INDE
INDENET, INC.
(Formerly INDEPENDENT TELEMEDIA GROUP, INC.)
1640 North Gower Street
Los Angeles, California 90028
______________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
______________________________
Notice is hereby given that an Annual Meeting of
Stockholders of IndeNet, Inc. ("INDE") will be held on September
16, 1996, at 3:00 p.m., Pacific Time, at the Charles Aidikoff
Screening Room, 150 South Rodeo Drive, Beverly Hills, California
90212, to consider and vote on the following matters:
1. The election of Directors.
2. Ratification of the retention of BDO Seidman as
independent auditors.
3. The transaction of such other business as may properly
come before the meeting or at any adjournment or
adjournments thereof.
Said meeting may be adjourned from time to time without
notice other than by announcement at said meeting, or at any
adjournment thereof, and any and all business for which said
meeting is hereby noticed may be transacted at any such
adjournment.
Only holders of the Company's $.001 par value common stock
of record at the close of business on August 16, 1996, will be
entitled to notice of and to vote at the meeting and at any
adjournment or adjournments thereof.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Robert W. Lautz, Jr.
Robert W. Lautz, Jr., Chief
Executive Officer
Los Angeles, California
July 24, 1996<PAGE>
INDE
INDENET, INC.
(Formerly INDEPENDENT TELEMEDIA GROUP, INC.)
1640 North Gower Street
Los Angeles, California 90028
______________________________
PROXY STATEMENT
_______________________________
Annual Meeting of Stockholders
September 16, 1996
INTRODUCTION
This Proxy Statement will be first sent or given to
stockholders on or about August 17, 1996, in connection with the
Annual Meeting of Stockholders to be held at the Charles Aidikoff
Screening Room, 150 South Rodeo Drive, Beverly Hills, California
90212, on September 16, 1996, at 3:00 p.m., Pacific Time (the
"Annual Meeting"). The purpose of the Annual Meeting is stated
in the Notice of Annual Meeting.
The securities entitled to vote at the Annual Meeting
consist of all of the issued and outstanding shares of the
Company's $.001 par value common stock (the "Common Stock"). The
close of business on August 16, 1996, has been fixed by the Board
of Directors of the Company as the record date. Only
stockholders of record as of the record date may vote at the
Annual Meeting. As of the record date, there were
shares of Common Stock issued and outstanding.
Each stockholder of record as of the record date will be
entitled to one vote for each share of Common Stock held as of
the record date. Cumulative voting is not permitted. The
presence at the Annual Meeting of the holders of an amount of
shares of Common Stock and proxies representing the right to vote
shares of Common Stock of a majority of the number of shares of
the Common Stock outstanding as of the record date will
constitute a quorum for transacting business. The affirmative
vote of the holders of a majority of the outstanding Common Stock
will be required to approve each of the matters which will come
before the meeting. The Board of Directors recommends a vote in
favor of each of the proposed actions to be taken.
DELIVERY OF ANNUAL REPORT
The Company's Annual Report is being delivered to all
stockholders along with this Proxy Statement and Notice of Annual
Meeting. Additional copies may be obtained by stockholders
without charge by calling the Company at (213) 466-6388. Upon
written request, the Company will provide, without charge, a copy
of its annual report on Form 10-KSB, including financial
statements and schedules thereto, for the fiscal year ended March
31, 1996, to each record or beneficial owner of its common stock
on the record date. Such request should be directed to the
Company at 1640 North Gower Street, Los Angeles, California
90028, Attention: Richard J. Parent.
VOTING SECURITIES AND
PRINCIPAL HOLDERS THEREOF
The following table sets forth, as of the date of this Proxy
Statement, the Common Stock ownership of each person known by the
Company to be the beneficial owner of five percent or more of the
Company's Common Stock, all Directors individually, each
executive officer and all Directors and executive officers of the
Company as a group. Except as noted, each person has sole voting
and investment power, as well as record and beneficial ownership,
with respect to the shares shown.
As of the date of this Proxy Statement, there were
15,341,725 shares of Common Stock issued and outstanding. The
following shares include shares underlying certain options
previously granted, although such options have not been exercised
(see footnote 1 below).
Common Amount of
Stock Total
Common Underly- Bene-
Name and Stock ing Exer- ficial
Address of Currently cisable Owner- Percent of
Beneficial Owner Owned Options ship Class (1)
Robert W. Lautz, 713,505 -0- 713,505 4.7%
Jr.
1640 N. Gower St.
Los Angeles CA
90028
Thomas H. Baur 1,587,030 100,000 1,687,030 11%
110 W. Hubbard St.
Chicago IL 60610
Robert E. Derham 29,940 135,000 164,940 1.1%
110 W. Hubbard St.
Chicago IL 60610
Cary S. Fitchey 94,640 25,000 119,640 0.8%
1640 N. Gower St.
Los Angeles CA
90028
William A. Kunkel 41,633 25,000 66,633 0.4%
554 Valley Road
New Canaan CT 06940
Andre A. Blay 188,195 45,833 234,028 1.5%
40300 Fairway 3 Dr.
Northville MI 48167
William D. Killion 1,530,000 -0- 1,530,000 10%
1640 N. Gower St.
Los Angeles CA
90028
Graeme R. Jenner -0- -0- -0- 0%
Richard L. Schleufer -0- -0- -0- 0%
Lewis K.
Eisaguirre(2) 71,724 -0- 71,724 0.5%
1640 N. Gower St.
Los Angeles CA 90028
All Directors and 4,256,667 330,833 4,587,500 29%
Officers as a
Group (Ten Persons)
(1) Rule 13d-3 under the Securities Exchange Act of 1934,
involving the determination of beneficial owners of
securities, includes as beneficial owners of securities,
among others, any person who directly or indirectly, through
any contract, arrangement, understanding, relationship or
otherwise has or shares voting power and/or investment power
with respect to such securities; and, any person who has the
right to acquire beneficial ownership of such security
within sixty days through means, including, but not limited
to, the exercise of any option, warrant, right or conversion
of a security. Any securities not outstanding which are
subject to such options, warrants, rights or conversion
privileges shall be deemed to be outstanding for the
purposed of computing the percentage of outstanding
securities of the class owned by such person, but shall not
be deemed to be outstanding for the purpose of computing the
percentage of the class by any other person.
(2) Mr. Eisaguirre resigned as an officer and a Director
effective March 15, 1996.
The following arrangements or understandings among members
of both the former and new control groups and their associates
with respect to election of Directors or other matters are in
effect. Mr. Baur has the right to appoint a nominee to be
included on the Management's slate of proposed Directors for the
next two (2) years. Messrs. Killion and Blay are permitted to
nominate Directors pursuant to voting rights agreements in place
with certain Directors of the Company. The former stockholders
of Enterprise Systems Group Limited ("Enterprise"), which was
acquired by the Company in May 1996, have the right to nominate
two Directors to the Board of Directors, which was expanded to up
to nine persons as a result of the Enterprise purchase agreement.
Messrs. Baur, Killion, Jenner and Schleufer have been nominated
pursuant to the foregoing agreements.
There are no contractual arrangements or pledges of the
Company's securities, known to the Company, which may at a
subsequent date result in a change of control of the Company.
DIRECTORS AND EXECUTIVE OFFICERS
The following eight individuals have been nominated by the
Board of Directors for election as Directors of the Company:
Robert W. Lautz, Jr.
Thomas H. Baur
William A. Kunkel
Cary S. Fitchey
Andre A. Blay
William D. Killion
Graeme R. Jenner
Richard L. Schleufer
The following table sets forth all Directors, executive
officers and nominees as of the date of this Information
Statement:
Name Age Position with the Company
Robert W. Lautz, Jr. 48 Chairman, Chief Executive
Officer and Director
Thomas H. Baur 50 Chief Executive Officer and
Chairman of Mediatech, and
Director
William A. Kunkel 43 Director and Member of the
Compensation and Audit
Committees
Cary S. Fitchey 43 Director and Member of Compen-
sation and Audit Committees
Andre A. Blay 58 Director
William D. Killion 64 Director
Graeme R. Jenner 44 Chief Operating Officer and
Director
Richard L. Schleufer 46 Director
Richard J. Parent 37 Chief Financial Officer and
Secretary
All Directors hold office until after the next annual meeting
of the Company's stockholders when their successors are elected
and qualified. The officers are elected by the Board of
Directors at the first meeting after each annual meeting of the
Company's stockholders and hold office until their successors are
duly elected and qualified or otherwise in accordance with the
By-laws of the Company.
No Director or executive officer is related to any other
Director or executive officer. None of the Company's officers,
Directors or nominees hold any Directorships in any other Company
with a class of securities registered pursuant to Section 12 of
the Exchange Act or subject to the requirements of Section 15(d)
of such Act or any Company registered as an investment Company
under the Investment Company Act of 1940, as amended. The
Company has no standing nominating committees of the Board of
Directors, or committees performing similar functions; however,
effective December 14, 1992 and June 17, 1993 respectively, the
Company empaneled compensation and audit committees. The audit
committee is made up of Robert W. Lautz, Jr., Cary S. Fitchey,
and William A. Kunkel. For the purposes of the Company's 1992
Stock Option Plan, as amended (the "Plan"), Cary S. Fitchey and
William A. Kunkel are the "Disinterested Persons" who administer
the Plan. The function of the compensation committee is to
report to the Board of Directors relative to executive
compensation issues when such issues arise. The function of the
Disinterested Persons under the Plan is to award options in their
discretion pursuant to the Plan. The compensation committee has
met two times during the last fiscal year.
During the Company's most recent fiscal year the Board of
Directors met a total of 21 times (including regularly scheduled
and special meetings). No member attended less than 75% of the
aggregate of such meetings during his incumbency. No Director
has resigned or declined to stand for re-election to the Board of
Directors since the date of the last annual meeting of the
Company's stockholders because of a disagreement with the Company
on any matter relating to the Company's operations, policies or
practices.
Robert W. Lautz, Jr. has been President since May 11, 1993
and Chief Executive Officer and a member of the Board of
Directors of the Company since May 9, 1991 and has served as a
Chief Executive Officer and was a member of the Board of
Directors of Coral, Inc. from July of 1990 until it was acquired
by INDE in May 1991. Mr. Lautz spent seven years with Citibank
N.A. in New York holding various senior management positions
within the Operations Group including Senior Financial Officer,
head of Strategic Planning and head of Acquisitions and Venture
Capital. He subsequently purchased various other computer
service, database and manufacturing concerns that required
financial and managerial assistance and resold the businesses to
multinational corporations and investment banking concerns.
Immediately prior to joining the Company, Mr. Lautz operated his
own Small Business Investment Company (SBIC licensed by the SBA)
specializing in venture investments. Mr. Lautz was awarded the
degree Bachelor of Science in business in 1970 from the Miami
University of Ohio, and was also awarded the degree of Masters in
International Management from the American Graduate School of
International Management.
Thomas H. Baur has been a Director of the Company since March
17, 1995, and the Chairman and Chief Executive Officer of
Mediatech, Inc., now a subsidiary of the Company ("Mediatech")
since 1975. Mr. Baur began his media career on the sales force
of Channel 44, a Chicago television station. He was the Sales
Manager for Cinema Processors, a Chicago post-production Company,
from 1972 to 1973, and from 1973 to 1975 formed and owned Tanski
& Baur wherein he represented nine production and post-production
companies. Mr. Baur founded Mediatech in 1975. Mr. Baur is also
the Chairman and largest stockholder of Travel Technology Group,
a private corporate travel management Company. Mr. Baur is a
member of the Board of Directors of the Chicago Museum of
Broadcast Communication, was a founder of the International
Television Association, the Chicago Coalition, and received the
Arthur Andersen & Co. small business award for excellence in
1989. Mr. Baur also received the Alumnus of the Year Award from
Southern Illinois University in 1990. Mr. Baur received a
Bachelors Degree in Business and Mass Communications from
Southern Illinois University in 1970.
Robert E. Derham has been the Executive Vice President and
Managing Director of Mediatech since 1983. Mr. Derham was
certified as a Certified Public Accountant in 1975, while
employed by Arthur Young & Co. In 1975, Mr. Derham joined the
McDonalds Corporation as the Regional Controller where he
remained for seven years in increasingly responsible capacities
in Boston, Sidney Australia, Atlanta, Los Angeles, and at the
world headquarters in Oakbrook, Illinois. In 1978, Mr. Derham
was chosen as one of 25 Company wide employees to be awarded the
President's Award for outstanding contributions to McDonalds
Corporation. Mr. Derham joined Mediatech after leaving McDonalds
Corporation in 1981. Mr. Derham also holds the position of
Managing Director of Travel Technology Group. Mr. Derham
graduated from Loyola University in Chicago, Illinois in 1971
with a B.S. degree in Accounting after serving four years in the
United States Marine Corps.
Andre A. Blay has been a member of the Board of Directors of
the Company since February 1996, as a result of the acquisition
of Starcom Television Services, Inc. ("Starcom"). Mr. Blay is
also currently a major investor and Director of Media Station, a
multimedia Company based in Ann Arbor, Michigan, serves on the
board of Directors of Geppetos Workshop, a privately-held
software Company and is an advisor to the Enterprise Development
Fund and Michigan State University Foundation. Mr. Blay founded
Magnetic Video Corp., the world's first pre-recorded video
cassette Company in 1969, which was acquired by Twentieth Century
Fox in 1979. He also founded the Blay Corp. in 1981 with offices
in Detroit and London. The Blay Corp. was subsequently acquired
by Coca-Cola. Mr. Blay has also produced motion pictures for
Universal, Columbia and Paramount. In 1990, Mr. Blay acquired a
major interest in Avalon Communications, a cable programming
Company which was subsequently sold to BET Holdings, a New York
Stock Exchange cable Company. Mr. Blay attended Michigan State
University from which he received a B.A. in 1959 and an M.B.A. in
1970.
William D. Killion has been a Director of the Company since
November 1995 as a result of the acquisition by the Company of a
majority interest in Channelmatic, Inc. ("Channelmatic"), which
was founded by Mr. Killion in 1976 from which time Mr. Killion
was sole stockholder and chief executive officer. Mr. Killion
also serves as chairman of the board of the Channelmatic
subsidiary from his offices in Alpine, California.
Cary S. Fitchey has been a member of the Board of Directors
of the Company since December 1991. Mr. Fitchey was the Chief
Executive Officer of Coral, Inc., the predecessor to the Company,
from January 1990 until July 1990. Mr. Fitchey serves on the
Compensation and Audit Committees of the Board. Mr. Fitchey is
currently a Partner of Dartford Partners, a private investment
partnership. Mr. Fitchey was previously Managing Director of
Triad Partners, Ltd., a consulting and investment Company he
founded in 1985 to provide services to clients in the areas of
strategic management, acquisitions, divestitures and
restructurings. From 1983 to 1985 Mr. Fitchey was the Vice
President of Business Planning for PepsiCo, Inc. In addition to
these activities, Mr. Fitchey was a partner with the
international management consulting firms of Strategic Planning
Associates and A.T. Kearney. Mr. Fitchey received his B.S.
degree from Purdue University in 1974, and a MBA with honors from
The University of Michigan in 1976.
William A. Kunkel has been a Director of INDE since April
1995. Mr. Kunkel is the Executive Vice President and a Partner
of Maxam Entertainment, a New York City syndicator of television
and other broadcast media. From 1990 to 1994, Mr. Kunkel was
Senior Vice President and General Manager of Hearst Entertainment
Distribution, also engaged in the worldwide sales of syndicated
television properties where Mr. Kunkel managed all facets of the
business including all sales and marketing activities,
advertising and finance. From 1986 to 1990, Mr. Kunkel was
President of domestic distribution for Tri-Star Pictures, Inc.
for whom his duties included the development and management of
the television distribution division for Tri-Star Pictures. Mr.
Kunkel held a variety of positions in the television syndication
and distribution industry commencing in 1978. During this period
of time, he was General Sales Manager for Metro-Goldwyn Mayer,
United Artists Entertainment and President of Marketing and Sales
for Tribune Entertainment/Tribune Company. Mr. Kunkel received
his Bachelors Degree in 1974 from Indiana University.
Graeme R. Jenner was the Chief Executive Officer of
Enterprise from 1987 until June 1996, at which time he was
appointed as the Chief Operating Officer of the Company. From
1978 until his appointment as the Chief Executive Officer of
Enterprise, Mr. Jenner was employed by Enterprise in various
capacities, including General Manager and the managing Director
of Enterprise's UK-based software companies.
Richard L. Schleufer was the President and Chief Executive
Officer of Enterprise Systems Group, Inc., the North American
subsidiary of Enterprise, from 1987 until June 1996, at which
time he was appointed as the Chief Executive Officer of
Enterprise. Mr. Schleufer joined Enterprise Systems Group, Inc.
in 1986 as its Vice President of Finance and Administration. Mr.
Schleufer received his bachelor's degree in Business Management
and Accounting from the University of Colorado in 1975, and has
been a certified public accountant in Colorado since 1976.
Richard J. Parent has been an employee of the Company since
1993 and the Secretary and Chief Financial Officer of the Company
since May 1996. Prior to joining the Company, Mr. Parent was an
audit manager at BDO Seidman in Los Angeles, California from 1990
to 1993. Mr. Parent received his bachelor's degree from the
University of South California in 1982 and was certified as a
public accountant in California in 1988.
Certain Relationships and Related Transactions
On December 14, 1992, the Company implemented the Plan as a
Section 16 qualified employee stock option plan. The purpose of
the Plan, as amended, is to further the success of the Company by
making Common Stock available for purchase by employees and
directors and to provide an incentive to such individuals. An
aggregate of 1,000,000 shares of Common Stock was reserved by the
Board of Directors for issuance under the Plan which was approved
at the annual meeting held in July 1993. As of March 31, 1996,
options to issue up to 1,676,459 shares were outstanding under
the Plan. Since March 31, 1995, options were exercised in a
manner which resulted a net of 342,695 shares remaining available
under the Plan. Because of recent changes in the regulations
promulgated under Section 16 of the Securities Exchange Act of
1934, the Board of Directors intends to terminate the Plan and
replace it with a more flexible plan providing for benefits
comparable to those under the Plan to employees, directors and
outside consultants.
During December 1991, the Board of Directors adopted a plan
that allows for bonus compensation of up to 15% of the Company's
net income to be distributed in cash to its key executives and
employees. This bonus compensation is to be awarded at the
discretion of the Board of Directors. No bonus compensation
expense was charged to operations for either fiscal years 1994 or
1993. Bonuses totalling $90,000 were granted during 1995,
however these grants were not within this plan.
On February 3, 1995, the Company acquired 96.33% of the
issued and outstanding capital stock of Mediatech from Thomas H.
Baur for an aggregate consideration of approximately $8,700,000.
At the time of the acquisition, Mr. Baur was not affiliated with
the Company. In connection with the acquisition, Mr. Baur was
elected as a Director of the Company and was hired to be the
President and Chief Executive Officer of Mediatech. See
"Management -- Employment Agreement," and "Management -- Voting
Arrangements." The purchase price paid by the Company consisted
of 866,970 shares of Common Stock, $2,889,900 in cash, and an
unsecured promissory note (the "Baur Note"), the principal amount
of which was subject to adjustment based on the average trading
price of the Common Stock during a specified 60-day trading
period. After the required adjustments, the principal balance of
the Baur Note was reduced to $4,332,000. At the time of the
acquisition, Mediatech had approximately $3,900,000 of
indebtedness outstanding to its primary bank, the repayment of
which indebtedness was guaranteed by Mr. Baur. In addition to
the payment of the purchase price, the Company also agreed to
cause Mr. Baur to be released from the personal guaranty of
Mediatech's indebtedness. Mr. Baur's guarantees of Mediatech's
bank indebtedness were released on February 1, 1996.
On June 30, 1995, Mr. Baur converted $2,250,000 of the
principal amount of the Baur Note into 750,000 shares of Common
Stock at a value of $3.00 per share. The closing price of the
Common Stock on the date of conversion was $2.50 per share.
Mediatech currently leases certain of its office and
warehouse facilities from companies that are owned, wholly or in
part, by Mr. Baur. During the fiscal years ended December 31,
1994 and March 31, 1996, Mediatech paid $955,000 and $868,000,
respectively, to these leasing companies that are affiliated with
Mr. Baur.
Lewis K. Eisaguirre was the Chief Financial Officer of the
Company from March 1990 until May 1996. Mr. Eisaguirre also was
a Director of the Company from May 1993 through May 1996. Upon
his resignation from all of the positions he held with the
Company in May 1996, the Company entered into a consulting
agreement with Mr. Eisaguirre pursuant to which Mr. Eisaguirre
has agreed to provide consulting services to the Company in
connection with the Company's proposed acquisitions for a
consulting fee of $10,000 per month on a month-to-month basis.
In November 1995, the Company acquired its 66.67% interest in
Channelmatic from a Company owned and controlled by Mr. William
Killion. At the time of the acquisition, Mr. Killion was not
affiliated with the Company. The purchase price paid by the
Company consisted of a $5,602,500 secured, five-year promissory
note, and 1,530,000 shares of Common Stock. In addition, in
connection with the acquisition, Channelmatic entered into an
employment agreement with Mr. Killion pursuant to which
Channelmatic is obligated to pay Mr. Killion $90,000 per year.
Channelmatic currently leases two of its facilities from Mr.
and Mrs. Killion. Pursuant to the leases for these facilities,
Channelmatic is obligated to pay Mr. and Mrs. Killion lease
payments of $78,000 per year through February 2000.
The Company acquired Starcom in January 1996 from certain
unaffiliated stockholders, including the Andre A. Blay Trust, a
trust affiliated with Mr. Blay. In connection with the
acquisition, the Company issued a total of 188,195 shares of
Common Stock to Andrew Blay and the Andre A. Blay Trust.
The Company acquired all of the capital shares of Enterprise
in May 1996 from the unaffiliated stockholders of Enterprise,
including Mr. Graeme R. Jenner and Mr. Richard Schleufer. The
amount of consideration paid to Mr. Jenner for his shares in
Enterprise consisted of cash in the amount of $276,224, a
$142,500 promissory note and 353,010 shares of Common Stock. The
amount of consideration paid to Mr. Schleufer for his shares in
Enterprise consisted of cash in the amount of $206,283, a
$106,456 promissory note and 263,627 shares of Common Stock. In
addition, in connecting with the acquisition of Enterprise, the
Company also entered into three-year employment agreements with
each of Mr. Jenner and Mr. Schleufer, pursuant to which
agreements the Company has agreed to pay Mr. Jenner and Mr.
Schleufer salaries of at least $150,000 and $160,000 per year,
respectively.
Enterprise obtained marketing services from Thames Business
Services until April 30, 1996 when the arrangement expired. Mr.
Graeme Jenner owns a controlling interest in, and is the Managing
Director of, Thames Business Services. Enterprise paid Thames
Business Services $51,250 and $58,750 in 1994 and 1995,
respectively.
Voting Arrangements
In connection with the acquisition of Mediatech in February
1995, the Company agreed to appoint Mr. Baur or a nominee of Mr.
Baur to the Board of Directors and to nominate Mr. Baur or his
nominee at any election of Directors held during the three-year
period following the acquisition.
In connection with the acquisition of the Company's interest
in Channelmatic, certain persons who were, at that time,
Directors of the Company entered into a voting agreement with
Killer Barn, Inc., a California corporation formerly known as
Channelmatic, Inc., pursuant to which the parties to that
agreement agreed to vote all of the shares of Common Stock at all
stockholder's meetings in favor of the election of William D.
Killion or a designee of Mr. Killion, as a Director. The voting
agreement will remain in effect until the earlier of the
termination of the employment agreement, dated November 27, 1995,
between Channelmatic and Mr. Killion or the death of Mr. Killion.
In connection with the Company's acquisition of Starcom,
certain persons who were then Directors of the Company entered
into a voting agreement with Andre A. Blay, Trustee for the Andre
A. Blay Trust, pursuant to which all parties to that agreement
agreed to vote all shares of Common Stock owned by them in favor
of the election of Mr. Blay or a person designated by Mr. Blay,
as a Director. Mr. Blay is entitled to designate any nominee for
the election of Director provided that such designee is
knowledgeable about the industry which the Company competes and
is otherwise reasonably acceptable by a majority of the parties
to the voting agreement. The voting agreement shall remain in
effect until the earlier of the death of Mr. Blay or February 7,
1999. In addition, Mr. Blay may terminate the agreement at any
time.
The Share Purchase Agreement dated May 24, 1996, pursuant to
which the Company acquired all of the issued and outstanding
shares of capital stock of Enterprise, provides that the former
stockholders of Enterprise are entitled to designate two members
to the Board of Directors and that the Company shall be required
to nominate for the election to the Board of Directors, at each
of the next two annual stockholder's meetings, the nominees of
the former Enterprise stockholders. The designees appointed by
the former Enterprise stockholders must be qualified and
acceptable to the Board of Directors, which acceptance may not be
unreasonably withheld. Mr. Jenner and Mr. Schleufer are the
initial designees of the Enterprise stockholders.
Compliance with Section 16(a) of the Exchange Act
Based on review of Forms 3, 4 and 5, and amendments thereto,
the Company is not aware of any person who, was an officer,
Director or 10% or greater holder (or any other person subject to
Section 16) and failed to file on a timely basis the reports
required by Section 16(a) during the most recent fiscal year or
prior fiscal years.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Summary Compensation Table
Long Term
Annual Compensation Compensation
(a) (b) (c) (d) (f) (g) (i)
All
Restricted Other
Name and Stock Compen-
Principal Awards sation
Position Year Salary($) Bonus($) (3)(4) Options ($)
Robert W. 1996(1)$160,000 $60,000 --- 335,000 $9,000(2)
Lautz, 1994 90,000 $ --- --- 232,000 $9,000(2)
Jr., 1993 180,000 $ --- 50,000(5) 50,000 $9,000(2)
Chief
Executive
Officer,
Director
Lewis K.
Eisaguirre,
Former
Chief
Financial 1996 $127,000 $30,000 6,000(3) 265,000 $9,000(2)
and 1994 90,000 $ --- --- 164,000 $9,000(2)
Account- 1993 120,000 $ --- --- --- $9,000(2)
ing
Officer,
Secretary,
Director
Thomas A. 1996 $125,000 $ --- --- 100,000 $6,000(2)
Baur
Chief
Executive
Officer of
Mediatech
and
Director
Robert E. 1996 $125,000 $ --- --- 135,000 $6,000(2)
Derham,
Managing
Director
of
Mediatech
(1) Annualized - during 1996 the Company changed its fiscal year
end to March 31 and the transitional year therefore had 15
months.
(2) Automobile allowance.
(3) Outright stock grant in lieu of salary.
(4) Shares awarded will receive dividends on the same conditions
as all other shares in the same class.
(5) In May 1993, the entire Board of Directors and the
Compensation Committee approved the grant of 50,000 shares to
retain the services of Mr. Lautz.
Option Grants in Last Fiscal Year
Individual Grants
(a) (b) (c) (d) (e)
Percentage Of
Total Options
Granted to Exercise or Expi-
Options Employees in Base Price ration
Name Granted (#) Fiscal Year ($/Share) Date
Robert W. 335,000 22% 200,000 @ 2/21/98
Lautz, $ 1.38/Sh.
Jr., Chief 135,000 @ 12/31/00
Executive $ 3.25/Sh. or 1 yr.
Officer following
termina-
tion,
whichever
is earlier
Lewis K. 265,000 17% 130,000 @ 2/21/98
Eisaguirre, $ 1.38/Sh.
Chief 135,000 @ 12/31/00
Financial and $ 3.25/Sh. or 1 yr.
Accounting following
Officer, termina-
Secretary tion,
whichever
is earlier
(1) This includes options issued over a 15-month year during the
transitional year and would normally have been issued during
two fiscal years.
Aggregated Option Exercises in Last Fiscal Year
(15 months) and Fiscal Year End Option Values
(a) (b) (c) (d) (e)
Value of
Number of Un- Unexercised
exercised In-the-Money
Options at Options at
Fiscal Fiscal
Year Year
End (#) End ($)
Exer- Exer-
Shares cisable cisable
Acquired on Value /Unexer- /Unexer-
Name Exercise (#) Realized ($) cisable cisable
Robert W. 314,366 $1,040,396 200,000 $550,000
Lautz, Jr.,
Chief
Executive
Officer
Lewis K. 277,478 1,162,276 130,000 357,500
Eisaguirre,
Chief
Financial
and Accoun-
ting Officer,
Secretary
Employment Agreements
Robert W. Lautz, Jr. has entered into a three-year employment
agreement with the Company pursuant to which he serves as
President and Chief Executive Officer for a term ending on March
31, 1998. The terms of this agreement were amended by Board
resolution on December 29, 1995. Pursuant to the amended terms,
the annual base salary of Mr. Lautz is $190,000 and he is
entitled to receive an annual discretionary bonus consisting of
up to 60% of such amount each year plus stock options of up to
200,000 shares at an exercise price equal to the market price on
the date of the grant. At the beginning of the second year, the
Executive Compensation Committee of the Board of Directors is
required to increase Mr. Lautz's base salary by between 5% and
20%, and at the beginning of the third year, the Executive
Compensation Committee of the Board of Directors is required to
increase Mr. Lautz's salary by between 5% and 20%, using his
second-year salary as the base. Mr. Lautz will participate in
the Company's executive profit sharing plan, whereby the Board of
Directors or a committee so designated by them has the authority
to grant Mr. Lautz additional compensation in an amount not to
exceed $37,500. Upon his execution of the employment agreement,
Mr. Lautz was granted immediately vested options to purchase
135,000 shares of Common Stock at the exercise price of $1.375.
The employment agreement may be terminated at any time without
cause by the Company upon 30 days written notice. In the event
of such termination, the Company shall be obligated to pay Mr.
Lautz a severance allowance equal to one year of service at the
then effective rate plus any bonus to which he is entitled. In
the event of a termination during the first two years of his
three-year term, Mr. Lautz shall also be entitled to the $45,000
of compensation due him under a previous employment agreement,
all of which he forgave upon entering the current employment
agreement.
In connection with the acquisition of Mediatech, the Company
entered into an employment agreement with Thomas H. Baur pursuant
to which Mr. Baur agreed to serve as the President and Chief
Executive Officer of Mediatech until December 31, 1998. Pursuant
to the employment agreement, Mr. Baur is entitled to receive an
annual base salary of $125,000 and is entitled to an annual cash
bonus, payable in the sole discretion of the Company's Board of
Directors, of up to $50,000 per year. This agreement was amended
April 1, 1996 to reduce Mr. Baur's annual salary to $50,000 and
to extend the expiration date until March 31, 1999. Mr. Baur is
entitled to a severance allowance in the amount of one year's
salary if the employment agreement is terminated by the Company
without cause.
In connection with the acquisition of the Company's interest
in Channelmatic (i) the Company entered into a five-year option
to acquire the remaining one-third interest in Channelmatic's
outstanding capital stock and (ii) Channelmatic entered into an
employment agreement with William D. Killion. Pursuant to the
employment agreement, Mr. Killion agreed to act as the Chairman
of the Board of Directors of Channelmatic and as an advisor of
Channelmatic. The employment agreement may be terminated (i) by
the Company upon 30 days written notice if the Company has
exercised in full its option to buy the remaining one-third
interest in Channelmatic's capital stock, (ii) upon Mr. Killion's
death, or (iii) by Mr. Killion at any time by giving 30 days
written notice to the Company. Pursuant to the employment
agreement, Mr. Killion is entitled to an annual salary of
$90,000. In the event that the employment agreement is still in
effect after November 30, 2000, the annual salary payable to Mr.
Killion shall thereafter increase, until the agreement is
terminated, to $200,000.
In connection with the acquisition of Enterprise, the Company
entered into an employment agreement with Graeme R. Jenner
pursuant to which Mr. Jenner has agreed to act as the Chief
Executive Officer of Enterprise. The employment agreement has an
initial term of three years, which initial term shall be
automatically extended for successive one-year periods thereafter
until terminated by either party. Mr. Jenner's salary during the
first year of the employment agreement shall be [f150,000] and
his base compensation during the second and third year shall be
increased by an amount equal to 5% to 20% annually, the exact
amount to be established by the Board of Directors. Mr. Jenner
shall also be entitled to participate in the Company's Executive
Profit Sharing Plan, with Mr. Jenner's share to be up to
[f37,500]. The employment agreement may be terminated at any
time without cause by the Company upon 30 days written notice.
In the event of such termination, the Company shall be obligated
to pay Mr. Jenner a severance allowance equal to one-year's
salary plus any bonus due for such period. In connection with
his employment by the Company, Mr. Jenner was granted an option
to purchase 125,000 shares at a price of $6.37 per share, which
price was equal to the closing sales price of the Common Stock on
Nasdaq on the date of grant. The option may be exercisable at
any time through March 23, 1999.
In connection with the acquisition of Enterprise, the Company
entered into an employment agreement with Richard L. Schleufer
pursuant to which the Company employed Mr. Schleufer as the
President and Chief Executive Officer of Enterprise Systems
Group, Inc., the North American subsidiary of Enterprise. The
employment agreement has a term of three years, which term shall
automatically be extended for successive one-year periods unless
terminated by either the Company or Mr. Schleufer. During the
first year of the employment agreement, Mr. Schleufer's salary is
$160,000 per year. During the second and third years of the
employment agreement, Mr. Schleufer's base compensation shall be
increased by between 5% and 20% annually, the exact amount to be
determined by the Board of Directors of the Company. Mr.
Schleufer also shall be permitted to participate in the Company's
Executive Profit Sharing Plan, and is entitled to additional
compensation thereunder in an amount up to $80,000 plus 5% of
"over-target" profits of Enterprise Systems Group, Inc. The
employment agreement may be terminated by the Company at any time
upon 30 days' written notice, provided that Mr. Schleufer shall,
upon such termination, be entitled to a severance allowance equal
to 12 months' salary, plus any bonus due for such period. In
connection with his employment by the Company, Mr. Schleufer was
granted an option to purchase 75,000 shares at a price of $6.37
per share, which price was equal to the closing sales price of
the Common Stock on Nasdaq on the date of grant. The option may
be exercisable at any time through March 23, 1999.
INDEPENDENT PUBLIC ACCOUNTANTS
Being proposed for ratification by stockholder vote is the
retention of the accounting firm of BDO Seidman, the Company's
present independent auditor since approximately September 1991.
A representative of BDO Seidman is expected to be present at the
Annual Meeting and is expected to have the opportunity to make a
statement and be available to answer questions.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the
1997 Annual Meeting of stockholders must be received by the
Company on or before May 6, 1997 in order to be eligible for
inclusion in the Company's proxy-related material. To be so
included, a proposal must also comply with all applicable
provisions of Rule 14a-8 under the Securities Exchange Act of
1934.
OTHER BUSINESS
As of the date of this Proxy Statement, Management of the
Company was not aware of any other matter to be presented at the
Annual Meeting other than as set forth herein. A majority vote
of the shares outstanding is necessary to approve any such
matters.
BY ORDER OF THE BOARD OF DIRECTORS
Robert W. Lautz, Jr., Chief Executive
Officer
Los Angeles, California
July 24, 1996<PAGE>
ANNUAL MEETING OF STOCKHOLDERS
INDENET, INC.
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF MANAGEMENT
The undersigned stockholder of IndeNet, Inc., a
Delaware corporation, hereby appoints Robert W. Lautz, Jr., Chief
Executive Officer and a Director of IndeNet, Inc., my proxy to
attend and represent me at the annual meeting of the stockholders
of the corporation to be held on September 16, 1996 at 3:00 p.m.,
and at any adjournment thereof, and to vote my shares on any
matter or resolution which may come before the meeting and to
take any other action which I could personally take if present at
the meeting.
1. Election of Directors: Management has nominated the
following persons to stand for election. You may vote "For" or
you may withhold your vote from any of those persons nominated
and vote "For" a person nominated by others or write in your own
nominee. To date no one has been nominated by anyone other than
management.
a. Robert W. Lautz, Jr.
For
Withhold
b. Thomas H. Baur
For
Withhold
c. Cary Fitchey
For
Withhold
d. William A. Kunkel
For
Withhold
e. Andre A. Blay
For
Withhold
f. William D. Killion
For
Withhold
g. Graeme R. Jenner
For
Withhold
h. Richard L. Schleufer
For
Withhold
2. Independent Public Accountants: The Board of Directors
has elected to retain the firm of BDO Seidman, certified public
accountants to serve as auditors for the corporation for the
ensuing fiscal year. You may vote "For," "Against" or "Abstain"
concerning ratification of the retention of BDO Seidman,
certified public accountants.
FOR AGAINST ABSTAIN
3. Other Matters. In his discretion upon such other
business as may properly come before the meeting or any
adjournments thereof.
FOR AGAINST ABSTAIN
PLEASE NOTE: Failure to check one of the boxes will give
management the authority to vote the proxy in its discretion.
Shares owned:
Dated this ______ day of _______________, 1996.
Stockholder
(Sign exactly as name appears
on certificate for shares.)
(When signing as attorney,
executor, administrator,
trustee or guardian, give full
title as such. If signer is a
corporation, sign full
corporate name by duly
authorized officer. If shares
are held in the name of two or
more persons, all should
sign.)
