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:
|
(2)
|
Form,
schedule or registration statement
no.:
|
(3)
|
Filing
party:
|
(4)
|
Date
filed:
|
Sincerely,
|
|
Kenneth
J. Hall
|
|
Chief
Executive Officer
|
DATE:
|
December
1, 2009
|
|
TIME:
|
10:30
a.m. EST
|
|
PLACE:
|
NexCen
Franchise Management
1346
Oakbrook Drive, Suite 170
Norcross,
GA 30093
|
1.
|
Election
of five directors to hold office until the 2010 Annual Meeting of
Stockholders or until their successors are elected and qualified;
and
|
2.
|
Ratification
of the appointment of KPMG LLP as NexCen’s independent registered public
accounting firm for the fiscal year ending December 31,
2009.
|
BY
ORDER OF THE BOARD OF DIRECTORS
|
Sue
J. Nam
|
General
Counsel, Secretary
|
General
Information
|
|
Voting
Instructions and Information
|
1
|
Item
1: Election of Directors
|
4
|
Item
2: Ratification of the Appointment of the Independent Registered Public
Accounting Firm
|
5
|
Audit
Committee Report
|
6
|
Corporate
Governance
|
7
|
Policies
and Procedures for the Review and Approval of Related Party
Transactions
|
8
|
Director
Nominee Criteria and Process
|
9
|
Committees
of the Board of Directors
|
9
|
Director
Compensation
|
11
|
Executive
Officers
|
13
|
Executive
Officer Compensation
|
14
|
Compensation
Discussion and Analysis
|
14
|
Process
for Determining Executive Compensation
|
15
|
Compensation
Committee Report
|
17
|
Summary
Compensation Table
|
17
|
Grants
of Plan-Based Awards
|
19
|
Outstanding
Equity Awards at Fiscal Year-End
|
20
|
Option
Exercises and Stock Vested in 2008
|
21
|
Employment
Agreements
|
22
|
Actual
Payments to Named Executive Officers upon Separation
|
30
|
Potential
Post-Employment Payments to Named Executive Officers Who Are Current
Officers
|
30
|
Security
Ownership of Certain Beneficial Owners and Management
|
32
|
Section
16(a) Beneficial Ownership Reporting Compliance
|
33
|
Submission
of Shareholder Proposals
|
34
|
Householding
of Proxy Materials
|
34
|
Notice
of Electronic Availability of Proxy Materials
|
34
|
Annual
Report on Form 10-K
|
34
|
Incorporation
by Reference
|
35
|
Other
Matters
|
35
|
|
1.
|
Election
of five directors to hold office until the 2010 Annual Meeting of
Stockholders or until their successors are elected and qualified;
and
|
|
2.
|
Ratification
of the appointment of KPMG LLP as our independent registered public
accounting firm for the fiscal year ending December 31,
2009.
|
|
·
|
By Internet. You can
vote on the Internet. The website address for Internet voting is www.proxyvote.com.
Internet voting is available 24 hours a day. If you vote by Internet, you
do not need to return a proxy card. Your vote by Internet must be received
by 11:59 p.m. EST, November 30,
2009.
|
|
·
|
By Telephone. You can
vote your shares by telephone by calling 1-800-690-6903. Telephone voting
is available 24 hours a day. If you vote by telephone, you do not need to
return a proxy card. Your vote by telephone must be received by 11:59 p.m.
EST, November 30, 2009.
|
|
·
|
By Mail. If you would
like to vote by mail, follow the instructions on the Notice to request a
paper copy of the proxy materials. Then complete the proxy card,
date and sign it, and return it in the postage-paid envelope provided.
Your vote by mail must be received by 10:00 a.m. EST, December 1, 2009,
the date of the Annual Meeting.
|
|
·
|
By Attending the Annual
Meeting. If you attend the Annual Meeting, you can vote your shares
in person. You will need to have proof of ownership of NexCen common stock
on the record date and valid photo identification with you for admission
to the Annual Meeting. For directions to the meeting location,
please call 770-514-4500.
|
|
·
|
If
your shares of common stock are held through a broker, bank or other
nominee, you will receive instructions from that entity in connection with
the voting of your shares.
|
|
·
|
If
you plan to attend the Annual Meeting and vote in person, you will need to
contact your broker, bank or other nominee to obtain a “legal proxy” to
permit you to vote by written ballot at the Annual
Meeting.
|
|
·
|
For
the election of directors in Item 1, the five candidates who receive the
highest number of votes cast “For” at the Annual Meeting shall be elected,
provided a quorum is present.
|
|
·
|
The
affirmative vote of a majority of the shares of our common stock present
in person or represented by proxy at the Annual Meeting, and entitled to
vote on the subject matter, shall be required to approve Item 2, provided
a quorum is present.
|
|
·
|
For
Item 1, abstentions and broker non-votes will not affect the outcome of
this proposal.
|
|
·
|
For
Item 2, because this proposal requires the affirmative vote of a majority
of the shares present in person or by proxy at the meeting and entitled to
vote on the subject matter, abstentions will have the same effect as votes
against the proposal because the shares will count toward the quorum but
not toward the vote needed to adopt this proposal. Broker non-votes
will have no effect on this
proposal.
|
|
·
|
Sending
written notice of revocation to the Secretary of
NexCen;
|
|
·
|
Submitting
another timely and later dated proxy by mail or, prior to 11:59 p.m. EST,
on November 30, 2009 by telephone or Internet;
or
|
|
·
|
Attending
the Annual Meeting and voting in person by written
ballet.
|
|
·
|
You
must contact your broker, bank or other nominee to obtain instructions on
how to revoke your proxy or change your vote. You may also obtain a “legal
proxy” from your broker, bank or other nominee to attend the Annual
Meeting and vote in person by written
ballot.
|
Name
|
Age
|
Position
|
||
David
S. Oros
|
49
|
Chairman
of the Board
|
||
James
T. Brady
|
68
|
Director,
Audit Committee (Chairman), Compensation Committee, Nominating/Corporate
Governance Committee (Chairman)
|
||
Paul
Caine
|
44
|
Director,
Audit Committee, Nominating/Corporate Governance
Committee
|
||
Edward
J. Mathias
|
67
|
Director,
Audit Committee, Compensation Committee (Chairman)
|
||
George
P. Stamas
|
58
|
Director
|
2008
|
2007
|
|||||||
Audit
Fees
|
$ | 1,267,900 | $ | 668,211 | ||||
Audit-Related
Fees
|
232,100 | 287,699 | ||||||
Tax
Fees
|
- | 37,608 | ||||||
Total
Fees
|
$ | 1,500,000 | $ | 993,528 |
|
·
|
In
May 2008, the Company engaged FTI Consulting, Inc. (“FTI”) to assist the
Company in its restructuring efforts and public relations. Since 1992, Mr.
Dunn, a member of the Company’s Board of Directors in 2008, has served as
a director of FTI and/or as its President and Chief Executive
Officer. This engagement is described below under the caption “Certain Related Party
Transactions for 2008 and 2009.” Mr. Dunn resigned as a director on
September 25, 2008.
|
|
·
|
In
July 2007, the Company entered into a commercial agreement with Mr. Traub,
a member of the Company’s Board of Directors in 2008, and a business that
he owns and operates, Marvin Traub Associates. This agreement is described
below under the caption “Certain Related Party
Transactions for 2008 and 2009.” The Board of Directors determined
that Mr. Traub should be considered an independent director on September
25, 2008 in connection with the resignation of Mr. Dunn from the Board of
Directors. Mr. Traub resigned as a director on December 4,
2008.
|
|
·
|
appointing,
replacing, overseeing and compensating the work of a firm to serve as the
registered independent public accounting firm to audit the Company's
financial statements;
|
|
·
|
discussing
the scope and results of the audit with the independent registered public
accounting firm and reviewing with management and the independent
registered public accounting firm the Company's interim and year-end
operating results;
|
|
·
|
considering
the adequacy of the Company's internal accounting controls and audit
procedures;
|
|
·
|
approving
(or, as permitted, pre-approving) all audit and non-audit services to be
performed by the independent registered public accounting firm;
and
|
|
·
|
providing
an avenue of communication among the independent auditor, management,
employees and the Board of
Directors.
|
|
·
|
identifying,
evaluating and recommending nominees to serve on the Board of Directors
and committees of the Board of
Directors;
|
|
·
|
conducting
searches for appropriate directors and evaluating the performance of the
Board of Directors and of individual
directors;
|
|
·
|
screening
and recommending to the Board of Directors individuals qualified to become
the chief executive officer of the Company or to become senior executive
officers of the Company;
|
|
·
|
assessing
the policies, procedures and performance of the Board of Directors and its
committees;
|
|
·
|
developing,
evaluating and recommending to the Board of Directors any changes or
updates to the Company’s policies on business ethics, conflicts of
interest and related party
transactions;
|
|
·
|
making
recommendations regarding director compensation to the Board of Directors;
and
|
|
·
|
overseeing
the Company’s corporate governance procedures and
practices.
|
|
·
|
reviewing
and approving corporate goals and objectives that are relevant to the
compensation of the chief executive officer and other executive
officers;
|
|
·
|
evaluating
the chief executive officer's performance and setting compensation in
light of corporate objectives;
|
|
·
|
reviewing
and approving the compensation of the Company's other executive
officers;
|
|
·
|
administering
the Company’s stock option and stock incentive plans;
and
|
|
·
|
reviewing
and making recommendations to the Board of Directors with respect to the
Company’s overall compensation objectives, policies and practices,
including with respect to incentive compensation and equity
plans.
|
Name
|
Fees Earned
or Paid
in Cash
($)
|
Stock
Awards
($)
|
Option
Awards
($)(8)
|
Non-Equity
Incentive Plan
Compensation
($)
|
Change in
Pension Value
and Nonqualified
Deferred Compensation
Earnings
($)
|
All Other
Compensation
($)
|
Total
($)
|
|||||||||||||||||||||
David
S. Oros
|
- | - | - | - | - | $ | 152,188 | (9) | $ | 152,188 | ||||||||||||||||||
James
T. Brady
|
$ | 97,500 | (1) | - | - | - | - | - | $ | 97,500 | ||||||||||||||||||
Paul
Caine
|
$ | 75,500 | (2) | - | - | - | - | - | $ | 75,000 | ||||||||||||||||||
Jack
B. Dunn, IV
(former
director)
|
$ | 34,228 | (3) | - | - | - | - | - | $ | 34,228 | ||||||||||||||||||
Edward
J. Mathias
|
$ | 82,500 | (4) | - | - | - | - | - | $ | 82,500 | ||||||||||||||||||
Jack
Rovner
(former
director)
|
$ | 32,761 | (5) | - | - | - | - | - | $ | 32,761 | ||||||||||||||||||
George
P. Stamas
|
$ | 48,500 | (6) | - | - | - | - | - | $ | 48,500 | ||||||||||||||||||
Marvin
Traub
(former
director)
|
$ | 41,033 | (7) | - | - | - | - | - | $ | 41,033 |
(1)
|
Consists
of $20,000 annual retainer, $30,000 in Board attendance fees, $12,500
retainer as chairman of the Audit Committee, $32,500 in Audit Committee
meeting fees, and $2,500 retainer as chairman of the Nominating/Corporate
Governance Committee. Mr. Brady currently is and was the chairman of the
Audit Committee and the Nominating/Corporate Governance Committee
throughout the fiscal year ended December 31,
2008.
|
(2)
|
Consists
of $20,000 annual retainer, $25,500 in Board attendance fees, and $30,000
in Audit Committee meeting fees. Mr. Caine has been a member of the Audit
Committee throughout the fiscal year ended December 31,
2008.
|
(3)
|
Consists
of $14,728 annual retainer (which reflects payment of $5,000 each for the
first and second quarter and $4,728 for the third quarter prorated to the
date of resignation) and $19,500 in Board attendance fees. Mr. Dunn
resigned as a director on September 25,
2008.
|
(4)
|
Consists
of $20,000 annual retainer, $30,000 in Board attendance fees, $2,500
retainer as chairman of the Compensation Committee, and $30,000 in Audit
Committee meeting fees. Mr. Mathias currently is and was the chairman of
the Compensation Committee and a member of the Audit Committee throughout
the fiscal year ended December 31,
2008.
|
(5)
|
Consists
of $13,261 annual retainer (which reflects payment of $5,000 each for the
first and second quarter and $3,261 for the third quarter prorated to the
date of resignation) and $19,500 in Board attendance fees. Mr. Rovner
resigned as a director on August 29,
2008.
|
(6)
|
Consists
of $20,000 annual retainer and $28,500 in Board attendance
fees.
|
(7)
|
Consists
of $18,553 annual retainer (which reflects payment of $5,000 each for the
first, second and third quarter and $3,533 for the fourth quarter prorated
to the date of resignation) and $22,500 in Board attendance fees. Mr.
Traub resigned as a director on December 4,
2008.
|
(8)
|
No
stock or option awards were granted to directors in 2008. In addition, as
of December 31, 2008, all of the non-qualified options granted to the
directors in 2007 were cancelled either (1) voluntarily by the director
through the Company’s Stock Option Cancellation Program] instituted on
November 12, 2008 or (2) in accordance with the option grant agreements
which provided that the grantee would forfeit any unvested options upon
resignation.
|
(9)
|
In
June 2006, Mr. Oros relinquished his position as Chief Executive Officer
of the Company, remaining as Chairman. Under the terms of his amended
employment agreement, for a period of three years ending in June 2009, Mr.
Oros remained an employee to provide advice and guidance to the Company
and to assist with the management and business transition processes. Mr.
Oros received an annual salary of $200,000 and health care coverage as an
employee during this period. Starting in May 2008, Mr. Oros agreed to
defer payment of his salary to provide the Company with additional
liquidity. The Company recommenced payment of Mr. Oros’ salary, including
the amounts deferred, in October 2008. $54,541 of Mr. Oros’ deferred 2008
salary was paid in 2009, and thus is not included in the amounts above.
The Company paid $10,724 for the employee’s portion of the premiums for
Mr. Oros’ health care coverage in
2008.
|
Name
|
Age
|
Position
|
||
Kenneth
J. Hall1
|
51
|
Chief
Executive Officer
|
||
Mark
E. Stanko2
|
47
|
Chief
Financial Officer and Treasurer
|
||
Sue
J. Nam3
|
40
|
General
Counsel and Secretary
|
||
Chris
Dull4
|
36
|
President,
NexCen Franchise
Management
|
1
|
Mr.
Hall joined the Company on March 25, 2008 as our Executive Vice President,
Chief Financial Officer and Treasurer. He became our Chief Executive
Officer on August 15, 2008.
|
2
|
Mr.
Stanko joined the Company on April 30, 2008 as the Chief Financial Officer
and Treasurer of NexCen Franchise Management, Inc. (“NFM”), the wholly
owned subsidiary of NexCen which manages all of the Company’s franchised
brands. He became the Company’s Chief Financial Officer on November 12,
2008.
|
3
|
Ms.
Nam joined the Company on September 24, 2007 as General
Counsel. She became Secretary on December 6,
2007.
|
4
|
Mr.
Dull joined the Company on February 28, 2007 as Executive Vice President
of the QSR Franchising of NFM. On May 22, 2007, he was promoted to
President of the QSR Division of NFM. He then was appointed President of
NFM on August 31, 2007 and appointed an executive officer of the Company
on February 13, 2009.
|
|
·
|
Base
salary;
|
|
·
|
Equity-based
awards;
|
|
·
|
Cash
bonuses;
|
|
·
|
Perquisites
and other personal benefits; and
|
|
·
|
Other
compensation.
|
|
·
|
Payments
of life, health and/or disability insurance premiums;
and/or
|
|
·
|
Car
expenses.
|
Name and
Principal Position
(1)
|
Year
|
Salary
($)
(2)
|
Bonus
($)
(3)
|
Stock
Awards
($)
|
Option
Awards
($)
(4)
|
Non-Equity
Incentive
Plan
Compensation
($)
|
Change in Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)
|
All Other
Compensation
($)
(5)
|
Total
($)
|
|||||||||||||||||||||||||
Kenneth
J. Hall
|
2008
|
$ | 369,102 | $ | 375,000 | - | $ | 86,648 | - | - | $ | 17,766 | $ | 848,516 | ||||||||||||||||||||
Chief
Executive Officer
|
||||||||||||||||||||||||||||||||||
Mark
E. Stanko
|
2008
|
$ | 132,218 | - | - | $ | 2,710 | - | - | - | $ | 135,088 | ||||||||||||||||||||||
Chief
Financial Officer
|
||||||||||||||||||||||||||||||||||
Sue
J. Nam
General
Counsel
|
2008
|
$ | 265,937 | $ |
238,000
|
- | $ | 22,515 | - | - | $ | 3,954 | $ | 530,406 | ||||||||||||||||||||
Robert
W. D’Loren
|
2008
|
$ | 454,827 | - | - | - | - | - | $ | 18,143 | (6) | $ | 427,950 | |||||||||||||||||||||
Former
Chief Executive Officer
|
2007
|
$ | 750,000 | - | - | - | - | - | $ | 35,167 | (7) | $ | 785,167 | |||||||||||||||||||||
2006
|
$ | 427,083 | $ | 701,406 | $ | 40,162 | (8) | $ | 1,168,651 | |||||||||||||||||||||||||
David
B. Meister
|
2008
|
$ | 51,563 | - | - | $ | 277,245 | - | - | $ | 1,033 | $ | 329,841 | |||||||||||||||||||||
Former Chief
Financial Officer
|
2007
|
$ | 225,000 | - | - | - | - | - | $ | 4,863 | $ | 229,863 | ||||||||||||||||||||||
2006
|
$ | 69,375 | $ | 40,671 | - | $ | 110,046 | |||||||||||||||||||||||||||
James
Haran
|
2008
|
$ | 227,404 | - | - | - | - | - | $ | 7,175 | $ | 234,579 | ||||||||||||||||||||||
Former
Executive Vice President
|
2007
|
$ | 375,000 | - | - | - | - | - | $ | 15,150 | $ | 390,150 | ||||||||||||||||||||||
2006
|
$ | 338,542 | $ | 145,117 | - | $ | 483,659 | |||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||
Charles
Zona
|
2008
|
$ | 125,000 | $ | 100,000 | - | $ | 433,066 | - | - | - | $ | 658,066 | |||||||||||||||||||||
Former
Executive Vice President
|
2007
|
$ | 300,000 | - | - | - | - | - | - | $ | 300,000 | |||||||||||||||||||||||
2006
|
$ | 18,182 | $ | 10,994 | $ | 29,176 |
(1)
|
Mr.
Hall has been the Company’s Chief Executive Officer since August 15, 2008.
Mr. Hall joined the Company as the Executive Vice President, Chief
Financial Officer and Treasurer on March 25, 2008. Mr. Stanko has been the
Company’s Chief Financial Officer and Treasurer since November 12, 2008.
He joined the Company on April 30, 2008 as the Chief Financial Officer of
NFM. Ms. Nam has been the Company’s General Counsel since she joined the
Company on September 26, 2007 and was appointed Secretary on December 6,
2008. Mr. D’Loren was the Chief Executive Officer of the Company from June
6, 2006 to August 15, 2008. Mr. Meister was the Senior Vice President,
Chief Financial Officer and Treasurer from September 12, 2006 to March 21,
2008. Mr. Haran was the Executive Vice President, M&A and Operations
from June 6, 2006 until August 14, 2008. Mr. Zona was the Executive Vice
President, Licensing and Brands from December 11, 2006 until May 30,
2008.
|
(2)
|
The
amount for the year ended December 31, 2008 for Mr. Hall is based on an
initial base salary of $400,000, prorated from March 25, 2008 (the date
his employment commenced) to May 31, 2008, and his current base salary of
$500,000, prorated from June 1, 2008 through December 31, 2008. The amount
for the year ended December 31, 2008 for Mr. Stanko is based on an initial
base salary of $185,000, prorated from April 30, 2008 (the date his
employment commenced) to October 15, 2008, and his current base salary of
$225,000, prorated from October 16, 2008 to December 31, 2008. The amount
included for the year ended December 31, 2008 for Ms. Nam is based on a
base salary of $250,000, prorated from January 1, 2008 through September
30, 2008, and her current base salary of $300,000, prorated from October
1, 2008 to December 31, 2008. The amounts included for the year ended
December 31, 2008 for Messrs. D’Loren, Meister, Haran and Zona is based on
a base salary of $750,000, $225,000, $375,000 and $300,000, respectively,
prorated to their separation dates of August 15, 2008, March
21, 2008, August 14, 2008 and May 30, 2008, respectively. See the section
captioned “Employment Agreements” below for more in-depth information
regarding each executive’s employment agreement and, where applicable,
separation agreement. The amounts included for the year ended December 31,
2006 for Messrs. D’Loren, Meister, Haran and Zona is based on a base
salary of $750,000, $225,000, $375,000 and $300,000, respectively,
prorated from their employment start dates of June 6, 2006, September 12,
2006, June 6, 2006 and December 11, 2006, respectively. Mr. Meister’s
amount for 2006 does not include $29,000 which was paid to Mr. Meister for
services as a consultant with the Company from July 2006 until September
2006. The amount for Mr. Haran for 2006 includes a deferred bonus of
$125,000 from UCC Capital that the Company assumed upon the
acquisition.
|
(3)
|
For
the year ended December 31, 2008, Mr. Hall received a total of $375,000 in
quarterly cash bonuses in accordance with the amendment to his employment
agreement. Ms. Nam received $25,000 on March 31, 2008 pursuant to her
original employment agreement, an additional $5,000 on March 31, 2008 as a
discretionary interim bonus, and $208,000 in retention bonuses in the
latter half of 2008 pursuant to the amendments to her employment
agreement. Mr. Zona received $100,000 on March 31, 2008 as a
discretionary interim bonus. See the section captioned “Employment
Agreements” below for more in-depth information regarding payment of
bonuses pursuant to each executive’s respective employment agreements and
payment of discretionary interim bonuses. For the years ended
December 31, 2007 and December 31, 2006, respectively, Messrs. D’Loren,
Meister, Haran and Zona did not receive any
bonuses.
|
(4)
|
The
amounts in the Option Awards column represents expenses for stock options
in each respective year as prescribed by FAS 123R. For the year ended
December 31, 2008, Mr. Hall received a grant of 250,000 stock options on
June 24, 2008 in connection with his initial hire under the same terms as
those stock options granted under the 2008 Retention Program. He also
received 250,000 additional stock options on August 26, 2008 in connection
with his promotion to the position of Chief Executive Officer. Mr. Stanko
received a grant of 20,000 stock options on June 24, 2008 in connection
with the 2008 Retention Program and 30,000 stock options on November 12,
2008 in connection with his promotion to the position of Chief Financial
Officer and Treasurer. Ms. Nam received a grant of 25,000 stock options on
March 19, 2008 in connection with a discretionary interim bonus and
100,000 stock options on June 24, 2008 in connection with the first
amendment to her employment agreement under the same terms as those stock
options granted under the 2008 Retention Program. On November 12, 2008,
Ms. Nam voluntarily agreed to cancel, pursuant to the Stock Option
Cancellation Program, 100,000 stock options that were granted to her on
September 24, 2007 in accordance with her employment agreement and in
connection with her hire. Mr. Meister was not granted any options in
2008. However, pursuant to a separation agreement between the
Company and Mr. Meister, the Company agreed to accelerate the vesting of
the 200,000 options that he received on September 12, 2006 and extend the
post-employment exercise period for those options until December 31, 2009.
Mr. Zona received a grant of 25,000 options on March 19, 2008. Pursuant to
a separation agreement between the Company and Mr. Zona, Mr. Zona agreed
to voluntarily surrender 166,666 of his unvested options granted on
December 11, 2006, and the Company agreed to accelerate the vesting of
25,000 options granted to Mr. Zona on March 19, 2008 and to extend the
post-employment exercise period on the 25,000 options and his vested
83,334 options until December 31, 2009. For the year ended December 31,
2007, Messrs. D’Loren, Meister, Haran and Zona did not receive any stock
option awards. For the year ended December 31, 2006, Messrs. D’Loren,
Meister, Haran and Zona received option awards pursuant to the terms of
their employment agreements. See “Grants of Plan-Based Awards Table,”
“Outstanding Equity Awards at Fiscal Year-End Table,” and accompanying
notes for additional information.
|
(5)
|
For
the year ended December 31, 2008, Mr. Hall received a total of $17,766
comprised of the Company’s payment pursuant to his employment agreement of
$3,267 for the employee
portion of premiums for life and health insurance and $14,499 for car
expenses; Ms. Nam received a total of $3,954 comprised of the Company’s
payment pursuant to her employment agreement of the employee portion of
premiums for life and health insurance; Mr. Haran received a total of
$7,175 comprised of the Company’s payment pursuant to his employment
agreement of car expenses; and Mr. Meister received a total of $1,033
comprised of the Company’s payment pursuant to his employment agreement of
the employee portion of premiums for life and health insurance. For the
year ended December 31, 2007 for “All Other Compensation,” Mr. Meister
received a total of $4,863 comprised of the Company’s payment of the
employee portion of premiums for health insurance, and Mr. Haran received
a total of $15,150 comprised of the Company’s payment of car expenses. See
notes 6, 7 and 8 below for discussion regarding payments to and from Mr.
D’Loren in 2008, 2007 and 2006,
respectively.
|
(6)
|
For
the year ended December 31, 2008, Mr. D’Loren received a total of $18,143,
comprised of the Company’s payment of $7,001 for the employee portion of
premiums for life and health insurance, $10,764 for car expenses and $378
for club dues. The amount of “All Other Compensation” for 2008 takes into
account reimbursements by Mr. D’Loren in 2008, pursuant to the Separation
Agreement by and between the Company and Mr. D’Loren dated August 15, 2008
(the “D’Loren Separation Agreement”). In reviewing our executives’
compensation and expense reimbursements for 2007 and 2008, we became aware
that certain expenses that the Company had agreed to pay pursuant to Mr.
D’Loren’s employment agreement, such as health and life insurance
premiums, in fact were not paid by the Company, whereas other expenses
that arguably were not authorized under Mr. D’Loren’s employment agreement
or by the Compensation Committee had been paid or reimbursed by the
Company. After netting these expenses, the Company came to believe that
the classification of $65,069 of expenses that we paid in 2008 and $65,923
of expenses that we paid in 2007 as business expenses or authorized
perquisites was questionable. Mr. D’Loren did not agree with the Company’s
conclusion. Nonetheless, pursuant to the D’Loren Separation Agreement, he
reimbursed the Company $130,992, which represented the entire amount of
the disputed expenses for 2008 and
2007.
|
(7)
|
For
the year ended December 31, 2007, Mr. D’Loren received a total of $35,167
comprised of the Company’s payment of $13,383 for the employee portion of
premiums for life and health insurance, $16,027 for car expenses, and
$5,757 for club dues. The amount of “All Other Compensation” for 2007
takes into account reimbursements by Mr. D’Loren in 2008, pursuant to the
D’Loren Separation Agreement.
|
(8)
|
For
the year ended December 31, 2006, Mr. D’Loren received a total of $40,162
in all other compensation which included insurance premiums for life and
long term disability of $28,830, car expenses of $9,842 and club dues of
$1,490. This amount was not affected by the D’Loren Separation
Agreement.
|
Name
|
Grant
Date
|
Number of
Securities
Underlying
Options
Granted (#)
|
Exercise or
Base Price
($/Sh)
|
Expiration
Date
|
Grant Date Fair Value of
Option Awards
|
|||||||||||||
Kenneth
J. Hall
|
06/24/08
|
250,000 | $ | 0.41 |
06/24/18
|
$ | 32,534 | |||||||||||
08/26/08
|
250,000 | $ | 0.41 |
08/26/18
|
$ | 54,114 | ||||||||||||
Mark
E. Stanko
|
06/24/08
|
20,000 | $ | 0.41 |
06/24/18
|
$ | 2,603 | |||||||||||
11/12/08
|
30,000 | $ | 0.12 |
11/12/18
|
$ | 107 | ||||||||||||
Sue
J. Nam
|
03/19/08
|
25,000 | $ | 2.83 |
03/19/18
|
$ | 9,501 | |||||||||||
06/24/08
|
100,000 | $ | 0.41 |
06/24/18
|
$ | 13,014 | ||||||||||||
Robert
W. D’Loren
|
-
|
- | - |
-
|
- | |||||||||||||
David
Meister
|
-
|
- | - |
-
|
- | |||||||||||||
James
Haran
|
-
|
- | - |
-
|
- | |||||||||||||
Charles
Zona (1)
|
03/19/08
|
25,000 | $ | 0.17 |
12/31/09
|
$ | 4,250 |
(1)
|
Pursuant
to a separation agreement between the Company and Mr. Zona, Mr. Zona
agreed to voluntarily surrender 166,666 of his unvested options granted on
December 11, 2006 and the Company agreed to accelerate the vesting of
25,000 options granted to Mr. Zona on March 19, 2008 and to extend the
post-employment exercise period on the 25,000 options until December 31,
2009. We have provided this additional information in tabular form above
by the addition of an “Expiration Date” column, even though not required
by SEC rules. For additional information with respect to Mr. Zona’s
employment agreement and separation agreement, see “Employment Agreements
- Charles A. Zona.”
|
Option Awards
|
Stock Awards
|
|||||||||||||||||||||||||||||||||||
Name
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
Equity
Incentive
Plan
Awards:
Number
of
Securities
Underlying
Unexercised
Unearned
Options
(#)
|
Option
Exercise
Price
($)
|
Option
Expiration
Date
|
Number
of
Shares
or
Units of
Stock
That
Have
Not
Vested
(#)
|
Market
Value
of
Shares
or Units
of Stock
That
Have
Not
Vested
($)
|
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights That
Have Not
Vested
(#)
|
Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
($)
|
|||||||||||||||||||||||||||
Kenneth
J. Hall(1)
|
125,000 | 125,000 | - | $ | 0.41 |
06/24/18
|
- | - | - | - | ||||||||||||||||||||||||||
125,000 | 125,000 | $ | 0.41 |
08/26/18
|
||||||||||||||||||||||||||||||||
Mark
E. Stanko(2)
|
10,000 | 10,000 | - | $ | 0.41 |
06/24/18
|
- | - | - | - | ||||||||||||||||||||||||||
- | 30,000 | $ | 0.12 |
11/12/18
|
||||||||||||||||||||||||||||||||
Sue
J. Nam(3)
|
- | 25,000 | $ | 2.83 |
03/19/18
|
- | - | - | - | |||||||||||||||||||||||||||
50,000 | 50,000 | $ | 0.41 |
06/24/18
|
||||||||||||||||||||||||||||||||
Robert
W. D’Loren(4)
|
- | - | - | - | - | - | - | - | - | |||||||||||||||||||||||||||
David
B. Meister(5)
|
200,000 | - | - | $ | 6.08 |
12/31/2009
|
- | - | - | - | ||||||||||||||||||||||||||
James
Haran(6)
|
- | - | - | - | - | |||||||||||||||||||||||||||||||
Charles
Zona(7)
|
88,334 | - | - | $ | 6.96 |
12/31/2009
|
- | - | - | - | ||||||||||||||||||||||||||
25,000 | $ | 0.17 |
12/31/2009
|
(1)
|
On
June 24, 2008, Mr. Hall was granted 250,000 stock options, encompassing
the initial grant of options that was supposed to have been awarded in
accordance with his employment agreement and in connection with his hire
but were not issued because of delays in the filing of our periodic
financial statements. Mr Hall was granted the initial 250,000 stock
options on terms consistent with those options granted under the 2008
Retention Program. Accordingly, the June 24, 2008 grant provided for the
stock options to vest in equal amounts over four quarters after the date
of grant on September 24, 2008, December 24, 2008, March 24, 2009 and June
24, 2009 and for accelerated vesting upon certain events. On August 26,
2008, in accordance with an amendment to Mr. Hall’s employment agreement
in connection with his promotion to the position of Chief Executive
Officer, Mr. Hall was granted an additional 250,000 stock options. The
August 26, 2008 grant provides for 125,000 of the options to vest
immediately upon the grant date and 125,000 of the options to vest on
February 1, 2009 with accelerated vesting upon certain events. For
additional information with respect to Mr. Hall’s employment agreement and
amendments thereto, see “Employment Agreements – Kenneth J.
Hall.”
|
(2)
|
On
June 24, 2008, as part of the 2008 Retention Program, Mr. Stanko was
granted 20,000 stock options, encompassing the initial grant of options
that were supposed to have been awarded in connection with his hire but
were not issued because of delays in the filing of our periodic financial
statements. The June 24, 2008 grant provides for the options to vest in
equal amounts over four quarters after the date of grant on September 24,
2008, December 24, 2008, March 24, 2009 and June 24, 2009 and for
accelerated vesting upon certain events. On November 12, 2008, in
accordance with his employment agreement, Mr. Stanko was granted an
additional 30,000 stock options. The November 12, 2008 grant provides for
the stock options to vest in equal amounts on the three anniversaries of
grant and for accelerated vesting upon certain events. For additional
information with respect to Mr. Stanko’s employment agreement and
amendments thereto, see “Employment Agreements – Mark E.
Stanko.”
|
(3)
|
On
September 24, 2007, in accordance with her employment agreement and in
connection with her hire, Ms. Nam was granted 100,000 stock options. The
options were to vest in equal amounts on the three anniversaries of grant.
On November 12, 2008, Ms. Nam voluntarily agreed to cancel the 100,000
stock options pursuant to the Stock Option Cancellation Program. On March
19, 2008, Ms. Nam was granted 25,000 stock options that vest in equal
amounts on the three anniversaries of grant. On June 24, 2008, in
accordance with the first amendment to Ms Nam’s employment agreement, she
was granted 100,000 stock options on terms consistent with those options
granted under the 2008 Retention Program. Accordingly, the June 24, 2008
grant provided for the stock options to vest in equal amounts over four
quarters after the date of grant on September 24, 2008, December 24, 2008,
March 24, 2009 and June 24, 2009 and for accelerated vesting upon certain
events. For additional information with respect to Ms. Nam’s employment
agreement and amendments thereto, see “Employment Agreements – Sue J.
Nam.”
|
(4)
|
On
June 6, 2006, in accordance with his employment agreement and in
connection with his hire, Mr. D’Loren was granted a warrant to purchase
125,000 shares and 2,686,976 stock options. Both the warrant and stock
options were to vest in equal amounts on the three anniversaries of grant.
Accordingly, 83,334 shares underlying the warrant and 1,641,317 shares
underlying the options vested on June 6, 2008. (Mr. D’Loren partially
exercised his options and purchased 150,000 shares in 2007.) Mr. D’Loren
resigned from the Company on August 15, 2008. Pursuant to his employment,
separation and warrant/option grant agreements, respectively, all of Mr.
D’Loren’s unexercisable warrants and options, totaling 937,325 shares,
expired upon his resignation. Mr. D’Loren did not exercise any of his
exercisable warrants or options, totaling 1,724,651 shares, within the 90
day post-employment exercise period provided in the warrant and option
grant agreements. Thus, all of the securities underlying Mr. D’Loren’s
exercisable and unexercisable warrants and options listed above expired in
2008. For additional information with respect to Mr. D’Loren’s employment
agreement and separation agreement, see “Employment Agreements – Robert W.
D’Loren.”
|
(5)
|
On
September 12, 2006, in accordance with his employment agreement and in
connection with his hire, Mr. Meister was granted 200,000 stock options
that were to vest in equal amounts on the three anniversaries of grant.
Accordingly, 66,667 stock options vested on September 12, 2007. On March
21, 2008, Mr. Meister’s employment was terminated without “Cause,” and all
unvested options immediately vested and became fully exercisable pursuant
to his employment agreement. Pursuant to a separation agreement, the
Company agreed to extend the post-employment exercise period on Mr.
Meister’s 200,000 options until December 31, 2009. For additional
information with respect to Mr. Meister’s employment agreement and
separation agreement, see “Employment Agreements - David B.
Meister.”
|
(6)
|
On
June 6, 2006, in accordance with his employment agreement and in
connection with his hire, Mr. Haran was granted 581,788 stock options that
were to vest in equal amounts on the three anniversaries of grant.
Accordingly, 193,930 stock options vested on June 6, 2007. Mr. Haran
resigned from the Company on August 14, 2008. Pursuant to his employment,
separation and option grant agreements, respectively, all of Mr. Haran’s
unexercisable options, totaling 387,858 shares, expired upon his
resignation. Mr. Haran did not exercise any of his exercisable options,
totaling 193,930 shares, within the 90 day post-employment exercise period
provided in the option grant agreement. Thus, all of the securities
underlying Mr. Haran’s exercisable and unexercisable options listed above
expired in 2008. For additional information with respect to Mr. Haran’s
employment agreement and separation agreement, see “Employment Agreements
– James Haran.”
|
(7)
|
On
December 11, 2006, in accordance with his employment agreement and in
connection with his hire, Mr. Zona was granted 250,000 stock options that
were to vest in equal amounts on the three anniversaries of grant.
Accordingly, 83,334 stock options vested on December 11, 2007. Mr. Zona’s
employment was terminated on May 30, 2008. Under his employment agreement,
Mr. Zona was entitled to accelerated vesting of all unvested options of
the December 2006 grant. However, pursuant to a
separation agreement, Mr. Zona agreed to voluntarily surrender 166,666 of
his unvested options from the December 2006 grant. The Company agreed to
extend the post-employment exercise period on Mr. Zona’s vested 83,334
options through December 31, 2009, accelerate the vesting of 25,000
options granted to Mr. Zona on March 19, 2008, and extend the
post-employment exercise period on the 25,000 options until December 31,
2009. For additional information with respect to Mr. Zona’s employment
agreement and separation agreement, see “Employment Agreements - Charles
A. Zona.”
|
|
·
|
any
earned but unpaid base salary through the date of employment termination
and any declared but unpaid annual
bonus;
|
|
·
|
an
amount equal to his base salary (at the rate then in effect) for the
greater of the remainder of the initial three year term or eighteen
months, payable over a six-month period or such shorter period as is
required to comply with Section 409A of the Internal Revenue Code and
applicable regulations adopted
thereunder;
|
|
·
|
continued
participation in NexCen’s group medical plan on the same basis as he
previously participated or receive payment of, or reimbursement for, COBRA
premiums (or, if COBRA coverage is not available, reimbursement of
premiums paid for other medical insurance in an amount not to exceed the
COBRA premium) for an eighteen month period following termination, subject
to termination of this arrangement if a successor employer provides him
with health insurance coverage; and
|
|
·
|
accelerated
vesting of all unvested options issued under the employment agreement with
the vested options remaining exercisable for twelve
months.
|
|
·
|
an
amount equal to the greater of (x) his base salary (at the rate then in
effect) for the remainder of the initial three year term or (y) two times
the sum of (1) his base salary (at the rate then in effect) and (2) a
bonus calculated as 100% of Mr. Hall’s base salary at the rate then in
effect, but in any event not to exceed $1,400,000 in the event that Mr.
Hall’s employment is terminated on or before January 31, 2009, with any
such payment to be paid over a six-month period or such shorter period as
is required to comply with Section 409A of the Internal Revenue Code and
applicable regulations adopted
thereunder;
|
|
·
|
any
earned but unpaid base salary through the date of employment termination
and any declared but unpaid annual
bonus;
|
|
·
|
an
amount equal to his base salary (at the rate then in effect) for twelve
months, payable over a six-month period or such shorter period as is
required to comply with Section 409A of the Internal Revenue Code and
applicable regulations adopted
thereunder;
|
|
·
|
continued
participation in NexCen’s group medical plan on the same basis as he
previously participated or receive payment of, or reimbursement for, COBRA
premiums (or, if COBRA coverage is not available, reimbursement of
premiums paid for other medical insurance in an amount not to exceed the
COBRA premium) for twelve months following termination, subject to
termination of this arrangement if a successor employer provides him with
health insurance coverage; and
|
|
·
|
accelerated
vesting of all unvested options issued under the employment agreement with
the vested options remaining exercisable for 90 days pursuant to the 2006
Plan.
|
|
·
|
any
earned but unpaid base salary through the date of employment termination
and any declared but unpaid annual
bonus;
|
|
·
|
an
amount equal to her base salary (at the rate then in effect) for six
months, payable over a six-month period or such shorter period as is
required to comply with Section 409A of the Internal Revenue Code and
applicable regulations adopted
thereunder;
|
|
·
|
continued
participation in NexCen’s group medical plan on the same basis as she
previously participated or receive payment of, or reimbursement for, COBRA
premiums (or, if COBRA coverage is not available, reimbursement of
premiums paid for other medical insurance in an amount not to exceed the
COBRA premium) for six months following termination, subject to
termination of this arrangement if a successor employer provides her with
health insurance coverage; and
|
|
·
|
accelerated
vesting of all unvested options issued under the employment agreement with
the vested options remaining exercisable for 90 days pursuant to the 2006
Plan.
|
|
·
|
$50,000
upon the successful closing of the restructuring of the Company’s credit
facility, with such bonus payable on or about October 15,
2008;
|
|
·
|
$50,000
upon the successful closing of the sale of the Bill Blass
business;
|
|
·
|
$50,000
upon the successful closing of the sale of the Waverly business;
and
|
|
·
|
$50,000
upon continued employment through March 31,
2009.
|
|
·
|
any
earned but unpaid base salary through the date of employment termination
and any declared but unpaid annual
bonus;
|
|
·
|
an
amount equal to his base salary (at the rate then in effect) for the
greater of the remainder of the initial three-year term or two years,
payable over a six-month period or such shorter period as is required to
comply with Section 409A of the Internal Revenue Code and applicable
regulations adopted thereunder;
|
|
·
|
continued
participation in NexCen’s group medical plan on the same basis as he
previously participated or receive payment of, or reimbursement for, COBRA
premiums (or, if COBRA coverage is not available, reimbursement of
premiums paid for other medical insurance in an amount not to exceed the
COBRA premium) for a two-year period following termination, subject to
termination of this arrangement if a successor employer provides him with
health insurance coverage; and
|
|
·
|
accelerated
vesting of all unvested options and restricted shares issued on June 6,
2006 pursuant to the 1999 Equity Incentive
Plan.
|
|
·
|
any
earned but unpaid base salary through the date of employment termination
and any declared but unpaid annual
bonus;
|
|
·
|
an
amount equal to his base salary (at the rate then in effect) for a period
of twelve months, payable over a six-month period or such shorter period
as is required to comply with Section 409A of the Internal Revenue Code
and applicable regulations adopted
thereunder;
|
|
·
|
continued
participation in NexCen’s group medical plan on the same basis as he
previously participated or receive payment of, or reimbursement for, COBRA
premiums (or, if COBRA coverage is not available, reimbursement of
premiums paid for other medical insurance in an amount not to exceed the
COBRA premium) for a one-year period following termination, subject to
termination of this arrangement if a successor employer provides him with
health insurance coverage; and
|
|
·
|
accelerated
vesting of all unvested options issued on September 12, 2006 pursuant to
the 1999 Equity Incentive Plan.
|
|
·
|
any
earned but unpaid base salary through the date of employment termination
and any declared but unpaid annual
bonus;
|
|
·
|
an
amount equal to his base salary (at the rate then in effect) for a period
of eighteen months, payable over a six-month period or such shorter period
as is required to comply with Section 409A of the Internal Revenue Code
and applicable regulations adopted
thereunder;
|
|
·
|
continued
participation in NexCen’s group medical plan on the same basis as he
previously participated or receive payment of, or reimbursement for, COBRA
premiums (or, if COBRA coverage is not available, reimbursement of
premiums paid for other medical insurance in an amount not to exceed the
COBRA premium) for a one-year period following termination, subject to
termination of this arrangement if a successor employer provides him with
health insurance coverage; and
|
|
·
|
accelerated
vesting of all unvested options issued on June 6, 2006 pursuant to the
1999 Equity Incentive Plan.
|
|
·
|
any
earned but unpaid base salary through the date of employment termination
and any declared but unpaid annual
bonus;
|
|
·
|
an
amount equal to his base salary (at the rate then in effect) for a period
of six months, payable over a six-month period or such shorter period as
is required to comply with Section 409A of the Internal Revenue Code and
applicable regulations adopted
thereunder;
|
|
·
|
continued
participation in NexCen’s group medical plan on the same basis as he
previously participated or receive payment of, or reimbursement for, COBRA
premiums (or, if COBRA coverage is not available, reimbursement of
premiums paid for other medical insurance in an amount not to exceed the
COBRA premium) for a one-year period following termination, subject to
termination of this arrangement if a successor employer provides him with
health insurance coverage; and
|
|
·
|
accelerated
vesting of all unvested options issued on December 11, 2006 pursuant to
the 2006 Plan.
|
Name
|
Cash
Severance
Payment
($)
|
Continuation of
Medical/Welfare
Benefits (Present
Value)
($)(1)
|
Value of
Accelerated
Vesting of Equity
Awards
($)(2)
|
Accrued but
Unused Paid
Time off
($)
|
Total Termination
Benefits
($)
|
|||||||||||||||
Robert
W. D’Loren
|
$ | 0 | $ | 14,722 | $ | 0 | $ | 0 | $ | 14,722 | ||||||||||
David
B. Meister
|
$ | 225,000 | $ | 15,330 | $ | 256,994 | $ | 26,827 | $ | 524,151 | ||||||||||
James
Haran
|
$ | 281,250 | $ | 14,722 | $ | 0 | $ | 0 | $ | 295,972 | ||||||||||
Charles
Zona
|
$ | 150,000 | $ |