UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
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Filed by Registrant
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Filed by a Party other than the Registrant
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Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material Pursuant to §240.14a-12
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HELIOS & MATHESON NORTH AMERICA INC.
(Name of Registrant as Specified in Its Charter)
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Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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Title of each class of securities to which transaction applies:
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Aggregate number of securities to which transaction applies:
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Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
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Proposed maximum aggregate value of transaction:
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Fee paid previously with preliminary materials
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Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
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Amount Previously Paid:
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Form, Schedule or Registration Statement No.:
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July 11, 2008
Dear Shareholder:
You are cordially invited to attend Helios & Matheson North America Inc.s Annual Meeting on
August 20, 2008. The meeting will begin promptly at 10:00 a.m. at the offices of the Companys
counsel, Davis Polk & Wardwell, at 450 Lexington Avenue, New York, New York 10017.
The official Notice of Annual Meeting of Shareholders, proxy statement, proxy card and return
envelope are included with this letter. Also enclosed is Helios & Matheson North America Inc.s
Annual Report to shareholders for the year ended December 31, 2007. The matters listed in the
Notice of Annual Meeting of Shareholders are described in detail in the proxy statement.
The vote of every shareholder is important. Please review carefully the enclosed materials
and then sign, date and promptly mail your proxy. If you sign and return your proxy card without
giving any instruction, it will be voted as the Board of Directors recommends.
The Board of Directors and management look forward to greeting those shareholders who are able
to attend.
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Sincerely,
HELIOS & MATHESON NORTH AMERICA INC.
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/s/ SALVATORE M. QUADRINO
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Salvatore M. Quadrino,
Interim
Chief Executive Officer
and Chief Financial Officer
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HELIOS & MATHESON NORTH AMERICA INC.
200 PARK AVENUE SOUTH
NEW YORK, NEW YORK 10003
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 20, 2008
To the shareholders of HELIOS & MATHESON NORTH AMERICA INC.:
PLEASE TAKE NOTICE that the Annual Meeting of Shareholders of Helios & Matheson North America
Inc. (Helios & Matheson or the Company) will be held at 10:00 a.m. (local time), on August 20,
2008, at the offices of the Companys counsel, Davis Polk & Wardwell, at 450 Lexington Avenue, New
York, New York 10017 for the following purposes:
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To elect the Board of Directors of the Company to serve until the Annual
Meeting of Shareholders in 2009 and until their respective successors are duly elected
and qualified;
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2.
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To ratify the appointment of Mercadien P.C. as the independent auditors of the
Company for the year ending December 31, 2008.
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Only shareholders of record at the close of business on July 1, 2008 are entitled to notice of
and to vote at this meeting and any adjournment or postponement thereof.
You may vote in person or by proxy. You may cast your vote by signing and dating the enclosed
proxy exactly as your name appears thereon and promptly returning such proxy in the envelope
provided. If you sign and return your proxy card without giving any instruction, it will be voted
as the Board of Directors recommends.
You may revoke your proxy by voting in person at the meeting, by written notice to the
Secretary of the Company or by executing and delivering a later-dated proxy by mail, prior to the
closing of the polls. Attendance at the meeting does not by itself constitute revocation of a
proxy. All shares that are entitled to vote and are represented by properly completed proxies
timely received and not revoked will be voted as you direct. If you sign and return your proxy
card without giving any instruction, it will be voted as the Board of Directors recommends.
You are cordially invited to attend the meeting. Whether or not you plan to attend the
meeting, please complete, sign, date and return the enclosed proxy card promptly. If you sign and
return your proxy card without giving any instruction, it will be voted as the Board of Directors
recommends. This proxy statement and the accompanying form of proxy, together with the Companys
2007 Annual Report to shareholders, are being mailed to shareholders on or about July 21, 2008.
Your cooperation is appreciated since a majority of the outstanding shares entitled to vote must be
represented, either in person or by proxy, to constitute a quorum for the purposes of conducting
business at the meeting.
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BY ORDER OF THE BOARD OF DIRECTORS
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By:
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/s/ Roxanne Weisbrot
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Roxanne Weisbrot
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Interim Secretary
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New York, New York
July 11, 2008
TABLE OF CONTENTS
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HELIOS & MATHESON NORTH AMERICA INC.
200 PARK AVENUE SOUTH
NEW YORK, NEW YORK 10003
(212) 979-8228
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
To be Held on August 20, 2008
This proxy statement and the accompanying form of proxy are furnished in connection with the
solicitation of proxies by the Board of Directors (the Board of Directors) of Helios & Matheson
North America Inc., a New York corporation (Helios & Matheson or the Company), to be voted at
its Annual Meeting of Shareholders which will be held at 10:00 a.m. (local time), on August 20,
2008 at the offices of the Companys counsel, Davis Polk & Wardwell, at 450 Lexington Avenue, New
York, New York 10017 and at any postponements or adjournments thereof (the Annual Meeting).
At the Annual Meeting, the Companys shareholders will be asked (i) to elect Messrs. Rabin
Dhoble, Daniel L. Thomas, Srinivasaiyer Jambunathan, Kishan Grama Ananthram, and Ms. Divya
Ramachandran as directors of the Company to serve until the Annual Meeting of Shareholders in 2009
and until their respective successors are duly elected and qualified, and (ii) to ratify the
appointment of Mercadien P.C. as the Companys independent auditors for the year ending December
31, 2008.
This proxy statement and the accompanying form of proxy, together with the Companys 2007
Annual Report to shareholders, are being mailed to shareholders on or about July 21, 2008.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of
Shareholders to be Held on
August 20, 2008:
This proxy statement and the Companys 2007 Annual Report to Shareholders are available for
viewing, printing and downloading at www.hmna.com/About Helios & Matheson.
Copies of the Companys Annual Report on Forms 10-K and 10-K/A for the fiscal year ended
December 31, 2007, as filed with the Securities and Exchange Commission (SEC), will be furnished
without charge to any stockholder upon written request to Helios & Matheson North America Inc., 77
Brant Avenue, Suite 320, Clark, New Jersey, 07066, Attention: Ms. Roxanne Weisbrot, Interim
Secretary. This proxy statement and the Companys 2007 Annual Report on Forms 10-K and 10-K/A for
the fiscal year ended December 31, 2007 are also available on the SECs website at www.sec.gov.
GENERAL INFORMATION
Solicitation and Voting of Proxies; Revocation; Record Date
PROXY SOLICITATION
Proxies may be solicited by mail, personal interview, telephone and facsimile transmission,
and by directors, officers and employees of the Company (without special compensation). Since the
Company is making this solicitation, the expenses for the preparation of proxy materials and the
solicitation of proxies for the Annual Meeting will be paid by the Company. The Company has
retained Mellon Investor Services to assist in the solicitation. Expenses for the solicitation are
estimated to be approximately $5,000 plus other reasonable expenses.
In accordance with the regulations of the Securities and Exchange Commission, the Company will
reimburse, upon request, banks, brokers and other institutions, nominees and fiduciaries for their
expenses incurred in sending proxies and proxy materials to the beneficial owners of the Companys
common stock.
REVOKING YOUR PROXY
A shareholder may revoke a proxy at any time before it is exercised in one of the three
following ways:
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By filing with the Secretary of the Company a written revocation to the attention of Ms.
Roxanne Weisbrot, Interim Secretary, Helios & Matheson North America Inc., 77 Brant Avenue,
Suite 320, Clark, New Jersey 07066, Telephone: (732) 499-8228. We must receive your
written revocation before the time of the Annual Meeting;
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By submitting a duly executed proxy bearing a later date than your original proxy. We
must receive such later dated proxy before the time of the Annual Meeting; or
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By voting in person at the meeting. However, attendance at the Annual Meeting does not
by itself constitute revocation of a proxy. A shareholder who holds shares through a
broker or other nominee must bring a legal proxy ballot to the meeting if that shareholder
desires to vote at the meeting.
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VOTING YOUR SHARES
Shares represented by each properly executed and returned proxy card will be voted (unless
earlier revoked) in accordance with the instructions indicated. If no instructions are indicated
on the proxy card, all shares represented by valid proxies received pursuant to this solicitation
(and not revoked before they are voted) will be voted FOR the election of the nominees for
director named below and FOR the ratification of the Companys independent auditors.
Under the Companys By-Laws, the presence at the Annual Meeting, in person or by duly
authorized proxy, of the holders of a majority of the total number of outstanding shares of common
stock voting as a single class, entitled to vote constitutes a quorum for the transaction of
business. Shares of our common stock represented in person or by proxy (regardless of whether the
proxy has authority to vote on all matters), as well as abstentions and broker non-votes, will be
counted for purposes of determining whether a quorum is present at the meeting.
An abstention is the voluntary act of not voting by a stockholder who is present at a
meeting and entitled to vote. Broker non-votes are shares of voting stock held in record name by
brokers and nominees concerning which: (i) instructions have not been received from the beneficial
owners or persons entitled to vote; (ii) the broker or nominee does not have discretionary voting
power under applicable rules or the instrument under which it serves in such capacity or (iii) the
record holder has indicated on the proxy or has executed a proxy and otherwise notified us that it
does not have authority to vote such shares on that matter.
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VOTES REQUIRED FOR APPROVAL
Shares Entitled to Vote.
Only holders of record of the Companys common stock at the close of
business on July 1, 2008 (the Record Date) are entitled to notice, to attend and to vote at the
Annual Meeting with each share entitled to one vote. As of the close of business on July 1, 2008,
the Company had 2,396,707 shares of common stock outstanding.
Quorum.
New Yorks Business Corporation Law and the Companys By-Laws provide that, a quorum being
present, nominees for the office of director are to be elected by a plurality of votes cast at the
meeting by holders of shares represented either in person or by proxy entitled to vote in the
election. Only shares affirmatively voted in favor of a nominee will be counted toward the
achievement of a plurality. Votes withheld (including broker non-votes) are counted as present for
the purpose of determining a quorum but are not counted as votes cast in determining a plurality.
Votes Required.
The votes required on each of the proposals are as follows:
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Proposal 1: Election of Directors
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The five nominees for director who receive the most votes will be elected. This is
called a plurality. If you indicate withhold authority to vote for a particular
nominee on your proxy card, your vote will not count either for or against the nominee.
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Proposal 2: Ratification of
Selection of Independent Registered Public
Accounting Firm
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The affirmative vote of a majority
of the votes cast at the Annual Meeting is required to ratify the
Audit Committees selection of the independent registered public accounting firm. If you abstain from voting, your abstention will not count as a vote cast for or against the proposal.
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PROPOSAL 1
ELECTION OF DIRECTORS
Pursuant to the Companys By-Laws, the Board of Directors shall be comprised of not less than
three and not more than nine directors. The exact number of directors shall be set by a resolution
of the Board of Directors. On March 18, 2008, the Board of Directors established the size of the
Board at five members. At each Annual Meeting of Shareholders, directors shall be elected for the
ensuing year.
Each director will be elected to serve for a one-year term, unless he/she resigns or is
removed before his term expires, or until his replacement is elected and qualified. Each of the
nominees listed are currently a member of the Board of Directors and each of them has consented to
serve as a director if elected. There is detailed information about each of the nominees available
in the section of this proxy statement titled Nominees Standing for Election.
If any of the nominees cannot serve for any reason, the Board of Directors may designate a
substitute nominee or nominees. If a substitute is nominated, we will vote all valid proxies for
the election of the substitute nominee or nominees. Alternatively, the Board of Directors may also
decide to leave the Board seat or seats open until a suitable candidate or candidates are
nominated, or it may decide to reduce the size of the Board.
Nominees Standing for Election
The following nominees are standing for election to serve as directors until the Annual
Meeting of Shareholders in 2009 and until their respective successors are duly elected and
qualified:
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Name
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Age
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Position
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Shri S. Jambunathan
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Chairman, Director
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Daniel L. Thomas
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Director
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Rabin K. Dhoble
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46
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Director
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Kishan Grama Ananthram
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Director
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Divya Ramachandran
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Director
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Srinivasaiyer Jambunathan
has been a director of the Company since August 22, 2006 and
Chairman of the Board since April 1, 2008. Mr. Jambunathan was named Vice Chairman of the Board of
Directors on November 8, 2006 and Lead Director on April 25, 2007. Mr. Jambunathan is the Chairman
of the Nominating and Corporate Governance Committee and the Executive Committee as well as a
member of the Audit Committee. Mr. Jambunathan served as a director of the Bombay Stock Exchange,
and thereafter, Bombay Stock Exchange Limited for a total period of six years until 2006. Mr.
Jambunathan was also the non-executive Chairman of Bombay Stock Exchange from March 2003 to August
2005. From March 2005 to August 2005 Mr. Jambunathan also served as non-executive Chairman of
Provogue India Ltd., a mens designer wear and fashion apparel company. Since November 2003, Mr.
Jambunathan has been a Director of JSW Steel Ltd. Since January 2001, Mr. Jambunathan has served
as non-executive Chairman of First Policy Insurance Pvt. Ltd. Mr. Jambunathan was Chairman of the
local Advisory Board, State Bank of Mauritiu, from 1996 to 2001.
Daniel L. Thomas
has been a director of the Company since June 5, 2006. Mr. Thomas is the
Chairman of the Audit Committee, as well as a member of the Executive Committee, the Nominating and
Corporate Governance Committee and the Transformation Committee. Mr. Thomas has over 28 years of
public accounting and financial experience. Mr. Thomas is currently a partner with Thomas &
Associates, a CPA firm, which he started in February 2002. From October 1999 to February 2002 he
was the Audit Partner in Charge with Corbin & Wertz, a CPA firm. Mr. Thomas experience includes
part-time CFO services, fraud prevention and investigation, acquisition consulting, transaction due
diligence, internal control review and systems implementation. Mr. Thomas is a Certified Public
Accountant and a Certified Fraud Examiner. Mr. Thomas is the past president of the Orange County
Chapter of the Association of Certified Fraud Examiners and he has served on the Board of Directors
for the Orange County Head Start program. Mr. Thomas is also a Reserve Deputy Sheriff for the
Orange County Sheriffs Department.
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Rabin K. Dhoble
has been a director of the Company since February 2006. Mr. Dhoble is a
member of the Audit Committee, the Compensation Committee, the Executive Committee and the
Transformation Committee. Mr. Dhoble is currently the President of Diversified Agency Services
Healthcare, Omnicom. Since 1998, Mr. Dhoble has been a senior executive within the healthcare
communications practice of Diversified Agency Services, the specialty communications unit of
Omnicom Group. Mr. Dhoble specializes in the development of business strategies and the management
of cross-functional teams that support the global commercialization of biotechnology and
pharmaceutical brands.
Kishan Grama Ananthram
has been a director of the Company since August 22, 2006. Mr.
Ananthram is the Chairman of the Compensation Committee, the Chairman of the Transformation
Committee and a member of the Executive Committee. Mr. Ananthram has served as the Founder,
Chairman, and Chief Executive Officer of IonIdea, Inc., a software product and engineering
outsourcing company since January 1994. Mr. Ananthram has over 20 years of entrepreneurial,
management, sales and technology experience. Prior to founding IonIdea, Inc. Mr. Ananthram held
various technical and management positions with NUS, Sprint, GTE, Fannie Mae and Hughes.
Divya Ramachandran
has been a director of the Company since August 22, 2006. Ms. Ramachandran
is a member of the Executive Committee, the Nominating and Corporate Governance Committee, the
Compensation Committee and the Transformation Committee. Since February 2004, Ms. Ramachandran has
been an Associate Vice President at Helios & Matheson Information Technology Ltd., the parent of
the Company, focusing on mergers and acquisitions. From June 2003 to January 2004, Ms.
Ramachandran was Program Director for General Management Programs at The Indian School of Business.
From July 2002 to January 2003, Ms. Ramachandran was a Senior Manager, Strategy and Restructuring
Cell for Lupin Limited, one of Indias leading pharmaceutical companies. From June 2000 to 2001,
Ms. Ramachandran was an associate with Arthur Andersen LLP.
Voting Requirements to Adopt the Proposal
The affirmative vote of the holders of a plurality of the outstanding shares of our common
stock who are present in person or represented by proxy and entitled to vote at the Annual Meeting
is required to approve Proposal No. 1.
Recommendation
The Nominating Committee has nominated each of the director nominees set forth in Proposal 1.
The Board of Directors recommends that shareholders vote
FOR
each of the nominees.
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CORPORATE GOVERNANCE
Board of Directors Meetings and Committees
During the year ended December 31, 2007, the Board of Directors met five times, including
regular and special meetings. The Board of Directors has an Audit Committee, Compensation
Committee, Nominating and Corporate Governance Committee, an Executive Committee and a
Transformation Committee. During 2007, the Audit Committee held seven meetings, the Nominating
Committee held one meeting, the Compensation Committee held one meeting and the Executive Committee
held twelve meetings. The Transformation Committee was formed on April 7, 2008 and had met on 3
occasions as of July 1, 2008. During 2007, each director attended 75% or more of the aggregate
number of meetings of the Board of Directors and committees on which such directors served. Each
of the committees of the Board of Directors, except the Transformation Committee, acts pursuant to
a separate written charter adopted by the Board of Directors.
It is anticipated that each member of the Board of Directors will attend the Companys 2008
Annual Meeting of Shareholders. At the Companys 2007 Annual Meeting of Shareholders, six of the
seven directors were in attendance.
Controlled Company
On March 30, 2006, Helios & Matheson Information Technology, Ltd. (Helios & Matheson
Parent), an IT services organization with its corporate headquarters in Chennai, India, purchased
1,024,697 shares of the Companys common stock from Mr. BenTov and his family members, which
represented approximately 43% of the Companys outstanding common stock. On September 5, 2006,
Helios & Matheson Parent increased their ownership to approximately 52%. Helios & Matheson Parent
is a publicly listed company on three stock exchanges in India, the National Stock Exchange (NSE),
the Stock Exchange Mumbai (BSE) and Madras Stock Exchange (MSE) and is included in the Bombay Stock
Exchange 500 Stock Index.
The Board of Directors has determined that Helios & Matheson is a Controlled Company for
purposes of the NASDAQ listing requirements. A Controlled Company is a company of which more
than 50% of the voting power is held by an individual, group or another company. Certain NASDAQ
requirements do not apply to a Controlled Company, including requirements: (i) that a majority of
its Board of Directors must be comprised of independent directors as defined in NASDAQs rules;
and (ii) that the compensation of officers and the nomination of directors be determined in
accordance with specific rules, generally requiring determinations by committees comprised solely
of independent directors or in meetings at which only the independent directors are present. The
Board of Directors has determined that Helios & Matheson is a Controlled Company based on the
fact that Helios & Matheson Parent holds more than 50% of the voting power of the Company.
Independent Directors
Upon consideration of the criteria and requirements regarding director independence set forth
in NASDAQ Rules 4200 and 4350, the Board of Directors has determined that each of Messrs.
Jambunathan, Thomas and Dhoble meet NASDAQ independence standards.
Audit Committee
Audit Committee.
The Audit Committee is authorized to engage the Companys independent
auditors and review with such auditors (i) the scope and timing of their audit services and any
other services they are asked to perform, (ii) their report on the Companys financial statements
following completion of their audit and (iii) the Companys policies and procedures with respect to
internal accounting and financial controls. From January 1, 2007 through May 23, 2007, the Audit
Committee was comprised of Messrs. Thomas (Chairman), Miller and Jambunathan. Mr. Rabin Dhoble was
appointed to the Audit Committee on May 23, 2007, replacing Mr. Miller. As of July 11, 2008, the
Audit Committee is comprised of Messrs. Thomas (Chairman), Dhoble and Jambunathan. The Board of
Directors has determined that Mr. Thomas qualifies as an audit committee financial expert. The
Board of Directors has determined that each of the members of the Audit Committee is independent
(as independence is defined in Rule 4200(a)(15) and in Rule 10A-3(b)(1) of the Securities and
Exchange Act of 1934, as amended). During the year ended December 31, 2007, the Audit Committee
held seven meetings. The Audit Committee
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Charter is posted at the Companys website, www.hmna.com, under About Helios & Matheson
Management. Any person may obtain a copy of the Audit Committee Charter without charge by calling
(732) 499-8228 or upon written request to Helios & Matheson North America Inc., 77 Brant Avenue,
Suite 320, Clark, New Jersey, 07066, Attention Ms. Roxanne Weisbrot, Interim Secretary.
Compensation Committee
Compensation Committee.
The Compensation Committee is authorized and empowered to approve
appointments and promotions of executive officers of the Company and fix salaries for such
officers, provided that all actions of the Compensation Committee must be ratified by the full
Board of Directors within three months of the subject action. The Compensation Committee is also
authorized to administer the Companys Amended and Restated 1997 Stock Option and Award Plan. From
January 1, 2007 through May 23, 2007, the Compensation Committee was comprised of Messrs. Mukamal
(Chairman), Thomas and Dhoble. Mr. Kishan Ananthram was appointed to the Compensation Committee on
May 23, 2007, replacing Mr. Mukamal as Chairman. As of July 11, 2008, the Compensation Committee
is comprised of Messrs. Ananthram (Chairman), Thomas and Dhoble. The Board of Directors has
determined that Messrs. Thomas and Dhoble are independent members of the Compensation Committee (as
independence is defined in NASDAQ Rule 4200(a)(15)). During the year ended December 31, 2007, the
Compensation Committee held one meeting. The Compensation Committee Charter is posted at the
Companys website, www.hmna.com, under About Helios & Matheson Management.
Nominating and Corporate Governance Committee
Nominating and Corporate Governance Committee.
The Nominating and Corporate Governance
Committee is authorized to nominate new candidates to the Board of Directors. From January 1, 2007
through May 23, 2007, the Nominating and Corporate Governance Committee was comprised of three
members, Messrs. Jambunathan (Chairman), Miller and Mukamal. Mr. Dan Thomas and Ms. Divya
Ramachandran were appointed to the Nominating and Corporate Governance Committee on May 23, 2007,
replacing Mr. Miller and Mr. Mukamal. As of July 11, 2008, the Nominating and Corporate Governance
Committee is comprised of Messrs. Jambunathan (Chairman), Thomas and Ms. Ramachandran. The Board
of Directors has determined that Messrs. Jambunathan and Thomas are independent members of the
Nominating and Corporate Governance Committee (as independence is defined in NASDAQ Rule
4200(a)(15)). The Nominating and Corporate Governance Committee Charter is posted at the Companys
website, www.hmna.com, under About Helios & Matheson Management. During the year ended December
31, 2007, the Nominating and Corporate Governance Committee met one time.
The Nominating and Corporate Governance Committee receives recommendations for director
nominees from a variety of sources, including from shareholders, management and members of the
Board of Directors. Shareholders may recommend any person to be a director of the Company by
writing to the Companys Secretary. Each submission must include (i) a brief description of the
candidate, (ii) the candidates name, age, business address and residence address, (iii) the
candidates principal occupation and the number of shares of the Companys capital stock
beneficially owned by the candidate and (iv) any other information that would be required under the
SEC rules in a proxy statement listing the candidate as a nominee for director.
The Nominating and Corporate Governance Committee generally reviews all recommended candidates
at the same time and subjects all candidates to appropriate review criteria. Members of the Board
of Directors should be qualified, dedicated, ethical and highly regarded individuals who have
experience relevant to the Companys operations and understand the complexities of the Companys
business environment. The Nominating and Corporate Governance Committee evaluates candidates in
the context of the current composition of the Board of Directors, and these recommendations are
submitted to the Board of Directors for review and approval. In conducting this assessment, the
Nominating and Corporate Governance Committee considers diversity, age, skills and such other
factors as it deems appropriate, given the current needs of the Board of Directors and its
committees. In addition, pursuant to NASDAQ Rules, the Company must have an Audit Committee
composed of at least three members, each of whom must satisfy specified independence and
qualification criteria. The Nominating and Corporate Governance Committee is also responsible for
providing a leadership role in shaping and monitoring the corporate governance practices of the
Company.
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Executive Committee
Executive Committee.
On January 10, 2007, the Executive Committee held its first meeting.
The Executive Committee was formally established as a committee appointed by the Board of Directors
on March 23, 2007. The Executive Committee usually meets monthly and has all the powers of the
Board of Directors except as limited by Section 712 of the Business Corporation Law of New York and
except for the matters that have been explicitly delegated by the Board of Directors to the Audit
Committee, the Compensation Committee and the Nominating Committee. The objectives of the
Executive Committee include; (i) focusing on business development, (ii) assisting in formulating
business strategies, (iii) monitoring the Companys progress on a monthly basis (actual vs. planned
performance), (iv) controlling expenditures, (v) when necessary, taking appropriate corrective
action, (vi) formulating plans for the future, (vii) helping management improve performance and
sanctioning actions by management to do so, (viii) periodically reviewing in consultation with the
Companys Chief Executive Officer the Companys management succession planning and (ix) other
actions consistent with applicable law and the Companys governing documents that the Executive
Committee or the Board deems appropriate. As of July 11, 2008, the Executive Committee is
comprised of Messrs. Jambunathan (Chairman), Dhoble, Thomas, Ananthram and Ms. Ramachandran.
During the year ended December 31, 2007, the Executive Committee held twelve meetings.
Other Committees
On April 7, 2008, the Transformation Committee was formally established as a committee with
the purpose of working with management and effecting the transformation of the Company to one that
is capable of delivering a higher percentage of its services through outsourcing and offshoring
solutions. The Transformation Committee will explore the appropriateness of moving functions such
as recruiting, solutions delivery, finance and administration offshore in an effort to enable the
Company to become more price competitive while maintaining high quality client services. As of
July 11, 2008, the Transformation Committee is comprised of Messrs. Ananthram (Chairman), Dhoble,
Thomas and Ms. Ramachandran. Since its inception, the Transformation Committee has held three
meetings.
The Board of Directors may establish additional standing or ad hoc committees from time to
time.
Shareholder Communication with the Board
Correspondence from the Companys shareholders to the Board of Directors or any individual
directors or officers should be sent to the Companys Secretary. Correspondence addressed to either
the Board of Directors as a body, or to any director individually, will be forwarded to the
Chairman of the Nominating and Corporate Governance Committee or to the individual director, as
applicable. The Companys Secretary will regularly provide to the Board of Directors a summary of
all shareholder correspondence that the Secretary receives on behalf of the Board of Directors.
This process has been approved by the Companys Board of Directors.
All correspondence should be sent to Helios & Matheson North America Inc., 77 Brant Avenue,
Suite 320, Clark, New Jersey 07066, Attention: Ms. Roxanne Weisbrot, Interim Secretary.
Compensation Committee Interlocks and Insider Participation
From January 1, 2007 through May 23, 2007, the Compensation Committee was comprised of Messrs.
Mukamal (Chairman), Thomas and Dhoble. On May 23, 2007, following the annual meeting of
shareholders, Mr. Kishan Ananthram was appointed to the Compensation Committee, replacing Mr.
Mukamal, as Chairman, and Ms. Divya Ramachandran was appointed to the Compensation Committee,
replacing Mr. Thomas. As of July 11, 2008, the Compensation Committee is comprised of Messrs.
Ananthram (Chairman), Dhoble and Ms. Ramachandran. None of the members of the Compensation
Committee has ever been an officer or employee of the Company.
Kishan Grama Ananthram, a member of the Companys Board of Directors, is the Chief Executive
Officer of IonIdea and Mr. Ananthram and his spouse own all of the outstanding capital stock of
IonIdea. The Company currently uses professional services and equipment provided by IonIdea. For
additional information, please see
Certain Relationships and Related Transactions.
7
Code of Business Conduct and Ethics
The Board of Directors has adopted a code of ethics designed, in part, to deter wrongdoing and
to promote honest and ethical conduct, including the ethical handling of actual or apparent
conflicts of interest between personal and professional relationships, full, fair, accurate, timely
and understandable disclosure in reports and documents that the Company files with or submit to the
Securities and Exchange Commission and in the Companys other public communications, compliance
with applicable governmental laws, rules and regulations, the prompt internal reporting of
violations of the code to an appropriate person or persons, as identified in the code, and
accountability for adherence to the code. The code of ethics applies to all directors, executive
officers and employees of the Company. The Company will provide a copy of the code to any person
without charge, upon request to Ms. Jeannie Lovastik, Human Resources Generalist by calling (732)
499-8228 or by writing to Helios & Matheson North America Inc., 77 Brant Avenue, Suite 320, Clark,
New Jersey 07066, Attention: Ms. Jeannie Lovastik.
The Company intends to disclose any amendments to or waivers of its code of ethics as it
applies to directors or executive officers by filing them on Form 8-K.
PROPOSAL 2
RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board of Directors has recommended to the Board of Directors of the
Company the selection of Mercadien, P.C. to be the independent auditors of the Company for the year
ending December 31, 2008.
Mercadien served as the principal accountant for the Company for the years ending December 31,
2007 and 2006. The Audit Committee of the Board of Directors of the Company engaged Mercadien P.C.
as the independent auditors of the Company on April 7, 2005.
Grant Thornton LLP was previously the principal accountant for the Company. The Audit
Committee of the Board of Directors dismissed Grant Thornton LLP on April 7, 2005.
Audit Fees
For the years ended December 31, 2007 and 2006, the aggregate fees paid or expected to be paid
to Mercadien P.C. for the audit of the Companys financial statements for such years and the review
of the Companys interim financial statements were $155,250 and $139,950, respectively.
Audit-Related Fees
During the years ended December 31, 2007 and 2006, there were no audit-related fees paid to
Mercadien P.C.
8
Tax Fees
For the years ended December 31, 2007 and 2006, the aggregate fees paid or expected to be paid
to Mercadien P.C. for tax compliance, tax advice and tax planning services were $23,500 and
$19,500, respectively.
All Other Fees
During the years ended December 31, 2007 and 2006, there were no fees paid to Mercadien P.C.
for professional services other than audit, audit-related and tax services.
For the year ended December 31, 2006, the Company paid Grant Thornton LLP aggregate fees of
$25,000 for its consent to the inclusion of the audited financial statements for the years ended
December 31, 2004 in the Companys Form 10-K for the year ended December 31, 2006. There were no
fees paid to Grant Thornton LLP during the year ended December 31, 2007.
Audit Committee Policies and Procedures
The Audit Committee reviews the independence of the Companys auditors on an annual basis and
has determined that Mercadien, P.C. is independent. In addition, the Audit Committee pre-approves
all work and fees, which are performed by the Companys independent auditors.
Report of the Audit Committee of the Board of Directors
The following is the report of the Audit Committee with respect to the Companys audited
financial statements for the fiscal year ended December 31, 2007. The information contained in this
report shall not be deemed to be soliciting material or to be filed with the Securities and
Exchange Commission, nor shall such information be incorporated by reference into any future filing
under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended,
except to the extent that the Company specifically incorporates it by reference in such filing.
REVIEW WITH MANAGEMENT. The Audit Committee has reviewed and discussed the Companys audited
financial statements with management.
REVIEW AND DISCUSSIONS WITH INDEPENDENT ACCOUNTANTS. The Audit Committee has discussed with
Mercadien P.C., the Companys independent accountants for the fiscal year ended December 31, 2007,
the matters required to be discussed by SAS 61 (Communication With Audit Committees), as amended by
SAS 90 (Audit Committee Communications) that includes, among other items, matters related to the
conduct of the audit of the Companys financial statements. The Audit Committee has received from
Mercadien P.C. the required written communication, as required by Independence Standards Board
Standard No. 1 (that relates to the accountants independence from the Company and its related
entities), and has discussed with the independent audit firm, that firms independence.
CONCLUSION. Based on the review and discussions with management and Mercadien P.C. referred to
above, the Audit Committee recommended to the Board of Directors that the Companys audited
financial statements be included in the Companys Annual Report of Form 10-K for the fiscal year
ended December 31, 2007.
AUDIT COMMITTEE:
Daniel Thomas, Chairman
Rabin Dhoble
Srinivasaiyer Jambunathan
9
Accountants Attendance at the Annual Meeting
A representative of Mercadien P.C., the independent accountants of the Company for the year
ending December 31, 2007, is expected to be present at the Annual Meeting. The representative will
be given the opportunity to make a statement at the Annual Meeting and is expected to be available
to respond to appropriate questions.
Voting Requirements to Adopt the Proposal
The affirmative vote of the holders of a majority of the outstanding shares of the Companys
common stock, who are present in person or represented by proxy and entitled to vote at the Annual
Meeting, is required to approve Proposal No. 2. Pursuant to the Sarbanes-Oxley Act of 2002, the
Audit Committee has the sole right to appoint the Companys independent auditor and the appointment
of the independent auditor is not contingent upon obtaining shareholder approval. However, the
Board of Directors is affording the Companys shareholders the opportunity to express their
opinions with regard to the selection of the Companys auditors for fiscal year 2008. This vote is
neither required nor binding, but is being solicited by the Board of Directors in order to
determine if shareholders would approve the Audit Committees selection. If this Proposal does not
receive the affirmative vote of a majority of the votes cast for this Proposal at the Annual
Meeting, in person or by proxy, the Audit Committee will take such vote into consideration in
determining whether to retain its independent auditor. Not withstanding its selection, the Audit
Committee, in its discretion, may appoint another independent registered public accounting firm at
any time during the year if the Audit Committee believes that such a change would be in the best
interest of the Company.
Recommendation
The Board of Directors recommends that the shareholders
RATIFY
the selection of Mercadien P.C.
to be the independent auditors of the Company for the year ending December 31, 2008.
10
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the number of shares of common stock beneficially owned as of
July 11, 2008 by (i) each of the Companys directors, (ii) each of the executive officers named in
the Summary Compensation Table, (iii) all directors and executive officers of the Company as a
group and (iv) each person known by the Company to own beneficially more than 5% of the common
stock. As of July 11, 2008, 2,396,707 shares of the Companys common stock were outstanding.
Unless otherwise indicated in the table below, the address of each stockholder is c/o Helios &
Matheson North America Inc., 77 Brant Avenue, Suite 320, Clark, NJ 07066.
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Shares of
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Common Stock
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Beneficially Owned
(1)
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Number of
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Percent of
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Name
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Shares
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Ownership
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Helios
& Matheson Information Technology Ltd.
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1,244,546
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(2)
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52
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%
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Michael Prude, COO
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23,125
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(3)
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*
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Salvatore M. Quadrino, CEO and CFO
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5,000
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(4)
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*
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Rabin Dhoble, Director
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500
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(5)
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*
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Dan Thomas, Director
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500
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(6)
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*
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Srinivasaiyer Jambunathan, Chairman and Director
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250
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(7)
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*
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Divya Ramachandran, Director
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250
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(8)
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*
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Kishan Ananthram, Director
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250
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(9)
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*
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All Directors and Executive
Officers as a group (7 Persons)
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29,875
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(10)
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52
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%
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(1)
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As used in the tables above, beneficial ownership means the sole or shared power to vote or
direct the voting or to dispose or direct the disposition of any security. A person is deemed
to have beneficial ownership of any security that such person has a right to acquire within
60 days of July 11, 2008. Any security that any person named above has the right to acquire
within 60 days is deemed to be outstanding for purposes of calculating the ownership of such
person but is not deemed to be outstanding for purposes of calculating the ownership
percentage of any other person. Unless otherwise noted, the Company believes each person
listed has the sole power to vote, or direct the voting of, and power to dispose, or direct
the disposition of, all such shares. The table is based upon information supplied by
officers, directors and principal stockholders and Schedules 13D and 13G, if any, filed with
the Securities and Exchange Commission.
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(2)
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Helios & Matheson Information Technology, Ltd.s, principal executive offices are located at
#9 Nungambakkam High Road, Chennai 600034 India.
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(3)
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Consists of 23,125 shares of common stock issuable upon exercise of currently exercisable
options.
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(4)
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Consists of 5,000 shares of common stock issuable upon exercise of currently exercisable
options.
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(5)
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Consists of 500 shares of common stock issuable upon exercise of currently exercisable
options.
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(6)
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Consists of 500 shares of common stock issuable upon exercise of currently exercisable
options.
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(7)
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Consists of 250 shares of common stock issuable upon exercise of currently exercisable
options.
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11
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(8)
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Consists of 250 shares of common stock issuable upon exercise of currently exercisable
options.
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(9)
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Consists of 250 shares of common stock issuable upon exercise of currently exercisable
options.
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(10)
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Includes 29,875 shares of common stock that may be acquired upon the exercise of options that
have vested as of July 1, 2008.
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*
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Indicates less than 1%.
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Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the Companys directors,
executive officers and certain beneficial owners of the Companys equity securities (the Section
16 Reporting Persons) to file with the SEC reports regarding their ownership and changes in
ownership of the Companys equity securities. The Company believes that, during the fiscal year
2007, its Section 16 Reporting Persons complied with all Section 16(a) filing requirements.
Certain Relationships and Related Transactions
Transactions with Related Persons, Promoters and Certain Control Persons
On January 29, 2007, the Company entered into a professional services agreement with IonIdea,
Inc. to provide certain professional services and equipment to the Company and its wholly owned
subsidiary Helios & Matheson Global Services Private Limited. Kishan Grama Ananthram, a member of
the Companys Board of Directors, is the Chief Executive Officer of IonIdea and Mr. Ananthram and
his spouse own all of the outstanding capital stock of IonIdea. The term of the professional
services agreement expired on June 30, 2007. Currently, although no contract exists, the Company
continues to use workstation facilities and communication equipment under the same terms as the
prior agreement at a cost of approximately $540 per person per month. The total amount paid or
expected to be paid to Ion Idea from January 1, 2008 through June 30, 2008 is $49,680.
Approximately, seventeen Company employees currently use Ion Idea workstation facilities.
Helios & Matheson Information Technology Limited (Helios & Matheson Parent), an IT services
organization with corporate headquarters in Chennai, India is the owner of approximately 52% of the
Companys outstanding common stock. Helios & Matheson Parent is the only parent of the Company.
Interests of Certain Persons in Matters to be Acted Upon
As the holder of approximately 52.0% of the Companys outstanding voting securities, Helios &
Matheson Parent will have significant influence on matters requiring stockholder approval,
including the election of directors and approval of certain corporate transactions.
Helios & Matheson Parent does not have any contractual rights to appoint directors or officers
of the Company or to cause the resignation of any existing Company directors or officers.
12
COMPENSATION DISCUSSION AND ANALYSIS
Introduction
The following compensation discussion and analysis summarizes the Companys philosophy and
objectives regarding the compensation of its named executive officers, including how the Company
determines elements and amounts of executive compensation. The following discussion and analysis
should be read in connection with the tabular disclosures regarding the compensation of named
executive officers for the fiscal year ended December 31, 2007.
In this section, we will discuss the details of the Companys compensation program as it
relates to the former Chief Executive Officer and the Chief Operating Officer and Chief Financial
Officer. These three individuals were the only executive officers of the Company during 2007. We
will refer to these three persons throughout this discussion with regards to compensation as named
executive officers. These named executive officers were deemed to be key employees of the Company
and their performance has the potential to substantially impact the short and long term success of
the Company. On March 31, 2008, effective with the expiration of his employment agreement, Shmuel
BenTov retired from his position as Chief Executive Officer of the Company and from all other
positions he held with the Company. On May 9, 2008, the Board of Directors entered into an
agreement with Salvatore M. Quadrino, the Companys Chief Financial Officer, to serve in an
additional capacity as interim Chief Executive Officer while the Board of Directors continues its
on going search for a Chief Executive Officer.
The Compensation Committee (Committee) was established by the Board of Directors to appoint,
promote and administer compensation packages for executive officers of the Company.
Compensation Objectives
The Companys executive officer compensation program is intended to attract and retain highly
qualified professionals who will assist the Company in meeting its financial and strategic goals.
By offering competitive compensation that is equivalent or above industry standards, the Company
seeks to promote a long-term commitment from its executive officers. The primary goals of the
Companys compensation program are to:
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align long-term interests of executives with shareholders;
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reward individual performance while maintaining cost efficiency;
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improve overall business performance; and
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develop mutually beneficial long term relationships between executive officers and the
Company.
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The Company seeks to accomplish these objectives through a combination of base salary,
long-term incentive compensation (stock options), cash bonuses and perquisites. The Compensation
Committee uses its discretion in determining compensation levels as there are no set guidelines for
compensation.
Compensation Process
At the end of each year, the Compensation Committee reviews and assesses the effectiveness of
the past compensation criteria and approves the policies and plans for the next year. The
Compensation Committee takes into consideration the performance of each of the named executive
officers and measures such individual performance against the performance level of the Company.
The named executive officers from time to time may have meetings with the Compensation Committee to
discuss their compensation plan and performance. There may be occasions where the Compensation
Committee requests to meet with the executive officer to gain clarification with regards to the
fulfillment of certain performance criteria. In determining the amount of compensation for the
named executive officers, the Compensation Committee may seek information from Human Resources on
current market evaluations. Subject to approval from the full Board of Directors, the Compensation
Committee makes the final decisions on executive compensation plans.
13
Primary Elements of Compensation
The Companys compensation program includes both short and long-term compensation in the form
of base salary, long-term incentive compensation (stock options) and cash bonus as detailed below:
Base Salary
.
The Compensation Committee utilizes its knowledge and general experience of the
industry to determine the base salaries for its executive officers. Competitive salary levels are
influenced by such factors as professional experience, accomplishments, duties, market comparisons
and individual performance. The Companys named executive officers primary source of compensation
is derived from base salary.
Long-Term Incentive Compensation
.
The Compensation Committee in its discretion may award
stock options to the Companys named executive officers as a part of their initial compensation
plan and upon annual review of their individual performance. The exercise price per share of a
stock option is established by the Committee, in its discretion, but may not be less than the fair
market value of a share of common stock as of the date of grant. The aggregate fair market value
of the shares of common stock with respect to which incentive stock options are exercisable for
the first time by an individual to whom an incentive stock option is granted during any calendar
year may not exceed $100,000. There were no stock options awarded to any named executive officers
during the year ended December 31, 2007.
Cash Bonus
.
The Compensation Committee in its discretion may award cash bonuses to the
Companys executive officers based upon an annual review of the Companys overall performance,
individual performance and available cash resources. There were no cash bonuses awarded to the
Companys named executive officers for the year ended December 31, 2007.
Retirement Plans
.
The Companys compensation program includes a tax deferred savings plan.
The Companys named executive officers can participate in Helios & Matheson North America Inc.s
401(k)Tax Deferred Savings Plan (the 401(k) plan). For 2007, contributions can be made for up to
70% per pay cycle with an annual cap of $15,500. In addition for those named executive officers
over the age of 50, a Catch-Up Deferral contribution can be made up to but not exceeding $5,000.
The Company does not offer a matching contribution for any of its employees including named
executive officers. The named executive officers participate in the 401(k) plan on the same terms
as all other employees.
Perquisites and Other Benefits
.
In comparison to base salary, perquisites and other benefits
represent only a small portion of the named executive officers compensation. The primary
perquisites are use of a company car or an automobile allowance, paid medical benefits and life
insurance. The Compensation Committee has approved these perquisites and other benefits as
reasonable components of the Companys executive officer compensation.
Employment Agreements
The Company entered into an employment agreement with Shmuel BenTov, its Chairman, Director,
Chief Executive Officer and President, which terminated on March 31, 2008. The contract called for
a salary of $360,000 per year, and contained non-competition, non-disclosure and non-solicitation
covenants. The contract also contained an annual bonus, subject to the approval of the
non-employee members of the Companys Compensation Committee and further subject to the Company
meeting certain financial performance criteria, in an amount to be determined by the non-employee
members of the Compensation Committee.
Effective with the expiration of his employment agreement on March 31, 2008, Mr. BenTov
retired from the Company on that date and no longer serves as the Companys Chairman, Director,
Chief Executive Officer and President or in any other capacity with the Company.
In 1998, Mr. Prude entered into an employment agreement (the 1998 Prude Employment
Agreement) and in 2005 he entered into a severance agreement (the Prude Severance Agreement)
with the Company. The 1998 Prude Employment agreement was terminable at the will of either Mr. Prude or the Company
and contained non-competition and non-solicitation covenants, each of which were enforceable for
one year after the date on which Mr. Prudes employment with the Company terminated for any reason.
The 1998 Prude Employment Agreement also stated that Mr. Prude could be eligible to receive a
performance-based bonus as well as stock option awards. The Prude Severance Agreement provided
that, in the event the Company terminated Mr. Prudes employment without cause (as defined therein)
within the first 18 months of a change in control (as defined therein), then Mr. Prude could be
entitled to a severance payment in an amount equal to 12 months of his then-current base salary.
14
On June 5, 2006, the Board of Directors appointed Mr. Michael Prude as the Chief Operating
Officer of the Company at an annual base salary of $225,000. On July 1, 2007, the Company entered
into a new employment agreement with its Chief Operating Officer, Michael Prude (the 2007 Prude
Employment Agreement). The 2007 Prude Employment Agreement was effective July 1, 2007, has a term
of two (2) years, and shall automatically renew for subsequent one year terms, unless and until
terminated by either party upon 60 days notice. The 2007 Prude Employment Agreement provides Mr.
Prude with an annual base salary of $237,000, a discretionary annual bonus, participation in the
Companys stock option plan and a $1,000 per month allowance for car related expenses. The 2007
Prude Employment Agreement provides that during the initial term of the Agreement in the event of
termination by the Company without cause, death or disability or by Mr. Prude for Sufficient
Reason, as defined in the Agreement, Mr. Prude will receive a severance allowance in an amount
equal to nine (9) months of Mr. Prudes then current base salary. If the contract is renewed after
the initial term has expired, new severance terms will need to be re-negotiated between Mr. Prude
and the Company. The agreement includes a one-year non-compete covenant commencing on termination
of employment.
On April 26, 2006, the Company entered into an employment agreement with its Chief Financial
Officer, Salvatore M. Quadrino (the 2006 Quadrino Employment Agreement). The 2006 Quadrino
Employment Agreement was effective as of May 1, 2006, has a term of two (2) years and shall
automatically renew for subsequent one-year terms, unless and until terminated by either party upon
30 days notice. The 2006 Quadrino Employment Agreement calls for a salary of $180,000 per year, a
discretionary annual bonus, participation in the Companys stock option plan, with an initial grant
of 20,000 options to purchase shares of the Companys common stock, and use of a Company car. The
2006 Quadrino Employment Agreement provides that during the initial term of the Agreement in the
event of termination by the Company without cause, death or disability or by Mr. Quadrino for
Sufficient Reason, as defined in the Agreement, Mr. Quadrino will receive a severance allowance
in an amount equal to twelve (12) months of Mr. Quadrinos then current base salary and all granted
options become vested and exercisable. After the initial term of the 2006 Quadrino Agreement in
the event of termination by the Company without cause, death or disability or by Mr. Quadrino for
Sufficient Reason, as defined in the 2006 Quadrino Agreement, Mr. Quadrino will receive a
severance allowance in an amount equal to six (6) months of Mr. Quadrinos then current base
salary.
On May 9, 2008, the Company entered into an amended employment agreement with Mr. Quadrino
(the Amended Quadrino Agreement) whereby Mr. Quadrino continues to be employed as the Chief
Financial Officer of the Company. In addition, the Company offered and Mr. Quadrino has accepted
the position of interim Chief Executive Officer of the Company, to serve in this additional
capacity, while the Board of Directors continues its on going search for a Chief Executive Officer.
Mr. Quadrino will not serve as the Secretary of the Company for so long as he serves the Company
in the capacity of interim Chief Executive Officer.
The Amended Quadrino Agreement is dated as of May 9, 2008 and is effective as of May 1, 2008,
expires on June 30, 2009 and shall automatically renew for subsequent one-year terms, unless and
until terminated by either party with at least 30 days notice. The Amended Quadrino Agreement
provides Mr. Quadrino with an annual base salary of $200,000 for his role as Chief Financial
Officer and an additional $60,000 per year for his role as interim Chief Executive Officer. This
additional compensation will be withdrawn when the Company hires a Chief Executive Officer and Mr.
Quadrino reverts back to his original role as Chief Financial Officer. In addition to his annual
base salary, Mr. Quadrino is eligible to receive a performance based bonus, to continue to
participate in the Companys stock option and award plan and to continue to use a Company car.
The Amended Quadrino Agreement provides that in the event of termination by the Company
without Cause (as defined in the Amended Quadrino Agreement), death or disability or by Mr.
Quadrino for Sufficient Reason, (as defined in the Amended Quadrino Agreement), Mr. Quadrino will
receive a severance allowance in an
amount equal to six months of Mr. Quadrinos then current base salary. In the event the
Company terminates Mr. Quadrino without cause within six months after the appointment of a new
Chief Executive Officer, Mr. Quadrino will receive an additional severance allowance in an amount
equal to three months of Mr. Quadrinos then current base salary. The Quadrino Agreement includes
a one-year non-compete covenant commencing on termination of employment.
15
Impact of Tax and Accounting
As a general matter, the Compensation Committee always considers the various tax and
accounting implications of compensation vehicles employed by the Company.
Section 162 (m) of the code generally prohibits any publicly held corporation from taking a
federal income deduction for compensation paid in excess of $1 million in any taxable year to the
Chief Executive Officer and the next three highest compensated officers (other than the Chief
Financial Officer). Exceptions are available for qualified performance-based compensation, among
other things.
When determining amounts of long-term incentive grants to executives and employees, the
Compensation Committee examines the accounting cost associated with the grants. Under Statement of
Financial Accounting Standards 123R (SFAS 123R), grants of options, restricted stock, restricted
stock units and other share-based payments result in an accounting charge for the Company. The
accounting charge is equal to the fair value of the instruments being issued. For restricted
stock, the cost is equal to the fair value of the stock on the date of grant multiplied by the
number of shares granted. For options, the cost is equal to the Black-Scholes value on the date of
grant multiplied by the number of shares granted. This expense is amortized over the requisite
service period, or vesting period of the instruments. Option grants and awards of performance
based restricted stock are intended to be performance based under Section 162(m) of the code.
DIRECTOR AND EXECUTIVE OFFICER COMPENSATION
Executive Officers
(1)
The Companys named executive officers, their ages and positions as of July 11, 2008 are:
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Name
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Age
|
|
Title
|
Salvatore M. Quadrino
|
|
|
61
|
|
|
Interim Chief Executive Officer and Chief Financial Officer
|
Michael Prude
|
|
|
45
|
|
|
Chief Operating Officer
|
|
|
|
(1)
|
|
Effective with the expiration of his employment agreement on March 31, 2008,
Mr. BenTov, the former Chairman, Director, Chief Executive Officer and President of the Company,
retired from all his positions with the Company and no longer serves in any capacity with the
Company. Mr. Quadrino, the Companys Chief Financial Officer, is currently serving as interim
Chief Executive Officer while the Board of Directors continues its ongoing search for a Chief
Executive Officer.
|
Salvatore M. Quadrino
has been the interim Chief Executive Officer of the Company since May 9,
2008, the Chief Financial Officer of the Company since May 1, 2006. Mr. Quadrino was Secretary of
the Company from April 26, 2006, but he will not serve the Company in such capacity for so long as
he serves the Company in the capacity of interim Chief Executive Officer. From January 2004
through May 1, 2006, Mr. Quadrino served as an independent consultant providing finance and
accounting solutions to clients as either interim chief financial officer
or project manager. From 2002 to 2004, Mr. Quadrino served as Chief Financial Officer for Con
Edison Communications, Inc. From 2000 to 2001 Mr. Quadrino served as the Chief Financial Officer
for Submit Order Inc. Prior to 2000, Mr. Quadrino served as Chief Financial Officer for Medical
Logistics Inc., COVISTA Communications Inc. and Erols Internet, Inc. From 1990 to 1996, Mr.
Quadrino was employed by Suburban Propane Partners LP, initially as Chief Financial Officer, then
as President and Chief Executive Officer. In the role of President and Chief Executive Officer, Mr.
Quadrino led Suburban Propane in its successful initial public offering and listing on the New York
Stock Exchange. Mr. Quadrino is a Certified Public Accountant.
Michael Prude
has been the Chief Operating Officer of the Company since June 5, 2006. Mr.
Prude has been a full-time employee of Helios & Matheson since 1993 and prior to his promotion to
Chief Operating Officer, he held various positions within the Company, the last of which was as
Chief Technology Officer, pursuant to which he had responsibilities for sales, recruiting and
project delivery. Mr. Prude has over 20 years of experience
16
providing business technology
solutions to Fortune 1,000 clients. He began his career managing development projects for Long
Island Trust Co. and has delivered technology solutions for numerous financial services
organizations such as Citibank and Barclays. Prior to joining Helios & Matheson, Mr. Prude formed
his own consulting company which provided services to organizations such as Chase Manhattan Bank,
First Boston, Manufacturers Hanover Trust and CCH Legal.
Summary Compensation Table for 2007 and 2006
The following table sets forth certain information regarding compensation for services
rendered in all capacities during the year ended December 31, 2007 and 2006 by our named executive
officers. Compensation for each of 2007 and 2006 includes not only compensation earned in 2007 and
2006, but in the case of stock option awards and option awards, compensation recognized for
financial statement reporting purposes with respect to such fiscal years.
Summary Compensation Table for 2007 and 2006
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
|
Incentive Plan
|
|
|
All Other
|
|
|
|
|
Name and Principal Position
|
|
|
|
|
|
Salary
|
|
|
Options
(a)
|
|
|
Compensation
|
|
|
Compensation
(b)
|
|
|
Total
|
|
Shmuel BenTov
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Former Chairman, Director, Chief
Executive Officer and President
|
|
|
2007
|
|
|
$
|
360,000
|
|
|
$
|
7,555
|
|
|
$
|
|
|
|
$
|
4,015
|
|
|
$
|
371,570
|
|
|
|
|
2006
|
|
|
|
360,000
|
|
|
|
7,555
|
|
|
|
|
|
|
|
21,004
|
|
|
|
388,559
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael Prude
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chief Operating Officer
|
|
|
2007
|
|
|
|
231,000
|
(2)
|
|
|
11,848
|
|
|
|
19,807
|
(4)
|
|
|
6,000
|
|
|
|
268,655
|
|
|
|
|
2006
|
|
|
|
225,000
|
|
|
|
15,213
|
|
|
|
|
|
|
|
|
|
|
|
240,213
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salvatore M. Quadrino
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chief Financial Officer & Secretary
|
|
|
2007
|
|
|
|
180,000
|
|
|
|
19,399
|
|
|
|
|
|
|
|
1,600
|
|
|
|
200,999
|
|
|
|
|
2006
|
|
|
|
156,000
|
(3)
|
|
|
13,022
|
|
|
|
|
|
|
|
800
|
|
|
|
169,822
|
|
|
|
|
|
(a)
|
|
This column represents the dollar amount recognized for financial statement
reporting purposes under SFAS 123R with respect to fiscal 2007 and 2006 stock option grants as well
for stock options granted in prior fiscal years, if applicable. The values in this column
represent the accounting expense values incurred during the year and may not be equivalent to the
actual value recognized by the named executive officer. The assumptions used in calculating these
amounts are set forth in Note 1 to the Companys Financial Statements for the fiscal year ended
December 31, 2007 and 2006, respectively, which is located on pages F-9 to F-10 of the Companys
2007 Annual Report on Form 10-K and pages F-11 to F-12 of the Companys 2006 Annual Report on Form
10-K.
|
|
(b)
|
|
Includes payments with respect to life insurance, health insurance and car
allowance.
|
|
(1)
|
|
Effective with the expiration of his employment agreement on March 31, 2008, Mr.
BenTov, the former Chairman, Director, Chief Executive Officer and President of the Company,
retired from all his positions with the Company and no longer serves in any capacity with the
Company. The Board of Directors is currently searching for a Chief Executive Officer.
|
|
(2)
|
|
Includes prorated portion ($112,500) from January 1, 2007 through June 30, 2007 of
an annual salary of $225,000 plus a prorated portion ($118,500) from July 1, 2007 through December
31, 2007 of an annual salary of $237,000.
|
|
(3)
|
|
Includes prorated portion ($120,000) from May 1, 2006 through December 31, 2006 of
an annual salary of $180,000 plus consulting fees of $36,000 for work performed during March and
April of 2006.
|
|
(4)
|
|
Includes amounts earned for Sales Commission.
|
17
Aggregated Option Exercises in the Year Ended December 31, 2007 and Fiscal Year End Option Values
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
Underlying Unexercised
|
|
Value of Unexercised In-
|
|
|
Shares
|
|
|
|
|
|
Options Held at
|
|
the-Money Options at
|
|
|
Acquired on
|
|
Value
|
|
December 31, 2007
|
|
December 31, 2007
|
Name
|
|
Exercise
|
|
Realized
|
|
Exercisable/Unexercisable
|
|
Exercisable/Unexercisable
|
|
Shmuel BenTov
(1)
|
|
|
|
|
|
|
|
|
|
|
13,125/1,875
|
|
|
|
$0/$0
|
|
Michael Prude
|
|
|
|
|
|
|
|
|
|
|
23,125/3,750
|
|
|
|
$6,212.50/$0
|
|
Salvatore M. Quadrino
|
|
|
|
|
|
|
|
|
|
|
5,000/15,000
|
|
|
|
$0/$0
|
|
|
|
|
|
(1)
|
|
Effective with the expiration of his employment agreement on March 31, 2008, Mr. BenTov, former Chairman, Director, Chief
Executive Officer and President of the Company, retired from all his positions with the Company and no longer serves in any capacity with the
Company.
|
Outstanding Equity Awards at Fiscal Year End for 2007
The following table provides certain information about all equity compensation awards held by
the named executive officers as of December 31, 2007.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities
|
|
|
|
|
|
Market Value
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underlying
|
|
Number of
|
|
of Shares or
|
|
|
Unexercised
|
|
|
|
|
|
Option
|
|
Option
|
|
Unexercised
|
|
Shares or Units
|
|
Units of Stock
|
|
|
Options
|
|
|
|
|
|
Exercise
|
|
Expiration
|
|
Options Not
|
|
of Stock that
|
|
that have not
|
Name
|
|
Exercisable
|
|
Grant Date
|
|
Price
|
|
Date
|
|
Vested (a)
|
|
have not Vested
|
|
Vested
|
|
Shmuel BenTov
(1)
|
|
|
7,500
|
(2)
|
|
|
12/1/1999
|
|
|
$
|
15.50
|
|
|
|
12/1/2009
|
|
|
|
|
|
|
|
|
|
|
$
|
|
|
|
|
|
5,625
|
(2)
|
|
|
12/7/2004
|
|
|
|
5.90
|
|
|
|
12/7/2009
|
|
|
|
1,875
|
|
|
|
|
|
|
|
|
|
|
Michael Prude
|
|
|
5,625
|
|
|
|
3/31/2004
|
|
|
$
|
3.36
|
|
|
|
3/31/2009
|
|
|
|
1,875
|
|
|
|
|
|
|
|
|
|
|
|
|
5,625
|
|
|
|
12/7/2004
|
|
|
|
5.90
|
|
|
|
12/7/2009
|
|
|
|
1,875
|
|
|
|
|
|
|
|
|
|
|
|
|
1,875
|
|
|
|
12/15/2001
|
|
|
|
1.20
|
|
|
|
12/15/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
|
10/9/2002
|
|
|
|
1.41
|
|
|
|
10/9/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salvatore M. Quadrino
|
|
|
5,000
|
|
|
|
5/1/2006
|
|
|
$
|
5.82
|
|
|
|
5/1/2016
|
|
|
|
15,000
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
(a)
Option Awards vest as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vesting Date
|
|
|
|
Mar. 31,
|
|
|
May 1,
|
|
|
Dec. 7,
|
|
|
May 1,
|
|
|
May 1,
|
|
Name
|
|
2008
|
|
|
2008
|
|
|
2008
|
|
|
2009
|
|
|
2010
|
|
Shmuel BenTov
|
|
|
|
|
|
|
|
|
|
|
1,875
|
|
|
|
|
|
|
|
|
|
Michael Prude
|
|
|
1,875
|
|
|
|
|
|
|
|
1,875
|
|
|
|
|
|
|
|
|
|
Salvatore M. Quadrino
|
|
|
|
|
|
|
5,000
|
|
|
|
|
|
|
|
5,000
|
|
|
|
5,000
|
|
(1)
|
|
Effective with the expiration of his employment agreement on March 31, 2008,
Mr. BenTov, the former Chairman, Director, Chief Executive Officer and President of the
Company, retired from all his positions with the Company and no longer serves in any
capacity with the Company.
|
|
(2)
|
|
Mr. BenTov has 90 days from his date of retirement on March 31, 2008 to
exercise his 13,125 outstanding options.
|
18
Potential Post-Employment Payments and Benefits
The following table sets forth the potential payments if termination of employment or a change
in control for each named executive officer had occurred on December 31, 2007. The values in this
table reflect estimated payments associated with various termination scenarios.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
Termination with
|
|
|
|
|
|
|
|
Benefits and Payments
|
|
without cause or
|
|
|
cause or for
|
|
|
Change in
|
|
|
Death or
|
|
upon Termination
|
|
for good reason
(a)
|
|
|
good reason
|
|
|
control
|
|
|
Disability
|
|
Shmuel BenTov
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance payment
|
|
$
|
720,000
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
360,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
720,000
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
360,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael Prude
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance payment
|
|
$
|
177,750
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
177,750
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salvatore M. Quadrino
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Severance payment
|
|
$
|
180,000
|
|
|
$
|
|
|
|
$
|
180,000
|
|
|
$
|
|
|
Stock options
(2)
|
|
|
116,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
296,400
|
|
|
$
|
|
|
|
$
|
180,000
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
These represent rights that Mr. BenTov, Mr. Prude and Mr. Quadrino would
have under employment agreements discussed in more detail under Employment
Agreements. In addition, upon termination without cause or good reason, Mr. BenTov
would be entitled to continue to receive certain deferred and earn-out payments under
the Stock Purchase Agreement signed March 30, 2006 which would otherwise be forfeited
as described in our Statement of Form 8-K filed with the SEC on April 3, 2006.
|
|
(1)
|
|
Effective with the expiration of his employment agreement on March 31, 2008,
Mr. BenTov, the former Chairman, Director, Chief Executive Officer and President of the
Company, retired from all his positions with the Company and no longer serves in any
capacity with the Company.
|
|
(2)
|
|
In accordance with his employment agreement, 20,000 stock options become
immediately vested and exercisable at an exercise price of $5.82.
|
The 2005 BenTov Employment Agreement provides that in the event of termination (i) by the
Company without cause or by Mr. BenTov in the event of a material breach of the employment
agreement by the Company or a substantial dimunition of his duties, Mr. BenTov would receive a lump
sum severance allowance in an amount equal to two times his then annual base salary; (ii) as a
result of the incapacity or disability of Mr. BenTov, Mr. BenTov would be entitled to receive his
then annual base salary during the one year that followed the termination notice; or (iii) as a
result of Mr. BenTovs death, Mr. BenTovs estate would be entitled to receive a lump sum payment
equal to his then annual base salary.
Effective with the expiration of his employment agreement on March 31, 2008, Mr. BenTov
retired from the Company on that date and will no longer serve as the Companys Chairman, Director,
Chief Executive Officer and President or in any other capacity with the Company.
The 2007 Prude Employment Agreement provides that during the initial term of the Agreement in
the event of termination by the Company without cause, death or disability or by Mr. Prude for
Sufficient Reason, as defined in the Agreement, Mr. Prude will receive a severance allowance in
an amount equal to nine (9) months of
his then-current base salary. If the contract is renewed after the initial term has expired,
new severance terms will need to be re-negotiated between Mr. Prude and the Company.
19
The 2006 Quadrino Employment Agreement provides that during the initial term of the Agreement
in the event of termination by the Company without cause, death or disability or by Mr. Quadrino
for Sufficient Reason, as defined in the Agreement, Mr. Quadrino will receive a severance
allowance in an amount equal to twelve (12) months of Mr. Quadrinos then-current base salary and
all granted options will become vested and exercisable. After the initial term of the 2006
Quadrino Agreement in the event of termination by the Company without cause, death or disability or
by Mr. Quadrino for Sufficient Reason, as defined in the 2006 Quadrino Agreement, Mr. Quadrino
will receive a severance allowance in an amount equal to six (6) months of Mr. Quadrinos then
current base salary.
Equity Compensation Plan Information
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of securities
|
|
|
|
|
|
|
|
|
|
|
remaining available for
|
|
|
|
|
|
|
|
|
|
|
future issuance under
|
|
|
|
|
|
|
Weighted-average
|
|
equity compensation plans
|
|
|
Number of securities to
|
|
exercise price of
|
|
(Excluding securities to be
|
|
|
be issued upon exercise
|
|
outstanding options,
|
|
issued upon exercise of
|
|
|
of outstanding options,
|
|
warrants and rights
|
|
outstanding options,
|
|
|
warrants and rights as
|
|
as of December 31,
|
|
warrants and rights as of
|
Plan Category
|
|
of December 31, 2007
|
|
2007
|
|
December 31, 2007)
|
Equity Compensation plans
approved by security
holders
|
|
|
|
129,000
|
|
|
$
|
4.96
|
|
|
|
317,094
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Compensation plans not
approved by security
holders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
129,000
|
|
|
$
|
4.96
|
|
|
|
317,094
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20
Director Compensation
The following table sets forth certain information regarding compensation for services
rendered by the Companys non-employee directors during the year ended December 31, 2007. During
2007, there were no stock awards granted to Directors and no other compensation was earned
(including in the form of nonqualified deferred compensation earnings).
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|
|
|
|
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|
Fees Earned or
|
Name (a)
|
|
Paid in Cash (b)
|
Rob Dhoble
|
|
$
|
24,000
|
|
Dan Thomas
|
|
|
24,000
|
|
Srinivasaiyer Jambunathan
|
|
|
24,000
|
|
Divya Ramachandran
|
|
|
24,000
|
|
Kishan Ananthram
|
|
|
24,000
|
|
Shankar Ram
(1)
|
|
|
18,000
|
|
Steven Mukamal
(2)
|
|
|
10,000
|
|
William Miller
(2)
|
|
|
10,000
|
|
|
|
|
(a)
|
|
Compensation for Shmuel BenTov, the Companys former Chairman,
Director, Chief Executive Officer and President, is reported in the Summary
Compensation Table included in this Proxy Statement.
|
|
(b)
|
|
On March 23, 2007, the Board of Directors approved an increase in
non-employee directors compensation from $3,000 per quarter to $6,000 per quarter,
effective as of the first quarter of 2007. Each director is reimbursed for travel and
other reasonable expenses incurred as related to the business of the Company.
|
|
(1)
|
|
Mr. Ram resigned from the Board of Directors effective September 30, 2007.
|
|
(2)
|
|
Mr. Mukamal and Mr. Miller did not stand for re-election to the Board of
Directors at the Companys 2007 Annual Shareholder meeting held on May 23, 2007.
|
On March 23, 2007, the Board of Directors adopted and approved amendments to the Companys
Amended and Restated 1997 Stock Option and Award Plan (the Plan) to eliminate Section 9.1.1 of
the Plan, which granted to each new non-employee director who first becomes a non-employee director
after the effective date of the Plan, an option to purchase 250 shares of the Companys common
stock (the Shares), and Section 9.1.2 of the Plan, which granted each non-employee director who
was re-elected as a non-employee director of the Company, an option to purchase 250 Shares upon
re-election. The following table shows the number of stock options and stock awards held by each
non-employee director as of December 31, 2007. The options represented in the table below were
granted and had vested before the March 23, 2007 amendments to the Companys stock option plan.
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|
|
|
|
|
|
|
|
|
|
|
Outstanding Stock
|
|
Outstanding Stock
|
|
|
Name
|
|
Options
|
|
Awards
|
|
Grant Value
(c)
|
Rob Dhoble
|
|
|
500
|
|
|
|
|
|
|
$
|
1,150
|
|
Dan Thomas
|
|
|
500
|
|
|
|
|
|
|
|
734
|
|
Srinivasaiyer Jambunathan
|
|
|
250
|
|
|
|
|
|
|
|
405
|
|
Divya Ramachandran
|
|
|
250
|
|
|
|
|
|
|
|
405
|
|
Kishan Ananthram
|
|
|
250
|
|
|
|
|
|
|
|
405
|
|
|
|
|
(c)
|
|
Represents the SFAS123R expense.
|
21
SHAREHOLDER PROPOSALS
Pursuant to Rule 14a-8 under the Exchange Act, proposals by Shareholders that are intended for
inclusion in our proxy statement and proxy card and to be presented at our next annual meeting must
be received by us no later than the close of business on April 22, 2009 in order to be considered
for inclusion in our proxy materials relating to the next annual meeting. Such proposals shall be
addressed to our secretary at our corporate headquarters
and may be included in next years annual meeting proxy materials if they comply with rules
and regulations of the Securities and Exchange Commission (SEC) governing stockholder proposals.
For any proposal that is not submitted for inclusion in our proxy statement, but is instead
sought to be presented directly at the 2009 annual meeting, the Companys By-Laws require that such
proposal be mailed and received by, or delivered to, the Secretary of the Company at 77 Brant
Avenue, Suite 320, Clark, New Jersey 07066, Attention: Ms. Roxanne Weisbrot, Interim Secretary not
later than the close of business on the 90
th
day prior to the anniversary date of the
2008 annual meeting which is expected to be May 22, 2009.
OTHER BUSINESS
The Board of Directors of the Company is not aware of any other matters to come before the
Annual Meeting. If any other matter should come before the meeting, the persons named in the
enclosed proxy intend to vote the proxy according to their best judgment.
MULTIPLE SHAREHOLDERS SHARING ONE ADDRESS
In accordance with Rule 14a-3 (e)(1) under the Exchange Act, one proxy statement will be
delivered to two or more shareholders who share an address, unless we have received contrary
instructions from one or more of the shareholders. We will deliver promptly upon written or oral
request a separate copy of the proxy statement to a shareholder at a shared address to which a
single copy of the proxy statement was delivered. Requests for additional copies of the proxy
statement, and requests that in the future separate proxy statements be sent to shareholders who
share an address, should be directed to Helios & Matheson North America Inc., Attn: Ms. Roxanne
Weisbrot, Interim Secretary, 77 Brant Avenue, Suite 320, Clark, New Jersey 07066, (732) 499-8228.
In addition, shareholders who share a single address but receive multiple copies of the proxy
statement may request that in the future they receive a single copy by contacting us at the address
and phone number set forth in the prior sentence.
22
A COPY OF THE 2007 ANNUAL REPORT TO SHAREHOLDERS ACCOMPANIES THIS PROXY STATEMENT. COPIES OF
THE COMPANYS FORM 10-K AND 10-K/A REPORTS FOR FISCAL YEAR 2007, AS AMENDED, INCLUDING EXHIBITS,
CONTAINING INFORMATION ON OPERATIONS AND THE COMPANYS FINANCIAL STATEMENTS AND THE FINANCIAL
STATEMENT SCHEDULES, FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, ARE AVAILABLE UPON WRITTEN
REQUEST WITHOUT CHARGE FOR REQUESTORS WHO INCLUDE IN THEIR WRITTEN REQUEST A GOOD FAITH
REPRESENTATION THAT, AS OF JULY 1, 2008, SUCH REQUESTOR WAS A BENEFICIAL OWNER OF THE COMPANYS
COMMON STOCK. PLEASE WRITE TO:
HELIOS
& MATHESON NORTH AMERICA INC.
77
BRANT AVENUE
SUITE 320
CLARK, NJ 07066
ATTENTION: ROXANNE WEISBROT, INTERIM SECRETARY
COPIES MAY ALSO BE OBTAINED WITHOUT CHARGE THROUGH THE SECS WORLD WIDE WEB SITE AT
http://www.sec.gov
23
PROXY
HELIOS & MATHESON NORTH AMERICA INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints Shri
Jambunathan, Chairman of, and Salvatore M. Quadrino, Interim Chief
Executive Officer of, Helios & Matheson North America Inc., a New York corporation (the Company)
and each of them as proxy for the undersigned, with full power of substitution, for and in the name of the undersigned to act for the undersigned and to vote, as designated below,
all of the shares of common stock, $0.01 par value per share, of the Company that the undersigned is entitled to vote at the 2008 Annual Meeting of Shareholders of the Company,
to be held on August 20, 2008, at 10:00 a.m. (local time), at the
offices of the Companys counsel, Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York 10017 and
at any adjournments or postponements thereof, in accordance with the directions as follows with respect to the following matters (and with discretionary authority as to any and all other):
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THIS PROXY, WHEN
PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE
UNDERSIGNED SHAREHOLDER, IF YOU SIGN AND
RETURN THIS PROXY WITHOUT GIVING ANY INSTRUCTION, THIS PROXY WILL BE VOTED FOR THE ELECTION OF ALL OF THE
NOMINEES NAMED BELOW AND FOR ALL OTHER PROPOSALS OR OTHERWISE IN ACCORDANCE WITH THE RECOMMENDATION OF THE BOARD
OF DIRECTORS.
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(Continued, and to be marked, dated and signed,
on the other side)
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Address
Change/Comments
(Mark the
corresponding box on the reverse side)
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5
FOLD AND DETACH HERE
5
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
|
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|
Mark Here
for Address
Change or
Comments
|
o
|
PLEASE SEE REVERSE SIDE
|
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|
|
1. Election of Directors
|
|
FOR ALL NOMINEES
|
|
WITHHOLD
|
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Nominees:
|
|
listed to the left
|
|
AUTHORITY
|
|
|
|
(except as marked
to the contrary)
|
|
to vote for all nominees
listed to the left
|
|
01 Shri S. Jambunathan
02 Daniel L. Thomas
03 Rabin K. Dhoble
04 Kishan Grama Ananthram
05 Divya Ramachandran
|
|
o
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|
o
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Instruction: to withhold authority to vote for any nominee(s),
write such nominee(s) name(s) below.
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FOR
|
|
AGAINST
|
|
ABSTAIN
|
|
2. To ratify the appointment
of Mercadien P.C. as independent public accountants of the Company for the fiscal year ending December 31,
2008.
|
|
o
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o
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o
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3. In his or her
discretion, the proxy is authorized to vote upon such other matters as may properly come before the
meeting.
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Signature
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Signature
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Date
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NOTE: Please sign
exactly as the name appears on this card. When shares are held by two or more persons, both should sign. When
signing as attorney, executor, administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by president or authorized officer. If a partnership, please
sign in partnership name by authorized person.
|
5
FOLD AND DETACH HERE
5
Choose
MLink
SM
for fast, easy and secure 24/7 online access to your future proxy materials,
investment plan statements, tax documents and more. Simply log on to
Investor ServiceDirect
®
at
www.bnymellon.com/shareowner/isd
where step-by-step instructions will prompt you through enrollment.
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