LANCIT MEDIA PRODUCTIONS, LTD.
601 West 50th Street
New York, New York 10019
NOTICE OF ANNUAL MEETING
To Be Held On December 18, 1996
TO OUR SHAREHOLDERS:
The Annual Meeting of Shareholders of Lancit Media Productions, Ltd., a New York
corporation (the "Company"), will be held at the Company's offices at 601 West
50th Street, New York, New York 10019 on Wednesday, December 18, 1996, at 11:00
A.M. to consider
and take action on the following matters:
1. The election of a board of directors to hold office until the 1997
Annual Meeting of Shareholders and until their successors have been elected and
qualified.
2. An amendment of the Certificate of Incorporation of the
Company to change the Company's name to "Lancit Media
Entertainment, Ltd."; and
3. The transaction of such other business as may properly
come before the Meeting or any adjournments thereof.
The Board of Directors has fixed the close of business on November 1,
1996, as the record date for the determination of shareholders entitled to
notice of and to vote at the Meeting and any adjournment or postponement of the
Meeting.
Your vote is important, regardless of the size of your holdings. PLEASE
COMPLETE, SIGN, AND DATE THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED SELF-ADDRESSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED WITHIN THE
UNITED STATES. Any Proxy may be revoked at any time before it is exercised by
following the instructions set forth on the first page of the accompanying Proxy
Statement.
BY ORDER OF THE BOARD OF DIRECTORS
/S/ Marc L. Bailin
New York, New York Marc L. Bailin
November 11, 1996 Secretary
LANCIT MEDIA PRODUCTIONS, LTD.
601 West 50th Street
New York, New York 10019
PROXY STATEMENT
Solicitation and Voting of Proxies
This Proxy Statement is furnished in connection with the solicitation on
behalf of the Board of Directors of Lancit Media Productions, Ltd. a New York
corporation (the "Company"), of proxies to be voted at the Annual Meeting of
Shareholders to be held on Wednesday, December 18, 1996 (the "Meeting") and any
adjournment or postponement of the Meeting.
The Board of Directors of the Company has fixed the close of business on
November 1, 1996 as the record date (the "Record Date") for the determination of
holders of shares of outstanding common stock, par value $.001 per share (the
"Common Stock"), of the Company entitled to notice of and to vote at the Annual
Meeting. On the Record Date there were 6,626,750 outstanding shares of Common
Stock, the holders of which will be entitled to one vote per share for each
matter submitted to a vote at the Meeting. The presence, in person or by proxy,
of the holders of a majority of the outstanding shares entitled to vote will
constitute a quorum for the transaction of business.
A proxy in the accompanying form which is properly signed, dated and
returned to the Company and not revoked will be voted in accordance with
instructions contained therein. If no instructions are indicated, proxies will
be voted as recommended by the Board of Directors. Shareholders of record who
execute proxies may revoke them at any time prior to their being exercised by
delivering written notice to the Secretary of the Company or by subsequently
executing and delivering another proxy at any time prior to the voting. Mere
attendance at the Meeting will not revoke the proxy, but a shareholder present
at the Meeting may revoke his proxy and vote in person.
As of the date of this Proxy Statement, the only business which the
management of the Company intends to present at the Meeting are the matters set
forth in the accompanying Notice of Annual Meeting. Management has no knowledge
of any other business to be presented at the Meeting. If other business is
brought before the Meeting, the persons named in the enclosed form of proxy will
vote according to their discretion.
The approximate date on which this Proxy Statement and the accompanying
proxy will first be mailed to shareholders is November 13, 1996.
The date of this Proxy Statement is November 11, 1996
Expenses of Solicitation
The cost of soliciting proxies will be borne by the Company, including
expenses in connection with the preparation and mailing of this Proxy Statement
and all papers which now accompany or may hereafter supplement it. The
solicitation will be made by mail. The Company will supply brokers or persons
holding shares of record in their names or in the names of their nominees for
other persons, as beneficial owners, with such additional copies of proxies,
proxy materials and Annual Reports as may reasonably be requested in order for
such record holders to send one copy to each beneficial owner, and will, upon
request of such record holders, reimburse them for their reasonable expenses in
mailing such material.
Certain directors, officers and employees of the Company, not
especially employed for this purpose, may solicit Proxies, without additional
remuneration therefor, by mail, telephone, telegraph or personal interview. The
Company may also enlist the assistance of brokerage houses, fiduciaries,
custodians and other like parties in soliciting proxies.
Vote Required
The election of directors will require a plurality of the votes cast in
the election, a quorum being present at the Meeting. The approval of the
amendment to the Company's Certificate of Incorporation will require the
affirmative vote of a majority of the outstanding shares of Common Stock. Each
other matter will require the affirmative vote of a majority of the votes cast
on the matter, a quorum being present at the Meeting. Generally, abstentions,
shares withholding authority to vote for one or more nominees for election as
director, and shares held by brokers for their customers and represented at the
Meeting but as to which the brokers have no voting instructions from their
customers and thus have no discretion to vote on certain matters ("broker
non-votes") will be considered present at the Meeting for the purpose of
determining the presence of a quorum, but because they are neither votes "for"
nor "against," are not counted in determining the votes cast on a matter and,
therefore, have no effect on the outcome of the vote.
Because approval of the amendment to the Company's Certificate of
Incorporation will require the affirmative vote of a majority of the outstanding
shares of Common Stock, abstentions and broker non-votes will have the same
effect as votes against approval. As directors will be elected by a favorable
vote of a plurality of the shares of Common Stock present and entitled to vote,
in person or by proxy, at the Meeting, votes "withheld" from director-nominee(s)
are not counted against the election of such nominees. Brokers have
discretionary authority to vote on this proposal.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth, as of September 27, 1996, the ownership of
the Company's Common Stock held by (i) each person who owns of record or who is
known by the Company to own beneficially more than 5% of such stock, (ii) each
of the directors and nominees for election as directors of the Company, (iii)
the Company's chief executive officer and each other executive officer to whom
aggregate annual compensation (salary and bonus) exceeded $100,000 during the
Company's most recently completed fiscal year (see "EXECUTIVE COMPENSATION"
below) and (iv) all of the Company's directors and executive officers as a
group. As of such date, the Company had 6,626,750 shares of Common Stock issued
and outstanding. The number of shares and the percentage of the class
beneficially owned by the persons named in the table and by all directors and
executive officers as a group is presented in accordance with Rule 13d-3 of the
Securities and Exchange Commission ("SEC") and includes, in addition to shares
actually issued and outstanding, unissued shares which are subject to issuance
upon exercise of options within 60 days. Except as otherwise indicated, the
persons named in the table have sole voting and dispositive power with respect
to all securities listed.
Security Ownership
Number of Percent
Shares of
Name and Address of Beneficial Owners Beneficially Class
Owned (%)
Discovery Communications, Inc.
7700 Wisconsin Avenue
Bethesda, Maryland 20814................. 876,232 1 12.4%
Directors, Nominees and Executive Officers2
Cecily Truett............................ 1,149,238 3 17.3%
Laurence A. Lancit....................... 1,149,238 3 17.3%
Marjorie Kaplan.......................... 80,000 4 1.2%
Arlene J. Scanlan........................ 61,667 4 *
Orly Wiseman............................. 61,000 5 *
John R. Costantino....................... 26,400 6 *
Marc L. Bailin........................... 24,000 7 *
Joseph Kling............................. 5,000 4 *
All Officers and Directors as a Group (12 1,610,905 8 23.1%
persons).................................
*.....Less than 1 %
1 Includes warrants to purchase 438,116 shares. The number of shares
beneficially owned is derived from the Schedule 13D filed with the SEC by
Discovery Communications, Inc.
2 Address is c/o Lancit Media Productions, Ltd., 601 West 50th
Street, New York, New York 10019 for all officers and
directors.
3 Laurence A. Lancit and Cecily Truett are husband and wife. Includes (i)
560,653 shares of Common Stock held by the named individual's spouse 2,932
held by the named individual's children and 25,000 shares held by a trust
for the benefit of the named individual's children, and (ii) 560,653
shares of Common Stock held by the named individual. Each named individual
disclaims beneficial ownership of the shares held by the spouse.
4 Includes options to purchase the following number of shares:
Marjorie Kaplan - 80,000, Arlene J. Scanlan - 21,667, Joseph
Kling - 3,000.
5 Includes options to purchase 7,500 share owned by Mr. Ed
Wiseman, Ms. Wiseman's husband, in which options Ms. Wiseman
disclaims any beneficial interest, and options to purchase
47,500 shares owned by Ms. Wiseman.
6 Includes options to purchase 13,400 shares owned by Walden
Partners, Ltd. of which Mr. Costantino is a vice president,
director and principal, and options to purchase 3,000 shares
owned by Mr. Costantino.
7 Includes 15,000 shares owned by Marie E. Valdes, M.D., the
wife of Mr. Bailin, in which shares Mr. Bailin disclaims any
beneficial interest, and options to purchase 3,000 shares
owned by Mr. Bailin.
8 Includes options to purchase 352,567 shares and shares owned of record by
persons other than those named in the table or described in notes 6 and 7.
Section 16(a) Beneficial Ownership Reporting Compliance
Under United States securities laws, the Company's directors and officers
and persons who own more than ten percent of the Common Stock are required to
file initial reports of ownership and reports of changes in ownership with the
SEC. Based solely on its review of copies of such reports received or written
representations from certain reporting persons, the Company believes that during
the fiscal year ended June 30, 1996, all filing requirements under section 16(a)
of the Securities Exchange Act of 1934 (the "Exchange Act") applicable to its
directors and officers and holders of more than 10% of its Common Stock were
complied with except for the filing of Form 3 by David Michaels, the filing of
Form 4 by Mr. Kling, Mr. Lancit and Ms. Truett and the filing of Form 4 for four
transactions by Ms.
Wiseman.
Board of Directors and Committees
The Company's Board of Directors (the "Board") held six (6) meetings and
acted on unanimous written consent seven (7) times in fiscal 1996. Of the
incumbent directors, none attended fewer than 100% of the aggregate number of
meetings of the Board and the committees thereof on which they serve that were
held during the period that they served.
The functions of the Audit Committee of the Board (the "Audit Committee"),
currently consisting of Messrs. Kling, Bailin and Costantino, include
recommending the engagement and discharge of the independent auditors, directing
and supervising special investigations, reviewing with the independent auditors
the plan and results of the auditing engagement, reviewing the scope and results
of the Company's procedures for internal auditing, approving each professional
service provided by the independent auditors prior to the performance of such
service, reviewing the independence of the independent auditors, considering the
range of audit and nonaudit fees and reviewing the adequacy of the Company's
system of internal accounting controls. The Audit Committee held one (1) meeting
in fiscal 1996.
The Compensation Committee of the Board (the "Compensation Committee"),
currently consisting of Messrs. Bailin, Costantino and Lancit, is authorized (i)
to establish and maintain compensation guidelines for salaries and merit pay
increases throughout the Company; and (ii) to make specific recommendations to
the Board concerning the compensation of executive officers of the Company. The
Compensation Committee also administers the Company's retirement and savings
plan. The Compensation Committee held one (1) meeting in fiscal 1996.
In October 1996, in order to bring the Company's 1990 Stock Option Plan
(the "1990 Plan") into compliance with new revisions to the SEC's regulations
under Section 16 of the Exchange Act, the Company's Board amended the 1990 Plan
to eliminate the Board's 3-member Compensation Advisory Committee (the
"Compensation Advisory Committee"), effective November 1, 1996. Until that time,
the Compensation Advisory Committee consisted of Messrs. Bailin and Lancit and
Ms. Truett and was empowered to grant options under, to construe or interpret
the Plan, to prescribe, amend and rescind rules and regulations relating to it
and to make all other determinations necessary or advisable for its
administration, subject to its express terms and conditions. Except as otherwise
provided in the 1990 Plan, the Committee was also charged with determining which
persons would be granted options, the nature of the options granted, the number
of shares subject to options and the time at which options would be granted.
Since November 1, 1996, the Compensation Advisory Committee's functions are
being performed by the Board of Directors. The Compensation Advisory Committee
held one (1) meeting in fiscal 1996.
The Company currently has no executive committee or standing nominating
committee.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
The By-Laws of the Company provide for a Board of Directors of not fewer
than three directors. The Board currently consists of five members, Cecily
Truett, Laurence A. Lancit, Marc L. Bailin, Joseph Kling and John R. Costantino.
At the Meeting, five directors will be elected to serve until the next Annual
Meeting of Shareholders and until their successors have been elected and
qualified. Any vacancies which occur during the year may be filled by the Board,
and any directors so appointed must stand for reelection at the next annual
meeting of shareholders. All five current directors have been nominated for
reelection by the Board. All nominees have consented to be named and have
indicated their intent to serve if elected.
Each "Non-Employee Director" of the Company receives $3,000 per year,
payable semi-annually, and options to purchase 3,000 shares of the Company's
Common Stock pursuant to the 1994 Plan for service on the Board. A "Non-Employee
Director" is a person who as of any applicable date is a member of the Board but
is not an employee of the Company or any parent or subsidiary of the Company,
but may include a person who though not an employee holds a statutory office in
the Company. No other standard compensation was paid to directors of the Company
for their services as directors of the Company during fiscal 1996. See also,
"EXECUTIVE COMPENSATION - Certain Relationships and Related Transactions" below.
Set forth below is certain information furnished by and concerning the
nominees for election as directors.
CECILY TRUETT, age 47, is a co-founder of the Company and
has served as Chairman of the Board of Directors and Chief
Executive Officer of the Company since March 1989. From the
Company's inception in 1979 through March 1989, Ms. Truett served
as Executive Vice President of the Company. From 1978 to 1979,
Ms. Truett was Project Director of Books and Broadcasting For
Children, an international symposium in children's media.
Between 1974 and 1978, she was an associate producer/producer for
South Carolina Educational Television Network ("SCET"). Ms.
Truett has served as a Blue Ribbon panelist for the Emmy Awards
and as a judge at the Prix Jeunesse International Awards for
children's programs. Ms. Truett has also written an Emmy
Award-winning episode of Reading Rainbow(R). Ms. Truett is the
wife of Laurence A. Lancit.
LAURENCE A. LANCIT, age 48, is co-founder of the Company and has served as
President, Chief Operating Officer and as a director of the Company since its
inception in 1979, as well as Treasurer through June 1995. From 1977 to 1979, he
was a producer/director for the Network for Continuing Medical Education, a
major distributor of medical information productions to hospitals nationwide.
From 1971 to 1977, Mr. Lancit was a producer/director for SCET, a PBS affiliate.
During this period, his credits included Director of "Lowell Thomas Remembers",
a series of 44 half hours, and "10 Years of Firing Line" with William F. Buckley
Jr. In June 1992, Mr. Lancit received a 1992 Daytime Emmy Award as Best Director
In A Children's Series for his efforts on Reading Rainbow(R). Mr. Lancit is the
husband of Cecily Truett.
MARC L. BAILIN, age 44, has served as Secretary and as a
Director of the Company since the Company's inception in 1979.
He is a senior partner of Rubin, Bailin, Ortoli, Mayer, Baker &
Fry, LLP and has been engaged in the practice of entertainment
and corporate law in New York and California for nineteen years.
Mr. Bailin has served as the line production attorney for the
Reading Rainbow(R) series since its creation and has served as
Executive Producer of nine feature length action motion
pictures. Mr. Bailin is also a Director and founder of Virtu
Management Group, Ltd., a business management and financial
affairs firm for a variety of leading motion picture, prime-time
television and daytime television personalities. Mr. Bailin
attended New York University and Boston University Schools of Law
(J.D.) as well as Columbia University Graduate School of Business
(M.B.A.) and Yale College (B.A.).
JOSEPH KLING, age 65, has served as a director of the Company since 1993.
From 1985 to 1989, Mr. Kling was Vice Chairman and President of View Master
Ideal Group. From 1989 to 1991, he was President of Sharon Industries, Inc., a
manufacturer and distributor of toy products. Since 1991, he has been President
of PAMSCO Inc., a consulting company. Mr. Kling is on the Board of Directors of
Russ Berrie & Co., a New York Stock Exchange-listed designer and marketer of
gift products worldwide.
JOHN R. COSTANTINO, age 50, has served as a Director of the company since
May, 1995. From 1978 to 1984, Mr. Costantino was a Senior Tax Partner at Touche
Ross & Co. where he served as Managing Tax Partner of the firm's New York
practice. From 1984 to 1985, he was President and Managing Director of
Integrated Acquisition Corporation. From 1985 to 1987, he was Senior Executive
Vice President and Chief Operating Officer of Conair Corporation. Since 1987 he
has been a private investor and is presently a Principal of Walden Partners Ltd.
Mr. Costantino is a member of the Board of Directors of Brooklyn Bancorp Inc.
(the holding company for Crossland Federal Savings Bank), a Trustee of the
General Electric Company's family of funds and is also a director of a number of
domestic and international companies. He is an attorney and certified public
accountant admitted to practice in New York State.
Unless authority to vote for election of directors (or for one or more
nominees) shall have been withheld in the manner provided in the accompanying
Proxy, the votes represented by such Proxy will be cast for the election of each
of the above-named nominees, or for one or more substitute nominees recommended
by the Board in the event that by reason of circumstances not presently known to
the Board one or more of the above-named nominees should become unavailable for
election.
The election of the Company's directors will require a plurality of the
votes cast in the election, in person or by proxy, a quorum being present at the
Meeting.
The Board of Directors recommends a vote "FOR" the election to the Board
of Directors of the above-named nominees to hold office until the next Annual
Meeting of Shareholders and until their successors are elected and qualified.
EXECUTIVE COMPENSATION
The following table sets forth the aggregate cash compensation paid or
accrued by the Company for services rendered during the three fiscal years ended
June 30, 1996 to the Company's chief executive officer and each other executive
officer to whom aggregate annual compensation (salary and bonus) exceeded
$100,000 (collectively, the "Named Executive Officers").
Summary Compensation Table
Annual Compensation
Securities
Year Other Underlying
Name and Ended Annual Options/SARs
Principal Positions June Salary Bonus Compensation (#)
30,
Cecily Truett 1996 $146,600 $10,665 $26,051 -
(Chief Executive 1995 133,300 2,000 43,357 -
Officer and 1994 122,519 2,000 7,759 -
Chairman of the Board)
Laurence A. Lancit 1996 $146,600 $10,665 $36,575 -
(President, Chief 1995 133,300 2,000 23,744 -
Operating 1994 122,519 2,000 20,317 -
Officer and Treasurer)
Arlene J. 1996 $125,000 $10,665 $4,070 -
Scanlan 1995 125,000 2,000 3,810 5,000
(President of 1994 100,000 2,000 - 25,000
Strategy)
Orly Wiseman 1996 $123,625 $10,665 $3,969 32,500
(Senior Vice 1995 111,250 2,000 3,397 15,000
President - 1994 98,125 1,750 1,500 17,500
Production)
Marjorie Kaplan 1996 $108,848 $10,665 $43,180 57,500
(Vice President - 1995 80,415 2,000 22,001 15,000
Marketing 1994 23,949 - 5,987 25,000
and Sales)
In October 1995, the Company, entered into employment agreements, covering
the term October 1, 1995 to October 1, 1998, with its Chairman of the Board and
Chief Executive Officer and its President and Chief Operating Officer. Each
agreement calls for a base annual salary starting at $150,000 for the first
year. The base salary of each of the remaining two years of the agreements
increases by a minimum of the annual increase in the consumer price index with
the actual amount of the increase being determined by the Board of Directors.
These individuals are eligible to participate in the Company's incentive bonus
plan. In addition, the Chief Executive Officer and Chairman of the Board was one
of the individuals responsible for creating The Puzzle Place(R) and, according
to the agreement with the Writers Guild of America, is entitled to receive a
share, which amounted to $19,803 and $34,830 for fiscal 1996 and 1995,
respectively, of the royalties associated with the licensing of that property.
The Company, at the time of the acquisition of The Strategy Licensing
Company, Inc. ("Strategy"), entered into a three year employment agreement,
effective July 1, 1993, with the President of Strategy. The agreement provided
for a base salary of $125,000 in fiscal 1996. In addition, the agreement calls
for this individual to receive, on an annual basis a performance bonus equal to
a set percentage of certain established, annually increasing, levels of
Strategy's pre-tax income. Also, at the time of the acquisition, this individual
was granted options to purchase 25,000 shares of the Company's common stock, all
of which are currently exercisable. This employee is eligible to participate in
the incentive bonus plan. Following the expiration of the agreement, this
individual's employment was continued without an employment agreement at the
existing base salary.
In March, 1994, the Company entered into a two year employment agreement
with its Senior Vice President - Marketing and Sales. The agreement provided for
a base salary of $80,000 per year as well as an annual non-refundable advance
against commissions in the amount of $20,000 per year. During fiscal 1996, this
individual's base annual salary was increased to $100,000, retroactively to
March 16, 1995. Also, under the terms of the agreement this individual was
granted the following options under the 1990 Plan: (a) at the commencement of
the agreement, options covering 25,000 shares of Common Stock; (b) on the first
anniversary of the agreement, options covering 10,000 shares of Common Stock;
and (c) on the second anniversary of the agreement, options covering 10,000
shares of Common Stock, all of which are currently exercisable. Also, this
employee is eligible to participate in the incentive bonus plan. Following the
expiration of the two year agreement, this individual's employment was continued
without an employment agreement at a base salary of $107,500 and with the same
annual non-refundable advance against commissions.
Under the incentive bonus plan referred to in this section, officers as a
group, receive a bonus of 5% of pretax income (before bonus), for the fiscal
year, provided that (i) pretax income (before bonus) for such fiscal year is at
least $250,000, (ii) net income for such fiscal year exceeds net income for the
prior fiscal year and (iii) net income is at least $.05 per share (adjusted for
stock splits and stock dividends), on a fully diluted basis. There was no
accrual under this plan for fiscal 1996.
Common Stock Options
Stock Option Plans. In July 1990, the Company adopted the 1990 Stock
Option Plan (the "1990 Plan") covering 200,000 shares of the Company's Common
Stock, which was increased, over the years, to 1,000,000 shares, pursuant to
which officers, directors, consultants and employees of the Company are eligible
to receive non-qualified, or to the extent allowed, incentive stock options.
Through October 1996, the 1990 Plan, which expires on July 19, 2000, was
administered by the Compensation Advisory Committee (the "Advisory Committee")
of the Board of Directors. In October 1996, in order to bring the Company's 1990
Plan into compliance with the new revisions in SEC's regulation under Section 16
of the Exchange Act the Company's Board amended the 1990 Plan to eliminate the
Board's 3-member Advisory Committee. To the extent permitted under the express
provisions of the 1990 Plan, the Advisory Committee has had authority to
determine the selection of participants, allotment of shares, price and other
conditions of purchase of options and administration of the 1990 Plan in order
to attract and retain persons instrumental to the success of the Company. Since
November 1, 1996, the Advisory Committee's functions are being performed by the
Board of Directors. Stock options granted under the 1990 Plan are exercisable
for a period of up to 10 years from the date of grant at an exercise price which
is not less than the fair market value of the Common Stock on the date of the
grant, except that the term of an incentive stock option granted under the 1990
Plan to a shareholder owning more than 10% of the outstanding Common Stock may
not exceed five years and its exercise price may not be less than 110% of the
fair market value of the Common Stock on the date of the grant.
In December 1994, the Company adopted the 1994 Non-Employee Director
Non-Qualified Stock Option Plan (the "1994 Plan") authorizing the issuance of
options covering 45,000 shares of the Company's common stock. Non-employee
Directors of the Company are eligible to participate in the 1994 Plan. The 1994
Plan provides that each non-employee Director shall be granted 3,000 options on
the day of their initial appointment and annually thereafter on the day of their
re-election. The exercise price per share for each option granted will be the
fair market value of the shares on the date of grant. Each option is exercisable
one year from the date of grant and expires no later than ten (10) years from
the date of grant.
The following table sets forth all grants of stock options during the
fiscal year ended June 30, 1996 to the Named Executive Officers. The Company has
not issued any SARs.
Option/SAR Grants In Last Fiscal Year
Potential
Realizable Value at
Assumed Annual
Rates of Stock
Price Appreciation
Individual Grants for Option Term1
Number % of Total
of Options
Securities Granted to
Underlying Employees Exercise
Options in Fiscal or Base Expiration
Name Granted Year Price ($) Date
0%($) 5%($) 10%($)
Cecily Truett - - - - - - -
Laurence A. - - - - - - -
Lancit
Arlene J. - - - - - - -
Scanlan
Orly Wiseman 17,500 4.6% 10.94 12-20-05 - 120,374 305,052
15,000 3.9% 9.38 03-14-06 - 88,438 224,120
Marjorie 17,500 4.6% 10.94 12-20-05 - 120,374 305,052
Kaplan 10,000 2.6% 9.38 03-13-00 - 20,204 43,509
30,000 7.8% 9.38 03-14-06 - 176,877 448,240
- ---------------------
1 The dollar amounts under these columns are the result of calculations at
0% and at the 5% and 10% rates set by the SEC for the maximum option term
and therefore are not intended to and may not accurately forecast possible
future appreciation, if any, in the price of the Company's Common Stock.
The following table sets forth information with respect to options
exercised by each of the Named Executive Officers during the fiscal year ended
June 30, 1996 and the number and value of their unexercised options as of June
30, 1996.
Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End
Option Values
Number of Value of
Securities Unexercised
Underlying In-the-Money
Unexercised Options at
Options at Fiscal Year End
Fiscal Year End (#) ($)1
Shares
Name Acquired Value
on Realized Unexer- Unexer-
Exercise (#) ($) Exercisable cisable Exercisable cisable
Cecily Truett - - - - - -
Laurence A. - - - - - -
Lancit
Arlene Scanlan - - 21,667 8,333 - -
Orly Wiseman 6,000 54,000 47,500 17,500 34,688 13,125
Marjorie Kaplan - - 80,000 17,500 92,500 13,125
- ---------------------
1 The value of unexercised options was determined based upon the average of
the closing bid and closing ask price of the Company's Common Stock on
June 30, 1996.
On January 1, 1994, the Company adopted a combined 401K Savings and Profit
Sharing Plan (the "Plan"). The Plan provides for immediate eligibility for all
employees as of January 1, 1994 and eligibility after completion of six months
of service for all employees after January 1, 1994. The 401K Savings portion of
the Plan provides for an employer match which is determined on an annual basis.
For calendar years 1996, 1995 and 1994, the Company declared a match of 50% of
the first 6% of any employee elective deferrals. The Profit Sharing portion of
the Plan provides for an employer discretionary contribution, on an annual
basis, which is reduced by any 401K employer match already received. For
calendar years 1996, 1995 and 1994, the Company declared a profit sharing
contribution in the amount of 3% of eligible compensation reduced by any 401K
employer match already received.
Compensation Committee Interlocks and Insider Participation
Laurence A. Lancit, the Company's President, serves on the Compensation
Committee and served on the Compensation Advisory Committee which administered
the 1990 Plan through October 1996. Cecily Truett, the Company's Chairman,
served on the Compensation Advisory Committee. No executive officer of the
Company served on the board of directors or compensation committee of any entity
which has one or more executive officers serving as a member of the Company's
Board of Directors or Compensation Committee.
Compensation Committee Report on Executive Compensation
The Compensation Committee has the authority and responsibility for
approving the overall compensation strategy for the Company and reviewing and
making recommendations to the Board with respect to the Company's executive
compensation. The Compensation Committee is comprised of two outside directors,
Marc L. Bailin and John R. Costantino, and a Named Executive Officer and
director, Laurence A. Lancit. In October 1996, in order to be in compliance with
recent changes in the SEC's regulations under Section 16 of the Exchange Act,
the Board of Directors eliminated the 3-member Compensation Advisory Committee
and assumed all of its duties and responsibilities, effective November 1, 1996.
The functions of the Compensation Advisory Committee were to grant options
under, to construe or interpret the Company's 1990 Plan, to prescribe, amend and
rescind rules and regulations relating to it and to make all other
determinations necessary or advisable for its administration, subject to the
1990 Plan's express terms and conditions. The Compensation Advisory Committee
was comprised of Marc L. Bailin, Laurence A. Lancit and Cecily Truett.
General Compensation Policy. The Compensation Committee's overall policy
is to offer the Company's executive officers unique and competitive compensation
opportunities. The Company uses stock options as a form of compensation to
retain key personnel while maintaining salary levels which the Compensation
Committee believes are lower than industry norms. The Compensation Committee's
objectives are (i) to create a performance-oriented environment with variable
compensation based upon the achievement of annual and longer-term business
results; and (ii) to focus management on maximizing shareholder value through
stock option based compensation.
The Compensation Committee is authorized (i) to establish and maintain
compensation guidelines for salaries and merit pay increases throughout the
Company; and (ii) to make specific recommendations to the Board concerning the
compensation of executive officers of the Company, including the Chief Executive
Officer.
Chief Executive Officer Compensation. Compensation paid by the Company to
the Chief Executive Officer of the Company is determined in accordance with the
general compensation policy of the Company set forth above. For the three years
ended September 30, 1995, Ms. Truett's salary was paid pursuant to an existing
employment agreement. The compensation provisions of the renewal of her
employment agreement were based on a number of factors, including her experience
as Chairman of the Board and Chief Executive Officer of the Company, her
performance as such for the Company since its inception in 1979 and compensation
levels for other chief executive officers in companies of similar size, business
and complexity. The Compensation committee based its recommendation on, among
other things, the fact that the policies and programs initiated by Ms. Truett
and the Company's President and Chief Operating Officer, Laurence A. Lancit,
since the Company's inception have resulted in the growth and success of the
Company. No specific quantitative value was assigned to these factors in
determining Ms. Truett's compensation.
Ms. Truett's bonus paid in fiscal 1996 consisted of an equal share of the
total amount available, for fiscal 1995 performance, to all individuals eligible
to participate in the Company's incentive bonus plan during fiscal 1995 as well
as an amount equal to her 1994 calendar year end bonus. There was no accrual
under the incentive bonus plan based on fiscal 1996 performance.
Submitted by:
Compensation Committee of the
Board of Directors Compensation Advisory Committee
Marc L. Bailin Laurence A. Lancit Marc L. Bailin Laurence A. Lancit
John R. Costantino Cecily Truett
The graph set forth below shows, for the period from June 30, 1991 through
June 30, 1996, the cumulative total return of the Common Stock, as compared with
a broad equity market index, in this case, the NASDAQ Market Index, and with a
published industry index, in this case, MG Industry Group 471 - Motion Picture
Production, Distribution and Theaters as published by Media General Financial
Services.
Comparative 5-Year Cumulative Total Return Among The Company,
NASDAQ Market Index And MG Group Index1
[Line graph with the following plot points]
FISCAL YEAR ENDING
1991 1992 1993 1994 1995 1996
Lancit Media 100 221.43 671.43 785.71 942.86 657.14
Productions
NASDAQ Market Index 100 107.75 132.27 145.04 170.11 214.14
MG Group Index 100 121.18 145.93 148.51 189.34 214.21
1 Assumes $100 invested on June 30, 1991 and assumes dividends reinvested.
As of fiscal year ended June 30, 1996.
Certain Relationships and Related Transactions
The Company's general counsel is Rubin, Bailin, Ortoli, Mayer, Baker, &
Fry, LLP, of which Marc L. Bailin is a partner. The Company paid legal fees of
$121,157, $135,140, and $113,965 to Rubin, Bailin, Ortoli, Mayer, Baker & Fry,
LLP, and its predecessor firm for the years ended June 30, 1996, 1995 and 1994,
respectively.
The Company has entered into an arrangement with Walden Partners, Ltd.
("Walden"), pursuant to which Walden will provide the Company with regular and
customary consulting advice involving matters relating to the Company's internal
operations, corporate transactions and financial markets. The arrangement has a
term commencing October 20, 1995 and ending October 31, 1996. Pursuant to the
arrangement, the Company pays Walden a monthly fee of $833.34 and has granted
Walden an option under the 1990 Plan to purchase 13,400 shares of Common Stock
with an exercise price equal to the market price of the Common Stock on the date
the term commenced. John R. Costantino is a vice president, director and
principal of Walden.
Pursuant to a Stock Purchase Agreement dated September 25, 1996 with
Discovery Communications, Inc. ("DCI") whereby DCI became a 6.6% shareholder of
the Company, DCI may also purchase, what currently represents an additional 6.2%
stake in the Company through the exercise of warrants at $13 per share.
Simultaneously, the Company entered into an a non-exclusive Production Output
Agreement pursuant to which the Company will develop and produce children's
programming for Discovery Channel's new Sunday children's block. The Company
will derive production-related revenues from programming it produces for DCI and
will participate in income generated by DCI from licensed product sales based on
that programming.
PROPOSAL NO. 2
AMENDMENT OF THE COMPANY'S CERTIFICATE OF INCORPORATION
On October 28, 1996, the Board of Directors of the Company authorized the
amendment of Paragraph FIRST of the Certificate of Incorporation to change the
Company's name to "Lancit Media Entertainment, Ltd." The name change is subject
to authorization by the shareholders at the 1996 Annual Meeting of Shareholders.
Since its inception in 1979, the Company has expanded its activities and
services beyond the production of children's television programs into ancillary
areas including licensing and merchandising, project fund raising and feature
film development. The Board of Directors believes that the new name better
reflects the Company's broader range of activities.
The Board of Directors also approved a resolution permitting and directing
the officers and directors of the Company to perform the ministerial tasks
necessary to implement the change in name. This resolution also allows the Board
of Directors to abandon the amendment anytime prior to filing with the Secretary
of State of the State of New York, notwithstanding shareholder approval.
Approval of this amendment of the Certificate of Incorporation requires
the affirmative vote of a majority of all outstanding shares of the Common
Stock. As such, abstentions will have the same effect as votes against the
proposal.
The Board of Directors recommends a vote "FOR" the amendment of the
Company's Certificate of Incorporation.
INDEPENDENT ACCOUNTANTS
The accounting firm of Feldman Radin & Co., P.C. acted as the
independent public accountants for the Company for the fiscal year ended June
30, 1996 and is anticipated to be selected by the Board to act as independent
public accountants for the current fiscal year. Feldman Radin & Co, P.C. has
advised the Company that neither it nor any member thereof has any financial
interest, direct or indirect, in the Company or any of its subsidiaries in any
capacity. One or more representatives of Feldman Radin & Co., P.C. is expected
to be present at the Meeting, will have the opportunity to make a statement, and
will be available to respond to appropriate questions.
OTHER BUSINESS
The Board knows of no matters to come before the Meeting or any
adjournment or postponement thereof other than those matters described in this
Proxy Statement and in the accompanying Notice of Annual Meeting. However, if
any other matters should properly come before the Meeting or any adjournment or
postponement thereof, it is the intention of the persons named in the
accompanying Proxy to vote such Proxy as in their discretion they may deem
advisable.
SHAREHOLDERS' PROPOSALS FOR NEXT ANNUAL MEETING
Shareholders' proposals submitted pursuant to Rule 14a-8 of the
Exchange Act intended to be presented at the next Annual Meeting of Shareholders
of the Company, tentatively scheduled for December 11, 1997, must be received by
the Company at its offices shown on the first page of this Proxy Statement by
September 1, 1997, for inclusion in the Company's proxy statement and form of
proxy relating to such Meeting.
ANNUAL REPORT
The Company's 1996 Annual Report to Shareholders (which includes
financial statements for the fiscal year ended June 30, 1996) accompanies this
Proxy Statement but is not to be deemed part of this Proxy Statement. A copy of
the Company's Annual Report on Form 10-K/A, for the fiscal year ended June 30,
1996 filed with the SEC is contained in the accompanying Annual Report to
Shareholders.
By Order of the Board of Directors
/S/ Marc L. Bailin
Marc L. Bailin
Secretary
LANCIT MEDIA PRODUCTIONS, LTD.
601 West 50th Street
New York, New York 10019
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD
December 18, 1996
The undersigned hereby appoints LAURENCE A. LANCIT and MARC L. BAILIN, and each
or any of them, attorneys and proxies, with full power of substitution, and
authorizes them to vote all shares of common stock of Lancit Media Productions,
Ltd. held of record by the undersigned on November 1, 1996, at the Annual
Meeting of Shareholders to be held on December 18, 1996, and any adjournments or
postponement thereof, hereby revoking all previous proxies, with all powers the
undersigned would possess if present, on all matters set forth in the Notice of
Annual Meeting dated November 11, 1996, as follows:
INSTRUCTION: MARK ONLY ONE BOX FOR EACH NUMBERED MATTER
(1) ELECTION OF DIRECTORS - The election of all below named
nominees; to wit: Cecily Truett, Laurence A. Lancit, Marc
L. Bailin, Joseph Kling and John R. Costantino.
__ FOR all nominees except the following:
__ ABSTAIN (i.e., withhold authority to vote for any
nominees.)
(2) AMENDMENT OF THE CERTIFICATE OF INCORPORATION - The approval of the
amendment to Article FIRST of the Company's Certificate of Incorporation
to change the Company name to "Lancit Media Entertainment, Ltd."
__ FOR __ AGAINST __ ABSTAIN
LANCIT MEDIA PRODUCTIONS, LTD.
(3) In their discretion, to vote upon such other business as may properly come
before the Meeting.
UNLESS OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED "FOR" PROPOSALS 1 AND 2.
Please mark, date, sign and return this Proxy promptly, using
the enclosed envelope.
Dated , 1996
Month Day
Signature
Signature
Please sign exactly as name appears hereon, indicating
official position or representative capacity, if any.
If shares are held jointly, both owners must sign.
I plan to attend the Meeting.
Yes __ No __
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
