<PAGE> 1
SCHEDULE 14A
(RULE 14A)
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:
<TABLE>
<S> <C>
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14A-6(E)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
PLANET HOLLYWOOD INTERNATIONAL, 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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(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:
<PAGE> 2
PLANET HOLLYWOOD INTERNATIONAL, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 16, 1997
To Our Stockholders:
The Annual Meeting of Stockholders of Planet Hollywood International, Inc.
(the "Company") will be held at the Omni Rosen Hotel, second floor, Signature II
Meeting Room, 9840 International Drive, Orlando, Florida 32819 on May 16, 1997
at 10:00 a.m. (local time) to consider and act upon the following matters which
are more fully described in the accompanying Proxy Statement:
1. The election of three directors (Class I directors) to the
Company's Board of Directors;
2. The approval of a proposal to amend the Company's 1995 Stock Award
and Incentive Plan to increase the number of shares available for grant to
6,000,000;
3. The approval of a proposal to adopt the Company's Employee Stock
Purchase Plan; and
4. Such other business as may properly come before the meeting or any
adjournment thereof.
Stockholders of record as of the close of business on April 4, 1997 will be
entitled to notice of and to vote at the meeting and any adjournment thereof.
The transfer books will not be closed.
The Board of Directors of the Company desires to have the maximum
representation at the meeting and respectfully requests that you date, execute
and promptly mail the enclosed proxy card in the enclosed postage-paid envelope.
By Order of the Board of Directors,
Scott E. Johnson, Secretary
Orlando, Florida
April 14, 1997
<PAGE> 3
PLANET HOLLYWOOD INTERNATIONAL, INC.
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
MAY 16, 1997
To Our Stockholders:
This Proxy Statement is furnished to stockholders of Planet Hollywood
International, Inc. (the "Company") for use at the Annual Meeting of
Stockholders to be held at 10:00 a.m. (local time) on May 16, 1997 (the "Annual
Meeting"), at the Omni Rosen Hotel, second floor, Signature II Meeting Room,
9840 International Drive, Orlando, Florida 32819 or at any postponements or
adjournments thereof for the purposes set forth in the accompanying Notice of
Annual Meeting of Stockholders. The approximate date on which this Proxy
Statement and the enclosed proxy card are first being sent to stockholders is
April 14, 1997.
The enclosed Proxy Statement and proxy is solicited on behalf of the Board
of Directors of the Company. Any stockholder giving a proxy has the right to
revoke it at any time prior to its exercise, either by delivering notice in
writing to the Secretary of the Company or by appearing and voting in person at
the Annual Meeting. Unless a contrary choice is indicated, all duly executed
proxies received by the Company will be voted:
1. For the election of the three nominees for Class I director;
2. For the proposal to amend the Company's 1995 Stock Award and
Incentive Plan to increase the number of shares available for grant to
6,000,000;
3. For the proposed adoption of the Company's Employee Stock Purchase
Plan; and
4. In the discretion of the proxy holder with respect to such other
business as may properly come before the Annual Meeting or any adjournment
thereof.
At the Annual Meeting, the results of stockholder voting will be tabulated
by an inspector of elections appointed for the Annual Meeting.
VOTING SECURITIES
Stockholders of record as of the close of business on April 4, 1997 (the
"Record Date") are entitled to notice of, and to vote at, the Annual Meeting and
any adjournments or postponements thereof. On that date there were outstanding
95,942,563 shares of Class A Common Stock, par value $0.01 per share ("Common
Stock"). Each share of Common Stock is entitled to one vote on all matters to
come before the Annual Meeting. Shares of Common Stock cannot be voted at the
Annual Meeting unless the holder is present in person or represented by proxy.
The presence, in person or by proxy, of a majority of stockholders is necessary
to constitute a quorum at the Annual Meeting. The affirmative vote of holders of
a majority of the shares of Common Stock represented in person or by proxy at
the Annual Meeting is required to elect directors.
1
<PAGE> 4
BENEFICIAL OWNERSHIP OF SECURITIES
The following table sets forth information regarding the ownership of the
Company's Class A Common Stock on March 13, 1997, by (i) each person known by
the Company to be the beneficial owner of more than 5% of the outstanding shares
of Class A Common Stock; (ii) each director and nominee to the Board of
Directors; (iii) each of the Named Executives (as defined below -- see
"Executive Compensation"); and (iv) directors and Named Executives of the
Company as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME OF BENEFICIAL OWNERSHIP OF PERCENT OF
BENEFICIAL OWNER CLASS A COMMON STOCK(A) CLASS(%)(A)
---------------- ----------------------- -----------
<S> <C> <C>
Keith Barish(b)............................................ 22,278,896 23.22
Robert Earl(c)(d).......................................... 23,304,763 24.29
Thomas Avallone(c)(e)...................................... 202,011 *
Scott E. Johnson(c)........................................ 50,125 *
Daniel Harf(c)............................................. 50,000 *
Ong Beng Seng(f)(g)........................................ 22,650,335 23.61
Robert Krasnow(h).......................................... 55,556 *
Claudio Gonzalez(i)........................................ 27,778 *
Michael Tarnopol(j)........................................ 10,000 *
Mark McCormack(k).......................................... -- --
Isadore Sharp(l)........................................... -- --
All directors and Named Executives as a group (11
persons)................................................. 68,629,464 71.53
Leisure Ventures, Pte., Ltd.(f)............................ 22,650,335 23.61
</TABLE>
- ---------------
* Represents holdings of less than one percent (1%).
(a) Does not include or account for 11,764,144 shares of non-voting Class B
Common Stock outstanding.
(b) The address for Mr. Barish is c/o Planet Hollywood International, Inc., 140
W. 57th Street, New York, N.Y. 10019.
(c) The address for each of these beneficial owners is c/o Planet Hollywood
International, Inc., 7380 Sand Lake Road, Suite 650, Orlando, Florida 32819.
(d) Mr. Earl's shares are held of record by Ropat Limited Partnership, a Nevada
limited partnership ("Ropat L.P."), in which Ropat, Inc., a Nevada
corporation wholly owned by a Revocable Intervivos Trust for the benefit of
Mr. Earl, is the 1% general partner and such trust is the 99% limited
partner. Includes 38,500 shares held by Shakespeare's Tavern & Playhouse
(London) SARP, a United Kingdom pension scheme, as to which Mr. Earl is the
beneficiary. Includes 390,000 shares held by Celebrity Consultants, LTD, the
trustee of a trust, the beneficiaries of which are the children of Mr. Earl,
as to which Mr. Earl disclaims beneficial ownership.
(e) Mr. Avallone's shares are held of record by Avallone Worldwide Enterprises
Limited Partnership, a Nevada Limited partnership, in which Avallone
Worldwide Enterprises, Inc., a Nevada corporation wholly owned by Mr.
Avallone, is the 1% general partner and Mr. Avallone, jointly with his
spouse, is the 99% limited partner.
(f) Excludes 300,000 shares beneficially owned by certain employees of Leisure
Ventures Pte., Ltd. ("LV"), formerly Planet Hollywood Holdings Pte., Ltd.,
as to which LV and Mr. Ong disclaim any beneficial ownership. LV is a
private Singapore company that is 50% owned by Mr. Ong and 50% owned by HPL,
a public Singapore company of which Mr. Ong is the largest stockholder. Each
of Mr. Ong and HPL disclaims beneficial ownership of such shares. The
address for LV is c/o Kuo Investments Company, 767 Third Avenue, 33rd Floor,
New York, N.Y. 10017.
(g) The shares listed for Mr. Ong are owned of record by LV. The address for Mr.
Ong is c/o Kuo Investments Company, 767 Third Avenue, New York, N.Y. 10017.
(h) The address for Mr. Krasnow is c/o Krasnow Entertainment, 1755 Broadway, New
York, N.Y. 10019.
(i) The address for Mr. Gonzalez is c/o Kimberly Clark de Mexico, Hose Luis
Lagrange, No. 103, 3rd Floor, Colonia, Los Morales, 11510 Mexico, D.F.
(j) The address for Mr. Tarnopol is c/o Bear, Stearns & Co., Inc., 245 Park
Avenue, New York, NY 10167.
2
<PAGE> 5
(k) The address for Mr. McCormack is c/o International Management Group, 1
Erieview Plaza, Suite 1300, Cleveland, Ohio 44114.
(l) The address for Mr. Sharp is Four Seasons/Regent Hotels and Resorts, 1165
Leslie Street, Don Mills, Ontario, Canada M3C 2K8.
PROPOSAL NO. 1: ELECTION OF DIRECTORS
Pursuant to the Restated Certificate of Incorporation and Bylaws of the
Company, the Board of Directors is divided into three classes of directors,
denoted as Class I, Class II and Class III, serving staggered three-year terms
with one class of the Board of Directors elected each year. The Class I
directors are Messrs. Avallone, McCormack and Sharp, the Class II directors are
Messrs. Gonzalez, Krasnow and Ong and the Class III directors are Messrs.
Barish, Earl and Tarnopol. The initial terms of the Class I, Class II and Class
III directors will expire at the annual meeting of the stockholders of the
Company in 1997, 1998 and 1999, respectively.
At the 1997 Annual Meeting, three directors (the Class I directors) are to
be elected to serve a three-year term or until their successors have been duly
elected and qualified. Set forth below are the names of, and certain information
with respect to, the persons nominated by the Board of Directors for election as
directors. It is intended that all duly executed proxies in the accompanying
form will be voted for the election of such nominees, unless such authorization
has been withheld.
Authority granted to the persons named in the proxy to vote for nominees is
limited to the three nominees proposed by the Board of Directors and named
below, and proxies cannot be voted for a greater number of persons than the
number of nominees named. The Board of Directors is not aware that any of the
nominees will be unavailable for service at the date of the Annual Meeting. If,
for any reason, any of the nominees shall become unavailable for election, an
event which is not presently anticipated, discretionary authority may be
exercised by the persons named in the proxy to vote for substitute nominees
proposed by the Board of Directors.
Information with respect to the nominees for election to the Board of
Directors, furnished in part by each such person, is as follows:
<TABLE>
<CAPTION>
NAME, AGE AND POSITION WITH THE
COMPANY OTHER THAN DIRECTOR OCCUPATION AND OTHER INFORMATION
- ------------------------------------------ --------------------------------
<S> <C>
Thomas Avallone, 38....................... Mr. Avallone, Executive Vice President, Chief Financial
Executive Vice President Officer and director of the Company, has been involved
and Chief Financial Officer in the entertainment theme restaurant industry for
over 15 years. From July 1987 until joining the
Company in September 1994, Mr. Avallone served as
Chief Financial Officer of Hard Rock Cafe and Rank
Leisure USA. He has been a director of the Company
since February 1996. Prior to serving in those
positions, Mr. Avallone, a certified public
accountant, was a Senior Manager at Laventhol and
Horwath CPAs, a public accounting firm, specializing
in that firm's leisure industry practice.
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
NAME, AGE AND POSITION WITH THE
COMPANY OTHER THAN DIRECTOR OCCUPATION AND OTHER INFORMATION
- ------------------------------------------ --------------------------------
<S> <C>
Mark McCormack, 66........................ Mr. McCormack has been a director of the Company since
June 1996. Mr. McCormack is the Chairman and Chief
Executive Officer of the Cleveland-based sports and
entertainment conglomerate known as International
Management Group ("IMG"), which he founded in 1965.
Mr. McCormack has also authored a number of
best-selling business and management books.
Isadore Sharp, 65......................... Mr. Sharp has been a director of the Company since
February 1996. In 1961, Mr. Sharp founded Four Seasons
Hotels, Inc., and is currently its Chairman and Chief
Executive Officer. Mr. Sharp has also been a director
of the Bank of Nova Scotia since 1990 and a director
of the Bank of Nova Scotia Trust Co. since 1992.
</TABLE>
Information with respect to all other Directors of the Company, furnished
in part by each such person, is as follows:
<TABLE>
<CAPTION>
NAME, AGE AND POSITION WITH THE
COMPANY OTHER THAN DIRECTOR OCCUPATION AND OTHER INFORMATION
- ------------------------------------------ --------------------------------
<S> <C>
Keith Barish, 52.......................... Mr. Barish is the co-founder of the Company and a movie
Chairman of the Board of Directors producer who has been instrumental in securing the
support of many of the Company's celebrity
stockholders. Mr. Barish continues to provide a
crucial link between the entertainment world and the
Company. Since 1979, Mr. Barish has been the producer
or executive producer of 18 motion pictures, including
The Fugitive, Ironweed, The Running Man, Sophie's
Choice and 9 1/2 Weeks. In 1987, Mr. Barish was
honored as Producer of the Year by the National
Association of Theater Owners. Mr. Barish has been
Chairman of the Company since its inception and has
been a director of the Company since its organization,
his term as director to end in 1999.
Robert Earl, 45........................... Mr. Earl co-founded the Company with Mr. Barish in 1991
President, Chief Executive Officer and has over 23 years experience in the restaurant
industry. In 1977, Mr. Earl founded President
Entertainment, a company that developed theme
restaurants. Under Mr. Earl's leadership, over the
next ten years, President Entertainment grew to a $120
million enterprise. In 1988, Mr. Earl sold President
Entertainment to Pleasurama plc ("Pleasurama") and
joined the Pleasurama management team, where he
assumed responsibility for the management of another
theme restaurant, Hard Rock Cafe International plc
("Hard Rock Cafe"). During his five years in charge of
Hard Rock Cafe, Mr. Earl pioneered its expansion from
seven to twenty-two units while substantially
increasing its profitability. In 1993, Mr. Earl
resigned from Hard Rock Cafe to concentrate full time
on running the Company. He has been President and
Chief Executive Officer of the Company since its
inception and a director of the Company since its
organization, his term as director to end in 1999.
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
NAME, AGE AND POSITION WITH THE
COMPANY OTHER THAN DIRECTOR OCCUPATION AND OTHER INFORMATION
- ------------------------------------------ --------------------------------
<S> <C>
Mr. Gonzalez has been a director of the Company since
Claudio Gonzalez, 63...................... June 1996, his term as director to end in 1998. Mr.
Gonzalez has been the Chairman and Chief Executive
Officer of Kimberly Clark de Mexico since 1973. Mr.
Gonzalez is also currently a member of the Board of
Directors of Kimberly Clark Corporation, Kellogg
Company, General Electric Company, Chemical Bank
Advisory Board, Banco Nacional de Mexico, IBM World
Trade Latin America, Grupo Carso, Grupo Industrial
Alfa, Impulsora del Fondo Mexico, Telefonos de Mexico,
Stanford University Graduate School of Business
Advisory Council and Grupo Modelo.
Robert Krasnow, 61........................ Mr. Krasnow has been a director of the Company since
February 1996, his term as director to end in 1998. Mr.
Krasnow has worked in the music and entertainment
industry for over 35 years. Mr. Krasnow is the
President of Krasnow Entertainment, which he founded
in 1994. From 1983 to 1994, Mr. Krasnow was Chairman
and Chief Executive Officer of Elektra Records, an
affiliate of Time Warner Corporation.
Ong Beng Seng, 51......................... Mr. Ong has been a director of the Company since
February 1996, his term as director to end in 1998. He
is a co-founder and has been a Managing Director since
1980 of Hotel Properties Limited ("HPL"), a Singapore
public-listed company. HPL has diversified interests
in the hotel, leisure and retail industries spanning
Asia, Europe and North America. Mr. Ong also has
personal diversified interests ranging from the oil,
stockbrokering and automotive industries to art and
concert promotion.
Michael Tarnopol, 60...................... Mr. Tarnopol has been a director of the Company since
June 1996, his term to end in 1999. Mr. Tarnopol has
been a Senior Managing Director and Chairman of the
Investment Banking Division of Bear, Stearns & Co.,
Inc. ("Bear Stearns") since 1988. Mr. Tarnopol joined
Bear Stearns in 1975 and headed the firms'
International Department from 1975 until 1985, at
which time he was appointed head of the Mergers &
Acquisitions Department of Bear Stearns. He is Vice
Chairman of the Board of Directors of The Bear Stearns
Companies and Chairman of Bear Stearns International,
Ltd. He is a Trustee of the University of Pennsylvania
and a member of the Board of Overseers of the Wharton
School of Business.
</TABLE>
5
<PAGE> 8
INFORMATION RELATING TO THE BOARD OF DIRECTORS
AND CERTAIN COMMITTEES OF THE BOARD
The Board of Directors held three meetings during 1996. Other than Messrs.
Gonzalez and Ong, each director attended each of the three Board meetings. Mr.
Ong did not attend one of the three Board meetings and Mr. Gonzalez did not
attend one of the two Board meetings which took place during the time he was a
director of the Company.
The Board of Directors has an Audit Committee, a Compensation Committee and
a Stock Option Committee. The general functions of such committees, the identity
of each committee member and the number of committee meetings held by each
committee during 1996 are set forth below.
AUDIT COMMITTEE
The current members of the Audit Committee are Messrs. Gonzalez, Krasnow,
Ong and Tarnopol. The general functions of the Audit Committee include making
recommendations to the Board regarding the independent auditors, reviewing the
independence of such auditors, approving the scope of the annual activities of
the independent auditors and reviewing audit results. The Audit Committee held
one meeting during 1996. Messrs. Gonzalez and Ong did not attend the meeting.
COMPENSATION COMMITTEE
The current members of the Compensation Committee are Messrs. Earl, Krasnow
and Sharp. Mr. Earl is employed by the Company and serves as its President and
Chief Executive Officer. The general functions of the Compensation Committee
include recommending compensation plans and arrangements with respect to certain
of the Company's executive officers. The Compensation Committee held one meeting
during 1996, at which all members were present.
STOCK OPTION COMMITTEE
The current members of the Stock Option Committee are Mr. Barish and Mr.
Earl. The general functions of the Stock Option Committee include administering
certain benefit plans for employees and other persons associated with the
Company, including the Employee Plan and the Celebrity Plan (defined below --
see "Stock Incentive Plans"). Mr. Barish and Mr. Earl are not entitled to
receive options under either of these plans. The Stock Option Committee held no
meetings in 1996 and took all action by written consent.
6
<PAGE> 9
EXECUTIVE OFFICERS
WHO DO NOT SERVE AS DIRECTORS
Scott E. Johnson, 40
Senior Vice President, General
Counsel and Secretary.......... Mr. Johnson has been Vice President,
General Counsel and Secretary of the
Company since joining the Company in
March 1994. In February 1997, Mr. Johnson
became Senior Vice President of the
Company. From January 1992 to March 1994,
Mr. Johnson was engaged in the private
practice of law. From May 1990 through
January 1992, Mr. Johnson was Senior Vice
President and General Counsel of
Financial Benefit Life Insurance Company,
having previously served as Deputy
General Counsel of Independence Blue
Cross (formerly, Blue Cross of Greater
Philadelphia).
Daniel Harf, 38
Vice President of Operations... Mr. Harf has been Vice President of
Operations for the Company since joining
the Company in October 1991 and has over
ten years' experience in the
theme-restaurant industry. From January
1989 to October 1991, Mr. Harf was Vice
President of Human Resources and a
Regional Director of Hard Rock Cafe.
Prior to joining Hard Rock Cafe, Mr. Harf
owned and operated theme restaurants and
nightclubs in California.
EXECUTIVE COMPENSATION
The following table sets forth certain compensation awarded to, earned by
or paid to the Chief Executive Officer, each of the other four most highly
compensated executive officers of the Company serving as executive officers at
the end of the 1996 fiscal year (collectively, the "Named Executives") and an
additional individual whom would have been included as one of such four
individuals but for the fact that he was not serving as an executive officer of
the Company at the end of the 1996 fiscal year, for services rendered in all
capacities to the Company during fiscal years 1995 and 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
---------------------------------
ANNUAL COMPENSATION AWARDS
-------------------------- -----------------------
OTHER SECURITIES PAYOUTS
ANNUAL RESTRICTED UNDERLYING -------
ANNUAL ANNUAL COMPEN- STOCK OPTIONS/ LTIP ALL OTHER
NAME AND FISCAL SALARY BONUS SATION AWARDS SARS(A) PAYOUTS COMPENSATION
PRINCIPAL POSITION(S) YEAR ($) ($) ($) ($) (#) ($) ($)
--------------------- ------ ------- ------ ------- ---------- ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Robert Earl, 1995 500,000 -- -- -- -- -- --
President and 1996 500,000 -- 9,972 -- -- -- --
Chief Executive Officer
Keith Barish, 1995 500,000 -- -- -- -- -- --
Chairman of the Board 1996 500,000 -- 9,950 -- -- -- --
Thomas Avallone, 1995 206,437 50,000 9,278 -- 5,333 -- --
Executive Vice President and 1996 240,000 -- 7,926 -- 62,000 -- --
Chief Financial Officer(b)
Scott E. Johnson, 1995 129,350 20,000 -- -- 5,333 -- 7,933(c)
Senior Vice President, 1996 160,888 -- 6,227 -- 41,000 -- --
General Counsel and Secretary(b)
Daniel Harf, 1995 165,615 65,000 8,570 -- -- -- --
Vice President of Operations 1996 170,000 -- 1,039 -- 50,000 -- --
John Thall, 1995 138,000 65,000 1,450 -- 5,333 -- --
Vice President of 1996 138,462 14,174 1,142 -- -- -- --
Corporate Operations(d)
</TABLE>
7
<PAGE> 10
- ---------------
(a) See discussion of "Stock Incentive Plans" below.
(b) In fiscal 1995, although Messrs. Avallone and Johnson were executive
officers of the Company, they were not employees of the Company but rather
of Orlando Corporate Services, Inc. ("OCS"), a company wholly owned by Mr.
Earl. The amounts shown above reflect compensation paid by OCS to Messrs.
Avallone and Johnson for the work they performed for the Company and its
consolidated subsidiaries in fiscal 1995, which amounts were reimbursed to
OCS by the Company.
(c) All Other Compensation for Mr. Johnson consists primarily of relocation
expenses.
(d) As of December 29, 1996, Mr. Thall was no longer employed by the Company.
STOCK INCENTIVE PLANS
The First Amended and Restated Planet Hollywood International, Inc. 1995
Stock Award and Incentive Plan (the "Employee Plan") and the First Amended and
Restated Planet Hollywood International, Inc. 1995 Celebrity Stock Award and
Incentive Plan (the "Celebrity Plan") (collectively, the "Plans") are designed
to give certain selected directors, employees and independent contractors of the
Company a continuing proprietary interest in the success of the Company.
Currently, a maximum of 5,000,000 shares of Class A Common Stock may be issued
under the Employee Plan (see Proposal No. 2 below) and a maximum of 6,000,000
shares of Class A Common Stock may be issued under the Celebrity Plan, subject
to adjustment as described below.
The Plans are administered by the Stock Option Committee. See "Information
Relating to the Board of Directors and Certain Committees of the Board" above.
The Stock Option Committee will have full authority, subject to the provisions
of the Plans, to determine, among other things, the persons to whom awards under
the Plans ("Awards") will be made, the exercise price, vesting, size and form of
payment of such Awards, and the specific performance goals (in the case of the
Employee Plan), restrictions on transfer and circumstances for forfeiture
applicable to Awards.
Awards under the Employee Plan may be made to directors, officers and
employees of the Company and its Subsidiaries (other than to Messrs. Barish and
Earl) and to persons or companies acting as independent contractors, and Awards
under the Celebrity Plan may be granted to celebrities or other independent
contractors of the Company and its Subsidiaries. A variety of Awards may be
granted under both Plans, including stock options, stock appreciation rights
("SARs"), restricted stock awards, restricted stock units, dividend equivalents,
as well as other stock-based or cash-based awards as the Stock Option Committee
deems consistent with the purposes of the two Plans. Stock options granted under
the Employee Plan may be either "incentive stock options" (as such term is
defined in Section 422 of the Internal Revenue Code of 1986, as amended, or
non-qualified stock options. Recipients of options under the Plans will not be
deemed stockholders with respect to shares purchasable upon exercise of such
options prior to the exercise thereof. Unexercised options and SARs granted
pursuant to either of the Plans shall be canceled upon the termination of a
recipient's employment or independent contractor relationship for cause, and
restricted stock is subject to forfeiture upon termination of the recipient's
relationship with the Company.
In the event of a "change of control" of the Company (as defined in the
Plans), (i) all outstanding options and freestanding SARs granted under either
of the Plans will become immediately exercisable in full (ii) any performance
conditions imposed with respect to outstanding Awards shall be deemed to be
fully achieved and a pro rata portion of each such outstanding Award granted for
all outstanding performance periods shall become payable in cash, with the
remainder of such Award being canceled for no value and (iii) all restrictions
applicable to any other Award granted under either of the Plans will lapse and
such Awards will become fully vested and nonforfeitable. The Stock Option
Committee may make equitable adjustments in the number and kind of shares
issuable under, and the exercise price relating to, Awards as the Stock Option
Committee may deem necessary to prevent dilution or enlargement of the rights of
participants under the Plans as a result of changes in the Company's corporate
structure or capitalization.
Pursuant to the Employee Plan, as of December 29, 1996, approximately 800
non-employee directors, employees and independent contractors held options (the
"Options") to purchase a total of 3,741,315 shares of Class A Common Stock
(after taking into account Options that have been canceled). Options to purchase
a total of 2,904,564 shares of Class A Common Stock were granted in fiscal 1996
and options to purchase a total
8
<PAGE> 11
of 836,751 shares of Class A Common Stock were granted in fiscal 1995. The
Options generally vest over three years and have a five year exercisable period.
The exercise prices for the Options granted in fiscal 1996 range from $14.00 per
share to $21.63 per share. The exercise price for the Options granted in fiscal
1995 is $7.88 per share. Of those Options granted in fiscal 1996, Options to
purchase a total of 733,500 shares of Class A Common Stock were repriced by the
Stock Option Committee from $22.63 per share to $19.00 per share. The Options
will generally remain exercisable after the termination of a recipient's
employment or independent contractor relationship with the Company as follows:
(i) in the event of the recipient's disability or retirement (in the case of
employees), the Options that are vested as of such time will remain exercisable
for a period of one year, (ii) in the event of the recipient's death, the vested
Options will remain exercisable for one year and the unvested portion of the
Award will vest at the time of death; (iii) in the event of termination for
cause, all the Options will be canceled; and (iv) in the event of termination
for any other reason, the vested Options will be exercisable for three months
and the unvested portion of the Award will be canceled. In addition, the Options
cannot be transferred by the recipient to any third party (except upon the
recipient's death).
Pursuant to the Celebrity Plan, as of December 29, 1996, 36 celebrities
held options to purchase a total of 4,095,000 shares of Class A Common Stock
(after taking into account Options that have been canceled). Options to purchase
a total of 1,895,000 shares of Class A Common Stock were granted in fiscal 1996
and Options to purchase a total of 2,200,000 shares of Class A Common Stock were
granted in fiscal 1995. The exercise prices for those Options granted in fiscal
1996 range from $14.00 per share to $24.00 per share. The exercise price for
those Options granted in fiscal 1995 is $7.88 per share. The celebrity Options
are subject to the same terms as the Options issued under the Employee Plan
(described above) with respect to vesting schedule and restrictions on transfer.
In addition, the celebrity Options will generally remain exercisable after the
termination of the recipient's relationship with the Company as follows: (i) in
the event of the recipient's disability, the Options that are vested as of such
time will be exercisable for a period of one year, (ii) in the event of the
recipient's death, the vested Options will remain exercisable for one year and
the unvested portion of the Award will vest at that time; and (iii) in the event
of termination for any reason other than death or disability, the vested Options
will be exercisable for three months and the unvested portion of the Award will
be canceled.
OPTION/SAR GRANTS TABLE
The following table sets forth all grants in fiscal 1996 of stock options
and SARs to the executive officers named in the summary compensation table
above.
OPTION/SAR GRANTS IN FISCAL 1996
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------------ POTENTIAL REALIZABLE VALUE
NUMBER OF PERCENT OF TOTAL AT ASSUMED ANNUAL RATES OF
SECURITIES OPTIONS/SARS STOCK PRICE APPRECIATION FOR
UNDERLYING GRANTED TO OPTION TERM
OPTIONS/ EMPLOYEES IN EXERCISE OR ----------------------------
SARS FISCAL YEAR BASE PRICE EXPIRATION 5% 10%
NAME GRANTED(#) (%) ($/SHARE) DATE ($) ($)
---- ---------- ---------------- ----------- -------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Robert Earl............. -- -- -- -- -- --
Keith Barish............ -- -- -- -- -- --
Thomas Avallone......... 20,000 * 19.00 July 22, 2001 104,986 231,994
42,000 1.45 21.63 Dec. 9, 2001 250,989 554,624
Scott E. Johnson........ 20,000 * 19.00 July 22, 2001 104,986 231,994
21,000 * 21.63 Dec. 9, 2001 125,495 277,312
Daniel Harf............. 50,000 1.72 19.00 Oct. 19, 2001 262,466 579,985
John Thall.............. -- -- -- -- -- --
</TABLE>
- ---------------
* Represents less than one percent (1%)
9
<PAGE> 12
COMPENSATION OF DIRECTORS
Directors who are not compensated as officers of the Company receive
$20,000 in annual fees, with an additional $1,000 payment for each Board meeting
attended and a $500 payment for each Committee meeting. Directors who are
compensated as Company employees receive no additional compensation for service
as a director. The Company will also reimburse each director for reasonable
out-of-pocket expenses incurred in attending meetings of the Board of Directors
and its committees. All directors, except Messrs. Earl and Barish, are eligible
to receive stock options. See "Stock Incentive Plans" above. In fiscal 1996, the
following directors (other than those named above) received stock options:
OPTION/SAR GRANTS IN FISCAL 1996
<TABLE>
<CAPTION>
NUMBER OF SECURITIES EXERCISE OR
UNDERLYING OPTIONS/ BASE PRICE
NAME SARS GRANTED(#) ($/SHARE) EXPIRATION DATE
---- -------------------- ----------- ---------------
<S> <C> <C> <C>
Claudio Gonzalez................................... 50,000 15.00 Apr. 15, 2001
Robert Krasnow..................................... 50,000 14.00 Mar. 21, 2001
50,000 21.63 Dec. 9, 2001
Mark McCormack(a).................................. 50,000 19.00 July 22, 2001
Michael Tarnopol(a)................................ 50,000 19.00 July 22, 2001
</TABLE>
- ---------------
(a) In July 1996 Messrs. McCormack and Tarnopol were each issued stock options
to purchase a total of 50,000 shares of Class A Common Stock at an exercise
price of $22.63 per share. In October 1996, the Stock Option Committee
repriced such options at the then current market price of $19.00.
10
<PAGE> 13
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
The Company is party to an employment agreement with Mr. Earl dated August
8, 1995 providing for his employment as President and Chief Executive Officer of
the Company and its significant subsidiaries and affiliates through December 31,
2001. The agreement provides for a base salary of $500,000 per year, to be
increased by 10% each January 1, beginning January 1, 1996, an annual incentive
bonus in the discretion of the Board of Directors of the Company, participation
in the Company's stock-based incentive compensation plan for executives and
employees and all benefits generally made available to executive officers of the
Company. The agreement further provides that Mr. Earl must devote substantially
all of his productive time and attention to the business of the Company and that
he may not own or participate in the activities of any competing business,
subject to certain exceptions. The Company has the right to terminate the
agreement without any further obligation in the event (i) Mr. Earl resigns from
the Company, (ii) he willfully breaches the agreement or (iii) he is convicted,
of or pleads guilty to, a felony involving moral turpitude or certain crimes
involving the Company's property. Mr. Earl is entitled to terminate the
agreement in the event he is not elected or retained in his present positions at
the Company or the Company materially reduces his responsibilities. In the case
of such termination, or if the agreement is terminated by the Company without
cause or upon Mr. Earl's death or disability, he will be entitled to receive the
remainder of his base salary and all other incentives. The agreement includes a
non-competition provision prohibiting Mr. Earl for a period of two years
following the termination of his employment with the Company in most
circumstances from working for any company that operates restaurants with a
movie, sports or action hero theme.
The Company is also party to an employment agreement with Mr. Barish dated
January 1, 1993 providing for his employment as Chairman of the Board of the
Company. The agreement has a current term of one year commencing January 1, 1997
and is automatically renewable each year unless either party gives notice of
non-renewal. The agreement provides for a base salary of $500,000, with
additional bonuses and any salary increases to be determined by the Board of
Directors, and for his participation in the Company's employee benefit plans.
The agreement may be terminated by the Company for cause in the event (i) Mr.
Barish is convicted of, or pleads guilty to, a crime involving moral turpitude
or certain other crimes involving the Company's property, (ii) he willfully
breaches the agreement or (iii) the Board of Directors determines that he has
materially failed to perform his duties or has engaged in material wrongful
conduct in connection with his employment. If the Company terminates the
agreement for any reason other than cause, Mr. Barish will be entitled to
continue to receive his salary for a two-year period at the rate in effect at
the time of termination. Mr. Barish is entitled to terminate the agreement in
the event of a material breach thereof by the Company after giving the Company
notice and an opportunity to cure the breach. In the case of such termination,
he will be entitled to receive his base salary in effect at that time for the
then remaining term of the agreement.
11
<PAGE> 14
REPORT ON REPRICING OF OPTIONS/SARS
In July 1996, Mr. Avallone and Mr. Johnson were issued stock options to
each purchase a total of 20,000 shares of Class A Common Stock at an exercise
price of $22.63 per share. In October 1996, the Stock Option Committee decided
to reprice such options granted to Messrs. Avallone and Johnson in order to
increase the incentive of Mr. Avallone and Mr. Johnson to increase stockholder
value. The options were repriced at the then current market price of $19.00. The
following table sets forth information regarding all such repricing of options
and SARs held by any executive officer since the Company became a reporting
company pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of
1934 ("Exchange Act").
<TABLE>
<CAPTION>
EXERCISE LENGTH OF
NUMBER OF MARKET PRICE PRICE AT ORIGINAL OPTION
SECURITIES OF STOCK AT TIME OF TERM
UNDERLYING TIME OF REPRICING NEW REMAINING AT
OPTIONS/SARS REPRICING OR OR EXERCISE DATE OF
REPRICING REPRICED OR AMENDMENT AMENDMENT PRICE REPRICING OR
NAME AND POSITION DATE AMENDED(#) ($) ($) ($) AMENDMENT
----------------- --------- ------------ ------------ --------- -------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Thomas Avallone............ 10/19/96 20,000 19.00 22.63 19.00 57 months
Scott E. Johnson........... 10/19/96 20,000 19.00 22.63 19.00 57 months
</TABLE>
/s/ ROBERT EARL
--------------------------------------
Robert Earl, Director
Stock Option Committee
/s/ KEITH BARISH
--------------------------------------
Keith Barish, Director
Stock Option Committee
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee, formed after the Company's initial public
offering in April 1996, did not adopt compensation policies applicable to the
Company's executive officers for 1996. The compensation in 1996 of Mr. Earl,
President and Chief Executive Officer, and Mr. Barish, Chairman of the Board,
was determined by their employment agreements which took effect January 1, 1996.
The compensation of the other executive officers in 1996 was determined by Mr.
Earl. The Compensation Committee intends to establish compensation policies
applicable to the Company's executive officers for 1997.
/s/ ROBERT EARL
--------------------------------------
Robert Earl, Director
Compensation Committee
/s/ ISADORE SHARP
--------------------------------------
Isadore Sharp, Director
Compensation Committee
/s/ ROBERT KRASNOW
--------------------------------------
Robert Krasnow, Director
Compensation Committee
12
<PAGE> 15
STOCKHOLDER RETURN PERFORMANCE GRAPH
The following line graph compares the total returns (assuming reinvestment
of dividends) of the Company's Class A Common Stock, the Nasdaq Composite Index,
the Russell 2000 Index and the Russell 2000 Consumer Discretionary and Services
Index for the period beginning on April 19, 1996 (the date of the Company's
initial public offering) and ending on December 29, 1996 (the close of the
Company's 1996 fiscal year). The graph assumes $100 invested on April 19, 1996
in the Company's Class A Common Stock (at the initial public offering price of
$18.00 per share) and each of the indices.
<TABLE>
<CAPTION>
Russell 2000
Planet Consumer
Hollywood Nasdaq Com- Discretionary
Measurement Period Common posite Index Russell 2000 and Services
(Fiscal Year Covered) Stock (1) Index (2) Index (3)
<S> <C> <C> <C> <C>
4/19/96 100.00 100.00 100.00 100.00
6/30/96 150.00 104.35 103.01 106.57
9/29/96 156.00 108.37 103.09 104.19
12/29/96 115.80 113.84 107.61 100.53
</TABLE>
- ---------------
(1) The Nasdaq Composite Index is a broad-based capitalization-weighted index of
all Nasdaq stocks.
(2) The Russell 2000 Index is comprised of the smallest 2,000 companies in the
Russell 3000 Index, representing approximately 11% of the Russell 3000 total
market capitalization.
(3) The Russell 2000 Consumer Discretionary and Services Index is a
capitalization-weighted index of companies that manufacture products and
provide discretionary services directly to the consumer.
The total percentage return for the Company's Class A Common Stock for the
period from April 19, 1996 to December 29, 1996 was approximately 15.80%. This
compares with the total percentage return for such period of the Nasdaq
Composite Index, which was approximately 13.84%; the Russell 2000 Index, which
was approximately 7.61%; and the Russell 2000 Consumer Discretionary & Services
Index, which was approximately 0.53%.
PROPOSAL NO. 2: APPROVAL OF AMENDED STOCK AWARD
AND INCENTIVE PLAN
The First Amended and Restated Planet Hollywood International, Inc. 1995
Stock Award and Incentive Plan (the "Employee Plan") was adopted by the Board of
Directors in October 1995, and adopted by the Company's stockholders in February
1996. The Employee Plan initially provided that 4,000,000 shares of Class A
Common Stock would be available for issuance upon the exercise of options, stock
appreciation rights and other stock-based awards. In October 1996, the Employee
Plan was amended by the Board of Directors to
13
<PAGE> 16
increase the maximum number of available shares to 5,000,000 shares of Class A
Common Stock, and was further amended in February 1997, subject to obtaining
stockholder approval, to increase the maximum number of available shares to
6,000,000 shares of Class A Common Stock.
Options to purchase 2,904,564 shares of the Company's Class A Common Stock
were granted under the Employee Plan during the fiscal year ended December 29,
1996 at exercise prices ranging from $14.00 to $21.63 per share. Of these
options granted, 153,000 were granted to the Company's Named Executives during
fiscal 1996. Option grants under the Employee Plan are made at the discretion of
the Stock Option Committee of the Board of Directors. Accordingly, future grants
under the Employee Plan are not yet determinable. As of December 29, 1996, a
total of 3,741,315 shares were subject to options outstanding under the Employee
Plan, leaving 1,258,685 shares of Class A Common Stock available for future
option grants under the Employee Plan. Due to the limited number of shares
remaining, on February 27, 1997, the Board of Directors amended the Employee
Plan, subject to stockholder approval, to increase the aggregate number of
shares of Class A Common Stock reserved for issuance under the Employee Plan by
1,000,000 shares from 5,000,000 shares to 6,000,000 shares.
The Board of Directors now seeks stockholder approval of the amendment to
the Employee Plan authorizing a total of 6,000,000 shares for future stock
option awards. The Board of Directors believes that approval of the amendment to
the Employee Plan to make available an adequate number of shares for the future
grant of stock options is in the best interests of the Company and its
stockholders because stock options serve to align the long-term interests of the
optionees and the stockholders and are an important factor in attracting,
motivating and retaining qualified personnel and key employees essential to the
success of the Company. Awards under the Employee Plan may be made to directors,
officers and employees of the Company (other than to Mr. Barish and Mr. Earl)
and to persons or companies acting as independent contractors. A variety of
Awards may be granted, including stock options, stock appreciation rights
("SARs"), restricted stock awards, restricted stock units, dividend equivalents,
as well as other stock-based or cash-based awards as the Stock Option Committee
deems consistent with the purposes of the Employee Plan.
If this proposal is adopted by the Company's stockholders, the first
sentence of section 5 of the Employee Plan will be changed to read as follows in
its entirety:
5. Stock Subject to the Plan; Limitation on Grants. The maximum
number of shares of Stock reserved for issuance pursuant to the Plan shall
be Six Million (6,000,000) shares, subject to the adjustment as provided
herein; provided, however, in the event the Board approves and effects a
stock split, then the maximum number of shares of Stock reserved for
issuance pursuant to the Plan shall, without any further action by the
Board or the Committee and without amendment to this Plan, be
correspondingly increased (in accordance with the terms of such split),
subject to adjustment as provided herein.
The Company will provide to any stockholder as of the record date, who so
requests in writing, copies of the Employee Plan, and if specifically requested,
any exhibits thereto. Requests for such copies should be directed to Scott E.
Johnson, Secretary, Planet Hollywood International, Inc., 7380 Sand Lake Road,
Suite 650, Orlando, Florida 32819.
VOTE REQUIRED FOR APPROVAL OF AMENDMENT OF FIRST AMENDED AND RESTATED PLANET
HOLLYWOOD INTERNATIONAL, INC. 1995 STOCK AWARD AND INCENTIVE PLAN
The affirmative vote of a majority of the shares of Common Stock having
voting power present in person or represented by proxy, a quorum being present,
is necessary to approve the Amendment to the Company's First Amended and
Restated 1995 Stock Award and Incentive Plan.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL NO. 2, THE AMENDMENT
TO INCREASE THE NUMBER OF SHARES OF CLASS A COMMON STOCK RESERVED FOR ISSUANCE
UNDER THE COMPANY'S FIRST AMENDED AND RESTATED 1995 STOCK AWARD AND INCENTIVE
PLAN TO 6,000,000.
14
<PAGE> 17
PROPOSAL NO. 3: APPROVAL OF THE PLANET HOLLYWOOD INTERNATIONAL, INC. EMPLOYEE
STOCK PURCHASE PLAN
In February 1997, the Board of Directors approved, and recommended that the
Company's stockholders approve, the Planet Hollywood International, Inc.
Employee Stock Purchase Plan (the "Purchase Plan"). The following is a general
summary of the Purchase Plan which is qualified in its entirety by reference to
the Purchase Plan, a copy of which is attached as Exhibit A.
SUMMARY OF THE PLAN
The Purchase Plan is intended to provide the employees of the Company and
its subsidiaries an opportunity to acquire a proprietary interest in the Company
through the purchase of shares of the Company's Class A Common Stock ("Common
Stock"), thereby encouraging employees to share in the economic growth and
success of the Company through stock ownership.
The Company has reserved 2,000,000 shares of Class A Common Stock for
offering to employees until such time as the 2,000,000 shares are no longer
available, in quarterly offerings of an amount calculated as set forth in the
Purchase Plan. The quarterly offerings shall commence on July 1, 1997 and
October 1, 1997, and on the first day of each January, April, July and October
thereafter until expiration or termination of the Purchase Plan. The Purchase
Plan is designed to meet the requirements of an "employee stock purchase plan"
within the meaning of the Internal Revenue Code of 1986, as amended (the
"Code").
All employees of the Company, other that those owning stock or outstanding
options representing 5% or more of the total combined voting power or value of
all classes of stock of the Company, who have completed a specified period of
employment and have met certain other requirements are eligible to participate
in the Purchase Plan. Employees who elect to participate in an offering may
utilize up to 10% of their Base Pay (as such term is defined in the Purchase
Plan) for the purchase of Common Stock through payroll deductions. No employee
may purchase, however, more than $25,000 in fair market value of the Company's
Common Stock under the Purchase Plan in any calendar year.
An employee who elects to participate in an offering will be deemed to have
exercised his option to purchase Common Stock with payroll deductions for the
purchase of that number of shares of Common Stock which the accumulated payroll
deduction at the end of the offering will purchase at the applicable purchase
price for the shares. The purchase price for the shares is the market value of
the shares on the applicable date multiplied by the Purchase Percentage, as set
forth in the Purchase Plan. The Purchase Plan currently provides that the
Purchase Percentage cannot be less than 95%, but such percentage may be reduced
to not less than 85% by subsequent action of the Board of Directors.
An employee may elect to terminate participation in the Purchase Plan upon
written notice to the Chief Financial Officer at any time prior to the end of
the offering. All of the employee's payroll deductions previously credited to
the employee's account will be paid to the participant promptly after receipt of
such notice of withdrawal, and no further payroll deductions will be made from
the participant's pay during that quarterly offering. An employee's withdrawal
from any quarterly offering will not affect the employee's eligibility to
participate in any succeeding quarterly offering. If any employee terminates
employment, including retirement, prior to the last day of the offering, all of
the employee's payroll deductions previously credited to the employee will be
promptly paid to the participant. If the employee's employment is terminated
because of death, the employee's beneficiary may withdraw all of the payroll
deductions credited to the employee or the beneficiary may choose to exercise
the employee's option for the number of full shares of Common Stock which the
accumulated payroll deductions in the employee's account at the date of the
employee's death will purchase, and any excess will be returned to the
beneficiary.
The Board of Directors of the Company has the right, at any time and from
time to time, to amend, in whole or in part, any of the terms and provisions of
the Purchase Plan. No amendment, however, may be made without the approval of
the stockholders of the Company to (i) increase the number of shares which may
be issued under any offering; (ii) amend the requirement as to the class of
employees eligible to purchase
15
<PAGE> 18
Common Stock under the Purchase Plan; or (iii) permit the members of the
Committee administering the Purchase Plan to purchase Common Stock under the
Purchase Plan.
The Board of Directors of the Company has the right at any time and for
whatever reason it may deem appropriate to terminate the Purchase Plan.
The Board of Directors shall appoint a committee (the "Committee") to
administer the Purchase Plan, which shall consist of two or more persons, each
of whom is a "disinterested person," appointed by the Board of Directors. The
Committee has plenary authority to administer the Purchase Plan, interpret and
construe all provisions of the Purchase Plan, adopt rules and regulations for
administering the Purchase Plan, and make all other determinations necessary or
advisable for administering the Purchase Plan.
As of March 1, 1997, approximately 3,000 employees would be eligible to
participate in the Purchase Plan.
FEDERAL INCOME TAX CONSEQUENCES
Under the Code, a participant will not realize any taxable income as a
result of participating in the Purchase Plan or upon the purchase of Common
Stock under the Purchase Plan. Instead, taxation is deferred until the
disposition of such Common Stock by the participant. The Company will not be
entitled to a deduction for income tax purposes as a result of any such
purchase. A participant will be taxed on amounts withheld from his salary under
the Purchase Plan as if the salary was actually received by the employee. The
Company will receive a deduction for such amounts. The participant's basis for
gain or loss will equal the amount paid for such shares.
If a participant disposes of shares purchased under the Purchase Plan more
than two years after the date of grant (the first day of the relevant offering
period) and one year after the shares are issued to the participant, and the
fair market value of the shares at the time of disposition exceeds the purchase
price of the shares, then the participant will realize taxable income. An amount
equal to the lesser of (a) the amount by which the fair market value of the
shares on the first day of the offering period for the shares exceeded the
purchase price of the shares, or (b) the amount by which the fair market value
of the shares at the time of disposition exceeded the purchase price of the
shares, will be taxed as ordinary income. Any gain realized in excess of the
amount taxed as ordinary income will be taxed as long-term capital gain. If a
participant disposes of shares for less than the purchase price of the shares,
then the entire loss will be treated as a long-term capital loss. In either of
these cases, the Company will not be entitled to a deduction for income tax
purposes.
If a participant disposes of shares purchased under the Purchase Plan
within two years after the date of grant or within one year after the shares are
issued to the participant (a "disqualifying disposition"), the amount by which
the fair market value of the shares at the time of purchase exceeded the
purchase price of the shares will be treated as ordinary income in the nature of
compensation received by the participant in the year of the disqualifying
disposition. The Company will be entitled to a corresponding income tax
deduction equal to the amount treated as compensation to the participant. Any
amount realized in excess of the sum of the purchase price of the shares and the
amount treated as compensation will be taxed as a capital gain. If the amount
realized is less than the sum of the purchase price of the shares and the amount
treated as compensation, the difference will be treated as a capital loss. Any
capital gain or loss will be classified as long-term or short-term, depending on
the participant's holding period with respect to the shares. Generally, the
participant's holding period for the shares begins on the date the shares are
purchased.
THE VOTE REQUIRED FOR APPROVAL OF THE PLANET HOLLYWOOD INTERNATIONAL, INC.
EMPLOYEE STOCK PURCHASE PLAN
The affirmative vote of a majority of the shares of Common Stock having
voting power present in person or represented by proxy, a quorum being present,
is necessary to approve the Company's Employee Stock Purchase Plan.
16
<PAGE> 19
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL NO. 3, THE APPROVAL
OF THE PLANET HOLLYWOOD INTERNATIONAL, INC. EMPLOYEE STOCK PURCHASE PLAN
ATTACHED AS EXHIBIT A.
INDEPENDENT AUDITORS
The Audit Committee of the Board of Directors recommended and the Board has
selected the firm of Price Waterhouse LLP to continue as the Company's
independent public accountants for the current fiscal year. A representative of
Price Waterhouse is expected to attend the Annual Meeting to respond to
questions and will be given the opportunity to make a statement should the
representative desire to do so.
OTHER BUSINESS
Management knows of no other business to be presented for action at the
meeting. If other matters properly come before the meeting or any adjournment
thereof, the persons named as proxies will vote upon them in accordance with
their best judgment.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company is required to identify any director, officer, beneficial owner
of more than ten percent of Common Stock or any other person subject to Section
16 of the Exchange Act that failed to file on a timely basis, as disclosed in
their forms, reports required by Section 16(a) of the Exchange Act. Based on a
review of the forms submitted to the Company, the Company believes that during
the 1996 fiscal year three directors did not file certain reports on a timely
basis. Messrs. Sharp and Krasnow were named as directors of the Company in
February 1996 and accordingly became subject to Section 16 of the Exchange Act
upon the Company's initial public offering in April 1996. Mr. McCormack was
named a director of the Company in June 1996 and accordingly became subject to
Section 16 of the Exchange Act at such time. Messrs. Sharp and Krasnow each
inadvertently filed one late report with respect to single transactions
involving the issuance of certain options to each of them (amended reports were
filed within 30 days of the date of original filing). Mr. McCormack may have
inadvertently filed two late reports with respect to two transactions involving
his indirect beneficial ownership of certain restricted shares of the Company's
non-voting Class B Common Stock owned by two companies within the IMG group of
companies, which group is indirectly controlled by Mr. McCormack. The Company
believes that all other reports were filed as required.
EXPENSE OF SOLICITATION
The cost of this solicitation, estimated to be $20,000, will be borne by
the Company. In addition to the use of the mail, proxy solicitation may be made
by telephone, telegraph and personal interviews by regular employees of the
Company.
STOCKHOLDER PROPOSALS FOR THE 1998 ANNUAL MEETING
The 1998 Annual Meeting of Stockholders is expected to be held in May of
1998. Accordingly, the date by which stockholder proposals for inclusion in the
proxy materials relating to the next Annual Meeting of Stockholders must be
received by the Company at its principal executive offices, Attention Scott E.
Johnson, Secretary, Planet Hollywood International, Inc., 7380 Sand Lake Road,
Suite 650, Orlando, Florida 32819, is December 8, 1997.
17
<PAGE> 20
ANNUAL REPORT
A copy of the Company's Annual Report for 1996, which contains the
consolidated financial statements of the Company, accompanies this proxy
statement. The Company will provide to any stockholder as of the record date,
who so requests in writing, copies of its Form 10-K, and if specifically
requested, the exhibits thereto. Requests for such copies should be directed to
Scott E. Johnson, Secretary, Planet Hollywood International, Inc., 7380 Sand
Lake Road, Suite 650, Orlando, Florida 32819.
By Order of the Board of Directors,
Scott E. Johnson, Secretary
Orlando, Florida
April 14, 1997
PLEASE DATE AND SIGN THE
PROXY CARD AND RETURN IT PROMPTLY
USING THE ENCLOSED RETURN ENVELOPE
18
<PAGE> 21
EXHIBIT A
PLANET HOLLYWOOD INTERNATIONAL, INC.
EMPLOYEE STOCK PURCHASE PLAN
ARTICLE I
PURPOSE
1.01 Purpose
The Planet Hollywood International, Inc. Employee Stock Purchase Plan (the
"Plan") is intended to provide a method whereby Employees of Planet Hollywood
International, Inc. (the "Plan Sponsor") and Participating Corporations
(hereinafter both referred to unless the context otherwise requires, as the
"Company") will have an opportunity to acquire a proprietary interest in the
Plan Sponsor through the purchase of shares of the Class A Common Stock, par
value $.01 (the "Common Stock") of the Plan Sponsor. It is the intention of the
Company to have the Plan qualify as an "employee stock purchase plan" under
sec. 423 of the Internal Revenue Code of 1986, as amended (the "Code"). The
provisions of the Plan shall be construed so as to extend and limit
participation in a manner consistent with the requirements of that section of
the Code.
ARTICLE II
DEFINITIONS
2.01 Base Pay
"Base Pay" shall mean regular straight-time earnings and salary excluding
payments for overtime, bonuses, commissions, marketing incentive payments and
other special payments.
2.02 Board of Directors
"Board of Directors" shall mean the Board of Directors of Planet Hollywood
International, Inc.
2.03. Committee
"Committee" shall mean the individuals appointed by the Board of Directors
as described in Article XI.
2.04 Employee
"Employee" means any person who is customarily employed on a full-time or
part-time basis by the Company.
2.05 Offering
"Offering" means the grant of options by the Company to eligible Employees
to purchase Common Stock pursuant to this Plan.
2.06 Offering Period
"Offering Period" means the three (3) month period commencing on the
Offering Commencement Date and ending on the next following Offering Termination
Date.
A-1
<PAGE> 22
2.07 Offering Commencement Date
"Offering Commencement Date" means the January 1, April 1, July 1, or
October 1 on which a particular Offering Period begins. During 1997, July 1 and
October 1 shall be the Offering Commencement Dates.
2.08 Offering Termination Date
"Offering Termination Date" means the March 31, June 30, September 30, or
December 31 on which a particular Offering Period ends. During 1997, September
30 and December 31 shall be the Offering Termination Dates.
2.09 Participant
"Participant" means an Employee who has met the eligibility requirements of
Section 3.01, is not prohibited from participating under Section 3.03, and has
commenced participation pursuant to Section 3.04.
2.10 Participating Corporation
"Participating Corporation" means any corporation which (i) is a Subsidiary
Corporation of Planet Hollywood International, Inc. and (ii) is designated as a
Participating Corporation by the Committee.
2.11 Purchase Percentage
"Purchase Percentage" means the percentage to be multiplied by the market
price of the Common Stock in order to determine (a) the number of options to be
granted, and (b) the Exercise Price, with such percentage to be determined with
respect to each Offering by the Plan Sponsor's Chief Executive Officer,
provided, such percentage shall not be less than ninety-five percent (95%) and
shall not be greater than one hundred percent (100%).
2.12 Subsidiary Corporation
"Subsidiary Corporation" means any corporation (other than the Plan
Sponsor) in an unbroken chain of corporations beginning with the Plan Sponsor
if, at the time of an Offering, each of the corporations other than the last
corporation in the unbroken chain owns stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock of one of the
other corporations in such chain.
ARTICLE III
ELIGIBILITY AND PARTICIPATION
3.01 Initial Eligibility
Any Employee who has completed nine (9) months of employment and is
employed by the Company on an Offering Commencement Date shall be eligible to
participate in Offerings under the Plan which commence on or after such nine
(9) month period has concluded. Participation in the Plan is limited to eligible
Employees.
3.02 Leave of Absence
For purposes of participation in the Plan, a person on leave of absence
shall be deemed to be an Employee under the Plan for the first 90 days of such
leave of absence. Such Employee's employment (for purposes of eligibility to
participate) shall be deemed to have terminated at the close of business on the
90th day of such leave of absence unless such Employee shall have returned to
regular full-time or part-time employment (as the case may be) prior to the
close of business on such 90th day. Termination by the Company of any Employee's
leave of absence, other than termination of such leave of absence on return to
full-time or part-
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<PAGE> 23
time employment, shall terminate an Employee's employment for all purposes of
the Plan and shall terminate such Employee's participation in the Plan and right
to exercise any option under the Plan.
3.03 Restrictions on Participation
Notwithstanding any provisions of the Plan to the contrary, no Employee
shall be granted an option to participate in the Plan:
(a) if, immediately after the grant, such Employee would own stock,
and/or hold outstanding options to purchase stock, possessing 5% or more of
the total combined voting power or value of all classes of stock of the
Plan Sponsor or Subsidiary Corporations (for purposes of this paragraph,
the rules of sec. 424(d) of the Code shall apply in determining stock
ownership of any Employee); or
(b) which permits such Participant's rights to purchase Common Stock
under all Code sec. 423 employee stock purchase plans of the Plan Sponsor
and Subsidiary Corporations to accrue at a rate which exceeds $25,000 in
fair market value of the Common Stock (determined at the time such option
is granted) for each calendar year in which such option is outstanding.
3.04 Commencement of Participation
An eligible Employee may become a Participant by completing an
authorization for a payroll deduction on the form provided by the Company and
filing it with the Employee Benefits Department of the Plan Sponsor, or, if made
available by an administrative service provider to the Plan, by electing via
telephone, on or before the date set therefor by the Committee, which date shall
be prior to the Offering Commencement Date for the Offering. Payroll deduction
for a Participant shall begin as of the first day of the first payroll period
coincident with or immediately preceding the applicable Offering Commencement
Date and shall end on the last day of the last payroll period the payment date
of which is coincident with or immediately preceding the Offering Termination
Date of the Offering Period to which such authorization is applicable unless
earlier terminated by the Participant as provided in Article VIII.
3.05 Rehired Employees
An Employee whose employment with the Plan Sponsor or Participating
Employer has terminated prior to such Employee having met the eligibility
requirements of Section 3.01, shall be required to meet the eligibility
requirements of this Article III upon reemployment to be eligible to
participate. An Employee whose employment with the Plan Sponsor or Participating
Employer has terminated after such Employee has met the eligibility requirements
of Section 3.01, shall, upon reemployment, not be required to again meet the
requirements of Section 3.01.
ARTICLE IV
OFFERINGS
4.01 Quarterly Offerings
The Plan will be implemented by quarterly Offerings of options on Common
Stock on each Offering Commencement Date. The maximum number of shares of Common
Stock which may be issued pursuant to an exercise of options under this Plan
during an Offering Period may be limited by the Committee prior to the beginning
of the applicable Offering Period. The maximum number of options to purchase
shares of Common Stock which may be granted to a Participant during a particular
Offering Period under this Plan may be limited by the Committee prior to the
beginning of the applicable Offering Period in a uniform and nondiscriminatory
manner.
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<PAGE> 24
ARTICLE V
PAYROLL DEDUCTIONS
5.01 Amount of Deduction
At the time a Participant files an authorization for payroll deduction,
such Participant shall elect to have deductions made from his or her pay on each
payday during the time he or she is a Participant in an Offering at the rate of
1, 2, 3, 4, 5, 6, 7, 8, 9 or 10% of his or her base pay in effect at the
Offering Commencement Date of such Offering. In the case of a part-time hourly
employee, such employee's base pay during an offering shall be determined by
multiplying such Employee's hourly rate of pay in effect on the Offering
Commencement Date by the number of regularly scheduled hours of work for such
Employee during such Offering.
5.02 Participant's Account
All payroll deductions made for a Participant shall be credited to his or
her account under the Plan. A Participant may not make any separate cash payment
into such account except when on leave of absence and then only as provided in
sec. 5.04.
5.03 Changes in Payroll Deductions
A Participant may discontinue his or her participation in the Plan as
provided in Article VIII, but no other change can be made during an Offering
and, specifically, a Participant may not alter the amount of his or her payroll
deductions for that Offering Period.
5.04 Leave of Absence
If a Participant goes on a leave of absence, such Participant shall have
the right to elect:
(a) to withdraw the balance in his or her account pursuant to
sec. 7.02,
(b) to discontinue contributions to the Plan but remain a Participant
in the Plan, or
(c) remain a Participant in the Plan during such leave of absence,
authorizing deductions to be made from payments by the Company to the
Participant during such leave of absence and undertaking to make cash
payments to the Plan at the end of each payroll period to the extent that
amounts payable by the Company to such Participant are insufficient to meet
such Participant's authorized Plan deductions.
ARTICLE VI
GRANTING OF OPTIONS
6.01 Number of Option Shares
On each Offering Commencement Date, a Participant shall be granted an
option to purchase a maximum number of shares of the Common Stock equal to an
amount determined by dividing: (a) that percentage of the Employee's base pay
which he has elected to have withheld (but not in excess of 10%) multiplied by
the Employee's base pay during the Offering Period, by (b) a deemed per share
price equal to the Purchase Percentage multiplied by the market value of one
share of the Common Stock on the applicable Offering Commencement Date.
The market value of the Company's stock shall be determined as provided in
paragraphs (a) and (b) of sec. 6.02 below. An hourly Employee's Base Pay during
the Offering Period shall be determined by multiplying such Employee's hourly
rate of pay (as in effect on the last day prior to the Commencement Date of the
particular Offering) by five hundred twenty (520), provided that, in the case of
a part-time hourly Employee, the Employee's base pay during the Offering Period
shall be determined by multiplying such Employee's hourly rate of pay by the
number of regularly scheduled hours of work for such Employee during such
Offering Period. A salaried Employee's Base Pay during the Offering Period shall
be determined by dividing such
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<PAGE> 25
Employee's annual Base Pay (as in effect on the last day prior to the
Commencement Date of the particular Offering) by four (4). In the event that
fractional shares will not be issued under this Plan, the maximum shares shall
be rounded down to the nearest whole number.
6.02 Option Price
The option price of Common Stock purchased with payroll deductions made
during any Offering Period for a Participant therein shall be the lower of:
(a) the amount determined by multiplying the Purchase Percentage by
the closing price of the Common Stock on the Offering Commencement Date or
the nearest prior business day on which trading occurred on the Nasdaq
National Market System; or
(b) the amount determined by multiplying the Purchase Percentage by
the closing price of the Common Stock on the Offering Termination Date or
the nearest prior business day on which trading occurred on the Nasdaq
National Market System.
If the Common Stock is not admitted to trading on any of the aforesaid
dates for which closing prices of the Common Stock are to be determined, then
such fair market value of the Common Stock on such date, shall be determined on
such basis as shall be established or specified for that purpose by the
Committee.
ARTICLE VII
EXERCISE OF OPTION
7.01 Automatic Exercise
Unless a Participant gives written notice to the Company as hereinafter
provided, the Participant's option for the purchase of Common Stock with payroll
deductions granted during any Offering will be deemed to have been exercised
automatically on the Offering Termination Date applicable to such Offering, for
the purchase of the number of shares of Common Stock (which may consist of full
and fractional shares pursuant to Section 7.03) which the accumulated payroll
deductions in the Participant's account at that time will purchase at the
applicable option price (but not in excess of the number of shares for which
options have been granted to the Employee pursuant to sec. 6.01), and any excess
payroll deductions in the Participant's account at that time will be returned to
the Participant without interest. In no event shall any amount in a
Participant's account carry forward to any Subsequent Offering Period.
If the aggregate number of options to be exercised on a particular Offering
Termination Date exceeds the number of shares authorized for the Offering, each
Participant shall receive a pro-rata number of shares based on the Participant's
relative account balances and each Participant's excess account balance shall be
refunded to the Participant without interest.
7.02 Withdrawal of Account
By written notice to the office of the Corporate Benefits and Compensation
Manager of the Plan Sponsor, at any time prior to the Offering Termination Date
applicable to any Offering, a Participant may elect to withdraw all of the
accumulated payroll deductions in his or her account at such time.
7.03 Fractional Shares
Fractional shares will not be issued under the Plan, unless the
administrative service provider to the Plan has the capability to track and
maintain records on fractional shares and agrees to do so. Any accumulated
payroll deductions which would have been used to purchase fractional shares of
Common Stock will be returned to the Participant following the Offering
Termination Date, without interest.
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7.04 Transferability of Option
During a Participant's lifetime, options held by such Participant shall be
exercisable only by that Participant.
7.05 Delivery of Stock
Unless requested by the Participant, the Company will not deliver to a
Participant a stock certificate for the Common Stock purchased upon exercise of
the Participant's option, until such Participant terminates employment with the
Company. The Participant shall be responsible for the cost of issuing a stock
certificate.
ARTICLE VIII
WITHDRAWAL
8.01 In General
As indicated in sec. 7.02, a Participant may withdraw payroll deductions
credited to his or her account under the Plan at any time by giving written
notice to the office of the Corporate Benefits and Compensation Manager of the
Plan Sponsor. All of the Participant's payroll deductions credited to his or her
account will be paid to the Participant after receipt of such Participant's
notice of withdrawal, and no further payroll deductions will be made from his or
her pay during such Offering Period.
8.02 Effect on Subsequent Participation
A Participant's withdrawal from any offering will not have any effect upon
the Participant's eligibility to participate in any succeeding Offering or in
any similar plan which may hereafter be adopted by the Company.
8.03 Termination of Employment
Upon termination of a Participant's employment for any reason, including
retirement (but excluding death while in the employ of the Company or
continuation of a leave of absence for a period beyond ninety (90) days), the
payroll deductions credited to the Participant's account will be returned to the
Participant, or, in the case of the Participant's death subsequent to the
termination of the Participant's employment, to the person or persons entitled
thereto under sec. 12.01 without interest.
8.04 Termination of Employment Due to Death
Upon termination of the Participant's employment because of the
Participant's death, the Participant's beneficiary (as defined in sec. 12.01)
shall have the right to elect, by written notice given to the office of the
Corporate Benefits and Compensation Manager of the Plan Sponsor prior to the
earlier of the Offering Termination Date or the expiration of a period of sixty
(60) days commencing with the date of the death of the Participant, either:
(a) to withdraw all of the payroll deductions credited to the
Participant's account under the Plan, without interest, or
(b) to exercise the Participant's option for the purchase of Common
Stock on the Offering Termination Date next following the date of the
Participant's death for the purchase of the number of full shares of Common
Stock which the accumulated payroll deductions in the Participant's account
at the date of the Participant's death will purchase at the applicable
option price, and any excess in such account will be returned to said
beneficiary, without interest.
In the event that no such written notice of election shall be duly received
by the office of the Corporate Benefits and Compensation Manager of the Plan
Sponsor, the beneficiary shall automatically be deemed to have elected, pursuant
to paragraph (b), to exercise the Participant's option.
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8.05 Leave of Absence
A Participant on leave of absence shall, subject to the election made by
such Participant pursuant to sec. 5.04, continue to be a Participant in the Plan
so long as such Participant is on continuous leave of absence. A Participant who
has been on leave of absence for more than 90 days shall not be entitled to
participate in any Offering commencing after the 90th day of such leave of
absence. Notwithstanding the above or any other provisions of the Plan, unless a
Participant on leave of absence returns to regular full-time or part-time
employment with the Company at the earlier of: (a) the termination of such leave
of absence or (b) three months from the 90th day of such leave of absence, such
Participant's participation in the Plan shall terminate on whichever of such
dates first occurs.
ARTICLE IX
INTEREST
9.01 Payment of Interest
No interest will be paid or allowed on any money paid into the Plan or
credited to the account of any Participant.
ARTICLE X
STOCK
10.01 Maximum Shares
The maximum number of shares which may be issued under the Plan, subject to
adjustment upon changes in capitalization of the Company as provided in
sec. 12.04 below shall be two million (2,000,000) shares. If the total number of
shares for which options are to be exercised on any Offering Termination Date in
accordance with Article VI, together with the total number of shares for which
options were previously exercised under this Plan, exceeds the maximum number of
shares which may be issued under this Plan, the Company shall make a pro rata
allocation of the shares available for which options may be exercised in a
nearly uniform manner as shall be practicable and as it shall determine to be
equitable. The balance of payroll deductions credited to the account of each
Participant under the Plan that are not used as payment for option exercise
shall be returned such Participant as promptly as possible.
10.02 Participant's Interest in Option Common Stock
Neither any Participant nor any personal representative (or beneficiary)
shall be, or shall have any rights or privileges of, a stockholder of the Plan
Sponsor with respect to any shares of Common Stock purchasable or issuable upon
the exercise of any option granted hereunder, in whole or in part, prior to the
date such option has been exercised.
10.03 Registration of Stock
Common Stock to be delivered to a Participant under the Plan will be
registered in the name of the Participant, or, if the Participant so directs by
written notice to the office of the Corporate Benefits and Compensation Manager
of the Plan Sponsor at least two (2) weeks prior to the issuance of a stock
certificate, in the names of the Participant and one (1) such other person as
may be designated by the Participant, as joint tenants with rights of
survivorship or as tenants by the entireties, to the extent permitted by
applicable law.
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ARTICLE XI
ADMINISTRATION
11.01 Appointment of Committee
The Board of Directors shall appoint a committee (the "Committee") to
administer the Plan, which shall consist of two or more persons each of whom is
a "disinterested person" within the meaning of Rule 16b-3. The Committee may
appoint a chairperson and a secretary and may make such rules and regulations
for the conduct of its business as it shall deem advisable. No member of the
Committee shall be eligible to purchase Common Stock under the Plan.
11.02 Authority of Committee
Subject to the express provisions of the Plan, the Committee shall have
plenary authority in its discretion to interpret and construe any and all
provisions of the Plan, to adopt rules and regulations for administering the
Plan, and to make all other determinations deemed necessary or advisable for
administering the Plan. The Committee's determination on the foregoing matters
shall be conclusive. The Committee may delegate to one or more of its members or
to one or more agents such administrative duties as it may deem advisable, and
the Committee or any person to whom it has delegated duties as above may employ
one or more persons to render advice with respect to any responsibility of the
Committee or such person may have under the Plan. All decisions, determinations
and interpretations of the Committee shall be final and binding on all persons,
including the Company, the Participants, (or any person claiming any rights
under the Plan from or through any Participant) and any stockholder.
11.03 Rules Governing the Administration of the Committee
The Board of Directors may from time to time appoint members of the
Committee in substitution for or in addition to members previously appointed and
may fill vacancies, however caused, in the Committee. The Committee shall hold
its meetings at such times and places as it shall deem advisable and may hold
telephonic meetings or take actions by written consent. A majority of its
members shall constitute a quorum. All determinations of the Committee shall be
made by a majority of its members. The Committee may correct any defect or
omission or reconcile any inconsistency in the Plan, in the manner and to the
extent it shall deem desirable. Any decision or determination reduced to writing
and signed by a majority of the members of the Committee shall be as fully
effective as if it had been made by a majority vote at a meeting duly called and
held. The Committee may appoint a secretary and shall make such rules and
regulations for the conduct of its business as it shall deem advisable.
ARTICLE XII
MISCELLANEOUS
12.01 Designation of Beneficiary
A Participant may file a written designation of a beneficiary who is to
receive any Common Stock and/or cash. Such designation of beneficiary may be
changed by the Participant at any time by written notice to the office of the
Corporate Benefits and Compensation Manager of the Plan Sponsor. Upon the death
of a Participant and upon receipt by the Company of proof of identity and
existence at the Participant's death of a beneficiary validly designated by the
Participant under the Plan, the Company shall deliver such Common Stock and/or
cash to such beneficiary. In the event of the death of a Participant and in the
absence of a beneficiary validly designated under the Plan who is living at the
time of such Participant's death, the Company shall deliver such Common Stock
and/or cash to the executor or administrator of the estate of the Participant,
or if no such executor or administrator has been appointed (to the knowledge of
the Company), the Company, in its discretion, may deliver such Common Stock
and/or cash to the spouse or to anyone or more dependents of the Participant as
the Company may designate. No beneficiary shall, prior to the death of
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<PAGE> 29
the Participant by whom he has been designated, acquire any interest in the
Common Stock or cash credited to the Participant under the Plan.
12.02 Transferability
Neither payroll deductions credited to a Participant's account nor any
rights with regard to the exercise of an option or to receive Common Stock under
the Plan may be assigned, transferred, pledged, or otherwise disposed of in any
way by the Participant other than by will or the laws of descent and
distribution. Any such attempted assignment, transfer, pledge or other
disposition shall be without effect, except that the Company may treat such act
as an election to withdraw funds in accordance with sec. 7.02.
12.03 Use of Funds
All payroll deductions received or held by the Company under this Plan may
be used by the Company for any corporate purpose and the Company shall not be
obligated to segregate such payroll deductions.
12.04 Adjustment Upon Changes in Capitalization
(a) If, while any options are outstanding, the outstanding shares of Common
Stock of the Plan Sponsor have increased, decreased, changed into, or been
exchanged for a different number or kind of shares or securities of the Plan
Sponsor through reorganization, merger, recapitalization, reclassification,
stock split, reverse stock split or similar transaction, appropriate and
proportionate adjustments may be made by the Committee in the number and/or kind
of shares which are subject to purchase under outstanding options and on the
option exercise price or prices applicable to such outstanding options. In
addition, in any such event, the number and/or kind of shares which may be
offered in the Offerings described in Article IV hereof shall also be
proportionately adjusted. No adjustments shall be made for stock dividends. For
the purposes of this paragraph, any distribution of shares to stockholders in an
amount aggregating 20% or more of the outstanding shares shall be deemed a stock
split and any distributions of shares aggregating less than 20% of the
outstanding shares shall be deemed a stock dividend.
(b) Upon the dissolution or liquidation of the Plan Sponsor, or upon a
reorganization, merger or consolidation of the Plan Sponsor with one or more
corporations as a result of which the Plan Sponsor is not the surviving
corporation, or upon a sale of substantially all of the property or stock of the
Plan Sponsor to another corporation, the holder of each option then outstanding
under the Plan will thereafter be entitled to receive at the next Offering
Termination Date upon the exercise of such option for each share as to which
such option shall be exercised, as nearly as reasonably may be determined, the
cash, securities and/or property which a holder of one (1) share of the common
stock was entitled to receive upon and at the time of such transaction. The
Board of Directors shall take such steps in connection with such transactions as
the Board shall deem necessary to assure that the provisions of this sec. 12.04
shall thereafter be applicable, as nearly as reasonably may be determined, in
relation to the said cash, securities and/or properties to which such holder of
such option might thereafter be entitled to receive.
12.05 Amendment and Termination
The Board of Directors shall have complete power and authority to terminate
or amend the Plan; provided, however, that the Board of Directors shall not,
without the approval of the stockholders of the Plan Sponsor:
(a) increase the maximum number of shares which may be issued under
this Plan (except pursuant to sec. 12.04); or
(b) amend the requirements as to the class of Employees eligible to
purchase Common Stock under the Plan or permit the members of the Committee
to purchase Common Stock under the Plan.
No termination, modification, or amendment of the Plan may, without the
consent of an Employee then having an option under the Plan to purchase Common
Stock, adversely affect the rights of such Participant under such option.
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12.06 No Employment Rights
The Plan does not, directly or indirectly, create any right for the benefit
of any Employee or class of Employees to purchase any shares under the Plan
unless expressly stated, or create in any Employee or class of Employees any
right with respect to continuation of employment by the Company, or create any
right to remuneration or benefits not set forth in the Plan, and the Plan shall
not be deemed to interfere in any way with the Company's right to terminate, or
otherwise modify, an Employee's employment at any time.
12.07 Effect of Plan
The provisions of the Plan shall, in accordance with its terms, be binding
upon, and inure to the benefit of, all successors of each Employee participating
in the Plan, including, without limitation, such Employee's estate and the
executors, administrators or trustees in bankruptcy or representative of
creditors of such Employee.
12.08 Governing Law
The law of the State of Florida will govern all matters relating to this
Plan except to the extent it is superseded by the laws of the United States.
12.09 Effective Date
The Plan shall become effective upon approval by both:
(a) the holders of the majority of the stock of the Plan Sponsor
entitled to vote (both common and if applicable, preferred stock of the
Plan Sponsor) either present or represented at a special or annual meeting
of the stockholders, or by written consent or consents in writing signed by
such holders setting forth the action so taken; and
(b) the majority of the Board of Directors.
If the Plan is not so approved, the Plan shall not become effective.
12.10 Termination Date
The Plan shall terminate when the maximum number of shares that may be
issued under the Plan has been issued under the Plan.
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APPENDIX
PROXY
PLANET HOLLYWOOD INTERNATIONAL, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR ANNUAL MEETING OF STOCKHOLDERS,
MAY 16, 1997
The undersigned hereby appoints Robert Earl and Scott E. Johnson and each of
them, jointly and severally, with power of substitution, to vote on all matters
which may properly come before the 1997 Annual Meeting of Stockholders of Planet
Hollywood International, Inc., or any adjournment thereof.
<TABLE>
<S> <C> <C> <C>
1. ELECTION OF DIRECTORS. [ ] FOR all nominees listed below (except [ ] WITHHOLD AUTHORITY to vote for all
as marked to the contrary below). nominees listed below.
</TABLE>
NOMINEES: Thomas Avallone, Mark McCormack and Isadore Sharp
INSTRUCTION: To withhold authority to vote for any individual nominee,
strike a line through or otherwise strike the nominee's name in the list above.
2. To increase the aggregate maximum number of shares of the Company's Class A
Common Stock issuable under its 1995 Stock Award and Incentive Plan by
1,000,000 shares from 5,000,000 shares to 6,000,000 shares.
<TABLE>
<S> <C> <C>
[ ] FOR [ ] AGAINST [ ] ABSTAIN
</TABLE>
3. To approve and adopt the Company's Employee Stock Purchase Plan.
<TABLE>
<S> <C> <C>
[ ] FOR [ ] AGAINST [ ] ABSTAIN
</TABLE>
[ ] If you plan to attend the Annual Meeting, please check here
(Continued on reverse side)
(Continued from other side)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED STOCKHOLDER, UNLESS OTHERWISE SPECIFIED, THE SHARES WILL BE
VOTED FOR PROPOSALS 1, 2 AND 3.
Date:
------------------------------
------------------------------
------------------------------
Signatures of Stockholder(s)
NOTE: Signature should agree
with name on stock certificate
as printed hereon. Executors,
administrators, trustees and
other fiduciaries should so
indicate when signing.
PLEASE DATE, SIGN AND RETURN THIS PROXY PROMPTLY
THANK YOU
