corporation. Mr.
Pillar graduated Phi Beta Kappa, cum laude, with an A.B. from Brown
University.
The terms of the following directors expire at the annual meeting of
stockholders in 2003:
. Gerry Hogan
Gerry Hogan, 55, was appointed as a director in November 1996. He is
currently a private investor. From May 1997 to June 2000, he served as
Chairman and Chief Executive Officer of Cygnus Business Media, Inc., a
magazine publishing and trade show company. He served as President and
Chief Executive Officer of the Home Shopping Network from February
1993 to September 1995. Prior thereto, Mr. Hogan served as vice
chairman of Whittle Communications, L.P. from October 1990 to February
1993. From October 1971 to September 1987, Mr. Hogan held various
positions at Turner Entertainment Networks and most recently served as
President.
7
. Sean McManus
Sean McManus, 46, was appointed as a director in March 1997. He has
served as President of CBS Sports since December 1996. From October
1987 to December 1996, Mr. McManus was Senior Vice President U.S.
Television Sales and Programming at Trans World International, the
television division of International Management Group. From August
1981 to October 1987, Mr. McManus was Vice President Planning and
Development at NBC Sports. From September 1979 to August 1981, Mr.
McManus served as Associate Producer and Producer at NBC Sports and
from August 1977 to September 1979 he was a Production Assistant to
the Associate Producer at ABC Sports.
. Michael P. Schulhof
Michael P. Schulhof, 59, was appointed as a director in November 1997.
He is currently a private investor focused on high technology, new
media and internet companies. From June 1974 to January 1996, Mr.
Schulhof held various positions at Sony Corporation of America, Inc.
and most recently served as President and Chief Executive Officer from
June 1993 to January 1996. Mr. Schulhof is a trustee of Brandeis
University, Lincoln Center for the Performing Arts, Inc., New York
University Medical Center, the International Tennis Hall of Fame and
the Brookings Institution, serves on the Board of Directors of the
Center on Addiction and Substance Abuse at Columbia University and The
American Hospital of Paris Foundations and is a member of the Council
on Foreign Relations. Mr. Schulhof is a director of j2 Global
Communications, Inc.
How are directors compensated?
Compensation. We reimburse our directors for all out-of-pocket expenses
incurred in the performance of their duties as directors. We currently do not
pay fees to our directors for attendance at meetings.
Options. Our non-employee directors are eligible to receive options under
our 1997 Incentive Compensation Plan. In April 2000, Messrs. Lacob, Nibley,
Cullen, Horrow, Hogan, Schulhof and Walsh each received an option, immediately
exercisable, to purchase 5,000 shares of our common stock. The exercise price of
each option was the market price of our common stock at the time of the grant.
How often did the board meet during 2000?
Our board of directors met five times during 2000, including telephonic
meetings, and took action by unanimous written consent twice. Each director
attended more than 75% of the total number of meetings of the board and
committees on which he served.
What committees has the board established?
Our board of directors has a standing compensation committee and audit
committee. We do not have a nominating or similar committee. Our board of
directors performs the functions of a nominating or similar committee.
Compensation Committee. Messrs. Hogan, McManus and Pillar are the current
members of our compensation committee. The compensation committee reviews and
approves the compensation of our directors, officers and employees, including
salaries, bonuses, commission, and benefit plans, and administers our stock
plans, including the 1995 Stock Option Plan, the 1997 Incentive Compensation
Plan and the 1997 Employee Stock Purchase Plan. During 2000, the compensation
committee took action by unanimous written consent four times.
Audit Committee. Messrs. Cullen, Lacob and Schulhof (Chair) are the current
members of our audit committee. The members of our audit committee are
independent as defined by the rules and regulations of the Nasdaq Stock Market.
The audit committee represents the board in its relations with our independent
public accountants and oversees the financial reporting and disclosures prepared
by our management. The functions of the
8
audit committee and its activities during the year ended December 31, 2000 are
described below under the heading "Report of the Audit Committee."
Report of the Audit Committee
The following Report of the Audit Committee does not constitute soliciting
material and should not be deemed filed or incorporated by reference in any
other filing by us under the Securities Act of 1933 or the Securities Exchange
Act of 1934.
The audit committee's role is to act on behalf of the board of directors in
the oversight of all material aspects of our corporate financial reporting and
our external audit, including, among other things, our internal control
structure, the results and scope of the annual audit and other services provided
by our independent auditors and our compliance with legal requirements that have
a significant impact on our financial reports. Although management has the
primary responsibility for the financial statements and the reporting process
including the systems of internal controls, the audit committee consults with
management and our independent auditors regarding the preparation of financial
statements and, as appropriate, initiates inquiries into aspects of our
financial affairs. In addition, the audit committee has the responsibility to
consider and recommend the appointment of, and to review fee arrangements with,
our independent auditors. A full description of the audit committee's primary
responsibilities, operating principles and relationship with internal and
external auditors is contained in the Charter of the Audit Committee adopted by
our board of directors, which is attached to this proxy statement as Appendix A.
During the year ended December 31, 2000, the audit committee met six times.
In fulfilling its oversight responsibilities, the audit committee reviewed
the audited financial statements for the year ended December 31, 2000 with
management including a discussion of the quality of the accounting principles,
the reasonableness of significant judgments and the clarity of disclosures in
the financial statements. The audit committee reviewed the financial statements
for the year ended December 31, 2000 with the independent auditors and discussed
with them all of the matters required to be discussed by Statement of Auditing
Standards No. 61, including the auditors' judgments as to the quality, not just
the acceptability, of our accounting principles. In addition, the audit
committee has received the written disclosures and the letter from the
independent auditors required by Independent Standards Board No. 1 and has
discussed with the independent auditors their independence from management and
SportsLine.com. Finally, the audit committee has considered whether the
provision by the independent auditors of non-audit services to SportsLine.com is
compatible with maintaining the auditors' independence.
The members of the audit committees are not professionally engaged in the
practice of auditing or accounting and are not experts in the fields of
accounting or auditing, including in respect of auditor independence. Members of
the audit committee rely without independent verification on the information
provided to them and on the representations made by management and the
independent auditors. Accordingly, the audit committee's oversight does not
provide an independent basis to determine that management has maintained
appropriate accounting and financial reporting principles or appropriate
internal controls and procedures designed to assure compliance with accounting
standards and applicable laws and regulations. Furthermore, the audit
committee's considerations and discussions referred to above do not assure that
the audits of the financial statements have been carried out in accordance with
generally accepted auditing standards, that the financial statements are
presented in accordance with generally accepted accounting principles or that
the auditors are in fact "independent."
In reliance on the reviews and discussions referred to above, the audit
committee recommended to the board of directors that the audited financial
statements for the year ended December 31, 2000 be included in the Company's
Annual Report on Form 10-K for the year ended December 31, 2000 for filing with
the Securities and Exchange Commission.
Members of the Audit Committee
Michael P. Schulhof
Thomas Cullen
Joseph Lacob
9
MANAGEMENT
Executive Officers
Our current executive officers are:
- ------------------------------------------------------------------------------------------------------------------------
Name Age Position
- ------------------------------------------------------------------------------------------------------------------------
Michael Levy.................................. 54 Chairman of the Board, President and Chief Executive Officer
- ------------------------------------------------------------------------------------------------------------------------
Daniel L. Leichtenschlag...................... 39 President of Operations and Chief Technology Officer
- ------------------------------------------------------------------------------------------------------------------------
Mark J. Mariani............................... 44 President, Sales and Marketing
- ------------------------------------------------------------------------------------------------------------------------
Kenneth W. Sanders............................ 44 President of Finance and Administration and Chief Financial Officer
- ------------------------------------------------------------------------------------------------------------------------
Andrew S. Sturner............................. 36 President, Corporate and Business Development
- ------------------------------------------------------------------------------------------------------------------------
Peter Pezaris................................. 31 President, Product Development
- ------------------------------------------------------------------------------------------------------------------------
. Michael Levy
See "Directors Continuing in Office."
. Daniel L. Leichtenschlag
Daniel L. Leichtenschlag has served as President of Operations and
Chief Technology Officer since January 2001. Mr. Leichtenschlag joined
SportsLine.com as Director of Operations in May 1995, was promoted to
the position of Vice President of Engineering in 1997, became the
Chief Technology Officer in 1998 and Senior Vice President of
Operations in June 1999. Mr. Leichtenschlag is responsible for
technology and computer operations. Prior to joining SportsLine.com,
Mr. Leichtenschlag spent 12 years in various technology management
roles at General Electric.
. Mark J. Mariani
Mark J. Mariani has served as President, Sales and Marketing, since
June 1999. He joined SportsLine.com in April 1996 as Executive Vice
President, Sales. Mr. Mariani is responsible for Sales, Marketing,
Radio Operations and Vegas Insider. From August 1991 to March 1996,
Mr. Mariani served as Executive Vice President of Sports Sales for
Turner Broadcasting Sales, Inc. From June 1990 to August 1991, Mr.
Mariani served as Senior Vice President and National Sales Manager for
CNN in New York, and from May 1986 to June 1990, Mr. Mariani served as
Vice President for CNN Sales Midwest. Prior to joining Turner
Broadcasting, Mr. Mariani served as an Account Executive for WBBM, an
owned and operated CBS television station in Chicago, Illinois.
. Kenneth W. Sanders
Kenneth W. Sanders has served as President of Finance and
Administration and Chief Financial Officer since January 2001. Mr.
Sanders became the Vice President and Chief Financial Officer of
SportsLine.com in September 1997 and was appointed Senior Vice
President in October 1998. From January 1996 to August 1997, Mr.
Sanders served as Senior Vice President, Chief Financial Officer of
Paging Network, Inc., the world's largest paging company. From May
1993 to December 1995, Mr. Sanders served as Executive Vice President,
Chief Financial Officer and a director of CellStar Corporation, an
integrated wholesaler and retailer of cellular phones and related
products. Between July 1979 and April 1993, Mr. Sanders was with KPMG
Peat Marwick, most recently as an Audit Partner from July 1990 to
April 1993.
. Andrew S. Sturner
Andrew S. Sturner has served as President, Corporate and Business
Development since June 1999. He joined SportsLine.com as Vice
President, Business Development in June 1995 and was promoted to
Senior Vice President, Business Development in October 1998. From May
1994 to
10
June 1995, Mr. Sturner served as Vice President of Business
Development for MovieFone, Inc., an interactive telephone service
company. From March 1993 to May 1994, Mr. Sturner served as President
of Interactive Services, an interactive audio text development company
that he co-founded in 1992. From August 1990 to March 1993, Mr.
Sturner was a bankruptcy associate at the law firm of Stroock &
Stroock & Lavan.
. Peter Pezaris
Peter Pezaris has served as President, Product Development since June
2001, responsible for programming, production and fantasy products.
Previously, Mr. Pezaris was Senior Vice President, Product
Development, responsible for SportsLine.com's Commissioner.com
subsidiary, which produces fantasy products for our website, CBS
SportsLine.com, as well as official fantasy games for NFL.com, MLB.com
and NBA.com. Mr. Pezaris joined SportsLine.com in December 1999 when
we acquired Daedalus World Wide Corporation ("DWWC"), the producer of
Commissioner.com fantasy products. Mr. Pezaris co-founded DWWC in
1995. Prior to DWWC, Mr. Pezaris was a systems and software developer
for the investment banking firms of Bankers Trust and Salomon
Brothers.
11
EXECUTIVE COMPENSATION AND OTHER INFORMATION
Executive Compensation
The following table sets forth information concerning the compensation paid
by us for the three fiscal years ended December 31, 2000 to our Chief Executive
Officer and each of our four other highest paid executive officers in 2000. We
did not grant any restricted stock awards or stock appreciation rights or make
any long-term 1997 Incentive Compensation Plan payouts during these three fiscal
years.
Summary Compensation Table
Long Term
Annual Compensation (1) Compensation Awards
------------------------- ---------------------
Name and Securities Underlying All Other
Principal Position Year Salary Bonus Options Compensation
- ------------------------------------------- ---- -------- --------- --------------------- --------------
Michael Levy............................... 2000 $385,000 $192,500 345,000 $19,747(3)
Chairman, President and 1999 330,000 - (2) 435,000 17,420(3)
Chief Executive Officer 1998 306,250 105,000 175,000 25,097(3)
Daniel L. Leichtenschlag................... 2000 210,000 120,000 110,000
President of Operations and 1999 157,500 - (2) 90,000
Chief Technology Officer 1998 124,375 27,000 30,000
Mark J. Mariani............................ 2000 270,000 160,000 145,000
President, Sales and Marketing 1999 230,000 - (2) 100,000
1998 197,917 50,000 100,000
Kenneth W. Sanders......................... 2000 315,000 157,500 145,000
President of Finance and Administration 1999 270,000 - (2) 100,000
and Chief Financial Officer 1998 225,000 56,000 100,000 1,716(4)
Andrew S. Sturner.......................... 2000 270,000 135,000 145,000
President, Corporate and Business 1999 220,000 - (2) 100,000
Development 1998 178,125 50,000 130,000
_________________
(1) The aggregate value of perquisites and other personal benefits received by
the named executive officers are not reflected because the amounts are
below the reporting requirements established by the rules of the Securities
and Exchange Commission.
(2) In lieu of cash bonuses for 1999, in January 2000 each executive officer
was granted options to purchase shares of our common stock in the following
amounts: Levy (50,000), Leichtenschlag (15,000), Mariani (25,000), Sanders
(25,000) and Sturner (25,000). The options were immediately exercisable at
an exercise price of $35.3125 per share and have a term of ten years.
(3) Represents premiums paid for life and disability insurance policies for the
benefit of Mr. Levy.
(4) Represents reimbursement of relocation and moving expenses.
Stock Option Information
The following table sets forth, with respect to our Chief Executive Officer
and our four other highest paid current executive officers named in the Summary
Compensation Table, certain information concerning the grant of stock options in
2000.
12
Option Grants in Last Fiscal Year
Individual Grants Potential Realizable
---------------------------------------------------------- Value at Assumed
Number of % of Total Annual Rates of Stock
Securities Options Granted Price Appreciation for
Underlying to Exercise Option Term(2)
Options Employees in Price -------------------------
Name Date of Grant Granted(1) Fiscal Year ($/share) Expiration Date 5%($) 10%($)
- --------------------------- ------------- ---------- --------------- --------- --------------- ---------- -----------
Michael Levy............... 01/31/2000 225,000 7.10% $35.3125 01/31/2010 $4,996,764 $12,662,782
04/17/2000 20,000 0.63 11.6250 04/17/2010 146,218 370,545
10/19/2000 100,000 3.16 7.8125 10/19/2010 491,324 1,245,111
Daniel L. Leichtenschlag... 01/31/2000 40,000 1.26 $35.3125 01/31/2010 888,314 2,251,161
04/17/2000 20,000 .63 11.6250 04/17/2010 146,218 370,545
10/19/2000 50,000 1.58 7.8125 10/19/2010 245,662 622,556
Mark J. Mariani............ 01/31/2000 75,000 2.37 $35.3125 01/31/2010 1,665,588 4,220,927
04/17/2000 20,000 0.63 11.6250 04/17/2010 146,218 370,545
10/19/2000 50,000 1.58 7.8125 10/19/2010 245,662 622,556
Kenneth W. Sanders......... 01/31/2000 75,000 2.37 $35.3125 01/31/2010 1,665,588 4,220,927
04/17/2000 20,000 0.63 11.6250 04/17/2010 146,218 370,545
10/19/2000 50,000 1.58 7.8125 10/19/2010 245,662 622,556
Andrew S. Sturner.......... 01/31/2000 75,000 2.37 $35.3125 01/31/2010 1,665,588 4,220,927
04/17/2000 20,000 0.63 11.6250 04/17/2010 146,218 370,545
10/19/2000 50,000 1.58 7.8125 10/19/2010 245,662 622,556
- ------------
(1) All such options were granted under the 1997 Incentive Compensation Plan and
become exercisable in installments over four years. Under our 1997 Incentive
Compensation Plan, these options will become immediately exercisable in the
event of certain change of control transactions.
(2) Potential realizable value assumes that the stock price increases from the
date of grant until the end of the option term (10 years) at the annual rate
specified (5% and 10%). The 5% and 10% assumed annual rates of appreciation
are mandated by rules of the Securities and Exchange Commission and do not
represent our estimate or projection of the future price of our common
stock. We do not believe that this method accurately illustrates the
potential value of a stock option.
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
The following table sets forth certain information concerning stock options
exercised by our Chief Executive Officer and our four other highest paid current
executive officers named in the Summary Compensation Table, as well as the
number of unexercised options held by such persons at December 31, 2000 and the
value thereof, based on a value per share of Common Stock of $5.3125, the
closing price of the Common Stock on the Nasdaq National Market System on
December 29, 2000.
Number of Securities Underlying Value of Unexercised
Unexercised Options at In-the-Money Options at
Shares December 31, 2000 (#) December 31, 2000 ($)
Acquired on Value -------------------------------------- --------------------------
Name Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
- ----------------------------------- ------------ ----------- ------------------ ------------------ ----------- -------------
Michael Levy....................... - - 369,062 735,938 - -
Daniel L. Leichtenschlag........... 10,000 $ 488,047 114,708 150,917 $ 1,289 $156
Mark J. Mariani.................... 22,000 1,235,625 167,008 209,792 55,313 -
Kenneth W. Sanders................. - - 169,375 210,625 - -
Andrew S. Sturner.................. - - 159,137 224,375 627 156
13
The following Report on Executive Compensation and the performance graph
included elsewhere in this proxy statement do not constitute soliciting material
and should not be deemed filed or incorporated by reference into any other
filing by us under the Securities Act of 1933 or the Securities Exchange Act of
1934, except to the extent we specifically incorporate this Report or the
performance graph by reference therein.
Report of the Compensation Committee
Compensation Philosophy and Review. Our compensation philosophy for
executive officers serves two principal purposes:
. to provide a total compensation package for officers that is
competitive and enables SportsLine.com to attract and retain key
executive and employee talent needed to accomplish SportsLine.com's
long-term business objectives; and
. to directly link compensation to improvements in SportsLine.com's
performance and increases in stockholder value as measured principally
by the trading price of SportsLine.com's Common Stock and an
individual's contribution and personal performance.
The compensation committee reviews, recommends and approves changes to
SportsLine.com's compensation policies and benefits programs, administers
SportsLine.com's stock option plans, including approving stock option grants,
and otherwise seeks to ensure that SportsLine.com's compensation philosophy is
consistent with its best interests and is properly implemented.
Elements of Executive Officer Compensation. SportsLine.com's executive
compensation consists primarily of base salary, health insurance and similar
benefits, cash bonuses, the award of stock options designed to provide long-term
incentive and eligibility to participate in compensation and benefit programs
available to other employees, including SportsLine.com's Employee Stock Purchase
Plan. In addition, the compensation committee may recommend the grant of
discretionary bonuses to SportsLine.com's executive officers. The compensation
committee believes that in the highly competitive, emerging markets in which
SportsLine.com operates, equity-based compensation provides the greatest
incentive for outstanding executive performance and the greatest alignment of
management and stockholder long-term interests.
Officer Salaries. The compensation committee reviews the annual salary of
the executive officers, including the Chief Executive Officer. In determining
the appropriate salary levels, the compensation committee considers, among other
factors, the officer's scope of responsibility, prior experience, past
accomplishments, and data on prevailing compensation levels in relevant markets
for executive talent. Based on the foregoing, during 2000 the compensation
committee approved salary increases for certain executive officers which the
compensation committee believes appropriately reflect the increase in the level
of SportsLine.com's operations and officer responsibility and performance. The
compensation committee increased Mr. Levy's salary to $450,000, effective
January 1, 2001, based upon, among other factors, the compensation committee's
positive assessment of Mr. Levy's performance during 2000. In reviewing Mr.
Levy's performance, the compensation committee noted in particular a number of
Company achievements during 2000, including the significant growth in revenues
and site traffic, the capital raised by Sports.com Limited during 2000 totaling
$52.5 million and Sports.com's growth during 2000 into the leading sports site
in Europe, the development of the Company's fantasy operations into an industry
leader, the implementation of key database initiatives which will allow the
Company to monetize its database of over five million registered users, the
establishment of new relationships and the strengthening of existing
relationships with the major sports leagues including the NBA, the NFL and MLB,
the completion of a number of other significant strategic alliances and the
successful recruiting and hiring of other key employees. The compensation
committee also increased the salary levels of several of the other members of
SportsLine.com's senior management team, effective January 1, 2001. In general,
these increases were consistent with Mr. Levy's increase, and were based upon
14
a similar analysis of such officers' increased responsibility and positive
performance assessments.
Stock Option Grants. SportsLine.com has utilized long-term equity
compensation as an important element for compensating and providing incentives
to its executive officers. It is SportsLine.com's practice to set option
exercise prices for officers at not less than 100% of the stock fair market
value on the date of grant. Thus, the value of the stockholders' investment in
SportsLine.com must appreciate before an optionee receives any financial benefit
from the option. Options are generally granted for a term of ten years. Options
granted to executive officers generally provide that they are not exercisable
until one year after the date of grant, at which time they become exercisable on
a cumulative basis at a maximum annual rate of 25% of the total number of shares
underlying the option grant. In determining the size of the stock option grants,
the compensation committee considers various subjective factors primarily
relating to the responsibilities of the individual officers, and also to their
expected future contributions and the number of shares owned by the officer or
which continue to be subject to vesting under outstanding options. In addition,
the compensation committee examines the level of equity incentives held by each
officer relative to the other officers' equity positions and their tenure,
responsibilities, experience, and value to SportsLine.com. During 2000, the
compensation committee granted all executive officers as a group (including Mr.
Levy) additional options to purchase an aggregate of 890,000 shares of
SportsLine.com common stock.
Annual Cash Bonuses. Annual cash bonus awards are based on both the
performance of SportsLine.com relative to an annual plan prepared before the
beginning of each fiscal year and approved by the Board of Directors, reflecting
appropriate progress toward SportsLine.com's long-term goals, and individual
contributions to the achievement of the annual plan. Bonus awards vary depending
on the officer's base salary.
Summary. The compensation committee believes that SportsLine.com's
compensation programs are competitive with those of other technology and
Internet companies.
Policy on Deductibility of Compensation. Section 162(m) of the U.S.
Internal Revenue Code limits the tax deductibility by a corporation of
compensation in excess of $1 million paid to the Chief Executive Officer and any
other of its four most highly compensated executive officers. Certain
performance-based compensation is not subject to the limitation on
deductibility. 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 intends to maintain
qualification of stock option and other grants under the 1997 Incentive
Compensation Plan for the performance-based exception to the $1 million
limitation on deductibility of compensation payments.
Members of the compensation committee
Gerry Hogan
Sean McManus
Russell Pillar
Compensation Committee Interlocks and Insider Participation
During 2000, the compensation committee was comprised of Gerry Hogan,
Michael Levy, Sean McManus and Russell Pillar. Mr. Levy is our President and
Chief Executive Officer. Mr. Levy did not participate in discussions or
decisions regarding his own compensation or performance appraisals. Mr. Levy is
no longer a member of the Compensation Committee.
Employment Agreements
Mr. Levy is employed by SportsLine.com under an employment agreement, which
was amended and restated in January 2000, pursuant to which he will serve as
SportsLine.com's Chairman of the Board, President and Chief Executive Officer
through December 31, 2003, subject to extension or renewal. Mr. Levy will
receive an annual base salary of at least $385,000 for each fiscal year
beginning January 1, 2000, an annual bonus equal to 50% of his base salary for
each fiscal year for which SportsLine.com achieves its budgeted EBITDA target,
as approved by
15
the compensation committee, and such other bonuses as may be awarded from time
to time by the Board or the compensation committee. During each calendar year,
beginning in 2000, SportsLine.com will grant Mr. Levy options to purchase at
least 175,000 shares of Common Stock at exercise prices to be determined at the
time of grant. Effective August 10, 1999, SportsLine.com also granted Mr. Levy
options to purchase 200,000 shares of Common Stock at an exercise price of
$17.00 per share, which options will vest and become exercisable on the earlier
to occur of August 10, 2004 or the first day of the quarter after which
SportsLine.com achieves positive EBITDA for a quarter. If Mr. Levy's employment
is terminated by SportsLine.com other than by reason of death, Disability (as
defined in the agreement) or Cause (as defined in the agreement), or by Mr. Levy
for Good Reason (generally defined as a material breach by SportsLine.com of the
agreement), SportsLine.com will pay Mr. Levy within five days of such
termination the sum of his accrued base salary and vacation pay through the date
of termination, a pro rata portion of his most recent bonus plus an amount equal
to the greater of two times his current annual base salary or the amount of base
salary that would have been payable to him for the remainder of the term of the
agreement. In addition, upon such termination by SportsLine.com other than by
reason of death, Disability or Cause or by Mr. Levy for Good Reason or upon the
happening of a Change of Control (as defined in the agreement), all unvested
stock options held by Mr. Levy at the time his employment is terminated or on
the date of a Change of Control, as the case may be, will immediately vest and
be exercisable for one year following the date of termination or Change of
Control, as applicable, or, if earlier, until the then scheduled expiration
date(s) of such options. During his employment and for a period of two years
after termination, Mr. Levy is prohibited from competing with SportsLine.com or
soliciting employees or former employees of SportsLine.com.
In August 1999, SportsLine.com entered into employment agreements with
Kenneth W. Sanders (its President of Finance and Administration and Chief
Financial Officer) and Daniel L. Leichtenschlag (President of Operations and
Chief Technology Officer), which such agreements were amended and restated in
January 2000, and with Mark J. Mariani (its President, Sales and Marketing) and
Andrew S. Sturner (its President, Corporate and Business Development) in January
2000. Each agreement is for a term of three years, in the case of Messrs.
Sanders and Leichtenschlag through August 31, 2002 and in the case of Messrs.
Mariani and Sturner through January 28, 2003, subject to extension or renewal.
Messrs. Mariani, Sturner, Sanders and Leichtenschlag will receive annual base
salaries of at least $270,000, $270,000, $315,000 and $210,000, respectively, an
annual bonus equal to 50% of their base salary for each fiscal year for which
SportsLine.com achieves its budgeted EBITDA target (or revenue target, in the
case of Mr. Mariani's agreement), as approved by the compensation committee, and
such other bonuses as may be awarded from time to time by the Board or the
compensation committee. During each calendar year, beginning in 2000,
SportsLine.com will grant Messrs. Mariani, Sturner and Sanders options to
purchase at least 50,000 shares of Common Stock and will grant Mr.
Leichtenschlag options to purchase at least 25,000 shares of Common Stock, in
each case at exercise prices to be determined at the time of grant. If any of
these executive's employment is terminated by SportsLine.com other than by
reason of death, Disability (as defined) or Cause (as defined), or by the
executive for Good Reason (generally defined as a material breach by
SportsLine.com of the agreement), SportsLine.com will pay such executive within
thirty (30) days of such termination the sum of such executives accrued base
salary and any accrued incentive compensation and continue to pay the executive
his base salary for one year; provided, that the executive use reasonable
efforts to seek other employment and the amount of such payment will be reduced
by any compensation the executive earns as a result of such other employment. In
addition, upon such termination by SportsLine.com other than by reason of death,
Disability or Cause or by the executive for Good Reason or upon the happening of
a Change of Control (as defined in the agreement), all unvested stock options
held by the executive at the time his employment is terminated or on the date of
a Change of Control, as the case may be, will immediately vest and be
exercisable for one year following the date of termination or Change of Control,
as applicable, or, if earlier, until the then scheduled expiration date(s) of
such options. During each executive's employment and for a period of two years
after termination, each executive is prohibited from competing with
SportsLine.com or soliciting employees or former employees of SportsLine.com.
16
PERFORMANCE GRAPH
The following graph compares, for the period from November 13, 1997 (the
date that our common stock was first publicly traded) to December 31, 2000, the
cumulative total stockholder return on our common stock with:
. the Nasdaq Stock Market (U.S. companies) Index; and
. the J.P. Morgan H&Q Internet Index.
The graph assumes that $100 was invested on November 13, 1997 in our common
stock, the Nasdaq Stock Market Index and the J.P. Morgan H&Q Internet Index, and
further assumes no payment or reinvestment of dividends. The stock price
performance on the following graph is historical and not necessarily indicative
of future stock price performance.
[GRAPH]
11/13/97 12/31/97 12/31/98 12/31/99 12/31/00
SPLN $100 $134.38 $194.53 $626.56 $ 66.41
Nasdaq Composite $100 $101.13 $142.59 $264.97 $159.35
J.P. Morgan $100 $113.54 $263.95 $919.62 $372.99
H&Q Internet Index
17
CERTAIN TRANSACTIONS
CBS Agreement
In March 1997, we entered into a strategic alliance with CBS pursuant to
which CBS acquired a minority ownership interest in us and our flagship Web site
was renamed "cbs.sportsline.com". The agreement provides for cbs.sportsline.com
to receive, among other things, extensive network television advertising and on-
air promotion during the term of the agreement, primarily during CBS television
sports broadcasts such as the NFL, the NCAA Men's Basketball Tournament, NCAA
Football, PGA Tour events, U.S. Open tennis and the Daytona 500. In addition, we
have the right to use certain CBS logos and television-related sports content on
cbs.sportsline.com and in connection with the operation and promotion of that
Web site. In combination with CBS, we will seek to maximize revenue through a
joint advertising sales effort. The agreement also provides us access to certain
CBS television-related sports content and the potential to create distribution
and revenue opportunities with more than 200 CBS affiliates throughout the
United States.
In February 1999, we amended our agreement with CBS to extend the term of
the agreement for five years, through 2006. Commencing in calendar year 1999,
CBS provides advertising and promotion in accordance with a fixed promotion
schedule. We accelerated the issuance to CBS of 1,052,937 shares of our common
stock and warrants to purchase 760,000 shares of our common stock, which
originally were to be issued in 2000 and 2001. We also issued to CBS new
warrants to purchase 1,200,000 shares of our common stock, which vest on various
dates through January 2001, and agreed to issue to CBS additional shares of
common stock valued at $100 million between 2002 and 2006. Shares having a fair
market value of $20 million will be issued each year based on specified issue
dates. In addition, a revenue sharing provision which required us to pay CBS a
percentage of certain advertising revenues was replaced with a new revenue
sharing formula based on specified percentages of our "Net Revenue" which is
defined in the agreement. For the year ended December 31, 2000, revenue share
payments of $5,753,182 were payable to CBS pursuant to the agreement.
Planned Licensing Agreement
In August 1994, we entered into a five-year agreement with Planned
Licensing, Inc., a wholly owned subsidiary of Namanco Productions, Inc.,
pursuant to which Planned Licensing, Inc. agreed to cause Joe Namath to provide
certain services to us, including endorsements of our products. James C. Walsh,
one of our directors, is the president and sole stockholder of Namanco
Productions, Inc. Our agreement was amended and extended for an additional five-
year period in October 1999. Under the amended agreement, we are obligated to
pay Planned Licensing, Inc. $200,000 per year in cash on a quarterly basis
commencing on January 1, 2000 and royalties at a rate of $0.15 per month for
each paid subscriber who became a member from the date our service became
generally available to end users on a commercial basis through and including
June 30, 1999 and continues to be a paid subscriber. The amounts paid to Planned
Licensing pursuant to this agreement for the year ended December 31, 2000 were
$262,431.
18
RELATIONSHIPS WITH INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Arthur Andersen LLP served as our independent public
accountants for the 2000 fiscal year and will serve in that capacity for the
2001 fiscal year. One or more representatives of Arthur Andersen LLP are
expected to be present at the annual meeting and will be afforded the
opportunity to make a statement if they so desire and to respond to appropriate
stockholder questions.
FEES PAID TO OUR INDEPENDENT AUDITORS
The rules of the Securities and Exchange Commission require us to disclose
fees billed by our independent auditors for services rendered to us for the year
ended December 31, 2000.
Audit Fees
The aggregate fees billed by Arthur Andersen LLP for professional services
rendered for the audit of our annual financial statements for the year ended
December 31, 2000 and for the reviews of the financial statements included in
our Quarterly Reports on Form 10-Q for the year ended December 31, 2000 were
$145,000.
Financial Information Systems Design and Implementation Fees
Arthur Andersen LLP billed no fees for professional services rendered to us
for information technology services relating to financial information systems
design and implementation for the year ended December 31, 2000.
All Other Fees
The aggregate fees billed by Arthur Andersen LLP for services rendered to
us, other than the services described above under "Audit Fees" and "Financial
Information Systems Design and Implementation Fees," for the year ended December
31, 2000 were $139,754.
OTHER BUSINESS
We know of no other business to be brought before the annual meeting. If,
however, any other business should properly come before the annual meeting, the
persons named in the accompanying proxy will vote proxies as in their discretion
they may deem appropriate, unless they are directed by a proxy to do otherwise.
STOCKHOLDER PROPOSALS FOR THE 2002 ANNUAL MEETING
Stockholders interested in submitting a proposal for inclusion in the proxy
materials for our annual meeting of stockholders in 2002 may do so by following
the procedures prescribed in SEC Rule l4a-8. To be eligible for inclusion,
stockholder proposals must be received by our Corporate Secretary no later than
April 6, 2002. Notice of a stockholder proposal submitted outside the procedures
of Rule 14a-8 will be considered untimely unless submitted by such date. If a
proposal is not submitted by that date, the persons named in our proxy for the
2002 annual meeting will be allowed to exercise their discretionary authority to
vote upon any such proposal without the matter having been discussed in the
proxy statement for the 2002 annual meeting.
19
APPENDIX A
CHARTER OF THE AUDIT COMMITTEE OF
SPORTSLINE.COM, INC.
PURPOSE AND SCOPE
- -----------------
This Charter governs the operations of the Audit Committee (the "Committee") of
the Board of Directors (the "Board") of SportsLine.com, Inc., a Delaware
corporation (the "Company"). The purpose of the Committee is to assist the Board
in fulfilling the Board's responsibilities to oversee:
. the financial reports and other financial information provided by the
Company to any governmental or regulatory body, the public, or any
other user of such financial statements;
. the Company's systems of internal accounting and financial controls;
. the independence and performance of the Company's outside auditors;
and
. compliance by the Company with any legal compliance and ethics
programs as may be established by the Board and the Company's
management from time-to-time.
In fulfilling its obligations, the Committee shall maintain free and open
communications between the Committee and the Company's:
. independent auditors,
. internal accounting staff, and
. management.
In discharging its oversight role, the Committee is empowered to investigate any
matter brought to its attention with full access to all books, records,
facilities, and personnel of the Company. The Committee is authorized to retain
outside or special counsel, auditors, accounting or other consultants, experts,
and professionals for this purpose.
The Committee may request any officer or employee of the Company or the
Company's outside counsel or independent auditors to attend a meeting of the
Committee or to meet with any members of, or consultants or advisors to, the
Committee.
The Committee shall review and reassess the adequacy of this Charter annually
and recommend any proposed changes to the Board for approval. This Charter shall
be published as an appendix to the Company's Proxy Statement for the Company's
annual meeting of shareholders to the extent required by the rules and
regulations of the Securities and Exchange Commission.
MEMBERS OF THE COMMITTEE
- ------------------------
The Committee shall be comprised of not less than three members of the Board.
The members of the Committee shall meet all "independence" and qualification
requirements of the rules and regulations of the Nasdaq Stock Market, as such
rules and regulations may be amended or supplemented from time-to-time.
Accordingly, each member of the Committee must be a director who:
. has no relationship to the Company that may interfere with the
exercise of his or her independent judgment in carrying out the
responsibilities of a director; and
. is able to read and understand fundamental financial statements,
including a company's balance sheet, income statement, and cash flow
statement, or will become able to do so within a reasonable period of
time after appointment to the Committee.
In addition, at least one member of the Committee must have past employment
experience in finance or accounting, professional certification in accounting,
or other comparable experience or background that results in such individual's
financial sophistication including, but not limited to, being or having been a
chief executive officer, chief financial officer, or other senior officer with
financial oversight responsibilities.
Under exceptional and limited circumstances, however, one director who is not
independent as defined in the rules and regulations of the Nasdaq Stock Market
and who is not a current employee or an immediate family member of an employee
of the Company may serve as a member of the Committee, provided that:
. the Board determines that membership by the individual on the
Committee is required by the best interests of the Company and its
shareholders, and
. the Company complies with all other requirements of the rules and
regulations of the Nasdaq Stock Market with respect to non-independent
members of the Committee, as such rules and regulations may be amended
or supplemented from time-to-time.
KEY RESPONSIBILITIES AND PROCESSES
- ----------------------------------
The primary responsibility of the Committee is to oversee the Company's
financial reporting process on behalf of the Board and to report the results of
the Committee's activities to the Board. The Committee recognizes that
management shall be responsible for preparing the Company's financial statements
and the independent auditors shall be responsible for auditing those financial
statements. The functions set forth below shall be the principal recurring
activities of the Committee in carrying out its oversight function. In carrying
out its responsibilities, however, the Committee shall remain flexible in order
to best react to changing conditions and circumstances. The following functions
are set forth as a guide with the understanding that the Committee may deviate
from this guide and supplement these functions as the Committee deems
appropriate under the circumstances.
1. The Committee shall have a clear understanding with management and the
independent auditors that the independent auditors are ultimately
accountable to the Board and the Committee, as representatives of the
Company's shareholders. The Board, upon the recommendation of the
Committee, shall have the ultimate authority and responsibility to select
(or to nominate for shareholder approval) the independent auditors, to
approve the fees to be paid to the independent auditors, to evaluate the
performance of the independent auditors, and, if appropriate, to replace
the independent auditors.
2. The Committee shall discuss with management and the independent auditors
the overall scope and plans for the audit, including the adequacy of
staffing and the compensation to be paid to the independent auditors. The
Committee also shall discuss with management and the independent auditors
the adequacy and effectiveness of the Company's accounting and financial
controls, including the Company's system to monitor and manage business
risk, as well as legal and ethical compliance programs. To the extent the
Committee deems it to be necessary, the Committee shall meet separately
with the internal accounting staff and the independent auditors, with or
without management present, as well as the Company's Chief Financial
Officer and other management personnel, to discuss the results of the
Committee's examinations.
3. The Committee shall:
. ensure that the independent auditors submit annually a formal written
statement delineating all relationships between the independent
auditors and the Company, consistent with Independence Standards Board
Standard No. 1, as such standard may be amended or supplemented from
time to time;
. discuss with the independent auditors any such relationships or
services provided by the independent auditors and their impact on the
objectivity and independence of the independent auditors; and
A-2
. recommend that the Board take appropriate action to oversee the
independence of the independent auditors.
4. The Committee shall review with management and the independent auditors the
financial statements to be included in the Company's Annual Report on Form
10-K (or the Annual Report to Shareholders if distributed prior to the
filing of the Form 10-K), including the auditors' judgment about the
quality, not just acceptability, of the Company's accounting principles,
the consistency of the Company's accounting policies and their application,
and the clarity and completeness of the Company's financial statements and
related disclosures. The Committee also shall discuss the results of the
annual audit and any other matters required to be communicated to the
Committee by the independent auditors under generally accepted auditing
standards, including SAS No. 61, as such may be amended or supplemented.
5. If so requested by the independent auditors or the Company's management,
prior to the filing of the Company's Quarterly Report on Form 10-Q the
Committee (as a whole or acting through the Committee chair) shall:
. review the interim financial statements with management and the
independent auditors, and
. discuss the results of the quarterly review and any other matters
required to be communicated to the Committee by the independent
auditors under generally accepted auditing standards, including
Statement of Auditing Standards ("SAS") No. 71, as such may be amended
or supplemented from time to time.
6. The Committee shall prepare the report required by the rules of the
Securities and Exchange Commission to be included in the Company's Proxy
Statement to be delivered to shareholders in connection with the Company's
annual meeting of shareholders.
With respect to the foregoing responsibilities and processes, the Committee
recognizes that the Company's financial management, including its internal audit
staff, as well as the independent auditors, have more time, knowledge, and more
detailed information regarding the Company than do Committee members.
Consequently, in discharging its oversight responsibilities, the Committee will
not provide or be deemed to provide any expertise or special assurance as to the
Company's financial statements or any professional certification as to the
independent auditors' work. While the Committee has the responsibilities and
powers set forth in this Charter, it is not the duty of the Committee to plan or
conduct audits or to determine that the Company's financial statements are
complete and accurate and are in accordance with generally accepted accounting
principles. This is the responsibility of management and the independent
auditors. Nor is it the duty of the Committee to conduct investigations, to
resolve disagreements, if any, between management and the independent auditors,
or to assure compliance with laws and regulations and the Company's internal
policies and procedures.
Dated: June 12, 2000
A-3
APPENDIX B
SPORTSLINE.COM, INC.
2200 West Cypress Creek Road
Fort Lauderdale, Florida 33309
THIS PROXY IS SOLICITED ON BEHALF OF THE COMPANY'S BOARD OF DIRECTORS
The undersigned holder of Common Stock of SportsLine.com, Inc., a Delaware
corporation (the "Company"), hereby appoints Michael Levy and Kenneth W.
Sanders, and each of them, as proxies for the undersigned, each with full power
of substitution, for and in the name of the undersigned to act for the
undersigned and to vote, as designated on the reverse side of this proxy card,
all of the shares of stock of the Company that the undersigned is entitled to
vote at the Company's 2001 Annual Meeting of Stockholders, to be held on
Tuesday, September 25, 2001, at 10:00 a.m., local time, at the Company's offices
located at 2200 West Cypress Creek Road, Fort Lauderdale, Florida 33309 and at
any adjournments or postponements thereof.
PLEASE DETACH AND MAIL IN THE ENVELOPE PROVIDED
[X] PLEASE MARK YOUR VOTES AS IN THIS EXAMPLE.
1. Election of Directors.
Vote for all Nominees Listed Below (except as written below)
[ ]
Vote Withheld from all Nominees
[ ]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF ALL THE
DIRECTOR NOMINEES LISTED IN PROPOSAL (1).
NOMINEES: Michael Levy
Joseph Lacob
Andrew Nibley
James C. Walsh
(Instruction: To withhold authority for an individual nominee, write that
nominee's name on the line provided below.)
_________________________________________________________________________
2. In their discretion, upon such other business as may properly come before the
Annual Meeting or any adjournment or postponement thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED "FOR" THE ELECTION OF ALL DIRECTOR NOMINEES LISTED HEREIN.
PLEASE MARK, SIGN AND DATE THIS PROXY CARD AND PROMPTLY RETURN IT IN THE
ENVELOPE PROVIDED. NO POSTAGE NECESSARY IF MAILED WITHIN THE UNITED STATES.
The undersigned hereby acknowledges receipt of (i) the Notice of Annual
Meeting, and (ii) the Proxy Statement.
DATE__________________________________________________________________________
SIGNATURE_____________________________________________________________________
SIGNATURE (If held jointly)___________________________________________________
Note: Please sign exactly as your name appears hereon and mail it promptly even
though you may plan to attend the meeting. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by president or other authorized officer. If
partnership, please sign in the partnership name by authorized person.
B-2