<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
FOOD COURT ENTERTAINMENT NETWORK, INC.
- -----------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
----------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------------
5) Total fee paid:
----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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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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<PAGE>
[GRAPHIC OMITTED]
FOOD COURT ENTERTAINMENT NETWORK, INC.
NOTICE AND PROXY STATEMENT FOR THE
1997 ANNUAL MEETING OF STOCKHOLDERS
<PAGE>
FOOD COURT ENTERTAINMENT NETWORK, INC.
220 East 42nd Street
16th Floor
New York, New York 10017
May 2, 1997
Dear Stockholder:
You are cordially invited to attend the 1997 Annual Meeting of Stockholders
of Food Court Entertainment Network, Inc. which will be held on Wednesday, June
4, 1997, at 9:00 A.M., at the Company's offices located at 220 East 42nd Street,
16th Floor, New York, New York. The official notice of the meeting together with
a proxy statement and form of proxy are enclosed. Please give this information
your careful attention.
Stockholders of the Company are being asked to elect seven directors of the
Company to serve until the 1998 Annual Meeting of Stockholders and to ratify the
appointment by the Company's Board of Directors of Richard A. Eisner & Company,
LLP as the Company's independent auditors for 1997. Whether or not you expect to
attend the meeting in person, it is important that your shares be voted at the
meeting. I urge you to specify your choices by marking the enclosed proxy and
returning it promptly.
Sincerely,
/s/ JAMES N. PERKINS
--------------------
JAMES N. PERKINS
President and Chief Executive
Officer
<PAGE>
FOOD COURT ENTERTAINMENT NETWORK, INC.
220 East 42nd Street
16th Floor
New York, New York 10017
---------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
to be held June 4, 1997
---------------------
TO OUR STOCKHOLDERS:
Notice is hereby given that the annual meeting of stockholders of FOOD
COURT ENTERTAINMENT NETWORK, INC. (the "Company") will be held on Wednesday,
June 4, 1997, at 9:00 A.M. (prevailing time), at the Company's offices located
at 220 East 42nd Street, 16th Floor, New York, New York for the following
purposes:
1. To elect seven directors to hold office until the 1998 Annual Meeting of
Stockholders and until their successors shall have been elected and
qualified ("Proposal One");
2. To ratify the appointment by the Company's Board of Directors of Richard
A. Eisner & Company, LLP as the Company's independent auditors for the
fiscal year ending December 31, 1997 ("Proposal Two"); and
3. To transact such other business as may properly come before this meeting
or any postponement or adjournment thereof.
The Board of Directors has fixed April 18, 1997 as the record date for the
determination of stockholders entitled to vote at the Annual Meeting. Only
stockholders of record at the close of business on that date will be entitled to
notice of, and to vote at, the Annual Meeting.
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN PERSON. WHETHER
OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON, YOU ARE URGED TO SIGN,
DATE AND PROMPTLY RETURN THE ENCLOSED PROXY. A SELF-ADDRESSED ENVELOPE IS
ENCLOSED FOR YOUR CONVENIENCE; NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES.
May 2, 1997 By Order of the Board of Directors,
/s/ Robert H. Lenz
-------------------------
Robert H. Lenz
Chairman
<PAGE>
FOOD COURT ENTERTAINMENT NETWORK, INC.
220 East 42nd Street
16th Floor
New York, New York 10017
---------------------
PROXY STATEMENT
---------------------
The accompanying proxy is solicited by and on behalf of FOOD COURT
ENTERTAINMENT NETWORK, INC. (the "Company") for use at the annual meeting
("Annual Meeting") of stockholders to be held on Wednesday, June 4, 1997, at
9:00 A.M. (prevailing time), at the Company's offices located at 220 East 42nd
Street, 16th Floor, New York, New York and at any postponement or adjournment
thereof. The approximate date on which this Proxy Statement and the accompanying
form of proxy will first be sent or given to stockholders is May 2, 1997.
Sending in a signed proxy will not affect the stockholder's right to attend
the Annual Meeting and vote in person since the proxy is revocable. Any
stockholder giving a proxy has the power to revoke it by, among other methods,
giving written notice to the Secretary of the Company or delivering a later
dated proxy at any time before the proxy is exercised.
The expense of the proxy solicitation will be borne by the Company. In
addition to solicitation by mail, proxies may be solicited in person or by
telephone, telegraph or teletype by directors, officers or employees of the
Company without additional compensation. Upon request by record holders of the
Company's Series A Common Stock, par value $.01 per share (the "Series A Common
Stock"), who are brokers, dealers, banks or voting trustees, or their nominees,
the Company will pay the reasonable expenses incurred by such record holders for
mailing proxy material and annual reports to any beneficial owners of Series A
Common Stock.
A form of proxy is enclosed. If properly executed and received in time for
voting, and not revoked, the enclosed proxy will be voted as indicated in
accordance with the instructions thereon. If no directions to the contrary are
indicated, the persons named in the enclosed proxy will vote all shares of the
Company's Series A Common Stock and Series B Common Stock, par value $.01 per
share (the "Series B Common Stock"), "FOR" the election of all nominees for
directors as set forth in Proposal One and "FOR" the ratification of the
appointment of Richard A. Eisner & Company, LLP as the Company's independent
auditors for 1997 as set forth in Proposal Two.
The enclosed proxy confers discretionary authority to vote with respect to
any and all of the matters that may come before the Annual Meeting. In
connection with such matters, the persons named in the enclosed form of proxy
will vote in accordance with their best judgment.
The Company is not currently aware of any matters which will be brought
before the Annual Meeting (other than procedural matters) which are not referred
to in the enclosed notice of the Annual Meeting.
The Company had 6,963,655 shares of Series A Common Stock and 1,064,765
shares of Series B Common Stock outstanding at the close of business on April
18, 1997, the record date (the "Record Date"). The presence, in person or by
proxy, of stockholders entitled to cast at least a majority of the votes which
all stockholders are entitled to cast on a particular matter constitutes a
quorum for the purpose of considering such matter. All such shares that are
present, in person or by proxy, at the meeting will be counted in determining
whether a quorum is present, no matter how the shares are voted or whether they
abstain from voting or are broker non-votes. Each share of Series A Common Stock
outstanding is entitled to one vote and each share of Series B Common Stock is
entitled to five votes on each matter which may be brought before the Annual
Meeting. Except as otherwise indicated, Series A and Series B stockholders vote
as a single class. Mr. Robert H. Lenz, Chairman of the Board and Director of the
Company, and four other stockholders own collectively 100% of the issued and
outstanding Series B Common Stock. All current officers and directors, together
with such four other stockholders of Series B Common Stock, beneficially own in
the aggregate approximately 21.6% of the total outstanding capital stock of the
Company and have approximately 47.22% of the total combined voting power of the
Company.
<PAGE>
The election of directors will be determined by a plurality vote. With
respect to the election of directors (Proposal One), each stockholder may cast
such holder's votes "FOR" all the nominees or may "WITHHOLD AUTHORITY" to vote
for all or for any individual nominee. Holders of the Common Stock are not
entitled to cumulate votes in the election of directors.
The ratification of auditors (Proposal Two) requires the affirmative vote
of a majority of shares present, in person or by proxy, and entitled to vote.
With respect to the ratification of the appointment of auditors, each
stockholder may cast all of such holder's votes "FOR" or "AGAINST" such
proposal, or may "ABSTAIN" from voting.
Under the Delaware General Corporation Law, an abstention, withholding of
authority to vote or a broker non-vote on Proposal One or Proposal Two will have
no effect on the outcome of such Proposals because the election of directors
will be determined by a plurality vote and the approval of Proposal Two requires
only the affirmative vote of a majority of shares present, in person or by
proxy, and entitled to vote.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of April 1, 1997, the ownership of the
Company's Common Stock by (i) each person who is known by the Company to own, of
record or beneficially, more than five percent of the Company's Series A Common
Stock or Series B Common Stock, (ii) each of the Company's Directors and
Executive Officers, and (iii) all Directors and Executive Officers as a group.
Except as otherwise indicated, the stockholders listed in the table have sole
voting and investment powers with respect to the shares indicated.
<TABLE>
<CAPTION>
Shares of Percentage of Shares of Percentage of
Series A Series A Series B Series B
Common Stock Common Stock Common Stock Common Stock
Beneficially Beneficially Beneficially Beneficially Voting
Name(1) Owned(2) Owned Owned(2)(3)(4) Owned(5) Control
- -------------------------------- ------------------- ---------------- ----------------- --------------- ---------
<S> <C> <C> <C> <C> <C>
Robert H. Lenz ............... 1,024,471(6) 12.89 440,748(7) 41.39 21.73%
Stephen G. Bowen ............... 349,045(8) 4.78 206,545(9) 19.40 9.45
Jeffrey Steinberg ............ 169,545(10) 2.38 163,386(9) 15.34 6.70
Joseph Mercaldo ............... 188,786(11) 2.64 178,786(9) 16.79 7.36
Harvey S. Wilson ............... 101,526(12) 1.44 75,300(13) 7.07 3.16
Gary Penisten .................. 60,000(14) * -0- -0- *
Howard W. Phillips ............ 93,488(15) 1.32 -0- -0- *
Robert S. Wussler ............ 60,000(14) * -0- -0- *
Benjamin Frank ............... 45,000(16) * -0- -0- *
E. Donald Shapiro ............ 45,000(16) * -0- -0- *
James Perkins .................. 215,873(17) 2.79 -0- -0- 1.73
Darren M. Sardoff ............ 100,000(18) 1.42 -0- -0- *
All Officers and Directors as a
Group (8 persons) ............ 1,643,832(19) 19.22% 440,748 41.39% 25.36%
</TABLE>
- ------------
* Denotes less than 1%
(1) Except as otherwise indicated, the address of all of the named individuals
is c/o Food Court Entertainment Network, Inc., 220 East 42nd Street, New
York, New York 10017.
(2) The securities "beneficially owned" by an individual are determined in
accordance with the definition of "beneficial ownership" set forth in the
regulations of the Securities and Exchange Commission. Accordingly, they
may include securities owned by or for, among others, the wife and/or minor
children of the individual and any other relative who has the same home as
such individual, as well as other securities as to which the individual has
or shares voting or investment power or has the right to acquire under
outstanding stock options, warrants or convertible securities within 60
days after the date of this table. Beneficial ownership may be disclaimed
as to certain of the securities.
2
<PAGE>
(3) Certain holders of Series B Common Stock have placed a portion of their
shares of Series B Common Stock in escrow and may vote such shares but not
transfer them as of this time ("Escrow Shares").
(4) Each share of Series B Common Stock is entitled to five votes per share, is
convertible into one share of Series A Common Stock at the option of the
holder, and will automatically convert into an equivalent number of shares
of Series A Common Stock upon the sale or transfer by the record holder to
any person other than another holder of Series B Common Stock.
(5) Excludes 20,135 shares of Series B Common Stock held in treasury.
(6) Includes warrants to purchase 542,850 shares of Series A Common Stock and
440,748 shares of Series A Common Stock which may be acquired upon the
conversion of Series B Common Stock. Does not include (i) 55,668 shares of
Series A Common Stock underlying warrants which are not exercisable until
November 14, 1997 or (ii) 600,000 shares of Series A Common Stock
underlying unvested options.
(7) Includes 241,180 Escrow Shares.
(8) Includes (i) 100,000 shares of Series A Common Stock which may be acquired
upon the exercise of currently exercisable options, (ii) 30,000 shares of
Series A Common Stock underlying currently exercisable warrants and (ii)
206,545 shares of Series A Common Stock which may be acquired upon the
conversion of Series B Common Stock.
(9) Includes 106,545 Escrow Shares.
(10) Includes 163,386 shares of Series A Common Stock which may be acquired upon
the conversion of Series B Common Stock.
(11) Includes 178,786 shares of Series A Common Stock which may be acquired upon
the conversion of Series B Common Stock.
(12) Includes warrants to purchase 14,026 shares of Series A Common Stock and
75,300 shares of Series A Common Stock which may be acquired upon the
conversion of Series B Common Stock.
(13) Includes 75,300 Escrow Shares.
(14) Represents 60,000 shares of Series A Common Stock which may be acquired
upon the exercise of currently exercisable options. Does not include 60,000
shares of Series A Common Stock underlying unvested options.
(15) Represents 93,488 shares of Series A Common Stock which may be acquired
upon the exercise of currently exercisable options and warrants. Does not
include 154,560 shares of Series A Common Stock which may be acquired upon
exercise of a unit purchase option not exercisable until October, 1998.
Does not include 60,000 shares of Series A Common Stock underlying unvested
options.
(16) Represents 45,000 shares of Series A Common Stock which may be acquired
upon the exercise of currently exercisable options. Does not include 60,000
shares of Series A Common Stock underlying unvested options.
(17) Includes 200,000 shares of Series A Common Stock which may be acquired upon
the exercise of currently exercisable options. Does not include (i) 55,668
shares of Series A Common Stock underlying warrants which are not
exercisable until November 14, 1997 or (ii) 300,000 shares of Series A
Common Stock underlying unvested stock options.
(18) Represents 100,000 shares of Series A Common Stock which may be acquired
upon the exercise of currently exercisable options.
(19) Includes 964,338 shares of Series A Common Stock which may be acquired upon
the exercise of currently exercisable options and warrants and 629,534
shares of Series A Common Stock which may be acquired upon conversion of
Series B Common Stock.
3
<PAGE>
PROPOSAL ONE
ELECTION OF DIRECTORS
The Company's by-laws provide that the Board of Directors shall consist of
such number of directors as determined by the Board of Directors. The Board of
Directors has by resolution set the number of directors to be elected at seven.
The Board of Directors has designated the persons listed below to be
nominees for election as Directors. The Company does not have a nominating
committee. The nominees are being nominated to serve for a one year term and
until their successors are elected and qualified. The Company has no reason to
believe that any of the nominees will be unavailable for election; however,
should any nominee become unavailable for any reason the Board of Directors may
designate a substitute nominee. The proxy agents intend (unless authority has
been withheld) to vote for the election of the Company's nominees.
Information as to Directors and Nominees
The following information regarding the Company's nominees is based, in
part, upon information furnished by these individuals.
<TABLE>
<CAPTION>
Name Age Position
- ---- ---- --------
<S> <C> <C>
Robert H. Lenz 57 Chairman of the Board of Directors
James N. Perkins 63 President, Chief Executive Officer and Director
Gary D. Penisten 65 Director
Howard W. Phillips 66 Director
Robert J. Wussler 58 Director
Benjamin Frank 62 Director
E. Donald Shapiro 65 Director
</TABLE>
Robert H. Lenz,
Chairman of the Board of Directors
Mr. Lenz has served as the Company's Chairman since May, 1993. From 1979 to
1991, Mr. Lenz was a principal, Creative Director and co-founder with five
partners of the advertising firm of Backer & Spielvogel Inc. After the merger of
Backer & Spielvogel with Ted Bates, Inc. in 1988, Mr. Lenz was Chairman and
Creative Director of Backer Spielvogel Bates U.S. until 1991. Subsequent to his
departure from Backer Spielvogel Bates U.S. in 1991, Mr. Lenz has been pursuing
personal interests including the development of Cafe USA.
James N. Perkins,
President, Chief Executive Officer and Director
Mr. Perkins has served as President, Chief Executive Officer and Director
of the Company since October 1, 1996. Mr. Perkins served as Executive Vice
President and Chief Operating Officer of the Company from February, 1996 to
October 1, 1996. From 1988 to 1996, Mr. Perkins was President of US Tel, Inc., a
telecommunications development company specializing in new media. From 1985 to
1988, Mr. Perkins organized and managed an interactive media research venture of
Citibank, NYNEX and RCA. From 1981 to 1985, Mr. Perkins organized and managed
the cable television programming venture of Hearst Corporation and ABC that led
to the development of the Arts & Entertainment and Lifetime Networks. From 1980
to 1981, Mr. Perkins created and produced "The Home Shopping Show," the
forerunner of The Home Shopping Network. Mr. Perkins is a graduate of Dartmouth
College and a former Captain in the U.S. Air Force.
Gary D. Penisten,
Director
Mr. Penisten has been a director of the Company since October, 1993. Mr.
Penisten was employed with General Electric from 1953 to 1974, including as
Manager of Finance for General Electric's Power Generation Group from 1972 to
1974. From 1974 to 1977 Mr. Penisten served as Assistant Secretary of the Navy,
Financial Management. In 1977 he joined Sterling Drug, Inc. where he was Senior
Vice President, CFO, and member of
4
<PAGE>
the Board of Directors of Sterling until 1988. After Sterling Drug was acquired
by Eastman Kodak in 1988, Mr. Penisten remained with Kodak for two years as CFO
of the Health Group until he took early retirement to pursue personal business
interests in 1990. Mr. Penisten was a minority owner and director of Network
Communications, Inc. which in December, 1990 filed a petition pursuant to
Chapter 11 of the Federal Bankruptcy laws. Currently, Mr. Penisten is Chairman
of the Board and a director of Acme United Corporation and a Director of D.E.
Foster Partners, Inc.
Howard W. Phillips,
Director
Mr. Phillips has been a director of the Company since October, 1993. From
1983 until August, 1995, Mr. Phillips was Director of Corporate Finance at D.H.
Blair Investment Banking Corp. Mr. Phillips was a partner and Director of
Corporate Finance of Oppenheimer & Co., Inc., an investment banking firm from
1970 to 1980. Mr. Phillips is currently a financial consultant and private
investor and is a director of Pioneer Healthcare.
Robert J. Wussler,
Director
Mr. Wussler has been a director of the Company since October, 1993. Mr.
Wussler was President of CBS Sports and CBS Television, Senior Executive Vice
President with Turner Broadcasting Systems (1980-1989), and CEO with Comsat
Video Enterprises (1989-1992). Since leaving Comsat Video in 1992, Mr. Wussler
has remained active in the industry serving as Treasurer to the Board of
Governors of the National Cable Television Association (NCTA), the Board of
Governors of the National Academy of Cable Programming (NACP) and the Board of
Advisors of the Cable Television Public Affairs Association (CTPAA). Mr. Wussler
is currently the President and Chief Executive Officer of New Venco, Inc., a
private corporation owned by ABC affiliated television stations organized to
explore new media ventures and is also a Director of the Nostalgia Channel, a
publicly held corporation.
Benjamin Frank,
Director
Mr. Frank has been a Director of the Company since October, 1995.
Currently, Mr. Frank, an Attorney, is the Chairman of Benjamin Frank &
Associates, a business engaged in real estate development, international trade
and mergers and acquisitions. Prior thereto, Mr. Frank had served as a Senior
Vice President of Allied Stores Corporation and on President Reagan's Advisory
Committee for Trade Negotiations.
E. Donald Shapiro,
Director
Mr. Shapiro has been a Director of the Company since October, 1995. Mr.
Shapiro is currently a Joseph Solomon Distinguished Professor of Law at New York
Law School and a Supernumerary Fellow at St. Cross College at Oxford University.
Mr. Shapiro is a member of the Board of Directors of Loral Space &
Communications, a NYSE company, Bank Leumi, Eyecare Products PLC, a London Stock
Exchange company, Kranzco Realty Trust, a NYSE company, Vion, Inc., a NASDAQ
company, Vascomedical Products, Inc., a NASDAQ company, Telepad, Inc., a NASDAQ
company, Premier Laser Systems, Inc., a NASDAQ company and United Industrial
Corporation, a NYSE company.
Board Meetings and Committees of the Board
During 1996, there were six meetings of the Board of Directors. Each
Director attended more than 83% of the meetings of the Board.
The Board of Directors has established an Audit Committee and a
Compensation Committee. The Audit Committee is responsible for reviewing the
Company's accounting and financial practices and policies and the scope and
results of the Company's audit. The Audit Committee is also responsible for
recommending the selection of the Company's independent public accountants. The
Audit Committee is comprised of Robert Wussler and E. Donald Shapiro. The Audit
Committee did not meet in 1996.
5
<PAGE>
The Compensation Committee reviews the compensation of executive officers,
makes recommendations to the Board regarding executive compensation and
administers the Company's Employee Stock Option Plan. The Compensation Committee
is comprised of Benjamin Frank and Gary Penisten. The Compensation Committee met
four times in 1996.
The Company does not have a Nominating Committee.
EXECUTIVE OFFICERS
The executive officers of the Company as of April 1, 1997 are set forth
below.
<TABLE>
<CAPTION>
Name Age Position
- ---- --- --------
<S> <C> <C>
Robert H. Lenz 57 Chairman of the Board of Directors
James N. Perkins 63 President, Chief Executive Officer and Director
Darren M. Sardoff 31 Senior Vice President, Business Affairs, Chief Financial
Officer and Secretary
</TABLE>
Mr. Lenz has served as the Company's Chairman since May, 1993. From 1979 to
1991, Mr. Lenz was a principal, Creative Director and co-founder with five
partners of the advertising firm of Backer & Spielvogel Inc. After the merger of
Backer & Spielvogel with Ted Bates, Inc. in 1988, Mr. Lenz was Chairman and
Creative Director of Backer Spielvogel Bates U.S. until 1991. Subsequent to his
departure from Backer Spielvogel Bates U.S. in 1991, Mr. Lenz has been pursuing
personal interests including the development of Cafe USA.
Mr. Perkins has served as President, Chief Executive Officer and Director
of the Company since October 1, 1996. Mr. Perkins served as Executive Vice
President and Chief Operating Officer of the Company from February, 1996 to
October 1, 1996. From 1988 to 1996, Mr. Perkins was President of US Tel, Inc., a
telecommunications development company specializing in new media. From 1985 to
1988, Mr. Perkins organized and managed an interactive media research venture of
Citibank, NYNEX and RCA. From 1981 to 1985, Mr. Perkins organized and managed
the cable television programming venture of Hearst Corporation and ABC that led
to the development of the Arts & Entertainment and Lifetime Networks. From 1980
to 1981, Mr. Perkins created and produced "The Home Shopping Show," the
forerunner of The Home Shopping Network. Mr. Perkins is a graduate of Dartmouth
College and a former Captain in the U.S. Air Force.
Mr. Sardoff has served as Senior Vice President, Business Affairs and Chief
Financial Officer, since September 1995. From 1993 to 1995, Mr. Sardoff was a
Manager of Strategic Planning and Business Development with the Warner Music
Group (a division of Time Warner Inc.) involved in the evaluation and start-up
of new media ventures. Prior to Time Warner, Mr. Sardoff was an Associate with
the investment banking firm of Alpine Capital Group Inc. from 1990 to 1993.
Prior thereto, he held positions with the international accounting firm of Ernst
& Young. Mr. Sardoff is a certified public accountant and holds a Master of
Business Administration degree from the Wharton School of the University of
Pennsylvania.
Beneficial Ownership Reports
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of
the Company's Common Stock, to file with the Securities and Exchange Commission
("SEC") initial reports of ownership and reports of changes in ownership of
Common Stock and other securities of the Company. Such persons are required by
the SEC to furnish the Company with copies of all Section 16(a) forms that they
file.
To the Company's knowledge, during the year ended December 31, 1996, based
solely on a review of the copies of the Section 16(a) reports furnished to the
Company, all of the Company's directors, officers and ten percent stockholders
have complied with Section 16(a) of the Exchange Act, except that Messrs. Frank
and Perkins were late in filing initial statements of beneficial ownership on
Form 3, Messrs. Lenz and Perkins were each late in filing a Form 4 for one
transaction, and Mr. Penisten was late in filing a Form 5 for one transaction.
6
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth information for each of the three years
ended December 31, 1996, concerning compensation for services in all capacities
awarded to, earned by or paid to (i) each person serving as the chief executive
officer, and (ii) the other executive officers of the Company who earned more
than $100,000 during 1996 (collectively, the "Named Executives"). There were no
other executive officers for whom disclosure would have been provided but for
the fact that such individuals were not serving at December 31, 1996.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term Compensation
--------------------------------------------
Annual Compensation Awards Payouts
-------------------------------------- ------------------------------ -------
Other Securities All
Annual Underlying Other
Compensa- Restricted Options/ LTIP Compen-
tion(1) Stock Awards SARs(2) Payouts sation
Name and Principal Position Year Salary ($) Bonus($) ($) ($) (#) ($) ($)
- ----------------------------- ------- ------------- ----------- ---------- ------------ ------------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Robert H. Lenz ............ 1996 $100,000 $N/A $ N/A $N/A 600,000 $N/A $N/A
Chairman of the 1995 82,083 N/A N/A N/A N/A N/A N/A
Board and Director 1994 118,749 N/A N/A N/A N/A N/A N/A
James N. Perkins ............ 1996 151,667 N/A N/A N/A 500,000 N/A
President and Chief 1995 N/A N/A N/A N/A N/A N/A N/A
Executive Officer 1994 N/A N/A N/A N/A N/A N/A N/A
Darren M. Sardoff ......... 1996 155,000 N/A N/A N/A 100,000 N/A N/A
Chief Financial Officer 1995 29,583 N/A N/A N/A N/A N/A N/A
1994 N/A N/A N/A N/A N/A N/A N/A
Stephen G. Bowen ............ 1996 175,000 N/A N/A N/A 100,000 N/A N/A
Former President and 1995 165,208 N/A A N/A N/A N/A N/A
Chief Executive Officer 1994 97,920 N/A A N/A N/A N/A N/A
</TABLE>
- ------------
"N/A" indicates that the column is not applicable because no compensation of the
category required to be disclosed in the column was received.
"A" indicates that the column is applicable but that no amount is required to be
disclosed.
(1) The costs of certain perquisites and other personal benefits are not
included because they did not exceed, in the case of each Named Executive,
the lesser of $50,000 or 10% of the total of annual salary and bonus
reported in the columns above.
(2) Indicates number of shares for which options were granted during the
applicable periods.
The following table sets forth information concerning grants of stock
options for the fiscal year ended December 31, 1996 to the Named Executives.
Option/SAR Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Individual Grants
-----------------------------
Number of % of Total
Securities Options/ Number of
Underlying SARs Shares/
Options/ Granted to Exercise
SARs Employees or Base
Granted in Fiscal Price(2) Expiration
(#)(1) Year ($/Sh) Date
------------- ------------- --------------- ------------
<S> <C> <C> <C> <C>
Robert H. Lenz ......... 600,000 43.17 600,000/2.00 11/14/06
James N. Perkins ...... 500,000 35.97 25,000/2.81 2/06/06
475,000/2.00 11/14/06
Darren M. Sardoff ...... 100,000 7.19 85,000/2.81 2/06/06
15,000/2.00 11/14/06
Stephen G. Bowen ...... 100,000 7.19 100,000/2.00 11/14/06
</TABLE>
7
<PAGE>
- ------------
(1) All amounts represent stock options to purchase shares of Series A Common
Stock granted under the terms of the 1995 Employee Stock Option Plan (the
"Plan"). No SARs or SARs granted in tandem with options were granted during
1996. Options terminate three months (but not later than the scheduled
termination date) after the date on which employment is terminated (whether
such termination be voluntary or involuntary) other than by reason of death
or disability. The option terminates one year from the date of termination
due to death or disability (but not later than the scheduled termination
date).
(2) Under the terms of the Plan, the exercise price per share must equal the
fair market value on the date the option is granted. Certain options granted
to Messrs. Perkins and Sardoff were repriced. See " -- Compensation
Committee Report on Option Repricing," herein. The exercise price may be
paid in cash, in shares of Series A Common Stock valued at fair market value
on the date of exercise, or in any combination of cash and shares of Series
A Common Stock.
The following table sets forth information concerning the exercise of
options to purchase shares of Series A Common Stock by the Named Executives
during the fiscal year ended December 31, 1996, as well as the number of
securities underlying unexercised options and potential value of unexercised
options (both options which are presently exercisable and options which are not
presently exercisable) as of December 31, 1996.
Aggregated Option/SAR Exercises in Last Fiscal Year
and Fiscal Year-End Option/SAR Value(1)
<TABLE>
<CAPTION>
Number of Value of
Securities Unexercised
Underlying In-the-Money
Options/SARs at Options/SARs at
Fiscal Year-End Fiscal Year-End
(#) ($)(2)
Shares Acquired Value Realized Exercisable/ Exercisable/
Name on Exercise(#) ($) Unexercisable Unexercisable
- ------------------------- ------------------ ----------------- ------------------ -----------------
<S> <C> <C> <C> <C>
Robert H. Lenz ......... 0 $0 0/600,000 $0/0
James N. Perkins ...... 0 0 200,000/300,000 0/0
Darren M. Sardoff ...... 0 0 85,000/15,000 0/0
Stephen G. Bowen ...... 0 0 100,000/0 0/0
</TABLE>
- ------------
(1) All amounts represent stock options to purchase shares of Series A Common
Stock. No SARs or SARs granted in tandem with stock options were either
exercised during 1996 or outstanding at fiscal year-end 1996.
(2) "In-the-money options" are stock options with respect to which the market
value of the underlying shares of Series A Common Stock exceeded the
exercise price at December 31, 1996. The value of such options is determined
by subtracting the aggregate exercise price for such options from the
aggregate fair market value of the underlying shares of Series A Common
Stock on December 31, 1996.
Employment Contracts, Termination of Employment and Change-in-Control
Arrangements
Effective October 1, 1996, Robert H. Lenz, the Company's Chairman, entered
into a three-year employment agreement with the Company which provides for: (1)
a base salary of $100,000 per year, with increases in subsequent years as may be
determined in the discretion of the Board of Directors, (2) bonus compensation
as determined from time to time in the discretion of the Board of Directors, (3)
a special bonus consisting of 3.75% of the fair market value of any strategic
alliance or merger or acquisition transaction, (4) options to purchase 600,000
shares of Series A Common Stock at an exercise price of $2.00 per share, with
certain vesting provisions as described below, (5) severance payments upon a
change in control of the Company, termination of employment or voluntary
resignation for "good reason" (as defined in the agreement) equal to 2.99 times
his then base compensation, and (6) benefits provided to all other senior
management employees of the Company.
Effective October 1, 1996, James N. Perkins, President and Chief Executive
Officer, entered into an employment agreement with the Company on substantially
similar terms to that between the Company and Mr.
8
<PAGE>
Lenz except that Mr. Perkins will receive base compensation of $150,000 and
options to purchase 475,000 shares of Series A Common Stock at an exercise price
of $2.00 per share. 175,000 of Mr. Perkins' options vested immediately and the
remaining 300,000 vest as described below.
The options granted to Mr. Lenz and 300,000 of the options granted to Mr.
Perkins under their employment agreements shall vest in three equal annual
installments on November 14, 1997, 1998 and 1999 provided that (a) the first
installment shall vest if and only if the Company (i) reports positive earnings
before extraordinary items, interest, taxes, depreciation and amortization for
the fiscal year ending December 31, 1997, or (ii) reports earnings (before
extraordinary items) per primary share ("EPS") of at least $0.35 for the fiscal
year ending December 31, 1998, or (iii) reports EPS of at least $0.60 for the
fiscal year ending December 31, 1999, or (iv) reports EPS of at least $0.90 for
the fiscal year ending December 31, 2000, (b) the second installment shall vest
if and only if the Company achieves a target set forth in preceding sub-clauses
(a)(ii), (a)(iii) or (a)(iv), and (c) the third installment shall vest if and
only if the Company achieves a target set forth in sub-clause (a)(iii) or
(a)(iv).
On October 9, 1995, the Company entered into an employment agreement with
Darren M. Sardoff as the Senior Vice President, Business Affairs and Chief
Financial Officer of the Company. Under the employment agreement, Mr. Sardoff is
entitled to a minimum base salary of $150,000 per year, and bonus and incentive
compensation as determined by the Board of Directors. The contract will continue
from year to year unless terminated by either party. Under the employment
agreement, Mr. Sardoff received options to purchase 100,000 shares of Series A
Common Stock at an exercise price equal to the fair market value on the date of
the grant. Under his employment agreement, Mr. Sardoff is entitled to severance
payments of $150,000 and 100,000 options on a fully-vested basis if his
employment is terminated by the Company other than for "Cause" (as defined in
the agreement), and a severance payment of the lesser of $50,000 or the balance
of his year salary and 50,000 options which vested as of January 1, 1996 if his
employment is terminated by him for other than "Cause." On February 6, 1996, the
Compensation Committee of the Board of Directors determined to replace the
options granted to Mr. Sardoff with an exercise price of $5.00 per share with an
option with an exercise price of $2.81 per share, based upon the last reported
trade price of the Series A Common Stock at the time of such replacement. Prior
to Completion of the Private Offering on November 14, 996, the Compensation
Committee of the Board of Directors determined to replace options to purchase
15,000 shares of Series A Common stock with an exercise price of $2.81 per share
with options with an exercise price of $2.00 per share. See " -- Compensation
Committee Report on Option Repricing," herein.
On October 24, 1996, the Company entered into a severance agreement with
Stephen Bowen, former President and Chief Executive Officer of the Company.
Under the severance agreement, Mr. Bowen is entitled to receive severance pay of
$175,000 which is payable by the Company in 52 weekly installments beginning on
October 1, 1996. In addition, Mr. Bowen was granted options to purchase 100,000
shares of Series A Common Stock which are fully vested and immediately
exercisable at the price of $2.00 per share.
Compensation Committee Report on Option Repricing
Prior to the completion of the Company's Private Offering on November 14,
1996, the Company agreed to (i) reset the exercise price of all outstanding
options to purchase 200,000 shares of Series A Common Stock granted to Mr.
Perkins from $2.81 per share to $2.00 per share, and (ii) reset the exercise
price of all outstanding options to purchase 15,000 shares of Series A Common
Stock granted to Mr. Sardoff from $2.81 per share to $2.00 per share. The
Compensation Committee believes that Mr. Perkins and Mr. Sardoff have each made
valuable contributions to the Company and accordingly determined in November,
1996 to reset the exercise price of their outstanding options. The reset
exercise price of the options is equal to the closing bid price of the Series A
Common Stock in the over-the-counter market as reported by Nasdaq on November
13, 1996, the last business day immediately preceding the date on which the
Private Offering was completed.
Directors' Compensation
In 1996, non-employee directors of the Company who were not also holders of
Series B Common Stock and have not been nominated pursuant to a contractual
undertaking by the Company receive a fee of $1,000 per meeting, $500 for each
committee meeting attended in conjunction with a Board meeting and $1,000 per
com-
9
<PAGE>
mittee meeting attended not in conjunction with a Board meeting. In addition, in
July 1996, the Company granted options to purchase 90,000 shares of Series A
Common Stock at an exercise price of $5.00 to each of Messrs. Penisten,
Phillips, Wussler, Frank and Shapiro pursuant to the Company's Director Stock
Option Plan.
PROPOSAL TWO
RATIFICATION OF INDEPENDENT AUDITORS
The Board of Directors of the Company has appointed Richard A. Eisner &
Company, LLP, independent accountants, to provide auditing and accounting
services for the Company during fiscal year 1997. Such appointment is being
submitted to stockholders for ratification.
Richard A. Eisner & Company, LLP has audited the books of account and
financial statements of the Company since 1992. The Company has been advised
that neither the firm nor any of its partners possesses any other material
direct or indirect relationship with the Company or its officers or directors,
in their capacities as such. Representatives of Richard A. Eisner & Company, LLP
are expected to attend the Annual Meeting, will be afforded an opportunity to
make a statement, if they desire to do so, and will be available to respond to
questions from stockholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" RATIFICATION
OF THE APPOINTMENT OF RICHARD A. EISNER & COMPANY, LLP AS THE COMPANY'S
INDEPENDENT AUDITORS FOR THE 1997 FISCAL YEAR. The affirmative vote of a
majority of the shares present, in person or by proxy, at the Annual Meeting is
required to ratify the appointment. All proxies will be vote "FOR" ratification
of the appointment unless a stockholder specifies to the contrary on such
stockholder's proxy card.
STOCKHOLDER PROPOSALS
Stockholder proposals regarding the 1998 Annual Meeting must be submitted
to the Company by January 2, 1998 to receive consideration for inclusion in the
Company's 1998 proxy material.
OTHER MATTERS
As of the date hereof, the Company knows of no other business that will be
presented for consideration at the Annual Meeting. However, the enclosed proxy
confers discretionary authority to vote with respect to any and all of the
following matters that may come before the meeting: (i) matters that the
Company's Board of Directors does not know, a reasonable time before proxy
solicitation, are to be presented for approval at the meeting; (ii) approval of
the minutes of a prior meeting of stockholders, if such approval does not
constitute ratification of the action at the meeting; (iii) the election of any
person to any office for which a bona fide nominee is unable to serve or for
good cause will not serve; (iv) any proposal omitted from this Proxy Statement
and the form of proxy pursuant to Rule 14a-8 under the Exchange Act, as amended;
and (v) matters incidental to the conduct of the meeting. If any such matters
come before the meeting, the proxy agents named in the accompanying proxy card
will vote in accordance with their judgment.
ANNUAL REPORT TO STOCKHOLDERS AND FORM 10-KSB
This Proxy statement is accompanied by the Company's Annual Report to
Stockholders for the year ended December 31, 1996, which includes the Company's
Annual report on Form 10-KSB for the fiscal year ended December 31, 1996.
By Order of the Board of
Directors
/s/ Robert H. Lenz
------------------
Robert H. Lenz
Chairman
10
<PAGE>
PROXY
-------
FOOD COURT ENTERTAINMENT NETWORK, INC.
Proxy for Annual Meeting of Stockholders
June 4, 1997
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints Robert H. Lenz and James N.
Perkins and each of them, as attorneys-in-fact and proxies of the undersigned,
with full power of substitution for and in the name, place and stead of the
undersigned to appear at the Annual Meeting of Stockholders of Food Court
Entertainment Network, Inc. (the "Company"), to be held on the 4th day of June,
1997, and at any postponement or adjournment thereof, and to vote all of the
shares of Series A Common Stock and Series B Common Stock of the Company which
the undersigned is entitled to vote, with all the powers and authority the
undersigned would possess if personally present. The undersigned directs that
this proxy be voted as follows:
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
<PAGE>
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Stockholders
FOOD COURT ENTERTAINMENT NETWORK, INC.
June 4, 1997
Please Detach and Mail in the Envelope Provided.
- --------------------------------------------------------------------------------
A [ X ] Please mark your votes as in this example.
1. ELECTION OF DIRECTORS
FOR [ ]
WITHHOLD AUTHORITY to vote for all directors, check this box [ ]
Nominees:
Robert H. Lenz, James N. Perkins,
Gary D. Penisten, Howard W. Phillips,
Robert J. Wussler, Benjamin Frank
and E. Donald Shapiro
2. Ratification of independent auditor.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. To transact such other business as may properly come before this meeting or
any postponement or adjournment thereof.
This proxy will, when properly executed, be voted as directed. If no
directions to the contrary are indicated, the persons named herein intend to
vote for the election of the named nominees for director and for proposal 2.
THE PROXY AGENTS PRESENT AND ACTING IN PERSON OR BY THEIR SUBSTITUTES (OR, IF
ONLY ONE IS PRESENT AND ACTING, THEN THAT ONE) MAY EXERCISE ALL THE POWERS
CONFERRED BY THIS PROXY. DISCRETIONARY AUTHORITY IS CONFERRED BY THIS PROXY AS
TO CERTAIN MATTERS DESCRIBED IN THE COMPANY'S PROXY STATEMENT.
The undersigned hereby acknowledges receipt of the Company's 1997 Annual
Report to Stockholders, Notice of the Company's 1997 Annual Meeting of
Stockholders and the Proxy Statement relating thereto.
PLEASE DATE AND SIGN THIS PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED
POSTAGE PAID ENVELOPE.
______________________ ____________________________ DATE:________________,1997
Signature Signature if held jointly (Please date this Proxy)
NOTE: It would be helpful if you signed your name exactly as it appears on your
stock certificate(s), indicating any official position or representative
capacity. If shares are registered in more than one name, all owners
should sign.
