Item 10. EXECUTIVE COMPENSATION
Directors' Compensation
Directors receive no cash compensation in consideration for their
serving on the Board of Directors.
Compensation Committee
Presently, we do not have a compensation committee. Compensation of
executive officers is determined by the board of directors. We intend to form a
compensation committee during the 2000 fiscal year but have not yet determined
who will serve on that committee.
Summary Compensation Table
The following table provides a summary of cash and non-cash
compensation for each of the last three fiscal years ended December 31, 1999,
1998 and 1997 earned by the Chief Executive Officer. No other executive earned
in excess of $100,000 in 1999.
------------------------------------------------------------------------------------- ---------------- ---------------
Annual Compensation Long Term
Compensation
------------------ ------------- ---------------- -------------- -------------------- ---------------- ---------------
Securities
Name and Other Annual Underlying All Other
Principal Compensation Options/SA Compensation
Position Year Salary ($) Bonus ($) ($)(1) Rs(#) ($)
------------------ ------------- ---------------- -------------- -------------------- ---------------- ---------------
Darien Dash 1999 125,500 0 0 0
C.E.O. 1998 20,000 0
1997 20,000 0
------------------ ------------- ---------------- -------------- -------------------- ---------------- ---------------
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(1) Excludes perquisites and other personal benefits which in the aggregate do
not exceed 10% of 1999 annual salary and bonus.
(2) This information is derived from the books and records of DME Interactive
and its accounting predecessor, Digital Mafia, LLC. No information pertaining to
the executive officers of our legal predecessor, Pride Automotive Group, Inc.,
has been included.
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Option Grants in Last Fiscal Year
DME Interactive granted its employees options to acquire 1,210,000
shares of its Common Stock in 1999. The following table contains information
concerning the grant of stock options to the Named Executive Officers during the
fiscal year ended December 31, 1999:
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Individual Grants
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% of Total
Number of Options
Securities Granted to Exercise or
Underlying Employees in Base Price
Options Fiscal Year ($/Share) Expiration
Name Granted (#) Date
--------------------- ---------------- ---------------- -------------- --------------
Andre H. McKoy 250,000 0.625 August 1,
--------------------- ---------------- ---------------- -------------- --------------
Kathleen McQuaid 60,000 2.00 September 1,
Packard 2009
--------------------- ---------------- ---------------- -------------- --------------
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Description of 2000 Stock Option Plan
The DME Interactive Holdings, Inc. Stock Option Plan of 2000 ("2000
Plan") is intended to serve as an equity incentive program for management,
qualified employees, non-employee members of the Board of Directors, and
independent advisors or consultants. The 2000 Plan became effective on February
29, 2000 upon adoption by the Board of Directors. The 2000 Plan has not been
ratified by shareholders but will be submitted for shareholder approval at our
2000 annual meeting. Options to acquire up to 3,000,000 shares of Common Stock
may be granted under the 2000 Plan. The following is a summary of the principal
features of the 2000 Plan.
Options granted under the 2000 Plan may be Incentive Stock Options
("ISOs") within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended, or nonqualified stock options. However, in order to qualify as ISOs,
DME Interactive's shareholders must approve the 2000 Plan. If any outstanding
option expires or is terminated for any reason, the shares of common stock
allocable to the unexercised portion of that option may again be subject to an
option to the same optionee or to a different person eligible under this Plan.
The 2000 Plan is to be administered a committee of two or more members
of the Board of Directors (the "Committee"). The Committee has the sole
authority to prescribe the form, content and status of options to be granted,
select the eligible recipients, determine the timing of option grants, determine
the number of shares subject to each grant, the exercise price, vesting
schedule, and term for which any option will remain outstanding; provided,
however, that the exercise price for any option granted may not be less than the
fair market value per share of the common stock at the date of grant. The
Committee has the authority to determine the terms and restrictions on all
option awards granted under the 2000 Plan, and in general, to construe and
interpret any provision of the 2000 Plan. Currently, entire board is acting as
the Committee. Upon formation of a Compensation Committee, that committee will
administer the 2000 Plan.
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The exercise price of options to be granted pursuant to the 2000 Plan
shall not be less than the fair market value of DME Interactive's common stock
on the date of the grant. The exercise price for outstanding option grants under
the 2000 Plan may be paid in cash or, upon approval of the plan administrators,
in shares of common stock valued at fair market value on the exercise date,
having shares withheld from the amount of shares of common stock to be received
by the optionee, by delivery of an irrevocable subscription agreement obligating
the optionee to take and pay for the shares of common stock to be purchased
within one year of the date of such exercise, through a same-day cashless
exercise program or a reduction in the amount of any Company liability to the
optionee, or by such other consideration and method of payment for the issuance
of shares to the extent permitted by applicable laws.
Under the 2000 Plan, no stock option can be granted for a period longer
than ten years. Unless extended by the 2000 Plan administrators until a date not
later than the expiration date of the option, the right to exercise an option
terminates ninety days after the termination of an optionee's employment,
contractual or director relationship with DME Interactive. If the optionee dies
or is disabled, the option will remain exercisable for a period of one year
after the termination of employment or relationship with DME Interactive.
The vesting schedule for options is to be set by the 2000 Plan
administrators, provided that vesting may accelerated upon a change in control
of DME Interactive.
Option Exercises and Fiscal Year-End Values
There were no options exercised by employees of DME Interactive in the
last fiscal year.
Employment and Termination Agreements
In March 2000, DME Interactive entered into an employment agreement
with Darien Dash to serve as Chief Executive Officer. Mr. Dash is to be paid an
annual base salary of $160,000 plus a discretionary bonus and salary increases.
The initial term of his employment expires on March 2, 2003, provided that such
term is extended by an additional year on each anniversary of the date of the
agreement unless either party provides the other at least 90 days written
notice. Mr. Dash may terminate employment at any time upon 120 days notice. Mr.
Dash also may terminate employment, among other reasons, (i) if he is no longer
elected to DME Interactive's board of directors or as its Chief Executive
Officer or (ii) within one year of a change of control of DME Interactive. If
Mr. Dash terminates employment for such reasons, or if DME Interactive
terminates Mr. Dash other than for cause, DME Interactive is required to pay Mr.
Dash a severance package consisting primarily of (i) one year's then current
salary and (ii) five times Mr. Dash's prior year's bonus (including stock based
compensation).
DME Interactive has entered into an employment agreement with Andre H.
McKoy to serve as DME Interactive's Executive Vice President of Finance,
Accounting and Administration. Mr. Mckoy is paid a minimum annual base salary of
$125,000, effective in March 2000, plus a discretionary bonus and salary
increases. The agreement also provides for the grant of options to acquire
250,000 shares of DME Interactive common stock . The initial term of his
employment expires on July 31, 2001, provided that the agreement can be
terminated by either party upon 30 days notice.
DME Interactive has entered into an employment agreement with Kathleen
McQuaid Packard to serve as DME Interactive's Senior Vice President of
Interactive
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Services. Ms. McQuaid is to be paid an annual salary of $125,000 with 10% annual
increases plus a discretionary bonus. The agreement also provides for the grant
of options to acquire 60,000 shares of DME Interactive Common Stock. The initial
term of her employment expires on August 31, 2002.
Each of these employment agreements contain provisions prohibiting the
employee to directly or indirectly engage in business conduct competitive with
DME Interactive for the term of their agreement and for a period of one year
after it terminates.
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