>The fact that insiders are not selling is a pretty scary thing.
Any idea if there is another way they are getting money out of
the company?<
How about this (from the 10K): Very high compensation and sweet
deals given how poorly the company is doing:
ITEM 11. EXECUTIVE COMPENSATION
Members of the Board of Directors who are also employees of the Company do not
receive any additional compensation for service on the Board or any committees
of the Board. Members of the Board who are not employees of the Company
presently receive an annual retainer of $27,500 plus a $1,000 stipend for each
Board meeting attended. Non-employee directors presently receive additional
stipends for service on committees of the Board of $500 per year for committee
members and $1,000 per year for committee chairmen.
The following table sets forth, for each of the years indicated, the
compensation paid by the Company to its Chief Executive Officer during 1997, and
the four other most highly compensated executive officers of the Company as of
December 31, 1997 (collectively, the "Named Executive Officers"). During these
years, the Named Executive Officers were compensated in accordance with the
plans and policies of the Company. All reference to securities in the following
table relate to awards of options to purchase Common Stock.<TABLE>
SUMMARY COMPENSATION TABLE<CAPTION>
LONG-TERM COMPENSATION
ANNUAL COMPENSATION AWARDS
----------------------------------- -------------------------
OTHER ANNUAL RESTRICTED SECURITIES ALL OTHER
COMPENSATION STOCK AWARDS UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) ($) (1) ($) (2) OPTIONS(#) ($)
--------------------------- ---- --------- -------- ------------ ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Lee S. Hillman (3) 1997 375,000 250,000(4) 3,499,700(5) - 125,000 19,704(6)
President and Chief 1996 34,000 - - 721,875 150,000 -
Executive Officer 1995 - - - - - -
John W. Dwyer (7) 1997 225,000 150,000(4) 1,407,381(5) - 45,000 12,204(6)
Executive Vice President, 1996 170,600 - - 288,750 35,000 -
Chief Financial Officer 1995 - - - - - -
and Treasurer
Cary A. Gaan 1997 225,000 90,000(4) 1,407,381(5) - 15,000 954(6)
Senior Vice President, 1996 225,000 40,000 - 288,750 35,000 12,091
Secretary and General 1995 225,000 70,000 - - - 40,263
Counsel
Harold Morgan (8) 1997 175,000 80,000(4) 1,407,381(5) - 15,000 9,502(6)
Senior Vice President, 1996 158,100 - - 288,750 35,000 -
Human Resources 1995 - - - - - -
John H. Wildman 1997 200,000 100,000(9) 1,407,381(5) - 15,000 -
Senior Vice President, 1996 200,000 40,000 - 288,750 45,000 -
Sales and Marketing 1995 175,000 70,400 - - - -
</TABLE>-------------
(1) Certain incidental personal benefits to executive officers of the Company
may result from expenses incurred by the Company in the interest of
attracting and retaining qualified personnel. These incidental personal
benefits made available to the Named Executive Officers during 1997 are not
described herein because the incremental cost to the Company of such
benefits is below the Securities and Exchange Commission (the "Commission")
disclosure threshold.
(2) The number of shares of restricted stock awarded to Messrs. Hillman, Dwyer,
Gaan, Morgan and Wildman during 1996 was 150,000, 60,000, 60,000, 60,000
and 60,000, respectively. The value of such shares was determined by the
closing price of the Common Stock at the date of grant. Restrictions on
these shares generally lapsed based upon the market price of the Common
Stock reaching certain targeted stock prices unless less than half of such
shares awarded vested within two years 48
<PAGE>
after the date of grant, at which time a number of shares would vest so
that the total number of vested shares equaled 50% of the original grants.
In addition, a recipient of these restricted stock awards receives a cash
payment from the Company upon the lapse of restrictions in an amount
sufficient to insure that the recipient receives the Common Stock net of
all taxes imposed upon the recipient because of the receipt of such Common
Stock and cash payment.
(3) Mr. Hillman served as Executive Vice President and Treasurer of the Company
through October 7, 1996, when he became President and Chief Executive
Officer of the Company. For serving in such capacities, Mr. Hillman
received (i) an annual base salary of $22,500 through December 18, 1996
pursuant to his former employment agreement with the Company and (ii) an
annual base salary of $375,000 from December 19, 1996 pursuant to an
employment arrangement with the Company. In addition, Mr. Hillman served as
Executive Vice President, Chief Financial Officer and Treasurer of
Entertainment until December 18, 1996. For serving in such capacities, Mr.
Hillman received compensation from Entertainment and was awarded
non-qualified options to purchase shares of Entertainment common stock
during 1996 and 1995. The compensation paid to Mr. Hillman by Entertainment
for the years covered was for services rendered to Entertainment and all of
its subsidiaries.
(4) Represents the bonus earned in 1997 by the Named Executive Officer. Under
the Company's 1997 Bonus Plan, 50% of the bonus was paid in March 1998 and
the remaining 50% is to be paid by March 15, 1999, subject to certain
forfeiture provisions. See "The Company's 1997 Bonus Plan."
(5) Represents amount paid by the Company to the Named Executive Officer for
the tax gross-up upon the final vesting in August 1997 of the restricted
stock awards described in Note (2) above.
(6) Represents amounts matched by the Company in connection with the Named
Executive Officer's participation in the Company's savings plans. See "The
Company's Retirement Savings Plan" and "The Company's Savings Plan."
(7) Mr. Dwyer also served as Vice President and Corporate Controller of
Entertainment until December 18, 1996. For serving in such capacities, Mr.
Dwyer received compensation from Entertainment and was awarded
non-qualified options to purchase shares of Entertainment common stock
during 1996 and 1995. Pursuant to the Transitional Services Agreement with
Entertainment, 75% of Mr. Dwyer's salary was allocated to the Company
through December 18, 1996, at which time the Company began paying all of
Mr. Dwyer's salary.
(8) Mr. Morgan also served as Vice President, Human Resources of Entertainment
until December 18, 1996. For serving in such capacities, Mr. Morgan
received compensation from Entertainment and was awarded non-qualified
options to purchase shares of Entertainment common stock during 1996 and
1995. Pursuant to the Transitional Services Agreement with Entertainment,
90% of Mr. Morgan's salary was allocated to the Company through December
18, 1996, at which time the Company began paying all of Mr. Morgan's
salary.
(9) Represents the bonuses earned in 1997 by Mr. Wildman, $40,000 of which was
paid in 1997. The remaining $60,000 bonus is under the Company's 1997 Bonus
Plan, pursuant to which 50% was paid in March 1998 and the remaining 50% is
to be paid by March 15, 1999, subject to certain forfeiture provisions. See
"The Company's 1997 Bonus Plan."EMPLOYMENT AGREEMENTS
Mr. Hillman and the Company reached an agreement with respect to his employment
effective as of October 7, 1996. The agreement is for a term through December
31, 1999 and provides for a base salary of $375,000 (effective December 19,
1996), participation in any Company bonus plan and a bonus payable at the
discretion of the Company. In the event a change of control of the Company
occurs and Mr. Hillman is asked to leave the employ of the Company or, absent
cause, Mr. Hillman elects to terminate his employment
49<PAGE>
because he has been constructively terminated, Mr. Hillman will be entitled to
receive a lump sum payment equal to 36 months base salary and two times the
average of bonuses, if any, paid to Mr. Hillman by the Company for the three
prior years. If a change in control of the Company were to occur on February 28,
1998 and Mr. Hillman were asked to leave the employ of the Company or, absent
cause, constructively terminated, Mr. Hillman would be entitled to a payment of
$1,625,000 under his employment arrangement. Additionally, if a change in
control of the Company were to occur on February 28, 1998, Mr. Hillman could
elect, at his option, to terminate his employment arrangement and receive a lump
sum of six months salary ($187,500).
Mr. Dwyer, the Company and Entertainment entered into an employment agreement
effective as of January 1, 1996 for an initial term of three years, after which
the agreement will continue from year to year unless terminated by any party in
his or its sole discretion on 90 days' notice given prior to the expiration of
the term. Effective December 19, 1996, Entertainment's obligations under this
employment agreement terminated. The agreement provides for an annual base
salary of $225,000 and a bonus payable at the discretion of the Company.
Mr. Gaan and the Company entered into an employment agreement effective as of
March 20, 1997 for an initial term of three years, after which the agreement
will continue from year to year unless terminated by either party in its
discretion on six months' notice given prior to the expiration of the term. The
agreement provides for a base salary of $225,000 per year and a bonus payable at
the discretion of the Company. In the event of a change in control of the
Company and Mr. Gaan were asked to leave the Company or, absent cause, Mr. Gaan
elects to terminate his employment because he has been constructively
terminated, Mr. Gaan will be paid a lump sum equal to 24 months base salary or
an amount equal to his base salary for the balance of the three-year term,
whichever is greater, and the greater of the average of the bonuses, if any,
paid by the Company to Mr. Gaan for the three prior years and the bonus, if any,
for the prior year. If a change in control of the Company were to occur on
February 28, 1998 and Mr. Gaan were asked to leave the employ of the Company,
Mr. Gaan would be entitled to a payment of $552,945 under his employment
agreement.
Mr. Morgan, the Company and Entertainment entered into an employment agreement
effective as of January 1, 1996 for an initial term of three years, after which
the agreement will continue from year to year unless terminated by any party in
his or its sole discretion on 60 days' notice given prior to the expiration of
the term. Effective December 19, 1996, Entertainment's obligations under this
employment agreement terminated. The agreement provides for an annual base
salary of $175,000 and a bonus payable at the discretion of the Company.
Mr. Wildman and the Company entered into an employment agreement effective as of
October 7, 1996 for an initial term of two years, after which the agreement will
continue from year to year unless terminated by either party in his or its sole
discretion on 60 days' notice given prior to the expiration of the term. The
agreement provides for an annual base salary of $200,000 and a bonus payable at
the discretion of the Company, which shall not be less than $40,000. In the
event of a change in control of the Company and the successor in control,
without cause, terminates the agreement, Mr. Wildman will be paid a lump sum
equal to 12 months base salary or an amount equal to his base salary for the
balance of the two-year term, whichever is greater, and the greater of the
average of the bonuses, if any, paid by the Company to Mr. Wildman for the two
prior years and the bonus, if any, for the prior year. For purposes of the
agreement, if Mr. Wildman is constructively terminated by the successor in
control, the successor in control shall be deemed to have terminated Mr. Wildman
without cause. If a change in control of the Company were to occur on February
28, 1998 and Mr. Wildman were asked to leave the employ of the Company, Mr.
Wildman would be entitled to a payment of $300,000 under his employment
agreement. |
