SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14(a)-12
THE WESTERN TRANSMEDIA COMPANY, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) filing Proxy Statement, if other than Registrant)
Payment of filing fee (check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
/ / 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.
<PAGE>
/ / 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:
-2-
<PAGE>
THE WESTERN TRANSMEDIA COMPANY, INC.
475 SANSOME STREET
SAN FRANCISCO, CALIFORNIA 94111
-------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 13, 1996
-------------
To the Stockholders of The Western Transmedia Company, Inc.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders
(the "Meeting") of THE WESTERN TRANSMEDIA COMPANY, INC., a Delaware corporation
(the "Company"), will be held at the offices of Olshan Grundman Frome &
Rosenzweig LLP, 505 Park Avenue, 16th floor, New York, New York 10022, on June
13, 1996 at 11:00 a.m., local time, for the following purposes:
1. To elect three (3) directors to Class I of the Board of
Directors to serve until the 1999 Annual Meeting of Stockholders;
2. To ratify the appointment of Lazar, Levine & Company LLP
as the Company's independent auditors for the fiscal year ending
December 31, 1996; and
3. To transact such other business as may properly be
brought before the Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on
April 30, 1996 as the record date for the Meeting. Only stockholders of record
on the stock transfer books of the Company at the close of business on that date
are entitled to notice of, and to vote at, the Meeting.
By Order of the Board of Directors
WILLIAM J. BARRETT
Secretary
San Francisco, California
May 6, 1996
WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING,
YOU ARE URGED TO FILL IN, DATE, SIGN AND RETURN THE
ENCLOSED PROXY IN THE ENVELOPE THAT IS
PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED IN
THE UNITED STATES.
<PAGE>
THE WESTERN TRANSMEDIA COMPANY, INC.
475 SANSOME STREET
SAN FRANCISCO, CALIFORNIA 94111
--------------------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
JUNE 13, 1996
--------------------------
INTRODUCTION
The Proxy accompanying this Proxy Statement is being solicited
by the Board of Directors of The Western Transmedia Company, Inc., a Delaware
corporation (the "Company"), for use at the 1996 Annual Meeting of Stockholders
of the Company (the "Meeting") to be held at the offices of Olshan Grundman
Frome & Rosenzweig LLP, 505 Park Avenue, 16th floor, New York, New York 10022,
on June 13, 1996 at 11:00 a.m., local time, or at any adjournments thereof.
The principal executive offices of the Company are located at
475 Sansome Street, San Francisco, California 94111. The approximate date on
which this Proxy Statement and the accompanying Proxy will first be sent or
given to stockholders is May 8, 1996.
RECORD DATE AND VOTING SECURITIES
Only stockholders of record at the close of business on April
30, 1996, the record date (the "Record Date") for the Meeting, will be entitled
to notice of, and to vote at, the Meeting and any adjournment(s) thereof. As of
the close of business on the Record Date, there were outstanding 7,903,421
shares of the Company's common stock, $.60 par value (the "Common Stock"). Each
outstanding share of Common Stock is entitled to one vote. A majority of the
outstanding shares of Common Stock present in person or by Proxy is required for
a quorum.
VOTING OF PROXIES
Shares of Common Stock represented by Proxies that are
properly executed, duly returned and not revoked will be voted in accordance
with the instructions contained therein. If no specification is indicated on the
Proxy, the shares of Common Stock represented thereby will be voted (i) for the
election as directors of the persons who have been nominated by the Board of
Directors, (ii) for the ratification of the appointment of Lazar, Levine &
Company LLP as the Company's independent auditors for the fiscal year ending
December 31, 1996 and (iii) upon any other matter that may properly be brought
before the Meeting, in accordance with the judgment of the person or persons
voting the Proxy. The execution of a Proxy will in no way affect a stockholder's
right to attend the Meeting and vote in person. Any Proxy executed and returned
by a stockholder may be revoked at any time thereafter by written notice of
revocation given to the Secretary of the Company, by execution of a subsequent
Proxy that is presented at the Meeting, or by voting in person at the Meeting,
in any such case, except as to any matter or matters upon which a vote shall
have been cast pursuant to the authority conferred by such Proxy prior to such
revocation. Broker "non- votes" and the shares as to which a stockholder
abstains are included for purposes of determining whether a quorum of shares is
present at a meeting. A broker "non-vote" occurs when a nominee holding shares
for a beneficial owner does not vote on a particular proposal because the
nominee does not have
<PAGE>
discretionary voting power with respect to that item and has not received
instructions from the beneficial owner. Broker "non-votes" are not included in
the tabulation of the voting results on the election of directors or issues
requiring approval of a majority of the votes cast and, therefore, do not have
the effect of votes in opposition in such tabulations. Proxies marked as
abstaining with respect to the proposals to ratify the appointment of
independent auditors will have the effect of a vote against such proposal.
The cost of solicitation of the Proxies being solicited on
behalf of the Board of Directors will be borne by the Company. In addition to
the use of the mails, proxy solicitation may be made by telephone, telegraph and
personal interview by officers, directors and employees of the Company and its
transfer agent, American Stock Transfer & Trust Company (which will receive a
nominal fee in connection with any such efforts). The Company will, upon
request, reimburse brokerage houses and persons holding Common Stock in the
names of their nominees for their reasonable expenses in sending soliciting
material to their principals.
SECURITY OWNERSHIP
The following table sets forth information concerning
ownership of the Company's Common Stock, as of the Record Date, by each person
known by the Company to be the beneficial owner of more than five percent of the
Common Stock, each director, nominee for director and for each executive officer
and by all directors and executive officers of the Company as a group. Unless
otherwise indicated, the address of each person or entity listed below is the
Company's principal executive offices.
<TABLE>
<CAPTION>
Name and Address Shares Percentage
Of Beneficial Owner(1) Beneficially Owned(2) Of Class
<S> <C> <C>
Stuart M. Pellman 449,312(3) 5.5%
Herbert M. Gardner 426,254(4) 5.4%
c/o Janney Montgomery Scott Inc.
26 Broadway
New York, NY 10004
William J. Barrett 556,501(5) 7.0%
c/o Janney Montgomery Scott Inc.
26 Broadway
New York, NY 10004
Special Situations Fund III, L.P.(6) 305,000 3.9%
625 Madison Avenue
New York, NY 10022
Special Situations Cayman Fund L.P.(7) 406,251(8) 5.0%
625 Madison Avenue
New York, NY 10022
MassMutual Corporate Investors 698,707(9) 8.6%
1295 State Street
Springfield, MA 01111
C. Scott Bartlett, Jr. 46,281(10) *
Howard Grafman(11) 144,762(12) 1.8%
Richard O. Starbird 100,997(13) 1.3%
Paulette W. Grafman(11) 29,705(14) *
-2-
<PAGE>
<CAPTION>
Name and Address Shares Percentage
Of Beneficial Owner(1) Beneficially Owned(2) Of Class
<S> <C> <C>
All Directors and Executive Officers
as a Group (7 persons) 1,753,812(15) 20.6%
</TABLE>
- ----------------------
* Less than 1%
(1) All of such persons and entities have sole investment and voting power over
the shares listed as being beneficially owned by them.
(2) All persons identified below as holding common stock purchase warrants
("Warrants") or options granted pursuant to the Company's 1992 Stock Option
Plan (the "1992 Plan") are deemed to be beneficial owners of shares
underlying such Warrants or subject to such options by reason of their
right to acquire such shares within 60 days after April 30, 1996 through
the exercise of such Warrants or options.
(3) Includes (i) 198,332 shares subject to options and (ii) 132,646 shares
owned by an individual retirement account as to which Mr. Pellman is the
beneficiary (including 8,823 shares underlying Warrants). Mr. Pellman
disclaims beneficial ownership of the shares beneficially owned by the
members of his family.
(4) Includes (i) 42,421 shares beneficially owned by Mr. Gardner's spouse
(including 7,352 shares underlying Warrants), (ii) 8,333 shares owned by an
individual retirement account as to which Mr. Gardner is the beneficiary,
and (iii) 241,298 shares owned by Mr. Gardner's qualified plan (including
22,058 shares underlying Warrants). Mr. Gardner disclaims beneficial
ownership of the shares beneficially owned by the members of his family.
(5) Includes (i) 14,705 shares underlying Warrants, (ii) 117,860 shares
beneficially owned by Mr. Barrett's spouse (including 39,702 shares
underlying Warrants), and (iii) 315,090 shares owned by Mr. Barrett's
qualified plan (including 44,117 shares underlying Warrants). Mr. Barrett
disclaims beneficial ownership of the shares beneficially owned by the
members of his family.
(6) Based upon a Statement on Schedule 13G dated January 10, 1996 filed with
the Securities and Exchange Commission by Special Situations Fund III, L.P.
(the "Fund"), MGP Advisers Limited Partnership ("MGP"), AWM Investment
Company, Inc. ("AWM") and Austin W. Marxe. Such Schedule 13G discloses that
(i) AWM is the sole general partner of MGP, a registered investment adviser
under the Investment Advisers Act of 1940, as amended, (ii) MGP is a
general partner of and investment adviser to the Fund, (iii) AWM is a
registered investment adviser under said Act and also serves as the general
partner of, and investment adviser to, Special Situations Cayman Fund, L.P.
and (iv) Austin W. Marxe is the principal owner and President of AWM.
(7) Based upon information contained in the Schedule 13G referred to in (6)
above.
(8) Includes 200,000 shares underlying Warrants.
(9) Based upon Amendment No. 1 dated June 5, 1995 to a Statement on Schedule
13G filed with the Securities and Exchange Commission by MassMutual
Corporate Investors, MassMutual Participation Partners and MassMutual
Corporate Value Partners in which the three entities indicate that they may
be
-3-
<PAGE>
regarded as a group. MassMutual Corporate Investors, MassMutual
Participation Partners and MassMutual Corporate Value Partners own 405,590,
54,000 and 56,000 shares of Common Stock respectively. MassMutual Corporate
Investors also owns warrants to purchase 183,117 shares of Common Stock.
(10) Includes (i) 8,399 shares held jointly with Mr. Bartlett's spouse, (ii)
26,000 shares subject to options and (iii) 5,882 shares underlying Warrants
held jointly with Mr. Bartlett's spouse.
(11) Howard Grafman and Paulette W. Grafman are spouses.
(12) Includes (i) 6,000 shares subject to options and (ii) 17,205 shares
underlying Warrants and (iv) 5,000 shares held by Radio First
International, Inc., of which Mr. Grafman is a principal shareholder. Does
not include shares reported as beneficially owned by Paulette W. Grafman.
(13) Includes (i) 6,000 shares subject to options and (ii) 14,705 shares
underlying Warrants.
(14) Includes 4,705 shares underlying Warrants. Does not include shares reported
as beneficially owned by Howard Grafman.
(15) Includes an aggregate of 251,332 shares subject to options and 379,254
shares underlying Warrants.
PROPOSAL I - ELECTION OF DIRECTORS
Article Tenth of the Certificate of Amendment to the
Certificate of Incorporation of the Company provides for the organization of the
Board of Directors into three classes. All directors are chosen for a full
three-year term to succeed those whose terms expire. It is proposed that three
directors be elected to Class I to serve until the 1999 Annual Meeting of
Stockholders and until their respective successors are elected and shall
qualify.
Unless otherwise specified, all Proxies received will be voted
in favor of the election of Richard O. Starbird, C. Scott Bartlett, Jr. and
Howard Grafman to Class I of the Board of Directors to serve until the 1999
Annual Meeting of Stockholders. Directors are to be elected by a plurality of
the votes cast, in person or by proxy, at the Meeting. All nominees for director
are currently directors of the Company. Management has no reason to believe that
any of the nominees will not remain a candidate for election at the date of the
Meeting. Should any of the nominees not then remain a candidate, the Proxies
will be voted in favor of those nominees who remain candidates and may be voted
for substitute nominees selected by the Board of Directors. The following table
and the paragraphs following the table set forth information regarding the
current ages, terms of office and business experience of the current and
proposed directors of the Company:
<TABLE>
<CAPTION>
Expiration of Current Term
Name Age of Office as Director
- ---- --- ---------------------------------------
<S> <C> <C>
NOMINEES FOR ELECTION TO CLASS I
OF THE BOARD OF DIRECTORS:
C. Scott Bartlett, Jr. 63 1996
Howard Grafman 67 1996
-4-
<PAGE>
<CAPTION>
Expiration of Current Term
Name Age of Office as Director
- ---- --- ---------------------------------------
<S> <C> <C>
Richard O. Starbird 71 1996
CONTINUING MEMBERS OF THE BOARD OF
DIRECTORS:
CLASS II DIRECTORS:
Paulette W. Grafman 49 1997
Herbert M. Gardner 56 1997
CLASS III DIRECTORS:
Stuart M. Pellman 54 1998
William J. Barrett 56 1998
</TABLE>
C. SCOTT BARTLETT has served as a director of the Company since August
1991. Since November 1990, he has been a consultant to the banking industry and
in conjunction with such activities served as Senior Vice President and Chief
Credit Officer of MTB Bank from 1992 to 1994. From April 1984 to November 1990,
he was an Executive Vice President and Chairman of the Credit Policy Committee
of National Westminster Bank USA. He is also a director of Harvard Industries,
Inc., an automotive supplier, NVR, Inc., a homebuilding company, Darling
International, Inc., a recycler of animal by-products, Bucyrus-Erie Company, a
manufacturer of surface mining equipment and Triangle Wire & Cable Company,
Inc., a manufacturer of electrical cable.
HOWARD GRAFMAN has served as a director of the Company since July 1992.
Mr. Grafman is currently Chairman of the Board of KRUZ-FM, a radio station based
in Santa Barbara, California, and a private investor. Mr. Grafman founded
Century Broadcasting Corporation, an independent operator of FM radio stations,
in 1964 and served as its President until 1987 and as one of its directors until
1992. Prior to founding Century Broadcasting Corporation, Mr. Grafman was
actively involved in the communications and broadcasting industries.
RICHARD O. STARBIRD has served as a director of the Company since July
1992. Mr. Starbird has been Emeritus Professor at Western Washington University
in Bellingham, Washington since 1983, where he is currently engaged as a
graduate school advisor, researcher and writer. Mr. Starbird also is a director
of Fredericks of Hollywood, Inc.
STUART M. PELLMAN has served as President, Chief Executive Officer and
director of the Company since January 1992. From May 1989 until September 1991,
he was a corporate securities attorney with, and a member of, the San Francisco,
California law firm of Steefel, Levitt & Weiss. Prior thereto and since 1965, he
was engaged in the private practice of law in New York City. In 1979, he
co-founded the law firm of Slade & Pellman in New York City and was a member of
that firm until December 1988. Commencing in 1986, Mr. Pellman supervised Slade
& Pellman's representation as general counsel to Transmedia Network Inc., the
Company's franchisor.
PAULETTE W. GRAFMAN has served as a director of the Company since
September 1993 and served as Executive Vice President of the Company from
September 1993 until January, 1996. Ms. Grafman is currently President and
General Manager of KRUZ-FM, a radio station based in Santa Barbara, California.
Ms. Grafman was Vice President and General Manager of KMEL, an FM radio station
in San Francisco, California from November 1985 to November 1992, when the
station was sold by Century Broadcasting Corporation. During the prior 10 years,
she held executive
-5-
<PAGE>
and sales positions with several radio stations in Los Angeles. She served on
the Board of Directors of the Northern California Broadcasters Association in
1987 and 1988, and as an officer of the Association since 1989, including the
office of President in 1991 and 1992. She was principally engaged as a private
investor from November 1992 to September 1993.
WILLIAM J. BARRETT has served as a director of the Company since
January 1992 and as Secretary and Assistant Treasurer of the Company since
August 1992. Mr. Barrett has been employed as a Senior Vice President of Janney
Montgomery Scott Inc., an investment banking firm, for more than five years. Mr.
Barrett is a director of the following publicly-held corporations: Supreme
Industries, Inc., a company that manufactures specialized truck bodies,
Fredericks of Hollywood, Inc., an apparel marketing company, Shelter Components
Corporation, a distributor to the manufactured housing and recreation vehicle
industries and manufacturer of carpet and bathroom products, TGC Industries,
Inc., which provides geophysical services to the oil and gas industries and
manufactures and distributes specialty packaging products, and Esmor
Correctional Services, Inc., a manager of correctional facilities. Mr. Barrett
is Secretary and a director of Contempri Homes, Inc., a company that
manufactures modular homes.
HERBERT M. GARDNER has served as a director of the Company since
January 1992. Mr. Gardner has been employed as a Senior Vice President of Janney
Montgomery Scott Inc. for more than five years. Mr. Gardner is a director of
Transmedia Network Inc. and also is a director of the following publicly-held
corporations: Shelter Components Corporation, Nu Horizons Electronics, Corp., an
electronics components distributor, TGC Industries, Inc. and Hirsch
International Corp., a distributor of computerized embroidery machines and a
developer of related software. Mr. Gardner also is Chairman of the Board of
Supreme Industries, Inc. and Contempri Homes, Inc.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF
EACH OF THE NOMINEES.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
For the fiscal year ended December 31, 1995, there were two
meetings of the Board of Directors. In addition, members of the Board of
Directors consulted regularly with each other and from time to time acted by
unanimous written consent pursuant to the laws of the State of Delaware. The
Board of Directors does not presently have a standing audit or nominating
committee, the customary functions of such committees being performed by the
entire Board of Directors.
See "Compensation Committee Report on Executive Compensation"
for information in respect of the Compensation and Stock Option Committee (the
"Compensation Committee") of the Board of Directors.
EXECUTIVE COMPENSATION
The following table sets forth, for the fiscal years
indicated, all compensation awarded to, earned by or paid to the chief executive
officer ("CEO") of the Company. The table also sets forth, for the fiscal year
ended December 31, 1995, all compensation awarded to, earned by or paid to the
executive vice president of the Company who was the only executive officer of
the Company other than the CEO whose salary and bonus exceeded $100,000 with
respect to the fiscal year ended December 31, 1995. There was no executive
officer of the Company,
-6-
<PAGE>
other than the CEO, whose salary and bonus exceeded $100,000 with respect to the
fiscal years ended December 31, 1994 or 1993.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation Long Term Compensation
------------------------------------------------- --------------------------------
Other Annual All Other
Compensation Number of Compensation
Name and Principal Position Year Salary ($) Bonus ($) ($)(1) Options ($)(2)
- ------------------------------ ------ ------------ ------------ -------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Stuart M. Pellman, 1995 175,000 25,580 4,680 150,000 --
President and Chief 1994 145,000 -- 4,680 -- --
Executive Officer 1993 135,250 12,300 -- 62,500 --
Paulette W. Grafman,
Executive Vice President
(3) 1995 115,000 15,290 -- 105,000(4) --
</TABLE>
(1) Perquisites and other personal benefits, securities or property delivered
to Mr. Pellman and Ms. Grafman did not exceed the lesser of $50,000 or 10%
of their respective total annual salaries and bonuses.
(2) Mr. Pellman's employment agreement provides that, in the event of the sale
of all or substantially all of the assets of the Company or upon the sale
of a controlling interest in the Company's stock, Mr. Pellman will be
entitled under certain circumstances to resign and collect a lump sum
payment of $300,000. The employment agreement also requires the Company to
pay the premiums (not exceeding $4,800 per annum) on term life insurance in
the face amount of $1,000,000 on the life of Mr. Pellman under policies
owned by Mr. Pellman. See "Management--Employment Agreements."
(3) Ms. Grafman resigned her position with the Company on January 10, 1996.
(4) These options expired unexercised three months after the date of Ms.
Grafman's resignation.
LONG-TERM INCENTIVE AND PENSION PLANS
The Company does not have any long-term incentive or defined
benefit pension plans.
OPTION GRANTS
The Company does not grant any Stock Appreciation Rights. The
following table sets out certain information with respect to options granted to
each of Mr. Pellman and Ms. Grafman under the Company's 1992 Stock Option Plan
during the fiscal year ended December 31, 1995:
-7-
<PAGE>
OPTION GRANTS TABLE
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
Percent
of Total
Options
Granted Market
Options to Price
Granted Employees Exercise (2) Date
(Shares) in Fiscal Price of Expiration
Name (1) Year ($/Sh) Option Date
---- ------- ------ -------- -------- ------
<S> <C> <C> <C> <C> <C>
Stuart M. Pellman 150,000 46.9% $3.75/ $3.75 4/18/2000
2.8125(3)
Paulette W. Grafman 105,000 32.8% $3.75/ $3.75 4/18/2000
2.8125(4)
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION
FOR OPTION TERM (5)
-------------------
NAME 5% 10%
---- -- ---
Stuart M. Pellman $272,596 $460,599
Paulette W. Grafman $169,723 $301,326
- ---------------------
(1) The options may not be exercised until December 31, 1995 and become fully
vested on December 31, 1996. The options to the extent not previously
exercised, expire on April 18, 2000. Ms. Grafman terminated her employment
with the consent of the Company on January 10, 1996. In accordance with the
terms of the Company's 1992 Stock Option Plan, her options expired
unexercised three months after such date.
(2) Market price represents the estimated fair market value for the securities
granted under option giving effect to the fact such securities are
unregistered and otherwise restricted as to sale or transfer.
(3) The exercise price is $3.75 as to 25,000 of the shares and $2.8125 as to
125,000 of the shares.
(4) The exercise price is $3.75 as to 40,000 of the shares and $2.8125 as to
65,000 of the shares.
(5) The potential realizable value portion of the foregoing table illustrates
value that might be realized upon exercise of options immediately prior to
the expiration of their term, assuming the specified compounded rates of
appreciation on the Company's Common Stock over the term of the options.
These numbers do not take into account provisions of certain options
providing for termination of the options following termination of
employment, non-transferability or differences in vesting periods.
Regardless of the theoretical value of an option, its ultimate value will
depend on the market value of the Common Stock at a future date, and that
value will depend on a variety of factors, including the overall condition
of the stock market and the Company's result of operations and financial
condition. There can be no assurances that the values reflected in this
table will be achieved.
-8-
<PAGE>
AGGREGATED FISCAL YEAR-END OPTION VALUE TABLE
The following table sets forth certain information concerning
unexercised options held as of December 31, 1995 by Mr. Pellman and Ms. Grafman.
No stock options were exercised by Mr. Pellman or Ms. Grafman during the fiscal
year ended on such date.
AGGREGATED FISCAL YEAR-END OPTION VALUES
Number of Unexercised Value of Unexercised in-
Options at December the-Money Options at
31, 1995(#) December 31, 1995 ($)(1)
Exercisable/ Exercisable/
Name Unexercisable Unexercisable
- ---- ----------------------- ------------------------------
Stuart M. Pellman 198,332/89,168 $46,125/0
Paulette W. Grafman 177/500/52,500 $0/0
- --------------------
(1) Based on the closing price of a share of Common Stock ($1.625 as reported
by the National Association of Securities Dealers Automated Quotation
System on December 29, 1995).
DIRECTOR COMPENSATION
Directors who are not officers or employees of the Company
receive such compensation for their services as the Board of Directors may from
time to time determine. Currently, directors who are not employees of the
Company receive a fee of $100 for each Board of Directors or committee meeting
attended, plus reasonable out-of-pocket expenses. Directors who are officers or
employees of the Company are not entitled to any compensation for their service
as a director.
EMPLOYMENT AGREEMENTS
Mr. Pellman serves as President and Chief Executive Officer of
the Company pursuant to an employment agreement that commenced as of January 1,
1995 and will terminate on December 31, 1996. Mr. Pellman received a base annual
salary of $175,000 from January 1, 1995 through December 31, 1995 and will
receive $200,000 per annum from January 1, 1996 through December 31, 1996. As
additional compensation, the Company is to pay Mr. Pellman an annual bonus equal
to 5% of the Company's pre-tax income up to $2,000,000 plus 6-1/2% of the
Company's pre-tax income, if any, over $2,000,000, for each fiscal year of the
Company (or portion thereof) commencing with the fiscal year ending December 31,
1995. Mr. Pellman received $580 pursuant to this clause at the end of December
31, 1995. In addition, Mr. Pellman received the sum of $25,000 in consideration
of his agreement to enter into the employment agreement. The employment
agreement also provides for such other salary increases and bonuses as the Board
of Directors of the Company shall determine and contains a covenant not to
compete that extends for a period of two years after termination for cause or
termination by Mr. Pellman otherwise than for employer breach. In the event of
the sale of all or substantially all of the assets of the Company and its
subsidiaries, the merger or consolidation of the Company with any other entity
or the sale of a controlling interest in the Company's stock, and Mr. Pellman's
duties are significantly altered, he ceases to serve as a member of the Board of
Directors of the Company, employer breach occurs under his employment agreement
-9-
<PAGE>
or the location at which he performs his principal duties is outside the San
Francisco, California metropolitan area, Mr. Pellman shall have the right either
to continue his employment with the Company under the terms of the employment
agreement or to elect to resign and receive, along with other benefits, a lump
sum payment of $300,000. Mr. Pellman's employment agreement requires the Company
to pay the premium (not exceeding $4,800 per annum) on term life insurance in
the face amount of $1,000,000 on the life of Mr. Pellman under policies owned by
Mr. Pellman.
Paulette W. Grafman served as Executive Vice President of the
Company and managed its Los Angeles office under an employment agreement that
commenced as of January 1, 1995 and would have terminated on December 31, 1996.
Ms. Grafman resigned her position with the Company on January 10, 1996. She
received a base salary of $115,000 per annum from January 1, 1995 through
January 10, 1996. As additional compensation, the Company was to pay Ms. Grafman
an annual bonus equal to 2-1/2% of the Company's pre-tax income up to $2,000,000
plus 4% of the Company's pre-tax income, if any, over $2,000,000, for each
fiscal year of the Company (or portion thereof) commencing with the fiscal year
ending December 31, 1995. Ms. Grafman received $290 under this arrangement for
the fiscal year ended December 31, 1995. In addition, Ms. Grafman received the
sum of $15,000 in consideration of her agreement to enter into the employment
agreement. The employment agreement also contains a covenant not to compete that
extends for a period of two years after termination for cause or termination by
Ms. Grafman otherwise than for employer breach.
COMPENSATION AND STOCK OPTION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
GENERAL
The Compensation and Stock Option Committee was established by
the Board of Directors in September 1993 to make recommendations to the Board of
Directors regarding compensation of executive officers and administration of the
Company's 1992 Stock Option Plan. It acted three times by unanimous written
consent during 1995. Messrs. Barrett, Bartlett and Starbird currently serve as
members of the Compensation and Stock Option Committee.
COMPENSATION PHILOSOPHY
The Compensation and Stock Option Committee's executive
compensation philosophy is (and the Board of Directors was) to base management's
pay, in part, on the achievement of the Company's annual and long-term
performance goals, to provide competitive levels of compensation, to recognize
individual initiative, achievement and length of service to the Company, and to
assist the Company in attracting and retaining qualified management. The
Compensation Committee also believes that the potential for equity ownership by
management is beneficial in aligning management's and stockholders' interests in
the enhancement of stockholder value.
SALARIES
Base salaries for the Company's executive officers are
determined initially by evaluating the responsibilities of the position held and
the experience of the individual and by reference to the competitive marketplace
for management talent, including a comparison of base salaries for comparable
positions at comparable companies. Annual salary adjustments are determined by
evaluating the competitive marketplace, the performance of the Company, the
performance of the executive particularly with respect to the ability to manage
growth of the Company, the length of the executive's service to the Company and
any increased responsibilities assumed by the executive.
-10-
<PAGE>
BONUSES
The Company from time to time will consider the payment of
bonuses to its executive officers, although no formal plan currently exists,
except as provided in individual employment agreements. Bonuses would be
determined based, first, upon the level of achievement by the Company of its
strategic and operating goals and, second, upon the level of personal
achievement by participants. The achievement of goals by the Company includes,
among other things, the performance of the Company as measured by return on
assets. The achievement of personal goals includes the actual performance of the
Company for which the executive officer has responsibility as compared to the
planned performance thereof, the level of cost savings achieved by such
executive officer, other individual contributions, the ability to manage and
motivate reporting employees and the achievement of assigned projects. In view
of the early stage of development of the Company's business, except as provided
for in individual employment agreements, no executive officer received a bonus
for the 1994 fiscal year.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
Mr. Pellman's base salary of $175,000 was based upon the
factors described in the "Salaries" paragraph above.
STOCK OPTION PLAN
It is the philosophy of the Compensation Committee that stock
options should be awarded only to key employees of the Company to promote
long-term interests between such employees and the Company's stockholders and to
assist in the retention of such employees. The Stock Option Committee awarded
stock options to Mr. Pellman and Ms. Grafman in April 1995 for services
performed in 1994. The size of these awards to each of Mr. Pellman and Ms.
Grafman was based generally on the factors described in "-- Salaries" above and
specifically on each of their performances. In addition, the Stock Option
Committee considered the extensive nature and the significant services rendered
by Mr. Pellman and Ms. Grafman, their seasoned managerial skills and the fact
that their base salaries are below the average of similar positions in
comparable companies.
COMPENSATION AND STOCK OPTION COMMITTEE: William J. Barrett,
C. Scott Bartlett, Jr.
Richard O. Starbird
-11-
<PAGE>
COMMON STOCK PERFORMANCE
The following graph compares, for the periods indicated, the
percentage change in the Company's cumulative total stockholder return on its
Common Stock with the cumulative total return of (a) the NASDAQ Market Index, a
broad equity market index (the "Broad Market"), and (b) an index consisting of
the following publicly traded Miscellaneous Business Credit Institutions with
the same Standard Industrial Classification Code (6159) as the Company: Allied
Capital Lending Corp., Ampal-American Israel Corporation, Banca Quadrum S.A. de
C.V. (ADR), Covered Financial Corp., Financial Federal Corp., Financing for
Science, HPSC Inc., Oxford Resources Corp. - Class A, PDS Financial Corp.,
Rockford Industries Inc., Student Loan Corp., Student Loan Marketing
Association, Walnut Financial Service Inc. and Winfield Capital Corp. (the
"Industry Index").
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
FISCAL FISCAL FISCAL FISCAL
JULY YEAR YEAR YEAR YEAR
18,1992 ENDING ENDING ENDING ENDING
COMPANY ($) 1992($) 1993($) 1994($) 1995($)
------- --- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
The Company 100.00 700.00 1400.00 1652.00 652.00
Industry Index 100.00 101.06 73.73 56.71 109.99
Broad Market 100.00 108.21 129.80 136.28 176.76
</TABLE>
-12-
<PAGE>
PROPOSAL II - RATIFICATION OF APPOINTMENT OF
INDEPENDENT AUDITORS
The Board of Directors has appointed Lazar, Levine & Company
LLP as the Company's independent auditors for the fiscal year ending December
31, 1996. Although the selection of auditors does not require ratification, the
Board of Directors has directed that the appointment of Lazar, Levine & Company
LLP be submitted to stockholders for ratification due to the significance of
such firm's appointment to the Company. Approval by holders of the majority of
shares of Common Stock represented in person or by proxy at the Meeting is
necessary for stockholder ratification of the appointment of Lazar, Levine &
Company LLP. If stockholders do not ratify the appointment of Lazar, Levine &
Company LLP, the Board of Directors will consider the appointment of other
certified public accountants. A representative of the auditors is expected to be
present at the Meeting, will have the opportunity to make such statements as he
may care to make and will respond to appropriate questions from stockholders of
the Company.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR
THE RATIFICATION OF THE APPOINTMENT OF LAZAR, LEVINE & COMPANY LLP AS THE
COMPANY'S INDEPENDENT AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 31, 1996.
ANNUAL REPORT
The Company's Annual Report for the fiscal year ended December
31, 1995, including financial statements, is being mailed herewith. If, for any
reason, you did not receive your copy of the Annual Report, please advise the
Company and another will be sent to you. The Company will furnish, without
charge, a copy of its Annual Report on Form 10-K (without exhibits) for the
fiscal year ended December 31, 1995 (as filed with the Securities and Exchange
Commission) to stockholders of record as of April 30, 1996 who make requests to
Stuart M. Pellman, President, The Western Transmedia Company, Inc., 475 Sansome
Street, San Francisco, California 94111.
STOCKHOLDER PROPOSALS
Stockholder proposals in respect of matters to be acted upon
at the Company's 1997 Annual Meeting of Stockholders should be received by the
Company on or before January 10, 1997 in order that they may be considered for
inclusion in the Company's proxy materials.
BY ORDER OF THE BOARD OF DIRECTORS
WILLIAM J. BARRETT, Secretary
San Francisco, California
May 6, 1996
-13-
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE WESTERN TRANSMEDIA COMPANY, INC.
PROXY -- ANNUAL MEETING OF STOCKHOLDERS
JUNE 13, 1996
The undersigned, a stockholder of The Western Transmedia
Company, Inc., a Delaware corporation (the "Company"), does hereby constitute
and appoint Stuart M. Pellman, William J. Barrett and Herbert M. Gardner and
each of them, the true and lawful attorneys and proxies with full power of
substitution, for and in the name, place and stead of the undersigned, to vote
all of the shares of Common Stock of the Company that the undersigned would be
entitled to vote if personally present at the 1996 Annual Meeting of
Stockholders of the Company to be held at the offices of Olshan Grundman Frome &
Rosenzweig LLP, 16th Floor, 505 Park Avenue, New York, New York 10022, on June
13, 1996 at 11:00 a.m., E.D.T., or at any adjournment or adjournments thereof.
The undersigned hereby instructs said proxies or their substitutes as
set forth below.
1. ELECTION OF DIRECTORS:
The election of Richard O. Starbird, C. Scott Bartlett, Jr.
and Howard Grafman to Class I of the Board of Directors to
serve until the 1999 Annual Meeting of Stockholders and until
their respective successors are elected and shall qualify.
TO WITHHOLD
AUTHORITY TO WITHHOLD AUTHORITY
TO VOTE TO VOTE FOR ANY INDIVIDUAL
FOR ALL NOMINEE(S), PRINT NAME(S)
FOR ____ NOMINEES ____ BELOW
-------------------
-------------------
2. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS:
To ratify the appointment of Lazar, Levine & Company LLP as
the independent auditors of the Company for the fiscal year
ending December 31, 1996.
FOR _____ AGAINST _____ ABSTAIN _____
3. DISCRETIONARY AUTHORITY: To vote with discretionary authority with
respect to all other matters that may come before the Meeting.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH ANY DIRECTIONS HEREINBEFORE
GIVEN. UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED TO ELECT THE
NOMINEES AS DIRECTORS, TO RATIFY THE APPOINTMENT OF LAZAR, LEVINE & COMPANY LLP
AS THE COMPANY'S INDEPENDENT AUDITORS AND IN ACCORDANCE WITH THE DISCRETION OF
THE PROXIES OR PROXY WITH RESPECT TO ANY OTHER BUSINESS TRANSACTED AT THE ANNUAL
MEETING.
The undersigned hereby revokes any proxy or proxies heretofore given
and ratifies and confirms all that the proxies appointed hereby, or any of them,
or their substitutes, may lawfully do or cause to be done by virtue hereof.
<PAGE>
, 1996
_____________________ (L.S.)
_____________________ (L.S.)
Signature(s)
NOTE: PLEASE SIGN EXACTLY AS YOUR NAME OR NAMES APPEAR HEREON. WHEN SIGNING AS
ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE INDICATE THE
CAPACITY IN WHICH SIGNING. WHEN SIGNING AS JOINT TENANTS, ALL PARTIES IN THE
JOINT TENANCY MUST SIGN. WHEN A PROXY IS GIVEN BY A CORPORATION, IT SHOULD BE
SIGNED WITH FULL CORPORATE NAME BY A DULY AUTHORIZED OFFICER.
PLEASE MARK, DATE, SIGN AND MAIL THIS PROXY IN THE ENVELOPE PROVIDED
FOR THIS PURPOSE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
