SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. 1)
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|X| Preliminary Proxy Statement
|_| Definitive Proxy Statement
|_| Definitive Additional Materials
|_| Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
|_| Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
NEW FRONTIER MEDIA, INC.
(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:
Common Stock, par value $.0001 per share
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
Fee paid previously with preliminary materials.
Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
SUBJECT TO COMPLETION,
DATED JUNE __, 2002
NEW FRONTIER MEDIA, INC.
7007 WINCHESTER CIRCLE, SUITE 200
BOULDER, COLORADO 80301
(303) 444-0900
July ___, 2002
Dear Fellow Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders
of New Frontier Media, Inc. (the "Company"), to be held at 10:00 a.m., Mountain
Standard Time, on August 20, 2002, at The Boulder Marriott, 2660 Canyon
Boulevard, Boulder, Colorado 80302.
At this meeting, you will be asked to consider and vote, in person or
by proxy, on the following matters:
1. To elect seven directors to the Board of Directors for the following
year and until their successors are elected. The Exectuive Committee of the
Board, which includes Mark H. Kreloff, Michael Weiner, Koung Y. Wong and Hiram
J. Woo, unanimously recommends a vote FOR the election of the nominees on the
enclosed WHITE proxy card;
2. To ratify the appointment of Grant Thornton LLP as the Company's
independent auditors. The Executive Committee of the Board unanimously
recommends a vote FOR this proposal; and
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The official Notice of Meeting, Proxy Statement and Form of Proxy are
included with this letter. The matters listed in the Notice of Meeting are
described in detail in the accompanying Proxy Statement.
You may have already received proxy-soliciting materials from Edward J.
Bonn in connection with the items Mr. Bonn intends to present at the meeting.
This Annual Meeting is of particular importance to all shareholders of the
Company in light of the attempt by Mr. Bonn and his hand-picked nominees to gain
control of the Company's Board. Whether or not you expect to attend, the
Executive Committee of the Board urges you to vote your shares by signing,
dating and returning the enclosed WHITE proxy card in the envelope provided,
which is postage paid if mailed in the United States. The Executive Committee of
the Board also urges you not to sign any proxy cards sent to you by Mr. Bonn.
Even if you have previously signed a proxy card sent to you by Mr. Bonn, you can
revoke it and vote for the Board's nominees by signing, dating and mailing the
enclosed proxy card in the envelope provided. If you have any questions, please
call toll-free at 1-888-875-0632.
Very truly yours,
Mark H. Kreloff
Chairman of the Board
of Directors
NEW FRONTIER MEDIA, INC.
7007 WINCHESTER CIRCLE, SUITE 200
BOULDER, COLORADO 80301
(303) 444-0900
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To the Shareholders of New Frontier Media, Inc.:
Notice is hereby given that the Annual Meeting of Shareholders of New
Frontier Media, Inc. (the "Company") will be held on August 20, 2002, at 10:00
a.m., Mountain Standard Time, at The Boulder Marriott, 2660 Canyon Boulevard,
Boulder, Colorado 80302 for the following purposes:
1. To elect seven directors to the Board of Directors to hold office
for the following year and until their successors are elected;
2. To ratify the appointment of Grant Thornton LLP as the Company's
independent auditors; and
3. To transact such other business as may properly come before the
meeting or any adjournments thereof.
The matters listed in this Notice of Meeting are described in detail in
the accompanying Proxy Statement. The Executive Committee of the Board of
Directors has fixed the close of business on July 9, 2002 as the record date for
determination of those shareholders who will be entitled to notice of and to
vote at the meeting and any adjournment thereof. You may examine a list of the
shareholders of record as of the close of business on July 9, 2002 for any
purpose germane to the meeting during the ten-day period preceding the date of
the meeting at the offices of the Company, located at 7007 Winchester Circle,
Suite 200, Boulder, Colorado 80301.
Even if you plan to attend the meeting, please still vote and mail the
enclosed proxy card so that your vote will be counted if you later decide to not
attend the meeting. Whether or not you expect to attend, shareholders are
requested to sign, date and return the enclosed WHITE proxy in the envelope
provided. No postage is required if mailed in the United States.
By Order of the Executive Committee of
the Board of Directors
Michael Weiner
Secretary
Boulder, Colorado
July ___, 2002
NEW FRONTIER MEDIA, INC.
7007 WINCHESTER CIRCLE, SUITE 200
BOULDER, COLORADO 80301
(303) 444-0900
------------------
PROXY STATEMENT
------------------
GENERAL INFORMATION
INFORMATION ABOUT PROXY SOLICITATION
This Proxy Statement is furnished to the holders of the Common Stock,
$.0001 par value per share ("Common Stock"), of New Frontier Media, Inc. (the
"Company") in connection with the solicitation of proxies on behalf of the
Executive Committee of the Board of Directors of the Company (the "Executive
Committee") for use at the Annual Meeting of Shareholders to be held on August
20, 2002 at 10:00 a.m., Mountain Standard Time, at the Boulder Marriott, 2660
Canyon Boulevard, Boulder, Colorado 80302, and at any adjournment thereof. The
Executive Committee consists of the Company's independent directors, Koung Y.
Wong and Hiram J. Woo, and the Company's Chief Executive Officer, Mark H.
Kreloff and the Company's Executive Vice President, Secretary and Treasurer,
Michael Weiner. The purposes of the meeting and the matters to be acted upon are
set forth in the accompanying Notice of Annual Meeting of Shareholders. At
present, the Executive Committee knows of no other business which will come
before the meeting.
The Notice of Annual Meeting, Proxy Statement, and form of proxy will
be mailed to Shareholders on or about July 12, 2002. The Company will bear the
cost of its solicitation of proxies. The original solicitation of proxies by
mail may be supplemented by personal interview, telephone, telegram, and telefax
by the directors, officers and employees of the Company. Arrangements will also
be made with brokerage houses and other custodians, nominees and fiduciaries for
the forwarding of solicitation material to the beneficial owners of stock held
by such persons, and the Company may reimburse such custodians, nominees and
fiduciaries for reasonable out-of-pocket expenses incurred by them in connection
therewith.
MR. BONN'S PROPOSAL
As you may be aware, Mr. Bonn is conducting his own proxy solicitation
to replace your Board of Directors with a slate of his own nominees. Mr. Bonn,
who is currently a director of the Company and the beneficial owner of at least
4,073,473 shares of the Company's Common Stock, has notified the Company and has
filed a preliminary proxy statement with the Securities and Exchange Commission
stating that Mr. Bonn will nominate seven individuals for election to the Board
of Directors in opposition to the Company's nominees for election as directors.
Mr. Bonn has not been re-nominated to the Board's slate of directors and is the
subject of a lawsuit by the Company alleging that Mr. Bonn committed fraud
against the Company and breached his fiduciary duties to the Company. We are
seeking to recover damages he has caused to the Company and its shareholders.
See "Litigation Against Mr. Bonn and Mr. Weber" on page 14.
We will be sending you information shortly as to the background of this
proxy contest and why we believe that the election of Mr. Bonn's nominees would
not be in your best interests.
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The Executive Committee of your Board of Directors is soliciting votes
FOR the Company's slate of nominees for election to the Board of Directors and
FOR ratification of the appointment of the firm of Grant Thornton LLP as the
Company's independent auditors.
INFORMATION ABOUT VOTING
Q: WHY AM I RECEIVING THESE MATERIALS?
A: The Executive Committee is providing these proxy materials for you in
connection with the Company's annual meeting of shareholders, which will take
place on August 20, 2002. As a shareholder, you are invited to attend the annual
meeting and are entitled to and requested to vote on the items of business
described in this proxy statement.
Q: WHAT INFORMATION IS CONTAINED IN THESE MATERIALS?
A: The information included in this proxy statement relates to the proposals to
be voted on at the annual meeting, the voting process, the compensation of
directors and the most highly paid executive officers, and certain other
required information. Our 2002 Form 10-K is also enclosed.
Q: WHAT ITEMS OF BUSINESS WILL BE VOTED ON AT THE ANNUAL MEETING?
A: There are two items of business scheduled to be voted on at the annual
meeting: (i) the election of directors and (ii) the ratification of independent
auditors. We will also consider other business that properly comes before the
annual meeting.
Q: HOW DOES THE EXECUTIVE COMMITTEE RECOMMEND THAT I VOTE?
A: The Executive Committee recommends that you vote your shares "FOR" each of
the nominees to the Board on the WHITE Proxy Card set forth in this proxy
statement, and "FOR" the ratification of independent auditors.
Q: WHAT SHARES CAN I VOTE?
A: You may vote all shares owned by you as of the close of business on July 9,
2002, the record date. These shares include: (i) shares held directly in your
name as the shareholder of record, and (ii) shares held for you as the
beneficial owner through a broker or other nominee such as a bank.
Q: WHAT IS THE DIFFERENCE BETWEEN HOLDING SHARES AS A SHAREHOLDER OF RECORD AND
AS A BENEFICIAL OWNER?
A: Most shareholders of the Company hold their shares through a broker or other
nominee rather than directly in their own name. As summarized below, there are
some distinctions between shares held of record and those owned beneficially.
If your shares are registered directly in your name with the Company's transfer
agent, Corporate Stock Transfer, you are considered, with respect to those
shares, the shareholder of record and these proxy materials are being sent
directly to you by the Company. As the shareholder of record, you have the right
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to grant your voting proxy directly to the Company or to vote in person at the
meeting. The Company has enclosed or sent a proxy card for you to use.
If your shares are held in a brokerage account or by another nominee, you are
considered the beneficial owner of shares held in street name, and these proxy
materials are being forwarded to you by your broker or nominee together with a
voting instruction card. As the beneficial owner, you have the right to direct
your broker or nominee how to vote and are also invited to attend the annual
meeting. However, since you are not the shareholder of record, you may not vote
these shares in person at the meeting unless you obtain a "legal proxy" from the
broker or nominee that holds your shares, giving you the right to vote the
shares. Your broker or nominee has enclosed or provided voting instructions for
you to use in directing the broker or nominee how to vote your shares.
Q: HOW CAN I ATTEND THE ANNUAL MEETING?
A: You are entitled to attend the annual meeting only if you were a shareholder
of the Company or joint holder as of the close of business on July 9, 2002, or
you hold a valid proxy for the annual meeting. You should be prepared to present
photo identification for admittance. If you are not a record holder but hold
shares through a broker or nominee (i.e., in street name), you should provide
proof of beneficial ownership on the record date, such as your most recent
account statement prior to July 9, 2002, a copy of the voting instruction card
provided by your broker or nominee, or other similar evidence of ownership. If
you do not provide photo identification or comply with the other procedures
outlined above upon request, you will not be admitted to the annual meeting. The
annual meeting will begin promptly at 10:00 a.m. Mountain Standard Time.
Check-in will begin at 8:30 a.m., and you should allow ample time for the
check-in procedures.
Q: HOW CAN I VOTE MY SHARES IN PERSON AT THE ANNUAL MEETING?
A: Shares held directly in your name as the shareholder of record may be voted
in person at the annual meeting. Shares held in street name may be voted in
person only if you obtain a "legal proxy" from the broker or nominee that holds
your shares giving you the right to vote the shares.
Q: HOW CAN I VOTE MY SHARES WITHOUT ATTENDING THE ANNUAL MEETING?
A: Whether you hold shares directly as the shareholder of record or beneficially
in street name, you may direct how your shares are to be voted without attending
the meeting. If you are a shareholder of record, you may vote by granting a
proxy. If you hold shares in street name, you may vote by submitting voting
instructions to your broker or nominee. Record holders of Company common stock
may submit proxies by completing, signing and dating their proxy cards and
mailing them in the accompanying pre-addressed envelopes. Company shareholders
who hold shares in street name may vote by mail by completing, signing and
dating the voting instruction cards provided by their brokers or nominees and
mailing them in the accompanying pre-addressed envelopes.
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Q: CAN I CHANGE MY VOTE?
A: You may change your vote at any time prior to the vote at the annual meeting.
For shares held directly in your name, you may accomplish this by granting a new
proxy bearing a later date (which automatically revokes the earlier proxy) or by
attending the annual meeting and voting in person. Attendance at the meeting
will not cause your previously granted proxy to be revoked unless you
specifically so request. For shares you hold beneficially, you may change your
vote by submitting new voting instructions to your broker or nominee, or, if you
have obtained a "legal proxy" from your broker or nominee giving you the right
to vote your shares, by attending the meeting and voting in person. You may also
change your vote by sending a written notice of revocation to Mr. Michael
Weiner, Secretary, New Frontier Media, Inc., 7007 Winchester Circle, Suite 200,
Boulder, Colorado, 80301.
Q: AS A SHAREHOLDER, WHO CAN HELP ANSWER MY QUESTIONS?
A: If you have any questions about the annual meeting or how to vote or revoke
your proxy, you should contact our proxy solicitor:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
Call 1-800-431-9642 (TOLL FREE IN THE UNITED STATES)
OR 1-212-269-5550 (COLLECT)
If you need additional copies of this proxy statement or voting materials, you
should contact D.F. King & Co. as described above.
Q: HOW ARE VOTES COUNTED?
A: In the election of directors, you may vote "FOR" all of the seven nominees or
your vote may be "WITHHELD" with respect to one or more of the seven nominees.
For ratification of the independent auditors, you may vote "FOR," "AGAINST" or
"ABSTAIN." If you "ABSTAIN," it has the same effect as a vote "AGAINST." If you
provide specific instructions, your shares will be voted as you instruct. If you
sign your proxy card or voting instruction card with no further instructions,
your shares will be voted in accordance with the recommendations of the
Executive Committee ("FOR" all of the Company's nominees to the Board, "FOR"
ratification of the independent auditors and in the discretion of the proxy
holders on any other matters that properly come before the meeting). If any
other matters properly arise at the meeting, your proxy, together with the other
proxies received, will be voted at the discretion of the proxy holders.
Q: WHAT IS A QUORUM AND WHY IS IT NECESSARY?
A: Conducting business at the meeting requires a quorum. The presence, either in
person or by proxy, of the holders of one third of the Company's shares of
capital stock outstanding on July 9, 2002 is necessary to constitute a quorum.
Under the Colorado Business Corporation Act, the Company's articles of
incorporation and by-laws, abstentions and broker non-votes (when your shares
are held in "street name," and you do not tell the nominee how to vote your
shares) are treated as present for purposes of determining whether a quorum
exists.
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Q: WHAT IS THE VOTING REQUIREMENT TO APPROVE EACH OF THE PROPOSALS?
A: In the election of directors, the seven persons receiving the highest number
of "FOR" votes at the annual meeting will be elected. Accordingly, abstentions
and broker non-votes do not have the effect of a vote for or against the
election of any nominee. You do not have the right to cumulate your votes.
All other proposals require the affirmative "FOR" vote of a majority of those
shares present in person or represented by proxy and entitled to vote on that
proposal at the annual meeting. Accordingly, abstentions on other proposals will
have the same effect as a vote against the proposal. Broker non-votes will not
have the effect of a vote for or against other proposals.
Q: WHAT SHOULD I DO IF I RECEIVE MORE THAN ONE SET OF VOTING MATERIALS?
A: You may receive more than one set of voting materials, including multiple
copies of this proxy statement and multiple proxy cards or voting instruction
cards. For example, if you hold your shares in more than one brokerage account,
you will receive a separate voting instruction card for each brokerage account
in which you hold shares. If you are a shareholder of record and your shares are
registered in more than one name, you will receive more than one proxy card.
Please complete, sign, date and return each proxy card and voting instruction
card that you receive. Remember the Company and the Executive Committee are
soliciting votes on the WHITE Proxy Card only. If there is any confusion as to
how you can vote, you should call D.F. King & Co., Inc., our proxy solicitor, at
1-800-431-9642 (toll free in the United States) or 1-212-269-5550 (collect).
Q: WHAT SHOULD I DO IF I RECEIVE PROXY MATERIALS FROM MR. BONN?
A: You may have already received proxy-soliciting materials from Mr. Bonn in
connection with the items Mr. Bonn intends to present at the meeting. Mr. Bonn
is conducting his own proxy solicitation to replace your Board of Directors with
a slate of his own nominees. Mr. Bonn's proxy contest stems from his attempts,
this past March, to remove our CEO, Mark Kreloff. On March 20, 2002, Mr. Bonn
and Bradley A. Weber attempted to remove Mark Kreloff as CEO and appoint a
special committee headed by Mr. Bonn to operate the Company while a search was
conducted for a new CEO. After the Company's Board rejected Messrs. Bonn's and
Weber's proposal and instead established an Independent Special Committee to
investigate, among other things, the activities of Messrs. Bonn and Weber
relating to their prior management of Interactive Gallery, Inc. ("IGallery"),
the Company's Internet subsidiary, and whether, by their actions, they triggered
the Company's Rights Plan (also known as a poison pill), Mr. Bonn notified the
Company he would seek to replace the Board of Directors and rescind the
Company's Rights Plan. The Rights Plan, which is intended to protect
shareholders from unsolicited takeover attempts, was adopted in November 2001 by
a unanimous vote of the Board, including both Mr. Bonn and Mr. Weber.
The Committee, along with its outside counsel, has conducted an investigation of
Mr. Bonn's allegations and activities and has determined that: (i) it is not in
the Company's best interest to replace the Company's current management; and
(ii) it is not in the Company's best interest to rescind its Rights Plan.
Additionally, on May 25, 2002, the Special Committee authorized the Company to
file a Complaint against Messrs. Bonn and Weber, and others, which alleges fraud
and breach of fiduciary duty and the Special Committee recommended that Messrs.
Bonn and Weber be terminated from their positions as officers and directors of
IGallery. See "Litigation Against Mr. Bonn and Mr. Weber" on page 14.
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Based on the findings of the Special Committee, the Company has
brought a lawsuit against Mr. Bonn and Mr. Weber alleging fraud and breach of
fiduciary duty in connection with their prior management of IGallery and their
sale of IGallery to the Company in 1999.
The Company and its counsel will review the proxy soliciting materials from Mr.
Bonn to ensure its accuracy and will continue to advise you of any material
developments in connection with the lawsuit against Mr. Bonn and Mr. Weber.
The Executive Committee urges you not to sign any proxy cards sent to you by Mr.
Bonn. The Executive Committee believes that Mr. Bonn has commenced this proxy
contest because the Board determined to support Mr. Kreloff, and decided to
establish a Special Committee to commence an investigation of, among other
things, Mr. Bonn's and Mr. Weber's activities at IGallery. Even if you have
previously signed a proxy card sent to you by Mr. Bonn, you can revoke it and
vote for the Executive Committee's nominees by signing, dating and mailing the
enclosed proxy card in the envelope provided.
Q: HOW DO I OBTAIN A SEPARATE SET OF VOTING MATERIALS?
A: If you share an address with another shareholder and have received only one
set of voting materials, you may write or call us to request a separate copy of
these materials at no cost to you. You may also write or call our proxy
solicitor:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
Call 1-800-431-9642 (TOLL FREE IN THE UNITED STATES)
OR 1-212-269-5550 (COLLECT)
Q: WHERE CAN I FIND THE VOTING RESULTS OF THE ANNUAL MEETING?
A: We intend to announce preliminary voting results at the annual meeting and
publish final results in our Quarterly Report on Form 10-Q for the fiscal
quarter ending September 30, 2002.
Q: WHAT HAPPENS IF ADDITIONAL MATTERS ARE PRESENTED AT THE ANNUAL MEETING?
A: Other than the two items of business described in this proxy statement, we
are not aware of any other business to be acted upon at the annual meeting.
However, if you grant a proxy, the persons named as proxy holders, Mark H.
Kreloff, the Company's Chairman and Chief Executive Officer, and Michael Weiner,
the Company's Executive Vice President and Secretary, will have the discretion
to vote your shares on any additional matters properly presented for a vote at
the meeting. If for any unforeseen reason any of our nominees is not available
as a candidate for director, the persons named as proxy holders will vote your
proxy for such other candidate or candidates as may be nominated by the Board.
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Q: WHAT SHARES ARE ENTITLED TO BE VOTED?
A: Each share of the Company's capital stock issued and outstanding as of the
close of business on July 9, 2002, the record date, is entitled to be voted on
all items being voted upon at the annual meeting. On the record date, we had
approximately ________ shares of capital stock issued and outstanding.
Q: WHO WILL COUNT THE VOTES?
A: An inspector or inspectors of election will tabulate the votes. We expect
that the inspector of election will be a representative of __________________.
Q: IS MY VOTE CONFIDENTIAL?
A: Proxy instructions, ballots and voting tabulations that identify individual
shareholders are handled in a manner that protects your voting privacy. Your
vote will not be disclosed either within the Company or to third parties,
except: (1) as necessary to meet applicable legal requirements, (2) to allow for
the tabulation of votes and certification of the vote, or (3) to facilitate a
successful proxy solicitation.
Q: WHO WILL BEAR THE COST OF SOLICITING VOTES FOR THE ANNUAL MEETING?
A: The Company is making this solicitation and will pay the entire cost of
preparing, assembling, printing, mailing and distributing these proxy materials.
In addition, D.F. King has been retained (for a fee of $75,000) to act as proxy
solicitor. Certain of our directors, officers and employees, without any
additional compensation, may also solicit your vote in person, by telephone or
by electronic communication. Upon request, we will also reimburse brokerage
houses and other custodians, nominees and fiduciaries for their reasonable
out-of-pocket expenses for forwarding proxy and solicitation materials to
shareholders. The total costs that are expected to be incurred by the Company in
furtherance of this proxy solicitation, including the fee to D.F. King, are
approximately $500,000. The total costs that have been incurred to date are
approximately $105,000.
Q: MAY I PROPOSE ACTIONS FOR CONSIDERATION AT NEXT YEAR'S ANNUAL MEETING OF
SHAREHOLDERS?
A: You may submit proposals for consideration at future shareholder meetings.
However, in order for a shareholder proposal to be considered for inclusion in
the Company's proxy statement for the annual meeting next year, the written
proposal must be received by the corporate secretary of the Company no later
than March 1, 2003. Such proposals also will need to comply with Securities and
Exchange Commission regulations under Rule 14a-8 regarding the inclusion of
shareholder proposals in company-sponsored proxy materials.
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PROPOSALS TO BE VOTED ON
PROPOSAL ONE
ELECTION OF DIRECTORS
The Board of Directors of the Company currently consists of one class
of seven directors. The Executive Committee, upon the recommendation of the
Company's Nominating Committee, is proposing a slate of directors that includes
five incumbent directors and two new directors, Ms. Melissa Hubbard and Dr.
Skender Fani.
THE NOMINEES
THE EXECUTIVE COMMITTEE RECOMMENDS A VOTE FOR THE ELECTION TO THE BOARD OF EACH
OF THE FOLLOWING NOMINEES:
NAME AGE POSITION DIRECTOR SINCE
------------- ------ --------------------------------- -------------------------
Mark H. Kreloff 40 Chairman of the Board and Chief Executive 1995
(1) Officer of New Frontier Media, Inc. and
Colorado Satellite Broadcasting, Inc.
Michael Weiner 60 Executive Vice President, Secretary, 1995
(1)(2)(3) Treasurer, and Director, New Frontier
Media, Inc. and Colorado Satellite
Broadcasting, Inc.
Alan Isaacman 59 Director 1999
(3)(4)
Koung Y. Wong 49 Director 1995
(1)(2)(3)(4)(5)
Hiram J. Woo 66 Director 2001
(1)(2)(4)(5)
Melissa Hubbard 44 Nominee for Director --
Dr. Skender Fani 62 Nominee for Director --
- -----------------------------------------------------------------------------------------------------------
(1) Member of the Executive Committee
(2) Member of the Special Committee
(3) Member of the Compensation Committee
(4) Member of the Audit Committee
(5) Member of the Nominating Committee
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It is the intention of the persons named in the accompanying form of
proxy to vote all shares of Common Stock represented by such proxy for the
election of Mark H. Kreloff, Michael Weiner, Alan Isaacman, Koung Y. Wong, Hiram
J. Woo, Melissa Hubbard and Dr. Skender Fani, each to serve as a director until
the next Annual Meeting of Shareholders and until his successor shall have been
duly elected and qualified. Five of the nominees presently serve as a director
of the Company, and all seven nominees have consented to being named in this
Proxy Statement and to serve as a director if elected. At the time of the Annual
Meeting, if any of the nominees named above is not available to serve as
director (an event which the Executive Committee does not presently have any
reason to anticipate), all the proxies will be voted for such other person or
persons, if any, as the Executive Committee may designate. The Executive
Committee believes it is in the best interests of the Company to elect the
above-described slate.
INFORMATION ABOUT THE NOMINEES
Set forth below are the principal occupation of the nominees, the
business experience of each for at least the past five years and certain other
information relating to the nominees.
MARK H. KRELOFF. Mr. Kreloff has been Chairman and Chief Executive
Officer of New Frontier Media, Inc. since the Company's inception in September,
1995. Mr. Kreloff has been involved in the cable television, entertainment and
computer software industries for 25 years. In 1977 he began working for his
family's cable television system in New Jersey where he held various jobs as an
installer, door-to-door salesman, local programming production assistant, and
eventually, Marketing Director. Prior to founding the Company, Mr. Kreloff
held the title Vice President, Mergers and Acquisitions, with Kidder Peabody &
Co. and Drexel Burnham Lambert. From 1983 through 1986, Mr. Kreloff was employed
by Butcher & Singer, Inc., a Philadelphia-based investment bank, in a variety of
departments including the Cable Television and Broadcast Media Group. Mr.
Kreloff is an honors graduate of Syracuse University and holds B.S. degrees in
Finance and Public Communications.
MICHAEL WEINER. Mr. Weiner has been Executive Vice President and a
director of New Frontier Media, Inc. since the Company's inception. Prior to
founding the Company, Mr. Weiner was actively involved as a principal and
director in a variety of publishing businesses, including a fine art poster
company. His background includes 20 years in real estate development and
syndication.
ALAN ISAACMAN. Mr. Isaacman is a Senior Partner of Isaacman, Kaufman &
Painter, Inc. Mr. Isaacman is a renowned litigation attorney based in Los
Angeles representing general corporate clients, as well as clients from the
media and entertainment industries. He is considered an expert on First
Amendment rights and has experience in areas of copyright, antitrust,
securities, right to privacy and general entertainment law. Mr. Isaacman has
successfully defended clients on First Amendment cases throughout the judicial
system up to and including the Supreme Court of the United States. Mr. Isaacman
received his undergraduate at Penn State University and received his law degree
from Harvard University Law School. He is a Fellow of the American College of
Trial Lawyers and is included in the Best Lawyers in America.
10
KOUNG Y. WONG. Mr. Wong has been the president and sole shareholder
since 1980 of WAV Entertainment, Inc., a leading electronics hardware and
software distribution company based in South San Francisco, California. WAV
Entertainment, Inc. includes a 20,000 square-foot corporate headquarters and
distribution center and an 8,500 square-foot retail superstore in San Francisco,
California. Mr. Wong was born in Canton, China in 1952 and immigrated to the
United States in 1969 with his family. He earned a Bachelor of Arts degree from
City College of San Francisco in 1975, and studied Architecture at the
University of California at Berkeley for one year.
HIRAM J. WOO. Mr. Woo has been the President and a director of
Steakhouse Partners, Inc., an operator of 65 full-service steakhouse restaurants
located in 11 states since January 1997. Mr. Woo was President of Regal
Financial & Development Corporation, a real estate development and planning firm
from 1985 through 1997. While at Regal Financial & Development Corporation, Mr.
Woo was responsible for acquisitions, feasibility analyses, financing and the
overall coordination of all development and construction projects with an
emphasis on residential single family homes and multiple residential units. Mr.
Woo managed over $300 million of real estate development projects in the Western
United States under this entity. Mr. Woo has wide experience in accounting,
taxes and management advisory services, actively practicing in his mid-size CPA
firm for a period of ten years. Mr. Woo was also a principal organizer of a
California State Chartered Savings and Loan Association and served as its
President and CEO from 1980 through 1985. On February 15, 2002, Steakhouse
Partners, Inc. filed a voluntary petition for relief under Chapter 11 of the
United States Bankruptcy Code. Mr. Woo graduated form the University of
California - Berkeley with a Bachelor of Science Degree in Accounting and
Finance and is a licensed Certified Public Accountant in California.
MELISSA HUBBARD. Ms. Hubbard was senior vice president and general
counsel, as well as an advisor to the Executive Committee, of Daniels &
Associates, L.P. from 1992 through June 2001. Daniels & Associates, L.P.,
located in Denver, Colorado, is a leader in financial services to the media,
Internet and telecommunications industries worldwide, and is a major force in
the U.S. mergers and acquisitions market. As senior vice president and general
counsel to Daniels & Associates, L.P., Ms. Hubbard was responsible for managing
the company's legal affairs, providing legal counsel, and maintaining policies
and practices to ensure compliance with federal and state laws. Ms. Hubbard's
expertise includes telecommunications, securities, mergers and acquisitions,
franchise licensing, venture capital financing and arbitration, as well as
corporate, partnership and non-profit law.
DR. SKENDER FANI. Dr. Fani is a leading European-based sports and
entertainment attorney, representing many of Europe's top athletes and
entertainers for over 20 years. In addition, he is a consultant to several major
media and television companies in Europe. Dr. Fani is also the personal advisor
to several major international soccer teams and their owners, including teams
such as FC Barcelona, Juventus Torino, Dynamo Kiev, and MAGNA Austria. Dr. Fani
is a member of the Board of Directors of Consulier Engineering, Inc., a Florida
based NASDAQ stock market listed company. Consulier Engineering, Inc. is a
distributor of automobile parts in the automotive after-market. Dr. Fani is also
Chairman of the Board of Directors of Otis Elevator - Austria.
Except as set forth in this proxy statement or in Appendix A hereto, to
the best knowledge of the Company, none of the directors (which includes all
nominees) of the Company, or any other persons participating in this
solicitation on behalf of the Company, or with respect to items (ii), (viii) and
(ix) of this paragraph, any associate (within the meaning of Rule 14a-1 of the
Securities Exchange Act of 1934, as amended) of the foregoing persons (i) have
any substantial interest, direct or indirect, in any matter to be acted upon at
the Annual Meeting, other than the interest of the director nominees in being
re-elected and each director's interest in the operations of the Company, to the
extent each believes the proposals set forth herein may contribute favorably to
such Company operations, (ii) own beneficially, directly or indirectly, any
securities of the Company, (iii) own beneficially, directly or indirectly, any
securities of any parent or subsidiary of the Company, (iv) own any securities
of the Company of record but not beneficially, (v) have purchased or sold any
securities of the Company within the past two years, (vi) have incurred
11
indebtedness for the purpose of acquiring or holding securities of the Company
within the past two years, (vii) are or have within the past year been a party
to any contract, arrangement or understanding with any person with respect to
any securities of the Company, except with respect to any employment agreement,
stock option grant or similar agreement with respect to the information
described in the "Summary Compensation Table," (viii) have since the beginning
of the Company's last fiscal year, been indebted to the Company or any of its
subsidiaries in excess of $60,000 or (ix) have any arrangement or understanding
with respect to future employment by the Company or its affiliates or with
respect to any future transactions to which the Company or any of its affiliates
will or may be a party. In addition, except as set forth in this proxy statement
or in Appendix A hereto, to the best knowledge of the Company, none of the
directors of the Company, nor any other person participating in this
solicitation on behalf of the Company, nor any associates of any of the
foregoing persons, have had or are to have a direct or indirect material
interest in any transaction or proposed transaction with the Company in which
the amount involved exceeds $60,000 since the beginning of the Company's last
fiscal year.
COMMITTEES OF THE BOARD OF DIRECTORS
AUDIT COMMITTEE
The Audit Committee, consisting of Messrs. Isaacman, Wong and Woo, was
formed by the Company's Board of Directors prior to the Company's initial public
offering on the Nasdaq Stock Market in February 1998, and has the responsibility
of recommending the engagement of independent auditors and reviewing and
considering actions of management in matters relating to audit functions. The
Committee reviews, with independent auditors, the scope and results of its audit
engagement, the system of internal controls and procedures and reviews the
effectiveness of procedures intended to prevent violations of laws. The Audit
Committee operates under a written charter adopted by the Board, which was
published in the August 2000 proxy statement. The Audit Committee has
recommended the selection of Grant Thornton LLP as independent auditors for the
year ended March 31, 2003.
COMPENSATION COMMITTEE
The Compensation Committee, consisting of Messrs. Weiner, Isaacman and
Wong, was formed by the Company's Board of Directors prior to the Company's
initial public offering on the Nasdaq Stock Market in February 1998, and
determines, approves and reports to the Board on all elements of compensation of
our executive officers. The Compensation Committee also has the power to
prescribe, amend and rescind rules relating to the Company's stock option plans,
to grant options and other awards under the stock option plans and to interpret
the stock option plans.
EXECUTIVE COMMITTEE
The Executive Committee, consisting of Messrs. Kreloff, Weiner, Wong
and Woo, was formed by the Company's Board of Directors on April 12, 2002, and
meets or takes written action when the Board is not otherwise meeting and has
the same level of authority as the Board, including the authority to form Board
committees, except that it cannot amend the Company's By-Laws, or take any other
action not permitted to be delegated to a committee under Colorado law.
NOMINATING COMMITTEE
The Nominating Committee, consisting of Messrs. Wong and Woo, was
formed by the Company's Executive Committee on June 7, 2002, and has
responsibility for suggesting nominees for election as directors. Shareholders
desiring to recommend director candidates for consideration by the Committee may
do so by writing to the Secretary of the Company, giving the recommended
candidate's name, biographical data, and qualifications. The Nominating
Committee evaluated candidates, and has recommended to the Executive Committee
the nomination of the individuals that have been proposed by the Executive
Committee.
SPECIAL COMMITTEE
The Special Committee, consisting of Messrs. Weiner, Wong and Woo, was
formed by the Board of Directors on March 29, 2002, in order to investigate,
among other things: (i) the impact of Messrs. Bonn and Weber's conduct on the
Company's Rights Agreement; (ii) the substance and accuracy of the statements
made in Mr. Bonn's Schedule 13D/A filed on March 22, 2002; (3) the statements
regarding Mr. Kreloff's performance as Chief Executive Officer made in Mr.
Bonn's Schedule 13D/A; and (iv) certain other activities of Messrs. Bonn and
Weber relating to their prior management of IGallery. The Special Committee has
reported its findings to the Executive Committee.
12
INFORMATION ABOUT THE BOARD OF DIRECTORS, COMMITTEES OF THE BOARD AND EXECUTIVE
OFFICERS.
During the Company's fiscal year ended March 31, 2002, the Board of
Directors held seven meetings and acted by unanimous written consent six times.
Each Director attended more than seventy-five percent (75%) of the Board
meetings and meetings of the Board committees on which he served.
During the Company's fiscal year ended March 31, 2002, the Compensation
Committee of the Board met once.
During the Company's fiscal year ended March 31, 2002, the Audit
Committee of the Board met twice.
The Executive Committee, the Special Committee and the Nominating
Committee were each formed after March 31, 2002 and therefore did not meet
during the Company's fiscal year ended March 31, 2002.
No director or executive officer of the Company is related to any other
director or executive officer. None of the Company's officers or directors hold
any directorships in any other public company except that Hiram J. Woo is a
director of Steakhouse Partners, Inc., and Dr. Skender Fani, a nominee for
director, is a member of the Board of Directors of Consulier Engineering, Inc.
Resignation of Mr. Weber
On June 10, 2002, the Company received a letter from Mr. Weber, dated
June 7, 2002, stating that he had resigned from the Company's Board of Directors
"effective today, June 6, 2002 [sic]". Mr. Weber indicated that his decision to
resign was based on several factors, including that he disagreed with the
Company's strategic direction and that he viewed the majority of the Board of
Directors as being contentious. The Company believes that the reasons set forth
by Mr. Weber for his resignation are, at best, incorrect, incomplete and
self-serving. The Company believes that Mr. Weber's true disagreement with the
Company derives from the lawsuit that the Company commenced against Mr. Bonn and
Mr. Weber on May 28, 2002. See "Litigation Against Mr. Bonn and Mr. Weber," on
page 14.
Mr. Weber stated in his resignation letter that the current proxy fight
arose from a "discussion between Board members regarding redirection and falling
stock value," and that the Company's lawsuit against Mr. Weber and Mr. Bonn
lacks a "real basis in fact," and was a result of Mr. Weber's efforts to
"vocalize genuine concerns." The Company believes that these statements are
incorrect and that the current proxy fight initiated by Mr. Bonn stems not from
discussions between Board members regarding redirection of the Company's
business, but rather Mr. Bonn's and Mr. Weber's attempts to cause the Board to
discharge Chief Executive Officer Mark H. Kreloff, after less than 15 minutes of
discussion, at a Special Meeting of the Board held on March 20, 2002. After the
Company's Board rejected Messrs. Bonn's and Weber's proposal and instead
established a Special Committee to investigate, among other things, the
activities of Messrs. Bonn and Weber relating to their prior management of
IGallery, and whether, by their actions, they triggered the Company's Rights
Plan, Mr. Bonn notified the Company he would seek to replace the Board of
Directors and rescind the Company's Rights Plan. Additionally, it was not Mr.
Weber's efforts to "vocalize genuine concerns" which resulted in the filing of a
Complaint against Mr. Bonn and Mr. Weber. Rather, it was the findings of the
Special Committee, after conducting a thorough investigation, which resulted in
the Company's lawsuit against Mr. Bonn and Mr. Weber, alleging fraud and breach
of fiduciary duty in connection with their prior management of IGallery, and
their sale of IGallery to the Company in 1999.
13
Mr. Bonn's Proxy Solicitation
As you may be aware, Mr. Bonn is conducting his own proxy solicitation
to replace your Board of Directors with a slate of his own nominees. Mr. Bonn,
who is currently a director of the Company and the beneficial owner of at least
4,073,473 shares of the Company's common stock, has notified the Company and has
filed a preliminary proxy statement with the Securities and Exchange Commission
stating that Mr. Bonn will nominate seven individuals for election to the Board
of Directors in opposition to the Company's nominees for election as directors.
Litigation Against Mr. Bonn and Mr. Weber
On March 20, 2002, Mr. Bonn and Bradley A. Weber attempted to remove
Mark Kreloff as CEO and appoint a special committee headed by Mr. Bonn to
operate the Company while a search was conducted for a new CEO. The Company's
Board rejected Messrs. Bonn's and Weber's proposal and instead, on March 29,
2002, established a Special Committee, comprised of a majority of independent
directors, to investigate, among other things, the activities of Messrs. Bonn
and Weber relating to their prior management of IGallery, the Company's Internet
subsidiary, and whether, by their actions, Messrs. Bonn and Weber triggered the
Company's Rights Plan (also known as a poison pill).
Shortly thereafter, on April 1, 2002, Mr. Bonn notified the Company he
would seek to call a special meeting to replace the entire Board of Directors
and rescind the Company's Rights Plan. The Rights Plan, which is intended to
protect shareholders from unsolicited and inappropriate takeover attempts, was
adopted in November 2001 by a unanimous vote of the Board, including both Mr.
Bonn and Mr. Weber. Mr. Bonn subsequently withdrew his attempt to rescind the
Rights Plan, after having caused the Company to expend substantial resources on
reviewing his efforts on this matter.
The Special Committee, following a two-month thorough investigation
with its outside counsel, determined, among other things, that: (i) it was
not in the Company's best interest to replace the Company's current management
and (ii) it was not in the Company's best interest to rescind its Rights Plan.
Further, on May 28, 2002, following the two-month thorough
investigation by the Special Committee, the Company filed a 13-Count Complaint
in the Superior Court of the State of California for the County of Los Angeles
against: (i) Mr. Bonn and Mr. Weber; (ii) Jerry D. Howard, the former Chief
Financial Officer of IGallery, Interactive Telecom Network, Inc. ("ITN") and
Card Transactions, Inc. ("CTI"); (iii) Response Telemedia, Inc. ("RTI"), a
California corporation owned by Mr. Bonn; and (iv) BEF LLC and Beacon Ocean LLC,
Messrs. Bonn's and Weber's family trusts, respectively.
The Complaint's allegations arise, in part, out of the Company's
purchase of 100 percent of the issued and outstanding shares of IGallery and ITN
and 90 percent of the issued and outstanding shares of CTI from defendants Bonn,
Weber, and Howard on October 27, 1999. The Complaint alleges that, from early
1999 to the date of the closing, defendants Bonn, Weber, and Howard knowingly
made material misrepresentations or omissions regarding IGallery's business and
financial results and prospects for the purpose of inducing the Company to
purchase the defendants' stock holdings of IGallery, ITN and CTI.
The Complaint also alleges that, subsequent to the Company's purchase
of IGallery, ITN and CTI on October 27, 1999, Messrs. Bonn, Weber and Howard (as
directors and/or officers) each breached their fiduciary duties owed to the
Company, IGallery, ITN and CTI. Specifically, the Complaint alleges that Messrs.
Bonn, Weber and Howard grossly mismanaged IGallery, ITN and CTI and concealed
marketing, operational and financial information that would have allowed the
Company to detect such mismanagement. The Complaint also alleges that Messrs.
Bonn, Weber and Howard engaged in self-dealing transactions that benefited
themselves and Mr. Bonn's company, RTI, at the expense of the Company and you,
as shareholders of the Company.
The Complaint seeks rescission of the purchase of the IGallery, ITN and
CTI as well as monetary damages in an amount to be proven at trial. Mr. Bonn has
filed an answer denying the allegations contained in the Complaint and a
cross-complaint against the Company seeking that the company indemnify him
against the claims alleged in the Complaint. The cross-complaint also seeks
unspecified monetary damages from the Company, alleging that the Company
breached Mr. Bonn's employment agreement with the Company by terminating his
employment on May 28, 2002.
We will continue to advise you of any material developments in
connection with this lawsuit.
14
Mr. Bonn's Actions Against the Company
On May 29, 2002, Mr. Bonn filed a Complaint and an accompanying motion
for Preliminary Injunction in which he sought to order the Company to hold a
Special Meeting of its Shareholders on Friday, July 5, 2002, with a record date
of April 15, 2002. The Court rejected Mr. Bonn's motion on June 13, 2002, and
instead ruled that the Company could hold its Annual Meeting on August 20th,
with a record date of July 9th, as previously announced and scheduled by the
Company. The Company views Mr. Bonn's attempt to set a meeting date one day
after the July 4th holiday as an attempt to harass management and disenfranchise
the voting rights of a majority of the Company's shareholders. A July 5th
meeting date would not have allowed shareholders holding their shares in
brokerage accounts (i.e., in street name) enough time to vote at and participate
in the meeting. In addition, a July 5th meeting date would not have allowed
shareholders sufficient time to evaluate the information contained in the
Company's Form 10-K, which will be filed on July 1, and would have forced
out-of-town shareholders to choose between attending the meeting or giving up
their July 4th holiday. The Executive Committee believes Mr. Bonn's choice of a
meeting date was unconscionable and indicative of his lack of respect for proper
corporate governance.
On June 12, 2002, Messrs. Bonn and Weber filed an Application for a
Temporary Restraining Order and Preliminary Injunction to restrain the Company
from reformatting hard drives of their computers. Their application effectively
stopped the Company from donating two-dozen Pentium I computers to charity.
Messrs. Bonn and Weber alleged, without foundation, that the computers may
contain "important evidence" relating to the Company's lawsuit against them for
fraud and breach of fiduciary duty, even though they knew that Mr. Weber himself
had implemented the Company's current back-up procedures for these computers.
The decision to donate the computers, which were unused and in storage for
approximately two years, was made prior to the filing of the Company's lawsuit
against Bonn and Weber. On June 12, 2002, the Court denied Messrs. Bonn's and
Weber's Application in substantial part. At the Company's request, the Court, in
a modified order dated June 18, 2002, ordered Messrs. Bonn, Weber and their
family trusts to assume the cost of removing and preserving the original hard
drives and installing new hard drives in any computers that the Company desires
to reformat. On June 20, 2002, the Company was vindicated when the Court
approved a Stipulation in which Messrs. Bonn and Weber agreed to vacate the
Temporary Restraining Order and withdrew their Application for a Preliminary
Injunction. The Executive Committee is of the opinion that this is just another
example of Messrs. Bonn and Weber deliberately causing the Company to spend
corporate assets and waste executives' time on harassing, self-serving and
useless matters, in their desperate efforts to gain control of the Company.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Pursuant to Section 16 of the Exchange Act, the Company's directors and
executive officers and beneficial owners of more than 10% of the Company's
Common Stock are required to file certain reports, within specified time
periods, indicating their holdings of and transactions in the Common Stock and
derivative securities. Based solely on a review of such reports provided to the
Company and written representations from such persons regarding the necessity to
file such reports, the Company is not aware of any failures to file reports or
report transactions in a timely manner during the Company's fiscal year ended
March 31, 2002, except that Edward J. Bonn was late in filing a Form 4 reporting
a disposition of shares by Response Telemedia, Inc. on January 1, 2002 pursuant
to the Response Telemedia, Inc. Phantom Stock Plan. Mr. Bonn is the President
and a principal stockholder of Response Telemedia Inc.
EXECUTIVE COMPENSATION
The following table sets forth the annual compensation paid to the
Chief Executive Officer and the five other most highly compensated executive
officers of the Company for the three fiscal years ended March 31, 2002, 2001
and 2000.
15
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION LONG-TERM COMPENSATION
---------------------------------------- ---------------------------------------------------------
OTHER
NAME AND ANNUAL SECURITIES
PRINCIPAL YEAR SALARY COMPENSATION UNDERLYING ALL OTHER
POSITION COMPENSATION ($) BONUS($) ($) OPTIONS/SARS (#) COMPENSATION ($)(1)
- ----------------- ------------ ----------- --------- ------------ ---------------- -------------------
Mark H. Kreloff, 2002 272,115 -- -- -- 3,699
CEO and Chairman 2001 197,308 200,000 -- 200,000 730
2000 117,134 37,212 -- 275,000 730
Michael Weiner, 2002 272,115 -- -- -- 8,299
Executive Vice 2001 197,308 200,000 -- 200,000 --
President 2000 117,134 37,212 -- 275,000 --
Ken Boenish, 2002 200,000 274,440 -- -- 4,556
President of 2001 166,615 189,054 -- 100,000 --
Colorado 2000 122,278 45,738 18,342 (2) 35,000 --
Satellite
Broadcasting,
Inc.
Scott Schalin, 2002 203,846 36,333 -- -- 6,211
Former President 2001 147,500 141,604 -- 75,000 4,645
of Interactive 2000 108,077 111,000 -- 50,000 8,954
Gallery, Inc.
Karyn Miller, 2002 131,154 50,000 -- -- 2,856
Chief Financial 2001 115,385 30,000 -- 50,000 --
Officer 2000 94,667 11,731 -- 75,000 --
Edward Bonn, 2002 196,154 -- -- -- 4,056
Former President 2001 147,500 150,500 -- -- (3) 10,182
of New Frontier 2000 156,665 -- -- 25,000 3,306
Media, Inc.
- ----------------------------------------------------------------------------------------------------------------------------
(1) All Other Compensation includes amounts contributed to the Company's 401(k)
Plan on behalf of the Named Executive Officers as well as premiums paid for
life insurance.
(2) The Other Annual Compensation for Mr. Boenish includes $14,442 of moving
expenses and auto allowance of $3,900. While each of the other Named
Executive Officers enjoy certain other perquisites, such perquisites do not
exceed the lesser of either $50,000 or 10% of each Named Executive
Officer's salary and bonus.
(3) An additional 200,000 options to purchase the Company's common stock,
exercisable at $2.20, were granted to Mr. Bonn in December 2000. These
options were subsequently cancelled following his removal as President of
the Company.
16
STOCK OPTION GRANTS IN LAST FISCAL YEAR
No stock options or SARs were granted to Named Executive Officers
during the last fiscal year.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED IN-THE-MONEY
SHARES VALUE UNEXERCISED OPTIONS AT FY-END (#) OPTIONS AT FY-END ($) (1)
ACQUIRED ON REALIZED --------------------------------- ---------------------------------
NAME EXERCISE ($) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCIASABLE
- -------------------- -------------- -------- --------------------------------- ---------------------------------
Mark Kreloff -- -- 644,000 100,000 $244,790 --
Michael Weiner -- -- 665,000 100,000 $263,900 --
Ken Boenish -- -- 64,666 70,334 -- --
Scott Schalin -- -- 58,083 66,917 -- --
Karyn Miller -- -- 121,500 33,500 -- --
Edward Bonn -- -- 25,000 -- -- --
- -----------------------------------------------------------------------------------------------------------------------------
(1) The dollar value of each exercisable and unexercisable option was
calculated by multiplying the number of shares of common stock underlying
the option by the difference between the exercise price of the option and
the closing price of the Company's common stock on May 22, 2002 ($1.91).
COMPENSATION OF DIRECTORS
Company directors who are not also employees are reimbursed for
reasonable travel expenses related to attendance at Board meetings and paid
$10,000 for each year of service as a member of the Board. Company directors who
are employees are not compensated for their services as Directors.
On March 20, 2002, Mr. Wong was granted an option to acquire 25,000
shares of common stock pursuant to the Millennium Stock Option Plan. These
options vest 50% per year over two years and have an exercise price of $1.92.
On March 20, 2002, Mr. Isaacman was granted an option to acquire
200,000 shares of common stock pursuant to the Millennium Stock Option Plan.
These options vest 50% per year over two years and have an exercise price of
$1.92.
17
On March 20, 2002, Mr. Woo was granted an option to acquire 25,000
shares of common stock pursuant to the Millennium Stock Option Plan. These
options vest 50% per year over two years and have an exercise price of $1.92.
EMPLOYMENT AGREEMENTS
The Company has an employment agreement with Mark Kreloff which ends on
March 31, 2003. The Agreement provides for the payment of an annual base salary
of $200,000 for fiscal years ending March 31, 2001, 2002 and 2003. The Agreement
also provides for an annual incentive bonus equal to: (a) 30% of his annual base
salary if the Company's annual earnings before interest, taxes, depreciation and
amortization ("EBITDA") is at least $1 million; (b) 50% of his annual base
salary if the Company's EBITDA is at least $2 million, or (c) 100% of his annual
base salary if the Company's EBITDA is at least $4 million. The Agreement
provides for the one-time issuance of 69,000 nonstatutory options to Mr.
Kreloff at the fair market value of the common stock on the date of grant. The
options are to vest in equal installments over three years, except that the
stock options shall vest immediately and become exercisable in their entirety
upon (i) a change of control of the Company (as defined in the Agreement); (ii)
upon the death or disability of Mr. Kreloff; or (iii) the discharge of Mr.
Kreloff without cause or the resignation of Mr. Kreloff for "good reason" (as
defined in the Agreement). The Agreement further provides for the payment to Mr.
Kreloff upon the occurrence of any of the above events of a lump sum equal to
his annual base salary and bonus.
The Company has an employment agreement with Michael Weiner which ends
on March 31, 2003. The Agreement provides for the payment of an annual base
salary of $200,000 for fiscal years ending March 31, 2001, 2002 and 2003. The
Agreement also provides for an annual incentive bonus equal to: (a) 30% of his
annual base salary if the Company's annual earnings before interest, taxes,
depreciation and amortization ("EBITDA") is at least $1 million; (b) 50% of his
annual base salary if the Company's EBITDA is at least $2 million; or (c) 100%
of his annual base salary if the Company's EBITDA is at least $4 million. The
Agreement provides for the one-time issuance of 150,000 nonstatutory options to
Mr. Weiner at the fair market value of the common stock on the date of grant.
The options are to vest over three years, except that the stock options shall
vest immediately and become exercisable in their entirety upon (i) a change of
control of the Company (as defined in the Agreement); (ii) upon the death or
disability of Mr. Weiner; or (iii) the discharge of Mr. Weiner without cause or
the resignation of Mr. Weiner for "good reason" (as defined in the Agreement).
The Agreement further provides for the payment to Mr. Weiner upon the occurrence
of any of the above events of a lump sum equal to his annual base salary and
bonus.
The Company has an employment agreement with Karyn Miller which ends on
July 31, 2002. The Agreement provides for the payment of an annual base salary
of $100,000 for the first year of the agreement, with annual reviews thereafter.
The Agreement also provides for an annual incentive bonus equal to: (a) $10,000
if the Company's annual earnings before interest, taxes, depreciation and
amortization ("EBITDA") is at least $3 million; (b) $30,000 if the Company's
EBITDA is at least $5 million; or (c) $50,000 if the Company's EBITDA is at
least $6 million. The Company is currently in negotiation with Ms. Miller to
extend her employment with the Company.
18
The Company had an employment agreement with Ken Boenish which ended on
February 22, 2002. The Agreement provided for the payment of an annual base
salary of $100,000 for the fiscal year ended March 2000, with an increase in
salary to $115,000 upon promotion to Senior Vice President of Affiliate Sales,
and an increase to $130,000 after six full months of employment with the
Company. The Agreement also provided that the base salary was subject to review
from time to time. The Agreement also provided for quarterly commissions to be
paid based on the number of new addressable subscribers. The Company is
currently in negotiation with Mr. Boenish to extend his employment with the
Company.
The Company had an employment agreement with Scott Schalin which was to
end on March 31, 2003. The Agreement provided for the payment of an annual base
salary. The Agreement also provided for an annual incentive bonus equal to: (a)
...62% of the amount by which IGallery's annual gross revenues exceeded $20
million, but were less than $40 million; and (b) 1% of the amount of IGallery's
annual gross revenues that exceeded $40 million. Mr. Schalin resigned from the
Company effective April 30, 2002.
The Company had an employment agreement with Edward J. Bonn which was
to end on March 31, 2003. The Agreement provided for the payment of an annual
base salary of $150,000 for calendar year 2001 and $175,000 for calendar years
2002 and 2003. The Agreement also provided for an annual incentive bonus equal
to: (a) 30% of his annual base salary if the Company's annual earnings before
interest, taxes, depreciation and amortization ("EBITDA") is at least $1
million; (b) 50% of his annual base salary if the Company's EBITDA is at least
$2 million; or (c) 100% of his annual base salary if the Company's EBITDA is at
least $4 million. The Company terminated its employment agreement with Mr. Bonn
effective May 28, 2002.
LIMITS ON LIABILITY AND INDEMNIFICATION
The Company's Articles of Incorporation eliminate the personal
liability of its directors to the Company and its shareholders for monetary
damages for breach of the directors' fiduciary duties in certain circumstances.
The Articles of Incorporation further provide that the Company will indemnify
its officers and directors to the fullest extent permitted by law. The Company
believes that such indemnification covers at least negligence and gross
negligence on the part of the indemnified parties. Insofar as indemnification
for liabilities under the Securities Act may be permitted to directors,
officers, and controlling persons of the Company pursuant to the foregoing
provisions or otherwise, the Company has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act and is, therefore, unenforceable.
19
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION.
Members of the Compensation Committee, with the exception of Michael
Weiner, who is the Executive Vice President of New Frontier Media, Inc., have
never served as our officers or employees or officers or employees of any of our
subsidiaries. During the last fiscal year, none of our executive officers served
on the Board of Directors or Compensation Committee of any other entity whose
officers served either on our Board of Directors or Compensation Committee.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON EXECUTIVE
COMPENSATION.
Executive Compensation Philosophy. Our executive compensation
philosophy emphasizes three guiding principles. First, providing a competitive
executive compensation package that enables us to attract, motivate and retain
talented executives. Second, basing a major portion of each executive's annual
cash compensation on our annual EBITDA or the annual EBITDA of the group or unit
for which the executive is primarily responsible. Third, aligning the financial
interests of executives with long-term total shareholder return, particularly
through stock options.
Our executive compensation program has three major components: base
salaries, annual incentives, and long-term incentives.
Base Salaries. Our executive officers receive base salaries as
compensation for their job performance, abilities, knowledge, and experience.
The base salaries of Mark H. Kreloff, Michael Weiner, Ken Boenish and Karyn
Miller are determined under the terms of their respective employment contracts
with us. Apart from any contractual commitments, the Compensation Committee
intends to maintain base salaries at competitive levels in the marketplace for
comparable executive ability and experience and to place more emphasis on the
incentive portion of executive compensation, thereby correlating compensation to
performance. The Committee reviews base salaries annually and determines
increases based upon an executive officer's contribution to corporate
performance and competitive market conditions.
Annual Incentive Compensation. Our executive officers also receive an
annual incentive bonus based on the Company's EBITDA, as set forth in their
respective employment agreements.
Long-Term Incentives. The Committee believes that stock option plans
provide an excellent vehicle for rewarding performance by Company executives and
retaining their services for the future. There are currently a total of
1,088,975 options available to be awarded under the Company's various stock
option plans.
Submitted June 1, 2002 by the members of the Compensation Committee.
Koung Y. Wong, Chairman
Alan Isaacman
Michael Weiner
20
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of July ___, 2002, the number and
percentage of shares of outstanding Common Stock owned by each person owning at
least 5% of the Company's Common Stock, each officer and director owning stock,
and all officers and directors as a group. Beneficial ownership is determined in
accordance with the rules of the Securities and Exchange Commission. In
computing the number of shares beneficially owned by a person and the percentage
ownership of that person, shares of common stock subject to options or warrants
held by that person that are currently exercisable or will become exercisable
within 60 days after July __, 2002 are deemed outstanding, while such shares are
not deemed outstanding for purposes of computing percentage ownership of any
other person. The number and percentage of shares beneficially owned are based
on the aggregate of 21,246,916 shares of common stock outstanding as of June 7,
2002 as reported in the Company's annual report on Form 10-K filed with the
Securities and Exchange Commission on July 1, 2002.
Unless otherwise indicated in the footnotes below, the persons and
entities named in the table have sole voting or investment power with respect to
all shares owned, subject to community property laws.
NAME AND ADDRESS OF NUMBER OF SHARES
BENEFICIAL OWNER BENEFICIALLY OWNED PERCENT
- ---------------------------------- ------------------ -------
Mark H. Kreloff 1,719,023 (1) 8%
7007 Winchester Circle, Suite 200
Boulder, CO 80301
Michael Weiner 1,073,116 (2) 5%
7007 Winchester Circle, Suite 200
Boulder, CO 80301
Koung Y. Wong 108,500 (3) 1%
168 Beacon St.
South San Francisco, CA 94080
Alan Isaacman 125,000 (4) 1%
8484 Wilshire Blvd., Suite 850
Beverly Hills, CA 90211
Hiram J. Woo -- (5) --
7007 Winchester Circle, Suite 200
Boulder, CO 80301
Melissa Hubbard 8,000 *
7007 Winchester Circle, Suite 200
Boulder, CO 80301
Dr. Skender Fani 49,000 *
7007 Winchester Circle, Suite 200
Boulder, CO 80301
21
Karyn Miller 126,500 (6) *
7007 Winchester Circle, Suite 200
Boulder, CO 80301
Ken Boenish 65,666 (7) *
7007 Winchester Circle, Suite 200
Boulder, CO 80301
Edward J. Bonn 4,073,473 (8) 19%
8215 Cattail Drive
Niwot, CO 80503
Scott Schalin 98,083 (9) *
22310 Burbank Blvd.
Woodland Hills, CA 91367
SAC Capital 1,940,997 (10) 9%
777 Long Ridge Road
Stamford, CT 06902
All officers and directors as a group 7,291,278 34%
(8 persons)
- -------------------------------------------------------------------------------
* Less than 1%.
(1) Includes the right to acquire 644,000 shares of common stock within 60 days
upon the exercise of employee stock options and warrants.
(2) Includes the right to acquire 665,000 shares of common stock within 60 days
upon the exercise of employee stock options.
(3) Includes the right to acquire 50,000 shares of common stock within 60 days
upon the exercise of employee stock options.
(4) Includes the right to acquire 125,000 shares of common stock within 60 days
upon the exercise of employee stock options.
(5) Excludes the right to acquire 125,000 shares of common stock, which options
are not presently exercisable.
(6) Includes the right to acquire 121,500 shares of common stock within 60 days
upon the exercise of employee stock options and warrants.
(7) Includes the right to acquire 64,666 shares of common stock within 60 days
upon the exercise of employee stock options and warrants.
(8) Includes (a) 25,000 shares subject to currently exercisable and vested
stock options, (b) 620,500 shares held by Response Telemedia, (c) 3,375,000
shares held by BEF and (d) 350,000 shares subject to options granted by Mr.
Bonn to Acclaim Financial Group Venture I LLC. Mr. Bonn controls and is the
President of Response Telemedia. Mr. Bonn also controls and is the sole
manager of BEF. The members of BEF are the EJB Trust and the Palmer Trust.
Both trusts are for the benefit of Mr. Bonn and his heirs.
22
(9) Includes the right to acquire 58,083 shares of common stock within 60 days
upon the exercise of employee stock options.
(10) According to Amendment No. 2 to SAC Capital's Schedule 13G filed on
February 13, 2002, these shares of common stock are held by S.A.C. Capital
Associates, LLC. Pursuant to certain investment agreements, S.A.C. Capital
Advisors, LLC and S.A.C. Capital Management LLC share all investment and
voting power with respect to these shares of common stock and each may be
deemed to be the beneficial owner of such shares. Steven A. Cohen is the
President and Chief Executive Officer of S.A.C. Capital Advisors, the
managing member of which is a corporation wholly owned by Mr. Cohen, and he
is the owner, directly and through a wholly owned subsidiary, of 100% of
the membership interests of S.A.C. Capital Management. Mr. Cohen may be
deemed to be the beneficial owner of such shares. He disclaims beneficial
ownership of the shares held by S.A.C. Capital Associates and its
affiliates.
PERFORMANCE GRAPH
The following graph compares on a cumulative basis the yearly
percentage change, assuming dividend reinvestment, over the last five fiscal
years in (a) the total shareholder return on our common stock with (b) the total
return on the Standard & Poors SmallCap 600 Index and (c) the total return on a
peer group index. The Standard & Poors SmallCap 600 index includes companies
with an average market capitalization of approximately $615,551,000 with the
largest company having a capitalization of approximately $3,398,289,000. The
peer group is an index weighted by the relative market capitalization of the two
following companies which were selected for being in industries related to ours
(provider of adult content), for having revenues between $20,260,000 and
$347,817,000 in their most recently reported fiscal years and for having five
year compound annual revenue growth of at least 10%. The two are: Playboy
Enterprises, Inc. and Private Media Group, Inc.
23
The following graph assumes that $100 had been invested in each of the
Company, the Standard & Poors Small Cap 600 Index and the two member Peer Group
on March 31, 1997.
5-YEAR CUMULATIVE TOTAL RETURN COMPARISION AMONG NEW FRONTIER
MEDIA, INC., S&P SMALLCAP 600 INDEX AND PEER GROUP INDEX
NEW FRONTIER S&P INDEX PEER GROUP INDEX
------------- --------- ----------------
Base period March '97 100 100 100
March '98 65.00 147.68 113.82
March '99 86.25 119.42 146.34
March '00 232.50 156.08 174.57
March '01 58.44 154.08 98.85
March '02 38.20 187.93 122.98
ASSUMES $100 INVESTED ON MARCH 31, 1997
ASSUMES DIVIDED REINVESTMENT THROUGH
THE FISCAL YEAR ENDING MARCH 31, 2002
The preceding sections entitled "Executive Compensation" and
"Performance Graph" do not constitute soliciting material for purposes of SEC
Rule 14a-9, will not be deemed to have been filed with the SEC for purposes of
Section 18 of the Securities Exchange Act of 1934, and are not to be
incorporated by reference into any other filing that we make with the SEC.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company paid $740,995.28 to Isaacman, Kaufman, & Painter during the
fiscal year ended March 31, 2002, for legal services provided by Mr. Isaacman
and his associates.
24
PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
THE EXECUTIVE COMMITTEE RECOMMENDS A VOTE FOR THE RATIFICATION OF THE
SELECTION OF GRANT THORNTON LLP AS THE COMPANY'S AUDITORS FOR THE 2003 FISCAL
YEAR.
Spicer, Jeffries & Co. was the principal accounting firm for the
Company from June 1991 to December 2000, at which time the Company discharged
Spicer, Jeffries & Co. and replaced them with Singer, Lewak, Greenbaum &
Goldstein, LLP. Singer Lewak Greenbaum & Goldstein LLP was the principal
accounting firm for the Company from December 2000 until November 2001, at which
time the Company discharged Singer Lewak Greenbaum & Goldstein LLP and replaced
them with Grant Thornton LLP. Both decisions to change accountants were approved
by the Company's Audit Committee.
The Company anticipates that representatives of Grant Thornton LLP will
attend the Annual Meeting for the purpose of responding to appropriate
questions. At the Annual Meeting, the representatives of Grant Thornton LLP will
be afforded an opportunity to make a statement if they so desire.
Representatives of Singer Lewak Greenbaum & Goldstein LLP are not expected to
attend the Annual Meeting.
Singer Lewak Greenbaum & Goldstein LLP's Annual Report covering the
fiscal year ended March 31, 2001 did not include an adverse opinion or
disclaimer of opinion, and was not qualified as to the audit scope or accounting
principles. Spicer, Jeffries & Co.'s Annual Report covering the fiscal year
ending March 31, 2000 did not include an adverse opinion or disclaimer of
opinion, and was not qualified as to the audit scope or accounting principles.
The opinion, however, did include an emphasis of a matter relating to
uncertainty as to the litigation disclosed.
In connection with the audits of the two most recent fiscal years and
during any subsequent interim periods, there did not develop any disagreement on
any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure between such former independent
certified accountants and management of the Company or other reportable events
which have not been resolved to the Company's former independent certified
accountants' satisfaction.
AUDIT FEES
The aggregate fees billed for professional services rendered by Grant
Thornton LLP for the audit of the Company's annual financial statements for the
fiscal year ended March 31, 2002, and reviews of the financial statements
included in the Company's Forms 10-Q for that year, and all other audit related
fees were $184,465.
FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES
Grant Thornton LLP billed no fees to the Company for financial
information systems design and implementation during the fiscal year ended March
31, 2002.
ALL OTHER FEES
Grant Thornton LLP billed no other fees to the Company during the year
ended March 31, 2002.
25
Audit Committee Report
The Audit Committee is comprised of three independent directors (each
of whom meets the independence and expertise requirements of the National
Association of Securities Dealers, Inc.) and operates under a written charter,
which was published in the August 2000 proxy statement. The Audit Committee
recommends the engagement of independent auditors and reviews and considers
actions of management in matters relating to audit functions. The Audit
Committee reviews, with independent auditors, the scope and results of its audit
engagement, the system of internal controls and procedures and reviews the
effectiveness of procedures intended to prevent violations of laws. In
fulfilling its responsibilities, the Audit Committee has reviewed and discussed
the audited consolidated financial statements for the Company for the fiscal
year ended March 31, 2002 with the Company's management and Grant Thornton LLP
("Grant Thornton"), the Company's independent auditors.
The Audit Committee has discussed with Grant Thornton the matters
required to be discussed by Statement on Auditing Standards No. 61,
"Communication with Audit Committees." In addition, the Audit Committee has
received the written disclosures and the letter from Grant Thorton required by
Independence Standards Board Standard No. 1, "Independence Discussions with
Audit Committees" and has discussed with Grant Thorton its independence from the
Company and its management.
In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors that the audited consolidated
financial statements for the Company for the fiscal year ended March 31, 2002 be
included in our 2002 Annual Report to Stockholders which will be incorporated by
reference into our Annual Report on Form 10-K for the year ended March 31, 2002
for filing with the Securities and Exchange Commission.
Audit Committee
Alan Isaacman
Koung Y. Wong
Hiram J. Woo
26
The prompt return of the proxy will be appreciated and helpful in
obtaining the necessary vote. Therefore, whether or not you expect to attend the
meeting, please sign the proxy and return it in the enclosed envelope.
BY ORDER OF THE EXECUTIVE COMMITTEE
OF THE BOARD OF DIRECTORS
Michael Weiner
Secretary
Dated: July , 2002
27
SUBJECT TO COMPLETION,
DATED JUNE __, 2002
PROXY CARD
NEW FRONTIER MEDIA, INC.
2002 ANNUAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED BY THE EXECUTIVE COMMITTEE OF THE BOARD OF DIRECTORS
The undersigned, revoking all previous proxies, hereby appoints Mark H.
Kreloff and Michael Weiner, and each of them, as proxies, acting jointly and
severally, with full power of substitution, for and in the name of the
undersigned to vote all shares of Common Stock, par value $.0001 per share, of
New Frontier Media, Inc., that the undersigned is entitled to vote if personally
present at the Annual Meeting of Shareholders to be held on Tuesday, August 20,
2002, at 10:00 a.m. Mountain Standard Time, at The Boulder Marriott, 2660 Canyon
Boulevard, Boulder, Colorado 80302, and at any adjournment thereof, upon the
matters set forth in the accompanying Proxy Statement and upon such other
matters as may properly come before the Annual Meeting. Said proxies are
directed to vote or refrain from voting as checked on the reverse side upon the
matters listed on the reverse side, and otherwise in their discretion.
This Proxy, when properly executed, will be voted in the manner
directed herein by the undersigned stockholder. If no direction is specified,
this proxy will be voted "FOR" Proposals 1 and 2 AND IN THE DISCRETION OF THE
PROXIES UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE ANNUAL MEETING.
At present, the Executive Committee of the Board knows of no other business
which will come before the Annual Meeting. AT THE TIME OF THE ANNUAL MEETING, IF
ANY OF THE NOMINEES LISTED ON THIS PROXY CARD ARE UNABLE TO SERVE, THIS PROXY
WILL BE VOTED FOR SUCH OTHER PERSON OR PERSONS, IF ANY, AS THE EXECUTIVE
COMMITTEE MAY DESIGNATE.
THE EXECUTIVE COMMITTEE OF THE BOARD OF DIRECTORS RECOMMENDS
A VOTE "FOR" PROPOSALS 1 AND 2.
1. Election of the following director nominees to serve for the following year
and until their successors are elected:
Nominees are: Mark H. Kreloff, Michael Weiner, Koung Y. Wong,
Hiram J. Woo, Alan Isaacman, Melissa Hubbard and
Dr. Skender Fani
FOR ALL NOMINEES WITHHOLD AUTHORITY FOR WITHHELD FOR THE FOLLOWING ONLY:
LISTED ABOVE ALL NOMINEES (WRITE THE NAME(S) OF THE
WITH EXCEPTIONS NOTED NOMINEE(S) IN THE SPACE BELOW)
/ / / / _______________________________
2. Ratification of the selection of Grant Thornton LLP as the Company's
independent auditors for the fiscal year ending March 31, 2003.
FOR AGAINST ABSTAIN
/ / / / / /
Mark here if your address has changed and provide us with your new address in
the space provided to the right:
New Address:
------------------------------------
------------------------------------
------------------------------------
Dated: ___________________________, 2002
-----------------------------------------
Signature(s) of Stockholder(s)
----------------------------------------
Title
Please mark, date and sign exactly as
your name appears above and return in
the enclosed envelope. If acting as
executor, administrator, trustee,
guardian, etc., you should so indicate
when signing. If the signer is a
corporation, please sign the full
corporate name, by duly authorized
officer. If shares are held jointly,
each stockholder named should sign.
APPENDIX A
The following sets forth the business address and, as of July __, 2002,
information with respect to purchases and sales of the Company's Common Stock
within the past two years by the participants in this solicitation. All
transactions were effected in open market transactions.
During the past two years, MARK H. KRELOFF, whose business address is
c/o New Frontier Media, Inc. 7007 Winchester Circle, Suite 200 Boulder, Colorado
80301*, did not have any purchases or sales of the Company's Common Stock.
During the past two years, MICHAEL WEINER, whose business address is c/o New
Frontier Media, Inc. 7007 Winchester Circle, Suite 200 Boulder, Colorado 80301*,
did not have any purchases or sales of the Company's Common Stock.
During the past two years, ALAN ISAACMAN, whose business address is c/o New
Frontier Media, Inc. 7007 Winchester Circle, Suite 200 Boulder, Colorado 80301*,
did not have any purchases or sales of the Company's Common Stock.
During the past two years, KOUNG Y. WONG, whose business address is c/o New
Frontier Media, Inc. 7007 Winchester Circle, Suite 200 Boulder, Colorado 80301*,
did not have any purchases or sales of the Company's Common Stock.
During the past two years, HIRAM J. WOO, whose business address is c/o New
Frontier Media, Inc. 7007 Winchester Circle, Suite 200 Boulder, Colorado 80301*,
did not have any purchases or sales of the Company's Common Stock.
During the past two years, MELISSA HUBBARD, whose business address is c/o New
Frontier Media, Inc. 7007 Winchester Circle, Suite 200 Boulder, Colorado 80301*,
had the following transactions in the Company's Common Stock.
- ---------------------- ------------------------- -----------------------------
Date Number of Shares Purchase or Sale
- ---------------------- ------------------------- -----------------------------
January 23, 2002 2,000 Purchase
- ---------------------- ------------------------- -----------------------------
February 13, 2002 3,000 Purchase
- ---------------------- ------------------------- -----------------------------
February 25, 2002 3,000 Purchase
- ---------------------- ------------------------- -----------------------------
DR. SKENDER FANI whose business address is c/o New Frontier Media, Inc. 7007
Winchester Circle, Suite 200 Boulder, Colorado 80301*, had the following
transactions in the Comany's Common Stock.
- ---------------------- ------------------------- -----------------------------
Date Number of Shares Purchase or Sale
- ---------------------- ------------------------- -----------------------------
August 22, 2000 15,500 Purchase
- ---------------------- ------------------------- -----------------------------
August 23, 2000 4,500 Purchase
- ---------------------- ------------------------- -----------------------------
November 17, 2000 5,000 Purchase
- ---------------------- ------------------------- -----------------------------
January 12, 2001 10,000 Purchase
- ---------------------- ------------------------- -----------------------------
February 8, 2001 5,000 Purchase
- ---------------------- ------------------------- -----------------------------
*The Participant's principal occupation or employment is disclosed in the proxy
statement under "Information about the Nominees."