MANAGEMENT
Our bylaws provide that our board of directors shall consist of no less than
seven and no more than nine directors. There are presently seven directors
serving on our board of directors. There are no family relationships among our
executive officers and directors.
The following table sets forth certain information regarding our directors
and executive officers.
Name Age Position
Gene Simmons 56 Chairman of the Board of Directors
Kourosh Taj Co-President and Director, Vice President of
34 Programming
Jay Vir 50 Co-President, Secretary and Director
Richard J. David 47 Chief Financial Officer
Richard Abramson 58 Director, Strategic Advisor - Entertainment
Al Cafaro 56 Director, Strategic Advisor - Music(1)
Patrick Dovigi 26 Director
Andrew A. De Francesco 36 Director
John Burns 62 Director
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(1) We have extended an offer to Mr. Cafaro to become our Chief Operating
Officer. Mr. Cafaro has accepted the offer contingent on reaching a mutually
acceptable form of employment agreement. We anticipate that such agreement
and Mr. Cafaro's service as our Chief Operating Officer will be effective
prior to the completion of the unit offering.
Election of Directors
At each annual meeting of shareholders, directors will be elected by the
holders of common stock to succeed those directors whose terms are expiring.
Directors will be elected annually and will serve until successors are elected
and qualified or until a director's earlier death, resignation or removal. Our
bylaws provide that the authorized number of directors may be changed only by a
vote of the shareholders of our company. Vacancies in our board of directors may
be filled by a majority vote of the board of directors with such newly appointed
director to serve until the next annual meeting of shareholders, unless sooner
removed or replaced.
Committees of the Board of Directors
In connection with the listing of the units, common stock and public
warrants on the American Stock Exchange, our board of directors will establish
three committees, an audit committee, a compensation committee and a nominating
committee, as well as adopt new corporate governance policies and procedures
that comply with the requirements of the American Stock Exchange.
Audit Committee
In connection with the listing of our units, common stock and public
warrants on the American Stock Exchange, we will be required to establish an
audit committee, which will be comprised of one independent director after the
closing of this offering. Our board of directors does not currently include a
"financial expert" as that term is defined in rules promulgated by the
U.S. Securities and Exchange Commission, or SEC, to serve on the audit
committee. Within 90 days from the date of this prospectus, we will expand our
audit committee to two members and within one year, to three members, and we
will recruit a financial expert to our board of directors and add such financial
expert as the chair of the audit committee. The audit committee will assist the
board in overseeing and reviewing: (a) the integrity of our financial reports
and financial information provided to the public and to governmental and
regulatory agencies; (b) the adequacy of our internal accounting systems and
financial controls; and (c) the annual independent audit of our financial
statements, including the independent auditor's qualifications and independence.
The audit committee:
will have sole authority to select, evaluate, terminate and replace our
independent auditors;
will have sole authority to approve in advance all audit and non-audit
engagement fees and terms with our independent auditors;
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will review the activities, plan, scope of authority, organizational
structure and qualifications of any persons overseeing our accounting and
financial reporting processes and the audits of our financial
statements; and
will review our audited financial statements, public filings and each press
release prior to issuance, filing or publication.
The specific functions and responsibilities of the audit committee will be
as set forth in an audit committee charter to be adopted by our board of
directors. Our board of directors expects that, following the date of this
prospectus, at least one member of our audit committee will qualify as an audit
committee financial expert as defined under SEC and American Stock Exchange
rules and regulations and the other members of our audit committee will satisfy
the financial literacy requirements for audit committee members under current
such rules and regulations.
Compensation Committee
Our board of directors intends to establish a compensation committee, which
will be comprised of three independent directors, within one year after the date
of this prospectus. The principal functions of the committee will be to:
evaluate the performance of our named executive officers and approve their
compensation;
prepare an annual report on executive compensation for inclusion in our
proxy statement;
review and approve compensation plans, policies and programs, considering
their design and competitiveness;
administer and review changes to our equity incentive plans pursuant to the
terms of the plans; and
review our non-employee independent director compensation levels and
practices and recommend changes as appropriate.
The compensation committee will review and approve corporate goals and
objectives relevant to Chief Executive Officer's compensation, evaluate the
Chief Executive Officer's performance in light of those goals and objectives,
and recommend to the board the Chief Executive Officer's compensation levels
based on its evaluation.
The compensation committee will administer our 2000 Equity Incentive Plan.
The specific functions and responsibilities of the compensation committee will
be set forth in a compensation committee charter to be adopted by the board of
directors.
Nominating Committee and Corporate Governance
Our board of directors will establish a nominating and corporate governance
committee, which will be comprised of all of the independent directors then
serving on the board. This committee is responsible for seeking, considering and
recommending to the board qualified candidates for election as directors and
recommending a slate of nominees for election as directors at our annual
meeting, as well as overseeing compliance with various governance matters. The
specific functions and responsibilities of the nominating and corporate
governance committee will be set forth in the nominating and corporate
governance committee charter.
Corporate Governance
In connection with the listing of our securities on the American Stock
Exchange, we will be required to adopt many new corporate governance practices,
in addition to establishing our new board committees. Such practices include
maintaining a majority of independent directors on our board, providing that all
compensation payable to our chief executive officer be approved by a
compensation committee composed of independent directors, and requiring that any
newly adopted stock option and stock compensation plans be approved by our
shareholders. We have already adopted a code of ethics.
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Business Experience
Mr. Gene Simmons. Mr. Simmons was elected to our board of directors in
February 2004 and became Chairman of the board in February 2004. Mr. Simmons
assists the company with its marketing and public relations, and acts as a
spokesperson for the company. Mr. Simmons currently has numerous other projects
and businesses for which he serves as director and manager, as well as investor
during the past five years. Three decades ago, Mr. Simmons co-founded one of the
most famous and most successful rock groups in the world - KISS. Mr. Simmons is
President of his own record label, Simmons Records, as well as a film and
television producer, having produced "Detroit Rock City" for New Line Cinema. He
has a book imprint, Simmons Books, and he also publishes his own magazine
Tongue, available at all newsstands.
Mr. Kourosh Taj. Mr. Taj became our Co-President and was elected to our
board of directors at the inception of the company in 2000. Mr. Taj has been in
the music and entertainment industry for over 12 years holding various positions
in television production, development, licensing, talent booking and operations.
Prior to co-founding NGTV, Mr. Taj held the position of Executive Vice President
of MusiTopia and spearheaded the creative components and development of a
landmark music theme park project for the re-use of the old Atlantic City
Convention Center. For more than the last five years, Mr. Taj has led NGTV
programming, talent acquisition, production, business development, content
licensing from artists and labels, as well acting as the creative director and
development director of the NGTV premium channel.
Mr. Jay Vir. Mr. Vir became our Co-President and was elected to our board of
directors at the inception of the company in 2000. Mr. Vir has been a media
executive since 1996, and has an extensive background and network of
relationships in the cable television, music and entertainment industries. Prior
to NGTV he consulted and spearheaded the strategic development, operations,
finance and content licensing for MusiTopia, a landmark music and entertainment
project, which included media, television, record label and live venue
components. He was also a co-founder and CEO of NetInfo, a Microsoft network
content partner, and was instrumental in developing a revenue sharing
partnership with Microsoft. Prior to 1996 he was a business entrepreneur and a
consultant in the media, finance, publishing, technology and automobile
industries. For more than the last five years, Mr. Vir had lead NGTV operations,
including distribution, marketing, content licensing, corporate and business
affairs, programming and broadcast operations. Mr. Vir has also consulted for
major US corporations, which include Daily Journal, RJR Nabisco, Nissan and
Lockheed. Mr. Vir received his Bachelor's degree in Electrical Engineering, in
1977, from the Indian Institute of Technology in Bombay and an MBA, in 1979,
from the Indian Institute of Management in Calcutta.
Mr. Richard J. David. Mr. David became our Chief Financial Officer in
October 2005. Mr. David joined NGTV as its Vice President of Finance in March
2004. From April, 2002 through March 2004, Mr. David was a consultant with
Sunbelt Business Brokers of Beverly Hills, where he consulted with senior
management of private companies. Through April 2002, Mr. David was Vice
President, Finance and Administration with Simon Marketing, Inc. ("SMI"), a
public entity trading on Nasdaq National Market. At SMI, Mr. David was
responsible for financial controls, budgets and SEC Filings, as well as
operational issues. In addition, Mr. David has performed extensive work
consulting with management of mid-level firms on finance, enterprise valuations,
mergers and acquisitions. He earned his MBA in Finance and Organizational
Development, from Loyola Marymount University, Los Angeles, California, in 1998.
Mr. Richard Abramson. Mr. Abramson joined NGTV in February 2004, as its
Co-Chief Executive Officer and as a director. In July 2004, Mr. Abramson stepped
down from this position, but continues to serve as a director and consultant.
Mr. Abramson's successful career spans more than 25 years and several
industries. In the film industry, Mr. Abramson has served as Co-Creator,
Producer and Executive Producer on numerous films for studios such as Paramount,
New Line Cinema, Warner Bros. and Columbia. Mr. Abramson was the personal
manager of the character known as Pee-wee Herman. Mr. Abramson was co-creator
and producer of Pee-Wee's Playhouse and Pee-Wee's Big Adventure for Warner
Brothers and Executive Producer of BIG-TOP PEE-WEE for Paramount. In 2001,
Mr. Abramson became Chairman of EastWest Resort Development Corporation, a real
estate development company. Since 2004, Mr. Abramson has been managing member of
SAB 1, LLC, an entertainment services company. SAB 1, LLC is co-owned with
Mr. Gene Simmons, Chairman of our board.
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Mr. Al Cafaro. Mr. Cafaro was elected to our board of directors in October
2000. Mr. Cafaro also acts as our strategic advisor in the area of music. He is
a well-respected music industry veteran, now in his third decade in the music
business. He held the position of Chairman and CEO of A&M Records form 1996 to
1999. Mr. Cafaro joined A&M Records in 1976 as the regional promotion
representative in North and South Carolina. In 1987, he was named Vice President
of Promotion and relocated to A&M's home base in Los Angeles. Thereafter, he was
promoted to Senior Vice President and eventually to General Manager of the
label. In 1990, Mr. Cafaro was appointed President & CEO of the company and, in
1996 he was promoted to the position of Chairman and CEO of A&M Records.
Mr. Cafaro also served on the board of Radio Industry Association of America
from 1990-1999. From 1999 through 2002 Mr. Cafaro worked as an individual
consultant in the music industry for various clients. In 2002, Mr. Cafaro formed
Metropolitan/ Hybrid Recordings, a small record company with 6 contemporary
artists and a concert promotion company promoting music shows in the
northeastern region of the United States, which he continues to manage.
Mr. Patrick Dovigi. Mr. Dovigi was elected to our board of directors in
February 2004. Mr. Dovigi graduated from Ryerson University in Toronto, Canada
in 2000 with a degree in Business Management. Prior to that he was employed by
both the Edmonton Oilers and the Detroit Red Wings Organization of the National
Hockey League (NHL) as a Professional Hockey player. From 2002 through 2004
Mr. Dovigi was Vice President of Brovi Investments. Since September 2004, he has
also been President of Waste Excellence Corporation, a company involved in
Municipal Waste and Recycling Transfer Stations. From 1999 through January 2002,
Mr. Dovigi was Vice President of Right Lease, a construction equipment and
automotive leasing company.
Mr. Andrew A. De Francesco. Mr. De Francesco was appointed to our board of
directors on May 2, 2006. From September 2005 to the present he has been the
President of Apollo Limited Partnership, a private Canadian hedge fund. Prior to
that, since September 2001, he was the Managing Partner of Standard Securities
Capital Corp., a Canadian investment boutique. From February 2001 to September
2001, he served as Vice President of Canaccord Capital, a Canadian brokerage
firm. Over the last ten years, he has been involved in capital raising
activities for small cap companies in the United States and Canada. He is a
graduate of Western Ontario University and he has successfully completed the
Canadian Securities Course and the Partners, Directors and Officers exams under
Canadian securities laws.
Mr. John Burns. John Burns has over 20 years experience in the cable and
satellite industries and for more than the past 5 years he has served as the CEO
of The Burns Group, a consulting firm specializing in cable network and
interactive services, whose clients have included Sony Television, the Game Show
Network, Columbia Tri-Star International Television, Wisdom Networks, The
Parenthood Channel and Gemstar International. Previously, Mr. Burns held the
position of President, Distribution for the ABC Family Channel where he oversaw
the Affiliate Sales and Marketing efforts, as well as Local Ad Sales. From 1981
to 1992, Mr. Burns worked with Viacom's Showtime Networks, where he held
numerous marketing and sales positions, last serving as Senior Vice President,
Affiliate Sales and Marketing. Thereafter, John was Executive Vice President,
Sales and Marketing, and subsequently named President of StarSight Telecast,
Inc., where he formulated the business plan and all marketing, sales,
distribution, engineering, product planning and development strategies for the
world's first interactive on-screen television navigation system. He holds a
Bachelor's Degree from Guilford College and earned a JD from the University of
North Carolina, Chapel Hill. Mr. Burns served as our Chief Executive Office for
the period April 10, 2006 through May 16, 2006.
Legal Matters Concerning Certain Members of our Management
On August 19, 2005, Mr. Al Cafaro, one of our directors, filed a petition
for bankruptcy protection under Chapter 7 of the United States Bankruptcy Code.
The petition was filed in the United States Bankruptcy Court for the Southern
District of New York, as case number 05-16684. The case is pending and no order
of discharge has been entered. The case relates solely to Mr. Cafaro's personal
financial affairs and assets.
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Executive Compensation
The following table sets forth information concerning the total compensation
that we have paid or accrued on behalf of our Chief Executive Officer and other
officers with annual compensation exceeding $100,000 (collectively, the "named
executive officers") during the fiscal years ending December 31, 2003, 2004 and
2005.
SUMMARY COMPENSATION TABLE
Annual Compensation Restricted Securities
Other Annual Stock Underlying All Other
Name and Principal Position Year Salary Bonus Compensation Awards($) Options(#) Compensation
Allan Brown*(a) 2005 240,000
Former Chief Executive Officer 2004 212,000 881,929 98,175
2003
Jay Vir*(b) 2005 302,580
President 2004 295,200
2003 288,000 149,999
Kourosh Taj*(c) 2005 252,150
President 2004 246,000
2003 240,000 79,999
Richard David*(d) 2005 185,962 10,804 43,048
Chief Financial Officer 2004 133,846
2003
Paul Allen 2005 186,923
Vice President, Post Production 2004 143,308
2003
Al Cafaro(e) 2005 50,000 25,829
Director 2004
2003
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* These executives are covered by employment agreements which are discussed
elsewhere in this prospectus.
(a) Mr. Brown's employment with the company as Chief Executive Officer was
terminated effective February 12, 2006 and he resigned from our board of
directors effective February 27, 2006. There are no severance or other
payments, or stock options or issuances, presently due Mr. Brown in
connection with his departure from the company. In February 2004, an entity
controlled by Mr. Brown was provided with a consulting arrangement and paid
$310,000 for marketing services. The contract was subsequently canceled on
October 28, 2004. In February 2004, Mr. Brown converted $50,000 of debt that
we owed to him into 242,100 shares of common stock; the net benefit to
Mr. Brown, based on fair market value of the stock and related options at
the time, was $881,929. In addition, in February 2004, Mr. Brown was awarded
98,175 sub-penny options to purchase common stock, all of which were
exercised as of December 31, 2005. As of December 31, 2005, all of
Mr. Brown's outstanding options have been exercised and he maintains a total
of 320,088 shares of common stock, after the assignment of certain shares to
a non-related party.
(b) In 2005, Mr. Vir was provided with sub-penny warrants to purchase common
stock, in connection with outstanding debt that we owed to him. During that
year, 280,173 warrants were issued to him, which, based on the Black-Scholes
option pricing model at the time that the warrants were issued, were
estimated to be valued at $170,759. In 2003, Mr. Vir was awarded
322,859 shares of common stock, worth $149,999, based on fair market value
at the time of the award. As of December 31, 2005, Mr. Vir holds a total of
857,230 shares of common stock.
(c) In 2005, Mr. Taj was provided with sub-penny warrants to purchase common
stock, in connection with outstanding debt that we owed to him. During that
year, 126,061 warrants were issued to him, which, based on the Black-Scholes
option pricing model (minimum pricing method) at the time that the warrants
were issued, were estimated to be valued at $76,831. In 2003, Mr. Taj was
awarded 172,191 shares of common stock, worth $79,999, based on fair market
value at the time of the award. As of December 31, 2005, Mr. Taj holds a
total of 461,835 shares of common stock.
(d) In 2005, Mr. David was awarded 17,084 shares of common stock worth $10,804
based on fair market value of the stock at the time of the award.
Additionally, Mr. David was provided with 43,048 options under our Equity
Incentive Plan, at a strike price of $2.59 per share. Approximately 44% of
these options are vested at December 31, 2005.
(e) In 2000, the company entered into a consulting agreement with Mr. Cafaro, a
director, whereby he earned a maximum of $10,000 per month, in connection
with his services to the company, including, but not limited to those
services required of him as a director. Compensation accrued under this
agreement has been negotiated to a lesser
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amount, in conjunction with the agreement being modified to include a
monthly fee of $4,000, plus expenses, due to Mr. Cafaro in exchange for his
services as a director. In December 2005, we agreed to pay Mr. Cafaro
$50,000 for past services, with an additional $50,000 to be paid to him upon
the achievement of certain financing thresholds. Additionally, Mr. Cafaro
was awarded a ten-year option to purchase 25,829 shares of the company's
common stock, at $2.59 per share. Mr. Cafaro will continue to earn
$4,000 per month as a director.
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