<PAGE>
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 Section 240.14a-11(c) or Section 240.14a-12
PRISM ENTERTAINMENT
- --------------------------------------------------------------------------------
(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] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 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:
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(2) Aggregate number of securities to which transaction applies:
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(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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
PRISM ENTERTAINMENT CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
AND
PROXY STATEMENT
Notice is hereby given that the Annual Meeting of Stockholders of Prism
Entertainment Corporation (the "Company"), will be held on August 2, 1995 at
10:00 a.m., Pacific Daylight Time, in the Cypress Room of the Century Plaza
Hotel, 2025 Avenue of the Stars, Los Angeles, California, for the following
purposes:
1. To elect five directors;
2. To ratify the appointment of BDO Seidman as the independent auditors
of the Company for the 1996 fiscal year; and
3. To transact such other business as may properly come before the
meeting, and any adjournments thereof.
Stockholders of record at the close of business on June 30, 1995 are entitled
to receive notice of and to vote at the meeting.
By Order of the Board of
Directors
/s/ EARL ROSENSTEIN
Earl Rosenstein
Secretary
1888 Century Park East
Suite 350
Los Angeles, California 90067
July 6, 1995
<PAGE>
PROXY STATEMENT
GENERAL INFORMATION
Your proxy, in the form enclosed, is solicited by the Board of Directors of
Prism Entertainment Corporation (the "Company") for use at the 1995 Annual
Meeting of Stockholders to be held on August 2, 1995, and any adjournments
thereof. You are requested to complete, date and sign the enclosed proxy and
return it promptly to the Company.
A proxy may be revoked by the stockholder who executed said proxy at any time
prior to the commencement of the Annual Meeting by submitting to the Secretary
of the Company a written instrument revoking said proxy or a duly executed
proxy bearing a later date. In addition, a proxy may be revoked by the
stockholder who executed said proxy if the stockholder personally appears at
the Annual Meeting and notifies the Secretary of his intention to vote in
person. Subject to such revocation, all proxies duly executed and received by
the Company on a timely basis prior to the commencement of the Annual Meeting
will be voted in accordance with the directions specified on the proxy card.
The Annual Meeting has been called for the purpose of (1) electing five
directors and (2) ratifying the appointment of BDO Seidman as the Company's
auditors for the 1996 fiscal year. IF NO SPECIFICATION IS MADE TO THE CONTRARY,
DULY EXECUTED PROXIES WILL BE VOTED IN FAVOR OF THE ELECTION OF ALL FIVE
NOMINEES NAMED HEREIN AND FOR THE APPOINTMENT OF BDO SEIDMAN AS THE COMPANY'S
AUDITORS FOR THE 1996 FISCAL YEAR.
The presence, by proxy or in person, of a majority of the shares entitled to
vote will constitute a quorum for the Annual Meeting. Abstentions and broker
non-votes will be counted only for purposes of determining whether a quorum is
present at the Annual Meeting.
The principal executive offices of the Company are located at 1888 Century
Park East, Suite 350, Los Angeles, California 90067. Copies of the Company's
1995 Annual Report for the fiscal year ended January 31, 1995 are being mailed
to all stockholders with this Proxy Statement on or about July 6, 1995. The
Annual Report is not incorporated in this Proxy Statement, and is not to be
considered proxy solicitation material. Additional copies of the Annual Report
may be obtained, without charge, upon request addressed to Corporate Secretary,
Prism Entertainment Corporation, at the principal offices of the Company set
forth above.
June 30, 1995 has been fixed as the record date for determination of
stockholders entitled to notice of and to vote at the Annual Meeting, and any
adjournments thereof. At such date, there were 2,213,000 shares of the
Company's common stock ("Common Stock") outstanding and entitled to vote.
IMPORTANT
IF YOU DO NOT EXPECT TO BE PRESENT AT THE MEETING, PLEASE COMPLETE, SIGN AND
DATE THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.
YOU MAY NEVERTHELESS VOTE IN PERSON IF YOU DO ATTEND.
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table identifies the persons and entities known by the Company
to be the beneficial owners of 5% or more of the Company's outstanding voting
securities as of March 31, 1995:
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
NAME AND ADDRESS OF BENEFICIAL PERCENT
BENEFICIAL OWNER(1)(2) OWNERSHIP OF CLASS
---------------------- ---------- --------
<S> <C> <C>
Barry Collier(3)(4)...................................... 650,000 29.4
Investors(5)............................................. 756,000 34.3
KuwAm Corporation(5)(6)(7)............................... 679,000 30.6
Mishal Y. Al Sabah(5).................................... 32,000 1.4
Special Situation Investment Holdings, Ltd.(5)(6)........ 632,000 28.6
Special Situation Investment Holdings, L.P. II(5)(6)..... 25,000 1.1
Wirt D. Walker, III(5)(6)(8)............................. 758,000 34.3
</TABLE>
- --------
(1) The address of Mr. Collier is 1888 Century Park East, Suite 350, Los
Angeles, California 90067. The address of each of the Investors is 2600
Virginia Avenue N.W., Suite 900, Washington, D.C. 20037.
(2) The information was furnished by the named persons, or is contained in
filings made by certain named persons with the Securities and Exchange
Commission.
(3) Including 305,750 shares owned of record by Mr. Collier which were pledged
to Palan Settlement Trust ("Palan"), the predecessor in interest to Batur
Lake, Inc. and Betula Holdings, Inc., to secure a debt. On June 29, 1985,
Mr. Collier purchased 305,750 shares of the Company's common stock from
Palan, which shares are pledged to Palan to secure the deferred purchase
price owed to Palan. Under the terms of the pledge, Mr. Collier retains
voting rights and the right to receive cash dividends. Shares will be
released from the pledge on a pro rata basis as and when portions of the
deferred purchase price are paid to Palan. The deferred purchase price is
payable from proceeds to Mr. Collier of the sale of any of his common stock
or the shares of common stock held in trust for his children after such
time as aggregate proceeds of such sales exceed $500,000. Mr. Collier has
the obligation to pay the deferred purchase price only and to the extent
that he can lawfully sell any of such common stock. The Company is not a
party to the pledge and has not undertaken any obligation regarding the
sale to Mr. Collier. However, if Mr. Collier defaults in payments, Batur
Lake, Inc. and Betula Holdings, Inc., as successors to Palan's rights with
respect to the pledge, have the right to retain or to sell the pledged
shares to satisfy the unpaid balance of the purchase price.
(4) Including 137,000 shares held of record by trusts for Mr. Collier's
children for which Mr. Collier's brother is trustee. The trustee has sole
voting and investment power with respect to the shares held by such trusts.
Mr. Collier has sole voting and investment power over the remaining 513,000
shares.
(5) The "Investors" are KuwAm Corporation (the general partner of Special
Situation Investment Holdings, Ltd. and Special Situation Investment
Holdings, L.P. II); Special Situation Investment Holdings, Ltd.; Special
Situation Investment Holdings, L.P. II; Mishal Y. Al Sabah; and Wirt D.
Walker, III. The Investors have filed statements on Schedule 13D with the
Securities and Exchange Commission with respect to their ownership of
shares of common stock. The shares of the Investors are held of record as
follows: KuwAm Corporation--22,000 shares, Special Situation Investment
Holdings, Ltd.--632,000 shares, Special Situation Investment Holdings, L.P.
II--25,000 shares, Mishal Y. Al Sabah--32,000 shares, and Wirt D. Walker,
III and Sally Walker--25,000 shares.
(6) Mr. Walker is a director and Managing Director of KuwAm Corporation. By
reason of the foregoing and other relationships with members of the
Investors, Mr. Walker may be deemed to share voting and investment power
with respect to the shares owned by KuwAm Corporation, Special Situation
Investment Holdings, Ltd., Special Situation Investment Holdings, L.P. II
and Mr. Al Sabah.
2
<PAGE>
(7) Includes 632,000 and 25,000 shares held of record by Special Situation
Investment Holdings, Ltd. and Special Situation Investment Holdings, L.P.
II, respectively.
(8) Includes 632,000 shares, 22,000 shares, 32,000 shares and 25,000 held of
record by Special Situation Investment Holdings, Ltd., KuwAm Corporation,
Mr. Al Sabah, and Special Situation Investment Holdings L.P. II,
respectively, 2,000 shares held by Mr. Walker, as custodian for W.
Alexander Walker, and 20,000 shares purchasable by Mr. Walker upon exercise
of Nonqualified Stock Options granted pursuant to the Company's Stock
Option Plan.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the beneficial ownership of the Company's
Common Stock by (i) each director, individually, and (ii) all directors and
officers of the Company, as a group, as of March 31, 1995:
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
NAME AND ADDRESS OF BENEFICIAL PERCENT
BENEFICIAL OWNER(1) OWNERSHIP OF CLASS
------------------- ---------- --------
<S> <C> <C>
Ron Berger(2).......................................... 22,000 --
7227 N.E. 55th Avenue
Portland, Oregon 97218
Barry Collier(3)....................................... 650,000 29.4
1888 Century Park East
Suite 350
Los Angeles, CA 90067
Wirt D. Walker, III(4)................................. 758,000 34.3
2600 Virginia Avenue, N.W.
Suite 900
Washington, D.C. 20037
Peter Graham(5)........................................ 44,500 2.0
540 Madison Avenue
New York, New York 10022
Mishal Y. Al Sabah(6).................................. 32,000 1.4
2600 Virginia Avenue, N.W.
Suite 900
Washington, D.C. 20037
All Directors and Officers as a Group (9 persons)
(7)(8)(9)(10)......................................... 1,539,500 69.3
</TABLE>
- --------
(1) The information was furnished by the named persons.
(2) Does not include any shares owned by Rentrak Corporation as to which Mr.
Berger disclaims any beneficial ownership. Includes 20,000 shares
purchasable by Mr. Berger upon exercise of Nonqualified Stock Options
granted pursuant to the Company's Stock Option Plan.
(3) See notes 3 and 4 under "Security Ownership of Certain Beneficial Owners,"
above.
(4) See notes 5, 6 and 8 under "Security Ownership of Certain Beneficial
Owners" above.
(5) Includes 10,000 shares held of record by a trust for Mr. Graham's mother
for which Mr. Graham is a co-trustee. As co-trustee, Mr. Graham shares
voting and investment power over such shares.
(6) See Note 5 under "Security Ownership of Certain Beneficial Owners" above.
(7) Includes 15,000 shares purchasable by Joseph Petrone upon exercise of
Incentive Stock Options granted pursuant to the Company's Stock Option
Plan.
3
<PAGE>
(8) Includes 15,000 shares purchasable by Barbara Javitz upon exercise of
Incentive Stock Options granted pursuant to the Company's Stock Option
Plan.
(9) Includes 30,000 shares purchasable by Earl Rosenstein upon exercise of
Incentive Stock Options granted pursuant to the Company's Stock Option
Plan.
(10) Includes 5,000 shares purchasable by Kelly Nielsen upon exercise of
Incentive Stock Options granted pursuant to the Company's Stock Option
Plan.
CHANGE IN CONTROL
See note 3 under "Security Ownership of Certain Beneficial Owners," above.
ELECTION OF DIRECTORS
At the Annual Meeting, five directors will be elected to hold office for a
term of one year, and until their successors have been duly elected and
qualified. The persons named in the accompanying proxy, or their substitutes,
intend to vote the shares represented by each proxy in favor of the election of
the nominees set forth below, unless a contrary direction is specified on the
proxy card. Each nominee has indicated his intention to serve, if elected. In
case any such nominee shall become unavailable for election to the Board of
Directors, an event which is not anticipated, the persons named as proxies, or
their substitutes, will have full discretion and authority as provided in the
proxy to vote or to refrain from voting for any other nominee in accordance
with their judgment.
NOMINEES FOR ELECTION AS DIRECTORS
Set forth below are the five nominees for election to the Board of Directors.
All of the nominees are currently directors of the Company. The table below
indicates, where applicable, the year in which each nominee was first elected
or appointed as a director of the Company and any other office of the Company
held by each.
The following information furnished with respect to each nominee for election
as a director was obtained from information furnished directly by the
individual to the Company.
<TABLE>
<CAPTION>
DIRECTOR OF
THE COMPANY OTHER POSITIONS
NAME AGE SINCE WITH COMPANY
---- --- ----------- -----------------------
<S> <C> <C> <C>
Ron Berger 47 1986 None
Barry Collier 52 1984 President, Chief
Executive Officer,
Chief Operating Officer
Wirt D. Walker, III 49 1990 Chairman of the Board
Peter M. Graham 40 1994 None
Mishal Y. Al Sabah 34 1994 None
</TABLE>
The business experience of each of the nominees for election as a director is
described below.
MEETINGS OF THE BOARD OF DIRECTORS
During the fiscal year ended January 31, 1995, the Company's Board of
Directors held four meetings. The Board of Directors has no standing nominating
or any committee which performed similar functions during the last fiscal year.
The Board has established an audit committee whose members are currently
Messrs. Berger, Graham and Walker. The Audit Committee, which met twice during
the Company's last
4
<PAGE>
fiscal year, is responsible for appointment of independent auditors, review of
the Company's financial statements and establishment of internal control
procedures. The Board has also established a compensation committee consisting
of all members of the Board which met one time during the Company's last fiscal
year. Additionally, the Company's Stock Option Plan provides for a committee.
During the last fiscal year, the Stock Option Committee met one time.
EXECUTIVE OFFICERS
The following table identifies the executive officers of the Company, their
respective ages and the year in which each was first appointed an executive
officer. Each executive officer serves at the discretion of the Board of
Directors, subject to the terms of any employment contract.
<TABLE>
<CAPTION>
OFFICER
NAME AGE OFFICE SINCE
---- --- ------ -------
<C> <C> <S> <C>
Barry Collier 52 President; Chief Executive Officer; Chief 1984
Operating Officer
Earl Rosenstein 62 Senior Vice President; Secretary; Chief 1985
Financial Officer
Joseph Petrone 55 Senior Vice President--Sales and Marketing 1987
Barbara Javitz 40 Vice President--Acquisitions, and President, 1989
Prism Pictures Corporation
Kelly Nielsen 32 Vice President--Creative Services 1993
</TABLE>
BUSINESS EXPERIENCE
The following section summarizes the present occupation and prior business
experience during the past five years for each director, nominee for director
and executive officer of the Company:
Barry Collier has been a director, President and Chief Operating Officer of
the Company from its inception and served as its Secretary from its inception
until June 12, 1985, when he became Chief Executive Officer. Mr. Collier served
as Chairman of the Board from 1990 to 1994. Mr. Collier served as a director,
President and Chief Operating Officer of the Company pursuant to an Employment
Agreement between the Company and Mr. Collier. That Agreement was terminated on
August 1, 1985, but Mr. Collier now serves as President, Chief Executive
Officer and Chief Operating Officer pursuant to a new Employment Agreement,
effective August 1, 1985, as amended March 2, 1988 and on August 12, 1993.
Earl Rosenstein has been Chief Financial Officer, Vice President and
Secretary of the Company since June 12, 1985 and served as a director of the
Company from 1985 to 1994. Since February 1987, he has been Senior Vice
President of the Company.
Ron Berger has been a director of the Company since December 1986. In
September 1988, Mr. Berger became Chairman of the Board, President and Chief
Executive Officer of Rentrak Corporation, a publicly held information processor
and distributor of video cassettes.
Wirt D. Walker, III has been a director of the Company since 1990. Mr. Walker
was elected Chairman of the Board of the Company in August 1994. Mr. Walker is
a director and the Managing Director of KuwAm Corporation, a company engaged in
private investment banking and special situation investing activities, since
1982. He is also the Chairman of Commander Aircraft Company, a publicly held
company that manufactures, markets and provides support services for single-
engine high-performance Commander aircraft, and ILC Technology, Inc., a
publicly held company that is a manufacturer of high performance light source
products used for industrial, military, medical and aerospace applications. In
addition, Mr. Walker is the Chairman of Securacom, Incorporated and Advanced
Laser Graphics, Inc.
5
<PAGE>
Since 1990, 1989 and 1982, respectively, Mr. Graham has been Chairman of the
Executive Committee, Director of Corporate Finance and a Director of Ladenburg,
Thalmann & Co. Inc., a company engaged in investment banking. Mr. Graham is a
director of Regency Equities Corp., a company engaged in real estate investment
business. Mr. Graham is also a Director of Rudy's Restaurant Group, a company
engaged in the restaurant business, Suspension & Parts Industries, Ltd., a
company which designs, develops and markets suspension system components, and
Seventh Generation, a company which distributes via catalog environmental
products.
Since 1982, Mr. Al Sabah has served as the Chairman of the Board of Directors
of KuwAm Corporation, a company engaged in private investment banking and
special situation investment activities. Mr. Al Sabah is a director of
Commander Aircraft Company, a publicly held company that manufacturers, markets
and provides support services for single-engine high performance Commander
Aircraft. Mr. Al Sabah is also a director of Advanced Laser Graphics, Inc. and
Securacom, Incorporated. Additionally, Mr. Al Sabah is a private investor who
has been involved in a broad range of investment activities in the United
States and overseas for the past fifteen years.
Joseph A. Petrone has been Senior Vice President--Sales and Marketing of the
Company since September, 1992, having served as the Company's Vice President of
Sales from January 1987 to October 1988, Director of Sales from June 1986 to
January 1987, and National Sales Manager from December 1985 to June 1986. From
January 1985 to December 1985, Mr. Petrone was the National Sales Manager of
Sony Video Software. From January 1983 to January 1985, Mr. Petrone was a self-
employed sales consultant, and from January 1963 through October 1982, he was
employed by Capitol Records, having served in a variety of domestic and
international sales positions, including having served as Vice President of
Sales.
Barbara Javitz has been Vice President--Acquisitions since May, 1989. In this
capacity, she is responsible for all programming released by the Company and
monitors Prism's involvement in all production activities. In February 1992,
she was appointed as President of Prism Pictures Corporation, in which capacity
she is responsible for development, programming and co-production of up to 12
films per year. Prior to joining Prism, Ms. Javitz was Senior Vice President,
Programming at Nelson Entertainment from 1987 to 1989. She began her tenure in
the video industry in 1981 at Media Home Entertainment serving in various
capacities from administration to Vice President of Acquisitions.
Kelly Nielsen has been Vice President--Creative Services since July, 1993.
She has worked in various capacities with the Company since 1984.
6
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information concerning compensation paid (or
earned by the named individuals) by the Company and its subsidiary, Prism
Pictures Corporation, for the fiscal years ended January 31, 1995, 1994 and
1993 to individuals who were at January 31, 1995 the chief executive officer
and the three other executive officers who earned more than $100,000 for the
last fiscal year:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
STOCK
OPTIONS
OTHER ANNUAL # OF
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($)(1) COMPENSATION SHARES
--------------------------- ---- --------- ----------- ------------ -------
<S> <C> <C> <C> <C> <C>
Barry Collier..................... 1995 447,319 -- -- --
President; Chief Executive 1994 421,985 64,000 -- --
Officer; Chief Operating 1993 387,324 -- -- --
Officer
Earl Rosenstein................... 1995 147,930 -- -- --
Senior Vice President; 1994 150,000 20,000 -- --
Chief Financial Officer; 1993 141,935 -- -- --
Secretary
Joseph Petrone.................... 1995 108,479 -- -- --
Vice President--Sales and 1994 110,000 12,500 -- --
Marketing 1993 105,600 -- -- --
Barbara Javitz.................... 1995 108,479 -- -- --
Vice President--Acquisitions; 1994 110,000 12,500 -- 10,000
President, Prism Pictures
Corporation
</TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
SECURITIES UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS OPTIONS/SARS AT
AT FY-END(#) FY-END($)
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
---- --------------- ----------- ------------- ---------------
<S> <C> <C> <C> <C>
Barry Collier........ N/A N/A N/A N/A
Earl Rosenstein...... -0- -0- 30,000/0 0/N/A
Joseph Petrone....... -0- -0- 15,000/0 0/N/A
Barbara Javitz....... -0- -0- 15,000/0 0/N/A
</TABLE>
No stock options were granted to the named executive officers during the last
fiscal year.
STOCK OPTION PLAN
The Company maintains a Stock Option Plan (the "Plan"), effective as of June
12, 1985 and amended as of January 1, 1987 and as amended and readopted on
August 12, 1993, which provides for the grant of options to purchase up to
200,000 shares of the Company's common stock. Pursuant to the Plan, persons
classified by the Board of Directors (or a committee thereof) as key employees
of the Company and its subsidiaries, directors of the Company and its
subsidiaries and certain independent contractors of the Company and its
subsidiaries, by reason of their contribution to the success of the Company and
its subsidiaries, may be granted stock options intended to qualify as incentive
stock options ("ISOs") within the meaning of Section 422A of the Internal
Revenue Code of 1986, as amended (the "Code"), or nonqualified stock options,
at the discretion of the Board. Independent contractors and nonemployee
directors are only eligible for nonqualified stock options.
7
<PAGE>
The exercise price of the option shares cannot be less than the fair market
value of the Company's common stock on the date of grant, except that options
granted to any individual who at the time the option is granted owns more than
10% of the stock of the Company cannot be less than 110% of the fair market
value on the date of grant. Upon the grant of an option, the optionee is
required to enter into an agreement setting forth the terms of the option. No
option under the Plan may be exercised after ten years following the date of
grant and any option granted to any person then owning 10% or more of the
voting power of the Company must expire within five years of grant. Cash must
be paid for the purchase of the stock upon exercise of the option. No ISO
granted before January 1, 1987 may be exercised if a previous ISO is
outstanding (within the meaning of Section 422A of the Code). The Plan will
expire on June 12, 2000.
Options granted under the Plan are exercisable only while the optionee is
employed by or providing services to the Company or to its subsidiaries, except
that if the optionee's termination results from disability of the optionee, the
option may be exercised within one year from the date of disability of the
optionee, and if such termination results from the death of the optionee, the
option may be exercised (unless it provides to the contrary) by the optionee's
legal representatives to the extent it was exercisable on the date of the
optionee's death. The other terms and conditions of the options, including the
period and manner in which an option may be exercised, are to be established by
the Board. The Board may amend or discontinue the Plan at any time.
At a Board of Directors meeting held November 9, 1988, all stock options then
existing, subject to the written agreement of each person then holding an
option, were cancelled effective that date and new options were issued
effective that date in substitution of the cancelled options at an exercise
price of $3.125 per share, the closing price of the Company's common stock on
the American Stock Exchange on that date. All of the persons holding options at
November 9, 1988, have agreed in writing to the cancellation of their
outstanding options and the issuance of new options. The effect of this action
was to lower the exercise price of the outstanding options, but the Company's
Board of Directors believes that such action is consistent with the purpose and
intent underlying the Plan.
As of April 15, 1995, options for the purchase of 145,000 shares were
outstanding and held by 8 employees, one independent contractor and two outside
directors. Of these, options for 65,000 shares are held by executive officers.
The exercise prices for the options are as follows: one option for 5,000 shares
at an exercise price of $2.75 per share; five options for an aggregate of
46,000 shares at an exercise price of $3.125 per share, 10 options for an
aggregate of 99,000 shares at an exercise price of $3.00 per share. No options
were exercised in the past fiscal year.
EMPLOYEE BONUS FUND
The Company has a policy of reserving up to 6% of its pretax profits as an
employee bonus fund out of which bonuses may be paid to key employees (other
than Mr. Collier, who is not eligible) as and when determined by the Board of
Directors in its sole discretion. The Board has the right to amend or to
terminate this policy at any time. For the year ended January 31, 1995, no
bonuses were accrued under this policy.
COMPENSATION TO DIRECTORS
During the fiscal year ended January 31, 1995, directors of the Company who
are also officers did not receive any compensation for their services as
directors. Each director of the Company, other than those who are officers of
the Company or its affiliates, is entitled to receive $5,000 per year, plus
reimbursement of expenses incurred as a director. At the Board of Directors
Meeting held in August 1994, the Board authorized the payment of $12,500 to
Wirt Walker in connection with Mr. Walker acting as Chairman of the Board.
8
<PAGE>
PROVISIONS UPON TERMINATION OF EMPLOYMENT
Pursuant to a March 2, 1988 Amendment to Mr. Collier's Employment Agreement,
in the event that Mr. Collier's employment is terminated prior to the
expiration of the term for any reason other than "justifiable cause" (as
defined in the Agreement), the Company will pay Mr. Collier $440,000 for each
year remaining in the term plus an additional sum of $440,000. Pursuant to an
Amendment as of August 12, 1993, the term of Mr. Collier's employment agreement
was extended to July 31, 1998.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
RON BERGER
Mr. Berger, a director of the Company, is Chairman of the Board, President
and Chief Executive Officer of Rentrak Corporation ("Rentrak"). During the year
ended January 31, 1995, the Company had sales of $923,000 to Rentrak. In
December 1992, Prism and Rentrak entered into an agreement (the "PPT
Agreement") pursuant to which Prism appointed Rentrak as a distributor for
Prism's home video products through Rentrak's pay-per-transaction system ("PPT
System"). The PPT Agreement was amended on February 28, 1994. The PPT System
requires a participating home video retailer to pay to the distributor a per
transaction fee for each rental or sale of a video product to a consumer.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors had appointed the firm of BDO Seidman, as independent
auditors of the Company for the fiscal year ended January 31, 1995. BDO Seidman
has examined the financial statements of the Company and its consolidated
subsidiaries since February 1, 1993. A representative of BDO Seidman is
expected to be present at the Annual Meeting, will have the opportunity to make
a statement if such representative desires to do so, and will be available to
respond to appropriate questions.
STOCKHOLDER PROPOSALS
In order to be considered for inclusion in the Company's Proxy Statement and
form of proxy relating to the 1996 Annual Meeting of Stockholders, stockholder
proposals must be received by the Company not later than April 3, 1996. Such
proposals should be submitted to the Secretary of the Company at the Company's
principal office.
AVAILABILITY OF FORM 10-K
ANY STOCKHOLDER WHO WOULD LIKE TO RECEIVE WITHOUT CHARGE A COPY OF THE
COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED JANUARY 31, 1995 SHOULD
SEND A WRITTEN REQUEST THEREFOR TO THE COMPANY AT 1888 CENTURY PARK EAST, SUITE
350, LOS ANGELES, CALIFORNIA 90067, ATTENTION: CORPORATE SECRETARY.
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MISCELLANEOUS
The cost of preparing this Proxy Statement and of soliciting proxies will be
borne by the Company. Proxies may be solicited by mail, personal interview,
telephone and telegraph. Directors, officers and regular employees of the
Company may solicit proxies by such methods without additional remuneration.
Banks, brokerage houses and other institutions, nominees and fiduciaries will
be requested to forward the soliciting material to their principals and to
obtain authorizations for the execution of proxy cards, and will, upon request,
be reimbursed for reasonable expenses incurred.
As of the date of this Proxy Statement, the Company does not intend to
present, and has not been informed that any other persons intend to present,
any business not specified in this Proxy Statement for action at the meeting.
If any other matter comes before the meeting, proxies will be voted on such
matters in accordance with the judgment of the persons authorized to vote the
proxies.
By Order of the Board of
Directors
/s/ BARRY COLLIER
Barry Collier
President, Chief Executive
Officer and Chief Operating
Officer
Dated: July 6, 1995
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PRISM ENTERTAINMENT CORPORATION
1888 CENTURY PARK EAST, SUITE 350
LOS ANGELES, CALIFORNIA 90067
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF PRISM
ENTERTAINMENT CORPORATION. The undersigned hereby appoints Barry Collier and
Ron Berger, and each of them, as Proxy, with the power to appoint his
substitute, and hereby authorizes him to represent and vote as designated below
all the shares of common stock of Prism Entertainment Corporation held of
record by the undersigned on June 30, 1995, at the Annual Meeting of
Stockholders to be held on August 2, 1995, or any adjournment and postponement
thereof.
1. PROPOSAL TO ELECT five directors:
[_] FOR all nominees listed below (except as indicated below to the
contrary)
[_] WITHHOLD AUTHORITY to vote for all nominees listed below:
Ron Berger; Barry Collier; Wirt D. Walker III; Peter M. Graham; Mishal
Y. Al Sabah
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below)
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2. PROPOSAL TO RATIFY THE APPOINTMENT OF BDO SEIDMAN AS THE INDEPENDENT
AUDITORS OF THE COMPANY FOR THE 1996 FISCAL YEAR.
[_] IN FAVOR OF THE PROPOSAL
[_] AGAINST THE PROPOSAL
3. In his discretion, the Proxy is authorized to vote upon such other
business as properly may come before the meeting.
(Continued and to be dated and signed on other side)
This Proxy, when properly executed, will be voted in the manner
directed hereby by the undersigned stockholder. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.
P Please sign exactly as your name appears below. When shares are held
R by joint tenants, both should sign. When signing as attorney, executor,
O administrator, trustee or guardian, please give full title as such. If
X a corporation, please sign in full corporate name by President or other
Y authorized officer. If a partnership, please sign in full partnership
name by authorized person.
Dated: __________________, 1995
_______________________________
Signature
_______________________________
Signature if held jointly
PLEASE MARK, SIGN, DATE AND
RETURN THE PROXY CARD PROMPTLY
IN THE ENCLOSED ENVELOPE.
