<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
<TABLE>
<S> <C>
Filed by the registrant [X] [ ] Confidential, for Use of the
Filed by a party other than the registrant Commission Only (as permitted by Rule
[ ] 14a-6(e)(2))
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) on sec.240.14a-12
</TABLE>
SOURCE MEDIA, INC.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement)
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:
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(2) Aggregate number of securities to which transactions applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rules 0-11:
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Copies of all communications to:
Robert L. Winikoff, Esq.
Sonnenschein Nath & Rosenthal
1221 Avenue of the Americas
New York, New York 10020
(212) 768-6700
<PAGE> 2
SOURCE MEDIA, INC.
5400 LBJ FREEWAY, SUITE 680
DALLAS, TEXAS 75240
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD DECEMBER 19, 2000
To the Stockholders of Source Media, Inc.:
NOTICE IS GIVEN that the annual meeting of stockholders of Source Media,
Inc., a Delaware corporation, will be held on December 19, 2000, beginning at
9:00 a.m., local time, at The Harvard Club of New York City, 27 West 44th
Street, New York, New York, 10036 for the following purposes:
1. To elect four directors to serve until the next annual meeting of
stockholders;
2. To consider and vote upon a proposal to ratify the appointment of
Ernst & Young LLP as our independent auditors for 2000; and
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The board of directors has fixed November 15, 2000 as the record date for
determining the stockholders entitled to notice of, and to vote at, the meeting
or any adjournment of the meeting.
You are cordially invited to attend this meeting in person. If you do not
expect to be present in person, please sign and date the enclosed proxy, and
return it in the enclosed envelope, which requires no postage if mailed in the
United States. If you attend the meeting, you may vote in person if you wish,
whether or not you have returned your proxy. In any event, a proxy may be
revoked at any time before it is exercised.
BY ORDER OF THE BOARD OF DIRECTORS
Stephen W. Palley,
President
Dallas, Texas
November 21, 2000
<PAGE> 3
SOURCE MEDIA, INC.
5400 LBJ FREEWAY, SUITE 680
DALLAS, TEXAS 75240
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD DECEMBER 19, 2000
INTRODUCTION
This proxy statement is being mailed on or about November 21, 2000 to all
of our stockholders of record at the close of business on November 15, 2000 in
connection with the solicitation by our board of directors of proxies for the
annual meeting of stockholders to be held at The Harvard Club of New York City,
27 West 44th Street, New York, New York, 10036 on December 19, 2000.
SOLICITATION OF PROXIES
Proxies will be solicited by mail, and all expenses of preparing and
soliciting such proxies will be paid by us. We have arranged for reimbursement,
at the rate suggested by The Nasdaq Stock Market, Inc., of brokerage houses,
nominees, custodians and fiduciaries for the forwarding of proxy materials to
the beneficial owners of shares held of record. Proxies may also be solicited by
our directors, officers and employees, but such persons will not be compensated
specifically for such services.
All proxies properly executed and received by the persons designated as
proxy will be voted on all matters presented at the meeting in accordance with
the specific instructions of the person executing such proxy or, in the absence
of specified instructions, will be voted for the named nominees to the board and
in favor of the proposals as set forth in the Notice accompanying this proxy
statement.
The board does not know of any other matter that may be brought before the
annual meeting but, in the event that any other matter should come before the
meeting, or any nominee should not be available for election, the persons named
as proxy will have authority to vote all proxies not marked to the contrary in
their discretion as they deem advisable.
MANNER OF VOTING
Stockholders may vote their proxies by mail. Stockholders who hold their
shares through a bank or broker can also vote via telephone or the Internet if
any of these options are offered by the bank or broker. Any stockholder may
revoke his proxy, whether he votes by mail, telephone or the Internet, at any
time before the meeting by written notice to such effect received by us at the
address set forth above, attn: Secretary, by delivery of a subsequently dated
proxy or by attending the meeting and voting in person.
VOTE REQUIRED
The total number of shares of our common stock outstanding as of the record
date was 17,618,712. The common stock is the only class of securities entitled
to vote, each share being entitled to one non-cumulative vote. Only stockholders
of record as of the close of business on the record date will be entitled to
vote. A majority of the shares of common stock outstanding and entitled to vote
must be present at the meeting in person or by proxy in order to constitute a
quorum for the transaction of business. Abstentions and broker nonvotes will be
counted for purposes of determining the presence or absence of a quorum for the
transaction of business. Assuming the presence of a quorum, directors will be
elected by a plurality of the votes cast at the meeting. An affirmative vote of
a majority of the shares of common stock present and voting, in person or by
proxy, at the meeting is required to pass upon Proposal 2.
<PAGE> 4
ABSTENTIONS AND NONVOTES
Abstentions will be counted in tabulations of the votes cast on each of the
proposals presented at the meeting, whereas broker nonvotes will not be counted
for purposes of determining whether a proposal has been approved. "Broker
nonvotes" are proxies received from brokers who, in the absence of specific
voting instructions from beneficial owners of shares held in brokerage name,
have declined to vote such shares in those instances where discretionary voting
by brokers is permitted.
LIST OF STOCKHOLDERS
A list of stockholders entitled to vote at the meeting will be available at
our offices, 5400 LBJ Freeway, Suite 680, Dallas, Texas, during ordinary
business hours for a period of ten days prior to the meeting and at the meeting
itself for examination by any stockholder.
PRINCIPAL STOCKHOLDERS
The following table sets forth as of October 18, 2000 (March 31, 2000 for
former executive officers) certain information regarding the ownership of our
common stock as of the record date by (i) each director and each nominee for
director, (ii) each person known by us to own beneficially 5% or more of our
common stock, (iii) each executive officer named in the summary compensation
table elsewhere in this proxy statement and (iv) all current directors and
executive officers as a group. Except as otherwise indicated, the address of
each beneficial holder of 5% or more of our common stock is 5400 LBJ Freeway,
Suite 680, Dallas, Texas 75240.
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY PERCENT
NAME OF BENEFICIAL OWNER OWNED(1) OF CLASS
------------------------ ------------ --------
<S> <C> <C>
James L. Greenwald(2)....................................... 12,000 *
Howard Gross(3)............................................. 59,819 *
Victoria Hamilton(4)........................................ 60,000 *
Philip Howort............................................... 100 *
Kim D. Kelly(5)(6).......................................... 3,000 *
Sidney R. Knafel(5)(6)...................................... 63,000 *
Michael J. Marocco(7)....................................... 968,726 5.2%
W. Thomas Oliver(8)(9)...................................... 248,417 1.4%
Stephen W. Palley(10)....................................... 250,000 1.4%
Timothy P. Peters(8)(11).................................... 379,524 2.1%
John J. Reed(8)(12)......................................... 100,779 *
Barry Rubenstein(13)........................................ 980,752 5.3%
F. Paul Tigh(14)............................................ 50,196 *
Maryann Walsh(8)(15)........................................ 247,584 1.4%
Michael S. Willner(6)(16)................................... 66,000 *
Insight Communications Company, Inc.(17).................... 5,438,891 24.5%
Insight Interactive LLC
810 Seventh Avenue
New York, NY 10019
Dr. Ernst Mueller-Moehl(18)................................. 1,025,000 5.8%
Actieninvest AG
Weinplatz 10
8022 Zurich
Switzerland
All current directors and executive officers as a group (11
persons).................................................. 1,575,655 8.3%
</TABLE>
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* Less than 1%
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<PAGE> 5
(1) Includes shares underlying currently exercisable options and warrants as
well as those options and warrants which will become exercisable within 60
days of October 18, 2000. Except as otherwise indicated, the named persons
herein have sole voting and dispositive power with respect to beneficially
owned shares.
(2) Includes 12,000 shares of common stock issuable upon exercise of options.
(3) Includes 58,333 shares of common stock issuable upon exercise of options.
(4) Includes 60,000 shares of common stock issuable upon exercise of options.
(5) Includes 3,000 shares of common stock issuable upon exercise of options.
(6) Excludes 5,438,891 shares of common stock beneficially owned by Insight
Communications Company, Inc., of which each individual is an officer and a
director. Each individual disclaims beneficial ownership of all of such
shares except to the extent of his or her pecuniary interest.
(7) Includes (i) 9,675 shares of common stock issuable upon exercise of
warrants and (ii) 9,000 shares of common stock issuable upon exercise of
options. Mr. Marocco is a general partner of Sandler Capital Management,
which through an affiliate is managing general partner of 21st Century
Communications Partners, L.P., 21st Century Communications T-E Partners,
L.P. and 21st Century Communications Foreign Partners, L.P. Accordingly,
also includes (iii) 635,949 shares of common stock issuable upon exercise
of warrants held by 21st Century Communications Partners, L.P., (iv)
216,374 shares of common stock issuable upon exercise of warrants held by
21st Century Communications T-E Partners, L.P. and (v) 85,615 shares of
common stock issuable upon exercise of warrants held by 21st Century
Communications Foreign Partners, L.P. Mr. Marocco disclaims beneficial
ownership to all of the shares referenced in the prior sentence except to
the extent of his pecuniary interest.
(8) Former executive officer.
(9) Includes 248,417 shares of common stock issuable upon exercise of options.
(10) Includes 250,000 shares of common stock issuable upon exercise of options.
(11) Includes 326,236 shares of common stock issuable upon exercise of options.
(12) Includes 100,779 shares of common stock issuable upon exercise of options.
(13) Includes (i) 16,125 shares of common stock issuable upon exercise of
warrants and (ii) 3,000 shares of common stock issuable upon exercise of
options. Mr. Rubenstein is an officer and shareholder of Infomedia
Associates, Ltd. which is one of the general partners of 21st Century
Communications Partners, L.P., 21st Century Communications T-E Partners,
L.P. and 21st Century Communications Foreign Partners, L.P. Accordingly,
also includes (iii) 635,949 shares of common stock issuable upon exercise
of warrants held by 21st Century Communications Partners, L.P., (iv)
216,374 shares of common stock issuable upon exercise of warrants held by
21st Century Communications T-E Partners, L.P., and (v) 85,615 shares of
common stock issuable upon exercise of warrants held by 21st Century
Communications Foreign Partners, L.P. Mr. Rubenstein disclaims beneficial
ownership to all the preceding shares except to the extent of his pecuniary
interest.
(14) Includes 50,196 shares of common stock issuable upon exercise of options.
(15) Includes 99,666 shares of common stock issuable upon exercise of options.
(16) Includes 21,000 shares of common stock issuable upon exercise of options.
(17) Includes 4,596,786 shares of common stock issuable upon exercise of
warrants owned by Insight Interactive, LLC a wholly-owned subsidiary of
Insight Communications.
(18) Based on a report on Schedule 13G dated March 21, 2000.
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<PAGE> 6
PROPOSAL 1
ELECTION OF DIRECTORS
Four directors are to be elected at the meeting to serve until the next
annual meeting of stockholders. Each of the nominees has consented to serve as a
director if elected.
The board of directors' nominees for the office of director are as follows:
James L. Greenwald, age 73, has served as our director since May 1996. Mr.
Greenwald has served as chairman emeritus of Katz Media Corporation, a
communications representative firm, since August 1995. Mr. Greenwald joined Katz
Media in 1956 and has held various positions, including President of the radio
division from 1965 through 1970, Executive Vice President from 1970 through
1975, President from 1975 through 1982 and Chairman of the board of directors
and Chief Executive Officer from 1975 through 1994. Mr. Greenwald is a director
of Granite Broadcasting Company, Paxson Communications Corporation and the Young
Adult Institute, an honorary trustee of the Foundation of American Women in
Radio and Television and past president of the International Radio and
Television Foundation and the Station Representatives Association.
Michael J. Marocco, age 41, has served as our director since May 1996. Mr.
Marocco is a Managing Director of Sandler Capital Management ("Sandler") and has
been associated with Sandler since April 1989. Prior to that, Mr. Marocco was a
vice president at Morgan Stanley & Co., Inc. where he was involved in raising
capital and merger and acquisition transactions. Mr. Marocco serves as a
director of Next Generation Network, Inc., Convergent Communications, Inc. and
numerous private companies involved in cable television, advertising and
cellular telephone industries.
Stephen W. Palley, age 55, has served as our director since June 1999 and
joined us in April 1999 as our President and Chief Executive Officer. From 1996
to 1999, Mr. Palley was a private investor and a consultant in the
telecommunications industry. Mr. Palley was Chief Operating Officer of King
World Productions, Inc. from 1986 to 1996. Mr. Palley's background includes
entertainment and securities law. He is a member of the New York State Bar and
the Museum of Radio and Television Council. Mr. Palley is a graduate of American
University and the Columbia University School of Law.
Barry Rubenstein, age 56, has served as our director since September 1997.
In 1994, Mr. Rubenstein co-founded the 21st Century Partnerships, of which he is
presently a principal. In 1992, Mr. Rubenstein co-founded Applewood Associates,
L.P., of which he is presently a principal. Prior to 1992, Mr. Rubenstein was a
founder of, or founding consultant to, Applied Digital Data Systems, Inc.,
Novell, Inc., and Cheyenne Software, Inc. From 1983 to 1987, Mr. Rubenstein held
various positions with Cheyenne Software, Inc., including President, Chief
Executive Officer, Director and Chairman of the Board. Mr. Rubenstein is a
director of, or advisor to, Infonautics Corporation, Millwood Press and several
private technology companies.
We currently have seven members on our board of directors including Messrs.
Greenwald, Marocco, Palley and Rubenstein. Our board also presently includes Kim
D. Kelly, Sidney R. Knafel and Michael S. Willner, who were appointed to the
board by Insight Interactive and are not nominees for election at the meeting.
As holder of the sole share of our non-participating preferred stock, Insight
Interactive presently has the right to appoint three directors to the board.
Insight Interactive has informed us that it intends to reappoint Ms. Kelly and
Messrs. Knafel and Willner as its board representatives. Set forth below is
certain biographical information for each of these individuals.
Kim D. Kelly, age 44, has served as our director since November 1999. Ms.
Kelly has been Executive Vice President and Chief Financial Officer of Insight
Communications Company, Inc. and its predecessors ("Insight") since 1990. Ms.
Kelly has also been Chief Operating Officer of Insight since January 1998. Prior
to joining Insight, she served from 1982 to 1990 with Marine Midland Bank,
becoming its Senior Vice President in 1988, with primary responsibility for
media lending activities. Ms. Kelly serves as a member of the National Cable
Television Association Subcommittee for Telecommunications Policy, as well as
the National Cable Television Association Subcommittee for Accounting. She is
also a director of Insight and
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<PAGE> 7
Bank of New York Hamilton Funds, and serves on the boards of Cable in the
Classroom and Cable Advertising Bureau. Ms. Kelly is a graduate of George
Washington University.
Sidney R. Knafel, age 69, has served as our director since November 1999.
Mr. Knafel has been Chairman of the Board of Insight since 1985. He was the
founder, Chairman and an equity holder of Vision Cable Communications, Inc.
("Vision Cable") from 1971 until its sale in 1981. Mr. Knafel is presently the
managing partner of SRK Management Company, a private investment company, and
also serves as Chairman of BioReliance Corporation, a biological testing
company. He is a director of NTL, Incorporated, General American Investors
Company, Inc. and IGENE Biotechnology, Inc. as well as several private
companies. Mr. Knafel is a graduate of Harvard College and the Harvard Business
School.
Michael S. Willner, age 48, has served as our director since April 1998.
Mr. Willner co-founded and has served as President of Insight since 1985. Mr.
Willner served as Executive Vice President and Chief Operating Officer of Vision
Cable from 1979 through 1985, Vice President of Marketing for Vision Cable from
1977 to 1979 and General Manager of Vision Cable's Bergen County, New Jersey
cable television system from 1975 to 1977. Currently, Mr. Willner is a director
of Insight and NTL, Incorporated. He serves on the boards of C-SPAN and the
National Cable Television Association where he is a member of the Executive
Committee and serves as Treasurer. Mr. Willner is a graduate of Boston
University's College of Communication and serves on the school's Executive
Committee.
ADDITIONAL INFORMATION REGARDING THE BOARD OF DIRECTORS
Board Meetings and Committees
Our board of directors held 13 meetings during 1999. Each director attended
75% or more of the board meetings and the meetings of the committees on which
they serve, except that Mr. Rubenstein attended 57% of such meetings.
The audit committee of the board recommends independent auditors to the
board and reviews the scope and results of audits conducted and our internal
control procedures. The audit committee is currently composed of Messrs.
Greenwald and Palley and Ms. Kelly. The audit committee held one meeting during
1999.
The Nasdaq National Market, on which our common stock is listed, requires
that, no later than June 14, 2001, the members of an audit committee will meet
certain independence standards. We expect that the members of our audit
committee will comply with these standards prior to such date. A copy of the
charter of the audit committee adopted by the Board of Directors is attached to
this proxy statement as Exhibit A.
The compensation committee of the board establishes the level of
compensation of our executive officers and administers our 1995 stock option
plan and 1999 stock option plan. The compensation committee is currently
composed of Messrs. Greenwald, Palley and Willner. The compensation committee
held no meetings during 1999.
Compensation of Directors
Directors who are not full-time employees are paid a retainer of $2,500 per
fiscal quarter and $1,000 for each meeting of the board of directors and of any
Committee thereof that they attend (so long as the Committee meeting is not on
the same day as a board of directors meeting), or $500 for each telephonic
meeting in which they participate, and they are reimbursed for travel and
related expenses incurred in connection with attendance at board and Committee
meetings. Pursuant to the 1995 Nonqualified Stock Option Plan for Non-Employee
Directors, during 1999 each non-employee director was granted an option to
purchase 3,000 shares of our common stock, with an exercise price of $13.19, the
fair market value of a share of common stock on the date of grant (based on a
trailing five-day average); however, Messrs. Marocco and Rubenstein waived their
right to receive such options.
In certain instances, directors who are not full-time employees may be
engaged by the board of directors to participate in projects for our benefit. In
such instances, the board of directors has authorized payment to
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<PAGE> 8
those directors at a rate of $125 per hour, up to a maximum of $1,000 per day,
in addition to reimbursement of expenses incurred in the performance of
services.
RECOMMENDATION
The board of directors recommends a vote FOR the election of the nominees.
PROPOSAL 2
RATIFICATION OF THE SELECTION OF INDEPENDENT AUDITORS
Based on the recommendation of our Audit Committee, Ernst & Young LLP,
which has served as our independent public accountants since 1989, has been
appointed by the board of directors to audit our financial statements for the
year ending December 31, 2000. Although stockholder ratification for this
appointment is not required, the board of directors considers it desirable for
stockholders to pass on such appointment. If the stockholders do not ratify the
appointment of Ernst & Young LLP, the engagement of independent auditors will be
reevaluated by the board of directors. Representatives of Ernst & Young LLP are
expected to be present at the annual meeting to respond to appropriate questions
from the stockholders and will be given the opportunity to make a statement
should they desire to do so.
RECOMMENDATION
The board of directors recommends a vote FOR the ratification of the
appointment of Ernst & Young LLP.
REPORT OF THE AUDIT COMMITTEE
To the Stockholders of Source Media, Inc.:
The Audit Committee has reviewed and discussed the audited financial
statements of the Company for the year ended December 31, 1999 (the "Audited
Financial Statements"). In addition, the Audit Committee has discussed with
Ernst & Young, LLP, the Company's independent auditors, the matters required by
Statements of Accounting Standards No. 61 (Codification of Statements on
Auditing Standards).
The Audit Committee has also received the written disclosures and the
letter from Ernst & Young required by Independent Standards Board Standard No.
1, and has discussed with Ernst & Young, LLP its independence from the Company.
The Audit Committee has also discussed with management of the Company and with
Ernst & Young, LLP such other matters and received such assurances from them as
it deemed appropriate.
Based on the foregoing review and discussion and relying thereon, the Audit
Committee recommended to the Company's Board of Directors the inclusion of the
Audited Financial Statements in the Company's Annual Report on Form 10-K for the
year ended December 31, 1999.
AUDIT COMMITTEE
Kim D. Kelly
James L. Greenwald
Stephen W. Palley
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<PAGE> 9
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following summary compensation table sets forth the annual compensation
paid or accrued, together with the number of shares covered by options granted,
to our Chief Executive Officer, the four other highest paid executive officers
serving at the end of 1999 and three other former executive officers (the "named
executive officers") for the years indicated:
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION ------------------
-------------------------- COMMON STOCK ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS UNDERLYING OPTIONS COMPENSATION
--------------------------- ---- -------- -------- ------------------ ------------
<S> <C> <C> <C> <C> <C>
Stephen W. Palley(1)................ 1999 $150,000 -- 500,000 --
Chairman of the Board and Chief
Executive Officer
Victoria Hamilton(2)................ 1999 $237,154 -- 60,000 $ 50,000
Chief Operating Officer
F. Paul Tigh(3)..................... 1999 $185,000 -- 34,417 --
Chief Financial Officer and 1998 117,067 -- 70,002 --
Treasurer
Howard Gross(4)..................... 1999 $101,654 -- 125,000 $ 70,715
President, IT Network
Timothy P. Peters(5)................ 1999 $ 56,250 -- 16,666 $168,750
Former Chairman of the Board 1998 225,000 -- 212,500 --
and Chief Executive Officer 1997 225,000 $132,656 12,500 --
John J. Reed(6)..................... 1999 $ 52,500 -- 16,666 $157,500
Former President 1998 210,000 $ 2,363 70,000 --
1997 210,000 44,012 38,000 --
W. Thomas Oliver(7)................. 1999 $250,000 -- 41,750 --
Former Executive Vice President 1998 250,000 $ 1,910 60,000 --
1997 250,000 37,856 25,000 --
Maryann Walsh(8).................... 1999 $ 32,500 -- 16,666 $ 97,500
Former General Counsel 1998 130,000 $ 3,023 64,000 --
1997 100,000 32,550 4,000 --
</TABLE>
---------------
(1) Mr. Palley joined us in April 1999 as our President and Chief Executive
Officer.
(2) Ms. Hamilton became our Interim Chief Operating Officer in March 1999.
Between January and March 1999, Ms. Hamilton served as a consultant to us,
for which she was paid $50,000, as listed under "All Other Compensation."
(3) Mr. Tigh was elected as our Chief Financial Officer and Treasurer in July
1998. Mr. Tigh joined us in April 1998 as our Vice President and Corporate
Controller.
(4) Mr. Gross was elected as President and Chief Operating Officer of our
subsidiary, IT Network, Inc. in June 1999. Between January and June 1999,
Mr. Gross served as a consultant to us, for which he was paid $70,715, as
listed under "All Other Compensation."
(5) Mr. Peters entered into a Separation Agreement with us on March 29, 1999
pursuant to which he resigned as an officer and agreed to be retained as a
consultant through January 31, 2000 for which he was paid $168,750, as
listed under "All Other Compensation."
(6) Mr. Reed entered into a Separation Agreement with us on March 29, 1999
pursuant to which he resigned as an officer and agreed to be retained as a
consultant through January 31, 2000 for which he was paid $157,500, as
listed under "All Other Compensation."
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<PAGE> 10
(7) Mr. Oliver entered into a Separation Agreement with us on March 27, 2000
pursuant to which he resigned as an officer and agreed to be retained as a
consultant through May 31, 2000.
(8) Ms. Walsh entered into a Separation Agreement with us on March 29, 1999,
amended September 14, 1999, pursuant to which she resigned as an officer and
agreed to be retained as a consultant through July 2000 for which she was
paid $97,500, as listed under "All Other Compensation."
OPTIONS GRANTS IN LAST FISCAL YEAR
The following table sets forth information with respect to all options
granted during the 1999 fiscal year to each of the named executive officers.
<TABLE>
<CAPTION>
PERCENT OF
TOTAL POTENTIAL REALIZED VALUE AT
NUMBER OF OPTIONS ASSUMED ANNUAL RATES OF
SHARES GRANTED TO STOCK PRICE APPRECIATION FOR
UNDERLYING EMPLOYEES EXERCISE OPTION TERMS(1)
OPTIONS IN 1999 PRICE PER EXPIRATION ----------------------------
NAME GRANTED FISCAL YEAR SHARE DATE 5% 10%
---- ---------- ----------- --------- ---------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Stephen W. Palley........ 500,000 39.2% $15.3125 3/29/09 $4,814,974 $12,202,091
Victoria Hamilton........ 60,000 4.7% 15.3125 3/29/06 374,024 871,634
F. Paul Tigh............. 10,556 0.8% 16.6250 1/4/06 71,443 166,494
10,556 0.8% 16.6250 1/4/07 83,790 200,692
10,566 0.8% 16.6250 1/4/08 96,755 238,311
2,750(2) 0.2% 6.6250 1/4/05 43,049 62,775
Howard Gross............. 125,000 9.8% 15.0000 6/17/09 1,230,080 3,069,322
Timothy P. Peters........ 16,666 1.3% 15.3125 3/29/06 103,891 242,111
John J. Reed............. 16,666 1.3% 15.3125 3/29/06 103,891 242,111
W. Thomas Oliver......... 11,667 0.9% 16.6250 1/4/06 78,963 184,017
11,667 0.9% 16.6250 1/4/07 92,609 221,815
11,667 0.9% 16.6250 1/4/08 106,938 263,393
6,750(3) 0.5% 6.6250 1/4/05 105,665 154,084
Maryann Walsh............ 16,666 1.3% 15.3125 3/29/06 103,891 242,111
</TABLE>
---------------
(1) The assumed 5% and 10% rates of stock price appreciation are specified by
the SEC's rules and do not reflect expected appreciation. The amount shown
represents the assumed value of the stock options (less exercise price) at
the end of the ten year period beginning on the date of grant and ending on
the option expiration date.
(2) On the date Mr. Tigh's options were granted, the market price of our common
stock was $16.625. The value of these options (value of the underlying
common stock less the exercise price) based on the stock price on the date
of grant was $27,500.
(3) On the date Mr. Oliver's options were granted, the market price of our
common stock was $16.625. The value of these options (value of the
underlying common stock less the exercise price) based on the stock price on
the date of grant was $67,500.
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<PAGE> 11
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table sets forth for each of the named executive officers
information concerning exercised and unexercised options.
<TABLE>
<CAPTION>
NUMBER OF SHARES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN-THE-
SHARES OPTIONS AT MONEY OPTIONS AT
ACQUIRED DECEMBER 31, 1999 DECEMBER 31, 1999
ON VALUE --------------------------- -----------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- -------- ----------- ------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Stephen W. Palley........ -- -- 125,000 375,000 $ 398,438 $1,195,313
Victoria Hamilton........ -- -- 60,000 -- 191,250 --
Paul Tigh................ -- -- 22,305 82,114 163,804 445,115
Howard Gross............. -- -- 25,000 100,000 87,705 350,000
Timothy P. Peters........ -- -- 326,236 -- 3,120,268 --
John J. Reed............. 100,000 $902,796 100,779 -- 878,531 --
W. Thomas Oliver......... -- -- 266,750 60,000 2,279,844 310,938
Maryann Walsh............ -- -- 99,666 -- 880,333 --
</TABLE>
EMPLOYMENT CONTRACTS
We have entered into an employment agreement with Stephen W. Palley dated
March 29, 1999 pursuant to which Mr. Palley is employed for three years as Chief
Executive Officer at a base salary of $200,000 per year plus a bonus, the timing
and amount of such bonus to be determined in the discretion of the board. In
addition, Mr. Palley is entitled to benefits generally available to other senior
management employees. At the time Mr. Palley entered into his employment
agreement, we granted him a stock option to purchase 500,000 shares of common
stock at $15.31 per share, vesting over four years. If we terminate Mr. Palley's
employment, other than for cause, death or disability, or if Mr. Palley resigns
within a 60-day period beginning six months after a "change of control" (as
defined in the agreement), we have agreed to continue making monthly base salary
payments for the remainder of the agreement's term or until Mr. Palley obtains
other employment, whichever comes first, and to continue to provide insurance
coverage until Mr. Palley obtains other employment. We have agreed to make Mr.
Palley whole if payments he receives in the event of a change of control are
subject to excise tax.
We have entered into an employment agreement with Paul Tigh dated as of
September 1, 2000 pursuant to which Mr. Tigh is employed as Chief Financial
Officer and Treasurer at a base salary of $185,000 per year plus a bonus, the
timing and amount of such bonus to be determined in the discretion of the board.
In addition, Mr. Tigh is entitled to benefits generally available to other
senior management employees. If Mr. Tigh's employment is terminated other than
for cause or death, we have agreed to continue making monthly base salary
payments for six months after the date of termination and to continue to provide
insurance coverage until Mr. Tigh obtains insurance coverage through other
employment.
We have entered into an employment agreement with Philip Howort dated
September 20, 2000 pursuant to which Mr. Howort is employed for two years as
Senior Vice President at a base salary of $200,000 per year plus a bonus, the
timing and amount of such bonus to be determined in the discretion of the board.
In addition, Mr. Howort is entitled to benefits generally available to other
senior management employees. At the time Mr. Howort entered into his employment
agreement, we granted him a stock option to purchase 150,000 shares of common
stock at $4.625 per share, vesting over four years. If we terminate Mr. Howort's
employment, other than for cause, death or disability, or if Mr. Howort resigns
for good reason, we have agreed to continue making monthly base salary payments
for the remainder of the agreement's term or until Mr. Howort obtains other
employment, whichever comes first (and to pay the excess of his base salary
under the agreement over his salary from other employment for the remaining term
of the agreement) and to continue to provide insurance coverage until Mr. Howort
obtains other employment.
Our subsidiary, IT Network, Inc., has entered into a two-year employment
agreement with Howard Gross dated as of June 17, 1999 pursuant to which Mr.
Gross is employed as President and Chief Operating
9
<PAGE> 12
Officer of IT Network at a base salary of $180,000 per year plus a bonus, the
timing and amount of such bonus to be determined at the discretion of our board.
In addition, Mr. Gross is entitled to benefits generally available to other
senior management employees of IT Network. At the time Mr. Gross entered into
his employment agreement, we granted him stock options to purchase 125,000
shares of common stock at $15.00, vesting over four years. If IT Network
terminates Mr. Gross's employment, other than for cause, death or disability, IT
Network has agreed to continue making monthly base salary payments and to
continue to provide insurance coverage for the remainder of the agreement's term
or until Mr. Gross obtains other employment, whichever comes first.
We have entered into an employment agreement with Derrick Horner dated
October 17, 2000 pursuant to which Mr. Horner is employed for two years as Vice
President and General Counsel at a base salary of $200,000 per year plus a
bonus, the timing and amount of such bonus to be determined in the discretion of
the board. In addition, Mr. Horner is entitled to benefits generally available
to other senior management employees. At the time Mr. Horner entered into his
employment agreement, we granted him a stock option to purchase 150,000 shares
of common stock at $3.141 per share, vesting over four years. If we terminate
Mr. Horner's employment, other than for cause, death or disability, or if Mr.
Horner resigns for good reason, we have agreed to continue making monthly base
salary payments for the remainder of the agreement's term or until Mr. Horner
obtains other employment, whichever comes first (and to pay the excess of his
base salary under the agreement over his salary from other employment for the
remaining term of the agreement) and to continue to provide insurance coverage
for the remainder of the agreement's term or until Mr. Horner obtains insurance
coverage through other employment, whichever comes first. We have agreed to make
Mr. Horner whole if payments he receives in the event of a change of control are
subject to excise tax.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee of the Board of Directors are
currently Michael S. Willner, James L. Greenwald and Stephen W. Palley. Mr.
Greenwald became a member of the Compensation Committee on May 21, 1997. Mr.
Palley joined the Committee on June 7, 1999 and Mr. Willner joined the Committee
on May 21, 1999. Mr. Palley replaced Robert H. Alter, who had joined the
Committee in 1997. Mr. Willner replaced Michael J. Marocco, who had joined the
Committee in 1998. None of Messrs. Alter, Greenwald, Marocco or Willner is or
has been our officer, nor has any of them been involved in related transactions
with us. Mr. Palley is our chief executive officer and receives compensation as
described above under "Executive Compensation." Mr. Willner serves as President
and a director of Insight, which engaged in certain transactions with us, as
described below under "Certain Relationships and Related Transactions."
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
To the Stockholders of Source Media, Inc.:
The Compensation Committee establishes the level of compensation of the
executive officers of Source, and administers Source's stock option plans.
General
The goal of Source's executive compensation policy is to ensure that an
appropriate relationship exists between executive pay and the creation of
stockholder value, while at the same time motivating and retaining key
employees. To achieve this goal, Source's executive compensation policy
integrates competitive levels of annual base compensation with bonuses based
upon corporate performance and individual goals and initiatives. This annual
cash compensation, together with the payment of equity-based incentive
compensation, is designed to attract and retain qualified executives and to
ensure that such executives have a continuing stake in the long-term success of
Source. All executive officers and managers participate in Source's incentive
compensation plans.
In establishing executive compensation, the Compensation Committee neither
bases its decisions entirely on quantitative relative weights of various
factors, nor does it follow a mathematical formula. Rather, the Compensation
Committee exercises discretion and makes judgments after considering all factors
that it
10
<PAGE> 13
considers relevant, including industry compensation information, individual
performance, level of responsibility, and the achievement of certain objective
targets relating to Source's operating and financial performance. In making its
decisions about 1999 compensation, the Compensation Committee also considered a
comparative study prepared for Source by Coopers & Lybrand LLP in 1996. Coopers
& Lybrand provided data extrapolated from its survey of executive compensation
at approximately 27 telecommunications and 11 cable companies. Companies chosen
for comparison purposes in the compensation survey did not include all the
companies in the peer group indices in the performance graphs included in this
proxy statement. The Compensation Committee believes that the pool of executive
talent for Source comes from a broader group of companies than those comprising
the peer groups established for comparing stockholder returns.
Cash Compensation
Base Salary. The base salaries of executive officers of Source are
reviewed periodically by the Compensation Committee. Salaries are based
generally on consideration of factors such as Source's performance and financial
condition, competitive conditions, general economic conditions and cost of
living increases. The Compensation Committee's evaluation of these factors is
subjective, with no particular weight being assigned to any one factor.
Bonuses. Bonuses to executive officers are determined in the discretion of
the Compensation Committee based on a variety of factors. Some of the factors
considered by the Committee include our overall financial performance, the
individual performance of the executive officer and the anticipated contribution
of an officer's services to the long-term benefit and growth of our company.
Stock Options
The executive officers are also granted stock options under Source's stock
option plans. The timing of such grants is determined by the Compensation
Committee based upon market conditions affecting the price of Source's common
stock and other factors. The size of the overall option pool to be awarded in
any year is determined by the Compensation Committee based on such factors as
company performance and the delusive impact of such grants. Grants to individual
executive officers are based on the Compensation Committee's evaluation of their
performance and their contribution to the long-term performance of Source. The
Compensation Committee's evaluation of these factors is subjective with no
particular weight being assigned to any one factor. In 1999, options for the
purchase of 500,000 shares were awarded to Stephen Palley, Source's Chief
Executive Officer; options for the purchase of 60,000 shares were issued to
Victoria Hamilton, Source's Chief Operating Officer; options for the purchase of
34,428 shares were awarded to Paul Tigh, Source's Chief Financial Officer; and
options for the purchase of 125,000 shares were granted to Howard Gross, IT
Network's President and Chief Operating Officer.
COMPENSATION COMMITTEE
James L. Greenwald
Stephen W. Palley
Michael S. Willner
11
<PAGE> 14
COMPARISON OF STOCK PRICE PERFORMANCE
The following graph and table compare the cumulative total return of our
common stock (listed in the graph and table under the symbol "SRCM") with the
cumulative total return of (i) the Total Return Index for The Nasdaq Stock
Market ("Nasdaq Index") and (ii) the Total Return Index for The Nasdaq
Telecommunication Stocks ("Telecom Index"). The graph and table assume that $100
was invested on December 31, 1994 in each of our common stock, the Nasdaq Index
and the Telecom Index, and that dividends were reinvested. The stockholder
return shown is not necessarily indicative of future stock performance. Prior to
June 23, 1995, Source Media, Inc. was not publicly traded, and its predecessor
company was engaged in the business of acquiring a company in the communications
industry, rather than in our current communications business.
[PERFORMANCE GRAPH]
STOCK PRICE PERFORMANCE COMPARISON
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------
12/31/94 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SRCM 100.00 86.90 65.48 83.33 172.03 176.19
Telecom 100.00 134.17 139.04 197.44 322.56 653.87
Nasdaq Index 100.00 139.92 171.69 208.83 291.60 541.16
</TABLE>
CERTAIN TRANSACTIONS
On November 17, 1999, we formed SourceSuite LLC, a joint venture with
Insight Interactive, a wholly-owned subsidiary of Insight, to conduct all of our
lines of business relating to our VirtualModem and Interactive Channel products
and businesses. At the same time, pursuant to a Common Stock and Warrants
Purchase Agreement, Insight acquired 842,105 shares of our common stock at a
price of $14.25 per share, for a purchase price of $12 million in cash. We also
issued to Insight Interactive five-year warrants to acquire up to an additional
4,596,786 shares of our common stock at an exercise price of $20.00 per share.
The Purchase Agreement includes registration rights provisions for the
shares issued and the shares underlying the warrants. The warrants contain
provisions protecting the holder from future dilution in certain
12
<PAGE> 15
instances. The Purchase Agreement contains provisions to protect Insight
Interactive's interest in us, including preemptive rights and board
representation. In order to provide Insight Interactive with these rights, we
issued Insight Interactive a special series of Non-Participating Preferred
Stock.
The Non-Participating Preferred Stock entitles Insight Interactive to
designate a certain number of the members of our board of directors based on
Insight Interactive's ownership percentage of our common stock on a fully
diluted basis as set forth below. The terms of the Non-Participating Preferred
Stock require that the board be comprised of either seven or ten members.
<TABLE>
<CAPTION>
NUMBER OF BOARD SEATS TO BE DESIGNATED BY INSIGHT INTERACTIVE
--------------------------------------------------------------
BASED ON BASED ON PERCENTAGE OF VOTING STOCK OWNED BY INSIGHT
7 PERSON BOARD 10 PERSON BOARD INTERACTIVE ON A FULLY DILUTED BASIS
----------------- --------------- -------------------------------------------
<C> <C> <S>
3 4.................... 15% or greater
2 3.................... 7.5% or more but less than 15%
1 2.................... 5% or more but less than 7.5%
1 1.................... 2.5% or more but less than 5%
0 0.................... less than 2.5%
</TABLE>
In addition to the board representation described above, Insight
Interactive is entitled to have at least one voting representative on each
committee of the board of directors, including but not limited to, the executive
committee, if any, the audit committee and the compensation committee.
The Non-Participating Preferred Stock also gives Insight Interactive
certain preemptive rights to purchase securities that we may sell or issue to
enable Insight Interactive to maintain its ownership percentage of the then
outstanding common stock.
Insight Interactive's right to appoint members to the board of directors
(and committees of the board) and its preemptive rights will lapse in the event
that its ownership of our voting stock on a fully diluted basis falls below
2.5%.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act requires our directors,
officers and persons who beneficially own more than ten percent of our common
stock to file with the SEC initial reports of ownership and reports of changes
transactions of our common stock. Directors, officers and more than ten percent
stockholders are required by SEC regulations to furnish us with copies of all
Section 16(a) forms they file. To our knowledge, based solely on a review of the
copies of such forms received furnished to us and written representations that
no other reports were required, during the year ended December 31, 1999, all
directors, officers and more than ten percent stockholders were in compliance
with all applicable Section 16(a) filing requirements, except that Mr. Tigh was
not timely in the filing of two reports and each of Ms. Hamilton and Mr. Gross
were not timely in the filing of one report. All required reports have been
filed with the SEC.
STOCKHOLDER PROPOSALS
Stockholders are entitled to submit proposals on matters appropriate for
stockholder action consistent with regulations of the SEC. In order for
stockholder proposals to be eligible for inclusion in our proxy materials for
the 2001 annual meeting of stockholders, they must be received by our Secretary
at our offices in Dallas, Texas, not later than August 21, 2001.
OTHER MATTERS
Our board of directors does not know of any other matter that may be
brought before the annual meeting but, in the event that any other matter should
come before the meeting, or any nominee should not be available for election,
the persons named as proxy will have authority to vote all proxies not marked to
the contrary in their discretion as they deem advisable.
13
<PAGE> 16
ACCOMPANYING INFORMATION
Accompanying this proxy statement is a copy of our annual report on Form
10-K, as amended, for the fiscal year ended December 31, 1999. which includes
our audited financial statements for the three fiscal years ended December 31,
1999. Additional copies of this report and a copy of the exhibits to such report
will be furnished without charge to any stockholder upon written request to us
at 5400 LBJ Freeway, Suite 680, Dallas, TX 75240, attention: Secretary.
14
<PAGE> 17
EXHIBIT A
SOURCE MEDIA, INC.
AUDIT COMMITTEE CHARTER
ORGANIZATION
This charter governs the operations of the audit committee. The committee
will review and reassess the charter at least annually and obtain the Board of
Directors' approval of the charter. The committee will be appointed by the Board
and will be made up of at least three directors, each of whom are independent of
management and the Company. In exceptional and limited circumstances as
determined by the Board of Directors, one member who is not independent and is
not a current employee or an immediate family member of a current employee may
be a member of the committee. Members of the committee will be considered
independent if they have no relationship that, in the opinion of the Board,
would interfere with the exercise of their independence from management and the
Company, and would be considered independent under the rules of the NASD. All
committee members will be financially literate, (or will become financially
literate within a reasonable period of time after appointment to the committee),
and at least one member will have accounting or related financial management
expertise.
STATEMENT OF POLICY
The committee will provide assistance to the Board in fulfilling its
oversight responsibility to the shareholders, the investment community and
others relating to the Company's financial statements and the financial
reporting process, the systems of internal accounting and financial controls,
and the annual independent audit of the Company's financial statements. In so
doing, it is the responsibility of the committee to maintain free and open
communications between the committee, independent auditors and management. In
discharging its oversight role, the committee is empowered to investigate any
matter brought to its attention with full access to all books, records,
facilities, and personnel of the Company and the power to retain outside counsel
or other experts for this purpose.
RESPONSIBILITIES AND PROCESSES
The primary responsibility of the committee is to oversee the Company's
financial reporting process on behalf of the Board and report the results of
their activities to the Board. Management is responsible for preparing the
Company's financial statements, and the independent auditors are responsible for
auditing those financial statements. The committee, in carrying out its
responsibilities, believes its policies and procedures should remain flexible in
order to best react to changing conditions and circumstances. The committee will
set the overall corporate "environment" for quality financial reporting, sound
business risk practices and ethical behavior.
The following will be the principal recurring processes of the audit
committee in carrying out its oversight responsibilities. The processes are set
forth as a guide with the understanding that the committee may supplement them
as appropriate.
- The committee will have a clear understanding with management and the
independent auditors that the independent auditors are ultimately
accountable to the Board and the committee as representatives of the
Company's shareholders. The committee and the Board shall have ultimate
authority and responsibility to select, evaluate and, where appropriate,
replace the independent auditor.
- The committee will discuss with the independent auditors the overall
scope and plans for their respective audits including the adequacy of
staffing and compensation. Also, the committee will discuss with
management, and the independent auditors, the adequacy and effectiveness
of the accounting and financial controls, including the Company's system
to monitor and manage business risk. Further, the committee will meet
separately with the independent auditors, with and without management
present, to discuss the results of their examination.
15
<PAGE> 18
- The committee will review the interim financial statements with
management and the independent auditors prior to the filing of the
Company's Quarterly Report on Form 10-Q. Also, the committee shall
discuss the results of the quarterly review and any other matters
required to be communicated to the committee by the independent auditors
under generally accepted auditing standards. The chair of the committee
may represent the entire committee for the purposes of this review.
- The committee will review with management and the independent auditors
the financial statements to be included in the Company's Annual Report on
Form 10-K (or the annual report to shareholders if distributed prior to
the filing of Form 10-K), including their judgment about the quality (not
just acceptability) of accounting principles, the reasonableness of
significant judgments and the clarity of the disclosures in the financial
statements. Also, the committee will discuss the results of the annual
audit and any other matters required to be communicated to the committee
by the independent auditors under generally accepted auditing standards,
and make recommendations to the Board regarding such matters.
- The committee will recommend to the Board that the audited financial
statements be included in the Company's Annual Report on Form 10-K.
- The committee will ensure the independent auditors deliver to the
committee annually a formal written statement delineating all
relationships between the independent auditors and the Company,
consistent with Independence Standards Board Standard No. 1; discuss with
the independent auditors any disclosed relationships or services that may
impact the objectivity and independence of the Company's independent
auditors; and recommend that the Board take appropriate action to oversee
the independent auditors' independence.
- The committee chairman will be responsible for maintaining minutes of
each meeting and for communicating to the Board any matters the committee
deems appropriate.
16
<PAGE> 19
SOURCE MEDIA, INC.
5400 LBJ FREEWAY
SUITE 680
DALLAS, TEXAS 75240
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Stephen W. Palley and F. Paul Tigh, and each of
them, as the undersigned's attorneys and proxies, each with the power to appoint
his substitute, and hereby authorizes them to represent and to vote, as directed
on the reverse side, all the shares of common stock of Source Media, Inc. held
of record by the undersigned on November 15, 2000, at the annual meeting of
stockholders to be held on December 19, 2000 or any adjournment thereof.
(Continued and to be signed on reverse side)
<PAGE> 20
Please mark your votes as indicated in this example X
(INSTRUCTION: To withhold authority to vote for any individual nominee, strike a
line through the nominee's name below.)
1. ELECTION OF DIRECTORS:
[ ] FOR all nominees listed to the right James L. Greenwald
(except as marked to the contrary) Michael J. Marocco
Stephen W. Palley
Barry Rubenstein
[ ] WITHHOLD AUTHORITY to vote
for all nominees listed to the right
2. PROPOSAL TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP:
FOR [ ] AGAINST [ ] ABSTAIN [ ]
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR MANAGEMENT'S NOMINEES FOR ELECTION AS DIRECTORS AND FOR PROPOSAL 2.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
Date:
--------------------------------------
--------------------------------------------
Signature
--------------------------------------------
Signature if held jointly
Please sign exactly as name appears hereon.
When shares are held by joint tenants, both
should sign. When signing as attorney,
executor, administrator, trustee or
guardian, please give full title as such. If
a corporation, please sign in full corporate
name by President or other authorized
officer. If a partnership, please sign in
partnership name by authorized person.
