<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
DICK CLARK PRODUCTIONS, 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):
[_] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(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:
-------------------------------------------------------------------------
[X] 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:
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Notes:
<PAGE>
DICK CLARK PRODUCTIONS, INC.
------------------------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 12, 1996
------------------------------------------------------
The Annual Meeting of Stockholders of dick clark productions, inc., a
Delaware corporation, will be held at Chase Manhattan Corp., 270 Park Avenue,
11th Floor, Conference Room A, New York, New York, on Tuesday, November 12,
1996, at 11:30 a.m., local time, for the following purposes:
1. To elect seven members of the Board of Directors to serve until the
next annual meeting and until their successors have been elected and
qualified.
2. To adopt the 1996 Stock Option Plan of dick clark productions, inc.,
which is designed to provide an incentive to employees (including directors
and officers who are employees), and to consultants and directors who are
not employees, of dick clark productions, inc.
3. To ratify the appointment of Arthur Andersen LLP as dick clark
productions, inc.'s independent accountants for the fiscal year ending June
30, 1997.
4. To transact such other business as may properly come before the Annual
Meeting or any and all postponements or adjournments thereof.
Only stockholders of record at the close of business on October 1, 1996,
shall be entitled to notice of and to vote at the Annual Meeting or any and
all postponements or adjournments thereof. A complete list of holders of
common stock entitled to vote at the Annual Meeting, arranged in alphabetical
order and showing the address of each stockholder and the number of shares
registered in the name of each stockholder, will be available at the Annual
Meeting and will be available for examination by any stockholder for any
purpose germane to the Annual Meeting during ordinary business hours for a
period of ten days prior to the Annual Meeting at the offices of dick clark
productions, inc., 3003 West Olive Avenue, Burbank, California 91510-7811.
By order of the Board of Directors
/s/ Martin Eric Weisberg
Martin Eric Weisberg
Secretary
October 10, 1996
Burbank, California
IMPORTANT
TO ASSURE PROPER REPRESENTATION AT THE ANNUAL MEETING, ALL STOCKHOLDERS ARE
REQUESTED TO FILL IN AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT PROMPTLY
IN THE ACCOMPANYING ENVELOPE.
<PAGE>
DICK CLARK PRODUCTIONS, INC.
3003 WEST OLIVE AVENUE
BURBANK, CALIFORNIA 91510-7811
---------------------
PROXY STATEMENT
---------------------
ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 12, 1996
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of dick clark productions, inc., a Delaware corporation
(the "Company"), of proxies for use at the Annual Meeting of Stockholders (the
"Annual Meeting") to be held at Chase Manhattan Corp., 270 Park Avenue, 11th
Floor, Conference Room A, New York, New York, on Tuesday, November 12, 1996,
at 11:30 a.m., local time, or any and all postponements or adjournments
thereof, for the purposes set forth in the accompanying Notice of Annual
Meeting.
This Proxy Statement, Notice of Annual Meeting and accompanying proxy card
are first being mailed to stockholders on or about October 10, 1996.
A copy of the Company's Annual Report for the fiscal year ended June 30,
1996 ("fiscal 1996"), is being sent to each stockholder of record as of
October 1, 1996, together with this Proxy Statement.
GENERAL INFORMATION
Stockholders of record at the close of business on October 1, 1996, will be
entitled to notice of, and to vote the shares of Common Stock of the Company,
$.01 par value ("Common Stock"), and the shares of Class A Common Stock of the
Company, $.01 par value ("Class A Common Stock"), held by them on such date,
at the Annual Meeting or any and all postponements or adjournments thereof.
The Common Stock and the Class A Common Stock are the Company's only classes
of outstanding voting securities. Each share of Common Stock entitles the
holder thereof to one vote and each share of Class A Common Stock entitles the
holder thereof to ten votes. On October 1, 1996, there were 7,571,500 shares
of Common Stock and 750,000 shares of Class A Common Stock outstanding and
entitled to vote at the Annual Meeting.
If the accompanying proxy card is properly signed and returned to the
Company and not revoked, it will be voted in accordance with the instructions
contained therein. Unless contrary instructions are given, the persons
designated as proxy holders in the accompanying proxy card will vote for the
Board of Directors' nominees, for the adoption of the Company's 1996 Stock
Option Plan (the "1996 Plan"), for ratification of the appointment of Arthur
Andersen LLP as the Company's independent accountants for the fiscal year
ending June 30, 1997 ("fiscal 1997"), and in their own discretion as to all
other matters as may properly come before the Annual Meeting. Each such proxy
granted may be revoked by the stockholder giving such proxy at any time before
it is exercised by filing with the Secretary of the Company, at the address
set forth above, a revoking instrument or a duly executed proxy bearing a
later date. The powers of the proxy holders will be suspended if the person
who executed a proxy attends the Annual Meeting in person and so requests.
Attendance at the Annual Meeting will not in itself constitute revocation of a
proxy.
The presence at the Annual Meeting, in person or by proxy, of the holders of
one-third of the aggregate shares of Common Stock and Class A Common Stock
outstanding at the close of business on October 1, 1996, will constitute a
quorum.
<PAGE>
PROPOSAL 1.
ELECTION OF DIRECTORS
A Board of seven directors is to be elected at the Annual Meeting. In August
1996, the Board increased the number of directors constituting the entire
Board from five members to seven members. The Board of Directors proposes the
election of the following seven nominees to serve until the next Annual
Meeting and until their successors are duly elected and qualified:
Richard W. Clark
Karen W. Clark
Francis C. La Maina
Robert A. Chuck
Lewis Klein
Jeffrey B. Logsdon
Enrique F. Senior
Except for Messrs. Chuck and Logsdon, who are being nominated for election
by the stockholders of the Company for the first time, all of the other
nominees are present members of the Board of Directors. The Board has no
reason to believe that any of the foregoing nominees will not serve if
elected, but if any of them should become unavailable to serve as a director
or be withdrawn from nomination, and if the Board of Directors shall designate
a substitute nominee, the persons named as proxy holders will vote for the
substitute.
If elected, all nominees are expected to serve until the 1997 Annual Meeting
of Stockholders and until their successors are duly elected and qualified.
BUSINESS EXPERIENCE OF NOMINEES FOR ELECTION AS DIRECTORS
Richard W. Clark
Director since: 1957
Age: 66
Richard ("Dick") W. Clark has been Chairman and Chief Executive Officer and
a director of the Company since its inception. He acts as executive producer
on almost all of the television programs produced by the Company. Mr. Clark is
the principal stockholder, as well as a director and executive officer, of
Olive Enterprises, Inc., a Pennsylvania corporation ("Olive"). Olive is a
company controlled by Mr. Clark. Mr. Clark also acts and performs on a
freelance basis.
Karen W. Clark
Director since: 1977
Age: 54
Karen W. Clark became Vice President--Administration of the Company in July
1986 and was Secretary of the Company from 1977 to 1987. She serves as
production assistant on many of the Company's television programs and is the
Company's administrative coordinator. Ms. Clark is the wife of Richard W.
Clark.
Francis C. La Maina
Director since: 1974
Age: 57
Francis C. La Maina became President of the Company in July 1986. Mr. La
Maina serves as executive in charge of production on all television shows
produced by the Company. From 1977 to 1986, he was Executive Vice President of
the Company, and from 1974 to 1977, he was Vice President--Business Affairs of
the Company. From 1966 to 1974, he served as Controller of the Company and as
an associate producer. Mr. La Maina provides business related services to Mr.
Clark in connection with Mr. Clark's non-Company business ventures and is a
stockholder, director and executive officer of Olive.
2
<PAGE>
Robert A. Chuck
New Director Nominee
Age: 65
Robert A. Chuck became Vice President--Special Projects of the Company in
April 1993. He worked as a private consultant in the entertainment business
area from December 1992 to March 1993. From January 1990 to November 1992, Mr.
Chuck was Executive Vice President--Administration and Business Affairs of
Triad Artists, Inc., a leading full-service talent agency. He was Executive
Vice President and General Counsel of International Creative Management, Inc.,
another leading full-service talent agency, from 1978 through 1989. Overall,
Mr. Chuck has held various business positions in the entertainment industry
for over 30 years.
Lewis Klein
Director since: 1987
Age: 69
From 1985 to 1993, Mr. Klein was President of Gateway Communications, Inc.
("Gateway"), a company which owns and operates several television stations.
From 1972 to 1985, Mr. Klein served as Executive Vice President of Gateway,
and he has been a director of Gateway since 1975. Mr. Klein is the founder and
past president of the International Association of Television Program
Executives and is currently President of its Educational Foundation. Since
1952, Mr. Klein has been a professor at the Temple University School of
Communications.
Jeffrey B. Logsdon
New Director Nominee
Age: 44
Since August 1996, Jeffrey B. Logsdon has been a Managing Director of
Cruttenden Roth, Inc., an investment banking and brokerage firm, where he is
Director of Research. From July 1990 to August 1996, Mr. Logsdon was a
Managing Director of The Seidler Companies Incorporated, an investment banking
company, where he served as Director of Institutional Equities. In 1995, Mr.
Logsdon was named an All-Star Analyst by The Wall Street Journal for stocks in
the category of cable and broadcasting.
Enrique F. Senior
Director since: 1987
Age: 53
Since November 1982, Mr. Senior has been a Managing Director of Allen &
Company Incorporated, an investment banking firm. For a number of years prior
to November 1982, Mr. Senior was a Vice President of Allen & Company
Incorporated.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR EACH OF THE
NOMINEES TO SERVE AS DIRECTORS UNTIL THE NEXT ANNUAL MEETING AND UNTIL THEIR
SUCCESSORS HAVE BEEN ELECTED AND QUALIFIED.
COMMITTEES
The Board of Directors has an Audit Committee but does not have a Nominating
Committee or Compensation Committee. The Audit Committee's functions are to
recommend the appointment of independent accountants, review the arrangements
for and scope of the audit by the independent accountants, review and monitor
the Company's policies regarding business ethics and conflicts of interest and
discuss with management and the independent accountants annual financial
statements and key accounting and reporting matters. The Audit Committee is
currently composed of Messrs. Klein and Senior. The Audit Committee did not
meet during fiscal 1996.
DIRECTORS' REMUNERATION
Non-employee directors receive an annual fee of $10,000 plus reimbursements
of expenses incurred in connection with attendance at Board of Directors'
meetings.
The Board of Directors met three times during fiscal 1996. Mr. Senior
attended one meeting of the Board of Directors during fiscal 1996.
3
<PAGE>
PRINCIPAL STOCKHOLDERS
The following tables set forth information concerning the shares of Common
Stock and Class A Common Stock beneficially owned as of October 1, 1996, by
each stockholder known to the Company to own beneficially more than 5% of the
outstanding shares of either class of its common stock and by each director,
each nominee for director, certain officers and by all officers, directors and
nominees for director as a group.
COMMON STOCK
<TABLE>
<CAPTION>
PERCENTAGE
NAME AND ADDRESS NUMBER OF SHARES OF CLASS
OF BENEFICIAL OWNER BENEFICIALLY OWNED(1)(2) OUTSTANDING
------------------- ------------------------ -----------
<S> <C> <C>
Richard W. Clark(3)..................... 5,653,400(4) 74.67%
Karen W. Clark(3)....................... 2,965,500 39.17%
Francis C. La Maina(3).................. 763,586(5) 10.09%
Kenneth H. Ferguson(3).................. 5,000(6) *
Robert A. Chuck(3)...................... 0 *
Lewis Klein............................. 1,500 *
1475 Hampton Road
Rydal, Pennsylvania 19046
Jeffrey B. Logsdon...................... 1 *
13801 Von Karman, Suite 700
Irvine, California 92715
Enrique F. Senior....................... 0 *
711 Fifth Avenue
New York, New York 10022
All officers, directors and nominees for
director as a group (nine persons)..... 6,423,487(7) 84.84%
</TABLE>
CLASS A COMMON STOCK
<TABLE>
<CAPTION>
PERCENTAGE
NAME AND ADDRESS NUMBER OF SHARES OF CLASS
OF BENEFICIAL OWNER BENEFICIALLY OWNED(1) OUTSTANDING
------------------- --------------------- -----------
<S> <C> <C>
Richard W. Clark(3).......................... 675,000 90%
Francis C. La Maina(3)....................... 75,000 10%
All officers, directors and nominees for di-
rector as a group (seven persons)........... 750,000 100%
</TABLE>
- --------
*Less than 1%
(1) With the exception of Ms. Clark, and except where otherwise indicated, all
parties listed below have sole voting and investment power over the shares
beneficially owned by them. Pursuant to a voting trust agreement between
Mr. Clark and Ms. Clark, Mr. Clark has the sole voting power over the
shares owned by Ms. Clark.
(2) Does not include shares of Common Stock issuable upon conversion of Class
A Common Stock.
(3) The business address of each of these individuals is 3003 West Olive
Avenue, Burbank, California 91510-7811.
(4) Includes 2,965,500 shares owned by Ms. Clark and 357,400 shares owned by
Olive.
(5) Includes 500 shares owned by Mr. La Maina's wife and options to purchase
225,450 shares of Common Stock which are currently exercisable.
(6) Includes options to purchase 5,000 shares of Common Stock which are
currently exercisable.
(7) Includes 230,450 shares of Common Stock subject to options which are
currently exercisable and which may be exercised by certain officers
within 60 days under the Company's 1987 Employee Stock Option Plan.
4
<PAGE>
Pursuant to an agreement between Messrs. Clark and La Maina, Messrs. Clark
and La Maina have rights of the first refusal to purchase each other's shares
of Common Stock and Class A Common Stock in the event either wishes to sell
his shares to a third party (other than a spouse or lineal descendant) or in a
market transaction. A purchase by Mr. La Maina of shares held by Mr. Clark
could result in a change of control of the Company. Pursuant to an agreement
among Messrs. Clark, La Maina and Ms. Clark, Mr. Clark has rights of first
refusal in the event Ms. Clark wishes to sell her shares to a third party or
in a market transaction and a right of purchase in the event of her death, and
Mr. La Maina has identical rights in the event Mr. Clark does not exercise his
rights with respect to Ms. Clark's shares.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who beneficially own more than
10% of the Company's Common Stock, to file initial reports of ownership and
reports of changes in ownership with the Securities and Exchange Commission
("SEC"). Executive officers, directors, and greater than 10% beneficial owners
are required by SEC regulations to furnish the Company with copies of all
Section 16(a) forms they file.
Based solely on a review of the copies of such forms furnished to the
Company and written representations from the Company's executive officers and
directors, the Company believes that during fiscal 1995 all Section 16(a)
filing requirements applicable to its executive officers, directors, and
greater than 10% beneficial owners were complied with.
EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table contains information about the compensation paid by the
Company for services rendered in all capacities during the three years ended
June 30, 1996, to the Chief Executive Officer of the Company and each of the
most highly paid executive officers of the Company whose compensation
exceeds $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
------------
ANNUAL OPTIONS
COMPENSATION GRANTED
------------------ ------------
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS($)
--------------------------- ---- --------- -------- ------------
<S> <C> <C> <C> <C>
Richard W. Clark...................... 1996 950,000 494,282 --
Chairman of the Board and 1995 950,000 -- --
Chief Executive Officer 1994 950,000 400,640(1) --
Francis C. La Maina................... 1996 525,000 345,711 --
President and Chief 1995 518,000 -- --
Operating Officer 1994 518,000 275,480(1) --
Kenneth H. Ferguson................... 1996 150,000 -- --
Vice President of Finance, Treasurer
and 1995 150,000 26,000(2) 7,500
Chief Financial Officer 1994 135,000 51,380(1) --
</TABLE>
- --------
(1) Represents bonus compensation earned with respect to fiscal 1994, which
was paid during fiscal 1995.
(2) Represents bonus compensation earned with respect to fiscal 1995, which
was paid during fiscal 1996.
5
<PAGE>
EMPLOYMENT AGREEMENTS
The Company is party to an employment agreement with Richard W. Clark
pursuant to which he serves as Chairman and Chief Executive Officer of the
Company. The employment agreement provides for a five-year term which
commenced as of July 1, 1992 and terminates on June 30, 1997, unless earlier
terminated by the Company or Mr. Clark. The employment agreement provides for
a base salary of $950,000 and a bonus payable upon the Company's achievement
of certain performance targets, based on the Company's Pre-tax Profits (as
that term is defined in the employment agreement) that year. Pursuant to the
employment agreement, bonuses of $494,282 and $400,640 were earned with
respect to fiscal 1996 and fiscal 1994, respectively. No such bonus was earned
during fiscal 1995.
Mr. La Maina serves as President and Chief Operating Officer of the Company
pursuant to an employment agreement which provides for a five-year term which
commenced as of July 1, 1995 and expires on June 30, 2000, unless earlier
terminated by the Company or Mr. La Maina. The employment agreement provides
for a base salary of $525,000 plus an amount equal to the percentage increase
in the consumer price index for Los Angeles, California for the relevant
twelve-month period. In addition, he receives a bonus based on the Company's
Pre-tax Profits (as that term is defined in the employment agreement) during
that fiscal year if certain performance targets are met. Pursuant to similar
provisions in Mr. La Maina's prior employment agreement, bonuses of $345,711
and $275,480 were earned with respect to fiscal 1996 and fiscal 1994,
respectively. No such bonus was earned during fiscal 1995. Mr. La Maina was
also granted an option on September 1, 1992 to acquire up to 225,450 shares of
the Company's Common Stock in accordance with the Company's 1987 Employee
Stock Option Plan. The option is exercisable with respect to 56,362 shares on
each of September 1, 1992, June 30, 1993 and June 30, 1994, and for 56,364
shares on and after June 30, 1995.
Mr. Ferguson is employed as the Company's Vice President of Finance,
Treasurer and Chief Financial Officer. Pursuant to an employment agreement
which commenced as of July 1, 1994 and terminates on June 30, 1997,
Mr. Ferguson's base salary is $150,000, subject to annual adjustments in the
base amount for any cost of living increase or decrease (but which base salary
amount may not be decreased to an amount below $150,000). In addition, he is
entitled to receive bonus compensation in an amount determined by the Company
in its sole and absolute discretion, but in no event to exceed 50% of his
annual base salary for the fiscal year to which such bonus applies. In
accordance with such provisions, Mr. Ferguson was awarded a bonus of $26,000
with respect to fiscal 1995. Mr. Ferguson may be awarded a bonus with respect
to fiscal 1996, but the determination of such award has not yet been made by
the Company. In accordance with the provisions of Mr. Ferguson's prior
employment agreement, he earned bonus compensation of $51,380 with respect to
the Company's performance during fiscal 1994, which was paid during fiscal
1995.
STOCK OPTIONS
During fiscal 1995, Mr. Ferguson was granted an option to purchase up to
7,500 shares of the Company's Common Stock under the Company's 1987 Employee
Stock Option Plan.
The following table sets forth information with respect to the exercise of
stock options during fiscal 1996 and the options held as of June 30, 1996 by
each of the named executives.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS IN-THE-MONEY OPTIONS
AT FISCAL YEAR-END (#) AT FISCAL YEAR-END ($)(1)
------------------------- -------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Francis C. La Maina......... 225,450 0 $2,337,917 0
Kenneth H. Ferguson......... 5,000 2,500 $ 28,750 $14,375
</TABLE>
- --------
(1) Represents the difference between the closing market price of the Common
Stock at June 30, 1996 ($14.25 per share) and the exercise price ($3.88
per share for Mr. La Maina and $8.50 per share for Mr. Ferguson) of the
options. Where the exercise price of the options are in excess of the
market value, the value has been stated at zero.
6
<PAGE>
BOARD REPORT
The report of the Board of Directors shall not be deemed incorporated by
reference by any general statement incorporating by reference this proxy
statement into any filing under the Securities Act of 1933 or under the
Securities Exchange Act of 1934, except to the extent that the Company
specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such Acts.
The principal objectives of the Company's compensation program are to
attract and retain qualified executives, to compensate for experience and
goodwill, and to provide incentives for executives to enhance the
profitability and growth of the Company and thus enhance shareholder value.
During the fiscal year ended June 30, 1996, the Company's executive
compensation program was administered by the Board of Directors. The executive
compensation program consists principally of base salaries, performance
bonuses and stock options.
The following describes components of the Company's executive compensation
program and the related factors considered by the Board in determining
compensation.
Base Salaries. Base salaries are determined after evaluating a number of
factors, including market conditions, job performance and amounts paid to
executives with comparable experience, qualifications and responsibilities.
The Board also intends that salaries be comparable to those paid for similar
positions in other companies of similar size and performance. The length of
service to the Company, experience within the industry, and the goodwill
associated with their names are significant factors involved in the
compensation of the Company's two highest executive officers.
Performance Bonuses. Certain executives receive bonuses based upon the
Company's achievement of specified financial targets. Such bonuses are
intended to ensure that these employees have a continuing interest in the
success of the Company.
Discretionary Bonus. Certain executives receive bonuses based upon such
criteria as the President and Chief Operating Officer of the Company in his
sole and absolute discretion determines appropriate.
Stock Options. The Company, through its Stock Option Committee and subject
to the 1987 Employee Stock Option Plan, awards certain executives incentive
stock options which generally vest over a number of years. The number of
shares of Common Stock subject to an executive's stock option grant is
determined with reference to the responsibility and experience of the
executive and competitive conditions. By aligning the financial interests of
the Company's executives with those of the Company's stockholders, these
equity awards are intended to be directly related to the creation of value for
stockholders of the Company. The deferred vesting provisions are designed to
create an incentive for the individual executive to remain with the Company.
The goals of the stock option component of the Company's executive
compensation program would be continued through the 1996 Stock Option Plan
being presented and recommended for stockholder approval at the Annual
Meeting.
Benefits. The Company offers basic benefits, such as medical, life and
disability insurance comparable to those provided by similar companies.
BOARD OF DIRECTORS
Richard W. Clark
Karen W. Clark
Francis C. La Maina
Lewis Klein
Enrique F. Senior
7
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Clark and La Maina and Ms. Clark, each of whom is a director and an
officer of the Company, participated in discussions regarding compensation of
executive officers. Each of the aforementioned individuals excused himself or
herself from any deliberations regarding his or her own compensation during
fiscal 1996.
Messrs. Clark and La Maina are each stockholders, directors and executive
officers of Olive, a company controlled by Mr. Clark. Messrs. Clark and La
Maina participated in deliberations regarding compensation of Olive's
executive officers.
During fiscal 1996, the Company provided management, consulting and office
services to Olive and other companies owned by the Company's principal
stockholders. The net amount paid by Olive and the other companies during
fiscal 1996 for such services was $118,000 and $40,000, respectively. The
Company believes that the terms of the foregoing transactions were no less
favorable to the Company than could have been obtained from unaffiliated third
parties on an arms-length basis.
Olive licenses The American Bandstand(TM) trademark and variations thereof
to the Company pursuant to a license agreement which expires in 1996. The
Company and Olive have agreed to extend the license on a long-term basis
without any cost or license fee payable by the Company. Olive also loans to
the Company, without charge, certain memorabilia which the Company currently
uses in The American Bandstand(TM) Grill restaurants and the American
Bandstand Dance Club located in Reno, Nevada.
8
<PAGE>
PERFORMANCE GRAPH
The Performance Graph below shall not be deemed incorporated by reference by
any general statement incorporating by reference this proxy statement into any
filing under the Securities Act of 1933 or under the Securities Exchange Act of
1934, except to the extent the Company specifically incorporates this
information by reference, and shall not otherwise be deemed filed under such
Acts.
The following graph shows a five-year comparison for the period from June 30,
1991 to June 30, 1996 of cumulative total stockholder return (including the
reinvestment of any dividends) of $100 invested in (i) the Company, (ii) the
NASDAQ Market Index, and (iii) an index of peer companies selected by the
Company.
STOCK PRICE PERFORMANCE
COMPARISON OF 5 YEAR CUMULATIVE RETURN
AMONG DCPI, NASDAQ AND PEER GROUP
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
Measurement Period
(Fiscal Year Covered) DCPI NASDAQ Peer Group
- ------------------- -------- ------ ----------
<S> <C> <C> <C>
Measurement Pt- 1991 $100.00 $100.00 $100.00
FYE 1992 $100.00 $118.42 $ 71.47
FYE 1993 $ 88.89 $147.91 $ 88.11
FYE 1994 $200.00 $148.34 $106.14
FYE 1995 $194.44 $192.31 $100.19
FYE 1996 $316.67 $233.32 $201.07
</TABLE>
The Company chose its peer group by selecting entertainment companies other
than motion picture companies with revenues under $100 million and stock prices
for two years or more. The peer index includes J2 Communications, Kushner-Locke
Company, Matthews Studio Equipment Group, Rentrak Corporation, Todd-AO
Corporation, Showscan Corporation, Venture Entertainment Group, Ltd., and
Unitel Video. The peer group index included in this graph reflects the omission
of Prism Entertainment, which is no longer in the Company's line of business.
Due to the unique composition and nature of the Company's businesses, the
Company believes that the peer group index may not provide a meaningful
comparison to comparable businesses.
9
<PAGE>
CERTAIN TRANSACTIONS
The Company is a tenant under a triple net lease (the "Lease") with Olive,
covering the premises occupied by the Company in Burbank, California. The
Lease provides for a term ending on December 31, 2000 at a per annum rent of
$516,000 payable monthly commencing September 1, 1989, with adjustments based
on the Consumer Price Index every 24 months. In fiscal 1996, the Company paid
$612,000 per annum under this lease agreement. The Company subleases a portion
of the space covered by the Lease to Olive and to third parties on a month-to-
month basis. The Company believes that the terms of the Lease and the
subleases to Olive and to third parties are no less favorable to the Company
than could have been obtained from unaffiliated third parties on an arms-
length basis.
Mr. Clark is actively involved in the Company's television programming and
many of the programs involve the executive producing services and creative
talent of Mr. Clark. Mr. Clark's services are not exclusive to the Company.
The Company pays Mr. Clark for his services as a performer on Company
programs and for any use of his name and likeness in connection with
activities outside the television and motion picture business. Compensation
paid by the Company to Mr. Clark as a performer or for such use of his name
and likeness is based on industry standards for performers of his stature. In
fiscal 1996, the Company paid Mr. Clark $735,000 for his services as a
performer on Company programs.
See "Compensation Committee Interlocks and Insider Participation" for
descriptions of business arrangements between the Company and Olive.
PROPOSAL 2.
ADOPTION OF THE COMPANY'S 1996 STOCK OPTION PLAN
On August 27, 1996, the Board of Directors adopted, subject to stockholder
approval at the Annual Meeting, the Company's 1996 Stock Option Plan (the
"1996 Plan"). The 1996 Plan is designed to provide an incentive to employees,
and to consultants and directors who are not employees, of the Company or any
of its Subsidiaries (as such term is defined in the 1996 Plan), and to offer
an additional inducement in obtaining the services of such persons.
The following summary of certain material features of the 1996 Plan does not
purport to be complete and is qualified in its entirety by reference to the
text of the 1996 Plan, a copy of which is set forth as Exhibit A to this Proxy
Statement.
SHARES SUBJECT TO THE OPTION PLAN AND ELIGIBILITY
The 1996 Plan authorizes the grant of options to purchase a maximum of
1,000,000 shares of the Company's Common Stock (subject to adjustment as
described below) to employees (including officers and directors who are
employees), to consultants and to directors who are not employees of the
Company or any of its Subsidiaries (as such term is defined in the 1996 Plan).
Upon expiration, cancellation or termination of unexercised options, the
shares of the Company's Common Stock subject to such options will again be
available for the granting of options under the 1996 Plan. No options have
been granted to date under the 1996 Plan.
TYPE OF OPTIONS
Options granted under the 1996 Plan may either be incentive stock options
("ISOs"), within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), or nonqualified stock options which do not
qualify as ISOs ("NQSOs"). ISOs, however, may only be granted to employees.
The Company makes no representation or warranty, express or implied, as to the
qualification of any option as an "incentive stock option" under the Code.
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ADMINISTRATION
The 1996 Plan will be administered by the Board of Directors or a committee
of the Board of Directors consisting of at least two (2) directors (the
"Committee"). Each member of the Committee will be a non-employee director
within the meaning of Rule-3 (as the same may be in effect and interpreted
from time to time, "Rule 16b-3") promulgated under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"). Those administering the Plan are the
"Administrators".
Among other things, the Administrators have sole discretion to determine,
subject to the express provisions of the 1996 Plan: the employees, consultants
and directors to be granted options, whether an option granted to an employee
is to be an ISO or a NQSO, the number of shares of Common Stock to be subject
to each option, the exercise price of each option, the term of each option,
the date each option shall become exercisable as well as any terms or
conditions relating to the exercisability of each option, whether to
accelerate the date of exercise of any option or installment, the form of
payment of the exercise price, the amount, if any, required to be withheld,
and with the consent of the optionee, to modify an option. The Administrators
are also authorized to prescribe, amend and rescind rules and regulations
relating to the 1996 Plan and to make all other determinations necessary or
advisable for administering the 1996 Plan, and to construe each stock option
contract ("Contract") entered into by the Company with an optionee under the
1996 Plan.
TERMS AND CONDITIONS OF OPTIONS
Options granted under the 1996 Plan will be subject to, among other things,
the following terms and conditions:
(a) The exercise price of each option will be determined by the
Administrators; provided, however, that the exercise price of an ISO may
not be less than the fair market value of the Company's Common Stock on the
date of grant (110% of such fair market value if the optionee owns (or is
deemed to own) more than 10% of the voting power of the Company, of any of
its Subsidiaries or of a Parent (as such term is defined in the 1996 Plan);
(b) Options may be granted for a term determined by the Administrators;
provided, however, that the term of an ISO may not exceed ten (10) years
(five (5) years if the optionee owns (or is deemed to own) more than 10% of
the voting power of the Company, of any of its Subsidiaries or of a
Parent).
(c) The maximum number of shares of the Company's Common Stock for which
options may be granted to an employee in any calendar year is 250,000. In
addition, the aggregate fair market value of shares of Common Stock with
respect to which ISOs may be granted to an employee which are exercisable
for the first time during any calendar year may not exceed $100,000.
(d) The exercise price of each option is payable in full upon exercise
or, if the applicable Contract permits, in installments. Payment of the
exercise price of an option may be made in cash, certified check or, if the
applicable Contract permits, with previously acquired shares of the
Company's Common Stock, or any combination thereof.
(e) Options may not be transferred other than by will or by the laws of
descent and distribution, and may be exercised during the optionee's
lifetime only by him or her (or by his or her legal representative).
(f) Except as may otherwise be provided in the applicable Contract, if
the optionee's relationship with the Company, any of its Subsidiaries or a
Parent as an employee or consultant is terminated for any reason (other
than the death or disability of the optionee), then such optionee's options
will terminate immediately. In the case of the death of an optionee while
an employee or consultant (or, generally, within one year after termination
of such relationship by reason of disability), except as otherwise provided
in the applicable Contract, his or her legal representative or beneficiary
may exercise the option, to the extent exercisable on the date of death,
within one year after such date, but in no event after the expiration of
the term of the option. Except as may otherwise be provided in the
applicable Contract, an optionee whose relationship with
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the Company, any of its Subsidiaries or a Parent, was terminated by reason
of his or her disability may exercise the option, to the extent exercisable
at the time of such termination, within one year thereafter, but not after
the expiration of the term of the option. Except as may otherwise be
provided in the applicable Contract, options are not affected by a change
in the status of an optionee so long as such optionee continues to be an
employee of, or a consultant to, the Company, any of its Subsidiaries or a
Parent. Except as may otherwise be provided in the applicable Contract,
options granted to a Non-Employee Director (as such term is defined in the
1996 Plan) are not affected by the optionee becoming an employee of the
Company, any of its Subsidiaries or a Parent.
(g) The Company, a Subsidiary or Parent may withhold cash and/or, with
the consent of the Committee, shares of the Company's Common Stock to be
issued upon exercise of an option having an aggregate fair market value
equal to the amount which the Administrators determines is necessary to
satisfy the obligations of the Company, a Subsidiary or Parent to withhold
any federal, state and/or local taxes or other amounts incurred by reasons
of the grant, vesting or exercise of an option, its disposition or the
disposition of shares acquired upon the exercise of the option.
Alternatively, the Company, a Subsidiary or Parent may require the optionee
to pay it such amount, in cash, promptly upon demand.
ADJUSTMENT IN EVENT OF CAPITAL CHANGES
Appropriate adjustments will be made in the number and kind of shares
available under the 1996 Plan, in the number and kind of shares subject to
each outstanding option and the exercise prices of such options and the
limitation on the number of shares that may be granted to any employee in any
calendar year, in the event of any change in the Company's Common Stock by
reason of any stock dividend, spin-off, split-up, combination,
recapitalization, merger in which the Company is the surviving corporation,
exchange of shares or the like. In the event of (a) the liquidation or
dissolution of the Company, (b) a merger in which the Company is not the
surviving corporation or a consolidation or (c) any transaction (or series of
related transactions) in which more than 50% of the Company's outstanding
Common Stock is transferred or exchanged for other consideration or shares of
the Company's Common Stock in excess of the number of shares of the Company's
Common Stock outstanding immediately preceding the transaction are issued
(other than to stockholders of the Company with respect to their shares of
stock in the Company), any outstanding options shall terminate upon the
earliest of any such event, unless other provision is made therefor in the
transaction.
DURATION AND AMENDMENT OF THE 1996 PLAN
No ISO may be granted under the 1996 Plan after August 26, 2006. The Board
of Directors may at any time terminate or amend the 1996 Plan; provided,
however, that, without the approval of the Company's stockholders, no
amendment may be made which would (a) except as a result of the anti-dilution
adjustments described above, increase the maximum number of shares of the
Company's Common Stock available for the grant of options or increase the
maximum number of options that may be granted to an employee in any year, (b)
change the eligibility requirements for persons who may receive options or (c)
make any change for which applicable law requires stockholder approval. No
termination or amendment may adversely affect the rights of an optionee with
respect to an outstanding option without the optionee's consent.
FEDERAL INCOME TAX TREATMENT
The following is a general summary of the federal income tax consequences
under current tax law of options. It does not purport to cover all of the
special rules, including special rules relating to the exercise of an option
with previously-acquired shares, or the state or local income or other tax
consequences inherent in the ownership and exercise of stock options and the
ownership and disposition of the underlying shares.
An optionee will not recognize taxable income for federal income tax
purposes upon a grant of a NQSO or an ISO.
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Upon the exercise of a NQSO, the optionee will recognize ordinary income in
an amount equal to the excess, if any, of the fair market value of the shares
acquired on the date of exercise over the exercise price thereof, and the
Company will generally be entitled to a deduction for such amount at that
time. If the optionee later sells shares acquired pursuant to the exercise of
a NQSO, he or she will recognize long-term or short-term capital gain or loss,
depending on the period for which the shares were held. Long-term capital gain
is generally subject to more favorable tax treatment than ordinary income or
short-term capital gain. Proposed legislation would treat long-term capital
gain even more favorably. There can be no assurance, however, that such
proposed legislation will be enacted.
Upon the exercise of an ISO, the optionee will not recognize taxable income.
If the optionee disposes of the shares acquired pursuant to the exercise of an
ISO more than two years after the date of grant and more than one year after
the transfer of the shares to him or her, the optionee will recognize long-
term capital gain or loss and the Company will not be entitled to a deduction.
However, if the optionee disposes of such shares within the required holding
period, all or a portion of the gain will be treated as ordinary income and
the Company will generally be entitled to deduct such amount.
In addition to the federal income tax consequences described above, an
optionee may be subject to the alternative minimum tax, which is payable to
the extent it exceeds the optionee's regular tax. For this purpose, upon the
exercise of an ISO, the excess of the fair market value of the shares over the
exercise price therefor is an adjustment which increases alternative minimum
taxable income. In addition, the optionee's basis in such shares is increased
by such excess for purposes of computing the gain or loss on the disposition
of the shares for alternative minimum tax purposes. If an optionee is required
to pay an alternative minimum tax, the amount of such tax which is
attributable to deferral preferences (including the ISO adjustment) is allowed
as a credit against the optionee's regular tax liability in subsequent years.
To the extent the credit is not used, it is carried forward.
REQUIRED VOTE
Approval of the 1996 Plan requires the affirmative vote of the holders of a
majority of the shares of Common Stock present, in person or by proxy, at the
Annual Meeting and entitled to vote on this proposal. If the 1996 Plan is not
approved by the Company's Stockholders, the 1996 Plan will not be effective.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE 1996 PLAN.
PROPOSAL 3.
APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors of the Company has appointed Arthur Andersen LLP as
the Company's independent accountants for fiscal 1997.
Representatives of Arthur Andersen LLP will be present at the Annual Meeting
to respond to appropriate questions and to make such statements as they may
desire.
Ratification of the appointment of Arthur Andersen LLP as the Company's
independent accountants for fiscal 1997 will require the affirmative vote of
at least a majority of the votes of the shares of Common Stock and Class A
Common Stock represented in person or by proxy and entitled to vote at the
Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR
RATIFICATION OF THE APPOINTMENT OF ARTHUR ANDERSEN LLP AS THE COMPANY'S
INDEPENDENT ACCOUNTANTS FOR FISCAL 1997.
ALL OTHER MATTERS WHICH MAY COME BEFORE THE ANNUAL MEETING
As of the date of this Proxy Statement, the Company knows of no business
that will be presented for consideration at the Annual Meeting other than that
which has been referred to above. As to other business, if any, that may come
before the Annual Meeting, it is intended that proxies in the enclosed form
will be voted in accordance with the judgment of the proxy holder.
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STOCKHOLDER PROPOSALS FOR THE NEXT ANNUAL MEETING
Any proposal of a stockholder intended to be presented at the Company's 1997
Annual Meeting of Stockholders must be received by the Secretary of the
Company, for inclusion in the notice of meeting and proxy statement relating
to the 1997 Annual Meeting, by July 15, 1997.
ADDITIONAL INFORMATION
The cost of soliciting proxies in the enclosed form will be borne by the
Company. Officers and regular employees of the Company may, but without
compensation other than their regular compensation, solicit proxies by further
mailing, personal conversations, or by telephone or telegraph. The Company
will, upon request, reimburse brokerage firms and others for their reasonable
expenses in forwarding solicitation material to the beneficial owners of its
Common Stock.
By order of the Board of Directors
/s/ Martin Eric Weisberg
Martin Eric Weisberg
Secretary
October 10, 1996
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EXHIBIT A
1996 STOCK OPTION PLAN
OF
DICK CLARK PRODUCTIONS, INC.
1. PURPOSES OF THE PLAN. This stock incentive plan (the "Plan") is designed
to provide an incentive to employees (including directors and officers who are
employees), and to consultants and directors who are not employees, of dick
clark productions, inc., a Delaware corporation (the "Company"), or any of its
Subsidiaries (as such term is defined in Paragraph 19 hereof), and to offer an
additional inducement in obtaining the services of such persons. The Plan
provides for the grant of "incentive stock options" ("ISOs") within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), and nonqualified stock options which do not qualify as ISOs
("NQSOs"). The Company makes no representation or warranty, express or
implied, as to the qualification of any option as an "incentive stock option"
under the Code.
2. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Paragraph 12
hereof, the aggregate number of shares of Common Stock, $.01 par value per
share, of the Company ("Common Stock") for which options may be granted under
the Plan shall not exceed one million (1,000,000) shares. Such shares of
Common Stock may, in the discretion of the Board of Directors of the Company
(the "Board of Directors"), consist either in whole or in part of authorized
but unissued shares of Common Stock or shares of Common Stock held in the
treasury of the Company. Subject to the provisions of Paragraph 13 hereof, any
shares of Common Stock subject to an option which for any reason expires, is
canceled or is terminated unexercised or which ceases for any reason to be
exercisable, shall again become available for the granting of options under
the Plan. The Company shall at all times during the term of the Plan reserve
and keep available such number of shares of Common Stock as will be sufficient
to satisfy the requirements of the Plan.
3. ADMINISTRATION OF THE PLAN. The Plan shall be administered by the Board
of Directors or a committee (the "Committee") of the Board of Directors
consisting of not less than two (2) directors, each of whom shall be a non-
employee director within the meaning of Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended (as the same may be in effect and
interpreted from time to time, "Rule 16b-3"). Unless otherwise provided in
the By-laws of the Company or by resolution of the Board of Directors, a
majority of the members of the Committee shall constitute a quorum, and the
acts of a majority of the members present at any meeting at which a quorum is
present, and any acts approved in writing by all of the members of the
Committee without a meeting, shall be the acts of the Committee. Those
administering the Plan are the "Administrators".
Subject to the express provisions of the Plan, the Administrators shall have
the authority, in their sole discretion, to determine: the employees,
consultants and directors who shall be granted options; the type of option to
be granted to a employee; the times when an option shall be granted; the
number of shares of Common Stock to be subject to each option; the term of
each option; the date each option shall become exercisable; whether an option
shall be exercisable in whole, in part or in installments and, if in
installments, the number of shares of Common Stock to be subject to each
installment, whether the installments shall be cumulative, the date each
installment shall become exercisable and the term of each installment; whether
to accelerate the date of exercise of any option or installment; whether
shares of Common Stock may be issued upon the exercise of an option as partly
paid and, if so, the dates when future installments of the exercise price
shall become due and the amounts of such installments; the exercise price of
each option; the form of payment of the exercise price; whether to restrict
the sale or other disposition of the shares of Common Stock acquired upon the
exercise of an option and, if so, whether and under what conditions to waive
any such restriction; whether and under what conditions to subject all or a
portion of the grant or exercise of an option or the shares acquired pursuant
to the exercise of an option to the fulfillment of certain restrictions or
contingencies as specified in the contract referred to in Paragraph 11 hereof
(the "Contract"), including, without limitation, restrictions or contingencies
relating to entering into a covenant not to compete with the Company, any of
its Subsidiaries or a Parent (as such term is
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defined in Paragraph 19 hereof), to financial objectives for the Company, any
of its Subsidiaries or a Parent, a division of any of the foregoing, a product
line or other category, and/or to the period of continued employment of the
optionee with the Company, any of its Subsidiaries or a Parent, and to
determine whether such restrictions or contingencies have been met; whether an
optionee is Disabled (as such term is defined in Paragraph 19 hereof); the
amount, if any, necessary to satisfy the obligation of the Company, a
Subsidiary or Parent to withhold taxes or other amounts; the fair market value
of a share of Common Stock; to construe the respective Contracts and the Plan;
with the consent of the optionee, to cancel or modify an option, provided that
the modified provision is permitted to be included in an option granted under
the Plan on the date of the modification, and provided, further, that in the
case of a modification (within the meaning of Section 424(h) of the Code) of
an ISO, such option as modified would be permitted to be granted on the date
of such modification under the terms of the Plan; to prescribe, amend and
rescind rules and regulations relating to the Plan; to approve any provision
of the Plan or any option granted under the Plan, or any amendment to either,
which under Rule 16b-3 requires the approval of the Board of Directors, a
committee of non-employee directors or the stockholders to be exempt (unless
otherwise specifically provided herein); and to make all other determinations
necessary or advisable for administering the Plan. Any controversy or claim
arising out of or relating to the Plan, any option granted under the Plan or
any Contract shall be determined unilaterally by the Administrators in their
sole discretion. The determinations of the Administrators on the matters
referred to in this Paragraph 3 shall be conclusive and binding on the parties
thereto. No Administrator or former Administrator shall be liable for any
action, failure to act or determination made in good faith with respect to the
Plan or any option hereunder.
4. ELIGIBILITY. The Administrators may from time to time, in their sole
discretion, consistent with the purposes of the Plan, grant options to (a)
employees (including officers and directors who are employees) of the Company
or any of its Subsidiaries, (b) consultants to the Company or any of its
Subsidiaries and (c) Non-Employee Directors (as such term is defined in
Paragraph 19 hereof). Such options granted shall cover such number of shares
of Common Stock as the Administrators may determine, in their sole discretion,
as set forth in the applicable Contract; provided, however, that the maximum
number of shares subject to options that may be granted to any employee during
any calendar year under the Plan (the "162(m) Maximum") shall be two hundred
fifty thousand (250,000) shares; and provided, further, that the aggregate
market value (determined at the time the option is granted in accordance with
Paragraph 5 hereof) of the shares of Common Stock for which any eligible
employee may be granted ISOs under the Plan or any other plan of the Company,
or of a Parent or a Subsidiary of the Company, which are exercisable for the
first time by such optionee during any calendar year shall not exceed
$100,000. Such ISO limitation shall be applied by taking ISOs into account in
the order in which they were granted. Any option granted in excess of such ISO
limitation amount shall be treated as a NQSO to the extent of such excess.
5. EXERCISE PRICE. The exercise price of the shares of Common Stock under
each option shall be determined by the Administrators, in their sole
discretion, as set forth in the applicable Contract; provided, however, that
the exercise price of an ISO shall not be less than the fair market value of
the Common Stock subject to such option on the date of grant; and provided,
further, that if, at the time an ISO is granted, the optionee owns (or is
deemed to own under Section 424(d) of the Code) stock possessing more than 10%
of the total combined voting power of all classes of stock of the Company, of
any of its Subsidiaries or of a Parent, the exercise price of such ISO shall
not be less than 110% of the fair market value of the Common Stock subject to
such ISO on the date of grant.
The fair market value of a share of Common Stock on any day shall be (a) if
the principal market for the Common Stock is a national securities exchange,
the average of the highest and lowest sales prices per share of Common Stock
on such day as reported by such exchange or on a composite tape reflecting
transactions on such exchange, (b) if the principal market for the Common
Stock is not a national securities exchange and the Common Stock is quoted on
The Nasdaq Stock Market ("Nasdaq"), and (i) if actual sales price information
is available with respect to the Common Stock, the average of the highest and
lowest sales prices per share of Common Stock on such day on Nasdaq, or (ii)
if such information is not available, the average of the highest bid and
lowest asked prices per share of Common Stock on such day on Nasdaq, or (c) if
the principal market for the Common Stock is not a national securities
exchange and the Common Stock is not quoted on Nasdaq, the
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average of the highest bid and lowest asked prices per share of Common Stock
on such day as reported on the OTC Bulletin Board Service or by National
Quotation Bureau, Incorporated or a comparable service; provided, however,
that if clauses (a), (b) and (c) of this Paragraph are all inapplicable, or if
no trades have been made or no quotes are available for such day, the fair
market value of the Common Stock shall be determined by the Board of Directors
by any method consistent with applicable regulations adopted by the Treasury
Department relating to stock options.
6. TERM. The term of each option granted pursuant to the Plan shall be such
term as is established by the Administrators, in their sole discretion, as set
forth in the applicable Contract; provided, however, that the term of each ISO
granted pursuant to the Plan shall be for a period not exceeding ten (10)
years from the date of grant thereof; and provided, further, that if, at the
time an ISO is granted, the optionee owns (or is deemed to own under Section
424(d) of the Code) stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company, any of its Subsidiaries
or a Parent, the term of the ISO shall be for a period not exceeding five (5)
years from the date of grant. Options shall be subject to earlier termination
as hereinafter provided.
7. EXERCISE. An option (or any part or installment thereof), to the extent
then exercisable, shall be exercised by giving written notice to the Company
at its principal office stating which option is being exercised, specifying
the number of shares of Common Stock as to which such option is being
exercised and accompanied by payment in full of the aggregate exercise price
therefor (or the amount due on exercise if the applicable Contract permits
installment payments) (a) in cash or by certified check or (b) if the
applicable Contract permits, with previously acquired shares of Common Stock
having an aggregate fair market value on the date of exercise (determined in
accordance with Paragraph 5 hereof) equal to the aggregate exercise price of
all options being exercised, or with any combination of cash, certified check
or shares of Common Stock having such value. The Company shall not be required
to issue any shares of Common Stock pursuant to any such option until all
required payments, including payments for any required withholding amounts,
have been made.
The Administrators may, in their sole discretion, permit payment of the
exercise price of an option by delivery by the optionee of a properly executed
notice, together with a copy of his irrevocable instructions to a broker
acceptable to the Administrators to deliver promptly to the Company the amount
of sale or loan proceeds sufficient to pay such exercise price. In connection
therewith, the Company may enter into agreements for coordinated procedures
with one or more brokerage firms.
A person entitled to receive Common Stock upon the exercise of an option
shall not have the rights of a stockholder with respect to such shares of
Common Stock until the date of issuance of a stock certificate for such shares
or, in the case of uncertificated shares, until the date an entry is made on
the books of the Company's transfer agent representing such shares; provided,
however, that until such stock certificate is issued or until such book entry
is made, any optionee using previously acquired shares of Common Stock in
payment of an option exercise price shall continue to have the rights of a
stockholder with respect to such previously acquired shares.
In no case may a fraction of a share of Common Stock be purchased or issued
under the Plan.
8. TERMINATION OF RELATIONSHIP. Except as may otherwise be expressly
provided in the applicable Contract, if an optionee's relationship with the
Company, its Parent and Subsidiaries as an employee or a consultant is
terminated for any reason (other than as a result of the death or Disability
(as such term is defined in Paragraph 19 hereof) of the optionee), including,
without limitation, (a) for Cause (as such term is defined in Paragraph 19
hereof) or (b) without the consent of the Company, then such optionee's
options shall terminate immediately. Except as may otherwise be expressly
provided in the applicable Contract, options granted under the Plan to an
employee or consultant shall not be affected by any change in the status of
the optionee so long as the optionee continues to be an employee of, or a
consultant to, the Company, or any of the Subsidiaries or a Parent (regardless
of having changed from one to the other or having been transferred from one
corporation to another).
For the purposes of the Plan, an employment relationship shall be deemed to
exist between an individual and the Company, any of its Subsidiaries or a
Parent if, at the time of the determination, the individual was an employee of
such corporation for purposes of Section 422(a) of the Code. As a result, an
individual on military,
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sick leave or other bona fide leave of absence shall continue to be considered
an employee for purposes of the Plan during such leave if the period of the
leave does not exceed 90 days, or, if longer, so long as the individual's
right to reemployment with the Company, any of its Subsidiaries or a Parent is
guaranteed either by statute or by contract. If the period of leave exceeds 90
days and the individual's right to reemployment is not guaranteed by statute
or by contract, the employment relationship shall be deemed to have terminated
on the 91st day of such leave.
Except as may otherwise be expressly provided in the applicable Contract, if
an optionee's relationship with the Company as a Non-Employee Director ceases
for any reason (other than as a result of his death or Disability), then the
options granted to such optionee as a Non-Employee Director shall terminate
immediately. Except as may otherwise be expressly provided in the applicable
Contract, options granted to a Non-Employee Director shall not be affected by
the optionee becoming an employee of the Company, any of its Subsidiaries or a
Parent.
Nothing in the Plan or in any option granted under the Plan shall confer on
any optionee any right to continue in the employ of, or as a consultant to,
the Company, any of its Subsidiaries or a Parent, or as a director of the
Company, or interfere in any way with any right of the Company, any of its
Subsidiaries or a Parent to terminate the optionee's relationship at any time
for any reason whatsoever without liability to the Company, any of its
Subsidiaries or a Parent.
9. DEATH OR DISABILITY OF AN OPTIONEE. Except as may otherwise be expressly
provided in the applicable Contract, if an optionee dies (a) while he is an
employee of, or a consultant to, the Company, any of its Subsidiaries or a
Parent, or (b) within one (1) year following the termination of such
relationship by reason of his Disability, the options that were granted to him
as an employee or consultant may be exercised, to the extent exercisable on
the date of his death, by his Legal Representative (as such term is defined in
Paragraph 19 hereof) at any time within one (1) year after death, but not
thereafter and in no event after the date the option would otherwise have
expired.
Except as may otherwise be expressly provided in the applicable Contract,
any optionee whose relationship as an employee of, or a consultant to, the
Company, its Parent and Subsidiaries has terminated by reason of such
optionee's Disability may exercise the options that were granted to him as an
employee or consultant, to the extent exercisable upon the effective date of
such termination, at any time within one (1) year after such date, but not
thereafter and in no event after the date the option would otherwise have
expired.
Except as may otherwise be expressly provided in the applicable Contract,
any optionee whose relationship as a Non-Employee Director ceases as a result
of his death or Disability may exercise the options that were granted to him
as a Non-Employee Director, to the extent exercisable on the date of such
termination, at any time within one (1) year after the date of termination,
but not thereafter and in no event after the date the option would otherwise
have expired. In the case of the death of the Non-Employee Director, the
option may be exercised by his Legal Representative.
10. COMPLIANCE WITH SECURITIES LAWS. It is a condition to the exercise of
any option that either (a) a Registration Statement under the Securities Act
of 1933, as amended (the "Securities Act"), with respect to the shares of
Common Stock to be issued upon such exercise shall be effective and current at
the time of exercise, or (b) there is an exemption from registration under the
Securities Act for the issuance of the shares of Common Stock upon such
exercise. Nothing herein shall be construed as requiring the Company to
register shares subject to any option under the Securities Act or to keep any
Registration Statement effective or current.
The Administrators may require, in their sole discretion, as a condition to
the receipt of an option or the exercise of any option that the optionee
execute and deliver to the Company his representations and warranties, in
form, substance and scope satisfactory to the Administrators, which the
Administrators determine are necessary or convenient to facilitate the
perfection of an exemption from the registration requirements of the
Securities Act, applicable state securities laws or other legal requirement,
including, without limitation, that (a) the shares of Common Stock to be
issued upon the exercise of the option are being acquired by the optionee for
his own account, for investment only and not with a view to the resale or
distribution thereof, and (b) any
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subsequent resale or distribution of shares of Common Stock by such optionee
will be made only pursuant to (i) a Registration Statement under the
Securities Act which is effective and current with respect to the shares of
Common Stock being sold, or (ii) a specific exemption from the registration
requirements of the Securities Act, but in claiming such exemption, the
optionee shall, prior to any offer of sale or sale of such shares of Common
Stock, provide the Company with a favorable written opinion of counsel
satisfactory to the Company, in form, substance and scope satisfactory to the
Company, as to the applicability of such exemption to the proposed sale or
distribution.
In addition, if at any time the Administrators shall determine, in their
sole discretion, that the listing or qualification of the shares of Common
Stock subject to any option on any securities exchange, Nasdaq or under any
applicable law, or the consent or approval of any governmental agency or
regulatory body, is necessary or desirable as a condition to, or in connection
with, the granting of an option or the issuing of shares of Common Stock
thereunder, such option may not be granted and such option may not be
exercised in whole or in part unless such listing, qualification, consent or
approval shall have been effected or obtained free of any conditions not
acceptable to the Administrators.
11. CONTRACTS. Each option shall be evidenced by an appropriate Contract
which shall be duly executed by the Company and the optionee, and such
Contract shall contain such terms, provisions and conditions not inconsistent
herewith as may be determined by the Administrators. The terms of each option
and Contract need not be identical.
12. ADJUSTMENTS UPON CHANGES IN COMMON STOCK. Notwithstanding any other
provision of the Plan, in the event of a stock dividend, recapitalization,
merger in which the Company is the surviving corporation, spin-off, split-up,
combination or exchange of shares or the like which results in a change in the
number or kind of shares of Common Stock which is outstanding immediately
prior to such event, the aggregate number and kind of shares subject to the
Plan, the aggregate number and kind of shares subject to each outstanding
option and the exercise price thereof, and the 162(m) Maximum shall be
appropriately adjusted by the Board of Directors, whose determination shall be
conclusive and binding on all parties thereto. Such adjustment may provide for
the elimination of fractional shares which might otherwise be subject to
options without payment therefor.
In the event of (a) the liquidation or dissolution of the Company, (b) a
merger in which the Company is not the surviving corporation or a
consolidation, or (c) any transaction (or series of related transactions) in
which more than 50% of the outstanding Common Stock is transferred or
exchanged for other consideration or shares of Common Stock in excess of the
number of shares of Common Stock outstanding immediately preceding the
transaction are issued (other than to stockholders of the Company with respect
to their shares of stock in the Company), any outstanding options shall
terminate upon the earliest of any such event, unless other provision is made
therefor in the transaction.
13. AMENDMENTS AND TERMINATION OF THE PLAN. The Plan was adopted by the
Board of Directors on August 27, 1996. No ISO may be granted under the Plan
after August 26, 2006. The Board of Directors, without further approval of the
Company's stockholders, may at any time suspend or terminate the Plan, in
whole or in part, or amend it from time to time in such respects as it may
deem advisable, including, without limitation, in order that ISOs granted
hereunder meet the requirements for "incentive stock options" under the Code,
to comply with the provisions of Rule 16b-3, Section 162(m) of the Code, or
any change in applicable law, regulations, rulings or interpretations of
administrative agencies; provided, however, that no amendment shall be
effective without the requisite prior or subsequent stockholder approval which
would (a) except as contemplated in Paragraph 12 hereof, increase the maximum
number of shares of Common Stock for which options may be granted under the
Plan or the 162(m) Maximum, (b) change the eligibility requirements to receive
options hereunder or (c) make any change for which applicable law requires
stockholder approval. No termination, suspension or amendment of the Plan
shall, without the consent of the optionee, adversely affect his rights under
any option granted under the Plan. The power of the Administrators to construe
and administer any option granted under the Plan prior to the termination or
suspension of the Plan nevertheless shall continue after such termination or
during such suspension.
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<PAGE>
14. NON-TRANSFERABILITY. No option granted under the Plan shall be
transferable otherwise than by will or the laws of descent and distribution,
and options may be exercised, during the lifetime of the optionee, only by the
optionee or his Legal Representatives. Except to the extent provided in the
immediately preceding sentence, options may not be assigned, transferred,
pledged, hypothecated or disposed of in any way (whether by operation of law
or otherwise) and shall not be subject to execution, attachment or similar
process, and any such attempted assignment, transfer, pledge, hypothecation or
disposition shall be null and void ab initio and of no force or effect.
15. WITHHOLDING TAXES. The Company, a Subsidiary or Parent may withhold (a)
cash or (b) with the consent of the Administrators (in the Contract or
otherwise), shares of Common Stock to be issued upon exercise of an option
having an aggregate fair market value on the relevant date (determined in
accordance with Paragraph 5 hereof) or a combination of cash and shares, in an
amount equal to the amount which the Administrators determine is necessary to
satisfy the obligation of the Company, a Subsidiary or Parent to withhold
Federal, state and local income taxes or other amounts incurred by reason of
the grant, vesting, exercise or disposition of an option, or the disposition
of the underlying shares of Common Stock. Alternatively, the Company, a
Subsidiary or Parent may require the holder to pay to it such amount, in cash,
promptly upon demand.
16. LEGENDS; PAYMENT OF EXPENSES. The Company may endorse such legend or
legends upon the certificates for shares of Common Stock issued upon exercise
of an option under the Plan and may issue such "stop transfer" instructions to
its transfer agent in respect of such shares as it determines, in its
discretion, to be necessary or appropriate to (a) prevent a violation of, or
to perfect an exemption from, the registration requirements of the Securities
Act and any applicable state securities laws, (b) implement the provisions of
the Plan or any agreement between the Company and the optionee with respect to
such shares of Common Stock or (c) permit the Company to determine the
occurrence of a "disqualifying disposition," as described in Section 421(b) of
the Code, of the shares of Common Stock issued or transferred upon the
exercise of an ISO granted under the Plan.
The Company shall pay all issuance taxes with respect to the issuance of
shares of Common Stock upon the exercise of an option granted under the Plan,
as well as all fees and expenses incurred by the Company in connection with
such issuance.
17. USE OF PROCEEDS. The cash proceeds received upon the exercise of an
option under the Plan shall be added to the general funds of the Company and
used for such corporate purposes as the Board of Directors may determine, in
its discretion.
18. SUBSTITUTIONS AND ASSUMPTIONS OF OPTIONS OF CERTAIN CONSTITUENT
CORPORATIONS. Anything in this Plan to the contrary notwithstanding, the Board
of Directors may, without further approval by the Company's stockholders,
substitute new options for prior options or restricted stock of a Constituent
Corporation (as such term is defined in Paragraph 19 thereof) or assume the
prior options or restricted stock of such Constituent Corporation.
19. DEFINITIONS. For purposes of the Plan, the following terms shall be
defined as set forth below:
(a) "Cause" shall mean (i) in the case of an employee or consultant, if
there is a written employment or consulting agreement between the optionee
and the Company, any of its Subsidiaries or a Parent which defines
termination of such relationship for cause, cause as defined in such
agreement, and (ii) in all other cases, cause as defined by applicable
state law.
(b) "Constituent Corporation" shall mean any corporation which engages
with the Company, any of its Subsidiaries or a Parent in a transaction to
which Section 424(a) of the Code applies (or would apply if the option
assumed or substituted were an ISO), or any Parent or any Subsidiary of
such corporation.
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(c) "Disability" shall mean a permanent and total disability within the
meaning of Section 22(e)(3) of the Code.
(d) "Legal Representative" shall mean the executor, administrator or
other person who at the time is entitled by law to exercise the rights of a
deceased or incapacitated optionee with respect to an option granted under
the Plan.
(e) "Non-Employee Director" shall mean a person who is a director of the
Company, but is not an employee of the Company, any of its Subsidiaries or
a Parent.
(f) "Parent" shall have the same definition as "parent corporation" in
Section 424(e) of the Code.
(g) "Subsidiary" shall have the same definition as "subsidiary
corporation" in Section 424(f) of the Code.
20. GOVERNING LAW; CONSTRUCTION. The Plan, the options and Contracts
hereunder and all related matters shall be governed by, and construed in
accordance with, the laws of the State of Delaware, without regard to conflict
of law provisions.
Neither the Plan nor any Contract shall be construed or interpreted with any
presumption against the Company by reason of the Company causing the Plan or
Contract to be drafted. Whenever from the context it appears appropriate, any
term stated in either the singular or plural shall include the singular and
plural, and any term stated in the masculine, feminine or neuter gender shall
include the masculine, feminine and neuter.
21. PARTIAL INVALIDITY. The invalidity, illegality or unenforceability of
any provision in the Plan, any option or Contract shall not affect the
validity, legality or enforceability of any other provision, all of which
shall be valid, legal and enforceable to the fullest extent permitted by
applicable law.
22. STOCKHOLDER APPROVAL. The Plan shall be subject to approval by a
majority of the votes present in person or by proxy and entitled to vote
hereon at the next duly held meeting of the Company's stockholders at which a
quorum is present. No options granted hereunder may be exercised prior to such
approval; provided, however, that the date of grant of any option shall be
determined as if the Plan had not been subject to such approval.
Notwithstanding the foregoing, if the Plan is not approved by a vote of the
stockholders of the Company on or before August 26, 1997, the Plan and any
options granted hereunder shall terminate.
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<PAGE>
DICK CLARK PRODUCTIONS, INC.
PROXY SOLICITED BY BOARD OF DIRECTORS
Kenneth H. Ferguson and Martin Eric Weisberg, and each of them, with full
power of substitution, are hereby appointed proxies to vote the stock of the
undersigned in dick clark productions, inc. at the Annual Meeting of
Stockholders on November 12, 1996, and at any adjournments, to be held at Chase
Manhattan Corp., 270 Park Avenue, 11th Floor, Conference Room A, New York, New
York, on Tuesday, November 12, 1996, at 11:30 a.m., local time.
Management recommends that you vote FOR the election of the seven director
nominees (Proposal 1) and FOR Proposals 2 and 3.
<PAGE>
PLEASE MARK
YOUR VOTES AS [X]
INDICATED IN
THIS EXAMPLE
1. ELECTION OF DIRECTORS
Nominees:
Richard W. Clark Lewis Klein
Karen W. Clark Jeffrey B. Logsdon
Francis C. La Maina Enrique F. Senior
Robert A. Chuck
WITHHELD
FOR FOR ALL
[_] [_]
WITHHELD FOR: (Write that nominee's name in the space provided below).
- ----------------------------------------------------------------------
2. Adoption of the Company's 1996 Stock Option Plan.
FOR AGAINST ABSTAIN
[_] [_] [_]
3. Ratification of the appointment of Arthur Andersen LLP, as the
Company's auditors for the 1997 Fiscal year.
FOR AGAINST ABSTAIN
[_] [_] [_]
I PLAN TO ATTEND THE MEETING [_]
Receipt is hereby acknowledged
of the Notice of Annual Meeting of
Stockholders and Proxy Statement
each dated October 10, 1996, and
the Annual Report of dick clark's
productions, inc. for the year ended
June 30, 1996.
Signature(s) ___________________________ Date ___________________________, 1996
NOTE: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
FOLD AND DETACH HERE
<PAGE>
DICK CLARK PRODUCTIONS, INC.
PROXY SOLICITED BY BOARD OF DIRECTORS
Kenneth H. Ferguson and Martin Eric Weisberg, and each of them, with full
power of substitution, are hereby appointed proxies to vote the stock of the
undersigned in dick clark productions, inc. at the Annual Meeting of
Stockholders on November 12, 1996, and at any adjournments, to be held at Chase
Manhattan Corp., 270 Park Avenue, 11th Floor, Conference Room A, New York, New
York, on Tuesday, November 12, 1996, at 11:30 a.m., local time.
1. Election of Directors
[_] FOR ALL NOMINEES LISTED BELOW [_] WITHHOLD AUTHORITY to vote for
(except as indicated to the all nominees listed below
contrary below)
Nominees: Richard W. Clark, Karen W. Clark, Francis C. La Maina, Robert A.
Chuck, Lewis Klein, Jeffrey B. Logsdon and Enrique F. Senior.
INSTRUCTIONS: To withhold authority to vote for any nominee, strike a line
through his name above.
-----------------------------------------------------------------------------
2. Adoption of the Company's 1996 Stock Option Plan.
[_] FOR [_] AGAINST [_] ABSTAIN
3. Ratification of the appointment of Arthur Andersen LLP, as the Company's
auditors for the 1997 Fiscal year.
[_] FOR [_] AGAINST [_] ABSTAIN
MANAGEMENT RECOMMENDS THAT YOU VOTE FOR THE ELECTION OF THE SEVEN DIRECTOR
NOMINEES (PROPOSAL 1) AND FOR PROPOSALS 2 AND 3.
<PAGE>
Date __________________________ , 1996
--------------------------------------
(Signature)
--------------------------------------
(Signature)
RECEIPT IS HEREBY ACKNOWLEDGED OF THE
NOTICE OF ANNUAL MEETING OF
STOCKHOLDERS AND PROXY STATEMENT EACH
DATED OCTOBER 10, 1996, AND THE
ANNUAL REPORT OF DICK CLARK
PRODUCTIONS, INC. FOR THE YEAR ENDED
JUNE 30, 1996.
