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 | |
[X] | Definitive Proxy Statement | |
[ ] | Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
[ ] | Definitive Additional Materials | |
[ ] | Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12 |
TBA ENTERTAINMENT CORPORATION
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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. | ||||
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October 4, 2002
Dear Fellow Stockholder:
This years Annual Meeting of Stockholders (the Meeting) will be held on November 20, 2002 at the Nashville office of TBA Entertainment Corporation, 300 Tenth Avenue South, Nashville, Tennessee, commencing at 11:00 a.m. central time. You are cordially invited to attend. At the Meeting you will be asked to:
1. | elect seven (7) directors; | ||
2. | ratify appointment of BDO Seidman, LLP as TBAs independent public accountants for the year ending December 31, 2002; and | ||
3. | transact such other business as may properly come before the Meeting. |
To be certain that your shares are voted at the Meeting, whether or not you plan to attend in person, please sign, date and return the enclosed proxy card as soon as possible. Your vote is important.
At the Meeting, management will review the Companys activities during the past year and its plans and prospects for the future. An opportunity will be provided for questions by stockholders. I hope you will be able to join us.
Sincerely, | ||
TBA ENTERTAINMENT CORPORATION | ||
Thomas Jackson Weaver III Chairman of the Board and Chief Executive Officer |
TBA ENTERTAINMENT CORPORATION
16501 Ventura Boulevard, Suite 601
Encino, California 91436
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held November 20, 2002
To the Stockholders of
TBA ENTERTAINMENT CORPORATION
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders (the Meeting) of TBA Entertainment Corporation (the Company) will be held on Wednesday, November 20, 2002, at the Nashville office of the Company, 300 Tenth Avenue South, Nashville, Tennessee, commencing at 11:00 a.m. local time, for the following purposes:
(i) To elect seven (7) directors to hold office until the next annual meeting of stockholders and until their successors are duly elected and qualify; | |
(ii) To ratify appointment of BDO Seidman, LLP as the Companys independent public accountants for the year ending December 31, 2002; and | |
(iii) To transact such other business as may properly come before the Meeting or any adjournment thereof. |
A copy of the Proxy Statement relating to the Meeting, in which the foregoing matters are described in more detail, and the Annual Report outlining the Companys operations for the year ended December 31, 2001, accompanies this Notice of Annual Meeting of Stockholders.
Only stockholders of record at the close of business on September 30, 2002 are entitled to notice of and to vote at the Meeting or any adjournment thereof. A list of such stockholders, arranged in alphabetical order and showing the address of and the number of shares registered in the name of each such stockholder, will be available for examination by any stockholder for any purpose germane to the Meeting during ordinary business hours for a period of at least ten days prior to the Meeting at the offices of the Company at 16501 Ventura Boulevard, Suite 601, Encino, California.
Your vote is important. Whether or not you expect to be present at the Meeting, please complete, sign, date and return promptly the enclosed proxy in the enclosed pre-addressed, postage-paid return envelope.
By Order of the Board of Directors, | ||
Frank A. McKinnie Weaver, Sr. Secretary |
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October 4, 2002 |
TBA ENTERTAINMENT CORPORATION
16501 Ventura Boulevard, Suite 601
Encino, California 91436
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
To Be Held November 20, 2002
This Proxy Statement is being furnished to the stockholders of TBA Entertainment Corporation (the Company) in connection with the solicitation by the Board of Directors of the Company of proxies to be used at the 2002 Annual Meeting of Stockholders (the Meeting) to be held at the Nashville office of the Company, 300 Tenth Avenue South, Nashville, Tennessee, on Wednesday, November 20, 2002, at 11:00 a.m. This Proxy Statement and the accompanying Annual Report, form of proxy, Notice of Annual Meeting of Stockholders and letter to stockholders are first being mailed to stockholders of the Company on or about October 18, 2002.
SOLICITATION OF PROXIES
The expense of the solicitation of proxies will be borne by the Company. In addition to the solicitation of proxies by mail, solicitation may be made by the directors, officers and employees of the Company by other means, including telephone, telegraph or in person. No special compensation will be paid to directors, officers or employees for the solicitation of proxies. To solicit proxies, the Company also will request the assistance of banks, brokerage houses and other custodians, nominees or fiduciaries, and, upon request, will reimburse such organizations or individuals for their reasonable expenses in forwarding soliciting materials to beneficial owners and in obtaining authorization for the execution of proxies.
PURPOSE OF MEETING
At the Meeting, action will be taken to (i) elect seven (7) directors to hold office until the next annual meeting of stockholders and until their successors shall have been duly elected and qualify; (ii) ratify appointment of BDO Seidman, LLP as the Companys independent public accountants for the year ending December 31, 2002; and (iii) conduct such other business as may properly come before the Meeting.
Stockholders are urged to sign the accompanying form of proxy and, immediately after reviewing the information contained in this Proxy Statement and in the Annual Report outlining the Companys operations for the year ended December 31, 2001, return it in the envelope provided for that purpose. Valid proxies will be voted at the Meeting and any adjournment or adjournments thereof in the manner specified therein. If no directions are given but proxies are executed in the manner set forth therein, such proxies will be voted FOR the election of the nominees for director set forth in this Proxy Statement and the ratification of the appointment of BDO Seidman, LLP as the Companys independent public accountants for the year ending December 31, 2002. The Company does not know of any other matters that are to come before the Meeting. If any other matters are properly presented at the Meeting, however, the persons named in the enclosed form of proxy and acting thereunder will have discretion to vote on such matters in accordance with their judgment.
REVOCATION OF PROXY
Any stockholder returning the accompanying proxy may revoke such proxy at any time prior to its exercise by giving written notice to the Secretary of the Company of such revocation, voting in person at the Meeting, or executing and delivering to the Secretary of the Company a later-dated proxy.
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QUORUM AND VOTING REQUIREMENTS
Only stockholders of record as of the close of business on September 30, 2002 (the Record Date) are entitled to notice of and to vote at the Meeting or any adjournments thereof. As of the close of business on the Record Date, there were approximately 7,367,600 shares of the Companys common stock, par value $.001 per share (the Common Stock), issued and outstanding and entitled to vote. Each stockholder of record on the Record Date is entitled to one vote for each share of Common Stock held. A majority of the outstanding shares of Common Stock, represented in person or by proxy, will constitute a quorum at the Meeting; however, if a quorum is not present or represented at the Meeting, the stockholders entitled to vote thereat, present in person or represented by proxy, have the power to adjourn the Meeting from time to time, without notice, other than by announcement at the Meeting, until a quorum is present or represented. At any such adjourned Meeting at which a quorum is present or represented, any business may be transacted that might have been transacted at the original Meeting.
Each share of Common Stock may be voted to elect up to seven (7) individuals (the number of directors to be elected) as directors of the Company. To be elected, each nominee must receive a plurality of all votes cast with respect to such position as director. It is intended that, unless authorization to vote for one or more nominees for director is withheld, proxies will be voted FOR the election of all of the nominees named in this Proxy Statement.
Votes cast by proxy or in person will be counted by two persons appointed by the Company to act as inspectors for the Meeting. The election inspectors will treat shares represented by proxies that reflect abstentions as shares that are present and entitled to vote for the purpose of determining the presence of a quorum. Abstentions will have no effect on the outcome of the election of directors.
Broker non-votes occur where a broker holding stock in street name votes the shares on some matters but not others. Brokers are permitted to vote on routine, non-controversial proposals in instances where they have not received voting instructions from the beneficial owner of the stock but are not permitted to vote on non-routine matters. The missing votes on non-routine matters are deemed to be broker non-votes. The election inspectors will treat broker non-votes as shares that are present and entitled to vote for the purpose of determining the presence of a quorum. However, for the purpose of determining the outcome of any matter as to which the broker or nominee has indicated on the proxy that it does not have discretionary authority to vote, those shares will be treated as not present and not entitled to vote with respect to that matter (even though those shares are considered entitled to vote for quorum purposes and may be entitled to vote on other matters). Broker non-votes will have no effect on the outcome of the election of directors.
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ELECTION OF DIRECTORS
At the Meeting, seven (7) directors are to be elected and will hold office until the next annual meeting of stockholders and until their successors have been elected and qualify. Each of the nominees has consented to serve as a director if elected. If any of the nominees shall become unable or unwilling to stand for election as a director (an event not now anticipated by the Board of Directors), proxies will be voted for such substitute as shall be designated by the Board of Directors. The following table sets forth for each current director and nominee for election as a director of the Company, his age, principal occupation, position with the Company, if any, and certain other information.
Name | Age | Principal Occupation | Director Since | |||
Frank Bumstead | 60 | Since 1989, Mr. Bumstead has been President and a principal stockholder of Flood, Bumstead, McCready & McCarthy, Inc., a business management firm which represents the financial interests of artists, songwriters and producers in the music industry. From 1993 until 1999, he served as Chairman and Chief Executive Officer, and was a principal stockholder, of FBMS Financial, Inc., a registered investment advisor under the Investment Company Act of 1940. From 1986 to December 1990, Mr. Bumstead was President of Bumstead Co., a financial consulting company. He is also a director of American Retirement Corp. and Syntroleum, Inc. | June 1993 | |||
Charles Flood | 58 | Since 1989, Mr. Flood has been a principal stockholder of Flood, Bumstead, McCready & McCarthy, Inc., a business management firm which represents the financial interests of artists, songwriters and producers in the music industry. Prior to that time, Mr. Flood worked at Capitol Records in Nashville as the Director of Artist Relations and later as Director of Talent Acquisition. | May 1995 | |||
Joseph C. Galante | 52 | Since 1995, Mr. Galante has been the Chairman of RCA Label GroupRLG/Nashville. From 1990 to 1994, Mr. Galante served as President of the RCA Records Label/US. From 1982 through 1991, Mr. Galante served as President of RCA Records/Nashville. Mr. Galante is a director of First American National Bank Advisory Board, Leadership Music and the Country Music Association. He is also Chairman of the T.J. Martell Foundation. | October 1998 |
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Name | Age | Principal Occupation | Director Since | |||
W. Reid Sanders | 53 | Mr. Sanders is a director of Harbor Global Co., Ltd. and Chairman of the Regional Selection Committee for the Jefferson Scholarship at the University of Virginia and on the Universitys National Advisory Board, a member of the Advisory Board of the University of Tennessee at Memphis, a Trustee of the Hugo Dixon Foundation, and serves on the Board of Trustees of The Dixon Gallery & Gardens and is on the Board of Trustees, Rhodes College. Mr. Sanders also serves on the Advisory Board of SSM Venture Partner Funds, L.P. From 1976 to 2000, Mr. Sanders was President of Long Leaf Partners Funds. | August 2000 | |||
Frank A. McKinnie Weaver, Sr. | 42 | Mr. Weaver serves as Senior Vice President, FTN Financial, a subsidiary of First Tennessee National Corporation (FTN) located in Memphis, Tennessee. In his capacity at FTN, Mr. Weaver focuses on Correspondent Banking, Corporate Finance, and the delivery and creation of financial products and services for institutional clients. Prior to joining FTN, Mr. Weaver served as First Vice President, Correspondent Banking at National Bank of Commerce (NBC), Memphis, Tennessee. Mr. Weaver served at NBC for five (5) years prior to joining FTN. Prior to NBC, Mr. Weaver served The Whiteville Bank from 1985 to 1994, leaving that institution as Vice President & Director to join NBC in Memphis, Tennessee. Mr. Weaver is also a Director of Heritage Trust Company, and President of Heritage Farms of Hickory Valley, Inc. Mr. Weaver is the brother of Thomas Jackson Weaver III. | June 1993 | |||
Thomas Jackson Weaver III | 45 | Mr. Weaver has served as Chairman of the Board and Chief Executive Officer of the Company since its inception. Mr. Weaver also served as President until January 2001. From 1986 to 1988, Mr. Weaver served as president of Hard Rock International plc, an English public company whose securities traded on the London Stock Exchange and the American Stock Exchange. Since 1988, he has been the President of Heritage Trust Company, a corporation with investments in numerous public and private companies. Mr. Weaver devotes his full-time efforts to the business operations of the Company. Mr. Weaver is the brother of Frank A. McKinnie Weaver, Sr. | June 1993 | |||
Kyle Young | 47 | Since February 1999, Mr. Young has been the Director of the Country Music Hall of Fame (the CMHF). From 1975 to 1999, Mr. Young was employed by the CMHF in various capacities including involvement in the development and licensing of television shows, radio programs and music festivals produced by the CMHF, founding the CMHFs Education Department, serving as editor of the Journal of Country Music, developing the CMHFs record reissue label and supervising the creation of the CMHFs logo. Mr. Young led the team that created the financing, design and construction of the Country Music Hall of Fame Museum and exhibits. As Chief Executive Officer of the Hall of Fame, Mr. Young oversees an $11 million annual operating budget with assets of more than $50 million, a staff of 50, a volunteer contingent of 100 and partnerships with companies ranging from CMT.com and XM Satellite Radio to Ford Motor Company. | March 1996 |
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Meetings and Committees of the Board of Directors
During the year ended December 31, 2001, the Board of Directors held two meetings and acted by unanimous written consent on five (5) occasions. Other than Messrs. Frank Weaver, Flood, Young and Galante, each director attended at least 75% of all meetings held by the Board of Directors and all meetings of each committee of the Board of Directors on which such director served during the year ended December 31, 2001.
The Board of Directors has an Audit Committee and a Compensation Committee. The Board of Directors does not have a Nominating Committee.
The Audit Committee currently consists of Frank Bumstead, W. Reid Sanders and Kyle Young. Each such member is independent as defined in Section 121(A) of the American Stock Exchanges listing standards. The Audit Committee met one time during the year ended December 31, 2001. The functions of the Audit Committee are (i) to review significant audit and accounting policies and practices; (ii) to review the scope of audits and reports; and (iii) to review the performance of the overall accounting and financial controls of the Company. The Audit Committee also recommends to the Board of Directors the independent auditors to perform the annual audit of the Companys financial statements.
The Compensation Committee currently consists of Frank Bumstead and W. Reid Sanders. The Compensation Committee did not meet during the year ended December 31, 2001. The functions of the Compensation Committee are (i) to review and recommend to the Board of Directors the direct and indirect compensation and employee benefits of the Companys executive officers; (ii) to review and administer the Companys employee benefit plans; (iii) to review the Companys policies relating to employee and executive compensation; and (iv) to review managements long-range planning for executive development and succession.
Audit Committee Report
The following Audit Committee Report is provided in accordance with the rules and regulations of the Securities and Exchange Commission. Pursuant to such rules and regulations, this report shall not be deemed soliciting materials, filed with the Securities and Exchange Commission, subject to Regulation 14A or 14C of the Securities and Exchange Commission or subject to the liabilities of Section 18 of the Securities Exchange Act of 1934, as amended.
REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The audit committee oversees the Companys financial reporting process on behalf of the Board of Directors and the committees written charter is approved by the Board of Directors. In fulfilling its oversight responsibilities, the committee reviewed the audited financial statements in the Companys annual report for fiscal year 2001 with management, who has the primary responsibility for the financial statements and the reporting process. As part of its review, the committee discussed the quality, and not just the acceptability, of the accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements.
The committee reviewed with Arthur Andersen LLP, the Companys independent auditors for fiscal year 2001, who are responsible for expressing an opinion on the conformity of those audited financial statements with generally accepted accounting principles, their judgments as to the quality, not just the acceptability, of the Companys accounting principles and such other matters as are required to be discussed under generally accepted accounting principles and SAS 61 (Codification of Statements on Auditing Standards, AU 380). In addition, the committee has discussed with the independent auditors the auditors independence from management and the Company, including the matters in the written disclosures required by the Independence Standards Board, and considered the compatibility of non-audit services with the auditors independence.
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The committee discussed with Arthur Andersen LLP the overall scope and plans for their audits. The committee met with Arthur Andersen LLP, with and without management present, to discuss the results of their examinations, their evaluations of the Companys internal controls, and the overall quality of its financial reporting. The committee held one such meeting with Arthur Andersen LLP during the year ended December 31, 2001.
In reliance on the reviews and discussions referred to above, the committee recommended to the Board of Directors (and the Board of Directors approved) that the audited financial statements be included in the Annual Report on Form 10-K for the year ended December 31, 2001 for filing with the Securities and Exchange Commission. The committee has recommended and the Board of Directors has approved the selection of BDO Seidman, LLP as the Companys independent auditors for fiscal year 2002.
Audit Committee Frank Bumstead, Chairman W. Reid Sanders Kyle Young |
Compensation of Directors
Directors who are officers and employees of the Company receive no compensation, as such, for serving as members of the Board. Directors who are not officers or employees of the Company receive $100 for each Board meeting personally attended, and all Directors are reimbursed for their out-of-pocket expenses incurred in attending Board and committee meetings.
Compensation Committee Interlocks and Insider Participation
Frank Bumstead and W. Reid Sanders were the only members of the Compensation Committee during 2001. Neither Mr. Bumstead nor Mr. Sanders (i) was an officer or employee of the Company during such year, (ii) was formerly an officer of the Company, or (iii) was a party to any material transaction required to be disclosed in this Proxy Statement.
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EXECUTIVE OFFICERS
The executive officers of the Company serve at the discretion of the Board of Directors and are chosen annually by the Board at its meeting coinciding with the annual meeting of stockholders. The following table sets forth the names and ages of the executive officers of the Company and all positions held with the Company by each individual.
Name | Age | Title | ||||
Thomas Jackson Weaver III | 45 | Chairman of the Board and Chief Executive Officer | ||||
Greg M. Janese | 43 | President and Chief Operating Officer | ||||
Bryan J. Cusworth | 43 | Executive Vice President, Chief Financial Officer, and Treasurer |
For a description of the business experience of Thomas Jackson Weaver III, see Election of Directors.
Greg M. Janese currently serves as President and Chief Operating Officer of the Company and served as an Executive Vice President from April 1997 until January 2001. He has led the Companys Corporate Communications and Entertainment division since April 1997, when the Company acquired Avalon Entertainment Group, Inc. (AEG). Mr. Janese has over 20 years of experience in the entertainment industry. From 1993 to 1997, he served as President of AEG. He co-founded The Entertainment Group, a Nashville based concert promotion and production company and the predecessor to AEG, in 1989. In 1987, Mr. Janese founded World Class Productions, a corporate production firm partnered with Barbara Mandrell. Prior to that, Mr. Janese was involved in various capacities with artist promotions, public relations, and booking and producing talent for corporate meeting and special events.
Bryan J. Cusworth has served as Executive Vice President and Chief Financial Officer of the Company since 1996 and Treasurer since 1999. Prior to joining the Company, Mr. Cusworth was employed by Arthur Andersen LLP from July 1982 to September 1996, where he specialized in the resort, real estate and entertainment industries. Mr. Cusworth is a certified public accountant.
Certain Relationships and Related Transactions
In connection with the restructuring of the Companys bank credit facility in April 2002, an entity controlled by the Chief Executive Officer of the Company (Heritage) loaned the Company $500,000 (Affiliate Loan). In order to provide the Affiliate Loan, Heritage obtained a $500,000 loan from an independent third party finance company (Pass-Through Loan). As a condition to obtaining the Pass-Through Loan, Heritage paid a fee of $5,000 and interest accrued at 12% per annum. These costs were passed through to the Company as part of the Affiliate Loan.
The Affiliate Loan was repaid in June 2002, upon receipt of the Companys federal income tax refund.
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EXECUTIVE COMPENSATION
The following table sets forth the total compensation paid or accrued by the Company for the three years ended December 31, 2001 on behalf of each of the executive officers of the Company.
Summary Compensation Table
Long Term | |||||||||||||||||||||
Annual Compensation | Compensation | ||||||||||||||||||||
Name and Principal Position | Year | Salary | Bonus | Options (#) | |||||||||||||||||
Thomas J. Weaver III |
2001 | $ | 350,000 | $ | -0- | -0- | |||||||||||||||
Chairman of the Board and |
2000 | 350,000 | -0- | 175,000 | |||||||||||||||||
Chief Executive Officer |
1999 | 225,000 | -0- | -0- | |||||||||||||||||
Greg M. Janese |
2001 | 200,000 | -0- | -0- | |||||||||||||||||
President and Chief |
2000 | 200,000 | 50,000 | 75,000 | |||||||||||||||||
Operating Officer |
1999 | 175,000 | -0- | -0- | |||||||||||||||||
Bryan J. Cusworth |
2001 | 200,000 | -0- | -0- | |||||||||||||||||
Executive Vice President, |
2000 | 200,000 | -0- | 75,000 | |||||||||||||||||
Chief Financial Officer
and Treasurer |
1999 | 150,000 | -0- | -0- | |||||||||||||||||
Thomas Miserendino (1) |
2001 | 125,000 | -0- | -0- | |||||||||||||||||
Executive Vice President |
2000 | 250,000 | -0- | 75,000 | (2 | ) | |||||||||||||||
1999 | 175,000 | -0- | -0- |
(1) | Effective April 10, 2001, Mr. Miserendino was no longer an executive officer of the Company. | |
(2) | These options were forfeited upon Mr. Miserendinos cessation of employment. |
The following table sets forth information with respect to stock options held by the executive officers of the Company on December 31, 2001. The closing price for the Companys Common Stock on December 31, 2001, the last trading day of the year, was $3.55. None of the executive officers exercised any stock options during 2001.
Aggregated Fiscal Year-End Option Values
Number of Securities | Value of Unexercised | |||||||
Underlying Unexercised | In-the-Money Options | |||||||
Name and | Options at FY-End | at FY-End | ||||||
Principal Position | Exercisable/Unexercisable | Exercisable/Unexercisable | ||||||
Thomas J. Weaver III |
750,000 / -0- | $ | -0- / $-0- | |||||
Greg M. Janese |
25,000 / 50,000 | -0- / -0- | ||||||
Bryan J. Cusworth |
167,000 / 78,000 | -0- / -0- | ||||||
Thomas Miserendino |
-0- / -0- | -0- / -0- |
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Board Compensation Committee Report on Executive Compensation
This report provides information concerning determinations by the Compensation Committee of the Board of Directors for 2001 compensation with respect to the Companys Chief Executive Officer and the other executive officers.
The Committee reviews the base salaries of the CEO and the other executive officers annually and determines whether to increase each officers base salary based on the Companys performance in the most recent prior fiscal year. In 2001, the Committee did not recommend to the Board of Directors an increase in the base salaries of any of the executive officers. Each of Messrs. Weaver and Janese received the base salaries provided in their employment agreements.
The Committee also determines, at the end of each fiscal year, whether a bonus should be paid to the CEO or the other executive officers, based on similar performance criteria. In 2001, the committee did not recommend to the Board of Directors a bonus for any of the executive officers.
Compensation Committee W. Reid Sanders, Chairman Frank Bumstead |
Employment Agreements
The Company has entered into an employment agreement with Thomas Jackson Weaver III for a term of five years, commencing January 1, 1994. The agreement provided for an initial annual base salary of $125,000, with increases at the discretion of the Board of Directors. Pursuant to action taken by the Board of Directors, Mr. Weavers current annual base salary is $350,000. The agreement also provides for an annual bonus as determined by the Board of Directors based on the operating results of the Company. The agreement is automatically renewed on each anniversary date for an additional five-year term unless it is terminated by either party prior to the anniversary date. The agreement provides that Mr. Weaver is entitled to payment for the unexpired portion of the current term in the event his employment is terminated without cause by the Company. Under the agreement, cause is defined to include failure to perform the duties of his office, breach of fiduciary duty to the Company and willful violation of the confidentiality or non-competition provisions of the agreement.
The Company has entered into an employment agreement with Greg M. Janese, for an original term commencing on April 21, 1997 and continuing through December 31, 2002. The term of the agreement was extended to May 31, 2005 pursuant to a modification agreement entered into with Mr. Janese in May 2002. The agreement provides for an annual base salary of $275,000, with increases at the discretion of the Board of Directors. In addition, Mr. Janese is entitled to participate in applicable incentive plans established by the Company. If the Company terminates the employment of Mr. Janese without cause, or if Mr. Janese terminates his employment for good reason, he will be entitled to the greater of $400,000 or Mr. Janeses base salary for the remaining term of the agreement, plus incentive compensation for the portion of the year in which he was employed. Cause is defined to include failure to perform his duties to the Company, breach of the agreement, fraud, embezzlement, conviction of certain serious crimes, conduct harmful to the Company and failure of Mr. Janese to achieve certain performance objectives. Good reason is defined to include a material breach of the agreement by the Company, which remains uncured for 30 days after receipt of written notice of breach. The agreements contain certain covenants by Mr. Janese not to compete with the business of the Company both during the term of employment and for a period of two years following the termination of employment.
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Performance Graph
The following graph shows a five-year comparison for the period from December 31, 1996 to December 31, 2001 of cumulative total stockholder return of $100 invested in (i) the Company, (ii) an index of peer companies selected by the Company, and (iii) the Nasdaq Market Index.
The Company chose its peer group within the entertainment industry. Members of the peer group, which are added beginning the year following their initial public offering, include Dick Clark Productions, Inc., Vari-Lite, International, Inc. (from 1997), Integrity Incorporated, and ARTISTdirect, Inc (from 2000), which replaces two members of last years peer group, who were delisted by their stock exchanges. Due to the unique composition and nature of the Companys businesses, the Company believes that the peer group index may not provide a meaningful comparison to comparable businesses.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of September 30, 2002 certain information with respect to the beneficial ownership of the Companys Common Stock by (i) each person who is known by the Company to be the beneficial owner of more than 5% of the outstanding shares of Common Stock of the Company, (ii) each of the Companys directors, (iii) each of the Companys executive officers and (iv) all directors and executive officers of the Company as a group. Unless otherwise indicated, each of the stockholders listed below has sole voting and investment power with respect to the shares of Common Stock beneficially owned. None of the stockholders listed below beneficially owns any shares of the Companys Series A Preferred Stock.
Common Stock | ||||||||||||
Number of Shares | Percent of | |||||||||||
Name and Address (1) | Beneficially Owned | Total | ||||||||||
Thomas J. Weaver III |
1,682,839 | (2 | ) | 20.0 | % | |||||||
Frank Bumstead |
24,958 | * | ||||||||||
Charles Flood |
24,958 | * | ||||||||||
Joseph C. Galante |
30,000 | (3 | ) | * | ||||||||
W. Reid Sanders |
110,000 | (3 | ) | 1.3 | % | |||||||
Frank A. McKinnie Weaver, Sr. |
54,000 | * | ||||||||||
Kyle Young |
0 | * | ||||||||||
Bryan J. Cusworth |
206,000 | (4 | ) | 2.5 | % | |||||||
Greg M. Janese |
227,460 | (5 | ) | 2.7 | % | |||||||
Thomas Miserendino |
26,000 | * | ||||||||||
Dimensional Fund Advisors, Inc. (6) |
616,400 | 7.3 | % | |||||||||
Wellington Management Company LLP (7) |
540,000 | 6.4 | % | |||||||||
All executive officers and directors
as a group (nine persons) (2) (3)
(4) (5) (8) |
2,360,215 | 28.0 | % |
* | Less than 1%. | |
(1) | The address for Mr. Thomas J. Weaver III is 402 Heritage Plantation Way, Hickory Valley, Tennessee 38042; the address for Messrs. Bumstead and Flood is 1700 Hayes Street, Suite 304, Nashville, Tennessee 37203; the address for Mr. Galante is 1400 18th Avenue South, Nashville, Tennessee 37212; the address for Mr. Sanders is 5100 Wheelis Drive, Suite 206, Memphis, Tennessee 38117; the address for Mr. Frank A. McKinnie Weaver, Sr. is One Commerce Square, Memphis, Tennessee 38150; the address for Mr. Young is 4 Music Square East, Nashville, Tennessee 37203; the address for Mr. Cusworth is 16501 Ventura Blvd., Suite 601, Encino, California 91436; the address for Mr. Janese is 300 Tenth Avenue South, Nashville, Tennessee 37203; the address for Dimensional Fund Advisors, Inc. is 1299 Ocean Avenue, 11th Floor, Santa Monica, California 90401 and the address for Wellington Management Company LLP is 75 State Street, Boston, Massachusetts 02109. | |
(2) | Includes (a) 750,000 shares issuable to Mr. Weaver upon the exercise of outstanding stock options and (b) 159,963 shares held by the Katherine McKinnie Weaver Trust III, of which Mr. Weaver is trustee. | |
(3) | Includes 25,000 shares issuable upon the exercise of outstanding stock options. | |
(4) | Includes 206,000 shares issuable to Mr. Cusworth upon the exercise of outstanding stock options. | |
(5) | Includes 50,000 shares issuable upon the exercise of outstanding stock options. |
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(6) | Dimensional Fund Advisors Inc. (Dimensional), an investment advisor registered under Section 203 of the Investment Advisors Act of 1940, furnishes investment advice to four investment companies registered under the Investment Company Act of 1940, and serves as investment manager to certain other investment vehicles, including commingled group trusts. (These investment companies and investment vehicles are the Portfolios). In its role as investment advisor and investment manger, Dimensional possessed both investment and voting power over 616,400 shares of Common Stock as of February 2, 2002. The Portfolios own all securities reported in this statement and Dimensional disclaims beneficial ownership of such securities. | |
(7) | Wellington Management Company, LLP (WMC) is an investment adviser registered with the Securities and Exchange Commission (SEC) under Section 203 of the Investment Advisers Act of 1940, as amended. WMC, in its capacity as investment adviser, may be deemed to have beneficial ownership of shares of the common stock of the Company that are owned of record by investment advisory clients of WMC. Beneficial ownership, as such term is used herein, is determined in accordance with Rule 13d-3 promulgated under the Securities Exchange Act of 1934 (the 1934 Act), and includes voting and/or dispositive power with respect to such shares. The information provided on beneficial ownership is as of June 30, 2002, the most recent public information available. WMC is not the owner of record of such shares and disclaims any pecuniary interest (as such term is defined in Rule 16a-1(a) promulgated under the 1934 Act) in such shares. As of June 30, 2002, WMC, in its capacity as investment adviser, may be deemed to have beneficial ownership of 540,000 shares of the common stock of the Company. Such shares are owned by numerous investment advisory clients of WMC, none of which is known to have beneficial ownership of more than five percent of that class of securities of the Company. | |
(8) | Excludes Thomas Miserendino, who was no longer an executive officer of the Company effective April 10, 2001. |
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended (the Exchange Act), requires that Company directors, executive officers and persons who own more than 10% of the outstanding Common Stock file initial reports of ownership and reports of changes in ownership of Common Stock with the Securities and Exchange Commission (the SEC). Officers, directors and stockholders who own more than 10% of the outstanding Common Stock are required by the SEC to furnish the Company with copies of all Section 16(a) reports they file.
Based on a review of such forms, the Company believes that all Section 16(a) filing requirements applicable to its executive officers, directors and 10% stockholders were complied with for the year ended December 31, 2001.
INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP was the Companys independent accounting firm for the 2001 fiscal year. The Company paid the following fees to Arthur Andersen for professional and other services rendered by them during fiscal 2001:
Audit Fees
The aggregate fees billed for professional services rendered by Arthur Andersen for the audit of the Companys financial statements for the 2001 fiscal year and the reviews of the financial statements included in the Companys quarterly reports on the Forms 10-Q for the fiscal year were $145,000. |
All Other Fees
The aggregate fees billed for all other services rendered by Arthur Andersen to the Company during the 2001 fiscal year, exclusive of those services described above were $196,000. |
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The Audit Committee has considered whether Arthur Andersens provision of services, other than services rendered in connection with the audit of the Companys annual financial statements, is compatible with maintaining Arthur Andersens independence. A representative of Arthur Andersen is not expected to be present at the Meeting.
On August 6, 2002, the Company dismissed Arthur Andersen LLP as its independent public accountants. The decision to change accountants was recommended and approved by the Audit Committee of the Board of Directors.
During the 2000 and 2001 fiscal years, and through August 6, 2002, there were no disagreements with Arthur Andersen on any matter of accounting principles or practices, financial statement disclosure or auditing scope of procedure, which disagreements, if not resolved to their satisfaction, would have caused them to make reference in connection with their opinion to the subject matter of the disagreement. After reasonable efforts, the Company is unable to obtain a letter from Arthur Andersen stating that they are in agreement with this statement.
On August 15, 2002, the Board of Directors, upon recommendation of its Audit Committee, engaged BDO Seidman, LLP as the Companys independent public accountants for the year ending December 31, 2002. A representative of BDO Seidman, LLP is not expected to be present at the Meeting.
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PROPOSALS FOR STOCKHOLDER ACTION
1. ELECTION OF DIRECTORS
The nominees for election as directors are Frank Bumstead, Charles Flood, Joseph C. Galante, W. Reid Sanders, Frank A. McKinnie Weaver, Sr., Thomas Jackson Weaver III and Kyle Young. Information concerning the nominees is set forth in the section captioned Election of Directors.
THE BOARD RECOMMENDS A VOTE FOR EACH OF THE NOMINEES.
2. APPOINTMENT OF BDO SEIDMAN, LLP
The Company seeks ratification from the stockholders of the appointment of BDO Seidman, LLP as the Companys independent public accountants for the year ending December 31, 2002.
THE BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL.
OTHER MATTERS
The management of the Company is not aware of any other matters to be presented for action at the Meeting; however, if any such matters are properly presented for action, it is the intention of the persons named in the enclosed form of proxy to vote in accordance with their best judgment on such matters.
STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented at the 2003 annual meeting of stockholders of the Company must be received by the Secretary of the Company at the Companys principal executive office no later than January 1, 2003, in order to be included in the proxy statement and form of proxy for such meeting.
By Order of the Board of Directors, | ||
FRANK A. MCKINNIE WEAVER, SR. Secretary |
||
October 4, 2002 |
STOCKHOLDERS ARE URGED, REGARDLESS OF THE NUMBER OF SHARES OF COMMON STOCK OF THE COMPANY OWNED, TO DATE, SIGN AND RETURN THE ENCLOSED PROXY. YOUR COOPERATION IN GIVING THESE MATTERS YOUR IMMEDIATE ATTENTION AND IN RETURNING YOUR PROXY PROMPTLY IS APPRECIATED.
TBA ENTERTAINMENT CORPORATION
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Thomas Jackson Weaver III, as Proxy, with the power to appoint his substitute, and hereby authorizes him, to represent and vote, as designated on the reverse side, all shares of Common Stock of TBA Entertainment Corporation (the Company) held of record by the undersigned on September 30, 2002, at the Annual Meeting of Stockholders to be held on November 20, 2002 or any adjournment thereof.
(Continued and to be signed on reverse side)
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Stockholders
TBA ENTERTAINMENT CORPORATION
November 20, 2002
Please Detach and Mail in the Envelope Provided
A | x | Please mark your votes as in this example |
WITHHOLD | Nominees: | |||||||||
(1) |
ELECTION OF DIRECTORS |
FOR o |
AUTHORITY o |
Frank Bumstead Charles Flood Joseph C. Galante |
||||||
FOR, except vote withheld from the following nominees: | W. Reid Sanders Frank A. McKinnie Weaver, Sr. Thomas Jackson Weaver III Kyle Young |
|||||||||
FOR | AGAINST | ABSTAIN | ||||||
(2) | To ratify appointment of BDO Seidman, LLP as TBAs independent public accountants for the year ending December 31, 2002. | o | o | o |
If no direction is indicated, the proxy will be voted for the election of the named individuals as directors in Proposal 1 and to ratify the appointment of BDO Seidman, LLP in Proposal 2.
PLEASE SIGN, DATE AND MAIL THIS PROXY IMMEDIATELY IN THE ENCLOSED ENVELOPE.
Date: | , 2002 | |||||
SIGNATURE | ||||||
Date: | , 2002 | |||||
SIGNATURE IF HELD JOINTLY |
NOTE: | Please sign exactly as name appears on the certificate or certificates representing shares to be voted by this proxy, as shown on the label above. When signing as executor, administrator, attorney, trustee, or guardian, please give full title as such. If a corporation, please sign full corporation name by president or other authorized officer. If a partnership, please sign in partnership name by authorized person(s). |