<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
The Score Board, 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 Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
THE SCORE BOARD, INC.
1951 OLD CUTHBERT ROAD
CHERRY HILL, NEW JERSEY 08034
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
----------------
DECEMBER 10, 1997
----------------
TO OUR SHAREHOLDERS:
The Annual Meeting of Shareholders of THE SCORE BOARD, INC. will be held on
Wednesday, December 10, 1997, at 1:30 p.m. at The Mansion at Main Street,
Plaza 3000, Kresson and Evesham Roads, Voorhees, New Jersey 08043 for the
following purposes:
1. To elect six members of the Board of Directors for a one-year term;
and
2. To transact such other further business as may properly come before
the meeting or any postponement or adjournment thereof.
The Board of Directors has fixed October 20, 1997, as the record date for
determining shareholders entitled to vote at the Annual Meeting. Only
shareholders of record at the close of business on that date will be entitled
to notice of, and to vote at, the Annual Meeting.
You are cordially invited to attend the Annual Meeting in person. Whether or
not you expect to attend the Annual Meeting in person, you are urged to sign
and date the enclosed proxy and return it promptly in the envelope provided
for that purpose.
By Order of the Board of Directors,
Patrick J. Wujcik,
Secretary
November 10, 1997
<PAGE>
THE SCORE BOARD, INC.
1951 OLD CUTHBERT ROAD
CHERRY HILL, NEW JERSEY 08034
----------------
PROXY STATEMENT
----------------
The enclosed proxy is solicited by and on behalf of The Score Board, Inc., a
New Jersey corporation (the "Company"), for use at the Annual Meeting of
Shareholders to be held on Wednesday, December 10, 1997, at 1:30 P.M. at The
Mansion at Main Street, Plaza 3000, Kresson and Evesham Roads, Voorhees, New
Jersey 08043 and at any postponement or adjournment thereof (the "Annual
Meeting"). The approximate date on which this Proxy Statement and the
accompanying form of proxy will first be sent or given to shareholders is
November 10, 1997.
Sending a signed proxy will not affect the shareholder's right to attend the
Annual Meeting and vote in person since the proxy is revocable. The grant of a
later proxy revokes this proxy. The presence at the meeting of a shareholder
who has given a proxy does not revoke the proxy unless the shareholder votes
the shares subject to the proxy by written ballot or files written notice of
revocation with the secretary of the meeting prior to the voting of proxy.
The expense of the proxy solicitation will be borne by the Company. In
addition to solicitation by mail, proxies may be solicited in person or by
telephone or telecopier by directors, officers or employees of the Company
without additional compensation. The Company will, on request, reimburse
shareholders of record who are brokers, dealers, banks or voting trustees, or
their nominees, for their reasonable expenses in sending proxy materials and
annual reports to the beneficial owners of the shares they hold of record.
A form of proxy is enclosed. If properly executed and received in time for
voting, and not revoked, the enclosed proxy will be voted as indicated in
accordance with the instructions thereon. If no directions to the contrary are
indicated, the persons named in the enclosed proxy will vote all shares in
favor of the proposals specified in the attached notice.
The enclosed proxy confers discretionary authority to vote with respect to
any and all of the following matters that may come before the meeting: (i)
matters which the Company does not know about a reasonable time before the
proxy solicitation and are properly presented at the meeting; (ii) approval of
the minutes of a prior meeting of shareholders, if such approval does not
amount to ratification of the action taken at the meeting; (iii) the election
of any person to any office for which a bona fide nominee is unable to serve
or for good cause will not serve; and (iv) matters incident to the conduct of
the meeting. In connection with such matters, the persons named in the
enclosed form of proxy will vote in accordance with their best judgment.
OUTSTANDING SHARES AND VOTING RIGHTS
The Company had 14,689,142 shares of Common Stock, par value $.01 per share
("Common Stock"), outstanding at the close of business on October 20, 1997,
the record date fixed for determining shareholders entitled to notice of, and
to vote at, the Annual Meeting. The presence, in person or by proxy, of
shareholders entitled to cast a majority of the votes which all shareholders
are entitled to cast on a particular matter constitutes a quorum for the
purpose of considering such matter. Each share of Common Stock outstanding is
entitled to one vote on each matter brought before the Annual Meeting. The
election of directors will be determined by a plurality vote, and the nominees
receiving the most "for" votes will be elected. Approval of any other proposal
will require the affirmative vote of a majority of the votes cast with respect
to such proposal. An abstention,
1
<PAGE>
withholding of authority to vote for, or broker non-vote will not have the
same legal effect as an "against" vote and will not be counted in determining
whether the proposal has received the required shareholder vote. Shareholders
do not have appraisal or dissenter rights with respect to any of the proposals
specified in the attached notice.
ELECTION OF DIRECTORS
NOMINEES FOR ELECTION OF DIRECTORS
Six (6) directors are expected to be elected at the Annual Meeting to serve
on the Company's Board of Directors until the next Annual Meeting of
Shareholders and until each of their respective successors has been duly
elected and qualified as provided in the Company's By-Laws. Except for Mr.
White, all nominees are currently serving on the Board of Directors under
terms which will expire at the Annual Meeting. If any of the nominees becomes
unable to serve, or for good cause will not serve, the persons named in the
enclosed form of proxy will vote in accordance with their best judgment for
the election of such substitute nominee or nominees as shall be designated by
the Board of Directors. The Company's Board of Directors expects all nominees
to be willing and able to serve.
The name of each nominee for director, together with certain biographical
information for each nominee, is set forth below. THE BOARD OF DIRECTORS
RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF THE NOMINEES FOR DIRECTOR.
<TABLE>
<CAPTION>
YEAR OF
EXPIRATION
OF TERM AS
NAME OF NOMINEE AGE POSITION DIRECTOR
--------------- --- -------- ----------
<S> <C> <C> <C>
Kenneth Goldin..................... 32 Chairman of the Board and 1997
Chief Executive Officer
John F. White...................... 51 President and Chief --
Operating Officer;
Director - Nominee
Ira M. Lubert...................... 47 Director 1997
Allan R. Lyons..................... 56 Director 1997
Gerald B. Shreiber................. 55 Director 1997
Richard C. Yancey.................. 71 Director 1997
</TABLE>
Kenneth Goldin has been employed by the Company in various capacities since
1987 and has been a director since July 1989. Mr. Goldin has served as
Chairman of the Board and Chief Executive Officer since May 1994. He served as
President from May 1994 to January 1997 and as Executive Vice President from
July 1989 to May 1994.
John F. White has served as the Company's President and Chief Operating
Officer since February 1997. From 1994 to January 1997, Mr. White served as
Chairman, President and Chief Executive Officer of The Outsourcing
Partnership, L.L.C., a firm specializing in the outsourcing of internal
auditing, due diligence, information technology and human resources. Prior to
1994, Mr. White was a partner at Coopers & Lybrand LLP, where he was
responsible for the firm's financial services division and served clients in
the wholesale, retail and distribution industries.
2
<PAGE>
Ira M. Lubert has served as a director since November 1996. Since 1991, he
has been a managing director of Technology Leaders Management L.P., a venture
capital management company which is affiliated with Safeguard Scientifics,
Inc. and manages Technology Leaders II L.P. and Technology Leaders II Offshore
C.V. See "Security Ownership of Certain Beneficial Owners and Management." Mr.
Lubert also serves as a director of National Media Corporation, CompuCom
Systems, Inc., and Sanchez Computer Associates, Inc.
Allan R. Lyons has served as a director since June 1990. Since November
1993, Mr. Lyons has been the Chairman of the Board and Chief Executive Officer
of Piaker & Lyons, P.C., Certified Public Accountants, and he served as
Executive Vice President prior thereto. Mr. Lyons also serves as a director of
Franklin Credit Management Corporation.
Gerald B. Shreiber has served as a director since December 1994. Mr.
Shreiber is the founder of J & J Snack Foods Corp. and has served as its
Chairman of the Board, President and Chief Executive Officer since its
inception in 1971.
Richard C. Yancey has served as a director since November 1992. Mr. Yancey
had been an investment banker with Dillon, Read & Co. Inc. from 1952 through
1992, holding various positions, including managing director from 1975 to
1990, director from 1990 to 1991, and senior advisor from 1991 through 1992.
In addition, Mr. Yancey currently serves as a director of CapMac Holdings,
Inc. and eight mutual fund companies of The Composite Group.
DIRECTOR MEETINGS AND DIRECTOR COMPENSATION
The Board of Directors held four meetings during the eleven month period
ended December 31, 1996. No director attended fewer than seventy-five percent
of the meetings of the Board of Directors or of the committees on which he
served.
The Board of Directors has the authority to establish reasonable
compensation of directors for services to the Company. Pursuant to the terms
of the 1992 Directors Stock Option Plan (the "Directors Plan"), each eligible
non-employee director is entitled to receive an option to purchase 30,000
shares of Common Stock on the date he becomes a director. In addition, each
eligible non-employee director is entitled to receive on September 1st of each
year: (i) an option to purchase 15,000 shares of Common Stock at an exercise
price equal to the fair market value of the Common Stock on the date the
option is granted, exercisable six months after the date of grant; and (ii) an
option to purchase 15,000 shares of Common Stock at an exercise price equal to
120% of the fair market value of the Common Stock on the date the option is
granted, exercisable on the date of grant.
At September 1, 1996, no shares were available for grant under the Directors
Plan. On January 28, 1997, the shareholders approved an amendment to the
Directors Plan increasing the number of shares issuable from 400,000 to
800,000. The options that would have been issued to Mr. Lubert upon his
election to the Board, and to Messrs. Lyons, Shreiber and Yancey on September
1, 1996, were issued after the Directors Plan was amended. Accordingly, Mr.
Lubert was granted a non-qualified option to purchase 30,000 shares of Common
Stock at an exercise price of $3.25 per share. Messrs. Lyons, Shreiber and
Yancey were each granted 15,000 non-qualified options at an exercise price of
$1.78 per share (fair market value on September 1, 1996) and 15,000 retainer
options at an exercise price of $2.14 per share (120% of fair market value on
September 1, 1996). All of the options are currently exercisable and expire
upon the earlier of ten years from the date of grant or three months from the
date the recipient ceases to be a director.
Messrs. Lyons, Shreiber and Yancey were each paid $2,000 for attending audit
committee meeting during 1996.
3
<PAGE>
COMMITTEES OF THE BOARD OF DIRECTORS
The Company's Board of Directors has appointed an Audit Committee and a
Compensation Committee. The Company does not have a standing nominating
committee of the Board of Directors. The entire Board of Directors performs
the function of the nominating committee on an ad hoc basis.
Audit Committee. The current members of the Audit Committee are Messrs.
Lubert, Shreiber and Yancey. The Audit Committee is responsible for making
recommendations for the selection of the Company's independent public
accountants and reviewing with them the scope, status and results of audit.
The Audit Committee also is responsible for reviewing accounting policies and
internal control procedures for preparation of financial statements and all
potential conflict-of-interest situations resulting from related party
transactions. The Audit Committee held four meetings during 1996.
Compensation Committee. The current members of the Compensation Committee
are Messrs. Lubert and Lyons. The Compensation Committee is responsible for
recommending remuneration arrangements for senior management and directors,
and for adoption of compensation plans in which officers and directors are
eligible to participate subject to approval of the entire Board of Directors.
The Compensation Committee held two meetings during 1996.
EXECUTIVE OFFICERS
The names of current executive officers of the Company, together with
certain biographical information for each of them (other than Messrs. Goldin
and White, for whom biographical information is provided above), are set forth
below:
<TABLE>
<CAPTION>
NAME OF EXECUTIVE OFFICER AGE POSITION
------------------------- --- --------
<S> <C> <C>
Kenneth Goldin............................ 32 Chairman of the Board and
Chief Executive Officer
John F. White............................. 51 President and Chief
Operating Officer,
Director - Nominee
Raymond Abrahamsen........................ 50 Sr. V.P. Trading Card Sales
and Marketing and Retail
Memorabilia
Kenneth A. Marrama........................ 46 V.P. Finance and Treasurer
Patrick J. Wujcik......................... 35 V.P. Administration,
Secretary and General
Counsel
</TABLE>
Raymond Abrahamsen has served as the Company's Senior Vice President of
Trading Card Sales and Marketing and Retail Memorabilia since July 1997. From
1993 to June 1997, Mr. Abrahamsen was employed by Fleer Corp. and Fleer/Skybox
International in various capacities, most recently as Executive Vice President
of the Hobby Division. Previously, Mr. Abrahamsen was employed by Alberto
Culver Company, Inc., Church & Dwight Company, Inc., Johnson & Johnson Baby
Products Company and Lever Brothers Company, where he directed sales and
marketing efforts for a variety of consumer products.
Kenneth A. Marrama has served as the Company's Vice President of Finance
since September 1997. He was Vice President and Chief Financial Officer of
Xyan, Inc. from 1996 to 1997, and Senior Vice President and Chief Financial
Officer of Jack & Jill Ice Cream Co. from 1991 to 1996. From 1973 to 1991, Mr.
Marrama worked at various international accounting firms.
4
<PAGE>
Patrick J. Wujcik has been employed in the Company's legal department since
1994. Mr. Wujcik has served as corporate secretary since March 1995, as
General Counsel since June 1995, and as Vice President of Administration since
March 1996. Mr. Wujcik was an associate in the corporate department of Pepper,
Hamilton & Scheetz, a law firm based in Philadelphia, PA, prior thereto.
EXECUTIVE COMPENSATION
The following table sets forth certain summary information concerning the
compensation paid to the Company's Chief Executive Officer and other highly
compensated executive officers whose total annual salary and bonus were in
excess of $100,000 (collectively, the "Named Executive Officers") for services
rendered in all capacities to the Company and its subsidiaries for the eleven-
month period ended December 31, 1996 and years ended January 31, 1996 and
January 31, 1995:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
----------------------------- ------------
SECURITIES ALL OTHER
PERIOD SALARY UNDERLYING COMPENSATION
NAME & PRINCIPAL POSITION ENDED (1) ($) OPTIONS (#) ($)(2)
------------------------- -------- ------- ----------- ------------
<S> <C> <C> <C> <C>
Kenneth Goldin....................... 12/31/96 324,857 176,000 33,450
C.E.O 01/31/96 362,407 70,000 67,003
01/31/95 375,822 150,000 39,499
Barry Bookman........................ 12/31/96 122,917 75,000 0
C.O.O.(3)
Michael D. Hoppman................... 12/31/96 103,347 15,000 8,861
V.P. - Finance(4) 01/31/96 104,429 10,000 10,314
01/31/95 103,608 10,000 8,983
</TABLE>
- --------
(1) Compensation and awards for the period ended December 31, 1996 reflect an
eleven month period commencing February 1, 1996 and ending December 31,
1996. Compensation and awards for the two prior years reflect a twelve
month fiscal year commencing February 1st and ending January 31st.
(2) Includes: (a) Company contributions under its profit sharing plan for
certain of the Named Executive Officers (Messrs. Goldin $8,346 and Hoppman
$4,461); (b) Company payments of certain life insurance premiums (Mr.
Goldin $10,884); and (c) car allowances for certain of the Named Executive
Officers (Messrs. Goldin $14,220 and Hoppman $4,400).
(3) As of January 1997, Mr. Bookman was no longer an officer or employee of
the Company.
(4) As of August 1997, Mr. Hoppman was no longer an officer or employee of the
Company.
5
<PAGE>
The following table sets forth information concerning individual grants of
stock options made during the eleven-month period ended December 31, 1996 to
each of the Named Executive Officers:
OPTION GRANTS IN PERIOD ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
- ------------------------------------------------------------ -----------------------------
NUMBER OF
SECURITIES PERCENTAGE OF
UNDERLYING TOTAL OPTIONS EXERCISE
OPTIONS GRANTED TO OR BASE
GRANTED EMPLOYEES IN PRICE EXPIRATION
NAME (#)(1) FISCAL YEAR ($/SH) DATE 5%($)(2) 10%($)(2)
---- ---------- ------------- -------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Kenneth Goldin.......... 26,000(3) 7.0% $3.63 3/11/01 $120,455 $152,000
Kenneth Goldin.......... 100,000(3) 26.0% $1.82 8/29/01 $232,283 $293,113
Kenneth Goldin.......... 50,000(3) 13.0% $3.00 10/2/01 $191,442 $241,577
Barry Bookman........... 45,000(4) 12.0% $4.88 5/1/97 $230,868 $242,164
Barry Bookman........... 30,000(4) 8.0% $1.82 5/1/97 $ 56,429 $ 58,258
Michael Hoppman ........ 15,000(5) 4.0% $2.50 8/21/01 $ 47,861 $ 60,394
</TABLE>
- --------
(1) The options granted to Messrs. Goldin, Bookman and Hoppman were granted
under the Company's 1992 Stock Incentive Plan, with exercise prices equal
to the fair market value on the date of grant and a term of five years.
(2) The five percent and ten percent assumed rates of appreciation are
mandated by the rules of the Securities and Exchange Commission and do not
represent the Company's estimate or projection of future stock price or
performance.
(3) The option to purchase 26,000 shares is currently exercisable. One-third
of the option to purchase 100,000 shares is currently exercisable, and
one-third of the option will become exercisable on August 30, 1998 and
1999, respectively. One-third of the option to purchase 50,000 is
currently exercisable, and one-third of the option will become exercisable
on October 3, 1998 and 1999, respectively, if certain conditions are met.
Effective November 5, 1996, the following options previously granted to
Mr. Goldin were cancelled: (i) option to purchase 20,000 shares of Common
Stock at an exercise price of $9.13 per share; (ii) option to purchase
41,250 shares of Common Stock at an exercise price of $8.38 per share; and
(iii) option to purchase 25,000 shares of Common Stock at an exercise
price of $5.00 per share.
(4) Mr. Bookman's employment was terminated in January 1997. All of his
options were either cancelled or subsequently expired in accordance with
their terms.
(5) Mr. Hoppman's employment was terminated in August 1977. His options will
expire on November 1, 1997.
6
<PAGE>
The following table sets forth information concerning the exercise of stock
options during the period ended December 31, 1996 by each of the Named
Executive Officers and the value of unexercised options held by each of them
as of December 31, 1996:
AGGREGATED OPTION EXERCISES IN PERIOD ENDED DECEMBER 31, 1996 AND PERIOD END
OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
12/31/96 12/31/96
SHARES ACQUIRED VALUE REALIZED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#) ($) UNEXERCISABLE UNEXERCISABLE (1)
---- --------------- -------------- --------------- ----------------
<S> <C> <C> <C> <C>
Kenneth Goldin.......... 0 0 249,750/185,000 $0/$12,000
Barry Bookman........... 0 0 0/ 75,000 $0/$ 3,600
Michael D. Hoppman...... 0 0 31,333/ 21,667 $0/$0
</TABLE>
- --------
(1) This amount represents the market value of the underlying securities
relating to "in-the-money" options at December 31, 1996 minus the exercise
price of such options.
The following table sets forth information concerning repricings of options
held by executive officers of the Company during the last ten completed fiscal
years:
TEN-YEAR OPTION/SAR REPRICINGS
<TABLE>
<CAPTION>
LENGTH OF
NUMBER OF ORIGINAL
SECURITIES MARKET PRICE EXERCISE OPTION TERM
UNDERLYING OF STOCK AT PRICE AT REMAINING
OPTIONS/ TIME OF TIME OF NEW AT DATE OF
SARS REPRICING OR REPRICING OR EXERCISE REPRICING
REPRICED OR AMENDMENT AMENDMENT PRICE OR
NAME DATE AMENDED (#) ($) ($) ($) AMENDMENT
---- ------- ----------- ------------ ------------ -------- -----------
<S> <C> <C> <C> <C> <C> <C>
Kenneth Goldin.......... 9/30/94 * $4.375 $8.25 $5.00 4.25 years
Kenneth Goldin.......... 10/3/96 ** $ 2.00 ** $3.00 **
</TABLE>
* Effective September 30, 1994, Mr. Goldin's option to purchase 100,000
shares of Common Stock at an exercise price of $8.25 per share, granted on
June 10, 1994, was cancelled and replaced by an option to purchase 50,000
shares at an exercise price of $5.00 per share.
** Effective October 3, 1996, Mr. Goldin was granted an option to purchase
50,000 shares of Common Stock at an exercise price of $3.00 per share. The
following options were cancelled: (i) option to purchase 20,000 shares of
Common Stock at an exercise price of $9.13 per share (with approximately
two years of the original option term remaining at the date of
cancellation); (ii) option to purchase 41,250 shares of Common Stock at an
exercise price of $8.38 per share (with approximately one year of the
original option term remaining at the date of cancellation); and (iii)
option to purchase 25,000 shares of Common Stock at an exercise price of
$5.00 per share (with approximately three and one-half years of the
original option term remaining at the date of cancellation).
EMPLOYMENT AGREEMENTS, COMPENSATORY ARRANGEMENTS
Effective November 1, 1996, the Company entered into an employment agreement
with Kenneth Goldin pursuant to which Mr. Goldin was to receive an annual
salary of $375,000 and various benefits, including life and health insurance.
Mr. Goldin's employment agreement was subsequently amended and his annual
salary was reduced to $250,000. He is also eligible for such bonuses as the
Board of Directors may determine. The employment agreement, as amended, will
expire on February 19, 1998.
7
<PAGE>
Effective February 1, 1997, the Company entered into an employment agreement
with John F. White which provides for his employment until January 31, 1999.
Under the agreement, Mr. White is to receive an annual salary of $210,000 and
was granted an option to purchase 200,000 shares of the Company's Common Stock
at an exercise price of $2.00 per share under the 1992 Stock Incentive Plan.
The agreement also provided for the grant of an option to purchase 50,000
additional shares on each of June 1, 1997 and 1998, various benefits,
including health insurance, and bonuses at the discretion of the Board of
Directors.
On April 22, 1996, the Company entered into a two-year employment agreement
with Barry Bookman, pursuant to which Mr. Bookman was to receive an annual
salary of $200,000. As of January 1997, the employment agreement was
terminated and Mr. Bookman is no longer an officer or employee of the Company.
All options granted to Mr. Bookman were either terminated or expired in
accordance with their terms.
THE FOLLOWING REPORT OF THE COMPENSATION COMMITTEE 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, AS
AMENDED, OR UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, EXCEPT TO
THE EXTENT THAT THE COMPANY SPECIFICALLY INCORPORATES THIS INFORMATION BY
REFERENCE, AND SHALL NOT OTHERWISE BE DEEMED FILED UNDER SUCH ACTS.
COMPENSATION COMMITTEE REPORT
The Compensation Committee of the Board of Directors (the "Compensation
Committee") and the Stock Option Committee of the 1992 Stock Incentive Plan
(the "Option Committee") are responsible for determining executive
compensation. The Compensation Committee is responsible for making
recommendations with respect to matters concerning base salaries and bonus
remuneration of executive officers. The Company's executive compensation
program is comprised of base salary, annual incentive compensation in the form
of cash bonuses, and long-term incentive compensation in the form of stock
options. For the eleven-month period ended December 31, 1996, base salaries
were determined pursuant to existing employment agreements, bonuses were
determined by the Compensation Committee, and stock option awards were
determined by the Option Committee.
Compensation Goal. The goal of the Compensation Committee and Option
Committee is to establish and implement an executive compensation program that
will attract and retain superior management talent, recognize and reward
individual performance and align the financial interests of the executive
officers with those of its shareholders and the success of the Company. The
committees also consider compensation paid to executive officers by comparable
companies.
Base Salary. In determining the base salary payable to an executive officer
(whether by employment agreement or otherwise), the individual's expertise,
level of experience and level of responsibility, as well as the impact of such
individual on the profitability and future growth of the Company, were
considered.
Annual Incentive Compensation. Each existing employment agreement between
the Company and an executive officer provides for bonus compensation to be
awarded at the discretion of the Board of Directors. Other executive officers
may also be awarded bonus compensation at the Board's discretion. No executive
officer received bonus compensation in 1996.
Long-Term Incentive Compensation. The Company's 1992 Stock Incentive Plan
forms the basis of the Company's long-term incentive plan for executive
officers and key employees. The specific objective of this plan is to align
executive and shareholder long-term interests by creating a direct link
between executive pay and shareholder return. The value of the stock options
awarded, which is an important component of executive
8
<PAGE>
compensation, depends on the success of the Company and the price of its
stock. Thus, such awards serve as an incentive to executive officers to put
forth their best efforts on the Company's behalf.
Stock options granted under the 1992 Stock Incentive Plan generally have
five-year terms and include certain exercise restrictions and vesting
provisions. The exercise prices for options granted pursuant to these plans
equal the fair market value of the Company's Common Stock as of the dates of
grant. The options are non-transferable, except by will or the laws of
descent.
Chief Executive Officer Compensation. During the eleven month period ended
December 31, 1996, Kenneth Goldin received a base salary of $324,857. His
employment agreement was approved by the Board of Directors in recognition of
the dedication demonstrated by Mr. Goldin in prior years and in anticipation
of the effort expected of him during future fiscal years.
On March 11, 1996, Kenneth Goldin was granted an option to purchase 26,000
shares of the Company's Common Stock at an exercise price of $3.63 per share.
The option is currently exercisable. On August 29, 1996, Mr. Goldin was
granted an option to purchase 100,000 shares of Common Stock at an exercise
price of $1.82 per share. One-third of the option is currently exercisable,
and one-third of the option will become exercisable on August 30, 1998 and
1999, respectively. On October 3, 1996, Mr. Goldin was granted an option to
purchase 50,000 shares of Common Stock at an exercise price of $3.00 per
share. One-third of the option is currently exercisable, and one-third of the
option will become exercisable on October 3, 1998 and 1999, respectively, if
certain conditions are met. Certain options previously granted to Mr. Goldin
were cancelled. See "Ten-Year Option Repricing." The number of options granted
is consistent with market practices observed by the Option Committee for chief
executive officers of other companies of similar size and industry. The
ultimate value of these options will be determined by the actual performance
of the Company's stock price.
Deductibility of Certain Compensation. Section 162(m) of the Internal
Revenue Code denies a deduction for certain compensation exceeding $1,000,000
paid to the chief executive officer and four other highest paid executive
officers, excluding (among other things) certain performance-based
compensation. Through December 31, 1996, this provision has not affected the
Company's tax deductions, but the Company will continue to monitor the
potential impact of Section 162(m) on the Company's ability to deduct
executive compensation.
COMPENSATION COMMITTEE
ALLAN R. LYONS
GERALD B. SHREIBER
RICHARD C. YANCEY
9
<PAGE>
STOCK PRICE PERFORMANCE GRAPH
The Securities and Exchange Commission requires a comparison of cumulative
total shareholder return for the Company with a relevant broad equity market
index and a peer group of publicly-traded companies over a five-year period.
Cumulative total shareholder return represents share value appreciation
assuming dividend reinvestment. The Common Stock of the Company is traded on
The National Association of Securities Dealers Automated Quotation ("NASDAQ")
SmallCap Market System. Set forth below is a graph comparing cumulative total
shareholder return on the Company's Common Stock with the NASDAQ Stock Market
(U.S.) index and a group of companies that the Company selected as a peer
group. The criteria applied in selecting peer companies for this purpose
consisted of publicly-traded companies that are perceived as competitors of
the Company (Marvel Entertainment Group, Inc. and The Topps Company, Inc.) and
the publicly-traded companies within the NASDAQ Major Industry Group of
Wholesale Trade. The stock price performance shown on the graph is not
intended to forecast or be indicative of future price performance.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG SCORE BOARD, INC., THE NASDAQ STOCK MARKET (U.S.) INDEX AND A PEER GROUP
[GRAPH APPEAR HERE]
<TABLE>
SCOREBOARD, INC. PEER GROUP NASDAQ STOCK MARKET (U.S.)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
1/92 100 100 100
- --------------------------------------------------------------------------------
1/93 68 109 113
- --------------------------------------------------------------------------------
1/94 93 176 130
- --------------------------------------------------------------------------------
1/95 26 137 124
- --------------------------------------------------------------------------------
1/96 31 164 175
- --------------------------------------------------------------------------------
12/96 12 183 215
- --------------------------------------------------------------------------------
1/97
- --------------------------------------------------------------------------------
</TABLE>
* $100 INVESTED ON 1/31/92 IN STOCK OR INDEX -
INCLUDING REINVESTMENT OF DIVIDENDS.
10
<PAGE>
SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of October 30, 1997, information
concerning beneficial ownership of shares of the Company's Common Stock with
respect to (i) each person known to the Company to own five percent or more of
the outstanding shares of Common Stock, (ii) each director and director-
nominee of the Company, (iii) each of the Named Executive Officers and (iv)
all directors and officers of the Company as a group.
<TABLE>
<CAPTION>
SHARES
NAME AND ADDRESS BENEFICIALLY PERCENT OF
OF BENEFICIAL OWNER OWNED (1) CLASS
------------------- ------------ ----------
<S> <C> <C>
DIRECTORS, NOMINEES AND NAMED EXECUTIVE OFFICERS*
Kenneth Goldin............................................................................ 1,062,899(2) 7.2%
Barry Bookman............................................................................. 5,000 **
Michael D. Hoppman........................................................................ 30,916(3) **
Ira M. Lubert............................................................................. 272,500(4) 1.9%
Allan R. Lyons............................................................................ 246,500(5) 1.7%
Gerald B. Shreiber........................................................................ 105,000(6) **
John F. White............................................................................. 10,000 **
Richard C. Yancey......................................................................... 205,000(7) 1.4%
FIVE PERCENT SHAREHOLDERS
Carole Goldin*............................................................................ 1,274,500 8.0%
McCullough Andrews & Cappeillo, Inc.***
101 California Street, Suite 4250
San Francisco, CA 94111.................................................................. 1,192,000 8.1%
Technology Leaders II Offshore C.V. ("TLO II")
8000 The Safeguard Building
435 Dover Park Drive
Wayne, PA. 19087......................................................................... 1,487,472(8) 10.1%
Technology Leaders II L.P. ("TL II")
8000 The Safeguard Building
435 Dover Park Drive
Wayne, PA 19087 ......................................................................... 1,872,528(9) 12.7%
Technology Leaders II Management L.P.
8000 The Safeguard Building
435 Dover Park Drive
Wayne, PA 19087 ......................................................................... 3,360,000(10) 22.9%
All Directors and Officers as a Group (12 persons)........................................ 1,954,365(11) 13.3%
</TABLE>
- --------
* The address for each such person is c/o The Score Board, Inc., 1951 Old
Cuthbert Road, Cherry Hill, New Jersey 08034.
** Less than one percent.
*** Reflects information set forth on Forms 13F and 13G filed by the holder
with the Securities and Exchange Commission.
(1) The securities "beneficially owned" by a person are determined in
accordance with the definition of "beneficial ownership" set forth in the
regulations of the Securities and Exchange Commission and, accordingly,
may include securities owned by or for, among others, the spouse, children
or certain other relatives of such person as well as other securities as
to which the person has or shares voting or investment power or has the
right to acquire within sixty days after the date of these proxy
materials. The same shares may be beneficially owned by more than one
person. Beneficial ownership may be disclaimed as to certain of the
securities.
11
<PAGE>
(2) Includes 235,999 shares of Common Stock issuable upon exercise of
currently exercisable stock options.
(3) Includes 29,666 shares of Common Stock issuable upon exercise of currently
exercisable stock options.
(4) Includes 45,000 shares of Common Stock issuable upon exercise of
currently exercisable stock options. Mr. Lubert is one of the general
partners of Technology Leaders II Management L.P. (see note 10).
(5) Includes 165,000 shares of Common Stock issuable upon exercise of
currently exercisable stock options, and 73,500 shares which Mr. Lyons
has an option to purchase from a third party.
(6) Includes 105,000 shares of Common Stock issuable upon exercise of
currently exercisable stock options.
(7) Includes 165,000 shares of Common Stock issuable upon exercise of
currently exercisable stock options.
(8) Includes 956,230 shares of Common Stock issuable upon exercise of
currently exercisable warrants to purchase Common Stock.
(9) Includes 1,203,758 shares of Common Stock issuable upon exercise of
currently exercisable warrants to purchase Common Stock.
(10) Includes 2,159,988 shares of Common Stock issuable upon exercise of
currently exercisable warrants to purchase Common Stock. Technology
Leaders II Management L.P. ("TLM II") is the sole general partner of TL
II and co-general partner of TLO II. TL II and TLO II are venture capital
funds which are required by their governing documents to make all
investment, voting and disposition actions in tandem. TLM II has sole
authority and responsibility for all investment, voting and disposition
decisions for TL II and TLO II, which powers are exercised through its
eleven-person executive committee, by whose decisions the general partner
has agreed to be bound. As a result of TLM II's investment control over
all of the Company's Common Stock held by TL II and TLO II, TLM II may be
deemed to beneficially own all of the shares beneficially owned by TL II
and TLO II. TLM II disclaims beneficial ownership of all such shares
except to the extent of its proportionate pecuniary interest therein.
(11) Includes 760,890 shares of Common Stock issuable upon exercise of stock
options and 73,500 shares subject to Mr. Lyons' option (see note 6).
SECTION 16 BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the directors and certain officers of the Company, and persons who own more
than ten percent of the Company's Common Stock, to file with the Securities
and Exchange Commission initial reports of ownership and reports of changes in
ownership of such Common Stock. Such directors, officers and more than ten
percent shareholders are required by regulation to furnish the Company with
copies of all Section 16(a) reports which they file. Mr. Goldin did not timely
file a Form 5 reporting the cancellation of certain options in October 1996.
See "Ten-Year Option/SAR Repricings."
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In June 1994, the Company received proceeds of approximately $2,000,000 from
a key man life insurance policy on the life of Paul Goldin, the Company's
former Chairman of the Board, Chief Executive Officer and President. In
accordance with Mr. Goldin's employment agreement, the Company is required to
pay approximately $900,000 to Mr. Goldin's estate. During 1996, $220,000 was
paid, and the amount payable to Mr. Goldin's estate as of December 31, 1996
was $248,000.
On November 6, 1996, the Company issued 1,600,000 shares of its Common Stock
at $2.49 per share and warrants to acquire 2,720,000 shares of its Common
Stock at $3.07 per share to purchasers led by TL II and TLO II. TL II and TLO
II have the right to name a director of the Company pursuant to the related
securities purchase agreement, and have designated Ira M. Lubert as their
nominee. Effective as of October 17, 1997, and in consideration of TL II's and
TLO II's commitment to make certain loans to, or an equity investment in, the
Company, the Company agreed to amend the purchase price of the warrants from
$3.07 to $1.00.
12
<PAGE>
John F. White is Chairman of The Outsourcing Partnership, L..L.C.
("Outsourcing"), a firm specializing in the outsourcing of internal auditing,
due diligence and information technology. The Company currently utilizes
Outsourcing for its information technology and human resources functions.
Since December 1996, the Company has paid Outsourcing approximately $117,000
for these services. Mr. White does not receive any salary or other
remuneration for services from Outsourcing.
SHAREHOLDER PROPOSALS
Shareholder proposals for the 1998 Annual Meeting must be submitted to the
Company by March 31, 1998 to receive consideration for inclusion in the
Company's Proxy Statement.
INDEPENDENT PUBLIC ACCOUNTANTS
The accounting firm of Arthur Andersen LLP acted as the Company's
independent public accountants for the eleven-month period ended December 31,
1996 and has been selected by the Board of Directors to serve as the Company's
independent public accounts for the year ending December 31, 1997. A
representative of Arthur Andersen LLP is expected to be present at the Annual
Meeting and to have the opportunity to make a statement, if he desires to do
so, and is expected to be available to respond to appropriate questions.
On November 8, 1995, the Company dismissed BDO Seidman LLP ("BDO") as the
Company's independent public accountants and auditors, a capacity in which
that firm has served for several years, and selected Arthur Andersen LLP to
replace BDO in this role. The decision to change the Company's accountants and
auditors was approved by the Company's full Board of Directors.
During the fiscal years 1994 and 1995 and the subsequent period through
November 8, 1995, the date on which BDO was dismissed as the Company's
independent public accountants and auditors, there were no disagreements
between the Company and BDO on any matter relating to accounting principals or
practices, financial statement disclosure, or auditing scope or procedures,
which disagreements, if not resolved to BDO's satisfaction, would have caused
them to make reference in connection with their reports to the subject matter
of the disagreement. In addition, BDO's reports on the Company's financial
statements for fiscal years 1994 and 1995 contained no adverse opinions or
disclaimers of opinion, nor were such reports qualified as to uncertainty,
audit scope or accounting principles.
The Company authorized BDO to respond fully to the inquiries of Arthur
Andersen LLP. The Company also provided BDO with a copy of the disclosures
contained in the Form 8-K filed with the Securities and Exchange Commission on
November 15, 1995 in connection with BDO's dismissal, and BDO furnished the
Company with a letter addressed to the Securities and Exchange Commission
stating that it agreed with the statements made by the Company therein.
On November 10, 1995, the Company appointed the accounting firm of Arthur
Andersen LLP as the Company's independent public accountants and auditors.
FINANCIAL STATEMENTS
Consolidated financial statements of the Company and its subsidiaries are
contained in the Company's Annual Report on Form 10-K for the eleven month
period ended December 31, 1996, which is being delivered to you herewith.
13
<PAGE>
OTHER MATTERS
The Board of Directors is not currently aware of any other matter to be
transacted at the Annual Meeting. If, however, such other matters come before
the meeting, it is the intention of the persons named in the proxy to vote on
any such matters in accordance with the recommendation of the Board of
Directors.
Shareholders are urged to sign the enclosed proxy, which is solicited on
behalf of the Board of Directors, and return it in the enclosed envelope.
EACH PERSON SOLICITED HEREUNDER CAN OBTAIN AN ADDITIONAL COPY OF THE
COMPANY'S ANNUAL REPORT AND FORM 10-K, AS FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION, FOR THE ELEVEN MONTH PERIOD ENDED DECEMBER 31, 1996,
WITHOUT CHARGE BY SENDING WRITTEN REQUEST TO THE SCORE BOARD, INC., 1951 OLD
CUTHBERT ROAD, CHERRY HILL, NEW JERSEY 08034, ATTENTION PATRICK J. WUJCIK,
SECRETARY.
By Order of the Board of Directors
Patrick J. Wujcik
Secretary
14
<PAGE>
THE SCORE BOARD, INC.
ANNUAL MEETING OF SHAREHOLDERS
DECEMBER 10, 1997
The undersigned hereby appoints Allan R. Lyons and John F. White, with full
powers of substitution, to act as attorneys and proxies for the undersigned to
vote all shares of capital stock of The Score Board, Inc. (the "Company") that
the undersigned is entitled to vote at the Annual Meeting of Shareholders (the
"Meeting") to be held at The Mansion at Main Street, Plaza 3000, Kresson and
Evesham Roads, Voorhees, New Jersey 08043 on December 10, 1997 at 1:30 p.m. and
at any and all adjournments and postponements thereof.
1. The election as directors of all nominees listed below (except as marked to
the contrary)
[_] FOR [_] VOTE WITHHELD
INSTRUCTION: TO WITHHOLD YOUR VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A LINE
IN THAT NOMINEE'S NAME BELOW.
KENNETH GOLDIN GERALD B. SHREIBER IRA M. LUBERT
JOHN F. WHITE ALLAN R. LYONS RICHARD C. YANCEY
In their discretion, the proxies are authorized to vote on any other business
that may properly come before the Meeting or any adjournment or postponement
thereof.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE SPECIFIED,
THIS PROXY WILL BE VOTED FOR EACH OF THE NOMINEES LISTED ABOVE. IF ANY OTHER
BUSINESS IS PRESENTED AT THE MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED
IN THIS PROXY IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF
DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE NOMINEE
LISTED ABOVE.
(Continued and to be SIGNED on Reverse Side)
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Should the undersigned be present and choose to vote at the Meeting or at any
adjournments or postponements thereof, and after notification to the Company's
Secretary at the Meeting of the shareholder's decision to terminate this proxy,
then the power of such attorneys or proxies shall be deemed terminated and of
no further force and effect. This proxy may also be revoked by filing a written
notice of revocation with the Secretary of the Company or by duly executing a
proxy bearing a later date.
The undersigned acknowledges receipt from the Company, prior to the execution
of this proxy, of notice of the Meeting, a Proxy Statement and an Annual Report
to Shareholders.
Dated: __________________________ , 1997
(Please date this Proxy)
----------------------------------------
Signature of Shareholder
----------------------------------------
Signature of Shareholder
Please sign exactly as your name(s)
appear(s) to the left. When signing as
attorney, executor, administrator,
trustee or guardian, please give your
full title. If shares are held jointly,
each holder should sign.
<PAGE>
THE SCORE BOARD, INC.
1951 OLD CUTHBERT ROAD
CHERRY HILL, NEW JERSEY 08034
----------------
SUPPLEMENT TO PROXY STATEMENT
----------------
TO OUR SHAREHOLDERS:
On November 14, 1997, The Score Board, Inc. (the "Company") announced that
Kenneth Goldin, Chairman of the Board and Chief Executive Officer, had given
the Company notice of his intention to resign as Chief Executive Officer. The
last day of his employment has not yet been determined, but is expected to be
on or before February 19, 1998.
Mr. Goldin will continue to serve the Company as its Chairman and will stand
for election as a director at the Company's Annual Meeting of Shareholders on
December 10, 1997. See "Election of Directors" beginning on page 2 of the
enclosed Proxy Statement.
By Order of the Board of Directors,
Patrick J Wujcik,
Secretary
November 14, 1997
