<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential. For Use of the Commission Only
(as permitted by Rule 14a-6(e)(2))
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 14a-11(c) or 14a-12
TRANSMEDIA NETWORK INC.
________________________________________________________________________________
(Name of Registrant as Specified In Its Charter)
________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[x] No fee required.
[ ] Fee computed on table below per Exchange Act Rule 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
________________________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
________________________________________________________________________________
(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
________________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
________________________________________________________________________________
(5) Total fee paid:
________________________________________________________________________________
[ ] Fee paid previously with preliminary materials:
________________________________________________________________________________
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount previously paid: ________________________________________________
(2) Form, Schedule or Registration Statement No.: __________________________
(3) Filing Party: __________________________________________________________
(4) Date Filed: ____________________________________________________________
<PAGE>
[Letterhead of Transmedia Network Inc.]
Fellow Stockholders:
Please accept my personal invitation to attend our Annual Meeting of
Stockholders on March 3, 1999 at 10:00 a.m., Eastern Standard Time. This year's
meeting will be held at The Helmsley Hotel, 212 East 42nd Street, New York, New
York 10017 (between 2nd and 3rd Avenues). The attached Notice of Annual Meeting
and Proxy Statement describe the formal business to be transacted at the
meeting. During the meeting, I will also report on the operations of the
Company.
We hope that you will attend. Regardless of whether you plan to attend or
not, please complete, date, sign and return the enclosed proxy as soon as
possible. It is important that your shares be represented at the meeting.
YOUR VOTE IS IMPORTANT
We encourage you to complete, date, sign and promptly return your proxy
card in the enclosed envelope regardless of whether you plan to attend the
annual meeting.
Sincerely yours,
/s/ GENE M. HENDERSON
Gene M. Henderson
President and Chief
Executive Officer
<PAGE>
TRANSMEDIA NETWORK INC.
11900 Biscayne Boulevard
Miami, Florida 33181
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MARCH 3, 1999
------------------------
To the Stockholders
of Transmedia Network Inc.:
The 1999 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), on Wednesday, March 3, 1999 at 10:00 a.m.,
Eastern Standard Time, to consider and act upon the following matters:
(1) The election of eight (8) directors to serve until the next annual
meeting or until their successors have been elected and qualified.
(2) Such other business as may properly come before the meeting or any
adjournments or postponements thereof.
Owners of record of the Common Stock, par value $.02 per share, of the
Company at the close of business on January 26, 1999 are entitled to receive
notice of, and to vote at, the Annual Meeting and at any adjournment thereof. A
list of Stockholders of the Company as of the close of business on January 26,
1999 will be available for inspection during normal business hours from 10:00
a.m., February 19, 1999 through 5:00 p.m., March 2, 1999 at the Company's New
York offices at 750 Lexington Avenue, New York, New York, 10022. The Company's
1999 Annual Report, which is not a part of the proxy soliciting material, is
enclosed.
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, DATE AND MAIL THE ACCOMPANYING
PROXY 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 28, 1999
<PAGE>
TRANSMEDIA NETWORK INC.
------------------------
PROXY STATEMENT
------------------------
ANNUAL MEETING OF STOCKHOLDERS
to be held on March 3, 1999
INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Transmedia Network Inc., a Delaware
corporation, for use at the Company's 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), on Wednesday, March 3, 1999 at 10:00 a.m., Eastern
Standard Time, and at any adjournment thereof.
This Proxy Statement and the enclosed form of proxy are first being sent or
given to Stockholders of the Company on or about January 29, 1999.
Purposes of Meeting
The purposes of the meeting are to consider and act upon the following
matters:
1. The election of eight (8) directors to serve until the next annual
meeting or until their successors have been elected or qualified.
2. Such other business as may properly come before the meeting or any
adjournment or postponements thereof.
Record Date; Proxy; Vote Required; Recommendation; Solicitation
Only owners of record of shares of Common Stock, par value $.02 per share
(the "Common Stock"), at the close of business on January 26, 1999 are entitled
to receive notice of, and to vote at, the meeting or any adjournment thereof.
Each owner of record on the record date is entitled to one vote for each share
of Common Stock of the Company so held and there is no cumulative voting. The
Common Stock is the only class of securities issued by the Company that entitles
an owner of record to vote on the proposals contained herein. On January 26,
1999 there were 12,847,854 shares of Common Stock issued and outstanding. The
presence at the meeting, in person or by proxy, of the holders of the majority
of the outstanding shares of the Common Stock entitled to vote is necessary to
constitute a quorum.
Proxies in the accompanying form are solicited on behalf and at the
direction of the Board of Directors. All shares of Common Stock represented by
properly executed proxies will be voted at the meeting in accordance with the
instructions made on the proxies, unless such proxies have previously been
revoked. Regarding the election of Directors to serve until the 2000 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 any 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 authority to vote a proxy has not been withheld and no
instruction is indicated, the shares will be voted FOR the election of the
nominees for directors to the Board of Directors. If any other matters are
properly presented at the meeting for action, including a question of adjourning
the meeting from time to time, the persons named in the proxies and acting
thereunder will have discretion to vote on such matters in accordance with their
best judgment.
The Company's Board of Directors unanimously recommends that all
Stockholders vote FOR the election of the Nominees for Director named in this
Proxy Statement.
A Stockholder executing and returning a proxy has the power to revoke it
before it is exercised, and may do so by delivering a subsequently signed and
dated proxy or other written notice to the Secretary of the Company at any time
prior to the vote at the meeting or by appearing at the meeting and voting in
person the shares to which
<PAGE>
the proxy relates. Any written notice revoking a proxy should be sent to the
Company, attention: Kathryn M. Ferara, Secretary. The mailing address of the
Company's executive offices is 11900 Biscayne Boulevard, Miami, Florida 33181.
Directors will be elected by a plurality of the votes cast. Abstentions and
broker non-votes will have no effect on the election of directors. Approval of
any other matter will require the affirmative vote of the holders of a majority
of the shares of Common Stock cast, except as may otherwise be provided in the
Certificate of Incorporation or By-laws of the Company, by the rules of the New
York Stock Exchange, Inc., or by the General Corporation Law of the State of
Delaware. Abstentions and broker non-votes will have no effect with respect to
any other matter.
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 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.
2
<PAGE>
PROPOSAL NO. 1:
ELECTION OF DIRECTORS
The Board of Directors proposes for election as Directors of the Company
the following nominees: F. Philip Handy, Gene M. Henderson, Jack Africk, Melvin
Chasen, Rod F. Dammeyer, Herbert M. Gardner, George S. Wiedemann and Lester
Wunderman, each of whom is currently a Director of the Company.
Directors will be elected by a plurality of the votes cast.
The following table sets forth certain information relating to the nominees
for election to the Board of Directors. Unless otherwise instructed, the proxy
holders will vote the proxies received by them for the above named nominees, who
have consented to serve if elected. If a nominee is unable to serve as a
director (an event not now anticipated), the proxies will be voted by the proxy
holders for a substitute nominee.
The Company's Board of Directors recommends that the Stockholders vote FOR
the election to the Board of each of the following nominees.
NOMINEES FOR ELECTION
<TABLE>
<CAPTION>
Position and/or Director
Nominee Age(1) Principal Occupation Since
- - ----------------------------------------------------- ------ ------------------------------ --------
<S> <C> <C> <C>
F. Philip Handy...................................... 54 Chairman of the Board 1998
and President, Winter Park
Capital Company
Gene M. Henderson.................................... 52 Director, President and Chief 1998
Executive Officer of the
Company
Jack Africk.......................................... 70 Chairman of the Board, 1992
Evolution Consulting Group,
Inc.
Melvin Chasen........................................ 70 Partner, Evolution Consulting 1984
Group, Inc.
Rod F. Dammeyer...................................... 58 Managing Partner, Equity Group 1998
Corporate Investments
Herbert M. Gardner................................... 59 Senior Vice President, Janney 1983
Montgomery Scott Inc.
George S. Wiedemann.................................. 54 Chairman of the Board and 1998
Chief Executive Officer,
Grey Marketing
Lester Wunderman..................................... 78 Chief Executive Officer, 1998
Wunderman, L.L.C.
</TABLE>
- - ------------------
(1) As of January 1, 1999.
Business Experience
F. Philip Handy is Chairman and President of Winter Park Capital Company, a
private investment firm he founded in 1980. From 1996 until 1998, he was a
Managing Director of Equity Group Corporate Investments. From 1976 until 1980,
he was President of ComBanks Corporation, a bank holding company in Central
Florida. Mr. Handy formerly owned and was Chairman and Chief Executive Officer
of Maryland Club Foods, Inc., a coffee roasting and marketing company which was
purchased from the Coca-Cola Company and subsequently sold in 1989 to Procter &
Gamble Company. He also served as Chairman and Chief Executive Officer and was a
3
<PAGE>
majority owner of TOC Retail Inc., a 350-store gas-marketing/convenience store
chain. He was majority owner and Chairman of the Board of Bordo Citrus Products,
Inc. and Lakeland Packing Company, citrus-based food service companies. Mr.
Handy currently serves as a director of each of Anixter International, Inc.,
Banca Quandium S.A., Chart House Enterprises and Jacor Communications, Inc.
Gene M. Henderson was elected President and Chief Executive Officer of the
Company in October 1998. From March 1997 until June 1998, Mr. Henderson was
President and Chief Executive Officer of DIMAC Marketing, a full service direct
marketing company based in St. Louis. From 1977 until March 1997, Mr. Henderson
was employed in various capacities by Epsilon Data Management, a database
marketing firm based in Burlington, Massachusetts. From 1990 until 1998, Epsilon
was a wholly-owned subsidiary of American Express Company. Among his positions
at Epsilon, Mr. Henderson served as Chief Operating Officer and prior to that as
President of the division of Epsilon that provides services to membership and
not for profit organizations.
Mr. Africk 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 was a director of that company until
August 1997. Until 1993, Mr. Africk was Vice Chairman of UST, Inc. and the
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, Inc.
Mr. Chasen is a Partner of Evolution Consulting Group, Inc. From 1984 until
1998, he was Chairman of the Board, President and Chief Executive Officer of the
Company. 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., as a director of Transmedia
Europe, Inc., the Company's European licensee, and as a director of Transmedia
Asia Pacific, Inc., the Company's licensee for the Asia-Pacific rim region. Mr.
Chasen currently serves as a director of the Seiden Group, Inc.
Rod F. Dammeyer is managing partner of Equity Group Corporate Investments
which has, among other things, investments in approximately 30 companies,
several of which are public entities. In addition, he is a director and
vice-chairman of Anixter International, Inc where he has been employed since
1985. Mr. Dammeyer is also a director of Antec Corporation, CNA Surety Corp.,
Inc., Grupo Azucarero Mexico (GAM), IMC Global, Inc., Jacor Communications,
Inc., Matria Healthcare, Inc., Metal Management, Inc., Stericycle, Inc., and
TeleTech Holdings, Inc. He is also a trustee of the Van Kampen Closed-End Funds.
Mr. Gardner has been 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 Nu Horizons Electronics Corp., an electronics components
distributor. He is Chairman of the Board of Supreme Industries, Inc., which
manufactures specialized truck bodies and shuttle buses. He is also a director
of TGC Industries, Inc., a company in the geophysical services industry, a
director of Hirsch International Corp., an importer of computerized embroidery
machines, a developer of embroidery machine application software and a provider
of other services to the embroidery industry; and a director of Inmark
Enterprises, Inc., a marketing and sales promotion company.
George S. Wiedemann is the Chairman of the Board and Chief Executive
Officer of Grey Direct, a direct marketing agency he founded in 1979, that
specializes in multimedia direct response advertising. He also co-founded and
has served as Chairman and Chief Executive Officer of Grey Interactive and Grey
Direct Marketing in 1993 and 1995, respectively. Mr. Wiedemann was elected to
the Direct Marketing Association Board of Directors in October 1990, and
presently serves as Chairman-Elect of that Board.
Lester Wunderman is founder and Chief Executive Officer of Wunderman,
L.L.C., a marketing consulting company. From 1988 until 1998, he was Chairman of
the Board of Wunderman Cato Johnson, a direct marketing advertising agency, and
a director of Dentsu Wunderman Direct, an affiliated company in Japan. From 1958
until 1988 he served as President and Chief Executive Officer of Wunderman Cato
Johnson. He also currently serves as a visiting professor of Direct Marketing at
the School for Continuing Education at New York University, a director of
InfoNautics Inc. and as a director of the Childrens Television Workshop, a
not for profit organization. Mr. Wunderman was formerly a director of the
Advertising Council and of
4
<PAGE>
Direct Marketing Association and served for two years as Secretary and Treasurer
and as a member of the Operations Committee and Board of Directors of the
American Association of Advertising Agencies.
Meetings and Committees of the Board of Directors
During the fiscal year ended September 30, 1998 ("Fiscal 1998"), the
Compensation Committee of the Company consisted of Rod F. Dammeyer, Melvin
Chasen and George S. Wiedemann. The Compensation Committee was charged with
administering the Company's 1996 Long-Term Incentive Plan, as amended (the "1996
Plan"), reviewing the compensation of senior management and recommending to the
Board of Directors such changes to the compensation of senior management,
including changes to the Company's compensation plans and programs, as the
Compensation Committee determines are appropriate.
The Audit Committee of the Company consists of F. Philip Handy, Jack Africk
and Herbert M. Gardner. The Audit Committee is charged with recommending to the
Board of Directors the engagement of the Company's 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 the scope and nature of the Company's internal auditing system
with the Chief Financial Officer.
During the fiscal year ended September 30, 1998, the Board of Directors
held 6 meetings, the Compensation Committee held 1 meeting, and the Audit
Committee held 2 meetings. Each director attended at least 75% of the aggregate
number of meetings held by the Board and any committee on which he served.
Compensation of Directors
The Company pays each director who is not a full-time employee an annual
stipend of $18,000 in quarterly installments in arrears on January 1, April 1,
July 1 and October 1 of each fiscal year. Full-time employees of the Company who
also serve as directors do not receive compensation for attending board
meetings. On August 5, 1998, the 1996 Plan was amended to allow for non-employee
directors to elect to take their directors' fees in either cash or as deferred
stock awards. The Company also pays each member of the Audit Committee and the
Compensation Committee an attendance fee of $1,000 for each meeting of the
respective committee attended by such member.
5
<PAGE>
EXECUTIVE COMPENSATION
The following table summarizes for the last three years compensation earned
by or awarded to those serving as chief executive officer and the other four
most highly compensated officers during Fiscal 1998:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
------------
Annual Compensation Awards
------------------------------- ------------
Other Securities
Annual Underlying All Other
Salary Bonus Compen- Options/SARs Compensation
Name And Principal Position Year ($) ($) sation (#) ($)
- - ------------------------------------- ---- -------- -------- ------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Gene M. Henderson (1)................ 1998 -- -- -- -- --
President and Chief 1997 -- -- -- -- --
Executive Officer 1996 -- -- -- -- --
Melvin Chasen (2).................... 1998 $367,000 $ -- $6,700 (3) -- $ 3,005,050(4)
Former Chairman of the 1997 350,000 -- -- 20,000 --
Board, President and Chief 1996 300,000 216,100 -- -- --
Executive Officer
James M. Callaghan................... 1998 315,000 -- -- 58,750 --
Vice President of the 1997 300,000 30,000 -- 15,000 --
Company and President of 1996 250,000 10,000 -- -- --
Transmedia Restaurant
Company Inc.
Barry S. Kaplan (5).................. 1998 215,500 25,000 -- -- 108,000(6)
Former Vice President 1997 280,000 -- -- 15,000 --
1996 225,000 -- -- 50,000 --
Stephen E. Lerch..................... 1998 200,000 15,000 -- 25,000 --
Executive Vice President 1997 193,000 -- -- 30,000 --
and Chief Financial 1996 -- -- -- -- --
Officer
Paul A. Ficalora..................... 1998 165,500 -- -- 25,000 --
Executive Vice President 1997 155,500 -- -- 6,000 --
of Transmedia Restaurant 1996 146,250 10,000 -- -- --
Company Inc.
</TABLE>
- - ------------------
(1) Mr. Henderson became President and Chief Executive Officer of the Company on
October 13, 1998. See "Employment, Consulting and Other Agreements" for a
summary of the terms of his employment arrangements with the Company.
(2) Mr. Chasen resigned as President and Chief Executive Officer of the Company
effective September 15, 1998. See "Employment, Consulting and Other
Agreements" and "Certain Transactions."
(3) For medical insurance coverage provided by the Company.
(4) Includes (i) $2,750,000 paid as severance, (ii) $60,000 for the purchase of
a car, (iii) a $14,400 car allowance, (iv) $134,900 debt forgiveness, and
(v) $45,750 for professional fees and expenses. See "Compensation Committee
Interlocks and Insider Participation in Compensation Decisions."
(5) Mr. Kaplan resigned as Vice President of the Company effective May 1998. See
"Employment, Consulting and Other Agreements."
(Footnotes continued on next page)
6
<PAGE>
(Footnotes continued from previous page)
(6) Includes $100,000 paid for consulting services and (ii) an $8,000 car
allowance.
Options Granted
Shown below is further information regarding employee stock options awarded
during Fiscal 1998 under the 1996 Plan to the executive officers named above. No
stock appreciation rights were awarded during the year:
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential
Realizable
Value at
Assumed
Individual Grants Annual Rates
--------------------------------------------------------------------------- of
Percent of Stock Price
Number of Total Options Appreciation
Securities Granted to for Option
Underlying Employees Exercise of Term
Date of Options In Fiscal Base Price Expiration --------------
Name Grant Granted Year ($/sh)(1) Date 5%
- - ------------------------- --------------- ---------- ------------- ----------- --------------- --------------
<S> <C> <C> <C> <C> <C> <C>
James M. Callaghan....... March 3, 1998 24,372 10.26% $ 5.875 March 22, 2004 $ 192,383
James M. Callaghan....... March 3, 1998 13,128 5.53% 5.875 March 23, 2005 108,819
James M. Callaghan....... August 5, 1998 25,000 10.53% 4.50 August 5, 2008 183,263
Paul A. Ficalora......... March 3, 1998 10,000 4.21% 5.875 March 23, 2005 821,891
Paul A. Ficalora......... August 5, 1998 15,000 6.32% 4.50 August 5, 2008 109,958
Stephen E. Lerch......... August 5, 1998 25,000 10.53% 4.50 August 5, 2008 183,263
<CAPTION>
Name 10%
- - ------------------------- --------------
<S> <C>
James M. Callaghan....... $ 254,956
James M. Callaghan....... 151,095
James M. Callaghan....... 291,834
Paul A. Ficalora......... 115,094
Paul A. Ficalora......... 75,100
Stephen E. Lerch......... 291,834
</TABLE>
- - ------------------
(1) All options were granted at 100% of the underlying Common Stock closing sale
price on the date of grant.
Exercises and Values of Options
The following table sets forth, as to the executive officers named in the
"Summary Compensation Table" for Fiscal 1998, information relating to the
exercise and values of stock options issued under the 1996 Plan and otherwise.
7
<PAGE>
AGGREGATED OPTION EXERCISES IN THE LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
Value of
Unexercised
In-The-
Money Options
at
Number of Securities Underlying Fiscal
Shares Unexercised Options Year-End
Acquired on Value Held at Fiscal Year-End (#) ($)(1)
Exercise Realized ---------------------------------- --------------
Name (#) ($) Exercisable Unexercisable Exercisable
- - ------------------------------ ----------- ----------- -------------- ---------------- --------------
<S> <C> <C> <C> <C> <C>
Gene M. Henderson............. -- -- -- -- --
Melvin Chasen................. -- -- 207,500(2) -- --
James Callaghan............... -- -- 155,625 40,000 --
Stephen E. Lerch.............. -- -- 12,500 42,500 --
Barry Kaplan.................. -- -- -- -- --
Paul A. Ficalora.............. -- -- 24,750 22,000 --
<CAPTION>
Name Unexercisable
- - ------------------------------ ----------------
<S> <C>
Gene M. Henderson............. --
Melvin Chasen................. --
James Callaghan............... --
Stephen E. Lerch.............. --
Barry Kaplan.................. --
Paul A. Ficalora.............. --
</TABLE>
- - ------------------
(1) Based on the closing sale price of the Company's Common Stock on the New
York Stock Exchange of $3.1875 per share on September 30, 1998.
(2) Pursuant to an agreement with the Company, dated December 29, 1997, all of
Mr. Chasen's options were exercisable until December 31, 1998. Any options
unexercised at that date were canceled.
The following table sets forth information concerning the repricing of
certain stock options held by certain of the named executives officers referred
to in the "Summary Compensation Table" in Fiscal 1998. Except as set forth
below, no other options held by the named executives officers have been
repriced.
<TABLE>
<CAPTION>
Number of
Securities
Underlying Market Price of Exercise Price at New
Options/SARs Stock at Time of Time of Exercise
Repriced or Repricing or Repricing or Price
Name Date Amended (#) Amendment ($) Amendment ($) ($)(1)
- - -------------------------- ------------- ------------ --------------- ----------------- -----------
<S> <C> <C> <C> <C> <C>
James Callaghan........... March 3, 1998 9,975 $5.8750 $ 12.25 $5.8750
James Callaghan........... March 3, 1998 14,397 5.8750 15.00 5.8750
James Callaghan........... March 3, 1998 8,103 5.8750 15.00 5.8750
James Callaghan........... March 3, 1998 5,025 5.8750 12.25 5.8750
Paul A. Ficalora.......... March 3, 1998 10,000 5.8750 12.25 5.8750
<CAPTION>
Length of Original
Option Term
Remaining at Date
of Repricing or
Name Amendment
- - -------------------------- ------------------
<S> <C>
James Callaghan........... 7
James Callaghan........... 6
James Callaghan........... 6
James Callaghan........... 7
Paul A. Ficalora.......... 7
</TABLE>
- - ------------------
(1) All repricing of options were granted at the market closing price per share
of the Common Stock on the effective date of the repricing.
Employment, Consulting and Other Agreements
The following is a summary of the employment arrangements with the Named
Executive Officers:
Gene M. Henderson. In October 1998, the Board elected Mr. Henderson
President and Chief Executive Officer of the Company. The terms of his
employment include: (i) a base salary of $350,000 per year (subject to
adjustment annually in October of each year) and a bonus of up to 100% of his
base salary (with a guaranteed minimum bonus of $175,000 for fiscal 1999); (ii)
ten-year options to purchase 250,000 shares of Common Stock at an exercise price
of $2.00, and (iii) ten-year options to purchase an additional 100,000 shares of
Common Stock at an exercise price of $2.375. All the options vest ratably over
four years following their date of grant. The vesting schedule of the options
may be accelerated, however, if the Company's stock price achieves certain
closing price levels for 20 consecutive trading days as follows: (a) 50% of the
options vest if the stock price is at or above $12.00 per share; (b) an
additional 25% of the options vest if the stock price is at or above $16.00 per
share; and (c) 100% of the options vest if the stock price is at or above $20.00
per share. The terms of Mr. Henderson's employment restrict him from competing
against the Company for a one-year period following the termination of his
employment with the Company and also provide that Mr. Henderson will be entitled
to receive a lump sum payment equal to 18 months base salary from the employment
termination date plus the greater of his guaranteed bonus for that year (if any)
or the pro rata bonus of the maximum bonus for that year payable upon the
occurrence of a "Change in Control" (as defined in the 1996 Plan). In addition,
upon a Change in Control, all of Mr. Henderson's stock options will vest as
provided in the 1996 Plan.
8
<PAGE>
Melvin Chasen. See "Compensation Committee Interlocks and Insider
Participation in Compensation Decisions."
James Callaghan. In October 1998, the Company and Mr. Callaghan amended
the terms of his employment to provide that he will serve the Company as Vice
President and as President of Transmedia Restaurant Company Inc. until September
30, 2001. His annual base salary will be $335,000 and he will be eligible to
receive a bonus not to exceed one-half of his salary during each year. The
Company also agreed to maintain in force a $500,000 life insurance policy on his
life, 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 of his
employment). If Mr. Callaghan becomes disabled during the employment term, he
will receive his full compensation during the first six months of disability
(including a pro rata bonus, if any), and thereafter will be paid 75% of his
salary until the end of the term of his employment (including a pro rata bonus,
if any). If a "Change of Control" occurs before June 1999 (as defined in the
1996 Plan) and Mr. Callaghan's duties are reduced substantially from what he was
required to perform under the terms of his employment or he is required to
relocate from New York, New York, the Company will be obligated to pay Mr.
Callaghan the greater of (i) his salary for the remaining term of his employment
or (ii) the severance payment to which he would be entitled under the Company's
Senior Executive Severance Pay Plan. Also, upon a Change of Control, all
unvested options would vest and be exercisable in accordance with the terms of
the 1996 Plan. The terms of his employment restrict Mr. Callaghan from competing
against the Company for a two-year period following the termination of his
employment.
Stephen E. Lerch. Mr. Lerch received a base salary of $200,000 and a bonus
of $15,000. Mr. Lerch also was granted ten-year options to purchase 25,000
shares of Common Stock at an exercise price of $4.50 per share which was fair
market value at the time of the grant. The terms of his employment also provide
that Mr. Lerch will be entitled to receive a lump sum payment of $500,000 in the
event of a "change of control" of the Company in which he was not offered a
comparable position of comparable salary. The terms of his engagement letter do
not define a "change of control".
Barry Kaplan. In May 1998, Mr. Kaplan left the Company's employ. He
agreed, however, to render consulting services to the Company for the period
from June 1, 1998 through May 31, 1999 at the rate of $25,000 per month.
Additionally, the exercise period for his 15,000 existing stock options was
extended through August 1998. He is entitled to receive health insurance
benefits and an office at the Company's executive offices through the stated
expiration of his consultancy.
Compliance With Reporting Requirements
The Company believes that, during the fiscal year ended September 30, 1998,
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, 1998, the Compensation Committee
performed the functions of a board compensation committee. From October 1, 1997
until March 1998, the Compensation Committee consisted of Jack Africk, its
chairman, Irwin Hochberg, Henry Seiden and Herbert Gardner. Following the 1998
Annual Meeting of Stockholders in March 1998, the committee was reconstituted to
consist of Rod F. Dammeyer, as chairman, Melvin Chasen and George S. Wiedemann.
In December 1997 prior to Mr. Chasen's joining the Compensation Committee, the
Board of Directors of the Company and Mr. Chasen entered into negotiations with
respect to Mr. Chasen's Employment Agreement and his Consulting Agreement. As a
result of those negotiations, (i) Mr. Chasen's employment with the Company
terminated on September 15, 1998; (ii) his Consulting Agreement was terminated;
(iii) his right to receive $1,000,000 in the event of the sale of a control
block of stock of the Company was extinguished; and (iv) he agreed to a
five-year non-competition covenant and a confidentiality agreement with the
Company. In return, (i) Mr. Chasen received a payment of $2,750,000 in December
1997; (ii) the Company agreed that any of his stock options which are unvested
as of the termination of his employment would vest and that all of his stock
options would be exercisable through December 31, 1998; (iii) his indebtedness
to the Company in the amount of $134,900 was canceled; (iv) the Company agreed
to purchase a new car for him of similar style and quality to the leased
automobile which the Company then
9
<PAGE>
provided him (at a cost of approximately $60,000); (v) Mr. Chasen and his wife
will receive health insurance coverage for the remainder of their respective
lives (currently costing approximately $6,700 per year); and (vi) he was
reimbursed for his accounting and legal expenses (approximately $45,750)
incurred in connection with the negotiations.
The Company has treated the termination of Mr. Chasen's Amended and
Restated Employment Agreement and his Amended and Restated Consulting Agreement
as a one-time pretax charge of approximately $3.1 million in the fiscal quarter
ended December 31, 1997. For Fiscal 1998, Mr. Chasen received a salary of
$367,000 and did not receive a bonus.
For fiscal 1999, the Company has retained the services of Equity Group
Corporate Investments to perform financial consulting and investment advisory
services for it. Rod F. Dammeyer is managing partner of Equity Group Corporate
Investments. The Company believes that such services are on terms no less
favorable to the Company than could have been obtained with other independent
parties. In fiscal 1999, the Company anticipates paying fees and expenses to
Equity Group Corporate Investments in the amount of $250,000.
The following report of the Compensation Committee and the performance
graph that appears immediately after such report shall not be deemed to be
soliciting material or to be filed with the Securities and Exchange Commission
under the Securities Act of 1933 or the Securities Exchange Act of 1934 or
incorporated by reference in any document so filed.
REPORT OF THE COMPENSATION COMMITTEE
The Company's executive compensation program is designed to help attract,
retain, and motivate the highly qualified personnel needed to manage the
Company's business and affairs. To meet these goals, the Company has implemented
a compensation program with the following components:
o base salaries that reflect the scope and responsibilities of the
position, as well as the skills, knowledge, experience, abilities,
and contributions of each individual executive.
o short-term incentives that are based on the financial performance of
the Company.
o long-term incentives that balance the executive officer's short- and
long-term perspectives and provide rewards consistent with
Stockholder returns.
Compensation decisions are made following an assessment of the individual's
contributions to the Company's success, any significant changes in the
individual's role or responsibility, and internal equity of the Company's
compensation relationships.
The competitiveness of the Company's total compensation
program-incorporating base salaries, short-term incentives and long-term
incentives-is reviewed, and, where appropriate, with the assistance of outside
compensation consultants. In 1996, the Company retained William M. Mercer,
Incorporated ("Mercer") to evaluate the Company's compensation program. Based on
the Mercer report, the Company concluded that the compensation paid to its
executives was fair and reasonable. In general, the Company believes that the
overall compensation levels for the executive group should reflect competitive
levels of compensation for comparable positions in similarly sized companies
over the long term.
The Company believes that it is essential to link executive compensation
and Company performance. To meet this objective, the Company maintains a stock
option program which provides option grants on a regular, though not necessarily
annual, basis to provide participants with an opportunity to share in the
Company's performance. Stock option grants reflect the past contributions of the
individual, the individual's ability to affect Company profitability, the scope
of the individual's responsibilities, the need to retain the individual's
services over time and management's assessments and recommendations. All
executive officers, including the chief executive officer, are eligible to
participate in this program.
The Company's policy of awarding cash bonuses is designed to specifically
relate executive pay to Company and individual performance. As a
pay-for-performance program, cash bonuses provide financial rewards for
achievement of substantive Company and personal objectives. Actual awards paid
are based primarily on actual Company performance.
10
<PAGE>
Chief Executive Officer Compensation
Upon the resignation of Melvin Chasen as President and Chief Executive
Officer in September 1998, James M. Callaghan assumed the duties of President
until October 1998 when Gene M. Henderson was elected President and Chief
Executive Officer. Mr. Henderson's employment arrangements consist of a base
salary of $350,000; an annual bonus eligibility of up to 100% of his base salary
(with a $175,000 bonus guaranteed for Fiscal 1999). He also was awarded ten-year
options to purchase 250,000 shares with an exercise price of $2.00 and an
additional 100,000 shares with an exercise price of $2.375. The options vest
ratably over a four year period, subject to earlier vesting in the event the
Company's stock price meets certain stipulated levels. The Compensation
Committee believes that the terms of Mr. Henderson's employment are fair and
reasonable and offer appropriate incentives to him that will ultimately benefit
the Company and its stockholders. The Compensation Committee further believes
that Mr. Henderson's base salary is competitive and appropriate for the size,
geographic location and industry of the Company.
Additional information concerning the salary, bonus, and stock awards for
the Company's senior executive officers can be found in the section appearing
elsewhere in this Proxy Statement under the caption "Executive Compensation."
Compliance With Internal Revenue Code Section 162(m)
The Company will continue to analyze its executive compensation practices
and plans on an ongoing basis with respect to Section 162(m) of the Internal
Revenue Code. Where it deems advisable, the Company will take appropriate action
to maintain the tax deductibility of its executive compensation.
Report on the Repricing of Options
On March 3, 1998, the Board of Directors of the Company approved the
repricing of existing stock options held by James Callaghan and Paul A. Ficalora
that had an exercise price of $12.25 per share or more. The repricing was
effective March 3, 1998. The repriced options are identical to the original
options except for their exercise price, which was changed to $5.8750 per share,
the closing price of one share of Common Stock on the effective date of the
grant. The vesting and expiration dates of the options were not changed. Mr.
Callaghan, a Vice President of the Company, held options to purchase an
aggregate of 37,500 shares, which were repriced as stated. Mr. Ficalora, the
Executive Vice President of Transmedia Service Company, Inc., held options to
purchase an aggregate of 10,000 shares, which were repriced. In approving the
option repricing, the Board of Directors believed at the time of the decision to
reprice Mr. Callaghan's and Mr. Ficalora's options that the Company was in a
period of management transition, that the retention and motivation of these
senior, experienced employees would be critical to the Company's success and its
ability to achieve its performance objectives and that stock options constitute
one of the primary components of the Company's compensation structure and
therefore serve as a significant factor in the Company's ability to continue to
attract and retain the services of highly qualified personnel.
COMPENSATION COMMITTEE
Melvin Chasen
Rod F. Dammeyer
George S. Wiedemann
January 26, 1999
11
<PAGE>
Performance Analysis
Set forth below is a line graph comparing the cumulative total return of
the Company, the Standard & Poor's 500 Stock Price Index ("S&P 500") and the
Standard & Poor's Financials Index ("S&P Financials Index") for the five fiscal
years commencing October 1, 1993 and ended September 30, 1998.
Stock Performance Graph and Table
Comparison of Five-Year
Cumulative Total Returns Among Transmedia Network Inc.,
S&P 500 and the S&P Financials Index
[CHART GOES HERE]
<TABLE>
<CAPTION>
Company 09/30/93 09/30/94 09/30/95 09/30/96 09/30/97 09/30/98
- - ------------------------------------------------------ -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Transmedia Network Inc................................ 100 153 116 67 49 38
S&P 500............................................... 100 101 127 150 206 222
S&P Financials Index.................................. 100 90 124 151 233 223
</TABLE>
12
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Except as otherwise specified, the following table sets forth certain
information, as of January 1, 1999, regarding ownership of the Company's Common
Stock 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.
<TABLE>
<CAPTION>
OPTIONS AND
AMOUNT OF WARRANTS
COMMON STOCK EXERCISABLE
BENEFICIALLY WITHIN PERCENT OF
NAME AND ADDRESS OWNED 60 DAYS TOTAL CLASS
- - --------------------------------------------------------- ------------ ----------- --------- ----------
<S> <C> <C> <C> <C>
Melvin Chasen ........................................... 1,050,509 -- 1,050,509(1) 8.18%
c/o Transmedia Network Inc.
11900 Biscayne Boulevard
Miami, Florida 33181
Samstock, L.L.C. ........................................ 1,784,636 856,625 4,772,949(2)(3) 34.03%
EGI-Transmedia Investors, L.L.C. Halmostock Limited 322,059 154,588
Partnership 438,305 166,227
(see footnote 3 for addresses)
Pioneering Investment Management Inc. ................... 1,286,000(4) -- 1,286,000 10.01%
60 State Street
Boston, Massachusetts 02109
</TABLE>
Except as otherwise specified, the following table sets forth certain
information regarding beneficial ownership of the Company's Common Stock, as of
January 1, 1999, by each nominee for election as a 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 are exercisable as of January 1, 1999. 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>
OPTIONS AND
AMOUNT OF WARRANTS
COMMON STOCK EXERCISABLE
BENEFICIALLY WITHIN PERCENT OF
NAME AND ADDRESS OWNED 60 DAYS TOTAL CLASS
- - --------------------------------------------------------- ------------ ----------- --------- ----------
<S> <C> <C> <C> <C>
F. Philip Handy ......................................... 1,000 5,000 6,000(5) *
c/o Transmedia Network Inc.
11900 Biscayne Boulevard
Miami, Florida 33181
Gene M. Henderson(6) .................................... 100,000 -- 100,000 *
c/o Transmedia Network Inc.
750 Lexington Avenue
New York, New York 10022
Jack Africk ............................................. 63,695 29,000 92,695(7) *
c/o Transmedia Network Inc.
750 Lexington Avenue
New York, New York 10022
James M. Callaghan ...................................... 85,662 155,625 241,287(8) 1.85%
c/o Transmedia Network Inc.
750 Lexington Avenue
New York, New York 10022
Rod F. Dammeyer ......................................... 4,772,949 5,000 4,777,949(9) 34.05%
c/o Transmedia Network Inc.
11900 Biscayne Boulevard
Miami, Florida 33181
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
OPTIONS AND
AMOUNT OF WARRANTS
COMMON STOCK EXERCISABLE
BENEFICIALLY WITHIN PERCENT OF
NAME AND ADDRESS OWNED 60 DAYS TOTAL CLASS
- - --------------------------------------------------------- ---------- ------- --------- ------
Paul A. Ficalora ........................................ 186,035 24,750 210,785(10) 1.64%
c/o Transmedia Network Inc.
750 Lexington Avenue
New York, New York 10022
<S> <C> <C> <C> <C>
Herbert M. Gardner ...................................... 294,401 29,000 323,401(11) 2.51%
c/o Transmedia Network Inc.
750 Lexington Avenue
New York, New York 10022
Barry S. Kaplan ......................................... 33,000 -- 33,000 *
c/o Transmedia Network Inc.
11900 Biscayne Boulevard
Miami, Florida 33181
Stephen E. Lerch ........................................ -- 12,500 12,500(12) *
c/o Transmedia Network Inc.
11900 Biscayne Boulevard
Miami, Florida 33181
George S. Wiedemann ..................................... 1,000 25,000 26,000(13) *
c/o Transmedia Network Inc.
11900 Biscayne Boulevard
Miami, Florida 33181
Lester Wunderman ........................................ 25,000 50,000 75,000(14) *
c/o Transmedia Network Inc.
11900 Biscayne Boulevard
Miami, Florida 33181
All directors and executive officers as a group
(11 persons)........................................... 5,562,742 335,875 5,898,617 41.07%
</TABLE>
- - ------------------
* Represents less than 1%.
(1) Includes for Mr. Chasen (i) 605,131 shares held by Melvin Chasen,
(ii) 244,600 shares held by a family partnership jointly controlled by
Melvin Chasen and Iris Chasen, and (iii) 200,778 shares held by Iris
Chasen, the wife of Mr. Chasen. Mr. Chasen disclaims beneficial ownership
of 200,778 shares held by Iris Chasen. Subject to the terms of the Amended
and Restated Agreement Among Stockholders (the "Agreement Among
Stockholders"), dated as of March 3, 1998, among EGI-Transmedia Investors,
L.L.C., Samstock, L.L.C. and Melvin Chasen and Iris Chasen, the Chasen's
beneficially owned shares are subject to shared voting and disposition
power with Samstock, L.L.C. and EGI-Transmedia Investors, L.L.C. which are
affiliates of Equity Group Corporate Investments of which Rod F. Dammeyer
is managing partner.
(2) Includes 1,050,509 shares which are owned by Melvin Chasen and Iris Chasen,
but which are subject to the voting and disposition restrictions contained
in the Agreement Among Stockholders.
(3) Based in part: (i) upon information set forth in Amendment No. 1 to the
Schedule 13D filed on March 4, 1998 by Samstock LLC, (ii) other information
available to the Company, and (iii) pursuant to a Stockholders' Agreement
(the "Stockholders' Agreement"), dated as of March 3, 1998, among the
referenced entities. According to the Stockholders' Agreement, each entity
appointed Samstock, L.L.C. and EGI-Transmedia Investors, L.L.C. its true
and lawful attorney and proxy, during the period of such Stockholders'
Agreement, to appear for, represent, and vote the shares held by each
stockholder, as defined
(Footnotes continued on next page)
14
<PAGE>
(Footnotes continued from previous page)
in the Stockholders' Agreement. The warrants held by each stockholder are
exercisable in equal parts at $6.00 per share, $7.00 per share and $8.00
per share and expire in March 2003. The addresses for these entities are as
follows: Samstock, L.L.C. and EGI-Transmedia Investors, L.L.C., each at Two
North Riverside Plaza, Chicago, Illinois 60606 and Halmostock Limited
Partnership at 21 W. Las Olas Boulevard, Fort Lauderdale, Florida 33301.
(4) Based on Amendment No. 1 to Schedule 13G filed on January 15, 1999 by
Pioneering Investment Management Inc.
(5) Includes for Mr. Handy (i) 1,000 shares held by Mr. Handy, and (ii) options
to purchase 5,000 shares of Common Stock at an exercise price of $5.8750 per
share, which options were granted under the 1996 Plan and expire in March
2008.
(6) Subsequent to the Record Date, Mr. Henderson purchased 100,000 shares of
Common Stock. Mr. Henderson was granted (i) options to purchase 250,000
shares at an exercise price of $2.00 per share, which were granted under the
1996 Plan and expire in October 2008, and (ii) options to purchase 100,000
shares at an exercise price of $2.375 per share, which were granted under
the 1996 Plan and expire in January 2009. These options vest ratably over
four years from the date of the grant, subject to accelerated vesting upon
certain specified closing price over twenty consecutive trading days of the
Common Stock. All of such options are not presently exercisable within 60
days of January 1, 1999. See "Employment, Consulting and Other Agreements"
and "Compensation Committee Report on Executive Compensation--Chief
Executive Officer Compensation."
(7) Includes for Mr. Africk (i) 63,695 shares owned by a family corporation for
which Mr. Africk exercises voting and investment authority, (ii) 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 Stock Option and Rights
Plan, as amended (the "1987 Plan"), and expire in March 2004, (iii) options
to purchase 5,000 shares of Common Stock at an exercise price of $12.25 per
share, which options were granted under the 1987 Plan, and expire in March
2005, (iv) options to purchase 5,000 shares of Common Stock at an exercise
price of $7.875 per share, which options were granted under the 1996 Plan
and expire in March 2006, (v) options to purchase 5,500 shares of Common
Stock at an exercise price of $4.375 per share, which options were granted
under the 1996 Plan and expire in June 2007, and (vi) options to purchase
6,000 shares of Common Stock at an exercise price of $5.875 per share,
which options were granted under the 1996 Plan and expire in March 2008. All
of such options are presently exercisable. Does not include options to
purchase 5,500 shares, which were granted under the 1996 Plan and are not
exercisable within 60 days of January 1, 1999.
(8) Includes for Mr. Callaghan (i) 5,038 shares held in Mr. Callaghan's
Individual Retirement Account, (ii) options to purchase 84,375 shares of
Common Stock at an exercise price of $4.8333 per share, which options were
granted under the 1987 Plan and expire in May 2002, (iii) options to
purchase 33,751 shares at an exercise price of $7.4445 per share, which
options were granted under the 1987 Plan and expire in September 2003, (iv)
options to purchase 22,500 shares at an exercise price of $5.8750 per share,
which options granted under the 1987 Plan and expire in March 2004 (the
exercise price of these options was adjusted in March 1998 from $15.00 per
share to $5.875 per share, which was the closing price of the Common Stock
on the effective date of the grant), (v) options to purchase 11,250 shares
at an exercise price of $5.875 per share, which options were granted under
the 1987 Plan and expire in March 2005 (the exercise price of these options
was adjusted from $12.25 per share to $5.875 per share, which was the
closing price of the Common Stock on the effective date of the grant), and
(vi) options to purchase 3,750 Shares of Common Stock at an exercise price
of $4.375 per share, which options were granted under the 1996 Plan and
expire in April 2007. All of such options are presently exercisable. Does
not include (i) options issued under the 1987 and 1996 Plans to purchase
40,000 shares, which are not exercisable within 60 days of January 1, 1999,
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.
(Footnotes continued on next page)
15
<PAGE>
(Footnotes continued from previous page)
(9) Includes for Mr. Dammeyer (i) 1,784,636 shares of Common Stock and warrants
to purchase 856,625 Common Stock owned by Samstock, L.L.C., (ii) 32
2,059 shares and warrants to purchase 154,588 Common Stock owned by
EGI-Transmedia Investors, L.L.C., (iii) options to purchase 5,000 shares of
Common Stock at an exercise price of $5.875 per share, which options were
granted under the 1996 Plan and expire in March 2008, (iv) 438,305 shares
and 166,227 warrants exercisable for Common Stock owned by Halmostock
Limited Partnership, and (v) 1,050,509 shares held by Mr. Chasen pursuant
to the Agreement Among Stockholders described above. According to the
Stockholders' Agreement among these noted entities (except Rod F. Dammeyer
and Mr. Chasen, who are not parties), each entity/stockholder appointed
Samstock, L.L.C. and EGI-Transmedia Investors, L.L.C. its true and lawful
attorney and proxy during the term of said Stockholders' Agreement, to
appear for, represent and vote the shares held by each Stockholder, as
defined in the Stockholders' Agreement. Mr. Dammeyer has disclaimed
beneficial ownership of 3,722,440 shares and warrants and of Mr. Chasen's
1,050,509 shares of Common Stock. Samstock, L.L.C. and EGI-Transmedia
Investors, L.L.C. are affiliates of Equity Group Corporate Investments of
which Mr. Dammeyer is managing partner. Each of Samstock, L.L.C.,
EGI-Transmedia Investors, L.L.C., and Halmostock Limited Partnership have
disclaimed beneficial ownership of Mr. Dammeyer's 5,000 presently
exercisable options.
(10) Includes for Mr. Ficalora (i) options to purchase 15,750 shares at an
exercise price of $7.4445 per share, which options were granted under the
1987 Plan and expire in September 2003, (ii) options to purchase 1,500
shares at an exercise price of $4.375 per share, which options were
granted under the 1996 Plan and expire in April 2007, and (iii) options to
purchase 7,500 shares of Common Stock at an exercise price of $5.875 per
share, which options were granted under the 1996 Plan and expire in March
2005 (the exercise price of these options was adjusted in March 1998 from
$12.25 per share to $5.875 per share, which was the closing price of the
Common Stock on the effective date of the grant). All of such options are
presently exercisable. Does not include (i) options to purchase 22,000
shares, which were granted under the 1996 Plan and are not exercisable
within 60 days of January 1, 1999, (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.
(11) Includes for Mr. Gardner (i) 293,401 shares held by Herbert M. Gardner,
(ii) 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, (iii) options to purchase 5,000 shares of Common
Stock at an exercise price of $12.25 per share, which options were granted
under the 1987 Plan and expire in March 2005, (iv) options to purchase
5,000 shares of Common Stock at an exercise price of $7.875 per share,
which options were granted under the 1996 Plan and expire in March 2006,
(v) options to purchase 5,500 shares of Common Stock at an exercise price
of $4.375 per share, which options were granted under the 1996 Plan and
expire in June 2007, and (vi) options to purchase 6,000 shares of Common
Stock at an exercise price of $5.875 per share, which options were granted
under the 1996 Plan and expire in March 2008. All of such options are
presently exercisable. Does not include 3,834 shares held by Mr. Gardner's
wife individually or as custodian for their children as to all of which
shares Mr. Gardner disclaims beneficial ownership.
(12) Includes for Mr. Lerch (i) options to purchase 10,000 shares of Common
Stock at an exercise price of $5.25 per share, which options were granted
under the 1996 Plan and expire in February 2007, and (ii) options to
purchase 2,500 shares of Common Stock at an exercise price of $4.375 per
share, which options were granted under the 1996 Plan and expire in April
of 2007. Does not include options which were granted under the 1996 Plan to
purchase 42,500 shares, which are not exercisable within 60 days of January
1, 1999.
(13) Includes for Mr. Wiedemann (i) 1,000 shares owned by Mr. Wiedemann, and
(ii) options to purchase 25,000 shares of Common Stock at an exercise price
of $5.875 per share, which options were granted under the 1996 Plan and
expire in March 2008.
(14) Includes for Mr. Wunderman (i) 25,000 owned by Mr. Wunderman, and (ii)
options to purchase 50,000 shares of Common Stock at an exercise price of
$5.875 per share, which options were granted under the 1996 Plan and
expire in March 2008.
16
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Financial Advisors
See "Compensation Committee Interlocks and Insider Participation in
Compensation Decisions."
Investment Agreement
In connection with a Stock Purchase and Sale Agreement (the "Purchase
Agreement"), dated as of November 6, 1997, by and among Samstock, L.L.C.
("Samstock"), EGI-Transmedia Investors, L.L.C. ("EGI-TMI", and together with
Samstock, "Purchasers"), the Company, and for the purposes of Section 5 thereto
only, the Robert M. Steiner Trust, as trustee under declaration of trust dated
March 9, 1983, as amended, establishing the Robert M. Steiner Revocable Trust,
Purchasers and Halmostock Limited Partnership purchased 2,500,000 shares of
Common Stock (the "Shares") and 1,200,000 five-year warrants (the "Warrants")
exercisable into shares of Common Stock for $10,625,000. In connection with the
Purchase Agreement, the Company, Purchasers and Halmostock Limited Partnership
entered into an Amended and Restated Investment Agreement, dated as of March 3,
1998 (the "Investment Agreement"). Samstock and EGI-TMI are affiliates of Equity
Group Investments, Inc. of which Rod F. Dammeyer is Managing Director.
Covenants. Until March 3, 2003, the Purchasers will be entitled to
designate two representatives, reasonably acceptable to the independent
directors of the Company, to serve on the Board of Directors as long as the
Purchasers, Halmostock Limited Partnership and their affiliates beneficially own
at least an aggregate 15% of the combined voting power of the Company's
outstanding voting securities (including, for these purposes, the shares
issuable upon exercise of the Warrants until such time as the Warrants expire)
or one such representative, in the event that the Purchasers, Halmostock Limited
Partnership and their affiliates collectively beneficially own less than 15%,
but at least 5%, of the combined voting power of the Company's outstanding
voting securities. The Company agreed that it will not increase the size of the
Board beyond seven members as long as the Purchasers are entitled to designate
one or two Board representatives.
Voting Arrangements. The Purchasers and Halmostock Limited Partnership
agreed that, except to the extent otherwise provided in the Investment
Agreement, the Purchasers and Halmostock Limited Partnership would vote their
securities with respect to the election or removal of directors of the Company
either: (a) in accordance with the recommendations of a majority of the
disinterested directors of the Company or (b) in the same proportions (including
abstentions) as the owners of record of the Company's shares of Common Stock,
other than those beneficially owned by the Purchasers and Halmostock Limited
Partnership, vote their shares of Common Stock; provided that the Purchasers,
Halmostock Limited Partnership and their affiliates may vote in favor of the
election or retention of the one or two directors designated by the Purchasers
as described in the preceding paragraph.
Termination. The Investment Agreement will terminate if the Purchasers,
Halmostock Limited Partnership and their affiliates collectively cease to own
voting securities of the Company representing at least an aggregate 5% of the
combined voting power of the Company.
Amended and Restated Agreement Among Stockholders
In connection with the Purchase Agreement, the Company entered into an
Amended and Restated Agreement Among Stockholders, dated as of March 3, 1998,
with Purchasers and Melvin Chasen and Iris Chasen (collectively, the
"Stockholders"). Pursuant to this Agreement, the Stockholders, who together are
the beneficial owners of 1,050,509 shares, or 8.18% of the outstanding shares of
Common Stock of the Company, have agreed to grant Purchasers (i) a proxy to vote
all of their shares, (ii) the right of first refusal on all public and private
sales of their shares, and (iii) certain rights to require them to sell their
share holdings in the event the Purchasers sell their shares; provided, however,
that they will not be required to sell during a two-year period following March
3, 1998 at a share price of $6.00 or less. The Purchasers agreed to vote their
shares in favor of the election of Melvin Chasen to the Board of Directors of
the Company as long as the Stockholders collectively own at least 950,000 shares
of Common Stock. The Agreement Among Stockholders will terminate if the
Purchasers and their affiliates cease to own voting securities representing at
least 5% of the combined voting power of the Company.
17
<PAGE>
STOCKHOLDERS' AGREEMENT
In connection with the Purchase Agreement, the Company entered into a
Stockholders' Agreement, dated as of March 3, 1998, with Purchasers and
Halmostock Limited Partnership. Pursuant to this Agreement, Halmostock Limited
Partnership, who together with Purchasers are the beneficial owners of 4,772,949
shares, or 34.03% of the outstanding shares of Common Stock of the Company, have
agreed to grant Purchasers (i) a proxy to vote all of their shares, (ii) the
right of first refusal on all public and private sales of their shares, and
(iii) certain rights to require them to sell their share holdings in the event
the Purchasers sell their shares; provided, however, that Halmostock Limited
Partnership will not be required to sell 92,000 shares of Common Stock at a
share price of $7.11 or less. The Stockholders' Agreement will terminate if the
Purchasers, Halmostock Limited Partnership and their affiliates cease to own
voting securities representing at least in the aggregate 5% of the combined
voting power of the Company.
AGREEMENT WITH MELVIN CHASEN
See "Compensation Committee Interlocks and Insider Participation in
Compensation Decisions."
CONSULTING AGREEMENTS
In March 1998, Messrs. Wiedemann and Wunderman entered into consulting
arrangements with the Company. As compensation for their services,
Mr. Wiedemann and Mr. Wunderman were granted fully vested ten-year options to
purchase 20,000 and 45,000 shares of Common Stock, respectively, and exercisable
at $5.875 per share of Common Stock.
INDEPENDENT ACCOUNTANTS
KPMG Peat Marwick LLP audited the Company's financial statements for the
fiscal year ended September 30, 1998. 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.
Representatives of KPMG Peat Marwick LLP are expected to be present at the
Annual Meeting and will respond to appropriate questions. KPMG Peat
Marwick LLP will also be afforded an opportunity to make a statement if they
choose to do so.
OTHER BUSINESS
It is not intended to bring before the Annual Meeting any matters except
those proposed herein. 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.
PROVISION OF CERTAIN ADDITIONAL INFORMATION
The Company's Annual Report for the fiscal year ended September 30, 1998 is
being furnished with this Proxy Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following portion of the Company's Annual Report on Form 10-K for the
fiscal year ended September 30, 1998 (filed on December 31, 1998), is
incorporated by reference into this Proxy Statement:
"Executive Officers of the Registrant" on pages 8 through 9.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934, as amended, subsequent to the date
hereof and prior to the date of the Annual Meeting to which this Proxy Statement
relates are deemed to be incorporated herein by reference, and shall be deemed a
part hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein, or contained in this Proxy Statement, shall be
deemed to be modified or superseded for purposes of this Proxy Statement to the
extent that a statement contained herein or in any subsequently filed document
which also is deemed to be incorporated herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed to
constitute a part of this Proxy Statement, except as so modified or superseded.
PROPOSALS OF STOCKHOLDERS
Proposals, if any, of stockholders of the Company intended to be presented
at the Annual Meeting of Stockholders in 2000 must be received by the Company no
later than October 14, 1999. All shareholder notice of proposals submitted
outside the processes of Rule 14a-8 of the General Rules and Regulations under
the Securities Exchange Act of 1934 must be received by December 27, 1999, to be
considered for presentation at the Annual Meeting of Stockholders in 2000. The
proposal must be mailed to the Company's principal executive offices at 11900
Biscayne Boulevard, Miami, Florida 33181, Attention: Secretary.
18
<PAGE>
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 26, 1999, a
copy of the Company's Annual Report on Form 10-K, including the financial
statements and schedules thereto, as filed with the Securities and Exchange
Commission. Requests should be addressed to Mr. Stephen E. Lerch, Executive 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
Miami, Florida
January 28, 1999
19
<PAGE>
TRANSMEDIA NETWORK INC.
Proxy for Annual Meeting of Stockholders March 3, 1999
The undersigned hereby appoints Gene M. Henderson and Stephen E. Lerch 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 26, 1999, at the Annual Meeting of
Stockholders (the "Annual Meeting"), to be held on March 3, 1999 or any
postponement or adjournment thereof.
1. Election of Directors.
Nominees (term expiring in 2000): F. Philip Handy
Gene M. Henderson
Jack Africk
Melvin Chasen
Rod F. Dammeyer
Herbert M. Gardner
George S. Wiedemann
Lester Wunderman
[ ] FOR
[ ] WITHHOLD AUTHORITY to vote for all nominees listed above
[ ] FOR all nominees listed (except as marked to the contrary below)
___________________________________________________________________________
2. 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' EIGHT NOMINEES FOR ELECTION.
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.
SIGNATURES:______________________________________ DATE: __________________, 1999
Note: Please sign exactly as name or names appears on stock certificate (as
indicated hereon).
