UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
10-K/A
AMENDMENT
NO. 1
x
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE
ACT OF 1934
FOR
THE FISCAL YEAR ENDED DECEMBER 31, 2007
OR
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE
ACT OF 1934
COMMISSION
FILE NUMBER: 000-27707
NEXCEN
BRANDS, INC.
(EXACT
NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE
|
|
20-2783217
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(State
or other jurisdiction of
incorporation
or organization)
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|
(IRS
Employer
Identification
Number)
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1330
Avenue of the Americas, New York, N.Y.
|
|
10019-5400
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(Address
of principal executive offices)
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|
(Zip
Code)
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|
(Registrant’s
telephone number, including area code): (212)
277–1100
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|
SECURITIES
REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
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Title
of Each Class
|
Name
of Each Exchange on Which Registered
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Common
Stock, par value $.01
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The
NASDAQ Stock Market LLC
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|
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SECURITIES
REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
NONE
|
Indicate
by check mark if the registrant is a well-known seasoned
issuer, as defined in Rule 405 of the Securities Act.
Yes o No x
Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.
Yes o No x
Indicate
by check mark whether the registrant (1) has filed all reports required to
be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements
for
the past 90 days. Yes ý No o
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of the registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of the Form 10–K or any amendment of this
Form 10–K. o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company.
See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
Large
accelerated filer
|
o
|
Accelerated
filer
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x
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|
|
Non-accelerated
filer
|
o
|
Smaller
reporting company
|
o
|
|
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act). Yes o No x
The
aggregate market value of the voting stock held by nonaffiliates of the
registrant was $505,033,738 ($11.14 per share) as of June 30,
2007.
As
of
March 1, 2008, 56,616,764 shares of the registrant’s common stock, $.01 par
value per share, were outstanding.
DOCUMENTS
INCORPORATED BY REFERENCE
None.
NEXCEN
BRANDS, INC.
FORM
10-K/A
INDEX
Explanatory
Note
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3
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PART
III
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4
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Item
10
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Directors,
Executive Officers and Corporate Governance
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4
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Item
11
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Executive
Compensation
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9
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Item
12
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Security
Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
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23
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Item
13
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Certain
Relationships and Related Transactions and Director
Independence
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24
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Item
14
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Principal
Accounting Fees and Services
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25
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PART
IV
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26
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Item
15
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Exhibits
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26
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EXPLANATORY
NOTE
This
Amendment No. 1 to the Annual Report on Form 10-K for the fiscal year ended
December 31, 2007 (this “Form 10-K/A”) of NexCen Brands, Inc. (the “Company,”
“we,” “our,” or “NexCen”), which was originally filed with the Securities and
Exchange Commission on March 21, 2008, is being filed solely to include the
information required by Part III of Form 10-K pursuant to General Instruction
G(3) of Form 10-K because the Company’s definitive proxy statement for its 2008
annual meeting will be filed more than 120 days after the end of the Company’s
fiscal year. The original Form 10-K is also amended hereby to delete the
reference on the cover page thereof to the incorporation by reference of the
definitive proxy statement in Part III of such report. In addition, as required
by Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), this Form 10-K/A also includes the certifications pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”). Since no
financial statements are contained within this Form 10-K/A, we do not include
the certifications pursuant to Section 906 of Sarbanes-Oxley.
Except
as
described in this Explanatory Note, no other information in the original Form
10-K is modified or amended hereby, and this Form 10-K/A does not otherwise
reflect events occurring after the original filing date of March 21,
2008.
PART
III
Directors
and Executive Officers of the Registrant
The
following table shows, as of April 29, 2008, the names and ages of NexCen’s
directors and executive officers. Each director will continue in office until
the next annual meeting or until his earlier resignation, removal or death.
Name
|
|
Age
|
|
Position
|
|
David
S. Oros
|
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48
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|
Chairman
of the Board
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Robert
W. D’Loren
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50
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|
Director,
President, and Chief Executive Officer
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|
Kenneth
J. Hall (1)
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50
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Executive
Vice President, Chief Financial Officer and Treasurer
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James
Haran
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47
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Executive
Vice President, M&A and Operations
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|
Charles
A. Zona
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58
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|
Executive
Vice President, Brand Management and Licensing
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|
Joseph
DiMuro(2)
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43
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Executive
Vice President, Chief Marketing Officer
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|
Sue
J. Nam (3)
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38
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General
Counsel and Secretary
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James
T. Brady
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67
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Director
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Paul
Caine
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44
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|
Director
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|
Jack
B. Dunn IV
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57
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Director
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Edward
J. Mathias
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66
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Director
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Jack
Rovner
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53
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|
Director
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|
George
P. Stamas
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57
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Director
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Marvin
Traub
|
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82
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|
Director
|
|
(1)
Mr.
Hall is an executive officer effective as of March 25, 2008. Accordingly, the
disclosure regarding Mr. Hall is being provided solely for informational
purposes.
(2)
Mr.
DiMuro is an executive officer effective as of March 17, 2008. Accordingly,
the
disclosure regarding Mr. DiMuro is being provided solely for informational
purposes.
(3)
Ms.
Nam has been an executive officer effective as of September 24, 2007.
David
S. Oros founded
the Company in 1996, and currently serves as our Chairman of the board of
directors. From 1996 until June 2006, Mr. Oros served as our Chief Executive
Officer. From 1994 until 1996, Mr. Oros was President of NexGen Technologies,
L.L.C., a wireless software development company that contributed all of its
assets to the Company. From 1992 until 1994, he was President of the Wireless
Data Group at Westinghouse Electric. Prior to that, from 1982 until 1992, Mr.
Oros was at Westinghouse Electric directing internal research and managing
large
programs in advanced airborne radar design and development. Mr. Oros received
a
B.S. in mathematics and physics from the University of Maryland. Mr. Oros is
currently a managing partner for Global Domain Partners, LLC. Other
directorships include: Evolving Systems, Inc.
Robert
W. D'Loren
was
elected a director and appointed Chief Executive Officer of the Company on
June
6, 2006. He was appointed President on August 9, 2006. Prior to that, he served
as President and Chief
Executive Officer of
UCC
Capital Corporation, where he pioneered intellectual property and whole company
securitization finance and was responsible for developing many of the structures
and credit enhancement products currently being utilized in the market today.
Prior to forming UCC, Mr. D'Loren served as President and Chief Operating
Officer of CAK Universal Credit Corporation, an intellectual property finance
company. From 1985 to 1997, Mr. D'Loren founded and served as President and
Chief
Executive Officer of
the
D'Loren Organization, a real estate investment, lending, and restructuring
firm
responsible for aggregate transactions in excess of $2 billion. Prior to that,
Mr. D'Loren served as an asset manager for Fosterlane Management where he
managed $1.8 billion of Class A commercial real estate assets, and previously
served as a manager with Deloitte & Touche. Mr. D’Loren is a Certified
Public Accountant and holds a Master’s degree from Columbia University and a
B.S. from New York University.
Kenneth
J. Hall
joined
the Company on March 25, 2008 as Executive Vice President, Chief Financial
Officer and Treasurer. Prior to joining the
Company,
Mr.
Hall most recently served as the Chief Financial Officer and Treasurer of
Seevast Corp, a position he held from April 2005 to February 2008. From December
2003 to March 2005, Mr. Hall worked as an independent consultant advising
companies on strategic and financial matters. From July 2001 to November 2003,
he served as Executive Vice President, Chief Financial Officer and Treasurer
of
Mercator Software, Inc. Over his extensive career, Ken has also served as the
chief financial officer for a number of public and private companies including
Icon CMT Corp, a Nasdaq-traded company that was acquired by Qwest Communications
in 1998; NYSE-traded Global DirectMail Corp; and National Football League
Properties, Inc., the global licensing and marketing arm of the NFL. Mr. Hall
earned a M.B.A. from Golden Gate University and a B.S. in Finance from Lehigh
University.
James
Haran
joined
the Company on June 6, 2006 as Executive Vice President of M&A and
Operations. Prior to joining the Company, Mr. Haran served for nine years as
the
Chief Credit Officer of UCC Capital Corporation. Mr. Haran has a broad range
of
business experience in structured finance, M&A and consulting. For the past
eight years, his focus has been on maximizing value and creating leveraged
opportunities for IP centric companies and assets. These industries include
apparel and footwear, franchising, and entertainment. Mr. Haran played a key
role in the BCBG Max Azria transaction, winner of the Institutional Investor's
Securitization News 2004 Deal of the Year Award. Prior to joining UCC, Mr.
Haran
was a Partner at Sidney Yoskowitz and Company P.C., a regional diversified
certified public accounting firm. During his tenure, which began in 1987, his
focus was on real estate and financial services companies. Mr. Haran served
his
clients on an array of strategic and operational levels. Mr. Haran is a
Certified Public Accountant and holds a B.S. degree from State University of
New
York, at Plattsburgh.
Charles
A. Zona
joined
the Company on December 11, 2006 as Executive Vice President of Brand Management
and Licensing. Prior to joining the Company, Mr. Zona was a licensing consultant
for three years for clients such as The J. Peterman Company, Chris-Craft Boats
and XOR. Before that, he served as the Senior Vice President of Consumer
Products for The National Football League Properties where he was responsible
for developing a new consumer products (apparel, hardlines and accessories)
licensing business model. Preceding his position with the NFL, he served as
President of Salant Menswear Group which included Perry Ellis Dress
Furnishings/Accessories and Private Label denim. Earlier, he served, for nine
years, as President of Nautica Dress Furnishings/State of Maine Menswear
Division. Mr. Zona began a 19-year career in retail at Stern Brothers Department
Stores and Bambergers that concluded as a Senior Vice President at Lord and
Taylor. He holds a B.S. degree in Industrial Relations from Seton Hall
University.
Joe
DiMuro
joined
the Company on March 17, 2008 as Executive Vice President, Chief Marketing
Officer. Prior to joining the Company, since 1998, Mr. DiMuro served as the
Executive Vice President & General Manager of Sony BMG Entertainment, where
he managed television, film, commercial-advertising licensing,
digital/mobile-content platform development, new product and joint-venture
initiatives in addition to corporate/strategic business development. He also
was
the President of the jointly operated Nickelodeon Records with Nickelodeon
as
well as the President/Founder of Burgundy Records. In addition to these duties,
DiMuro was the chief strategic architect behind the global re-branding of the
Elvis Presley recording masters, resulting in worldwide sales in excess of
$250
million. Prior to his career at Sony BMG, Mr. DiMuro worked at News Corp’s 20th
Century Fox Film in a variety of senior theatrical marketing, sales,
distribution and licensing areas for the film, home entertainment, and
interactive business units. Mr. DiMuro graduated from Concordia College with
a
B.A. in English/Communications Arts.
Sue
J. Nam joined
the Company on September 24, 2007 as General Counsel. She was appointed
Secretary of the Company on December 6, 2007. Prior to joining the Company,
since 2001, Ms. Nam was Vice President, Corporate Counsel for Prudential
Financial, where she served as Intellectual Property Counsel and Assistant
Corporate Secretary. Prior to that, Ms. Nam was in private practice with Brobeck
Phleger & Harrison LLP in its San Francisco office and Gibson, Dunn &
Crutcher LLP in its New York office. Ms. Nam earned her B.A. in English and
French Literature from Northwestern University and her J.D. from Yale Law
School.
James
T. Brady
was
elected director of the Company on June 28, 2002. Mr. Brady has served as the
Managing Director - Mid-Atlantic, for Ballantrae International, Ltd., a
management consulting firm, since 2000 and was an independent business
consultant from May 1998 until 2000. From May 1995 to May 1998, Mr. Brady was
the Secretary of the Maryland Department of Business and Economic Development.
Prior to May 1995, Mr. Brady was a managing partner with Arthur Andersen LLP
in
Baltimore, Maryland. Mr. Brady received a B.A. from Iona College. Other
directorships include: McCormick & Company, Inc., Constellation Energy Group
and T. Rowe Price Group.
Paul
Caine
was
elected director of the Company on September 5, 2007.
Since
October 2007, Mr. Caine has served as President, Time Inc. Entertainment Group,
overseeing the PEOPLE Group (PEOPLE,
People.com, Stylewatch,
People
en Español,
People
Country)
as well
as Entertainment
Weekly
and
EW.com. His career
at
Time Inc. began in 1989 as an advertising sales representative for PEOPLE.
During
his tenure at Time Inc., Mr. Caine has been the Associate Publisher of
PEOPLE,
Publisher of Teen
People,
Entertainment
Weekly
and
PEOPLE,
as well
as the Group Publisher of the PEOPLE Group. Prior to joining Time Inc., Caine
worked for
USA
Today
and J.
Walter Thompson. Mr.
Caine
received a B.S. in Business Communication from Indiana University.
Jack
B. Dunn IV
was
elected director of the Company on June 28, 2002. Since October 1995, Mr. Dunn
has been Chief Executive Officer of FTI Consulting, Inc, a multi-disciplined
consulting firm with practices in the areas of financial restructuring,
corporate finance, forensic accounting, litigation consulting, economic
consulting, technology and strategic communications. He joined FTI in 1992
as
Executive Vice President and Chief Financial Officer and has served as a
director of FTI since May 1992 and as Chairman of the board of directors from
December 1998 to September 2004. Prior to joining FTI, he was a member of the
board of directors and a managing director of Legg Mason Wood Walker, Inc.
and
directed its Baltimore corporate finance and investment banking activities.
He
is a limited partner of the Baltimore Orioles. Mr. Dunn received a B.A. from
Princeton University and a J.D. from the University of Maryland Law School.
Other directorships include: Pepco Holdings, Inc.
Edward
J. Mathias
was
elected director of the Company on June 28, 2002. Mr. Mathias has been a
managing director of The Carlyle Group, a Washington, D.C. based private
merchant bank, since 1994. Mr. Mathias served as a managing director of T.
Rowe
Price Associates, Inc., an investment management firm, from 1971 to 1993. He
received a B.A. from the University of Pennsylvania and an M.B.A. from Harvard
University.
Jack
Rovner
was
elected director of the Company on October 31, 2006. Mr. Rover has led the
RCA
Record label, co-founded Vector Recordings and has partnered to lead Vector
Management. Preceding his work at RCA and Vector, Mr. Rovner was Senior Vice
President of Marketing at BMG North America and reported directly to the
chairman of BMG Worldwide and directed marketing efforts for company-owned
properties. Prior to that, he was a Senior Vice President of Arista Records
from
1991 to 1994. Mr. Rovner's career began at Columbia Records from 1981 until
his
departure in 1991 from the office of Vice President of Marketing. Mr. Rovner
received a B.A. in Communication Studies from the University of
Iowa.
George
P. Stamas
was
elected a director of the Company on October 20, 1999. Since January 2002,
Mr.
Stamas has been a senior partner with the law firm of Kirkland and Ellis LLP.
Also, since November 2001, Mr. Stamas has been a venture partner with New
Enterprise Associates. From December 1999 until December 2001, Mr. Stamas served
as the Vice Chairman of the board of directors and Managing Director of Deutsche
Banc Alex Brown (now Deutsche Bank Securities). Mr. Stamas is counsel to, and
a
limited partner of, the Baltimore Orioles baseball team and also of Lincoln
Holdings, which holds interests in the Washington Wizards and Washington
Capitals. He received a B.S. in economics from the Wharton School of the
University of Pennsylvania and a J.D. from the University of Maryland Law
School.
Other
directorships include: FTI
Consulting, Inc.
Marvin
Traub
was
appointed director of the Company by board resolution on May 2, 2007. Mr. Traub
began his career at Bloomingdales and became Executive Vice President and
General Merchandise Manager in 1962, President in 1969 and Chairman and Chief
Executive Officer in 1978. Mr. Traub also served as a Director of Federated
Department Stores for twelve years and Vice Chairman of the Campeau Corporation
prior to his resignation in 1992. At that time, he formed Marvin Traub
Associates, a consulting firm with expertise in global retailing, shopping
centers, marketing, media and the consumer goods sector. Mr. Traub received
a
B.A. from Harvard College and a M.B.A. from Harvard Business School.
Election
of Officers
Our
board
elects our executive officers on an annual basis, and our executive officers
serve until their successors are duly elected and qualified. No family
relationships exist among any of our officers or directors.
Election
of Directors
Our
board
of directors is currently comprised of nine directors. At each annual meeting
of
stockholders, the successors to the directors then serving are elected to serve
from the time of their election and qualification until the next annual meeting
following their election or until their successors have been duly elected and
qualified, or until their earlier death, resignation or removal. All of our
current directors have been elected to serve until the annual meeting of
stockholders to be held in 2008.
Corporate
Governance
Committees
of the Board of Directors
Our
bylaws authorize our board of directors to appoint one or more committees,
each
consisting of one or more directors. The board of directors currently has three
standing committees: an Audit Committee, a Nominating and Corporate Governance
Committee and a Compensation Committee, each of which has adopted written
charters that are all currently available on our website. On May 4, 2007, the
Board approved combining the previously separate Nominating Committee and
Corporate Governance Committee, and a new charter for the combined committee
was
adopted.
Audit
Committee
The
Audit
Committee’s responsibilities include:
|
·
|
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;
|
|
·
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approving
(or, as permitted, pre-approving) all audit and non-audit services
to be
performed by the independent registered public accounting firm;
and
|
|
·
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providing
an avenue of communication among the independent auditors, management,
employees and the board.
|
The
Audit
Committee currently consists of Messrs. Brady, Caine and Mathias, with Mr.
Brady
serving as its chairman. The board of directors has determined that the members
of the Audit Committee satisfy the “independence” and “financial literacy”
requirements for audit committee members as set forth by the SEC and as adopted
in the Nasdaq listing standards.
The
board
of directors has also determined that Mr. Brady is an audit committee financial
expert, as defined by Item 407 of Regulation S-K and as required by Nasdaq
Rule
4350(d), and is independent of management, as defined by Rule 10A-3(b)(1) of
the
Securities Exchange Act of 1934, as amended, and Nasdaq Rule 4200(a)(15) and
as
required by Nasdaq Rule 4350(d). We believe Mr. Brady is qualified to be an
“audit committee financial expert” because he has the following attributes: (i)
an understanding of generally accepted accounting principles, or GAAP, and
financial statements, (ii) the ability to assess the general application of
such
principles in connection with accounting for estimates, accruals and reserves,
(iii) experience preparing, auditing, analyzing or evaluating financial
statements that present a breadth and level of complexity of accounting issues
that are generally comparable to the breadth and complexity of issues that
can
reasonably be expected to be raised by NexCen’s financial statements, and
experience actively supervising one or more persons engaged in such activities,
(iv) an understanding of internal controls over financial reporting and (v)
an
understanding of audit committee functions. Mr. Brady has acquired these
attributes by means of having held various positions that provided the relevant
experience, including 33 years with Arthur Andersen (including twenty years
as
an audit partner) and membership on the audit committees of several public
companies since 1998. Mr. Brady also serves on the audit committees of three
other public companies, but the board of directors has determined that such
service does not affect his independence, responsibilities or duties as a member
of the Audit Committee.
Nominating
and Corporate Governance Committee
The
Nominating and Corporate Governance Committee's responsibilities
include:
|
·
|
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.
|
The
members of the Governance Committee are Messrs. Brady, Dunn
and
Mathias, with Mr. Brady serving as its chairman.
Compensation
Committee
The
Compensation Committee's responsibilities include:
|
·
|
reviewing
and approving corporate goals and objectives that are relevant to
the
compensation of 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.
|
The
members of the Compensation Committee are Messrs. Mathias, Dunn and Rovner,
with
Mr. Mathias currently serving as its chairperson.
Compensation
Committee Interlocks and Insider Participation
None
of
the members of our Compensation Committee is or has ever been an officer or
employee of NexCen or any of its subsidiaries. None of our executive officers
serve as a member of the board of directors or a compensation committee of
any
entity that has one or more executive officers serving on our board of directors
or our Compensation Committee.
Director
Independence
Our
board
of directors has adopted the
following standard for independence:
“Independent
director”
means
a
person other than an executive officer or employee of the Company or any other
individual having a relationship which, in the opinion of the Company's Board,
would interfere with the exercise of independent judgment in carrying out the
responsibilities of a director.
In
connection with, and to assist in making, this determination, the Board has
adopted the definition of independence contained in the Nasdaq listing standards
as its categorical standard of independence. However, even if a director meets
this categorical standard of independence, to conclude that a director is
independent, the Board must also determine that no other relationship exists
that, in the Board’s judgment, “would interfere with the exercise of independent
judgment by that director in carrying out the responsibilities of a
director.”
Each
of
our directors, other than Messrs. Oros, D’Loren, Stamas and Traub, qualifies as
“independent” in accordance with the Company’s independence standard. In making
its affirmative determination of independence for 2007, the directors reviewed
and discussed information provided by the directors and management with regard
to each director’s business and personal activities as they relate to NexCen and
NexCen’s management. Messrs. Oros and D’Loren are employed by the Company, and,
as such, neither qualifies as an independent director under the Nasdaq Global
Market standards. The board of directors determined that Mr. Stamas should
not
be considered an independent director in view of the business relationship
between the Company and Kirkland & Ellis LLP, which is one of the Company’s
primary outside counsel and of which Mr. Stamas is a partner. Mr.
Stamas’ business relationship with the Company is described in Item 13 under the
caption “Certain Relationships and Related Party Transactions.”
The
board of directors also determined that Mr. Traub should not be considered
an
independent director because in July 2007 the Company entered into a commercial
agreement with Mr. Traub and a business that he owns and operates, Marvin Traub
Associates. This agreement is described in
Item
13 under the caption “Certain Relationships and Related Party
Transactions.”
The
board of directors made these decisions despite the fact that the respective
business relationships of Mr. Stamas and Mr. Traub do not cause them to be
deemed non-independent under the Nasdaq Global Market standards. All members
of
the Audit Committee, Compensation Committee and Nominating Committee are
independent directors.
In
connection with the independence determination for Mr. Dunn, the directors
considered that in 2006, FTI
Consulting, Inc. (FTI) provided due diligence services to the Company totaling
approximately $15,000 in connection with the acquisition of UCC. Since 1992,
Mr.
Dunn has served as a director of FTI, and as its President and Chief Executive
Officer. The
board
of directors has determined that Mr. Dunn should be considered an independent
director in view of the fact that the services were immaterial to FTI and of
a
one-time nature. The board of directors intends to continue to monitor any
relationships that the directors have with the Company’s service providers.
Other
than as discussed above, the board of directors did not consider and was not
aware of any other transactions, relationships or arrangements that would effect
the determination of our directors’ independence under the Company’s
standards.
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Exchange Act requires our officers (as defined in regulations
issued by the SEC) and directors, and persons who own more than ten percent
of
our common stock, to file with the SEC initial reports of ownership and reports
of changes in ownership of our common stock (including options and warrants
to
acquire common stock). Officers, directors and greater than ten percent
stockholders are required by SEC regulation to furnish us with copies of all
Section 16(a) forms they file.
Based
solely on a review of the copies of such reports of ownership received by us
and
certifications from our executive officers and directors, we believe that during
fiscal year 2007 all filing requirements applicable to our executive officers,
directors and such greater than ten percent stockholders were complied with
on a
timely basis other than the following: a
late
report on Form 4 by Mr. Oros filed on September 14, 2007, reporting the exercise
of a warrant and the acquisition of 157,500 shares of the Company’s common
stock, and a late report on Form 4 by Mr. Traub filed on March 27, 2008
reporting the purchase of 35,000 shares of the Company’s common
stock.
Corporate
Governance Policies
We
have
adopted Corporate Governance Guidelines, as well as a general code of ethics
for
our business and a code of ethical conduct that applies solely to our principal
executive officer, principal financial officer, principal accounting officer,
controller and persons performing similar functions. We also adopted the Policy
and Procedures with respect to Related Persons Transactions. The Nominating
and
Corporate Governance Committee is responsible for reviewing and authorizing
waivers from the code of ethics, the code of ethical conduct for senior
financial officers, and the Policy and Procedures with respect to Related
Persons Transactions, and we will file any waivers from, or amendments to,
these
codes and policy on our website at www.nexcenbrands.com, the content of which
website is not incorporated by reference into or considered a part of this
document. In 2007, no waivers were reviewed or authorized. The Company’s
Corporate Governance Guidelines, its general code of ethics, its code of ethical
conduct for senior financial officers, and the Policy and Procedures with
respect to Related Persons Transactions, as well as the charters for our Audit
Committee, Nominating and Governance Committee and Compensation Committee,
are
available on our website. This information is also available in print upon
written request to our corporate secretary at the address of our corporate
headquarters office in New York City.
ITEM
11. EXECUTIVE COMPENSATION
Compensation
Discussion and Analysis
Overview
and Objectives
We
entered the brand management and franchising business in June 2006, when we
acquired UCC Capital Corporation. Upon the closing of that acquisition, Robert
W. D’Loren, who was the President and Chief Executive Officer of UCC Capital
Corporation, became our President and Chief Executive Officer and a member
of
our board of directors. From June 2006 to date, we have acquired nine brands:
Bill
Blass, Waverly, The Athlete's Foot, Shoebox New York, Great American Cookies,
MaggieMoo's, Marble Slab Creamery, Pretzel Time, and Pretzelmaker. We now
license and franchise our brands to a network of leading retailers,
manufacturers and franchisees that includes every major segment of retail
distribution from the luxury market to the mass market in the United States
and
in over 50 countries around the world. Our franchise network consists of
approximately 1,900 retail stores.
As we
continue to build both our business and our senior management team, we expect
that we will make material adjustments and refinements to our compensation
policies and programs.
Our
current compensation programs are intended to reward our named executives for
growing our business profitably. They also are intended to encourage the
retention of executives who contribute significantly to improved business
performance, overall growth and increased stockholder value. The components
of
our compensation programs for named executives include salary, annual bonus,
equity incentive compensation, and benefits.
We
have
paid salaries to each of our named executive officers that are at or slightly
below the median level in the marketplace pursuant to employment agreements
negotiated in 2006 with each such officer, reflecting our goal of conserving
cash as we acquire businesses and seek to build a profitable operation. To
enable us to attract and retain superior individuals, however, we offered
opportunities for generous performance-based annual bonus and equity incentive
awards. In the case of our chief executive officer, on whom we depended to
build
our new brand management and franchising business, we agreed to a compensation
package that, by component and in the aggregate, based upon our review of
relevant market information, will be at the top of the marketplace if certain
performance levels are achieved. We believe that this compensation package
was
necessary to attract and retain our chief executive officer.
In
2007,
we did not make any incentive equity awards to any of our named executive
officers. We also did not make any bonus awards to named executive officers
in
2007 either under our existing management bonus plan (the 2006 Management Bonus
Plan) or pursuant to the Compensation Committee’s general discretion under its
Charter to set executive compensation levels. The 2006 Management Bonus Plan
is
designed
so that amounts paid thereunder can qualify as performance-based compensation
under Section 162(m) where the Compensation Committee sets performance targets
for eligible participants and such targets are met. The
total
bonus pool available under the 2006 Management Bonus Plan is capped at 5% of
the
Company’s net income, as determined based on the Company’s audited financial
statements in the applicable fiscal year.
We
do not
currently have a comprehensive policy and approach to compensation. We believe
that the Company’s business and strategies must mature before we can fully
understand the critical elements to our financial and operational success for
which we can set appropriate metrics for short and long-term compensation.
In
that regard, we have decided not to adopt performance or award targets in 2008
under the 2006 Management Bonus Plan, and we are evaluating the 2006 Management
Bonus Plan and other Company plans in our efforts to develop long-term
compensation policies that will apply both to the named executive officers
and
more generally to our employee base. Our ultimate goal is to provide an
attractive, flexible and market-based total compensation program tied to
performance and aligned with shareholder interests.
Process
for Determining Compensation
General.
Our
Compensation Committee plays an integral role in shaping the Company’s overall
compensation objectives, policies and practices. The Compensation Committee
is
responsible for, among other things, reviewing and recommending approval of
the
compensation of our executive officers; administering our equity incentive
and
stock option plans; reviewing and making recommendations to the board of
directors with respect to incentive compensation and equity incentive and stock
option plans; evaluating our chief executive officer's performance in light
of
corporate objectives; and setting our chief executive officer's compensation
based on the achievement of corporate objectives.
The
Compensation Committee relies on its judgment in making compensation decisions,
based upon a review of the Company’s performance, the executive’s performance
and responsibilities, the Company’s and the executive’s achievement of business
objectives, plans and specified goals, and the executive’s contributions to the
development of the Company’s business and its long-term prospects for growth and
success. The Compensation Committee also takes into account information about
market levels of compensation provided by its compensation consultant, Towers
Perrin. Towers Perrin uses information from relevant published compensation
surveys, as well as public filings for similar peer companies. The Compensation
Committee also considers a named executive’s current and past compensation
levels in determining whether to make any discretionary awards or any
adjustments to compensation of a continuing executive. In this process, the
Company’s objective is to keep annual salaries at or below median levels, but to
provide annual bonus opportunities and equity incentive awards that offer
opportunities to earn overall compensation above median levels, if the Company
and the executive deliver superior performance.
In
general, the Compensation Committee has not developed or adhered to any strict
formulas in setting compensation or in establishing compensation packages.
We
expect that over time, the annual salaries of the named executive officers
will
be less than 50% of each person’s overall annual compensation and a
significantly smaller portion of such compensation over a period of years,
taking into account the value of incentive equity awards. In 2007, we did not
pay any annual bonuses or incentive equity awards to our named executive
officers. Accordingly, salaries represented a large proportion of their overall
annual compensation. We expect that this will change in future
years.
Participation
of the Chief Executive Officer and
Other Executives.
We do
not currently have a senior human resources executive. Our chief executive
officer participates in discussions with the Compensation Committee regarding
compensation decisions about all named executives other than himself. Except
for
the chief executive officer, no other named executive participates directly
in
discussions with the Compensation Committee about compensation matters, although
the chief executive officer does discuss these matters with the chief financial
officer. The Compensation Committee expects to rely heavily on the
recommendations of the chief executive officer on these matters, particularly
with respect to bonuses based on the performance of the executive and the
Company.
Role
of the Compensation Consultant.
To
assist the Compensation Committee in fulfilling its responsibilities, the
Compensation Committee has retained an independent compensation consultant,
Towers Perrin. The consultant reports directly to the Compensation Committee.
Other than the work Towers Perrin performs for the Compensation Committee and
the board of directors, Towers Perrin has not provided any consulting services
to NexCen or its executive officers.
In
assisting the Compensation Committee, Towers Perrin presents the committee
with
peer group benchmarking data and information about other relevant market
practices and trends, and makes recommendations to the Compensation Committee
regarding target levels for various elements of total compensation for executive
officers and directors of the Company.
Towers
Perrin’s recommendations are presented to and considered by the Compensation
Committee in their deliberations on compensation matters.
Towers
Perrin was retained by the Compensation Committee in 2006 to provide a
compensation study to benchmark and assist in the development of the
compensation packages for Mr. D’Loren and Mr. Haran. The compensation study
evaluated the reasonableness of the base salary, annual bonus and stock option
grants proposed for Mr. D’Loren employment as our new chief executive officer in
comparison to the competitive market. The compensation study was presented
to
the Compensation Committee and the board of directors and was considered by
each
in their deliberations and discussions on Mr. D’Loren’s compensation package.
The compensation packages for Mr. D’Loren and Mr. Haran have not changed.
Again
in
2007, Towers Perrin was retained by the Compensation Committee to assist in
a
review of executive officer and director compensation. In the 2007 review,
Towers
Perrin obtained peer group benchmarking data primarily from a group of companies
with revenue of $30 to $200 million regardless of industry, and
secondly from a group of companies that have a similar business strategy to
us,
regardless of revenue size. Although the data did not result in a statistical
random sampling, we believe it provided helpful data regarding the compensation
levels and practices of peer companies with whom we compete for key executive
talent.
Process
for Approving Equity Grants.
The
Compensation Committee administers the 2006 Equity Incentive Plan, which is
our
long-term incentive plan that was approved by our stockholders in October 2006.
The Compensation Committee is required to approve all grants of all awards
under
that plan, and has not delegated any grant authority. Under the terms of the
2006 Equity Incentive Plan, stock options are required to be priced at the
closing price of NexCen common stock on the date of grant, which is the actual
date on which the option (including all of its material terms) is approved
by
the Compensation Committee. Our long-term incentive plan does not permit the
re-pricing of options. Previously, we did not have a policy that addressed
the
specific issue of whether equity grants may be approved prior to the release
of
material information. In February 25, 2008, the Compensation Committee
established a policy to grant options on a quarterly basis on the third Trading
Day after the Company publicly announces its quarterly financial results
following each of the first three fiscal quarters of each year and after annual
financial results following the fourth fiscal quarter of each year.
We
typically grant stock options to new employees at senior levels when they begin
working for the Company. In 2007, these grants were usually made at the next
regularly scheduled or special meeting of the Compensation Committee after
the
date on which employment commenced. Beginning as of February 25, 2008, grants
made to new employees are typically made on the next quarterly grant date
following the start of employment.
Share
Ownership Guidelines.
We do
not currently have any requirements for any of our executive officers or other
employees to own specified amounts of NexCen common stock. As a result of his
prior ownership of UCC and purchases of our common stock on the open market
for
which he received pre-clearance, our chief executive officer (directly or
through entities that he controls) currently owns approximately 3.7 million
shares of our common stock.
Compensation
Deduction Limit.
Section
162(m) of the Internal Revenue Code generally limits the compensation that
a
corporation can deduct for payments to a chief executive officer and the four
other most highly compensated executive officers to $1 million per officer
per
year. However, compensation that is “performance-based,” as defined by Section
162(m), is exempt from this limitation on deductibility. In general,
compensation attributable to the exercise of stock options granted with an
exercise price at or above the market price of the underlying stock at the
time
of the grant qualifies as performance-based compensation. In 2007, we did not
pay our chief executive officer or our four other most highly compensated
executive officers compensation in excess of $1 million (excluding compensation
in respect of exercised options that we believe qualifies as performance-based
compensation).
Elements
of Compensation
For
2007,
the principal components of compensation for our named executive officers
consisted of:
|
·
|
Perquisites
and other personal benefits; and
|
These
principal elements have been chosen to create a flexible package that can reward
both our short and long-term performance, while providing the executive with
a
competitive compensation package.
Base
salary.
We
provide named executive officers and other employees with a base salary to
compensate them for basic services rendered during the fiscal year. Initial
base
salaries for our named executive officers were determined for each executive
in
2006 based on negotiations between the new executive, on the one hand, and
the
Company, on the other. The Compensation Committee expects to review salary
levels at least annually, as well as upon a promotion or other changes in job
responsibility. Merit based increases to salaries, if any, will be based on
the
Compensation Committee’s review and overall assessment of an individual’s
performance.
In
2007,
none of the named executive salaries received an increase in their respective
base salaries.
Equity-based
awards.
We
provide equity-based compensation to promote our long-term growth and
profitability. Equity-based awards not only provide directors, executive
officers, and employees with incentives to maximize stockholder value and
otherwise contribute to our long-term success, but they also allow us to
attract, retain and reward the best available individual for positions of
responsibility.
Awards
of
stock options and restricted stock are made under our 2006 Equity Incentive
Plan, which was approved by our stockholders in October 2006. The Compensation
Committee administers the 2006 Equity Incentive Plan and has not delegated
any
grant authority. Shares of restricted stock are issued subject to a vesting
schedule and cannot be sold until and to the extent the shares have vested.
Stock options are issued at an exercise price of no less than fair market value
on the date of grant and are subject to vesting requirements, which may include
time-based vesting, performance-based vesting, or both. Historically, we have
not issued any options subject to performance-based vesting.
In
2007,
we did not award any restricted stock or stock options to any of the named
executive officers.
Cash
bonuses. We
provide cash bonus compensation to motivate, reward and retain key executives.
Under the 2006 Management Bonus Plan bonuses are paid out of a pool determined
to be 5% of the Company’s net income. The chief executive officer has a
contractual right to 50% of this pool and the other half is allocated to senior
executives based on performance achievements determined by the chief executive
officer and the Compensation Committee.
The
Company reported net loss for 2007 and as a result there was no bonus pool
under
the 2006 Management Bonus Plan. In addition, the Compensation Committee did
not
award, nor did any of the named executive officers seek, any bonus under the
Compensation Committee’s general discretion pursuant to its Charter to set
executive compensation.
Perquisites
and other personal benefits.
We
provide certain executive officers with perquisites and other personal benefits
that we and the Compensation Committee believe are reasonable and consistent
with our overall compensation program to better enable us to attract and retain
superior employees for key positions. Perquisites are generally granted as
part
of our executive recruitment and retention efforts. During 2007, our named
executive officers received a limited amount of perquisites and other personal
benefits that we paid on their behalf. These perquisites and other personal
benefits included, among other things:
|
·
|
Payments
of life, health and/or disability insurance
premiums;
|
Other
Compensation. In
addition to the compensation discussed above, we also provide our named
executive officers with customary employee benefits, available to all employees,
including health, disability and life insurance. In general, these benefits
are
substantially the same as those available to all of our employees.
Compensation
Committee Report
The
Compensation Committee has reviewed the Compensation Discussion and Analysis
and
discussed that Analysis with management. Based on its review and its discussions
with management, the Committee has recommended to our board of directors that
the Compensation Discussion and Analysis be included in the Company’s Annual
Report on Form 10-K/A for 2007 and the Company’s 2008 proxy statement. This
Report is provided by the following independent directors, who comprise the
Compensation Committee:
Edward
J.
Mathias (Chairman)
Jack
B.
Dunn IV
Jack
Rovner
Summary
Compensation Table
The
table
below summarizes the total compensation paid to or earned by each of our named
executive officers, including our former chief financial officer, for the fiscal
year ended December 31, 2007.
In
light
of the fact that we reported a net loss for fiscal year ended December 31,
2007,
our named executive officers were not entitled to receive payments which would
be characterized as “Non-Equity Incentive Plan Compensation” pursuant to our
2006 Management Bonus Plan. Additionally, the Compensation Committee of the
board of directors did not award any payments which would be characterized
as
“Bonus” payments to any of the named executive officers and did not increase
their base salaries. We also have no defined benefit plans, actuarial plans,
or
non-qualified deferred compensation plans
Name and
Principal Position
(1)
|
|
Year
|
|
Salary
(2)
|
|
Bonus
($)
|
|
Stock
Awards
($)
|
|
Option
Awards
(3)
|
|
Non-Equity
Incentive
Plan
Compensation
($)
|
|
Change in Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($)
|
|
All Other
Compensatio
(4)
|
|
Total
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert
W. D’Loren
|
|
|
2007
|
|
|
$750,000
|
|
-
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
|
$80,223
|
|
|
$830,223
|
|
Chief
Executive Officer
|
|
|
2006
|
|
|
$427,083
|
|
-
|
|
-
|
|
|
$701,406
|
|
-
|
|
-
|
|
|
$40,162
|
|
|
$1,168,651
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David
B. Meister
|
|
|
2007
|
|
|
$225,000
|
|
-
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
|
$4,863
|
|
|
$229,863
|
|
Former
Chief Financial Officer
|
|
|
2006
|
|
|
$69,375
|
|
-
|
|
-
|
|
|
$40,671
|
|
-
|
|
-
|
|
|
-
|
|
|
$110,046
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James
Haran
|
|
|
2007
|
|
|
$375,000
|
|
-
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
|
$15,150
|
|
|
$390,150
|
|
Executive
Vice President
|
|
|
2006
|
|
|
$338,542
|
|
-
|
|
-
|
|
|
$145,117
|
|
- |
|
-
|
|
|
-
|
|
|
$483,659
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charles
Zona
|
|
|
2007
|
|
|
$300,000
|
|
-
|
|
-
|
|
|
-
|
|
-
|
|
-
|
|
|
-
|
|
|
$300,000
|
|
Executive
Vice President
|
|
|
2006
|
|
|
$18,182
|
|
-
|
|
-
|
|
|
$10,994
|
|
-
|
|
-
|
|
|
-
|
|
|
$29,176
|
|
(1)
|
Messrs.
D’Loren, Meister, Haran and Zona became named executive officers on
June
6, 2006, September 12, 2006 May 1, 2007 and December 11, 2006,
respectively. Mr. Meister ceased to be a named executive officer
on March
21, 2008.
|
(2)
|
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, pro rated from their 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, 2007, none of the named executive officers
received 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.
|
(4)
|
For
the year ended December 31, 2007, Mr. D’Loren received a total of $80,223
in all other compensation which included insurance premiums for auto,
life
and long term disability of $26,882, car expenses of $22,956 and
club dues
of $30,385; Mr. Meister received a total of $4,863 in all other
compensation comprised of the Company’s payment of health insurance
premiums; Mr. Haran received a total of $15,150 in all other compensation
comprised of car expenses. For 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 $1,490.
|
Grants
of Plan-Based Awards Table
During
fiscal year ended December 31, 2007, we did not granted any stock options or
restricted stock awards to our named executive officers under any of our
long-term equity incentive plans.
Outstanding
Equity Awards at Fiscal Year-End Table
The
following table sets forth information with respect to outstanding equity-based
awards at December 31, 2007 for our named executive officers.
|
|
Option
Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
|
|
Equity
Incentive
Plan
Awards:
Number
of
Securities
Underlying
Unexercised
Unearned
Options
(#)
|
|
Option
Exercise
Price
($)
|
|
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
($)
|
|
Equity
Incentive
Plan
Awards:
Number
of
Unearned
Shares,
Units or
Other
Rights That
Have Not
Vested
(#)
|
|
Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights That
Have Not
Vested
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert
W. D’Loren
|
|
|
787,324
|
(1)
|
|
1,874,652
|
|
-
|
|
$4.10
|
|
06/05/2016
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David
B. Meister
|
|
|
66,667
|
(2)
|
|
133,333
|
(3)
|
-
|
|
$6.08
|
|
09/11/2016
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James
Haran
|
|
|
193,930
|
(4)
|
|
387,858
|
|
|
|
$4.10
|
|
06/05/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charles
Zona
|
|
|
83,334
|
(5)
|
|
166,666
|
|
-
|
|
$6.96
|
|
12/10/2016
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(1)
|
In
June 2006, Mr. D’Loren was granted a warrant to purchase 125,000 shares
and the option to purchase 2,686,976 shares. Both the warrant and
the
option vest in equal amounts on the three anniversaries of grant:
June
2007, June 2008 and June 2009. Accordingly, 41,666 shares underlying
the
warrant and 895,658 shares underlying the option vested in June 2007.
As
noted in the following Option Exercises and Stock Vesting Table,
Mr.
D’Loren partially exercised his option and purchased 150,000 shares.
For
additional information with respect to accelerated vesting of Mr.
D’Loren’s awards upon certain events, see “Employment Agreements - Robert
W. D’Loren.”
|
(2)
|
In
September 2006, Mr. Meister was granted an option to purchase a total
of
200,000 shares that vest in equal amounts on the three anniversaries
of
grant: September 2007, September 2008 and September 2009. Accordingly,
66,667 shares underlying the option vested in September 2007.
|
(3)
|
On
March 21, 2008, Mr. Meister left the Company, and all unvested options
immediately vested and became fully exercisable pursuant to his employment
agreement.
For additional information with respect to accelerated vesting of
Mr.
Meister’s stock option award upon certain events, see “Employment
Agreements - David B. Meister.”
|
(4)
|
In
June 2006, Mr. Haran was granted an option to purchase a total of
581,788
shares that vest in equal amounts on the three anniversaries of grant:
June 2007, June 2008 and June 2009. Accordingly, 193,930 shares underlying
the option vested in June 2006. For additional information with respect
to
accelerated vesting of Mr. Haran’s stock option award upon certain events,
see “Employment Agreements – James Haran.”
|
(5)
|
In
December 2006, Mr. Zona was granted an option to purchase a total
of
250,000 shares that vest in equal amounts on the three anniversaries
of
grant: December 2007, December 2008 and December 2009. Accordingly,
83,334
shares underlying the option vested in December 2006. For additional
information with respect to accelerated vesting of Mr. Zona’s stock option
award upon certain events, see “Employment Agreements - Charles A.
Zona.”
|
Option
Exercises and Stock Vested Table
The
following table sets forth certain information regarding exercise of options
and
vesting of restricted stock held by the named executive officers during the
year
ended December 31, 2007.
|
|
Option Awards
|
|
Stock Awards
|
|
Name
|
|
Number of Shares
Acquired on Exercise
(#)
|
|
Value Realized
on Exercise
($)
|
|
Number of Shares
Acquired on Vesting
(#)
|
|
Value Realized
On Vesting
($)
|
|
|
|
|
|
|
|
|
|
|
|
Robert
W. D’Loren
|
|
|
150,000
|
|
|
$219,000
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
David
B. Meister
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James
Haran
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Charles
Zona
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Compensation
for Named Executives Officers in 2007
We
discuss here the compensation of those individuals who were named executive
officers at December 31, 2007. All of these named executive officers except
Mr.
Meister remain with the Company at the date of this Report. For each named
executive officer, we negotiated employment agreements in connection with their
hire in 2006. On March 25, 2008, we hired a new chief financial officer and
negotiated an employment agreement in connection with his hire. In each case,
we
provide competitive base salaries, discretionary bonus opportunities, basic
benefit packages and modest severance arrangements. The overall philosophy
of
our compensation policy is reflected in each agreement. See the section
captioned “Employment Agreements” for more in-depth information.
Compensation
for Chief Executive Officer.
In 2007,
the compensation of Mr. D’Loren, the President and Chief Executive Officer, was
based on his employment agreement entered into on June 6, 2006. Mr.
D’Loren did not receive an increase in his base salary and received no bonus
either in cash or in equity.
Compensation
for Other Named Executive Officers.
In 2007,
the compensation of our other name executive officers were based on their
respective employment agreements entered into in 2006. In
2007,
none of the other named executive salaries received an increase in their
respective base salaries and none received a bonus either in cash or
equity.
Post-termination
compensation.
We have
entered into employment agreements with each of the named executive officers.
Each of these agreements provides for certain payments and other benefits if
the
executive's employment terminates under certain circumstances, including, in
the
event of a “change of control”. See sections captioned “Employment Agreements"
and “Potential Payments Upon Termination or Change of Control” for a description
of the severance and change of control benefits.
Employment
Agreements
Employment
Agreements for Named Executive Officer
Robert
W. D’Loren
Simultaneous
with the acquisition of UCC in June 2006, we entered into an employment
agreement with Mr. D’Loren. Pursuant to the terms of Mr. D’Loren’s employment
agreement, Mr. D’Loren will receive an initial annual base salary of $750,000,
subject to periodic review and upward adjustment, as well as various perquisites
and benefits, including a monthly car allowance. For each calendar year during
the term of the employment agreement, Mr. D’Loren will be entitled to receive an
incentive bonus equal to 50% of amounts awarded under the 2006 Management Bonus
Plan (the “Annual Bonus”). No Annual Bonus was paid for fiscal years 2006 or
2007. Unless otherwise agreed, the Annual Bonus will be payable 50% percent
in
cash and 50% in restricted shares of NexCen’s common stock that will vest in
three equal installments over three years following the date of their
issuance.
On
June
6, 2006, as specified in Mr. D’Loren’s employment agreement, we granted Mr.
D’Loren options to purchase an aggregate of 2,686,976 shares of our common stock
under the terms of the Company’s 1999 Equity Incentive Plan. See
“Outstanding Equity Awards at Fiscal Year-End” table for details of Mr.
D’Loren’s stock options.
Under
Mr. D’Loren’s employment agreement, if Mr. D’Loren’s employment with NexCen is
terminated without “Cause” (as defined in Mr. D’Loren’s employment agreement),
or if he resigns for “Good Reason” (as defined in Mr. D’Loren’s employment
agreement), or if a Change of Control (as defined in Mr. D’Loren’s employment
agreement) occurs, all unvested options and restricted shares issued to Mr.
D’Loren pursuant to the 1999 Equity Incentive Plan will vest
immediately.
In
addition, in accordance with the terms of Mr. D’Loren’s employment agreement, we
issued to Mr. D’Loren a ten-year warrant to purchase 125,000 shares of our
common stock, at an exercise price of $4.10 per share. The terms, including
regular and accelerated vesting, of the warrant are identical to those of the
option grant he received at closing.
The
initial term of Mr. D’Loren’s employment agreement is three years, and it renews
automatically for successive one-year periods beginning June 6, 2009, unless
either party provides at least 90 days’ advance written notice of a decision not
to renew. If we do not renew Mr. D’Loren’s employment agreement at the end of
any term, Mr. D’Loren will be entitled to receive his then current base salary
for two years. If (i) we terminate Mr. D’Loren’s employment without “Cause” or
(ii) Mr. D’Loren terminates his employment for Good Reason, he will be entitled
to receive a severance package consisting of (1) any earned but unpaid base
salary through the date of employment termination and any declared but unpaid
annual bonus and (2) 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. The severance will be 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. Mr. D’Loren also will be entitled
to continue to participate 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.
If
Mr.
D’Loren’s employment is terminated without Cause (or if he resigns for Good
Reason) within one year of a Change of Control (as defined in Mr. D’Loren’s
employment agreement), he will be entitled to receive the same severance as
described above for termination without Cause or resignation for Good Reason,
except that instead of the amount described in clause (2) of the prior
paragraph, Mr. D’Loren will be entitled to receive an amount equal $100 less
than three times the sum of (i) Mr. D’Loren’s base salary (at the rate in effect
on the date of termination) and (ii) the Annual Bonus (which, for this purpose,
will be deemed to equal the product of (A) the percentage of the 2006 Management
Bonus Plan that Mr. D’Loren was awarded in the most recently completed fiscal
year, multiplied by (B) four times the net income reported by NexCen in the
last
complete fiscal quarter prior to the effective date of termination of Mr.
D’Loren’s employment). However, if the severance payment owed to Mr. D’Loren,
plus any other payments or benefits, either cash or non-cash, that Mr. D’Loren
has the right to receive from NexCen would constitute an “excess parachute
payment” (as defined in Section 280G of the Internal Revenue Code of 1986), then
his severance will be reduced to the largest amount that will not result in
receipt by Mr. D’Loren of an “excess parachute payment.”
During
the term of employment and for two years thereafter, or one year if Mr.
D’Loren’s employment is terminated without Cause or if he resigns for Good
Reason, Mr. D’Loren has agreed not to compete with NexCen. In addition, for two
years following the term of employment, Mr. D’Loren has agreed not to (i)
solicit, induce or attempt to induce any customer, supplier, licensee or other
business relation to cease doing business with the Company, (ii) solicit, induce
or attempt to induce any person who is, or was during the then-most recent
one
year period, a corporate officer, general manager or other employee of the
Company or any of its subsidiaries to terminate such employee’s employment with
the Company, or hire any such person unless such person’s employment was
terminated by the Company, or (iii) in any way interfere with the relationship
between any customer, supplier, licensee, employee or business relation of
the
Company or any of its subsidiaries.
David
B. Meister
In
September 2006, Mr. Meister joined the Company as Senior Vice President, Chief
Financial Officer, Treasurer and Secretary. Mr. Meister left the Company on
March 21, 2008.
Pursuant
to the terms of the employment agreement, Mr. Meister received an initial annual
base salary of $225,000, as well as customary employee perquisites and benefits.
For each calendar year during the term of the employment agreement, Mr. Meister
was entitled to receive a performance-based bonus pursuant to the 2006
Management Bonus Plan (the “Annual Bonus”) based on achieving annual performance
goals recommended by the Chief Executive Officer and subject to review and
confirmation by the Compensation Committee or board of directors. No Annual
Bonus was paid for fiscal years 2006 or 2007.
On
September 12, 2006, as contemplated by the employment agreement, Mr. Meister
was
granted options to purchase an aggregate of 200,000 shares of the Company’s
common stock under the terms of the Company’s 1999 Equity Incentive Plan.
See
“Outstanding Equity Awards at Fiscal Year-End” table for details of Mr.
Meister’s stock options.
On March
21, 2008, Mr. Meister left the Company, and all unvested options immediately
vested and become fully exercisable pursuant to his employment agreement.
Pursuant to his separation agreement, the Company agreed to extend the exercise
period on Mr. Meister’s 200,000 options until December 31,
2009.
The
initial term of the employment agreement was three years. As a result of Mr.
Meister's termination, he is entitled to receive a severance package under
his
employment agreement consisting of (1) any earned but unpaid base salary through
the date of employment termination and any declared but unpaid annual bonus
(which there was none) and (2) an amount equal to his base salary (at the rate
then in effect) for one year. The severance will be payable over a six-month
period or such shorter period required to comply with Section 409A of the
Internal Revenue Code and applicable regulations adopted thereunder. He also
is
entitled to continue to participate in the Company’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.
Pursuant
to the employment agreement, during the term of employment and one year
thereafter, Mr. Meister has agreed not to compete with the Company. In addition,
for two years following the term of employment, Mr. Meister has agreed not
to
(i) solicit, induce or attempt to induce any customer, supplier, licensee or
other business relation to cease doing business with the Company, (ii) solicit,
induce or attempt to induce any person who is, or was during the then-most
recent one year period, a corporate officer, general manager or other employee
of the Company or any of its subsidiaries to terminate such employee’s
employment with the Company, or hire any such person unless such person’s
employment was terminated by the Company, or (iii) in any way interfere with
the
relationship between any customer, supplier, licensee, employee or business
relation of the Company or any of its subsidiaries.
James
Haran
Simultaneous
with the acquisition of UCC in June 2006, we entered into an employment
agreement with Mr. Haran. Pursuant to the terms of Mr. Haran’s employment
agreement, Mr. Haran will receive an initial annual base salary of $375,000,
subject to periodic review and upward adjustment. For each calendar year during
the term of the employment agreement, Mr. Haran will also be eligible to receive
a performance-based bonus pursuant to the 2006 Management Bonus Plan (the
“Annual Bonus”) on
achieving annual performance goals recommended by the President and Chief
Executive Officer and subject to review and confirmation by the Compensation
Committee or board of directors.
No
Annual Bonus was paid in fiscal years 2006 or 2007.
On
June
6, 2006, as specified in Mr. Haran’s employment agreement, we granted Mr. Haran
options to purchase an aggregate of 581,788 shares of our common stock under
the
terms of the Company’s 1999 Equity Incentive Plan. See
“Outstanding Equity Awards at Fiscal Year-End” table for details of Mr.
Haran’s stock
options.
Under
Mr. Haran’s employment agreement, if Mr. Haran’s employment with NexCen is
terminated without “Cause” (as defined in Mr. Haran’s employment agreement), or
if he resigns for “Good Reason” (as defined in Mr. Haran’s employment
agreement), or if a Change of Control (as defined in Mr. Haran’s employment
agreement) occurs, all unvested options issued to Mr. Haran pursuant to the
employment agreement will vest immediately.
The
initial term of Mr. Haran’s employment agreement is three years, and it renews
automatically for successive one-year periods beginning June 6, 2009, unless
either party provides at least 30 days’ advance written notice of a decision not
to renew. If
the
Company terminates Mr. Haran’s employment (i) without Cause, or (ii) if Mr.
Haran resigns for Good Reason, or (iii) if the Company fails to renew the term,
Mr. Haran will be entitled to receive (1) any unpaid base salary including
any
declared but unpaid annual bonus and (2) an amount equal to his base salary
(at
the rate then in effect) for a eighteen-month period. The
severance will be 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. Mr. Haran also will be entitled to continue
to
participate 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.
If
Mr.
Haran’s employment is terminated without Cause (or if he resigns for Good
Reason) within one year of a Change of Control (as defined in Mr. Haran’s
employment agreement), he will be entitled to receive the same severance as
described above for termination without Cause or resignation for Good Reason,
except that instead of the amount described in clause (2) of the prior
paragraph, Mr. Haran will be entitled to receive an amount equal $100 less
than
two times the sum of (i) Mr. Mr. Haran’s base salary (at the rate in effect on
the date of termination) and (ii) the Annual Bonus, if declared, in the year
prior to the Change of Control. However, if the severance payment owed to Mr.
Haran, plus any other payments or benefits, either cash or non-cash, that Mr.
Haran has the right to receive from NexCen would constitute an “excess parachute
payment” (as defined in Section 280G of the Internal Revenue Code of 1986), then
his severance will be reduced to the largest amount that will not result in
receipt by Mr. Haran of an “excess parachute payment.”
During
the term of employment and for two years thereafter, or one year if Mr. Haran’s
employment is terminated without Cause or if he resigns for Good Reason, Mr.
Haran has agreed not to compete with the Company. In
addition, for two years following the term of employment, Mr. Haran has agreed
not to (i) solicit, induce or attempt to induce any customer, supplier, licensee
or other business relation to cease doing business with the Company, (ii)
solicit, induce or attempt to induce any person who is, or was during the
then-most recent one year period, a corporate officer, general manager or other
employee of the Company or any of its subsidiaries to terminate such employee’s
employment with the Company, or hire any such person unless such person’s
employment was terminated by the Company, or (iii) in any way interfere with
the
relationship between any customer, supplier, licensee, employee or business
relation of the Company or any of its subsidiaries
Charles
A. Zona
In
December 2006, Mr. Zona joined the Company as Executive
Vice President, Brand Management and Licensing.
Prior to
his appointment, Mr. Zona worked with the Company as a consultant since November
2006.
Pursuant
to the terms of the employment agreement, Mr. Zona will receive an initial
annual base salary of $300,000, subject to annual review and upward adjustments
(but not decreases), as
well
as customary employee perquisites and benefits.
Mr.
Zona will also be eligible to receive a performance-based bonus pursuant
to the 2006 Management Bonus Plan
(the
“Annual Bonus”) based on achieving annual performance goals recommended by the
President and Chief Executive Officer and subject to review and confirmation
by
the Compensation Committee or board of directors. No Annual Bonus was paid
for
fiscal years 2006 or 2007.
On
December 11, 2006, as contemplated by the employment agreement, Mr. Zona was
granted options to purchase a total of 250,000 shares of the Company’s common
stock pursuant to the terms of the Company’s 2006 Equity Incentive Plan. See
“Outstanding Equity Awards at Fiscal Year-End” table for details of Mr. Zona’s
stock options. Under Mr. Zona’s employment agreement, if his employment with the
Company is terminated without “Cause” (as defined in the employment agreement),
or if he resigns for “Good Reason” (as defined in the employment agreement), or
if a Change of Control (as defined in the employment agreement) occurs, all
unvested options will immediately vest and become fully
exercisable.
The
initial term of the employment agreement is three years, and it renews
automatically for one-year periods, unless either party gives the other party
90
days prior written notice of a decision not to renew. If the Company terminates
Mr. Zona’s employment (i) without Cause, or (ii) if Mr. Zona resigns for Good
Reason, or (iii) if the Company fails to renew the term, Mr. Zona will be
entitled to receive (1) any unpaid base salary including any declared but unpaid
annual bonus and (2) an amount equal to his base salary (at the rate then in
effect) for a six-month period. The
severance will be 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. Mr. Zona also will
be
entitled to continue to participate in the Company’s group medical plan on the
same basis as he previously participated or receive payment of, or reimbursement
for, COBRA premiums for a one-year period following his termination, subject
to
termination of coverage if a successor employer provides him with health
insurance.
Notwithstanding
the foregoing, if Mr. Zona’s employment is terminated within one year following
a Change of Control by the Company without Cause or by Mr. Zona with Good
Reason, Mr. Zona shall be entitled to receive the same severance as described
in
the preceding paragraph, however, the amount of severance will be changed to
an
amount equal to $100 less then two times the sum of (i) Mr. Zona’s base salary
(at the rate then in effect) and (ii) the annual bonus paid to Mr. Zona in
the
year prior to such Change in Control. However, if the lump sum severance owed
to
Mr. Zona would constitute an “excess parachute payment” (as defined in Section
280G of the Internal Revenue Code of 1986), then his severance will be reduced
to the largest amount that will not result in receipt by Mr. Zona of an “excess
parachute payment.”
During
the term of employment and for one year thereafter, or six months if Mr. Zona’s
employment is terminated without Cause or if he resigns for Good Reason, Mr.
Zona has agreed not to compete with the Company. In addition, for one year
following the term of employment, Mr. Zona has agreed not (i) to solicit, induce
or attempt to induce any customer, supplier, licensee, or other business
relation of the Company or any of its subsidiaries to cease doing business
with
the Company or any of its subsidiaries, (ii) to solicit, induce or attempt
to
induce any employee of the Company or any of its subsidiaries to terminate
such
employee’s employment with the Company or (iii) in any way interfere with the
relationship between any customer, supplier, licensee, employee or business
relation and the Company or any of its subsidiaries.
Employment
Agreement for New Chief Financial Officer
Kenneth
J. Hall
On
March
25, 2008, Mr. Hall joined the Company as Executive
Vice President, Chief Financial Officer and Treasurer.
Pursuant
to the terms of an employment agreement, Mr. Hall will receive an initial annual
base salary of $400,000, subject to periodic review and upward adjustment,
as
well as various perquisites and benefits, including a monthly automobile
allowance comparable to other senior executive officers (but in no event less
than $1,250 per month). For each calendar year during the term of the employment
agreement, Mr. Hall will be entitled to receive a performance-based bonus
calculated as a percentage of the “bonus pool,” based on Mr. Hall and the
Company achieving annual performance goals, subject to review and confirmation
by the Company’s Compensation Committee or board of directors. The “bonus pool”
will be equal to five percent of the Company’s annual net income, as reported on
the audited financial statements or any other amount authorized as the “bonus
pool” by the Company’s Compensation Committee or board of directors under the
2006 Management Bonus Plan or any other management bonus plan adopted by the
Company.
Mr.
Hall
will also be granted options to purchase a total of 250,000 shares of the
Company’s common stock, subject to the approval of the Company’s Compensation
Committee, under the terms of the Company’s 2006 Long Term Equity Incentive Plan
and a customary grant agreement. The options will have a 10-year term and an
exercise price equal to the fair market value of the Company’s common stock on
the grant date, which under the Company’s policy will be the third trading day
after the Company publicly announces results for the three month period ending
March 31, 2008. The options will vest and become exercisable in equal
installments on each of the first three anniversaries of the grant date. Under
Mr. Hall’s employment agreement, if his employment with the Company is
terminated without “Cause” (as defined in the employment agreement), or if he
resigns for “Good Reason” (as defined in the employment agreement), or if a
Change of Control (as defined in the employment agreement) occurs, all unvested
options will immediately vest and become fully exercisable for a period of
twelve months following such termination.
The
initial term of the employment agreement is three years, and it renews
automatically for successive one-year periods beginning March 25, 2011, unless
either party provides at least 90 days’ advance written notice of a decision not
to renew. If (i) the Company terminates Mr. Hall’s employment without “Cause” or
does not renew the employment agreement at the end of any term or (ii) Mr.
Hall
terminates his employment for Good Reason, he will be entitled to receive a
severance package consisting of (1) any earned but unpaid base salary through
the date of employment termination and any declared but unpaid annual bonus
and
(2) 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.
The
severance will be payable over a six month period or such shorter period
required to comply with Section 409A of the Internal Revenue Code and applicable
regulations adopted thereunder. He also will be entitled to continue to
participate in the Company’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.
If
Mr.
Hall’s employment is terminated without Cause or if he resigns for Good Reason
within a year of a Change of Control (as defined in the employment agreement),
he will be entitled to receive the same severance as described in the preceding
paragraph, however, the amount of severance will be increased to equal $100
less
than two times the sum of (i) Mr. Hall’s base salary (at the rate in effect on
the date of termination) and (ii) the annual bonus paid to Mr. Hall in the
year
prior to such Change of Control. However, if the severance payment owed to
Mr.
Hall would constitute an “excess parachute payment” (as defined in Section 280G
of the Internal Revenue Code of 1986), then his severance will be reduced to
the
largest amount that will not result in receipt by the Mr. Hall of an “excess
parachute payment.”
During
the term of employment and for two years thereafter, or one year if Mr. Hall’s
employment is terminated without Cause or if he resigns for Good Reason, Mr.
Hall has agreed not to compete with the Company. In addition, for two years
following the term of employment, Mr. Hall has agreed not to (i) solicit, induce
or attempt to induce any customer, supplier, licensee or other business relation
to cease doing business with the Company, (ii) solicit, induce or attempt to
induce any person who is, or was during the then-most recent one year period,
a
corporate officer, general manager or other employee of the Company or any
of
its subsidiaries to terminate such employee’s employment with the Company, or
hire any such person unless such person’s employment was terminated by the
Company, or (iii) in any way interfere with the relationship between any
customer, supplier, licensee, employee or business relation of the Company
or
any of its subsidiaries.
Potential
Payments to Named Executive Officers Upon Termination or
Change-of-Control
As
noted
above under “Employment Agreements,” we have entered into employment agreements
with each of our named executive officers. These agreements provide for certain
payments and other benefits if a named executive officer’s employment with us is
terminated under circumstances specified in his agreement, including a “Change
of Control” of the Company. The amounts of potential payments in the following
tables are hypothetical based on the rules of the Securities and Exchange
Commission. Actual payments will depend on the circumstances and timing of
any
termination.
The
receipt of the payments and benefits to the named executive officers under
their
employment agreements are generally conditioned upon their complying with
customary non-solicitation, non-competition, confidentiality, non-interference
and non-disparagement provisions. By the terms of such agreements, the
executives acknowledge that a breach of some or all of the covenants described
herein will entitle us to injunctive relief restraining the commission or
continuance of any such breach, in addition to any other available
remedies.
The
following table provides the term of such covenants following the termination
of
employment as it relates to each named executive officer:
Covenant
|
|
Robert
D’Loren
|
|
David
B. Meister
|
|
James
Haran
|
|
Charles
Zona
|
|
|
|
|
|
|
|
|
|
Confidentiality
|
|
Employment
term and thereafter
|
|
Employment
term and thereafter
|
|
Employment
term and thereafter
|
|
Employment
term and thereafter
|
|
|
|
|
|
|
|
|
|
Non-solicitation
|
|
Employment
term and 24 months thereafter
|
|
Employment
term and 24 months thereafter
|
|
Employment
term and 24 months thereafter
|
|
Employment
term and 12 months thereafter
|
|
|
|
|
|
|
|
|
|
Non-competition
|
|
Employment
term and 24 months thereafter or 12 months
if employment is terminated without Cause or
he resigns for “Good Reason”
|
|
Employment
term and 24 months thereafter or 12 months if employment is terminated
with Cause or he
resigns for “Good Reason”
|
|
Employment
term and 24 months thereafter or 12 months if employment is terminated
with Cause or he
resigns for “Good Reason”
|
|
Employment
term and 12 months thereafter or 6 months if employment is terminated
with
Cause or he
resigns for “Good Reason”
|
|
|
|
|
|
|
|
|
|
Non-interference
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
Non-disparagement
|
|
Indefinitely
|
|
Indefinitely
|
|
Indefinitely
|
|
Indefinitely
|
Termination
Payments (Other than in Connection with a
Change-of-Control)
The
table
below includes a description and the amount of estimated payments and benefits
that would be provided by us (or our successor) to each of the named executive
officers, assuming that a termination circumstance occurred as of December
31,
2007 and a “Change of Control” had not occurred. See “Employment Agreements”
included above for additional details for the named executive officers.
|
|
|
|
Estimated
Amount of Termination Payment to:
|
|
Termination
Event
|
|
Type
of Payment
|
|
Robert D’Loren
|
|
David B.
Meister
|
|
James Haran
|
|
Charles Zona
|
|
Termination
for Cause, death or disability
|
|
|
Payment
of accrued but unused vacation time
|
|
|
$8,219
|
|
|
$10,479
|
|
|
$7,192
|
|
|
$10,685
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
without Cause or by executive
for Good Reason
|
|
|
Lump
Sum Severance Payment
|
|
|
$1,500,000
|
|
|
$225,000
|
|
|
$562,500
|
|
|
$150,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
without Cause or by executive
for Good Reason
|
|
|
Pro
rata portion of
Bonuses (1)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Death,
termination without Cause, or termination
by executive for Good Reason
|
|
|
Continued
coverage under medical, dental, hospitalization and life insurance
plans
(2)
|
|
|
$27,732
|
|
|
$15,798
|
|
|
$11,291
|
|
|
$11,291
|
|
(1)
|
The
bonuses payable upon a termination event are based on the actual
bonus
paid in the prior year. Since no bonuses were paid in the prior year,
no
amount is shown here.
|
(2)
|
Calculated
at current insurance premium rates in effect at December 31, 2007
for the
period of time of the benefit:
Robert
D’Loren - 2 years
David
Meister - 1 year
James
Haran - 1 year
Charles
Zona - 1 year
|
Termination
in Connection with a Change of Control
The
employment agreements with each of Messrs. D’Loren, Meister, Haran and Zona
provide that, if, within twelve months following a “Change of Control,” their
employment is terminated without “Cause” or they terminate their employment for
“Good Reason” as all such terms are defined in each employment agreement, we are
obligated to make a lump-sum severance payment. A “Change of Control” is defined
in each employment agreement by reference to our 1999 Equity Incentive Plan,
which is defined to include a change in majority of our board of directors,
consummation of certain mergers, the sale of all or substantially all of our
assets or the acquisition of at least 80% of the undiluted total voting power
of
our then-outstanding securities. In addition, if within twelve months following
a change of control, our named executive officers are terminated without “Cause”
or they terminate their employment for “Good Reason,” then all unvested stock
options, shares of restricted stock and other equity awards shall vest
immediately, and remain exercisable for the lesser of 180 days after termination
and the remaining term of the applicable grant. See “Employment Agreements”
included above for additional details regarding Change of Control
payments.
For
Mr.
D’Loren, the severance payment is equal to $100 less than three times the sum
of
Mr. D’Loren’s base salary plus a bonus amount calculated as the percentage of
the bonus pool that Mr. D’Loren received in the prior fiscal year multiplied
times five percent of the annualized net income for the quarter immediately
preceding the executive’s separation. For each of Messrs. Meister, Haran and
Zona, the separation amount is calculated the same as for Mr. D’Loren, except
that the amount is multiplied times two. For each of our named executive
officers, in the event that the foregoing calculation, together with all other
cash and non-cash amounts that the executive has the right to receive from
us,
would result in the severance payment being treated as an “excess parachute
payment” within the meaning of Section 280G of the Internal Revenue Code, then
the payment is reduced automatically to the largest amount that will not result
in the payment being treated as an “excess parachute payment.” Because this
formula is intended to avoid the lump sum being treated as a parachute payment
subject to an excise tax under the tax code, we do not provide for any
“gross-up” payments to cover federal excise taxes in the event that the
severance payments are treated as a parachute payment.
The
following table quantifies the estimated maximum amount of payments and benefits
under our employment agreements and agreements relating to awards granted under
our equity incentive and stock option plans to which the named executive
officers would be entitled upon termination of employment if we terminated
their
employment without cause on December 31, 2007, assuming a Change of Control
occurred on that date. We have assumed that these payments would not result
in
the aggregate severance payments being treated as an “excess parachute payment.”
We, therefore, have not reduced the aggregate amount calculated under the base
formula.
Name
|
|
Cash Severance
Payment
($)
|
|
Continuation of
Medical/Welfare Benefits (Present
Value)
(1)
($)
|
|
Value of Accelerated
Vesting of Equity
Awards
(2)
($)
|
|
Total Termination
Benefits
($)
|
|
Robert
W. D’Loren
|
|
$2,249,900
|
|
$24,426
|
|
$1,293,843
|
|
$3,568,169
|
|
|
|
|
|
|
|
|
|
|
|
David
B. Meister
|
|
$449,900
|
|
$14,778
|
|
$175,179
|
|
$639,857
|
|
|
|
|
|
|
|
|
|
|
|
James
Haran
|
|
$749,900
|
|
$10,562
|
|
$269,285
|
|
$1,029,747
|
|
|
|
|
|
|
|
|
|
|
|
Charles
Zona
|
|
$599,900
|
|
$10,562
|
|
$293,716
|
|
$904,178
|
|
(1)
|
|
Calculated
at the present value of insurance premiums to be paid over the benefit
period.
|
|
|
|
(2)
|
|
This
amount represents the unamortized portion of the expense related
to each
respective named executive officer’s equity awards as of December 31,
2007.
|
Director
Compensation
The
following table sets forth compensation information for 2007 for each member
of
our board of directors with the exception of Mr. D’Loren. Directors who are
employees, such as Messrs. D’Loren and Oros, do not receive additional
compensation for serving on the board. However, in connection with an option
grant made to members of our board of directors in September 2007, the board
authorized grants to each director other than Mr. D’Loren. See “Summary
Compensation” table and “Grants of Plan-Based Awards” table for disclosures
related to Mr. D’Loren.
Name
|
|
Fees Earned
or Paid
in Cash
($)
|
|
Stock
Awards
($)
|
|
Option
Awards
($)
|
|
Non-Equity
Incentive Plan Compensation
($)
|
|
Change in
Pension Value
and Nonqualified
Deferred Compensation Earnings
|
|
All Other
Compensation
($)
|
|
Total
($)
|
|
David
S. Oros
|
|
|
-
|
|
-
|
|
|
$29,079(9)
|
|
-
|
|
-
|
|
$213,66(12)
|
|
|
$242,744
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
James
T. Brady
|
|
|
$68,250(1)
|
|
-
|
|
|
$29,079(9)
|
|
-
|
|
-
|
|
-
|
|
|
$97,329
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paul
Caine
|
|
|
$12,000(2)
|
|
-
|
|
|
$29,079(9)
|
|
-
|
|
-
|
|
-
|
|
|
$41,079
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jack
B. Dunn, IV
|
|
|
$39,000(3)
|
|
-
|
|
|
$29,079(9)
|
|
-
|
|
-
|
|
-
|
|
|
$68,079
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Edward
J. Mathias
|
|
|
$57,000(4)
|
|
-
|
|
|
$29,079(9)
|
|
-
|
|
-
|
|
-
|
|
|
$86,079
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jack
Rovner
|
|
|
$38,000(5)
|
|
-
|
|
|
$29,079(9)
|
|
-
|
|
-
|
|
-
|
|
|
$67,079
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Truman
T. Semans (former director)
|
|
|
$42,500(6)
|
|
-
|
|
|
$47,910(10)
|
|
-
|
|
-
|
|
-
|
|
|
$90,410
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
George
P. Stamas
|
|
|
$36,500(7)
|
|
-
|
|
|
$29,079(9)
|
|
-
|
|
-
|
|
-
|
|
|
$66,579
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marvin
Traub
|
|
|
$17,500(8)
|
|
-
|
|
|
$127,341(11)
|
|
-
|
|
-
|
|
-
|
|
|
$144,841
|
|
(1)
|
Includes
a $20,000 annual retainer, $19,500 in board attendance fees, a $12,500
retainer as chairman of the Audit Committee $15,000 in Audit Committee
meeting fees, and a $1,250 retainer as chairman of the Nominating
and
Corporate Governance Committee. Mr. Brady has been the chairman and
a
member of the Audit Committee throughout the fiscal year ended December
31, 2007 and became the chairman of the Nominating and Corporate
Governance Committee on May 4, 2007.
|
|
|
(2)
|
Includes
a $5,000 annual retainer, $4,500 in board attendance fees, and $2,500
in
Audit Committee meeting fees. Mr. Caine has been a member of the
board and
the Audit Committee since September 5, 2007.
|
|
|
(3)
|
Includes
a $20,000 annual retainer, $16,500 in board attendance fees and a
$2,500
retainer as chairman of the Nominating Committee. Mr. Dunn was the
chairman of the Nominating Committee through May 4, 2007 when the
Nominating Committee was merged with the Corporate Governance
Committee.
|
|
|
(4)
|
Includes
a $20,000 annual retainer, $19,500 in board attendance fees, a $2,500
retainer as chairman of the Compensation Committee, and $15,000 in
Audit
Committee meeting fees. Mr. Mathias has been the chairman of the
Compensation Committee and a member of the Audit Committee throughout
the
fiscal year ended December 31, 2007.
|
|
|
(5)
|
Includes
a $20,000 annual retainer and $18,000 in board attendance fees.
|
|
|
(6)
|
Includes
a $15,000 annual retainer, $15,000 in board attendance fees, and
$12,500
in Audit Committee meeting fees. Mr. Semans was a director through
September 5, 2007 but did not stand for re-election to the board
of
directors at the 2007 annual meeting held on that date.
|
|
|
(7)
|
Includes
a $20,000 annual retainer, and $16,500 in board attendance
fees.
|
|
|
(8)
|
Includes
a $10,000 annual retainer and $7,500 in board attendance fees. Mr.
Traub
has been a member of the board since May 2, 2007.
|
|
|
(9)
|
On
September 6, 2007, the Company granted non-qualified options to purchase
100,000 shares to each of the directors in 2007, other than Mr. D’Loren
and Mr. Traub, with an exercise price equal to the closing price
per share
on September 6, 2007. These options vest equally on the annual meeting
date of each of the four annual meeting dates following the date
of grant.
On September 6, 2007, Mr. Traub was granted non-qualified options
to
purchase 75,000 shares as discussed in footnote 9 below.
|
|
|
(10)
|
On
October 31, 2006, immediately following the 2006 annual meeting,
the
Company granted to Mr. Semans non-qualified options to purchase 25,000
shares, as part of the Company’s annual compensatory grant of options to
directors. The exercise price of these options was the closing price
per
share on October 31, 2006. By their terms, the options vested on
October
31, 2007, the first anniversary of the grant date. However, the Company
accelerated the vesting of these options to September 5, 2007 because
Mr.
Semans planned to retire from the board as of the 2007 annual meeting
on
September 5, 2007. In accelerating the options, the Company sought
to
avoid inadvertently penalizing Mr. Semans based on the scheduling
of its
annual meeting. The Company now generally grants options to directors,
which vest on annual meeting dates following the date of the
grant.
|
|
|
(11)
|
On
May 4, 2007, the Company granted to Mr. Traub, in connection with
his
appointment to the board of directors, non-qualified options to purchase
29,166 shares, which was comprised of a pro rata amount of the 25,000
stock options granted to non-employee directors in 2006 and an additional
25,000 options granted for his expected service in 2007. The exercise
price of these options is the closing price per share on May 4, 2007,
and
the options vest on May 4, 2008. On September 6, 2007, Mr. Traub
was
granted non-qualified options to purchase 75,000 shares with an exercise
price equal to the closing price per share on September 6, 2007.
These
options vest equally on the second, third and fourth annual meeting
dates
following the date of the grant.
|
(10)
|
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 remains an employee to provide advice and guidance to our new
chief
executive officer and to assist him with the management and business
transition processes. Mr. Oros receives an annual salary of $200,000
and
health care coverage as an employee during this period. In 2007,
the
Company paid $13,665 for the employer’s portion of the premiums for Mr.
Oros’ employee health care coverage.
|
The
following table sets forth certain information with respect to beneficial
ownership of our common stock as of April 21, 2008, as to:
|
·
|
each
of our directors and executive officers individually;
and
|
|
·
|
all
our directors and executive officers as a group.
|
To
our
knowledge, no person or entity, other than Mr. D’Loren, is the beneficial owner
of more than 5% of our common stock.
For
the
purposes of calculating percentage ownership, as of April 21, 2008, 56,620,644
shares were issued and outstanding. For any individual, who beneficially owns
shares of restricted stock that will vest or shares represented by options
that
are or will become exercisable within 60 days of April 21, 2008, those shares
are treated as if outstanding for that person, but not for any other person.
In
preparing the following table, we relied upon statements filed with the SEC
by
beneficial owners of more than 5% of the outstanding shares of our common stock
pursuant to Section 13(d) or 13(g) of the Exchange Act, unless we knew or had
reason to believe that the information contained in such statements was not
complete or accurate, in which case we relied upon information which we
considered to be accurate and complete. Unless otherwise indicated, the address
of each of the individuals and entities named below is: c/o NexCen Brands,
Inc.,
1330 Avenue of the Americas, 34th Floor, New York, NY 10019.
|
|
Beneficial Ownership
of Shares
|
|
Name
|
|
Number
|
|
Percent
|
|
Directors
and executive officers:
|
|
|
|
|
|
|
|
David
S. Oros (1)
|
|
|
2,315,879
|
|
|
4.09%
|
|
Robert
W. D’Loren (2)
|
|
|
7,330,175
|
|
|
12.95%
|
|
James
Haran (3)
|
|
|
711,428
|
|
|
1.26%
|
|
Kenneth
J. Hall
|
|
|
30,000
|
|
|
*
|
|
Charles
A. Zona (4)
|
|
|
93,334
|
|
|
*
|
|
Joseph
DiMuro
|
|
|
-
|
|
|
|
|
Sue
J. Nam
|
|
|
-
|
|
|
|
|
James
T. Brady (5)
|
|
|
102,500
|
|
|
*
|
|
Paul
Caine
|
|
|
-
|
|
|
*
|
|
Jack
B. Dunn IV
|
|
|
-
|
|
|
*
|
|
Edward
J. Mathias (6)
|
|
|
150,700
|
|
|
*
|
|
Jack
Rovner
|
|
|
25,000
|
|
|
*
|
|
Truman
T. Semans (7) |
|
|
55,000
|
|
|
*
|
|
George
P. Stamas (8)
|
|
|
146,868
|
|
|
*
|
|
Marvin
Traub (9)
|
|
|
114,166
|
|
|
*
|
|
|
|
|
|
|
|
|
|
All
directors and named executive officers as a group (14
Persons)
|
|
|
|
|
|
19.56%
|
|
*
|
Less
than 1%.
|
|
|
|
|
|
(1)
|
Includes
(i) 1,261,000 shares owned directly by Mr. Oros, (ii) 794,279 shares
owned
by Mr. Oros and his wife,
(iii)
exercisable warrants to purchase 155,000 shares of the Company’s common
stock, (iv) exercisable options to purchase 55,600 shares of the
Company’s
common stock and (v) 50,000 shares of restricted stock that will
become
exercisable within 60 days of April 21, 2008.
|
(2)
|
Includes
(i) 1,041,384 shares owned directly by Mr. D’Loren, (ii) 1,775,193 shares
owned by D’Loren Realty LLC, which is solely owned and managed by Mr.
D’Loren, (iii) 875,526 shares owned by D’Loren 2008 Retained Annuity
Trust, (iv)
immediately exercisable warrants to purchase 41,666 shares, (v)
immediately exercisable options to purchase 745,658 shares, vi) warrant
and option to purchase 937,325
shares that will become immediately exercisable within 60 days of
April
21, 2008, and (vii) 1,913,423 shares over which Mr. D’Loren exercises
voting control pursuant to the terms of two voting agreements entered
into
in connection with NexCen’s acquisition of The Athlete’s Foot in November
2006. The shares held by Mr. D’Loren exclude 537,308 shares held by the
Robert D’Loren Family Trust Dated March 29, 2002 (the “Family Trust”), the
beneficiaries of which are two minor children of Mr. D’Loren. The Family
Trust is irrevocable, the trustee is not a member of Mr. D’Loren’s
immediate family, and the trustee has independent authority to vote
and
dispose of the shares held by the Family Trust. As a result, Mr.
D’Loren
disclaims any beneficial ownership of the shares held by the Family
Trust.
|
(3)
|
Includes
(i) 517,499 shares owned directly by Mr. Haran and (ii) options to
purchase 193,929 shares of common stock that will become exercisable
within 60 days of April 21, 2008.
|
(4)
|
Includes
(i) 10,000 shares owned directly by Mr. Zona and (ii) exercisable
options
to purchase 83,334 shares of common stock.
|
(5)
|
Includes
(i) 2,500 shares owned directly by Mr. Brady and (ii) exercisable
options
to purchase 100,000 shares of common stock.
|
(6)
|
Includes
(i) 14,000 shares owned directly by Mr. Mathias, (ii) exercisable
options
to purchase 100,000 shares of common stock, (iii) 29,000 shares of
common
stock held indirectly in a retirement account and (iv) 7,700 shares
of
common stock held as custodian for Ellen Mathias.
|
(7)
|
Includes
(i) 30,000 shares owned by Mr. Semans
and his wife and (ii) exercisable options to purchase 25,000 shares
of
common stock.
|
(8)
|
Includes
(i) 11,268 shares owned directly by Mr. Stamas and
(ii) exercisable options to purchase 135,600 shares of common
stock.
|
(9)
|
Includes
(i) 85,000 shares owned directly by Mr. Traub and (ii) options to
purchase
29,166 shares of common stock, which will
become exercisable within 60 days of April 21, 2008.
|
Securities
Authorized for Issuance Under Equity Compensation
Plans
See
Item
5 of Part II of our Form 10-K for information regarding securities authorized
for issuance under equity compensation plans.
Policies
and Procedures for the Review and Approval of Related Party
Transactions
The
Company adopted the Policy and Procedures with respect to Related Persons
Transactions for the review, approval or ratification of all related party
transactions. The policy is administered by the Nominating and Corporate
Governance Committee.
Pursuant
to the Policy
and Procedures,
any
proposed related person transaction must be submitted for consideration at
the
first regular or special meeting of the Nominating
and Corporate Governance Committee that
immediately precedes or follows the Company entering into a related party
transaction. In
determining whether or not to approve or ratify such transactions, the Committee
considers all the relevant facts and circumstances related to the transaction
including, but not limited to (1) the benefit to the Company; (2) if the
transaction involves a director, a member of the director’s immediate family or
an entity affiliated with a director, the impact on the director’s independence;
(3) the related person’s relationship to the Company and interest in the
transaction; (4) the availability of other sources for comparable products
or
services; (5) the terms of the transaction (including dollar value of the
transaction); (6) the terms available to unrelated third parties; and (7) any
other information regarding the transaction or the related person in the context
of the transaction that is material to investors in light of the circumstances
of the particular transaction. The Nominating and Corporate Governance Committee
approves or ratifies only those transactions that are in, or are not
inconsistent with, the best interests of the Company and its shareholders.
In
the
event that the Nominating and Corporate Governance Committee determines not
to
ratify a related party transaction, it may evaluate all options, including
but
not limited to, termination of the transaction on a prospective basis,
rescission of such transaction, or modification
of the transaction in a manner that would permit it to be ratified by the
Committee.
The
Company’s Policy and Procedures with respect to Related Persons Transactions can
be found on our website.
Certain
Transactions
The
Company receives legal services from Kirkland & Ellis LLP, which is
considered a related party because a partner at that firm, George P. Stamas,
is
a member of the Company’s board of directors. For the years ended December 31,
2007, 2006 and 2005, expenses related to Kirkland & Ellis LLP were
approximately $1.3 million, $1.7 million, and $640,000, respectively. For the
years ended December 31, 2007, 2006 and 2005, the Company had outstanding
payables due to Kirkland & Ellis LLP of approximately $121,000, $492,000 and
$45,000, respectively.
In
July,
2007, the Company entered into an agreement with Marvin Traub Associates, Inc.
an entity owned by Mr. Traub, to help the Company identify, approach, and
negotiate a deal with a premier U.S. based big box retail chain so that such
retailer might joint venture with, or purchase a license from the Company to
open MaggieMoo’s ice cream locations within their stores. Marvin Traub
Associates, Inc. received a one time retainer fee of $25,000 upon the
agreement’s execution. If the Company is successful in consuming a relationship
with a third party, Marvin Traub Associates, Inc. will receive an additional
$100,000 success fee.
Director
Independence
See
Item
10 of Part III of this Form 10-K/A for information regarding director
independence.
Audit
Fees
The
aggregate fees billed for professional services rendered for NexCen by KPMG
LLP,
NexCen’s independent auditor, for the years ended December 31, 2007 and 2006
were:
|
|
2007
|
|
2006
|
|
Audit
Fees
|
|
$
|
668,211
|
|
$
|
225,000
|
|
Audit-Related
Fees
|
|
|
287.699
|
|
|
97,562
|
|
Tax
Fees
|
|
|
37,608
|
|
|
76,544
|
|
Total
Fees
|
|
$
|
993,528
|
|
$
|
399,106
|
|
“Audit
Fees” include time billed to NexCen for professional services rendered for the
annual audit for NexCen’s consolidated financial statements, the quarterly
reviews of the consolidated financial statements for fiscal years 2007 and
2006
and the audit with respect to management’s assessment of the effectiveness of
internal control over financial reporting as of December 31, 2007 and 2006
and
the effectiveness of internal control over financial reporting as of December
31, 2007 and 2006.
The
aggregate amount billed for all tax fees for the years ended December 31, 2007
and 2006 (see chart above under heading “Tax Fees”) principally covered tax
planning, tax consulting and tax compliance services provided to
NexCen.
“Audit
Related Fees” for 2007 include professional services performed by KPMG, LLP
related primarily to Form 8-K/A filings related to Bill Blass, MaggieMoo’s,
Marble Slab, Pretzel Time and Pretzelmaker acquisitions and audits of the
financial statements of certain of our franchise brands as required by the
Federal Trade Commission in preparing Uniform Franchise Offering Circulars.
For
2006, these fees include professional services performed by KPMG, LLP related
to
the UCC and The Athlete’s Foot acquisitions, and Form 8-K and Form S-3 filings
with the SEC.
NexCen
does not use its independent auditor as its internal auditor nor does it have
an
internal auditor.
No
other
professional services were rendered or fees were billed by KPMG for the most
recent fiscal year or for the year ending December 31, 2007 and
2006.
The
Audit
Committee has adopted policies and procedures for the pre-approval of the above
fees. All requests for services to be provided by KPMG are submitted to the
audit committee. Requests for all non-audit related services require
pre-approval from the entire Audit Committee. A schedule of approved services
is
then reviewed and approved by the entire Audit Committee at each Audit Committee
meeting.
EXHIBITS
The
following exhibits are filed herewith:
Exhibit
Index
31.1
|
|
Certification
pursuant to 17 C.F.R § 240.15d−14 (a), as adopted pursuant to Section 302
of the Sarbanes−Oxley Act of 2002 for Robert W.
D’Loren.
|
31.2
|
|
Certification
pursuant to 17 C.F.R § 240.15d−14 (a), as adopted pursuant to Section 302
of the Sarbanes−Oxley Act of 2002 for Kenneth J.
Hall.
|
_____________________
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the Registrant has duly caused this report on Form 10-K/A to be signed
on
its behalf by the undersigned, thereunto duly authorized on April 29,
2008.
|
NEXCEN
BRANDS, INC.
|
|
|
|
By:
|
/s/
Robert W. D’Loren
|
|
|
ROBERT
W. D’LOREN
|
|
|
President
and Chief Executive Officer
|
Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has
been
signed by the following persons in the capacities and on the dates
indicated.
SIGNATURE
|
|
TITLE
|
|
DATE
|
|
|
|
|
|
/s/
David S. Oros
|
|
Chairman
of the Board
|
|
April
29, 2008
|
DAVID
S. OROS
|
|
|
|
|
|
|
|
|
|
/s/
Robert W. D’Loren
|
|
Director,
President, and
|
|
April
29, 2008
|
ROBERT
W. D’LOREN
|
|
Chief
Executive Officer
|
|
|
|
|
|
|
|
/s/
Kenneth J. Hall
|
|
Executive Vice President, Chief Financial Officer, Treasurer
|
|
April
29, 2008
|
KENNETH
J. HALL
|
|
and
Principal Financial and Accounting Officer
|
|
|
|
|
|
|
|
/s/
James T. Brady
|
|
|
|
|
|
|
Director
|
|
April
29, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
Director
|
|
April
29, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
Director
|
|
April
29, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
Director
|
|
April
29, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
Director
|
|
April
29, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
Director
|
|
April
29, 2008
|
|
|
|
|
|
|
|
|
|
|
Director
|
|
April
29, 2008
|