<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant |X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission.
|X] Definitive Proxy Statement Only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
TRANSMEDIA NETWORK INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Payment of Filing Fee (check the appropriate box):
|X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item22(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.
[ ] 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:
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4) Date Filed:
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<PAGE>
TRANSMEDIA NETWORK INC.
11900 BISCAYNE BOULEVARD
MIAMI, FLORIDA 33181
--------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MARCH 20, 1996
-------------------------
To the Stockholders of TRANSMEDIA NETWORK INC.:
The 1996 Annual Meeting of Stockholders of Transmedia Network Inc. will be
held at The Helmsley Hotel, 212 East 42nd Street, New York, New York 10017
(between 2nd and 3rd Avenues), Room-- Knickerbocker "D", on Wednesday, March 20,
1996 at 10:00 a.m., New York time, for the following purposes:
(1) to elect Directors;
(2) to approve the adoption of the Company's 1996 Long-Term Incentive Plan;
and
(3) to transact such other business as may properly come before the meeting
or any adjournments or postponements thereof.
Provision is made on the enclosed proxy card for your direction as to the
matters set forth as Items (1) and (2) above. Further information concerning
these matters is set forth in the accompanying Proxy Statement.
Holders of record of the Company's Common Stock at the close of business on
January 24, 1996 are entitled to receive notice of and to vote at the 1996
Annual Meeting of Stockholders and at any postponement or adjournment thereof.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE ANNUAL MEETING WHETHER
OR NOT YOU ARE PERSONALLY ABLE TO ATTEND. STOCKHOLDERS WHO DO NOT EXPECT TO
ATTEND THE MEETING IN PERSON ARE URGED TO PLEASE SIGN AND DATE THE ACCOMPANYING
PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE. THIS WILL ENSURE THAT YOUR
SHARES ARE VOTED IN ACCORDANCE WITH YOUR WISHES AND THAT A QUORUM WILL BE
PRESENT AT THE ANNUAL MEETING.
By order of the Board of Directors
KATHRYN M. FERARA
Secretary
Miami, Florida
January 26, 1996
<PAGE>
TRANSMEDIA NETWORK INC.
11900 BISCAYNE BOULEVARD
MIAMI, FLORIDA 33181
--------------------------
1996 ANNUAL MEETING OF STOCKHOLDERS
--------------------------
PROXY STATEMENT
SOLICITATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Transmedia Network Inc., to be voted at the
1996 Annual Meeting of Stockholders to be held at The Helmsley Hotel, 212 East
42nd Street, New York, New York 10017 (between 2nd and 3rd Avenues), Room
Knickerbocker "D", on Wednesday, March 20, 1996, at 10:00 a.m., New York time,
and any postponements or adjournments thereof. This Proxy Statement and the
enclosed proxy are being sent to stockholders commencing on or about January 29,
1996. The principal executive offices of the Company are located at 11900
Biscayne Boulevard, Miami, Florida 33181.
Solicitation will be primarily by mail but may also be made by personal
interview, by telephone, by telegraph, by telex, or by telecopier, in each case
by officers and employees of the Company who will not be additionally
compensated therefor. The Company will request persons such as brokers, nominees
and fiduciaries, holding stock in their names for others, or holding stock for
others who have the right to give voting instructions, to forward proxy material
to their principals and request authority for the execution of the proxy. The
total cost of soliciting proxies will be borne by the Company.
VOTING
Only holders of record of common stock, par value $.02 per share, of the
Company (the "Common Stock") at the close of business of January 24, 1996, the
record date, will be entitled to vote at the meeting. On the record date, there
were 10,119,333 shares of Common Stock outstanding, and each holder of such
shares will be entitled to one vote at the meeting for each share registered in
his name. Holders of Common Stock are not entitled to cumulate their votes on
any matter to be considered at the meeting. The presence at the meeting, in
person or by proxy, of the holders of a majority of the total number of shares
of Common Stock outstanding on the record date constitutes a quorum for the
transaction of business at the meeting.
All properly executed proxies delivered pursuant to this solicitation and not
revoked will be voted at the Annual Meeting in accordance with the directions
given. Regarding the election of Directors to serve until the 1997 or 1999
annual meeting of stockholders, in voting by proxy, stockholders may vote in
favor of all nominees or withhold their votes as to all nominees or withhold
their votes as to specific nominees. With respect to the other proposal to be
voted upon, stockholders may vote in favor of the proposal, against the proposal
or may abstain from voting. Stockholders should specify their choices on the
enclosed form of proxy. If no specific instructions are given with respect to
the matters to be acted upon, the shares represented by a signed proxy will be
voted FOR the election of all nominees and FOR the proposal to approve the
adoption of the 1996 Long-Term Incentive Plan. Directors will be elected by a
plurality of the votes cast by the holders of the shares of Common Stock voting
in person or by proxy at the Annual Meeting. Approval of the adoption of the
1996 Long-Term Incentive Plan will require the affirmative vote of the holders
of a majority of the shares of Common Stock present or represented at the Annual
Meeting and entitled to vote. Thus, in the case of approval of the adoption of
the 1996
<PAGE>
Long-Term Incentive Plan, abstentions will have the same effect as a negative
vote, but abstentions will have no effect on the vote for election of Directors.
Broker non-votes will not be included in vote totals and will have no effect on
the outcome of the vote.
A stockholder who submits a proxy may revoke it at any time prior to the
voting of the proxy by written notice to the Secretary of the Company or by
attending the meeting and voting his shares in person.
After the initial mailing of this Proxy Statement, proxies may be solicited
by telephone, telegram or personally by directors, officers and other employees
of the Company (who will not receive any additional compensation therefor). All
expenses with respect to this solicitation of proxies, including printing and
postage costs will be paid by the Company. Arrangements will be made with
brokers and other custodians, nominees and fiduciaries to send proxies and the
proxy material to their principals, and the Company will, upon request,
reimburse them for their reasonable expenses in doing so. The Company may engage
an outside proxy soliciting firm to assist in the solicitation of proxies. The
Company will pay reasonable fees and out-of-pocket costs and expenses if it
elects to engage such a firm.
2
<PAGE>
ITEM NO. 1 -- ELECTION OF DIRECTORS
The Board of Directors is divided into three classes, with one class standing
for election each year for a three-year term. The Board has nominated Irwin
Hochberg, Henry Seiden and Jack Africk for reelection as directors, each to hold
office until the 1999 Annual Meeting of Stockholders and until his respective
successor is duly elected and qualified. In addition, the Board has also
nominated Barry S. Kaplan for election as a director to hold office until the
1997 Annual Meeting of Stockholders and until his successor is duly elected and
qualified.
Should any one or more of these nominees become unable to serve for any
reason, or will not serve, which is not anticipated, the Board of Directors may,
unless the Board by resolution provides for a lesser number of Directors,
designate a substitute nominee or nominees, in which event the persons named in
the enclosed proxy will vote proxies that would otherwise be voted for all named
nominees for the election of such substitute nominee or nominees.
RECOMMENDATION OF THE BOARD OF DIRECTORS CONCERNING THE ELECTION OF DIRECTORS
The Board of Directors of the Company recommends a vote FOR Irwin Hochberg,
Henry Seiden and Jack Africk as Directors to hold office until the 1999 Annual
Meeting of Stockholders and until their respective successors are duly elected
and qualified and FOR Barry S. Kaplan as director to hold office until the 1997
Annual Meeting of Stockholders and until his successor is duly elected and
qualified. Proxies received by the Board of Directors will be so voted unless
stockholders specify in their proxy a contrary choice.
NOMINEES FOR ELECTION
<TABLE>
<CAPTION>
DIRECTOR TERM TO
NOMINEE AGE POSITION AND/OR PRINCIPAL OCCUPATION SINCE EXPIRE
------- --- ------------------------------------ ----- ------
<S> <C> <C> <C> <C>
Irwin Hochberg....... 67 Senior Partner and President,
Bloom Hochberg & Co., P.C. 1987 1999
Henry Seiden ......... 67 Chairman and Chief Executive Officer,
The Seiden Group Inc. 1988 1999
Chairman of the Board,
Jack Africk........... 67 Evolution Consulting Group, Inc. 1992 1999
Vice President of the Company and
Barry S. Kaplan....... 37 President of Transmedia Service
Company Inc. -- 1997
</TABLE>
3
<PAGE>
CONTINUING DIRECTORS
<TABLE>
<CAPTION>
DIRECTOR TERM TO
DIRECTOR AGE POSITION AND/OR PRINCIPAL OCCUPATION SINCE EXPIRE
-------- ---- -------------------------------------- ------ -------
<S> <C> <C> <C> <C>
Melvin Chasen....... 67 Chief Executive Officer of the Company 1984 1998
James M. Callaghan.. 56 Vice President of the Company 1991 1998
Herbert M. Gardner.. 56 Senior Vice President,
Janney Montgomery Scott Inc. 1983 1997
A. Barry Merkin..... 60 Clinical Professor,
J.L. Kellogg Graduate School of Management,
Northwestern University 1995 1997
</TABLE>
BUSINESS EXPERIENCE
Mr. Hochberg, a director of the Company since 1987, served as a director of
Transmedia Network Inc., a Colorado corporation ("Transmedia Colorado"), which
was merged into the Company. He has been Senior Partner and President of Bloom
Hochberg & Co., P.C., a firm of Certified Public Accountants, for more than
seven years.
Mr. Seiden, a director of the Company since 1988, is presently the Chairman
and Chief Executive Officer of The Seiden Group Inc., an advertising consultant,
and Vice Chairman of Jordan, McGrath, Case & Taylor Inc., an advertising agency.
Mr. Seiden had been the Chairman of Ketchum Advertising, New York, an
advertising agency which is a division of Ketchum Communications, Inc., from
1987 through 1991.
Mr. Africk, who was elected a director of the Company in 1992, is the
Chairman of the Board of Evolution Consulting Group, Inc., Boca Raton, Florida.
From 1993 to 1995, he was Vice Chairman of the Board of Duty Free International,
Inc., and is currently a director of that company. Until June 1993, Mr. Africk
was Vice Chairman of UST, Inc. and President and Chief Executive Officer of its
subsidiary, United States Tobacco Company. He is also a director of Crown
Central Petroleum Corporation and of Tanger Factory Outlet Centers.
Mr. Kaplan has served as Vice President of the Company and President of
Transmedia Service Company Inc., a subsidiary, since July 1995. From 1986 until
joining the Company, he served in various positions including as Executive Vice
President and Chief Operating Officer of Liberty Travel, Inc., a chain of
full-service travel agencies.
Mr. Chasen, who devotes all of his time to the affairs of the Company, has
been a director and the Chairman of the Board, President and Chief Executive
Officer of the Company since 1984. From 1984 through 1987, he was a director,
Chairman of the Board, President and Chief Executive Officer of Transmedia
Colorado. From its inception in 1983 until 1984, he was President and a director
of Transmedia Network Inc., a private Delaware corporation engaged in the media
barter business, which merged with Transmedia Colorado in 1984. Until March
1995, Mr. Chasen served as a director of The Western Transmedia Company, Inc.,
the Company's California franchisee, a director of Transmedia Europe, Inc., the
Company's European licensee, and a director of Transmedia Asia Pacific, Inc.,
the Company's licensee for the Asia-Pacific rim region.
4
<PAGE>
Mr. Callaghan, a director of the Company since 1991, was elected Vice
President of the Company and President of Transmedia Restaurant Company Inc., a
subsidiary, in 1994. He joined the Company in 1989 and has served as Executive
Vice President, as Vice President, Sales and Marketing and as Treasurer.
Mr. Gardner, a director of the Company since 1983, has been employed as a
Senior Vice President of Janney Montgomery Scott Inc., an investment banking
firm, for more than five years. He was a director of two predecessors of the
Company from 1983 through 1987. Mr. Gardner is a director of Shelter Components
Corporation, a distributor to the manufactured housing and recreational vehicle
industries, and Nu Horizons Electronics Corp., an electronics components
distributor. He is Chairman of the Board of Supreme Industries, Inc., a company
which manufactures specialized truck bodies, and Contempori Homes Inc., a
manufacturer of modular homes. Mr. Gardner is also a director of TGC Industries,
Inc., which manufactures specialty bags principally for the agricultural
industry and provides geophysical services to the oil and gas industries. Mr.
Gardner also serves as director of Hirsch International Corp. which manufactures
technologically advanced commercial embroidery equipment and related diversified
value-added products. Since 1991, Mr. Gardner has been a director of The Western
Transmedia Company, Inc., the Company's California franchisee.
Mr. Merkin, a director of the Company since April 1995, has been Clinical
Professor at the J.L. Kellogg Graduate School of Management, Northwestern
University since 1992. From 1990 to 1992 he was an Executive Resident at DePaul
University, Chicago, Illinois.
MEETINGS AND COMMITTEES OF BOARD OF DIRECTORS
During the fiscal year ended September 30, 1995, the Stock Option Plan
Committee of the Company consisted of Messrs. Gardner and Hochberg and Mr.
Charles F. Simonelli, who served as a director until March 24, 1995. The Stock
Option Plan Committee was charged with administering the Company's 1987 Stock
Option and Rights Plan, as amended (the "1987 Plan"), and recommending to the
Board of Directors changes to that plan.
The Audit Committee of the Company consists of Messrs. Africk and Hochberg.
The Audit Committee is charged with recommending to the Board of Directors the
engagement or discharge of independent public accountants; reviewing the plan
and results of the auditing engagement with the Chief Financial Officer of the
Company and the independent public accountants; and reviewing with the Chief
Financial Officer of the Company the scope and nature of the Company's internal
auditing system.
During the fiscal year ended September 30, 1995, the Board of Directors held
five meetings, the Stock Option Plan Committee held two meetings, and the Audit
Committee held three meetings. Each director attended at least 75% of the
aggregate number of meetings held by the Board and the Stock Option Plan
Committee or the Audit Committee which he was eligible to attend.
COMPENSATION OF DIRECTORS
The Company pays each director who is not a full-time employee an annual
stipend of $10,000 payable quarterly in arrears on January 1, April 1, July 1
and October 1 of each fiscal year, and an attendance fee of $1,000 for each
meeting of the Board that the director attends. Full-time employees of the
Company who also serve as directors do not receive compensation for attending
board meetings. The Company also pays each member of the Audit Committee an
attendance fee of $500 for each meeting of the Audit Committee attended by such
member.
5
<PAGE>
EXECUTIVE COMPENSATION
The aggregate compensation paid or accrued by the Company during the fiscal
years ended September 30, 1995, 1994 and 1993, to the Chief Executive Officer of
the Company and to the four most highly compensated executive officers (other
than the Chief Executive Officer) whose compensation in salary and bonus
exceeded $100,000, is set forth in the following table.
SUMMARY COMPENSATION TABLE
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
-------------------- -------
NUMBER OF
OPTIONS
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS GRANTED
- --------------------------- ---- ------ ----- -------
Melvin Chasen 1995 $275,000 $400,100 30,000
Chairman of the Board, 1994 225,000 393,400 45,000
President and Chief 1993 200,000 247,800 67,500
Executive Officer
James M. Callaghan 1995 180,000 16,400 15,000
Vice President 1994 170,000 142,257 22,500
1993 160,000 99,757 33,750
David L. Weinberg 1995 137,154 25,000 15,000
Vice President and Chief 1994 115,346 -- 22,500
Financial Officer 1993 90,000 28,500 --
Paul A. Ficalora 1995 130,673 30,000 10,000
Executive Vice President of 1994 109,942 -- --
Transmedia Restaurant 1993 95,500 18,900 15,750
Company Inc.
Gregory R. Borges 1995 91,510 25,000 5,000
Treasurer 1994 82,472 -- --
1993 75,000 28,500 6,750
OPTIONS GRANTED
The following table sets forth, as to the executive officers named in the
Summary Compensation Table, with respect to the fiscal year ended September 30,
1995, information relating to the grants of stock options both outside and under
the 1987 Plan.
6
<PAGE>
OPTION GRANTS IN THE FISCAL YEAR ENDED SEPTEMBER 30, 1995
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
PERCENT OF POTENTIAL REALIZABLE
TOTAL VALUE AT ASSUMED ANNUAL
OPTIONS RATES OF STOCK PRICE
GRANTED TO APPRECIATION FOR
EMPLOYEES EXERCISE OPTION TERM
OPTIONS IN FISCAL PRICE PER EXPIRATION ---------------------
NAME DATE OF GRANT GRANTED YEAR SHARE(1) DATE 5% 10%
- ---- ------------- ------- ----- -------- ----- -- ---
<S> <C> <C> <C> <C> <C> <C> <C>
Melvin Chasen..... March 23, 1995 30,000 21.4% $12.25 March 23, 2005 $231,119 $585,700
James M.Callaghan. March 23, 1995 15,000 10.7% $12.25 March 23, 2005 115,559 292,850
David L.Weinberg.. March 23, 1995 15,000 10.7% $12.25 March 23, 2005 115,559 292,850
Paul A. Ficalora . March 23, 1995 10,000 7.1% $12.25 March 23, 2005 77,040 195,233
Gregory R.Borges.. March 23, 1995 5,000 3.6% $12.25 March 23, 2005 38,520 97,617
<FN>
- ------------
(1) All options were granted at 100% of the underlying Common Stock price on
the date of grant.
</FN>
</TABLE>
EXERCISES AND VALUES OF OPTIONS
The following table sets forth, as to the executive officers named in the
Summary Compensation Table, with respect to the fiscal year ended September 30,
1995, information relating to the exercise and values of stock options under the
1987 Plan and outside of the 1987 Plan.
AGGREGATED OPTION EXERCISES IN THE FISCAL YEAR ENDED SEPTEMBER 30, 1995
AND FISCAL YEAR ENDED SEPTEMBER 30, 1995 OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS AT
SHARES HELD AT SEPTEMBER 30, 1995 SEPTEMBER 30, 1995 (1)
ACQUIRED ON VALUE ----------------------------- ------------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- --------- --------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Melvin Chasen.......... -- -- 213,750 63,750 $870,001 --
James M.Callaghan...... -- -- 85,782 69,843 370,083 $152,105
David L.Weinberg....... 7,594 52,103 5,625 39,468 -- 46,402
Paul A. Ficalora....... -- -- 20,533 22,092 97,475 45,899
Gregory R. Borges...... -- -- 8,439 10,061 39,568 18,932
<FN>
- ---------
(1) Based on the closing sale price of the Company's Common Stock on the New
York Stock Exchange of $10.00 per share on September 30, 1995.
</FN>
</TABLE>
7
<PAGE>
EMPLOYMENT AGREEMENTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
Effective October 1, 1994, the Company's Employment Agreement with Mr. Chasen
was amended to: (i) extend the term of the Employment Agreement to cover the
period commencing October 1, 1994 and ending September 30, 1997; (ii) provide
Mr. Chasen with a base salary of $275,000 in fiscal year 1995, $300,000 in
fiscal year 1996 and $350,000 in fiscal year 1997; and (iii) provide Mr. Chasen
with a bonus, not to exceed $600,000 for fiscal year 1995, $600,000 for fiscal
year 1996 and $700,000 for fiscal year 1997, equivalent to 5% of pre-tax income
for each of the fiscal years occurring during the term of the Employment
Agreement. In the event of a sale of all or substantially all of the assets of
the Company, or the sale of a control block of its shares, Mr. Chasen shall have
the right, within one year after such event, to continue his employment under
the terms of the Employment Agreement or to resign and receive a payment of
$1,000,000 without further obligation to the Company. The Company has agreed to
maintain in force a $500,000 life insurance policy on Mr. Chasen during the term
of the agreement, which will be transferred to him without cost, at the end of
the employment term (whether or not he becomes disabled during the employment
term). If Mr. Chasen were to die during the term of the Employment Agreement,
the Company would be required to utilize a portion of the insurance policy
proceeds (with the balance to be retained by the Company) to purchase an annuity
contract which would provide payments of $50,000 per annum over a ten-year
period to Mr. Chasen's heirs. If Mr. Chasen becomes disabled during the
employment term, he will receive his full compensation during the first six
months of disability, and thereafter will be paid 75% of his salary for the
remaining term of the agreement and a pro rata bonus only with respect to the
portion of the fiscal year ending at the end of the first six months of
disability. The Company may terminate the Employment Agreement for certain
enumerated causes. The Employment Agreement restricts Mr. Chasen from competing
against the Company for a two-year period following termination.
Effective October 1, 1994, the Company's Employment Agreement with Mr.
Callaghan was amended to: (i) extend the term of the Employment Agreement to
cover the period commencing October 1, 1994, and ending September 30, 1997; (ii)
to provide Mr. Callaghan with an annual base salary of $180,000 in fiscal year
1995, $250,000 in fiscal year 1996 and $300,000 in fiscal year 1997; (iii) a
bonus of 3% percent of the Company's pre-tax income over the prior fiscal year,
for fiscal years 1995, 1996 and 1997; and (iv) in the event of a sale of all or
substantially all of the assets of the Company, or the sale of a control block
of its shares, Mr. Callaghan shall have the right, within one year after such
event, to continue his employment under the terms of the Employment Agreement or
resign and receive a payment of $750,000 without further obligation to the
Company. The Company has agreed to maintain in force a $500,000 life insurance
policy on Mr. Callaghan, with his estate listed as beneficiary, during the term
of the Employment Agreement, which will be transferred to Mr. Callaghan, without
cost, at the end of the employment term (whether or not he becomes disabled
during the term). If Mr. Callaghan becomes disabled during the employment term,
he will receive his full compensation during the first six months of disability,
and thereafter will be paid 75% of his salary for the remaining term of the
agreement and pro rata bonus only with respect to the portion of the fiscal year
ending at the end of the first six months of disability. The Company may
terminate the Employment Agreement for certain enumerated causes. The Employment
Agreement restricts Mr Callaghan from competing against the Company for a
two-year period following termination.
Effective October 1, 1995, the Company entered into an Employment Agreement
with Mr. Kaplan providing for (i) a term of employment covering the period
commencing October 1, 1995, and ending September 30, 1997; (ii) an annual base
salary of $225,000 in fiscal year 1996 and $250,000 in fiscal year 1997; (iii)
his eligibility for an annual bonus of up to one-third of his base salary for
each of fiscal years
8
<PAGE>
1996 and 1997; and (iv) in the event of a sale of all or substantially all of
the assets of the Company, or the sale of a control block of its shares, Mr.
Kaplan will have the right to continue his employment under the terms of the
Employment Agreement or resign and receive a payment of $500,000 without further
obligation to the Company. The Company has agreed to maintain in force a
$500,000 life insurance policy on Mr. Kaplan, with his estate listed as
beneficiary, during the term of the Employment Agreement, which will be
transferred to Mr. Kaplan, without cost, at the end of the employment term
(whether or not he becomes disabled during the term). If Mr. Kaplan becomes
disabled during the employment term, he will receive his full compensation
during the first six months of disability, and thereafter will be paid 75% of
his salary for the remaining term of the agreement and pro rata bonus only with
respect to the portion of the fiscal year ending at the end of the first six
months of disability. The Company may terminate the Employment Agreement for
certain enumerated causes. The Employment Agreement restricts Mr. Kaplan from
competing against the Company for a two-year period following the termination of
his employment.
On November 24, 1993, the Company entered into a Consulting Agreement with
Mr. Chasen to commence on October 1, 1997 through January 1, 2005. The agreement
provides for: (i) compensation at an annual amount equal to 50% of the sum of
the highest base salary and bonus received by him in any year under the
Employment Agreement, discussed above, not to exceed in any one year during the
term of the Consulting Agreement 10% of the Company's prior year's pre-tax
income, but in any event not less than $100,000; (ii) a commitment of five
business days per month, with opportunity to devote more time without additional
compensation at Mr. Chasen's option; (iii) possible continued Board
Chairmanship, if desired by the Board of Directors; (iv) termination upon death
or, after reasonable notice, disability; (v) continuation of certain office
services and benefits; (vi) a suitable covenant not to compete for two years;
and (vii) accelerated payment of consulting fees upon a change in control of the
Company, at Mr. Chasen's option.
BENEFIT PLANS
The Company does not have a pension plan. For information with respect to
options granted to executive officers of the Company under the 1987 Plan and
outside of the 1987 Plan, see "Executive Compensation -- Option Grants."
COMPLIANCE WITH REPORTING REQUIREMENTS
The Company believes that, during the fiscal year ended September 30, 1995,
all filing requirements under Section 16(a) of the Securities Exchange Act of
1934, as amended, applicable to its officers, directors and greater than ten
percent stockholders were complied with on a timely basis.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
For the fiscal year ended September 30, 1995, the Board of Directors
performed the functions of a board compensation committee. Executive Officers
who served on the Board were Mr. Chasen who is Chairman of the Board, President
and Chief Executive Officer of the Company and Mr. Callaghan who is Vice
President of the Company.
9
<PAGE>
COMPENSATION REPORT OF THE BOARD OF DIRECTORS
The Board of Directors has furnished the following report on executive
compensation:
The Board of Directors of Transmedia Network Inc. believes that executive
compensation should be directly related to Company performance and to the
enhancement of value received by the stockholders. This criteria can only be
realized by the successful implementation of short- and long-term strategic
goals and objectives of the Company. In order to attract and retain qualified
executive officers and to support the short- and long-term strategic goals and
objectives of the Company, executive compensation consists of the following
components--base salary, annual incentives and long-term incentives.
Base salary is targeted to be competitive with other similarly sized
companies operating in the Company's geographic locations. Salaries for
executive officers not having employment agreements are reviewed on an annual
basis and may be adjusted for increased responsibilities, improved performance
or general increases in competitive salaries.
Mr. Chasen, the Company's Chairman of the Board, President and Chief
Executive Officer and Mr. Callaghan, the Company's Vice President, have
employment contracts which were both amended, effective October 1, 1994, to
extend the term of employment through September 30, 1997. Mr. Chasen's base
salary increased in 1995 to $275,000, a 22.2% increase over 1994. Mr.
Callaghan's base salary increased to $180,000 in 1994, a 5.9% increase. Mr.
Chasen's and Mr. Callaghan's increases in salary pursuant to their respective
employment contracts reflect the Company's growth and increased profitability
over the past several years, as well as the enhancement of shareholder return on
equity over such period.
Annual incentives for executive officers are intended to reflect the
Company's belief that the management's contribution to stockholder return
through increasing stock price comes from maximizing earnings. Accordingly, Mr.
Chasen's employment contract includes an annual bonus of 5% of pre-tax income
not to exceed $600,000 for fiscal year 1995, $600,000 for fiscal year 1996 and
$700,000 for fiscal year 1997, while Mr. Callaghan's employment contract
includes an annual bonus of 3% of the increase in year-to-year pre-tax income.
In fiscal 1995 and prior years, long-term incentives for executive officers
were provided through annual grants of stock options under the Company's 1987
Stock Option and Rights Plan, as amended. Stock options are intended to attract,
retain and motivate executive officers by providing them with an equity
participation in the Company, which further provides them with an incentive to
improve long-term stock market performance. Stock options are granted at the
prevailing market value and will only have value if the Company's stock price
increases. Generally, stock option grants vest in equal amounts over five years,
commencing after one year of employment. At the time of vesting, executive
officers must be employed by the Company in order to exercise the options.
Option grants for 30,000, 15,000, 15,000, 10,000 and 5,000 shares were granted
to Mr. Chasen, Mr. Callaghan, David L. Weinberg, Paul A. Ficalora and Gregory R.
Borges, respectively, in 1995. Mr. Weinberg is the Company's Chief Financial
Officer and a Vice President, Mr. Ficalora is Executive Vice President of
Transmedia Restaurant Company Inc., a subsidiary of the Company, and Mr. Borges
is Treasurer of the Company.
In fiscal 1994, in order to assess the risk of potential competing pay
packages that may be offered to the Company's executives by companies comparable
to the Company, the Board of Directors retained the services of a national
independent compensation consulting firm. Based on this research, which the
Board believes is still valid, the Board believes that the compensation paid to
its executives is fair and reasonable.
10
<PAGE>
Board of Directors: Melvin Chasen, Irwin Hochberg, James M. Callaghan, Henry
Seiden, Herbert M. Gardner, Jack Africk and A. Barry Merkin.
PERFORMANCE ANALYSIS
Set forth below is a line graph comparing the cumulative total return of the
Company, the S&P 500 Index and the S&P Financial Index for the five fiscal years
commencing October 1, 1990 and ending September 30, 1995.
STOCK PERFORMANCE GRAPH AND TABLE
COMPARISON OF FIVE-YEAR
CUMULATIVE TOTAL RETURNS AMONG TRANSMEDIA NETWORK INC.,
S&P 500 INDEX AND THE S&P FINANCIAL INDEX
IMAGE OMITTED
[INSERT GRAPH]
Company 1990 1991 1992 1993 1994 1995
- ------- ---- ---- ---- ---- ---- ----
Transmedia Network Inc. 100 775 1,367 1,667 2,548 1,923
S&P 100 127 127 150 151 191
S&P Financial Index 100 152 173 230 207 284
11
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding ownership of the
Company's Common Stock as of January 15, 1996, by each person who is known by
the Company to own beneficially more than 5% of its Common Stock. Except as
otherwise specified, the named beneficial owner has sole voting and investment
power with respect to the shares beneficially owned by him.
AMOUNT OF
COMMON STOCK
BENEFICIALLY PERCENT
NAME & ADDRESS OWNED OF CLASS
- ----------------------------- ------------------ ----------
Melvin Chasen................ 998,814 (1) 9.67%
c/o Transmedia Network Inc.
11900 Biscayne Boulevard
Miami, Florida 33181
The following table sets forth certain information regarding beneficial
ownership of the Company's Common Stock as of January 15, 1996, by each director
and nominee for director of the Company, the executive officers named in the
Summary Compensation Table and the executive officers and directors as a group
and includes options and warrants to purchase shares of Common Stock which will
become exercisable by March 15, 1996. Except as otherwise indicated, each such
stockholder has sole voting and investment power with respect to the shares
beneficially owned by such stockholder.
<TABLE>
<CAPTION>
AMOUNT OF OPTIONS AND
COMMON STOCK WARRANTS
BENEFICIALLY EXERCISABLE PERCENT
NAME & ADDRESS OWNED WITHIN 60 DAYS TOTAL OF CLASS
- ------------------------------------------ --------------- ---------------- ------------ -----------
<S> <C> <C> <C> <C>
Melvin Chasen ............................ 785,064 213,750 998,814 (1) 9.67%
c/o Transmedia Network Inc.
11900 Biscayne Boulevard
Miami, Florida 33181
James M. Callaghan ....................... 65,162 85,782 150,944 (2) 1.48%
c/o Transmedia Network Inc.
750 Lexington Avenue
New York, New York 10022
Herbert M. Gardner ....................... 286,724 86,654 373,378 (3) 3.66%
c/o Transmedia Network Inc.
750 Lexington Avenue
New York, New York 10022
Irwin Hochberg ........................... 49,875 60,937 110,812 (4) 1.09%
c/o Transmedia Network Inc.
750 Lexington Avenue
New York, New York 10022
Henry Seiden ............................. 113,343 60,937 174,280 (5) 1.71%
c/o Transmedia Network Inc.
750 Lexington Avenue
New York, New York 10022
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
AMOUNT OF OPTIONS AND
COMMON STOCK WARRANTS
BENEFICIALLY EXERCISABLE PERCENT
NAME & ADDRESS OWNED WITHIN 60 DAYS TOTAL OF CLASS
- ------------------------------------------ --------------- ---------------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Jack Africk .............................. 52,893 60,937 113,830 (6) 1.11%
c/o Transmedia Network Inc.
750 Lexington Avenue
New York, New York 10022
A. Barry Merkin .......................... 2,000 -- 2,000 (7) .02%
c/o Transmedia Network Inc.
750 Lexington Avenue
New York, New York 10022
David L. Weinberg ........................ 15,094 11,250 26,344 (8) .26%
c/o Transmedia Network Inc.
11900 Biscayne Boulevard
Miami, Florida 33181
Paul A. Ficalora.......................... 156,300 20,533 176,833 (9) 1.74%
c/o Transmedia Network Inc.
750 Lexington Avenue
New York, New York 10022
Barry S. Kaplan .......................... 1,000 -- 1,000(10) .01%
c/o Transmedia Network Inc.
11900 Biscayne Boulevard
Miami, Florida 33181
Gregory R. Borges ........................ 16,875 8,439 25,314(11) .25%
c/o Transmedia Network Inc.
11900 Biscayne Boulevard
Miami, Florida 33181
All directors and executive officers as a
group (12 persons)....................... 1,544,330 612,595 2,156,925 20.10%
- ------------------------
<FN>
(1) Includes for Mr. Chasen (i) 100,000 shares owned by a family partnership
for which Mr. Chasen exercises voting and investment authority, (ii)
options to purchase 135,000 shares at a price of $4.8333 per share, which
options were granted outside the 1987 Plan, are exercisable and expire in
May 2002, (iii) options to purchase 67,500 shares of Common Stock of the
Company at an exercise price of $7.4445 per share, which options were
granted outside the 1987 Plan, are exercisable and expire in September
1998, and (iv) options to purchase 11,250 shares at a price of $15.00 per
share, which options were granted under the 1987 Plan and expire in March
2004. Does not include (i) options to purchase 63,750 shares, which were
granted under the 1987 Plan and are not exercisable within 60 days, (ii)
200,878 shares held by Iris Chasen, the wife of Mr. Chasen, or (iii)
81,000 shares held by Mr. Chasen's three adult children, as to all of
which Mr. Chasen disclaims beneficial ownership.
(2) Includes for Mr. Callaghan (i) 5,038 shares held in Mr. Callaghan's
Individual Retirement Account, (ii) options to purchase 63,282 shares of
Common Stock at an exercise price of $4.8333 per share, which options were
granted under the 1987 Plan, are exercisable and expire in May 2002, (iii)
options to purchase 16,875 shares at an exercise price of $7.4445 per
share, which were granted under the 1987 Plan, are exercisable and expire
in September 2003, and (iv) options to purchase 5,625 shares at an
exercise price of $15.00 per share, which options were granted under the
1987 Plan, are exercisable and expire in March 2004. Does not include (i)
options issued under the 1987 Plan to purchase 69,842 shares, which are
not exercisable within 60
13
<PAGE>
days, or (ii) 5,724 shares held in the Individual Retirement Account of
Mr. Callaghan's wife, as to all of which shares Mr. Callaghan disclaims
beneficial ownership.
(3) Includes for Mr. Gardner (i) 141,699 shares held by Herbert M. Gardner
(Keogh), (ii) options to purchase 42,187 shares at a price of $3.8889 per
share, which options were granted outside the 1987 Plan and expire in
March 1997, (iii) warrants to purchase 25,717 shares at a price of $4.56
per share, which warrants expire in June 1997, (iv) options to purchase
11,250 shares of Common Stock of the Company at an exercise price of
$7.4445 per share, which options were granted outside the 1987 Plan and
expire in September 1998, and (v) options to purchase 7,500 shares of
Common Stock at an exercise price of $15.00 per share, which options were
granted under the 1987 Plan and expire in March 2004. All of such options
and warrants are presently exercisable. Does not include (i) options
issued under the 1987 Plan to purchase 5,000 shares, which are not
exercisable within 60 days, or (ii) 7,668 shares held by Mr. Gardner's
wife individually or as custodian for their children as to which shares
Mr. Gardner disclaims beneficial ownership.
(4) Includes for Mr. Hochberg (i) options to purchase 42,187 shares at a price
of $3.8889 per share, which options were granted outside the 1987 Plan and
expire in March 1997, (ii) options to purchase 11,250 shares of Common
Stock of the Company at in exercise price of $7.4445 per share, which
options were granted outside the 1987 Plan and expire in September 1998,
and (iii) options to purchase 7,500 shares of Common Stock at an exercise
price of $15.00 per share which options were granted under the 1987 Plan
and expire in March 2004. All of such options are presently exercisable.
Does not include (i) options issued under the 1987 Plan to purchase 5,000
shares, which are not exercisable within 60 days, (ii) 28,000 shares owned
by Mrs. Hochberg and (iii) 10,500 shares owned by Mr. Hochberg's children
and grandchildren, as to all of which Mr. Hochberg disclaims beneficial
ownership.
(5) Includes for Mr. Seiden (i) options to purchase 42,187 shares at a price
of $3.8889 per share, which options were granted outside the 1987 Plan and
expire in March 1997, (ii) options to purchase 11,250 shares of Common
Stock of the Company at an exercise price of $7.4445 per share, which
options were granted outside the 1987 Plan and expire in September 1998,
and (iii) options to purchase 7,500 shares of Common Stock at an exercise
price of $15.00 per share, which options were granted under the 1987 Plan
and expire in March 2004. All of such options are presently exercisable.
Does not include options issued under the 1987 Plan to purchase 5,000
shares, which are not exercisable within 60 days.
(6) Includes for Mr. Africk (i) 35,262 shares owned by a family corporation
for which Mr. Africk exercises voting and investment authority, (ii)
options to purchase 11,250 shares of Common Stock of the Company at an
exercise price of $7.4445 per share, which options were granted outside
the 1987 Plan and expire in September 1998, and (iii) options to purchase
7,500 shares of Common Stock at an exercise price of $15.00 per share,
which options were granted under the 1987 Plan and expire in March 2004.
All of such options are presently exercisable. Does not include options
issued under the 1987 Plan to purchase 5,000 shares, which are not
exercisable within 60 days.
(7) Does not include for Mr. Merkin, options issued outside the 1987 Plan to
purchase 5,000 shares, which are not exercisable within 60 days.
(8) Includes for Mr. Weinberg options to purchase 11,250 shares at an exercise
price of $12.25, which options were granted under the 1987 Plan and expire
in March 2004. Does not include options issued under the 1987 Plan to
purchase 33,843 shares, which are not exercisable within 60 days.
(9) Includes for Mr. Ficalora (i) options to purchase 12,657 shares at an
exercise price of $3.8889 per share, which options were granted under the
1987 Plan and expire in March 1997 and (ii) options to purchase 7,876
shares at an exercise price of $7.4445 per share, which options were
granted under the 1987 Plan and expire in September 2003. Does not include
(i) options to purchase 22,092 shares, which were granted under the 1987
Plan and are not exercisable within 60 days, (ii) 6,075 shares held by
Mrs. Ficalora, and (iii) 1,350 shares held by Mr. Ficalora's child, as to
all of which shares Mr. Ficalora disclaims beneficial ownership.
(10) Does not include for Mr. Kaplan, options issued under the 1987 Plan to
purchase 70,000 shares, which are not exercisable within 60 days.
(11) Includes for Mr. Borges (i) options to purchase 5,063 shares at an
exercise price of $3.8889 per share, which options were granted under the
1987 Plan and expire March 1997 and (ii) options to purchase 3,376 shares
at an exercise price of $7.4445 per share, which options were granted
under the 1987 Plan and expire in September 2003. Does not include options
to purchase 10,061 shares, which were granted under the 1987 Plan and are
not exercisable within 60 days.
</FN>
</TABLE>
14
<PAGE>
ITEM NO. 2 -- APPROVAL OF THE 1996 LONG-TERM INCENTIVE PLAN
The Company's Board of Directors believes that attracting and retaining
directors, officers and other key employees and consultants of high quality is
essential to the Company's growth and success. The Board also believes that
important advantages to the Company are gained by a comprehensive compensation
program which may include different types of incentives for motivating employees
and others and rewards for outstanding service. In this regard, stock options
and other stock-related awards are an important element of compensation for
executives and other key employees because such awards enable the recipients to
acquire or increase their proprietary interest in the Company, thereby promoting
a closer identity of interests between them and the Company's stockholders. Such
awards also provide to the recipients an increased incentive to expend their
maximum efforts for the success of the Company's business.
Accordingly, effective January 19, 1996 the Board of Directors adopted,
subject to stockholder approval, the 1996 Long-Term Incentive Plan (the "1996
Plan"). The terms of the 1996 Plan will give the Compensation Committee of the
Board (the "Committee"), which will administer the 1996 Plan, the greatest
possible flexibility and the broadest possible discretion to design awards
involving stock, including options, to executives, key employees and, where
appropriate, consultants in order to meet the rapidly changing requirements of
the tax laws, accounting rules, securities laws, and corporate law, to provide
for positive stockholder relations, and, most importantly for achieving the
purposes of such awards, to provide substantial incentives for excellent
performance. Additionally, the Committee may require achievement of
pre-established performance targets as a condition of awards becoming
exercisable or settleable under the 1996 Plan, or as a condition to accelerating
the timing of such events.
The Board of Directors is requesting separate stockholder approval of the
1996 Plan in order to comply with requirements of newly adopted Section 162(m)
of the Internal Revenue Code of 1986, as amended (the "Code"), so that
compensation under the 1996 Plan paid to the chief executive officer and the
four other most highly compensated executive officers will be fully deductible
by the Company. Stockholder approval will also permit transactions under the
1996 Plan to be exempt under Rule 16b-3 under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), to satisfy the rules of the New York
Stock Exchange and to permit the grant of options qualifying as "incentive stock
options" ("ISOs") under the Code.
The following is a brief description of the material features of the 1996
Plan. Such description is qualified in its entirety by reference to the full
text of the 1996 Plan, a copy of which is attached to this Proxy Statement as
Exhibit A.
Relationship to the Company's 1987 Stock Option and Rights Plan. It is
intended that the 1996 Plan will replace the 1987 Plan, so that the Board of
Directors would terminate authority to make further awards under the 1987 Plan
(subject to stockholder approval of the 1996 Plan). All options outstanding
under the 1987 Plan will remain subject to the terms of the 1987 Plan.
Shares Available and Award Limitations. Under the 1996 Plan, a maximum of
505,966 shares of Common Stock may be subject to outstanding awards at any point
in time. Shares of Common Stock delivered under the 1996 Plan may consist, in
whole or in part, of authorized and unissued shares or treasury shares. In
addition, the 1996 Plan includes a limitation on the amount of awards that may
be granted to any one participant in a given calendar year in order to qualify
awards as "performance-based compensation" not subject to the new $1,000,000 cap
on deductibility under Section 162(m) of the Code. Under this annual per-person
limitation, no participant may in any calendar year be granted
15
<PAGE>
awards under the 1996 Plan with respect to more than 250,000 shares of Common
Stock nor be paid in connection with awards amounts of cash that exceed the
greater of the fair market value of that number of shares at the date of grant
or the date of settlement of the award. Adjustments to the exercise price as
well as to the number and kind of shares of stock, subject to the share
limitations and annual per-person limitations under the 1996 Plan and subject to
outstanding awards, are authorized in the event that the Committee determines
that a dividend or other distribution (whether in the form of cash, Common
Stock, or other property), recapitalization, forward or reverse split,
reorganization, merger, consolidation, spin-off, combination, repurchase, or
share exchange, or other similar corporate transaction or event, affects the
Common Stock such that an adjustment is appropriate in order to prevent dilution
or enlargement of the rights of participants under the 1996 Plan.
On January 15, 1996, the last reported sale price of the Company's Common
Stock on the composite tape for New York Stock Exchange-listed securities was
$9.125 per share.
Eligibility. Executive officers and other key employees of the Company and
its subsidiaries, including any director or officer who is also such an
employee, and persons who provide consulting or other services to the Company
deemed by the Committee to be of substantial value to the Company, are eligible
to be granted awards under the 1996 Plan. Non-employee directors who are members
of the Committee will not be eligible for awards under the 1996 Plan other than
pursuant to the 1996 Plan's formula award provision (see "-- Non-Employee
Directors Options" below). At any given time, the group of employees eligible to
receive options is expected to represent approximately 20% of the employees of
the Company and its subsidiaries.
Administration. The 1996 Plan will be administered by the Committee, the
members of which must each be a "disinterested person" as defined under Rule
16b-3 under the Exchange Act to the extent necessary to comply with such rule.
Subject to the terms and conditions of the 1996 Plan, the Committee will have
full and final authority to designate participants, determine the type or types
and number of awards to be granted, set terms and conditions of such awards,
prescribe forms of award agreements, interpret the 1996 Plan, adopt and construe
rules and regulations relating to the 1996 Plan, and make all other decisions
and determinations which the Committee may deem necessary or advisable for the
administration of the 1996 Plan. The 1996 Plan provides that Committee members
and officers and employees of the Company acting on behalf of the Committee will
not be personally liable, and will, to the extent permitted by law, be fully
indemnified and protected by the Company, in connection with any action,
determination, or interpretation taken or made in good faith under the 1996
Plan.
Stock Options and SARS. The Committee is authorized to grant stock options,
including both ISOs, which can result in potentially favorable tax treatment to
the participant, and non-qualified stock options, and stock appreciation rights
("SARs") entitling the participant to receive, upon the exercise thereof, the
excess of (A) the fair market value of a share of Common Stock on the date of
exercise (or other date specified by the Committee) over (B) the grant price of
the SAR. The exercise price per share of Common Stock subject to an option and
the grant price of a SAR is determined by the Committee provided that the
exercise price of an ISO generally may not be less than the fair market value of
the stock on the date of grant. The maximum term of each option or SAR, the
times at which each option or SAR will be exercisable, and provisions requiring
forfeiture of unexercised options at or following termination of employment,
generally will be fixed by the Committee, except no ISO or SAR granted in tandem
therewith may have a term exceeding ten years. Options may be exercised by
payment of the exercise price in cash, Common Stock, other awards or other
property (including notes or other contractual obligations of participants to
make payment on a deferred basis, such as through
16
<PAGE>
"cashless exercise" arrangements), as the Committee may determine from time to
time. Methods of exercise and settlement and other terms of the SARs will be
determined by the Committee. Unless otherwise determined by the Committee,
options will generally remain exercisable for a period of 90 days (one year in
the case of death or disability) following termination of employment.
Restricted and Deferred Stock. The 1996 Plan also authorizes the Committee to
grant restricted stock and deferred stock. Restricted stock is an award of
shares of stock which are subject to restrictions on transferability and which
may be forfeited and reacquired by the Company in the event of certain
terminations of employment prior to the end of a restriction period established
by the Committee. Such an award would entitle the participant to all of the
rights of a stockholder of the Company, including the right to vote the shares
and the right to receive any dividends thereon, unless otherwise determined by
the Committee. An award of deferred stock confers upon a participant the right
to receive shares of Common Stock at the end of a specified deferral period,
subject to possible forfeiture of the award in the event of certain terminations
of employment prior to the end of the applicable deferral period or portion
thereof to which forfeiture conditions apply. Deferred stock awards carry no
voting or dividend rights or other rights associated with stock ownership
(although dividend equivalents may be granted, as discussed below).
Dividend Equivalents. The Committee is authorized to grant dividend
equivalents conferring on participants the right to receive cash, Common Stock,
other awards, or other property equal in value to dividends paid on a specific
number of shares of Common Stock. Dividend equivalents may be awarded on a
free-standing basis or in connection with another award. The Committee may
provide that dividend equivalents will be paid or distributed when accrued or
will be paid or distributed on a deferred basis, and, if deferred, will be
deemed to have been reinvested in additional Common Stock, awards, or other
investment vehicles specified by the Committee.
Other Stock-Based Awards, Bonus Stock, and Awards in Lieu of Cash
Obligations. In order to enable the Company to respond to material developments
in tax regulations, accounting principles, securities laws, and other
legislation and regulations (interpretations thereof), and to trends in
executive compensation practices, the 1996 Plan authorizes the Committee to
grant awards that are denominated or payable in, valued in whole or in part by
reference to, or otherwise based on, or related to, Common Stock and factors
that may influence the value of Common Stock. The Committee will determine the
terms and conditions of such awards, including consideration to be paid to
exercise awards in the nature of purchase rights, the period during which awards
will be outstanding, and forfeiture conditions and restrictions on awards. In
addition, the Committee is authorized to grant Common Stock as a bonus, or to
grant Common Stock or other awards in lieu of Company obligations to pay cash
under other plans or compensatory arrangements, subject to such terms as the
Committee may specify.
Non-Employee Directors Options. On the day after the Company's annual meeting
of stockholders at which the 1996 Plan is approved, each person who is then a
non-employee director will automatically receive a non-qualified stock option
under the 1996 Plan relating to the purchase of 5,000 shares of Common Stock.
Thereafter, each person who becomes a non-employee director will automatically
receive a non-qualified stock option under the 1996 Plan relating to the
purchase of 5,000 shares of Common Stock on the day after the date that he
becomes a non-employee director. On the day after each of the Company's annual
meetings occurring in 1997 and thereafter, each person who is a non-employee
director on any such day will automatically receive a non-qualified stock option
under the 1996 Plan relating to the purchase of 5,000 shares of Common Stock,
plus an additional 500 shares for each full year of service as a non-employee
director performed from the date that the 1996 Plan was
17
<PAGE>
approved by the Company's stockholders to the date of such annual meeting,
provided, however, that any non-employee director who was granted an option
pursuant to the preceding sentence within 30 days of the date of an annual
meeting will not be granted an option pursuant to this sentence on the day after
such annual meeting.
The exercise price of each share of Common Stock subject to an option granted
to a non-employee director will equal the fair market value of a share of Common
Stock on the date of grant. Payment of the exercise price for the shares being
purchased may be made in cash, Common Stock, or a combination of both. Such
non-qualified stock options will be exercisable one year from the date granted
and will have a ten-year term from such date. An exercisable option will
generally remain exercisable for a period of 90 days (one year in the event of
death or disability) upon a non-employee director's cessation of his term.
Other Terms of Awards. Awards may be made in a single payment, single
transfer, or in installments, and awards may be settled in cash, Common Stock,
other awards, or other property, in the discretion of the Committee. The
Committee may require or permit participants to defer the distribution of all or
part of an award in accordance with such terms and conditions as the Committee
may establish, including payment of interest on any deferred amounts under the
plan. The 1996 Plan authorizes the Committee to place shares or other property
in trusts or make other arrangements to provide for payment of the Company's
obligations under the 1996 Plan. The Committee may condition the payment of an
award on the withholding of taxes and may provide that a portion of the Common
Stock or other property to be distributed will be withheld (or previously
acquired stock or other property surrendered by the participant) to satisfy
withholding and other tax obligations. Awards and other rights granted under the
1996 Plan may not be pledged or otherwise encumbered and are not transferable
except by will or by the laws of descent and distribution (or to a designated
beneficiary upon the participant's death).
In addition, the Committee may require achievement of preestablished
performance targets as a condition of awards becoming exercisable or settleable
under the 1996 Plan. If and to the extent required in order to comply with
Section 162(m) under the Code and regulations thereunder (so that payments with
respect to such awards will be fully deductible by the Company) the business
criteria applicable to awards will be selected from among the following: (i)
annual return on capital; (ii) annual earnings per share; (iii) annual cash flow
provided by operations; (iv) changes in annual revenues; and/or (v) strategic
business criteria, consisting of one or more objectives based on meeting
specified revenue, market penetration, geographic business expansion goals, cost
targets and goals relating to acquisitions or divestitures as specified by the
Committee.
Awards under the 1996 Plan are generally granted for no consideration other
than services. The Committee, however, may grant awards alone or in addition to,
in tandem with, or in substitution for, any other award under the 1996 Plan, any
award granted under any other plan of the Company, any subsidiary, or any
business entity to be acquired by the Company or subsidiary, or other rights to
payment from the Company or subsidiary. Awards granted in addition to or in
tandem with other awards may be granted either as of the same time or at
different times.
Vesting, Forfeitures and Acceleration Thereof. The Committee may, in its
discretion determine the vesting schedule of options and other awards, the types
of terminations of employment that will result in forfeiture of the awards, the
post-termination exercise periods of options and similar awards, and the events
that will result in acceleration of the exercisability and the lapsing of
restrictions, or the expira-
18
<PAGE>
tion of deferral periods on any award. Unless otherwise provided by the
Committee, all conditions and/or restrictions relating to the continued
performance of services and/or the achievement of performance objectives with
respect to the exercisability of an award will immediately lapse upon a change
in control as defined in the 1996 Plan.
Amendment and Termination of the 1996 Plan. The Board of Directors may amend,
alter, suspend, discontinue, or terminate the 1996 Plan or the Committee's
authority to grant awards thereunder without the consent of stockholders or
participants, except stockholder approval must be obtained within one year after
the effectiveness of such action if required by any federal or state law or
regulation or under the rules of any stock exchange or automated quotation
system on which the Common Stock is then listed or quoted. Thus, stockholder
approval will not necessarily be required for amendments which might increase
the cost of the plan or broaden eligibility. Unless earlier terminated by the
Board, the 1996 Plan will terminate at such time that no shares remain available
and the Company has no further obligation with respect to any outstanding award.
New Plan Benefits Table. The benefits or amounts that will received or
allocated in the future under the 1996 Plan are not presently determinable. The
following table sets forth the number of options that would have been
automatically granted to non-employee directors as a group under the 1996 Plan
in fiscal 1995 had the plan been in effect during that year:
NEW PLAN BENEFITS
1996 PLAN
NUMBER OF
NAME OF NON-EMPLOYEE DIRECTOR OPTIONS GRANTED
- ---------------------------- ----------------
Jack Africk................. 5,000
Herbert M. Gardner.......... 5,000
Irwin Hochberg.............. 5,000
A. Barry Merkin............. 5,000
Henry Seiden................ 5,000
Federal Income Tax Implications of the 1996 Plan. The following is a brief
description of the Federal income tax consequences generally arising with
respect to awards that may be granted under the 1996 Plan. This discussion is
intended for the information of stockholders considering how to vote at the
Annual Meeting and not as tax guidance to participants in the 1996 Plan. The
grant of an option or SAR (including a stock-based award in the nature of a
purchase right) will create no tax consequences for the participant or the
Company. A participant will not have taxable income upon exercising an ISO
(except that the alternative minimum tax may apply) and the Company will receive
no deduction at that time. Upon exercising an option other than an ISO
(including a stock-based award in the nature of a purchase right), the
participant must generally recognize ordinary income equal to the difference
between the exercise price and fair market value of the freely transferable and
nonforfeitable stock acquired on the date of exercise, and upon exercising a
SAR, the participant must generally recognize ordinary income equal to the cash
or the fair market value of the freely transferable and nonforfeitable stock
received. In each case, the Company will be entitled to a deduction equal to the
amount recognized as ordinary income by the participant.
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A participant's disposition of shares acquired upon the exercise of an
option, SAR, or other stock-based award in the nature of a purchase right
generally will result in short-term or long-term capital gain or loss measured
by the difference between the sale price and the participant's tax basis in such
shares (or the exercise price of the option in the case of shares acquired by
exercise of an ISO and held for the applicable ISO holding periods). Generally,
there will be no tax consequences to the Company in connection with a
disposition of shares acquired under an option or other award, except that the
Company will be entitled to a deduction (and the participant will recognize
ordinary taxable income) if shares acquired upon exercise of an ISO are disposed
of before the applicable ISO holding periods have been satisfied.
With respect to awards granted under the 1996 Plan that may be settled either
in cash or in stock or other property that is either not restricted as to
transferability or not subject to a substantial risk of forfeiture, the
participant must generally recognize ordinary income equal to the cash or the
fair market value of stock or other property received. The Company will be
entitled to a deduction for the same amount. With respect to awards involving
stock or other property that is restricted as to transferability and subject to
a substantial risk of forfeiture, the participant must generally recognize
ordinary income equal to the fair market value of the shares or other property
received at the first time the shares or other property become transferable or
not subject to a substantial risk of forfeiture, whichever occurs earlier. The
Company will be entitled to a deduction in an amount equal to the ordinary
income recognized by the participant. A participant may elect to be taxed at the
time of receipt of shares or other property rather than upon lapse of
restrictions on transferability or the substantial risk of forfeiture, but if
the participant subsequently forfeits such shares or property he would not be
entitled to any tax deduction, including as a capital loss, for the value of the
shares or property on which he previously paid tax. Such election must be made
and filed with the Internal Revenue Service within thirty days of the receipt of
the shares or other property.
The foregoing provides only a general description of the application of
federal income tax laws to certain types of awards under the 1996 Plan.
Different tax rules may apply with respect to participants who are subject to
Section 16 of the Exchange Act, when they acquire stock in a transaction deemed
to be a nonexempt purchase under that statute, upon exercise of a derivative
security within six months after the exempt grant of such derivative security
under the 1996 Plan, or in other kinds of transactions under the 1996 Plan (such
as payment of exercise price of an option by surrender of previously acquired
Common Stock). The summary does not address the effects of other federal taxes
(including possible "golden parachute" excise taxes) or taxes imposed under
state, local, or foreign tax laws. Because of the variety of awards that may be
made under the 1996 Plan and the complexities of the tax laws, participants are
encouraged to consult a tax advisor as to their individual circumstances.
The Omnibus Budget Reconciliation Act of 1993 added Section 162(m) to the
Code, which generally disallows a public company's tax deduction for
compensation to the chief executive officer and the four other most highly
compensated executive officers in excess of $1 million in any tax year beginning
on or after January 1, 1994. Compensation that qualifies as "performance-based
compensation" is excluded from the $1 million deductibility cap, and therefore
remains fully deductible by the company that pays it. The Company intends that
options granted with an exercise price at least equal to 100% of fair market
value of the underlying stock at the date of grant, and other awards, the
settlement of which is conditioned upon achievement of performance goals (based
on performance criteria described above), will qualify as such
"performance-based compensation," although other awards under the 1996 Plan will
not so qualify.
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The Board of Directors recommends that the Company's stockholders vote for
the approval of the 1996 Long-Term Incentive Plan.
The affirmative vote of holders of a majority of the Common Stock present, or
represented by proxy, and entitled to vote at the Annual Meeting is required for
the approval of the 1996 Plan.
The Board of Directors considers the 1996 Long-Term Incentive Plan to be in
the best interests of the Company and its stockholders and recommends that the
stockholders vote FOR approval.
INDEPENDENT ACCOUNTANTS
KPMG Peat Marwick audited the Company's financial statements for the fiscal
year ended September 30, 1995. As has been the prior practice, the Board of
Directors will appoint an auditor for the current fiscal year prior to the
commencement of the audit.
A representative of KPMG Peat Marwick is expected to be present at the
meeting and will be afforded an opportunity to make a statement and to respond
to appropriate questions.
OTHER BUSINESS
It is not intended to bring before the meeting any matters except the
Election of Directors. The Management is not aware at this time that any other
matters are to be presented for action. If, however, any other matters properly
come before the meeting, the persons named as proxies in the enclosed form of
proxy intend to vote in accordance with their judgment on the matters presented.
PROPOSALS OF STOCKHOLDERS
Proposals, if any, of stockholders of the Company intended to be presented at
the 1997 Annual Meeting of Stockholders must be received by the Company for
inclusion in the appropriate proxy materials no later than September 28, 1996.
OTHER MATTERS
On written request, the Company will provide without charge to each record or
beneficial holder of the Company's Common Stock as of January 24, 1996, a copy
of the Company's Annual Report on Form 10-K for the year ended September 30,
1995, as filed with the Securities and Exchange Commission. Requests should be
addressed to Mr. David L. Weinberg, Vice President and Chief Financial Officer,
Transmedia Network Inc., 11900 Biscayne Boulevard, Miami, Florida 33181.
By order of the Board of Directors,
KATHRYN M. FERARA
Secretary
January 26, 1996
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EXHIBIT 2
TRANSMEDIA NETWORK INC.
1996 LONG-TERM INCENTIVE PLAN
1. Purpose. The purpose of this 1996 Long-Term Incentive Plan (the "Plan") of
Transmedia Network Inc., a Delaware corporation (the "Company"), is to advance
the interests of the Company and its stockholders by providing a means to
attract, retain, and reward directors, officers and other key employees and
consultants of the Company and its subsidiaries (including consultants providing
services of substantial value) and to enable such persons to acquire or increase
a proprietary interest in the Company, thereby promoting a closer identity of
interests between such persons and the Company's stockholders.
2. Definitions. The definitions of awards under the Plan, including Options,
SARs (including Limited SARs), Restricted Stock, Deferred Stock, Stock granted
as a bonus or in lieu of other awards, Dividend Equivalents, and Other
Stock-Based Awards, are set forth in Section 6 of the Plan. Such awards,
together with any other right or interest granted to a Participant under the
Plan, are termed "Awards." For purposes of the Plan, the following additional
terms shall be defined as set forth below:
(a) "Award Agreement" means any written agreement, contract, or other
instrument or document evidencing an Award.
(b) "Beneficiary" shall mean the person, persons, trust, or trusts which have
been designated by a Participant in his or her most recent written beneficiary
designation filed with the Commttee to receive the benefits specified under
this Plan upon such Participant's death or, if there is no designated
Beneficiary or surviving designated Beneficiary, then the person, persons,
trust, or trusts entitled by will or the laws of descent and distribution to
receive such benefits.
(c) "Board" means the Board of Directors of the Company.
(d) A "Change in Control" shall be deemed to have occurred if:
(i) any person (as defined in Sections 3(a)(9) and 13(d)(3) of the
Exchange Act), other than the Company or an employee benefit plan of the
Company, acquires directly or indirectly the beneficial ownership (within the
meaning of Rule 13d-3 promulgated pursuant to the Exchange Act) of any voting
security of the Company and immediately after such acquisition such person
is, directly or indirectly, the beneficial owner of voting securities
representing 50 percent or more of the total voting power of all of the
then-outstanding voting securities of the Company;
(ii) the individuals (A) who constitute the Board as of the date this
Plan is adopted by the Board (the "Original Directors") or (B) who thereafter
are elected to the Board and whose election, or nomination for election, to
the Board was approved by a vote of at least two-thirds ( 2/3 ) of the
Original Directors then still in office (such directors becoming "Additional
Original Directors" immediately following their election) or (C) who are
elected to the Board and whose election, or nomination for election, to the
Board was approved by a vote of at least two-thirds ( 2/3 ) of the Original
Directors and Additional Original Directors then still in office (such
directors also becoming "Additional Original Directors" immediately following
their election) (such individuals being the "Continuing Directors"), cease
for any reason to constitute a majority of the members of the Board;
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(iii) the stockholders of the Company shall approve a merger,
consolidation, recapitalization, or reorganization of the Company, a reverse
stock split of outstanding voting securities, or consummation of any such
transaction if stockholder approval is not sought or obtained, other than any
such transaction which would result in at least 75 percent of the total
voting power represented by the voting securities of the surviving entity
outstanding immediately after such transaction being beneficially owned
(within the meaning of Rule 13d-3 promulgated pursuant to the Exchange Act)
by at least 75 percent of the holders of outstanding voting securities of the
Company immediately prior to the transaction, with the voting power of each
such continuing holder relative to other such continuing holders not
substantially altered in the transaction; or
(iv) the stockholders of the Company shall approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or a substantial portion of the Company's assets (i.e., 50
percent or more of the total assets of the Company).
(e) "Code" means the Internal Revenue Code of 1986, as amended from time to
time. References to any provision of the Code shall be deemed to include
regulations thereunder and successor provisions and regulations thereto.
(f) "Committee" means the Compensation Committee of the Board, or such other
Board committee as may be designated by the Board to administer the Plan;
provided, however, that to the extent necessary to comply with Rule 16b-3, the
Committee shall consist of two or more directors, each of whom is a
"disinterested person" within the meaning of Rule 16b-3.
(g) "Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time. References to any provision of the Exchange Act shall be deemed to
include rules thereunder and successor provisions and rules thereto.
(h) "Fair Market Value" means, with respect to Stock, Awards, or other
property, the fair market value of such Stock, Awards, or other property
determined by such methods or procedures as shall be established from time to
time by the Committee, provided, however, that if the Stock is listed on a
national securities exchange or quoted in an interdealer quotation system, the
Fair Market Value of such Stock on a given date shall be based upon the last
sales price or, if unavailable, the average of the closing bid and asked prices
per share of the Stock on such date (or, if there was no trading or quotation in
the Stock on such date, on the next preceding date on which there was trading or
quotation) as provided by one of such organizations.
(j) "ISO" means any Option intended to be and designated as an incentive
stock option within the meaning of Section 422 of the Code.
(k) "Non-Employee Director" shall mean a member of the Board who is not
otherwise an employee of the Company or any subsidiary.
(l) "Participant" means a person who, at a time when eligible under Section 5
hereof, has been granted an Award under the Plan.
(m) "Rule 16b-3" means Rule 16b-3, as from time to time in effect and
applicable to the Plan and Participants, promulgated by the Securities and
Exchange Commission under Section 16 of the Exchange Act.
(n) "Stock" means the Common Stock, $.02 par value, of the Company and such
other securities as may be substituted for Stock or such other securities
pursuant to Section 4.
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3. Administration.
(a) Authority of the Committee. The Plan shall be administered by the
Committee. The Committee shall have full and final authority to take the
following actions, in each case subject to and consistent with the provisions of
the Plan:
(i) to select Participants to whom Awards may be granted;
(ii) to determine the type or types of Awards to be granted to each
Participant;
(iii) to determine the number of Awards to be granted, the number of
shares of Stock to which an Award will relate, the terms and conditions of
any Award granted under the Plan (including, but not limited to, any exercise
price, grant price, or purchase price, any restriction or condition, any
schedule for lapse of restrictions or conditions relating to transferability
or forfeiture, exercisability, or settlement of an Award, and waivers or
accelerations thereof, and waivers of or modifications to performance
conditions relating to an Award, based in each case on such considerations as
the Committee shall determine), and all other matters to be determined in
connection with an Award;
(iv) to determine whether, to what extent, and under what circumstances
an Award may be settled, or the exercise price of an Award may be paid, in
cash, Stock, other Awards, or other property, or an Award may be cancelled,
forfeited, or surrendered;
(v) to determine whether, to what extent, and under what circumstances
cash, Stock, other Awards, or other property payable with respect to an Award
will be deferred either automatically, at the election of the Committee, or
at the election of the Participant;
(vi) to prescribe the form of each Award Agreement, which need not be
identical for each Participant;
(vii) to adopt, amend, suspend, waive, and rescind such rules and
regulations and appoint such agents as the Committee may deem necessary or
advisable to administer the Plan;
(viii) to correct any defect or supply any omission or reconcile any
inconsistency in the Plan and to construe and interpret the Plan and any
Award, rules and regulations, Award Agreement, or other instrument hereunder;
and
(ix) to make all other decisions and determinations as may be required
under the terms of the Plan or as the Committee may deem necessary or
advisable for the administration of the Plan.
(b) Manner of Exercise of Committee Authority. Unless authority is
specifically reserved to the Board under the terms of the Plan, the Company's
Certificate of Incorporation or Bylaws, or applicable law, the Committee shall
have sole discretion in exercising authority under the Plan. Any action of the
Committee with respect to the Plan shall be final, conclusive, and binding on
all persons, including the Company, subsidiaries of the Company, Participants,
any person claiming any rights under the Plan from or through any Participant,
and stockholders. The express grant of any specific power to the Committee, and
the taking of any action by the Committee, shall not be construed as limiting
any power or authority of the Committee. The Committee may delegate to officers
or managers of the Company or any subsidiary of the Company the authority,
subject to such terms as the Committee shall determine, to perform
administrative functions and, with respect to Participants not subject to
Section 16 of the Exchange Act, to perform such other functions as the Committee
may determine, to the extent permitted under Rule 16b-3, if applicable, and
other applicable law.
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(c) Limitation of Liability. Each member of the Committee shall be entitled
to, in good faith, rely or act upon any report or other information furnished to
him by any officer or other employee of the Company or any subsidiary, the
Company's independent certified public accountants, or any executive
compensation consultant, legal counsel, or other professional retained by the
Company to assist in the administration of the Plan. No member of the Committee,
nor any officer or employee of the Company acting on behalf of the Committee,
shall be personally liable for any action, determination, or interpretation
taken or made in good faith with respect to the Plan, and all members of the
Committee and any officer or employee of the Company acting on their behalf
shall, to the extent permitted by law, be fully indemnified and protected by the
Company with respect to any such action, determination, or interpretation.
4. Stock Subject to Plan.
(a) Amount of Stock Reserved. The total amount of Stock that may be subject
to outstanding Awards, determined immediately after the grant of any Award,
shall not exceed 505,966. Notwithstanding the foregoing, the number of shares
that may be delivered upon the exercise of ISOs shall not exceed 505,966
provided, however, that shares subject to ISOs shall not be deemed delivered if
such Awards are forfeited, expire or otherwise terminate without delivery of
shares to the Participant. If an Award valued by reference to Stock may only be
settled in cash, the number of shares to which such Award relates shall be
deemed to be Stock subject to such Award for purposes of this Section 4(a). Any
shares of Stock delivered pursuant to an Award may consist, in whole or in part,
of authorized and unissued shares or treasury shares.
(b) Annual Per-Participant Limitations. During any calendar year, no
Participant may be granted Options and other Awards under the Plan that may be
settled by delivery of more than 250,000 shares of Stock, subject to adjustment
as provided in Section 4(c). In addition, with respect to Awards that may be
settled in cash (in whole or in part), no Participant may be paid during any
calendar year cash amounts relating to such Awards that exceed the greater of
the Fair Market Value of the number of shares of Stock set forth in the
preceding sentence at the date of grant or the date of settlement of Award. This
provision sets forth two separate limitations, so that awards that may be
settled solely by delivery of Stock will not operate to reduce the amount of
cash-only Awards, and vice versa; nevertheless, Awards that may be settled in
Stock or cash must not exceed either limitation.
(c) Adjustments. In the event that the Committee shall determine that any
dividend or other distribution (whether in the form of cash, Stock, or other
property), recapitalization, forward or reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, or share exchange, or other
similar corporate transaction or event, affects the Stock such that an
adjustment is appropriate in order to prevent dilution or enlargement of the
rights of Participants under the Plan, then the Committee shall, in such manner
as it may deem equitable, adjust any or all of (i) the number and kind of shares
of Stock reserved and available for Awards under Section 4(a), (ii) the number
and kind of shares of outstanding Restricted Stock or other outstanding Award in
connection with which shares have been issued, (iii) the number and kind of
shares that may be issued in respect of other outstanding Awards, (iv) the
exercise price, grant price, or purchase price relating to any Award (or, if
deemed appropriate, the Committee may make provision for a cash payment with
respect to any outstanding Award), (v) the number of shares with respect to
which Options and SARs may be granted to a Participant in any calendar year, as
set forth in Section 4(b), and (vi) the number of shares specified in Section
4(b)(i) (and referenced in Section 4(b)(ii)) for purposes of measuring the
maximum Award Value of Awards other than Options and SARs in any calendar year.
In addition, the Committee is authorized to make adjust-
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ments in the terms and conditions of, and the criteria included in, Awards in
recognition of unusual or nonrecurring events (including, without limitation,
events described in the preceding sentence) affecting the Company or any
subsidiary or the financial statements of the Company or any subsidiary, or in
response to changes in applicable laws, regulations, or accounting principles.
The foregoing notwithstanding, without the consent of the Participant, no
adjustments shall be authorized under this Section 4(c) with respect to ISOs to
the extent that such adjustment would cause such ISOs to fail to qualify as
ISOs.
5. Eligibility. Executive officers and other key employees of the Company and
its subsidiaries, including any director or officer who is also such an
employee, and persons who provide consulting or other services to the Company
deemed by the Committee to be of substantial value to the Company, are eligible
to be granted Awards under the Plan. In addition, a person who has been offered
employment by the Company or its subsidiaries, and a person who is employed by
an entity expected to become a subsidiary, is eligible to be granted an Award
under the Plan, provided that such Award shall be cancelled if such person fails
to commence such employment, or if such entity fails to become a subsidiary, and
no payment of value may be made in connection with such Award until such person
has commenced such employment or until such entity has become a subsidiary. The
foregoing notwithstanding, Non-Employee Directors who are members of the
Committee shall not be eligible to be granted Awards under the Plan, other than
pursuant to Section 6(i).
6. Specific Terms of Awards.
(a) General. Awards may be granted on the terms and conditions set forth in
this Section 6. In addition, the Committee may impose on any Award or the
exercise thereof, at the date of grant or thereafter (subject to Section 8(e)),
such additional terms and conditions, not inconsistent with the provisions of
the Plan, as the Committee shall determine, including terms requiring forfeiture
of Awards in the event of termination of employment or service of the
Participant.
(b) Options. The Committee is authorized to grant Options to Participants
(including "reload" options automatically granted to offset specified exercises
of options) on the following terms and conditions:
(i) Exercise Price. The exercise price per share of Stock purchasable
under an Option shall be determined by the Committee; provided, however,
that, the exercise price of an ISO shall be not less than 100 percent (110
percent in the case of an ISO granted to a person who owns (within the
meaning of Section 422(b)(6) of the Code) 10 percent of the Stock) of the
Fair Market Value of a share on the date of grant of such Option.
(ii) Time and Method of Exercise. The Committee shall determine the time
or times at which an Option may be exercised in whole or in part, the methods
by which such exercise price may be paid or deemed to be paid, the form of
such payment, including, without limitation, cash, Stock, other Awards or
awards granted under other Company plans, or other property (including notes
or other contractual obligations of Participants to make payment on a
deferred basis, such as through "cashless exercise" arrangements, to the
extent permitted by applicable law), and the methods by which Stock will be
delivered or deemed to be delivered to Participants.
(iii) ISOs. The terms of any ISO granted under the Plan shall comply in
all respects with the provisions of Section 422 of the Code, including but
not limited to the requirement that no ISO shall be granted more than ten
years after the effective date of the Plan. Anything in the Plan to the
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contrary notwithstanding, no term of the Plan relating to ISOs shall be
interpreted, amended, or altered, nor shall any discretion or authority granted
under the Plan be exercised, so as to disqualify either the Plan or any ISO
under Section 422 of the Code.
(iv) Termination of Employment. Unless otherwise determined by the
Committee, upon termination of a Participant's employment with the Company
and its subsidiaries for any reason other than death, disability (within the
meaning of Section 22(e)(3) of the Code) or cause, such Participant may
exercise any Options during the 90-day period following such termination of
employment. In the event such termination is on account of death or
disability, the Participant may exercise any Options during the one-year
period following such termination. If the Committee determines that
termination of employment is for cause, all Options held by the Participant
shall immediately terminate. In any case where Options remain exercisable
following termination of employment, such Options shall be exercisable only
to the extent exercisable immediately prior to such termination of
employment.
(c) Stock Appreciation Rights. The Committee is authorized to grant SARs to
Participants on the following terms and conditions:
(i) Right to Payment. An SAR shall confer on the Participant to whom it
is granted a right to receive, upon exercise thereof, the excess of (A) the
Fair Market Value of one share of Stock on the date of exercise (or, if the
Committee shall so determine in the case of any such right other than one
related to an ISO, the Fair Market Value of one share at any time during a
specified period before or after the date of exercise), over (B) the grant
price of the SAR as determined by the Committee as of the date of grant of
the SAR, which, except as provided in Section 7(a), shall be not less than
the Fair Market Value of one share of Stock on the date of grant.
(ii) Other Terms. The Committee shall determine the time or times at
which an SAR may be exercised in whole or in part, the method of exercise,
method of settlement, form of consideration payable in settlement, method by
which Stock will be delivered or deemed to be delivered to Participants,
whether or not an SAR shall be in tandem with any other Award, and any other
terms and conditions of any SAR. Limited SARs that may only be exercised upon
the occurrence of a Change in Control may be granted on such terms, not
inconsistent with this Section 6(c), as the Committee may determine. Limited
SARs may be either freestanding or in tandem with other Awards.
Notwithstanding anything contained herein to the contrary, no award shall be
an SAR unless the Award Agreement explicitly so provides.
(d) Restricted Stock. The Committee is authorized to grant Restricted Stock
to Participants on the following terms and conditions:
(i) Grant and Restrictions. Restricted Stock shall be subject to such
restrictions on transferability and other restrictions, if any, as the
Committee may impose, which restrictions may lapse separately or in
combination at such times, under such circumstances, in such installments, or
otherwise, as the Committee may determine. Except to the extent restricted
under the terms of the Plan and any Award Agreement relating to the
Restricted Stock, a Participant granted Restricted Stock shall have all of
the rights of a stockholder including, without limitation, the right to vote
Restricted Stock or the right to receive dividends thereon.
(ii) Forfeiture. Except as otherwise determined by the Committee, upon
termination of employment or service (as determined under criteria
established by the Committee) during the applicable restriction period,
Restricted Stock that is at that time subject to restrictions shall be
forfeited
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and reacquired by the Company; provided, however, that the Committee may
provide, by rule or regulation or in any Award Agreement, or may determine in
any individual case, that restrictions or forfeiture conditions relating to
Restricted Stock will be waived in whole or in part in the event of
termination resulting from specified causes.
(iii) Certificates for Stock. Restricted Stock granted under the Plan may
be evidenced in such manner as the Committee shall determine. If certificates
representing Restricted Stock are registered in the name of the Participant,
such certificates shall bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to such Restricted Stock, the Company
shall retain physical possession of the certificate, and the Participant
shall have delivered a stock power to the Company, endorsed in blank,
relating to the Restricted Stock.
(iv) Dividends. Dividends paid on Restricted Stock shall be either paid
at the dividend payment date in cash or in shares of unrestricted Stock
having a Fair Market Value equal to the amount of such dividends, or the
payment of such dividends shall be deferred and/or the amount or value
thereof automatically reinvested in additional Restricted Stock, other
Awards, or other investment vehicles, as the Committee shall determine or
permit the Participant to elect. Stock distributed in connection with a Stock
split or Stock dividend, and other property distributed as a dividend, shall
be subject to restrictions and a risk of forfeiture to the same extent as the
Restricted Stock with respect to which such Stock or other property has been
distributed.
(e) Deferred Stock. The Committee is authorized to grant Deferred Stock to
Participants, subject to the following terms and conditions:
(i) Award and Restrictions. Delivery of Stock will occur upon expiration
of the deferral period specified for an Award of Deferred Stock by the
Committee (or, if permitted by the Committee, as elected by the Participant).
In addition, Deferred Stock shall be subject to such restrictions as the
Committee may impose, if any, which restrictions may lapse at the expiration
of the deferral period or at earlier specified times, separately or in
combination, in installments, or otherwise, as the Committee may determine.
(ii) Forfeiture. Except as otherwise determined by the Committee, upon
termination of employment or service (as determined under criteria
established by the Committee) during the applicable deferral period or
portion thereof to which forfeiture conditions apply (as provided in the
Award Agreement evidencing the Deferred Stock), all Deferred Stock that is at
that time subject to deferral (other than a deferral at the election of the
Participant) shall be forfeited; provided, however, that the Committee may
provide, by rule or regulation or in any Award Agreement, or may determine in
any individual case, that restrictions or forfeiture conditions relating to
Deferred Stock will be waived in whole or in part in the event of termination
resulting from specified causes.
(f) Bonus Stock and Awards in Lieu of Cash Obligations. The Committee is
authorized to grant Stock as a bonus, or to grant Stock or other Awards in lieu
of Company obligations to pay cash under other plans or compensatory
arrangements; provided, however, that, in the case of Participants subject to
Section 16 of the Exchange Act, the amount of such Stock or Awards shall be
determined by the Committee in a manner conforming to the disinterested
administration requirements of Rule 16b-3. Stock or Awards granted hereunder
shall be subject to such other terms as shall be determined by the Committee.
(g) Dividend Equivalents. The Committee is authorized to grant Dividend
Equivalents to a Participant, entitling the Participant to receive cash, Stock,
other Awards, or other property equal in value to dividends paid with respect to
a specified number of shares of Stock. Dividend Equivalents may be
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awarded on a free-standing basis or in connection with another Award. The
Committee may provide that Dividend Equivalents shall be paid or distributed
when accrued or shall be deemed to have been reinvested in additional Stock,
Awards, or other investment vehicles, and subject to such restrictions on
transferability and risks of forfeiture, as the Committee may specify.
(h) Other Stock-Based Awards. The Committee is authorized, subject to
limitations under applicable law, to grant to Participants such other Awards
that may be denominated or payable in, valued in whole or in part by reference
to, or otherwise based on, or related to, Stock and factors that may influence
the value of Stock, as deemed by the Committee to be consistent with the
purposes of the Plan, including, without limitation, convertible or exchangeable
debt securities, other rights convertible or exchangeable into Stock, purchase
rights for Stock, Awards with value and payment contingent upon performance of
the Company or any other factors designated by the Committee, and Awards valued
by reference to the book value of Stock or the value of securities of or the
performance of specified subsidiaries. The Committee shall determine the terms
and conditions of such Awards. Stock issued pursuant to an Award in the nature
of a purchase right granted under this Section 6(h) shall be purchased for such
consideration, paid for at such times, by such methods, and in such forms,
including, without limitation, cash, Stock, other Awards, or other property, as
the Committee shall determine. Cash awards, as an element of or supplement to
any other Award under the Plan, may be granted pursuant to this Section 6(h).
(i) Non-Employee Directors Options.
(i) On the day after the Company's annual meeting of stockholders at
which the Plan is approved, each person who is then a Non-Employee Director
shall receive, without the exercise of the discretion of any person, a
non-qualified stock option under the Plan relating to the purchase of 5,000
shares of Stock. Thereafter, each person who becomes a Non-Employee Director
shall receive a non-qualified stock option under the Plan relating to the
purchase of 5,000 shares of Stock on the day after the date that he becomes a
Non-Employee Director. On the day after each of the Company's annual meetings
occurring in 1997 and thereafter, each person who is a Non-Employee Director
on any such day shall receive, without the exercise of the discretion of any
person, a non-qualified stock option under the Plan relating to the purchase
of 5,000 shares of Stock, plus an additional 500 shares for each full year of
service as a Non-Employee Director performed from the date that the Plan was
approved by the Company's stockholders to the date of such annual meeting,
provided, however, that any Non-Employee Director who was granted an Option
pursuant to the preceding sentence within 30 days of the date of an annual
meeting shall be not be granted an Option pursuant to this sentence on the
day after such annual meeting. In the event that there are not sufficient
shares available under this Plan to allow for the grant to each Non-Employee
Director of an Option for the number of shares provided herein, each
Non-Employee Director shall receive an Option for his pro rata share of the
total number of shares of Stock available under the Plan.
(ii) The exercise price of each share of Stock subject to an Option
granted to a Non-Employee Director shall equal the Fair Market Value of a
share of Stock on the date such Option is granted. Payment of the exercise
price for the shares being purchased shall be made in cash, Stock, or a
combination of both.
(iii) Each Option granted to a Non-Employee Director shall be exercisable
in full one year from the date the Option is granted, and shall have a term
of ten years from such date. Upon a Non-Employee Director's cessation of
service as a Non-Employee Director, the Option, to the
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extent it was exercisable upon such cessation, shall remain exercisable for a
period of 90 days (one year in the event such cessation is on account of
death or disability). A Non-Employee Director's removal for cause shall
result in an immediate termination of all Options. For purposes of this
clause (iii), "cause" shall mean the director's fraud, intentional
misrepresentation, or embezzlement committed against the Company, its agents
or employees, or otherwise in connection with his or her service as a
director of the Company, the director's misappropriation or conversion of
assets or opportunities of the Company or its subsidiaries, or the director's
conviction of a crime, whether or not in connection with his or her service
as a director, other than a traffic infraction or other violation not deemed
a felony or misdemeanor.
7. Certain Provisions Applicable to Awards.
(a) Stand-Alone, Additional, Tandem, and Substitute Awards. Awards granted
under the Plan may, in the discretion of the Committee, be granted either alone
or in addition to, in tandem with, or in substitution for, any other Award
granted under the Plan or any award granted under any other plan of the Company,
any subsidiary, or any business entity to be acquired by the Company or a
subsidiary, or any other right of a Participant to receive payment from the
Company or any subsidiary. Awards granted in addition to or in tandem with other
Awards or awards may be granted either as of the same time as or a different
time from the grant of such other Awards or awards.
(b) Term of Awards. The term of each Award shall be for such period as may be
determined by the Committee; provided, however, that in no event shall the term
of any ISO or an SAR granted in tandem therewith exceed a period of ten years
from the date of its grant (or such shorter period as may be applicable under
Section 422 of the Code).
(c) Form of Payment Under Awards. Subject to the terms of the Plan and any
applicable Award Agreement, payments to be made by the Company or a subsidiary
upon the grant or exercise of an Award may be made in such forms as the
Committee shall determine, including, without limitation, cash, Stock, other
Awards, or other property, and may be made in a single payment or transfer, in
installments, or on a deferred basis. Such payments may include, without
limitation, provisions for the payment or crediting of reasonable interest on
installment or deferred payments or the grant or crediting of Dividend
Equivalents in respect of installment or deferred payments denominated in Stock.
(d) Rule 16b-3 Compliance.
(i) Six-Month Holding Period. Unless a Participant could otherwise
dispose of or exercise a derivative security or dispose of Stock issued under
the Plan without incurring liability under Section 16(b) of the Exchange Act,
(i) at least six months shall elapse from the date of acquisition of a
derivative security under the Plan to the date of disposition of the
derivative security (other than upon exercise or conversion) or its
underlying equity security and (ii) Stock granted or awarded under the Plan
other than upon exercise or conversion of a derivative security shall be held
for at least six months from the date of grant or award.
(ii) Reformation To Comply with Exchange Act Rules. It is the intent of
the Company that this Plan comply in all respects with applicable provisions
of Rule 16b-3 or Rule 16a-1(c)(3) under the Exchange Act in connection with
any grant of Awards to or other transaction by a Participant who is subject
to Section 16 of the Exchange Act (except for transactions exempted under
alternative Exchange Act Rules or acknowledged in writing to be non-exempt by
such Participant). Accordingly, if any provision of this Plan or any Award
Agreement relating to an Award does not
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comply with the requirements of Rule 16b-3 or Rule 16a-1(c)(3) as then
applicable to any such transaction, such provision will be construed or
deemed amended to the extent necessary to conform to the applicable
requirements of Rule 16b-3 or Rule 16a-1(c)(3) so that such Participant shall
avoid liability under Section 16(b). In addition, other provisions of the
Plan notwithstanding, the exercise price of any Award carrying a right to
exercise granted to a Participant subject to Section 16 of the Exchange Act
shall be not less than 50 percent of the Fair Market Value of Stock as of the
date such Award is granted if such pricing limitation is required under Rule
16b-3 at the time of such grant.
(e) Loan Provisions. With the consent of the Committee, and subject at all
times to, and only to the extent, if any, permitted under and in accordance
with, laws and regulations and other binding obligations or provisions
applicable to the Company, the Company may make, guarantee, or arrange for a
loan or loans to a Participant with respect to the exercise of any Option or
other payment in connection with any Award, including the payment by a
Participant of any or all federal, state, or local income or other taxes due in
connection with any Award. Subject to such limitations, the Committee shall have
full authority to decide whether to make a loan or loans hereunder and to
determine the amount, terms, and provisions of any such loan or loans, including
the interest rate to be charged in respect of any such loan or loans, whether
the loan or loans are to be with or without recourse against the borrower, the
terms on which the loan is to be repaid and conditions, if any, under which the
loan or loans may be forgiven.
(f) Performance-Based Awards. The Committee may, in its discretion, designate
any Award the exercisability or settlement of which is subject to the
achievement of performance conditions as a performance-based Award subject to
this Section 7(f), in order to qualify such Award as "qualified
performance-based compensation" within the meaning of Section 162(m) of the Code
and regulations thereunder. The performance objectives for an Award subject to
this Section 7(f) shall consist of one or more business criteria and a targeted
level or levels of performance with respect to such criteria, as specified by
the Committee but subject to this Section 7(f). Performance objectives shall be
objective and shall otherwise meet the requirements of Section 162(m)(4)(C) of
the Code and regulations thereunder. Business criteria used by the Committee in
establishing performance objectives for Awards subject to this Section 7(f)
shall be selected exclusively from among the following:
(1) Annual return on capital;
(2) Annual earnings per share;
(3) Annual cash flow provided by operations;
(4) Changes in annual revenues; and/or
(5) Strategic business criteria, consisting of one or more objectives based
on meeting specified revenue, market penetration, geographic business
expansion goals, cost targets, and goals relating to acquisitions or
divestitures.
The levels of performance required with respect to such business criteria may be
expressed in absolute or relative levels. Achievement of performance objectives
with respect to such Awards shall be measured over a period of not less than one
year nor more than five years, as the Committee may specify. Performance
objectives may differ for such Awards to different Participants. The Committee
shall specify the weighting to be given to each performance objective for
purposes of determining the final amount payable with respect to any such Award.
The Committee may, in its discretion, reduce the amount of a
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payout otherwise to be made in connection with an Award subject to this Section
7(f), but may not exercise discretion to increase such amount, and the Committee
may consider other performance criteria in exercising such discretion. All
determinations by the Committee as to the achievement of performance objectives
shall be in writing. The Committee may not delegate any responsibility with
respect to an Award subject to this Section 7(f).
(g) Acceleration upon a Change of Control. Notwithstanding anything contained
herein to the contrary, unless otherwise provided by the Committee in an Award
Agreement, all conditions and/or restrictions relating to the continued
performance of services and/or the achievement of performance objectives with
respect to the exercisability or full enjoyment of an Award shall immediately
lapse upon a Change in Control.
8. General Provisions.
(a) Compliance With Laws and Obligations. The Company shall not be obligated
to issue or deliver Stock in connection with any Award or take any other action
under the Plan in a transaction subject to the registration requirements of the
Securities Act of 1933, as amended, or any other federal or state securities
law, any requirement under any listing agreement between the Company and any
national securities exchange or automated quotation system, or any other law,
regulation, or contractual obligation of the Company, until the Company is
satisfied that such laws, regulations, and other obligations of the Company have
been complied with in full. Certificates representing shares of Stock issued
under the Plan will be subject to such stop-transfer orders and other
restrictions as may be applicable under such laws, regulations, and other
obligations of the Company, including any requirement that a legend or legends
be placed thereon.
(b) Limitations on Transferability. Awards and other rights under the Plan,
including any Award or right which constitutes a derivative security as
generally defined in Rule 16a-1(c) under the Exchange Act, will not be
transferable by a Participant except by will or the laws of descent and
distribution (or to a designated Beneficiary in the event of the Participant's
death), and, if exercisable, shall be exercisable during the lifetime of a
Participant only by such Participant or his guardian or legal representative;
provided, however, that such Awards and other rights (other than ISOs and SARs
in tandem therewith) may be transferred to one or more Beneficiaries during the
lifetime of the Participant in connection with the Participant's estate
planning, and may be exercised by such transferees in accordance with the terms
of such Award, but only if and to the extent then permitted under Rule 16b-3,
consistent with the registration of the offer and sale of Stock on Form S-8 or
Form S-3 or a successor registration form of the Securities and Exchange
Commission, and permitted by the Committee. Awards and other rights under the
Plan may not be pledged, mortgaged, hypothecated, or otherwise encumbered, and
shall not be subject to the claims of creditors.
(c) No Right to Continued Employment. Neither the Plan nor any action taken
hereunder shall be construed as giving any employee the right to be retained in
the employ of the Company or any of its subsidiaries, nor shall it interfere in
any way with the right of the Company or any of its subsidiaries to terminate
any employee's employment at any time.
(d) Taxes. The Company and any subsidiary is authorized to withhold from any
Award granted or to be settled, any delivery of Stock in connection with an
Award, any other payment relating to an Award, or any payroll or other payment
to a Participant amounts of withholding and other taxes due or potentially
payable in connection with any transaction involving an Award, and to take such
other action as the Committee may deem advisable to enable the Company and
Participants to satisfy obligations for
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the payment of withholding taxes and other tax obligations relating to any
Award. This authority shall include authority to withhold or receive Stock or
other property and to make cash payments in respect thereof in satisfaction of a
Participant's tax obligations; in such case, the shares withheld shall be deemed
to have been delivered for purposes of Section 4(a).
(e) Changes to the Plan and Awards. The Board may amend, alter, suspend,
discontinue, or terminate the Plan or the Committee's authority to grant Awards
under the Plan without the consent of stockholders or Participants, except that
any such action shall be subject to the approval of the Company's stockholders
at or before the next annual meeting of stockholders for which the record date
is after such Board action if such stockholder approval is required by any
federal or state law or regulation or the rules of any stock exchange or
automated quotation system on which the Stock may then be listed or quoted, and
the Board may otherwise, in its discretion, determine to submit other such
changes to the Plan to stockholders for approval; provided, however, that,
without the consent of an affected Participant, no such action may materially
impair the rights of such Participant under any Award theretofore granted to
him. The Committee may waive any conditions or rights under, or amend, alter,
suspend, discontinue, or terminate, any Award theretofore granted and any Award
Agreement relating thereto; provided, however, that, without the consent of an
affected Participant, no such action may materially impair the rights of such
Participant under such Award. No plan provision, within the meaning of Rule
16b-3(c)(2)(i)(D), shall be amended more than once every six months, other than
to comport with changes in the Code or rules thereunder.
(f) No Rights to Awards; No Stockholder Rights. No Participant or employee
shall have any claim to be granted any Award under the Plan, and there is no
obligation for uniformity of treatment of Participants and employees. No Award
shall confer on any Participant any of the rights of a stockholder of the
Company unless and until Stock is duly issued or transferred and delivered to
the Participant in accordance with the terms of the Award or, in the case of an
Option, the Option is duly exercised.
(g) Unfunded Status of Awards; Creation of Trusts. The Plan is intended to
constitute an "unfunded" plan for incentive and deferred compensation. With
respect to any payments not yet made to a Participant pursuant to an Award,
nothing contained in the Plan or any Award shall give any such Participant any
rights that are greater than those of a general creditor of the Company;
provided, however, that the Committee may authorize the creation of trusts or
make other arrangements to meet the Company's obligations under the Plan to
deliver cash, Stock, other Awards, or other property pursuant to any Award,
which trusts or other arrangements shall be consistent with the "unfunded"
status of the Plan unless the Committee otherwise determines with the consent of
each affected Participant.
(h) Nonexclusivity of the Plan. Neither the adoption of the Plan by the Board
nor its submission to the stockholders of the Company for approval shall be
construed as creating any limitations on the power of the Board to adopt such
other compensatory arrangements as it may deem desirable, including, without
limitation, the granting of stock options otherwise than under the Plan, and
such arrangements may be either applicable generally or only in specific cases.
(i) No Fractional Shares. No fractional shares of Stock shall be issued or
delivered pursuant to the Plan or any Award. The Committee shall determine
whether cash, other Awards, or other property shall be issued or paid in lieu of
such fractional shares or whether such fractional shares or any rights thereto
shall be forfeited or otherwise eliminated.
(j) Compliance with Section 162(m) of the Code. It is the intent of the
Company that Options granted at or above Fair Market Value, SARs, and other
Awards designated as Awards subject to
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Section 7(f) shall constitute "qualified performance-based compensation" within
the meaning of Section 162(m) of the Code and regulations thereunder.
Accordingly, if any provision of the Plan or any Award Agreement relating to
such an Award does not comply or is inconsistent with the requirements of
Section 162(m) of the Code or regulations thereunder, such provision shall be
construed or deemed amended to the extent necessary to conform to such
requirements, and no provision shall be deemed to confer upon the Committee or
any other person discretion to increase the amount of compensation otherwise
payable in connection with any such Award upon attainment of the performance
objectives.
(k) Governing Law. The validity, construction, and effect of the Plan, any
rules and regulations relating to the Plan, and any Award Agreement shall be
determined in accordance with the Delaware General Corporation Law, without
giving effect to principles of conflicts of laws, and applicable federal law.
(l) Effective Date; Plan Termination. The Plan shall become effective as of
the date of its adoption by the Board and shall continue in effect until
terminated by the Board.
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TRANSMEDIA NETWORK INC.
Proxy For Annual Meeting of Stockholders March 20, 1996
The undersigned hereby appoints Melvin Chasen and Herbert M. Gardner as
Proxies, each with power to appoint his substitute, and hereby authorizes them,
to represent and vote, as designated on the reverse side of this card, all
shares of Common Stock of Transmedia Network Inc. (the "Company"), held of
record by the undersigned on January 24, 1996, at the Annual Meeting of
Stockholders (the "Annual Meeting"), to be held on March 20, 1996 or any
postponement or adjournment thereof.
(To Be Signed On Reverse Side)
1. Election of Directors.
Nominee (term expiring in 1997): Barry S. Kaplan
Nominees (term expiring in 1999): Irwin Hochberg
Henry Seiden
Jack Africk
[ ] FOR
[ ] WITHHOLD AUTHORITY to vote for all nominees listed above
[ ] FOR all nominees listed (except as marked to the contrary below)
________________________________________________________________
2. Proposal to approve the Company's 1996 Long-Term Incentive Plan.
[ ] FOR
[ ] AGAINST
[ ] ABSTAIN
3. In their discretion, upon such other business as may properly come before the
Annual Meeting or any postponement or adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. THIS PROXY WILL BE
VOTED AS DIRECTED. IN THE ABSENCE OF DIRECTION, THIS PROXY WILL BE VOTED FOR THE
BOARD OF DIRECTORS' FOUR NOMINEES FOR ELECTION AND FOR PROPOSAL 2.
STOCKHOLDERS ARE URGED TO DATE, MARK, SIGN AND RETURN THIS PROXY PROMPTLY IN THE
ENVELOPE PROVIDED, WHICH REQUIRES NO POSTAGE IF MAILED WITHIN THE UNITED STATES.
SIGNATURE(S)______________________________ DATE _________________ 1996
NOTE: Please sign exactly as name or names appears on stock certificate (as
indicated hereon).
<PAGE>
[type letterhead; Morgan Lewis & Bockius LLP]
January 26, 1996
VIA EDGAR
- ---------
Attn: File Support, EDGAR
Securities and Exchange Commission
Operations Center Stop 0-7
6432 General Greenway
Alexanderia, VA 22312
Re: Transmedia Network Inc.; File No. 0-4028
----------------------------------------
Ladies and Gentlemen:
On behalf of our client, Transmedia Network Inc. (the "Company"), we are
transmitting via EDGAR for filing pursuant to Rule 14a-6 of the Securities
Exchange Act of 1934, as amended, the definitive Proxy Statement and form of
proxy respecting the Annual Meeting of Shareholders of the Company to be held on
March 30, 1996. It is currently intended that copies of the proxy materials will
be mailed to stockholders of the Company on or about January 29, 1996.
Please be advised that the Company has a $750 account balance with the SEC. In
conjunction with a December 29, 1995 filing of the Company's Annual Report on
Form 10-K (the "10-K"), the Company transferred $1000 into Account No.
0000078536. The SEC deducted from this account the $250 filing fee required for
the 10-K. We ask, therefore, that the SEC similary deduct the $125 proxy filing
fee from this account.
Pursuant to Item 304(d) of Regulation S-T the performance graph that appears in
the Proxy Statement provided to Shareholders, as required by Item 402(1) of
Regulation S-K, is presented only in tabular form within the electronic filing.
A paper copy of the performance graph is being supplementally submitted to the
Company's Branch Chief in the Division of Corporate Finance.
If you have any questions with respect to the proxy materials, please contact
Stephen P. Farrell at (212) 309-6050 or me at (212) 309-6321.
Very truly yours,
Isabella I. Wezdecki
