þ
|
No
fee required.
|
|
o
|
Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
|
(1)
|
Title
of each class of securities to which transaction applies:
N/A
|
||
(2)
|
Aggregate
number of securities to which transaction applies: N/A
|
||
(3)
|
Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
N/A
|
||
(4)
|
Proposed
maximum aggregate value of transaction: N/A
|
||
(5)
|
Total
fee paid: N/A
|
o
|
Fee
paid previously with preliminary materials.
|
|
o
|
Check
box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its
filing.
|
(1)
|
Amount
Previously Paid: N/A
|
||
(2)
|
Form,
Schedule or Registration Statement No.: N/A
|
||
(3)
|
Filing
Party: N/A
|
||
(4)
|
Date
Filed: N/A
|
Page
|
|
|
|
INFORMATION
ABOUT THE ANNUAL MEETING AND
VOTING
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL HOLDERS AND MANAGEMENT
|
1
4
|
EXECUTIVE
OFFICERS OF THE REGISTRANT
|
5
|
PROPOSAL
ONE – ELECTION OF DIRECTORS
|
5
|
NOMINEE
FOR ELECTION AS CLASS II DIRECTOR UNTIL THE 2013 ANNUAL
MEETING
|
5
|
DIRECTORS
CONTINUING IN OFFICE AS CLASS III DIRECTORS UNTIL THE 2011 ANNUAL
MEETING
|
6
|
DIRECTORS
CONTINUING IN OFFICE AS CLASS I DIRECTORS UNTIL THE 2012 ANNUAL
MEETING
|
6
|
LEADERSHIP
STRUCTURE OF THE BOARD OF DIRECTORS
|
6
|
COMMITTEES
OF THE BOARD OF DIRECTORS
Audit
Committee
Governance
and Nominating
Committee
Compensation
and Plan Administration
Committee
|
6
7
7
8
|
DIRECTOR
COMPENSATION
|
9
|
EXECUTIVE
COMPENSATION
Summary
Compensation
Table
Option
Exercises and Stock
Vested
Non-Qualified
Deferred
Compensation
Employment
and Severance
Agreements
Outstanding
Equity Awards at Fiscal
Year-End
|
10
10
11
11
11
12
|
AUDIT
COMMITTEE
REPORT
|
13
|
CODE
OF
ETHICS
|
13
|
CERTAIN
RELATIONSHIPS AND RELATED
TRANSACTIONS
|
13
|
SECTION
16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
|
13
|
PROPOSAL
TWO: INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
|
14
|
PROPOSAL
THREE: STOCKHOLDER PROPOSAL TO HIRE INDEPENDENT CONSULTANT TO REPRESENT
THE INTERESTS OF
CERTAIN
THIRD PARTIES
|
14
|
PROPOSALS
OF
STOCKHOLDERS
|
15
|
OTHER
MATTERS
|
16
|
INCORPORATION
BY
REFERENCE
|
16
|
HOUSEHOLDING
|
16
|
•
|
To
elect one Class II Director,
|
|
•
|
To
ratify the selection of Ernst & Young LLP as the independent
registered public accounting firm to audit the financial statements of the
Company,
|
|
•
|
To
consider a stockholder proposal, if properly presented at the Annual
Meeting, which our Board of Directors unanimously opposes, to require the
Company to hire an independent contractor to represent the interests of
certain third parties.
|
|
•
|
To
transact any other business that may properly come before the 2010 Annual
Meeting and any adjournment(s) or postponement(s)
thereof.
|
(1)
|
elect
one Class II Director for a three-year term;
|
|
(2)
|
ratify
the selection of Ernst & Young LLP as the independent registered
public accounting firm to audit the financial statements of the Company;
and
|
|
(3)
|
consider
a stockholder proposal, if properly presented at the Annual Meeting, which
our Board of Directors unanimously opposes, to require the Company to hire
an independent contractor to represent the interests of certain third
parties.
|
•
|
Delivering
a written notice of revocation to EDCI’s Corporate Secretary at the
address on the Notice of Annual
Meeting;
|
•
|
Executing
and delivering to the Corporate Secretary a later-dated proxy;
or
|
•
|
Attending
the meeting and voting in
person.
|
Name
of Beneficial Owner
|
Number
of Shares Beneficially Owned
|
Percent
of Class
|
|||
Clarke
H. Bailey
|
96,311
|
(1)
|
1.43
|
||
Matthew
K. Behrent
|
2,000
|
*
|
|||
Roger
J. Morgan
|
-
|
*
|
|||
Ramon
D. Ardizzone
|
26,074
|
(2)
|
*
|
||
Cliff
O. Bickell
|
25,735
|
(3)
|
*
|
||
Peter
W. Gilson
|
27,997
|
(4)
|
*
|
||
Horace
H. Sibley
|
26,477
|
(5)
|
*
|
||
David
Sandberg (8)
|
282,986
|
4.20
|
|||
All
directors and executive officers as a
group (10 persons)
|
487,580
|
(6)
|
7.24
|
||
Robert
L. Chapman, Jr. et al (9)
|
587,936
|
(7)
|
8.74
|
||
Dimensional
Fund Advisors, Inc. (10)
|
336,767
|
5.00
|
|||
*
|
Less
than 1%.
|
(1)
|
Includes
70 shares held by Mr. Bailey’s son and 60,053 shares that
may be acquired at or within 60 days of April 20, 2010, pursuant to
the exercise of options.
|
(2)
|
Includes
6,000 shares that may be acquired at or within 60 days of April
20, 2010 pursuant to the exercise of
options.
|
(3)
|
Includes
6,000 shares that may be acquired at or within 60 days of April
20, 2010 pursuant to the exercise of
options.
|
(4)
|
Includes
9,000 shares that may be acquired at or within 60 days of April
20, 2010 pursuant to the exercise of
options.
|
(5)
|
Includes
9,000 shares that may be acquired at or within 60 days of April
20, 2010 pursuant to the exercise of
options.
|
(6)
|
Includes
90,053 shares that may be acquired at or within 60 days of April
20, 2010 pursuant to the exercise of
options.
|
(7)
|
Includes
3,000 shares that may be acquired at or within 60 days of April
20, 2010 pursuant to the exercise of
options.
|
(8)
|
Red
Oak Partners, LLC (“ROP”) serves as the
general partner of The Red Oak Fund, LP, a Delaware limited partnership
(the “Fund”), the
direct owner of the subject securities. David Sandberg is the managing
member of ROP and the Fund’s portfolio manager. ROP serves as a
general partner of Pinnacle Partners, LLC, a Colorado limited liability
limited company (“Pinnacle Partners”).
Pinnacle Partners manages Pinnacle Fund, LLP, a Colorado limited liability
partnership (“Pinnacle
Fund”), the direct owner of the subject securities. ROP
is the investment advisor to Bear Market Opportunity Fund, L.P., the
direct owner of the subject securities, and exercises investment control
over the subject securities. David Sandberg is the managing member of ROP
and is the portfolio manager of the Bear Market Opportunity Fund,
L.P. Each Reporting Person disclaims beneficial ownership of
all securities reported herein, except to the extent of their pecuniary
interest therein, if any, and this report shall not be deemed an admission
that such Reporting Person is the beneficial owner of the shares for
purposes of Section 16 of the Securities and Exchange Act of 1934 or for
any other purpose.
|
(9)
|
Robert
L. Chapman, Jr., Chap-Cap Activist Partners Master Fund, Ltd., Chap-Cap
Partners II Master Fund, Ltd., and Chapman Capital L.L.C. jointly
report beneficial ownership of certain shares of Common Stock. Chap-Cap
Activist Partners Master Fund, Ltd. has shared voting power and sole
dispositive power over 268,551 shares, Chap-Cap Partners II
Master Fund, Ltd. has shared voting power and sole dispositive power over
237,620 shares, Chapman Capital L.L.C. has shared voting and dispositive
power over 506,171 shares and Mr. Chapman has shared voting and
dispositive power over 506,171 shares and sole voting and
dispositive power over 81,765 shares (which includes the options
referenced in footnote 7 above). Mr. Chapman’s and the reporting
entities’ address is 1007 N. Sepulveda Blvd. #129, Manhattan
Beach, CA 90267.
|
(10)
|
The
address of Dimensional Fund Advisors, Inc. (“DFA”) is 1299 Ocean
Avenue, 11th Floor, Santa Monica, CA 90401. This information is based on
the Schedule 13G filed by DFA on February 9, 2009. Such shares
are owned by certain investment companies, commingled group trusts and
accounts with respect to which DFA acts as an investment advisor or
manager. DFA disclaims beneficial ownership of all such
shares.
|
·
|
the
accounting and reporting practices of the
Company,
|
·
|
the
Company’s compliance with legal and regulatory requirements related to
financial reporting,
|
·
|
the
qualifications and independence of the Company’s independent registered
public accounting firm,
|
·
|
the
performance of the Company’s internal audit function and independent
registered public accounting
firm, and
|
·
|
the
quality and integrity of the financial reports of the
Company.
|
·
|
whether
the candidate is of the highest ethical character and shares the values of
the Company,
|
·
|
whether
the candidate’s reputation, both personal and professional, is consistent
with the image and reputation of the
Company,
|
·
|
whether
the candidate’s diversity, characteristics, experiences, perspectives and
skills would benefit the Board of Directors given the current composition
of the Board of Directors,
|
·
|
whether
the candidate is “independent” as defined by NASDAQ listing standards and
other applicable laws, rules or regulations regarding
independence,
|
·
|
whether
the candidate qualifies as someone who is “financially sophisticated” or
as an “audit committee financial expert” as described in NASDAQ listing
standards or any other applicable laws, rules or
regulations,
|
·
|
whether
the candidate is free from material conflicts of interest that would
interfere with the candidate’s ability to perform the duties of a director
or violate any applicable NASDAQ listing standard or other applicable law,
rule or regulation,
|
·
|
whether
the candidate’s service as an executive officer of another company or on
the boards of directors of other public companies would interfere with the
candidate’s ability to devote sufficient time to discharge his or her
duties as a director,
|
·
|
if
the candidate is an incumbent director, the director’s overall service to
the Company during the director’s term, including the number of meetings
attended, the level of participation and the overall quality of
performance of the director, and
|
·
|
whether
the candidate has specific skill sets that are important to the Company’s
future success.
|
·
|
the
name and address of the stockholder submitting the recommendation, the
beneficial owner, if any, on whose behalf the recommendation is made and
the director candidate,
|
·
|
the
class and number of shares of stock of the Company that are owned
beneficially and of record by the stockholder and, if applicable, the
beneficial owner, including the holding period for such shares as of the
date of the recommendation,
|
·
|
full
biographical information concerning the director candidate, including a
statement about the director’s
qualifications,
|
·
|
all
other information regarding each director candidate proposed by such
stockholder as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the
SEC,
|
·
|
a
description of all arrangements or understandings among the stockholder
and the candidate and any other person or persons pursuant to which the
recommendation is being
made, and
|
·
|
a
written consent of the candidate (1) to be named in the Company’s
proxy statement and stand for election if nominated by the Board of
Directors, and (2) to serve if elected by the
stockholders.
|
Name
|
Fees
Earned ($)(1)
|
Stock
Awards ($)(2)
|
Option
Awards ($)(3)
|
Total ($)
|
||||
Ramon
D. Ardizzone
|
39,000
|
18,000
|
17,910
|
74,910
|
||||
Donald
S. Bates (4)
|
18,205
|
—
|
13,500
|
31,705
|
||||
Cliff
O. Bickell
|
51,480
|
18,000
|
—
|
69,480
|
||||
Peter
W. Gilson
|
41,913
|
18,000
|
13,500
|
73,413
|
||||
David
A. Sandberg
|
22,813
|
—
|
15,210
|
38,023
|
||||
Horace
H. Sibley
|
37,000
|
18,000
|
15,480
|
70,480
|
||||
Howard
W. Speaks, Jr. (5)
|
19,695
|
—
|
—
|
19,695
|
(1)
|
For
2009 non-employee directors earned the following fees: an annual fee of
$20,000 plus $1,500 for attendance at in-person meetings and $500 for
attendance at meetings via telephonic conference call; no annual fee for
Executive Committee participation; an annual fee of $8,000 for Audit
Committee participation; an annual fee of $5,000 for Compensation and Plan
Administration Committee participation; an annual fee of $3,000 for
Governance and Nominating Committee participation; an annual fee of $8,000
for the Audit Committee chair position; $5,000 for the Compensation and
Plan Administration Committee chair position; $3,000 for the Governance
and Nominating Committee chair position; and an annual fee of $4,000 for
service as the lead independent director. Annual fees are paid ratably on
a quarterly basis. Meeting fees are also paid on a quarterly
basis.
|
(2)
|
At
the 2009 Annual Meeting of Stockholders, each director in the table above,
received a number of restricted stock units equal to $18,000 divided by
$4.92, the fair market value of the Common Stock on the last trading day
immediately preceding the 2009 Annual Meeting of Stockholders. See
Note 19 for a discussion of the assumptions underlying the valuation
of equity awards. At the end of 2009, the aggregate number of outstanding
restricted stock units held by each director in the table above was:
Mr. Ardizzone 6,524, Mr. Bates 2,866, Mr. Bickell 6,524,
Mr. Gilson 6,524, Mr. Sandberg 0, Mr. Sibley 6,524 and
Mr. Speaks 6,524.
|
(3)
|
In
accordance with resolutions passed by the Board, each non-employee
director receives automatic formula-based awards of stock options to
purchase 3,000 shares of the Common Stock upon initial appointment to the
Board of Directors and on each third anniversary
thereof. During 2009, 3,000 options were granted to Mr.
Ardizzone, Mr. Bates, Mr. Gilson, Mr. Sandberg and Mr.
Sibley. At the end of 2009, the aggregate number of outstanding
stock options held by each director in the table above was:
Mr. Ardizzone 12,000, Mr. Bates 12,000, Mr. Bickell 6,000,
Mr. Chapman 3,000, Mr. Gilson 12,000, Mr. Sandberg 3,000,
Mr. Sibley 12,000 and Mr. Speaks
9,000.
|
(4)
|
Mr.
Bates served as a director until his term expired in May
2009.
|
Name
and Principal Position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
Awards
($)
(1)
|
Non-Equity
Incentive Plan Compensation ($)
|
All
Other Compensation ($)
|
Total
($)
|
||||||||
Clarke
H. Bailey
|
2009
|
303,077
|
50,000
|
-
|
-
|
16,648
(2)
|
369,725
|
||||||||
Chief
Executive Officer
|
2008
|
277,500
|
-
|
-
|
-
|
11,648
(2)
|
289,148
|
||||||||
Matthew
K. Behrent
|
2009
|
227,500
|
-
|
-
|
-
|
26,378
(2)
|
253,878
|
||||||||
Executive
Vice President,
|
2008
|
260,000
|
260,000
|
(3)
|
-
|
-
|
9,365
(2)
|
529,365
|
|||||||
Corporate
Development
|
|||||||||||||||
Roger
Morgan (4)
|
2009
|
234,795
|
-
|
-
|
(5)
|
-
|
71,702
(6)
|
306,497
|
|||||||
Executive
Vice President
|
2008
|
278,277
|
-
|
-
|
(5)
|
-
|
84,980
(7)
|
363,257
|
|||||||
International
Operations of EDC
|
|||||||||||||||
Robert
L. Chapman, Jr. (8)
|
2009
|
112,500
|
-
|
112,500
|
(9)
|
-
|
-
|
225,000
|
|||||||
Former
Chief Executive Officer
|
2008
|
-
|
-
|
-
|
-
|
-
|
-
|
(1)
|
Amounts
in this column reflect stock compensation awarded to Mr. Chapman in
accordance with his employment agreement dated January 2,
2009. See “Employment and Severance Agreements” for additional
information.
|
(2)
|
Consists
of payments for a car allowance, matching contributions paid to a defined
contribution plan and disability insurance
premiums.
|
(3)
|
Represents
bonus paid in connection with retention contracts between the Company and
the respective employees.
|
(4)
|
Mr.
Morgan is based in the United Kingdom and is paid in pounds
sterling. Mr. Morgan’s compensation is reported in U.S. dollars
based upon the prevailing average exchange rate from pounds sterling to
U.S. dollars during 2009 of $1.5653 per
pound.
|
(5)
|
Mr. Morgan
holds 375 units of profits interests, all of which are fully vested,
in the Company’s subsidiary EDC,
LLC.
|
(6)
|
Consists
of payments of $23,480 for a car allowance, social club dues and a $46,959
contribution made to Mr. Morgan’s personal retirement
plan.
|
(7)
|
Consists
of payments of $27,828 for a car allowance, social club dues and a $55,655
contribution made to Mr. Morgan’s personal retirement
plan.
|
(8)
|
Mr.
Chapman served as the Company’s Chief Executive Officer until July 2009
when Mr. Bailey was named Chief Executive
Officer.
|
(9)
|
See
Mr. Chapman's employment agreement description below for assumptions made
in the valuation of these stock
awards.
|
|
|
Outstanding
Equity Awards at Fiscal Year-End
|
Name
|
Number
of Securities Underlying Unexercised Options (#)
Exercisable
|
Number
of Securities Underlying Unexercised Options (#)
Unexercisable
|
Option
Exercise Price ($)
|
Date
Options Fully Vested
|
Option
Expiration Date
|
||||||
Clarke
H. Bailey
|
20,000
|
—
|
25.00
|
6/7/2007
|
6/7/2014
|
||||||
30,000
|
—
|
23.00
|
6/30/2007
|
6/30/2014
|
|||||||
2,533
|
—
|
25.00
|
7/21/2009
|
7/21/2016
|
|||||||
7,500
|
—
|
23.00
|
12/14/2009
|
12/14/2016
|
|||||||
Robert
L. Chapman, Jr.
|
3,000
|
—
|
7.20
|
12/10/2009
|
12/10/2017
|
2009
|
2008
|
|
Audit
Fees (1)
|
$ 540,000
|
$
1,187,000
|
Audit-Related
Fees (2)
|
1,500
|
1,500
|
Tax
Fees (3)
|
75,000
|
100,000
|
All
Other Fees
|
–
|
–
|
$ 616,500
|
$
1,288,500
|
(1)
|
Audit
Fees consist of the aggregate fees billed for professional services
rendered for the audit of the Company’s annual consolidated financial
statements, for the reviews of the financial statements included in the
Company’s Quarterly Reports on Form
10-Q.
|
(2)
|
Audit
Related Fees consist of the aggregate fees billed for assurance and
related services that are reasonably related to the performance of the
audit or review of the Company’s consolidated financial statements and are
not reported under “Audit Fees.” These fees principally
included fees for services rendered in connection with statutory audit of
subsidiaries, mergers and acquisition services, and other accounting
advisory services.
|
(3)
|
Tax
services provided by Ernst & Young LLP principally included review of
and consultation regarding the Company’s federal, state and foreign tax
returns and tax planning.
|
The
Audit Committee’s current practice is to pre-approve all audit services
and all non-audit services to be provided to the Company by its
independent registered public accounting firm. The Board of Directors
recommends a vote FOR the ratification of
the selection of Ernst & Young LLP as the Company’s independent
registered public accounting firm to audit the financial statements of the
Company and its subsidiaries for the year ending December 31,
2010. Stockholder ratification of the selection of Ernst &
Young LLP as the Company’s independent public accountants is not required
by the Company’s By-Laws or otherwise. The Company is
submitting the selection of Ernst & Young LLP to the stockholders for
ratification as a matter of good corporate practice. If the
stockholders do not ratify the selection of Ernst & Young LLP, the
selection of the Company’s independent registered public accounting firm
will be reconsidered by the Audit
Committee.
|
·
|
do
not relate to the business or affairs of the Company or the functioning or
constitution of the Board or any of its
committees,
|
·
|
relate
to routine or insignificant matters that do not warrant the attention of
the Board,
|
·
|
are
advertisements or other commercial solicitations,
or
|
·
|
are
frivolous or offensive or otherwise not appropriate for delivery to
directors.
|