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
/ / Definitive Proxy Statement
/X/ 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:
EXPLANATORY NOTE
New Frontier Media, Inc., a Colorado corporation (the "Company"), is filing the
materials contained in this Schedule 14A with the Securities and Exchange
Commission on July 29, 2002 in connection with the solicitation of proxies for
electing the board of directors of the Company at the Company's 2002 annual
meeting of shareholders.
THE FOLLOWING LETTER WAS MAILED TO
THE COMPANY'S SHAREHOLDERS ON JULY 29, 2002
[New Frontier Media Logo]
7007 WINCHESTER CIRCLE, SUITE 200, BOULDER, CO 80301
July 29, 2002
Dear Shareholder:
Edward J. Bonn, a former director of New Frontier Media, has initiated a
proxy contest for control of your company. You should know that your board and
management oppose Mr. Bonn and urge you to reject him and his hand-picked
nominees.
Mr. Bonn joined the Company's board and management team when New Frontier
agreed to purchase Mr. Bonn's company, IGallery, in March 1999. Mr. Bonn has
since been sued by your Company FOR FRAUD AND BREACH OF FIDUCIARY DUTY. In
addition, Mr. Bonn's inept management of New Frontier's Internet division has
diminished the Company's value, and his self-serving campaign to oust the
current leadership has been a waste of management time and shareholder money.
You may have already received proxy materials from Mr. Bonn disparaging New
Frontier's leadership. However, as you reach your opinion as to which director
nominees are better suited to represent your interests on the New Frontier board
of directors, please CONSIDER THE FOLLOWING:
O We believe that Mr. Bonn initiated this proxy contest to "SWEEP UNDER THE
RUG" THE COMPANY'S INVESTIGATION AND LAWSUIT against him. No one should
be fooled by his claim to "hold current management accountable". The
Company is seeking to rescind the purchase of Mr. Bonn's company which
gave him his stake in New Frontier. A successful outcome of this lawsuit
may result in a significant benefit to shareholders and result in a
substantial loss to Mr. Bonn. If Mr. Bonn wins this proxy contest, he may
never be held accountable for his actions. We believe this proxy contest
is really all about Mr. Bonn's attempt to have his hand-picked board
withdraw the Company's lawsuit against him for fraud and breach of
fiduciary duty.
O Your board of directors, after a thorough independent investigation,
brought this legal action against Mr. Bonn for GROSS MISREPRESENTATION of
IGallery's business -- specifically its financial condition and marketing
practices. Our lawsuit alleges that material facts regarding IGallery's
deteriorating cash flow, increasing costs of sale, decreasing membership
revenues and FTC inquiries regarding deceptive marketing practices were
FRAUDULENTLY HIDDEN from the Company when it purchased IGallery from Mr.
Bonn.
O Mr. Bonn instructed the Company's accounting department on several
occasions to reimburse him for his personal legal bills. The Company is
now seeking to recover these MISAPPROPRIATED SHAREHOLDER FUNDS.
O MR. BONN CAN'T ADD -- OR ATTEMPTED TO MISLEAD YOU. Mr. Bonn claimed that
New Frontier has under performed Private Media by 385% as of March 31,
2002, when the true number was actually 15%. In fact, as of today New
Frontier has outperformed Private Media.
O It is DISHONEST AND MISLEADING for Mr. Bonn to wage a proxy campaign
blaming management for the decline in the Company's stock price, without
telling you that he was an active member of the Company's management
during the exact period in which the Company's common stock price
suffered its most significant decline. Indeed, he was President of the
Company from July 2000 to June 2001.
O Mr. Bonn's performance in a fiduciary capacity at other public companies
has been similarly criticized. Prior to IGallery, Mr. Bonn served as a
director and executive officer of Independent Entertainment Group, Inc.,
where his tenure lasted less than one year. Independent Entertainment
Group SUED MR. BONN FOR BREACH OF FIDUCIARY DUTY AND NEGLIGENCE
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for, among other things, MANIPULATION of the financials of his division
so as to trigger performance rewards for himself and others when those
payments would have been otherwise withheld.
O CERTAIN OTHER DIRECTOR NOMINEES MR. BONN IS ASKING YOU TO SUPPORT ARE
SIMILARLY "DISTINGUISHED". CARLTON JENNINGS sold the satellite phone
company he ran, once valued at $5.8 billion, for $25 million. BERNIE
STOLAR managed BAM! Entertainment, a childrens video game company, from
$10 per share seven months ago to $2 per share today. At PLM, STEPHEN
PEARY's compensation increased 54% while the company experienced an 84%
drop in operating income and a $6.6 million net loss. More importantly,
not one of Bonn's nominees has any experience bridging the gap between
the adult content and mainstream cable and satellite businesses.
MR. BONN HAS OFFERED NEITHER A VISION NOR AN ACTIONABLE PLAN FOR NEW
FRONTIER MEDIA. HIS ENTIRE CAMPAIGN IS NEGATIVE AND TRANSPARENTLY SELF-SERVING.
IN FACT, WE BELIEVE MR. BONN HAS CONSISTENTLY PLACED HIS OWN PERSONAL INTERESTS
AHEAD OF THE INTERESTS OF NEW FRONTIER SHAREHOLDERS.
We believe the best interests of New Frontier shareholders will be served
by electing the nominees selected by the independent members of the Nominating
Committee and recommended by both the Executive Committee and the full Board of
Directors. We urge you to sign, date and mail the enclosed WHITE proxy card
today. Discard any gold proxy card sent to you by Mr. Bonn.
Please direct any questions regarding voting your shares to D.F. King &
Co., Inc, which is assisting the Company, toll-free at 1-800-431-9642.
Thank you for your support.
Sincerely,
/s/ Mark Kreloff
Mark Kreloff
Chairman and Chief Executive Officer
/s/ Michael Weiner
Michael Weiner
Executive Vice President and Secretary
NEW FRONTIER MEDIA HAS FILED A DEFINITIVE PROXY STATEMENT WITH THE SECURITIES
AND EXCHANGE COMMISSION RELATING TO THE SOLICITATION OF PROXIES FROM THE
SHAREHOLDERS OF NEW FRONTIER MEDIA FOR USE AT THE ANNUAL MEETING OF
SHAREHOLDERS. NEW FRONIER MEDIA STRONGLY ADVISES ALL NEW FRONTIER MEDIA
SHAREHOLDERS TO READ THE DEFINITIVE PROXY STATEMENT BECAUSE IT CONTAINS
IMPORTANT INFORMATION. THE DEFINITIVE PROXY STATEMENT IS AVAILABLE AT NO CHARGE
ON THE SEC'S WEBSITE AT HTTP://WWW.SEC.GOV. INFORMATION RELATING TO THE
PARTICIPANTS IN NEW FRONTIER'S PROXY SOLICITATION IS CONTAINED IN THE DEFINITIVE
PROXY STATEMENT, FILED ON JULY 24, 2002.
If your shares are held in your name, please sign, date and return the enclosed
WHITE proxy card today. If your shares are held in "Street name", only your
broker or bank can vote your shares and only upon receipt of your specific
instructions. Return the enclosed card and contact the person responsible for
your account to ensure that a WHITE proxy card is voted on your behalf. If you
have returned a GOLD proxy card from Mr. Bonn, you can change your vote by
signing, dating and returning the enclosed proxy card. Only the latest-dated
card counts. If you have any questions or require assistance in voting your
shares, please call D.F. King & Co., Inc, toll-free on 1-800-431-9642.