SCHEDULE
14A INFORMATION
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Proxy
Statement Pursuant to Section 14(a) of the Securities Exchange Act
of
1934
(Amendment
No ____)
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Check
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Preliminary
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for Use of the Commission Only (as permitted by Rule
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[X]
Definitive
Proxy Statement
[
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Definitive
Additional Materials
[
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Soliciting
Material Pursuant to §240.14a-11(c) or §240.14a-12
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NATIONAL
LAMPOON, INC.
Name
of the Registrant as Specified In Its Charter
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(Name
of Person(s) Filing Proxy Statement, if other than the Registrant)
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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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(1)
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Not
applicable
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Not
applicable
(3)
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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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applicable
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applicable
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] Check box if any part of the fee is offset as provided by Exchange
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8228
Sunset Boulevard, Third Floor
Los
Angeles, California 90046
Telephone
(310) 474-5252
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
To
Our
Stockholders:
The
Annual Meeting of Stockholders of National Lampoon, Inc. (the “Company”) will be
held on Tuesday, June 19, 2007, at 11:00 a.m. (Pacific Time), at the Company’s
executive offices located at 8228 Sunset Boulevard, Third Floor, Los Angeles,
California 90046 for the following purposes:
(1)
to
elect
the seven persons listed in the Proxy Statement that accompanies this Notice
to
serve as directors of the Company;
(2)
to
ratify
the appointment of Stonefield Josephson, Inc. as the Company’s independent
auditors for the fiscal year ending July 31, 2007; and
(3)
to
transact such other business as may properly come before the meeting or any
adjournment or adjournments thereof.
Stockholders
of record at the close of business on May 18, 2007 will be entitled to notice
of
and to vote at the Annual Meeting and at any continuation or adjournment
thereof.
All
stockholders are cordially invited to attend the Annual Meeting in person.
Your
vote is important.
Please
return the enclosed proxy as promptly as possible, whether or not you plan
to
attend the Annual Meeting.
Your
promptness in returning the proxy will assist in the expeditious and orderly
processing of the proxies and will assist in ensuring that a quorum is present
or represented. Even though you return your proxy, you may nevertheless attend
the Annual Meeting and vote your shares in person if you wish. If you want
to
revoke your proxy at a later time for any reason, you may do so in the manner
described in the attached Proxy Statement.
|
By
Order of the Board of Directors
/s/
Cora Victoriano
Cora
Victoriano Secretary
|
May
25,
2007
Los
Angeles, California
NATIONAL
LAMPOON, INC.
8228
Sunset Boulevard, Third Floor
Los
Angeles, California 90046
PROXY
STATEMENT
ANNUAL
MEETING OF STOCKHOLDERS
To
Be Held June 19, 2007
VOTING
AND PROXY
This
Proxy Statement is furnished in connection with the solicitation of proxies
by
the Board of Directors of National Lampoon, Inc., a Delaware corporation
(referred to as the “Company”, “we”, “our” or “us”) for use at our Annual
Meeting of Stockholders to be held at our executive offices located at 8228
Sunset Boulevard, Third Floor, Los Angeles, California 90046 on Tuesday, June
19, 2007, at 11:00 a.m. local time, and at any meeting following adjournment
thereof. The Notice of Annual Meeting, this Proxy Statement and the accompanying
proxy card are being mailed to stockholders on or about May 25,
2007.
A
copy of
our Annual Report on Form 10-KSB for the fiscal year ended July 31, 2006 is
included with this Proxy Statement. The Annual Report does not constitute a
part
of the proxy solicitation material for the Annual Meeting.
Revocability
of Proxy and Voting of Shares
Any
stockholder giving a proxy has the power to revoke it at any time before it
is
exercised. The proxy may be revoked by filing an instrument of revocation or
a
duly executed proxy bearing a later date with the Company’s Secretary at our
principal executive offices located at 8228 Sunset Boulevard, Third Floor,
Los
Angeles, California 90046. The proxy may also be revoked by attending the
meeting and voting in person. If it is not revoked, the proxy will be voted
at
the meeting in accordance with the stockholder’s instructions indicated on the
proxy card.
If
no instructions are indicated, the proxy will be voted FOR the approval of
the
two proposals, and in accordance with the judgment of the proxy holders as
to
any other matter that may be properly brought before the meeting or any
adjournments thereof.
Record
Date, Voting Rights and Outstanding Shares
The
Board
of Directors has fixed May 18, 2007 as the record date (the “Record Date”) for
determining holders of our common stock, $0.0001 par value per share, who are
entitled to vote at the meeting. As of the Record Date, we had 8,144,478 shares
of common stock issued and outstanding, 63,607 shares of Series B Convertible
Preferred Stock that is convertible into 3,583,491 shares of common stock and
192,347 shares of Series C Convertible Preferred Stock that is convertible
into
3,846,940 shares of common stock for a total of 15,574,909 shares of common
stock available and entitled to vote. Each share of common stock is entitled
to
one vote. Each share of Series B and Series C Convertible Preferred Stock is
also entitled to vote on matters that are subject to the approval of the holders
of our common stock. Holders of our Series B and Series C Convertible Preferred
Stock are entitled to vote on an “as converted” basis, meaning that each share
of Series B Convertible Preferred Stock voted represents the vote of 56.338
shares of common stock and each share of Series C Convertible Preferred Stock
voted represents the vote of 20 shares of common stock (subject to adjustment
for stock splits and reverse stock splits). Therefore, as of the Record Date,
7,787,455 shares are required to pass the actions that require approval of
the
holders of common stock and will constitute a quorum at the meeting. Shares
which abstain from voting as to these matters, and shares held in “street name”
by brokers or nominees who indicate on their proxies that they do not have
discretionary authority to vote such shares as to these matters (“broker
non-votes”), will not be counted as votes in favor of such matters. For purposes
of determining whether the affirmative vote of a majority of the shares present
at the meeting and entitled to vote on a proposal has been obtained, abstentions
will be included in, and broker non-votes will be excluded from, the number
of
shares present and entitled to vote. Accordingly, abstentions will have the
effect of a vote “against” the matter and broker non-votes will have the effect
of reducing the number of affirmative votes required to achieve the majority
vote.
When
the
proxy is properly executed, dated and returned, the shares it represents will
be
voted in accordance with any directions noted on it. Votes cast by proxy or
in
person at the Annual Meeting will be tabulated by the Inspector of Election,
in
conjunction with information received from our transfer agent. The Inspector
of
Election will also determine whether or not a quorum is present.
Directors
are elected by a plurality of the votes cast in the election. In electing
directors, no stockholder has cumulative voting rights.
If
no specification is indicated, the shares will be voted “FOR” the election of
the director-nominees named on the proxy. Proxies cannot be voted for a greater
number of persons than the number of nominees named.
The
affirmative vote of the holders of a majority of the shares of common stock
present at the meeting in person or by proxy is required to approve all other
proposals brought before the meeting.
If
no specification is indicated, the shares will be voted “FOR” the proposals
included in the proxy.
Solicitation
We
will
bear the cost of solicitation of proxies, including expenses in connection
with
preparing and mailing this Proxy Statement. Copies of solicitation materials
will be furnished to brokerage houses, nominees, fiduciaries and custodians
to
forward to beneficial owners of common stock held in their names. We will
reimburse brokerage firms and other persons representing beneficial owners
of
common stock for their reasonable expenses in forwarding solicitation materials
to the owners. In addition to original solicitation of proxies by mail, our
directors, officers and other employees may, without additional compensation,
solicit proxies by telephone, facsimile and personal interviews.
We
will
only deliver one Proxy Statement to multiple stockholders sharing an address
unless we have received contrary instructions from one or more of the
stockholders. We will promptly deliver a separate copy of this Proxy Statement
to a stockholder at a shared address to which a single copy of the document
was
delivered upon oral or written request to:
National
Lampoon, Inc.
Attn:
Corporate Secretary
8228
Sunset Boulevard, Third Floor
Los
Angeles, California 90046
Telephone
No.: (310) 474-5252
OVERVIEW
OF PROPOSALS
This
Proxy Statement includes two proposals requiring stockholder action. The
proposals relate to:
| · |
the
election of seven directors and
|
| · |
ratification
of the appointment of Stonefield Josephson, Inc. as our independent
auditors for the fiscal year ending July 31,
2007.
|
The
proposals are discussed in more detail below.
PROPOSALS
PROPOSAL
#1 - ELECTION OF DIRECTORS
Seven
directors are to be elected to our Board of Directors at the Annual Meeting.
The
directors will hold office for a term of one-year. The Board of Directors has
nominated James P. Jimirro, Daniel S. Laikin, Timothy S. Durham, Paul Skjodt,
Duncan Murray, Robert Levy and James Toll. We expect that these nominees will
be
available for election, but if they are not, your proxy will be voted for the
election of other nominees to be designated by the Board of Directors to fill
any such vacancies.
IDENTIFICATION
OF THE BOARD OF DIRECTORS
The
number of directors required by our Bylaws is seven. Information regarding
the
business experience of each nominee and director is provided below. There are
no
family relationships among our executive officers and directors. Our directors
serve until the next annual meeting of our stockholders.
Daniel
S. Laikin
Age
45
DANIEL
S.
LAIKIN has been a director since 2000 and was employed as our Chief Operating
Officer from May 17, 2002 until February 1, 2005 when he became our Chief
Executive Officer. Mr. Laikin served as Co-Chairman of Biltmore Homes, Inc.,
an
Indiana-based home building and real estate development company until 2000.
He
also served as a managing partner of Four Leaf Partners, LLC, a closely held
investment company, concentrating on the startup and financing of high tech
and
Internet-related companies. He is also on the Board of Directors of Obsidian
Enterprises, Inc., a public company.
Timothy
S. Durham
Age
44
TIMOTHY
S. DURHAM has served as a director since 2002. He is the Chief Executive Officer
and Chairman of the Board of Directors of Obsidian Enterprises, Inc. (formerly
Danzer Corporation) and has held these positions since June 2001. Since April
2000, he has served as a Managing Member and the Chief Executive Officer of
Obsidian Capital Company LLC, which is the general partner of Obsidian Capital
Partners LP. Mr. Durham founded in 1998, and since then has maintained a
controlling interest in, several investment funds, including Durham Capital
Corporation, Durham Hitchcock Whitesell and Company LLC, and Durham Whitesell
Associates LLC. From 1991 to 1998, Mr. Durham served in various capacities
at
Carpenter Industries, Inc., including as Vice Chairman, President and Chief
Executive Officer. Mr. Durham serves as a director of Obsidian Enterprises,
Inc., a public company.
Paul
Skjodt
Age
48
PAUL
SKJODT has been a director since 2002. He is actively involved in a variety
of
companies including managing member of Four Leaf & Associates. Four Leaf is
a venture fund that provides seed money to a host of technology companies.
Mr.
Skjodt also is President of Oakfield Development a land development company
based of Indianapolis and owner of the Indiana Ice, an ice hockey team in the
United States Hockey League. Mr. Skjodt is also involved in numerous
philanthropic endeavors in Indiana.
Robert
Levy
Age
52
ROBERT
LEVY joined us as a director in September 2006. Mr. Levy has written and/or
produced motion pictures for over 20 years and is a principal partner in
Tapestry Films. His recent production credits include
The
Wedding Crashers
,
starring Vince Vaughn, Owen Wilson, Rachel McAdams and Christopher Walken;
Underclassman
,
starring Nick Cannon;
Serendipity
starring
John Cusack and Kate Beckinsale;
The
Wedding Planner
starring
Jennifer Lopez and Matthew McConaughey;
National
Lampoon's Van Wilder
starring
Ryan Reynolds;
Van
Wilder 2-The Rise of Taj
,
starring Kal Penn;
She's
All That
starring
Freddie Prinze Jr. and Rachael Leigh Cook; and
Employee
of the Month
,
starring Dane Cook, Jessica Simpson and Dax Shepard. Mr. Levy has also been
the
executive producer on the films
Swing
,
Black
& White
,
Payback
,
The
Chain
,
The
Granny
,
and
Dark
Tide
.
He was
not only the executive producer, but he also wrote the story for the classic
film
Smokey
and the Bandit
,
starring Burt Reynolds. Mr. Levy has also directed and produced
A
Kid
in Aladdin's Court
,
the
sequel to
A
Kid
in King Arthur's Court
,
which
was produced by Tapestry Films. Mr. Levy graduated from the University of
California at Los Angeles and received a producing fellowship from the American
Film Institute.
James
P. Jimirro
Age
70
JAMES
P.
JIMIRRO has been a director since 1986 and was employed as our President and
Chief Executive Officer from 1990 until January 2005. From 1980 to 1985, he
was
the President of Walt Disney Telecommunications Company, which included serving
as President of Walt Disney Home Video, a producer and distributor of family
home video programming. While in this position, he also served as Corporate
Executive Vice President of Walt Disney Productions. In addition, from 1983
to
1985, Mr. Jimirro served as the first President of the Disney Channel, a
national cable pay-television channel, which Mr. Jimirro conceived and
implemented. Mr. Jimirro continued in a consulting capacity for Walt Disney
Company through July 1986. From 1973 to 1980, he served as Director of
International Sales and then as Executive Vice President of Walt Disney
Educational Media Company, a subsidiary of Walt Disney Company. Prior to 1973,
Mr. Jimirro directed international sales for CBS, Inc., and later for Viacom
International. Mr. Jimirro also served as a member of the Board of Directors
of
Rentrak Corporation between January 1990 and September 2000.
Duncan
Murray
Age
61
DUNCAN
MURRAY has been a director since October 11, 2006. From 1998 to his retirement
in 2004, Mr. Murray served as Vice President, Business and Legal Affairs, of
Santa Monica based Transactional Marketing Partners, Inc. (“TMP”), a direct
response television consulting firm. Before joining TMP, from August 1986
through January 2003, Mr. Murray served as our Vice-President of Marketing
and,
prior to that, worked with The Walt Disney Company for 14 years in a variety
of
capacities including Vice President-Sales Administration for The Disney Channel
and Director of Sales for Walt Disney Telecommunications Company. While at
The
Walt Disney Company, Mr. Murray was an integral part of the small team that
created and launched The Disney Channel. During his tenure as Vice President
of
Marketing for us, he oversaw shareholder relations, published the final three
issues of National Lampoon Magazine, and managed negotiations with Artisan
Entertainment for attachment of our name to the feature film
National
Lampoon's Van Wilder
.
Mr.
Murray currently serves as a director, Secretary and Treasurer of The Greenburg
Family Foundation, a health issues-related philanthropic organization
headquartered in Santa Monica and Palm Springs, California.
James
Toll
Age
54
JAMES
TOLL joined us as a director in September 2006. Mr. Toll received his Bachelor
of Arts degree from the University of California, Berkeley with Distinction
and
Honors in his major and a Master of Business Administration (Finance and
Accounting) from the University of Southern California where he graduated Beta
Gamma Sigma in the top 15%. Mr. Toll has worked in the financial area for 26
years, including CBS Television Network in Los Angeles and
Warner/Electra/Atlantic International (WEA International) Records in Burbank
as
a Senior Financial Analyst for three years. While at WEA, Mr. Toll worked for
six months at the Mexico City division as their Director Financiero. Mr. Toll
spent three years as head of the accounting department for the non-profit
company WQED-West, and was involved with the production of the Emmy award
winning seven part series,
The
Planet Earth
,
and the
production of National Geographic specials. Mr. Toll spent three years as Chief
Financial Officer/Treasure in the direct response industry where he was involved
with the hit products “Komputer Tutor” and the “Mighty Pro Grill”, and the mega
hit, “Abslide”. Mr. Toll joined Keller Entertainment Group as the Chief
Financial Officer in l996 and was responsible for the corporate financial
functions of the company and management of $40 million for the production and
distribution of domestic and international television series such as
Tarzan
the Epic Adventure
,
Conan
the Adventurer
,
and
Acapulco
Heat
.
Mr.
Toll initially joined J2 Communications/National Lampoon in 1986 as Chief
Financial Officer and continued in that position until June 16, 2005. Mr. Toll
developed all computerized financial systems for J2 Communications, was
responsible for the preparation of all budgets, forecasts, and financial
statements including all SEC financial reporting. He was head of operations
of
J2 Communications video distribution, and was involved in all merger and
acquisition activity, including J2 Communication’s acquisition of National
Lampoon. After leaving National Lampoon in 2005, Mr. Toll joined Resources
Global Professionals, an international consulting firm that was spun off from
Deloitte & Touche. Resources Global Professionals has over 70 offices
worldwide. As a consultant with Resources Global Professionals, Mr. Toll has
worked with such clients as the Steven Wise Temple and Amp’d Mobile on enhancing
their accounting systems and their financial reporting.
Director
Nomination Process
Our
Board
of Directors does not have a standing nominating committee or a charter
governing the manner in which individuals are nominated to the Board. With
the
exception of Daniel S. Laikin, our current Chief Executive Officer, James P.
Jimirro, our former President and Chief Executive Officer, and James Toll,
our
former Chief Financial Officer, all of the members of our Board of Directors
are
“independent”, as that term is defined in Section 121A
of
the
Rules of the American Stock Exchange.
We
are a
“controlled company” as that term is defined in Section 801(a) of the Rules of
the American Stock Exchange. Three of our directors, Daniel S. Laikin, Timothy
S. Durham and Paul Skjodt, control over 50% of the voting power of National
Lampoon, Inc. As a controlled company, we are not subject to Section 804 of
the
Rules of the American Stock Exchange. Section 804 requires that nominees to
the
Board of Directors be made by either a nominating committee comprised solely
of
independent directors or by a majority of the independent directors. Instead,
nominees to the Board of Directors have been nominated in accordance with the
terms of that certain Voting Agreement entered into on May 17, 2002 among Daniel
S. Laikin, Paul Skjodt, Timothy S. Durham, Ronald Holzer, DC Investment, LLC,
NL
Acquisition Group LLC, Samerian LLP, Diamond Investments, LLC, Christopher
R.
Williams, Helen C. Williams, DW Leasing Company, LLC, Judy B. Laikin (all of
whom are collectively referred to in this discussion as the “NLAG Stockholders”)
and James P. Jimirro. The Voting Agreement was entered into in conjunction
with
the reorganization transaction, referred to in this Proxy Statement as the
“Reorganization Transaction,” that took place on May 17, 2002. According to the
terms of the Voting Agreement, the NLAG Stockholders agree to vote for Mr.
Jimirro and two directors nominated by Mr. Jimirro and, conversely, Mr. Jimirro
agrees to vote for four directors nominated by the NLAG Stockholders. The Voting
Agreement will not terminate until the later of the termination of Mr. Jimirro’s
employment agreement and the payment of all amounts due to him thereunder (which
occurred on January 28, 2005) or the date as of which Mr. Jimirro personally
ceases to own beneficially (whether by reason of his death or otherwise) at
least 100,000 shares of common stock. The Voting Agreement prevents us from
having a policy with regard to the consideration of any director candidates
recommended by security holders (other than the NLAG Stockholders and Mr.
Jimirro) or an independent committee whose purpose is to nominate director
candidates.
We
do not
have specific minimum qualifications that a person must meet in order to serve
on our Board of Directors. In forming our Board of Directors, we sought out
individuals who would be able to guide our operations based on their business
experience. To date, we have not paid any third parties to assist us in finding
suitable candidates to serve as directors. All of our nominees are directors
standing for re-election. One of the directors standing for re-election, Daniel
S. Laikin, is also our Chief Executive Officer. James P. Jimirro was our Chief
Executive Officer and President until January 28, 2005, when he separated from
service and James Toll was our Chief Financial Officer until June 16, 2005,
when
he separated from service. Each nominee to our Board of Directors expressed
a
willingness to serve during the next fiscal year and, based on a review of
his
qualifications, each nominee was deemed to be a suitable candidate for
nomination. We have not received a director-nominee recommendation from any
stockholder, other than from the NLAG Stockholders and Mr. Jimirro.
Communications
with Members of our Board of Directors
The
Board
of Directors has not established a formal process for stockholders to send
communications to its members. Any stockholder may send a communication to
any
member of the Board of Directors in care of our address below:
National
Lampoon, Inc.
8228
Sunset Boulevard, Third Floor
Los
Angeles, California 90046
Telephone:
(310) 474-5252
If
a
communication is sent to our address, we will forward any such communication
to
the Board member. If the stockholder would like the communication to be
confidential, it should be so marked.
Meetings
of the Board of Directors and Information about Committees
The
Board
of Directors met four times during the 2006 fiscal year. These meetings were
attended by all the directors. The Board of Directors acted by written consent
12 times during the 2006 fiscal year.
We
have
no policy with regard to the attendance by Board members at our Annual Meetings.
All of the members of our Board of Directors attended the last Annual
Meeting.
The
Board
of Directors has two standing committees. Information regarding the functions
of
the Board’s committees, their present membership and the number of meetings held
by each committee during the 2006 fiscal year is described below.
Audit
Committee.
The
Audit Committee is responsible for recommending to the Board of Directors the
selection of independent public accountants to audit the Company’s books and
records annually, to discuss with the independent auditors the scope and results
of any audit, to review and approve any nonaudit services performed by the
Company’s independent auditing firm, and to review certain related party
transactions. The Audit Committee acts pursuant to a written charter adopted
by
the Board of Directors. The members of the Audit Committee are Timothy S. Durham
and Robert Levy. The Audit Committee met four times in the 2006 fiscal year.
The
members of the Audit Committee are independent as that term is defined in
Section 121 of the Rules of the American Stock Exchange. None of our Board
members qualifies as an “audit committee financial expert”, as defined by the
Sarbanes Oxley Act of 2002 and the regulations promulgated under the Securities
Act of 1933 and the Securities Exchange Act of 1934.
Compensation
Committee.
The
Compensation Committee is responsible for recommending to the Board of Directors
the compensation to be paid to our executive officers. The Compensation
Committee is also responsible for overseeing the National Lampoon, Inc. 1999
Amended and Restated Stock Option, Deferred Stock and Restricted Stock Plan.
The
members of the Compensation Committee are Timothy S. Durham, Duncan Murray
and
James P. Jimirro. The Compensation Committee did not meet during the 2006 fiscal
year. Instead, all compensation issues were decided by the Board of Directors.
No change was made to Mr. Laikin’s compensation during the 2006 fiscal year. Mr.
Laikin’s compensation is governed by the terms of his employment agreement,
which is more fully described in the section titled “Management” in this Proxy
Statement.
REPORT
OF THE AUDIT COMMITTEE
In
fulfilling its oversight responsibilities, the Audit Committee has reviewed
and
discussed the audited financial statements with management.
The
Audit
Committee has discussed with the independent auditors the matters required
to be
discussed by SAS 61, as may be modified or supplemented.
The
Audit
Committee has received the written disclosures and the letter from the
independent accountants required by Independence Standards Board Standard No.
1
(Independence Standards Board Standard No. 1, Independence Discussions with
Audit Committees), as may be modified or supplemented, and has discussed with
the independent accountant the independent accountant's
independence.
Based
on
the review and discussions referred to above, the Audit Committee recommended
to
the Board of Directors that the audited financial statements be included in
the
Annual Report on Form 10-KSB for the fiscal year ended July 31,
2006.
|
Members
of the Audit Committee
Robert
Levy
Timothy
S. Durham
|
THE
BOARD OF DIRECTORS RECOMMENDS
THAT
YOU VOTE “FOR” THE ELECTION OF THE NOMINEES.
PROPOSAL
#2 - RATIFICATION OF STONEFIELD JOSEPHSON, INC. AS OUR INDEPENDENT
AUDITORS
FOR 2007
The
Board
of Directors requests that the stockholders ratify its selection of Stonefield
Josephson, Inc. as our independent auditors for the 2007 fiscal
year.
Disclosure
of Fees Billed by our Auditors
The
following table sets forth fees billed to us by our auditors during the fiscal
years ended July 31, 2006 and July 31, 2005 for: (i) services rendered for
the
audit of our annual financial statements and the review of our quarterly
financial statements, (ii) services by our auditor that are reasonably related
to the performance of the audit or review of our financial statements and that
are not reported as Audit Fees, (iii) services rendered in connection with
tax
compliance, tax advice and tax planning, and (iv) all other fees for services
rendered.
|
|
|
|
July
31, 2006
|
|
July
31, 2005
|
|
(i)
|
Audit
Fees
|
$
|
55,786
|
$
|
36,529
|
|
(ii)
|
Audit
Related Fees
|
$
|
67,083
|
$
|
95,114
|
|
(iii)
|
Tax
Fees
|
$
|
14,280
|
$
|
6,476
|
|
(iv)
|
All
Other Fees
|
$
|
0
|
$
|
0
|
Unless
they are de minimus, the Audit Committee is required to pre-approve services
that are reasonably related to the performance of the audit or review of our
financial statements, services rendered in connection with tax compliance,
tax
advice and tax planning, and all other fees for services rendered. The Audit
Committee reviews these services to assure that they do not impair the auditor’s
independence from the company.
We
have
not asked representatives of Stonefield Josephson, Inc. to be present at the
Annual Meeting.
THE
BOARD OF DIRECTORS RECOMMENDS
A
VOTE “FOR” THE RATIFICATION OF
STONEFIELD
JOSEPHSON, INC. AS OUR INDEPENDENT AUDITORS
FOR
THE 2007 FISCAL YEAR.
MANAGEMENT
Executive
Compensation
The
following table reflects all compensation awarded to, earned by or paid to
our
Chief Executive Officer, our two most highly compensated officers other than
the
Chief Executive Officer and any other individuals who are no longer serving,
but
who did serve, as an officer during the last completed fiscal year
and who
earned at least $100,000.
|
James
Toll,
|
2006
|
--
|
--
|
--
|
--
|
|
Former
Chief Financial
|
2005
|
139,800
|
--
|
--
|
--
|
|
Officer
|
2004
|
149,500
|
--
|
30,000
|
--
|
|
Jeff
Gonzalez
|
2006
|
48,000(6)
|
--
|
20,000
|
--
|
|
Former
Interim Chief
|
2005
|
--
|
--
|
--
|
--
|
|
Financial
Officer
|
2004
|
--
|
--
|
--
|
--
|
(1)
Represents one year of salary paid to Mr. Laikin that was paid with 7,649
units
of Series C Preferred Stock, with each unit consisting of one share of Series
C
Convertible Preferred Stock and a warrant to purchase 10 shares of common
stock
at a price of $1.775 per share.
(2)
On
December 9, 2004, we granted a bonus to Daniel S. Laikin for exceptional
services and issued to him 5,634 units of Series C Convertible Preferred Stock
having a value of $35.50 per unit. In connection with this bonus an expense
was
recognized in the amount of $200,000 during the year ended July 31, 2005. Each
unit included one share of Series C Convertible Preferred Stock and a warrant
to
purchase ten post-split shares of common stock at a price of $1.775 per share.
(3)
Of
this amount, $2,523,800 represents a severance payment made to Mr. Jimirro
upon
his separation from service. The remaining $171,819 represents an automobile
and
apartment allowance totaling $118,122 and a payoff of $53,697 for Mr. Jimirro’s
automobile made as part of the severance paid to him upon his separation from
service.
(4)
On
July 10, 2006 Bruce K. Long began providing services to us as our President.
Mr.
Long’s annual salary is $324,000.
(5)
On
April 18, 2005 Lorraine Evanoff joined us as our Chief Accounting Officer.
On
March 15, 2006 Ms. Evanoff separated from service. Ms. Evanoff’s annual salary
was $110,000.
(6)
On
April 10, 2006 Jeff Gonzalez began providing services to us as our principal
accounting officer. On December 15, 2006 Mr. Gonzalez separated from service.
Mr. Gonzalez’s annual salary was $144,000.
The
following tables set forth certain information concerning the granting and
exercise of stock options during the last completed fiscal year by each of
the
named executive officers and the fiscal year-end value of unexercised options
on
an aggregated basis:
|
Option/SAR
Grants for Last
Fiscal
Year-Individual Grants
|
||||
|
Name
|
Number
of
Securities
Underlying
Options/SARs
Granted
(#)
|
%
of Total
Options/SARs
Granted
to
Employees
in Fiscal
Year
|
Exercise
Price
($/sh)
|
Expiration
Date
|
|
Daniel
S. Laikin
Douglas
S. Bennett
Bruce
K. Long
Jeff
Gonzalez
|
100,000
100,000
50,000
20,000
|
24%
24%
12%
5%
|
2.98
2.98
2.50
2.75
|
1/31/2016
1/31/2016
5/12/2013
5/12/2016
|
|
Aggregated
Option/SAR Exercises in Last Fiscal Year
And
FY-End Option/SAR Values(1)
|
||||
|
Name
|
Shares
Acquired
on
Exercise (#)
|
Value
Realized
(1)
($)
|
Number
of
Unexercised
Options/SARs
at
FY-End (#)
Unexercisable/
Exercisable
|
Value
of
Unexercised
In-the-Money
Options/SARs
at
FY-End ($)
(2)
Unexercisable/
Exercisable
|
|
Daniel
S. Laikin
Douglas
S. Bennett
Bruce
K. Long
Jeff
Gonzalez
|
--
4,000
--
--
|
--
4,200
--
--
|
0/1,144,666
77,778/698,222
50,000/0
10,000/10,000
|
0/0
0/0
0/0
0/0
|
(1)
Value
realized is determined by calculating the difference between the aggregate
exercise price of the options and the aggregate fair market value of the common
stock on the date the options are exercised. The closing price of the common
stock on July 31, 2006 was $1.42.
(2)
The
value of unexercised options is determined by calculating the difference between
the fair market value of the securities underlying the options at fiscal year
end and the exercise price of the options.
Discussion
of Compensation
Our
compensation program consists of the following three components:
| · |
base
salary;
|
| · |
bonuses;
and
|
| · |
awards
of restricted stock or stock options from our Amended and Restated
1999
Stock Option, Deferred Stock and Restricted Stock
Plan.
|
We
believe that a combination of cash and common stock or options will allow us
to
attract and retain the services of the individuals who will help us achieve
our
business objectives, thereby increasing value for our shareholders.
In
setting the compensation for our officers, members of our Board of Directors
or
our Compensation Committee look primarily at the person’s responsibilities, at
salaries paid to others in businesses comparable to ours, at the person’s
experience and at our ability to replace the individual. We expect the salaries
of our executive officers to remain relatively constant unless the person’s
responsibilities are materially changed.
Bonuses
are used to reward exceptional performance, either by the individual or by
the
company. Bonuses are discretionary. There is no single method of computing
bonuses. The Board of Directors or the Compensation Committee may establish
any
criteria to determine the amount of a bonus. No bonuses were paid to our
executive officers during the 2006 fiscal year.
In
2006
we granted restricted stock or options to purchase our common stock to Daniel
S.Laikin, Douglas S. Bennett, Bruce K. Long and Jeff Gonzalez. We grant options
or restricted stock because we believe that share ownership by our employees
is
an effective method to deliver superior shareholder returns by increasing the
alignment between the interests of our employees and our shareholders. No
employee is required to own common stock in our company.
Director
Compensation
As
compensation to the members of our Board of Directors for the services rendered
by them, during the fiscal year ended July 31, 2006 we paid fees of $10,000
to
each of our directors and we awarded to each director an option to purchase
25,000 shares of our common stock at an exercise price of $2.19 per share.
These
options vested immediately and have a term of ten years.
Employment
Agreements
Daniel
S. Laikin, Chief Executive Officer
On
January 31, 2005 we entered into an Employment Agreement with Daniel S. Laikin.
The employment agreement was adopted and approved by our Board of Directors
on
February 1, 2005. The employment agreement has a term of three years, but is
automatically extended for successive three-year terms unless designated members
of the Board of Directors notify Mr. Laikin that the Board does not intend
to
renew the employment agreement or unless the employment agreement has been
terminated according to its terms.
Pursuant
to the employment agreement, Mr. Laikin receives an annual salary of $250,000.
Mr. Laikin is also entitled to receive four weeks paid vacation. Mr. Laikin
receives an automobile allowance and is entitled to participate in any other
benefits offered generally to our employees and executives. He is also granted
an option to purchase 100,000 shares of our common stock on each anniversary
of
the effective date of the employment agreement. The exercise price for the
options will be equal to the average of the last reported sale price for one
share of common stock during the five business days preceding the date of grant
or, if this method of valuing the common stock is not available, the Board
shall
determine, in good faith, the value of one share of common stock. The term
of
each option shall be 10 years. The options shall be granted in accordance with
the National Lampoon, Inc. Amended and Restated 1999 Stock Option, Deferred
Stock and Restricted Stock Plan. Mr. Laikin is to meet annually with the Board
of Directors to set certain performance milestones that must be met bi-annually.
If those milestones are met, Mr. Laikin will receive a bi-annual bonus of
$50,000. If the milestones are exceeded, Mr. Laikin will receive additional
compensation that will be paid one-half in cash and one-half in
stock.
Mr.
Laikin’s employment agreement may be terminated voluntarily by us at any time
during its term for Cause. Cause is defined as (i) the willful and continued
failure by Mr. Laikin to substantially perform his duties to us in good faith
(other than a failure resulting from his incapacity due to physical or mental
illness), or (ii) the willful engaging in conduct which is demonstrably and
materially injurious to us. In order to terminate Mr. Laikin for Cause, five
members of the Board of Directors (not including Mr. Laikin) must determine
at a
meeting held for such purpose that Mr. Laikin is guilty of the conduct
triggering the right to terminate him. If Mr. Laikin’s employment is terminated
by us for Cause, in addition to any benefits mandated by law, we shall pay
to
Mr. Laikin his full annual salary in effect at the date of termination and
other
benefits to which he is entitled through the date of termination at the rate
in
effect at the time notice of termination is given.
Mr.
Laikin’s employment may be terminated by Mr. Laikin at any time, and will
terminate automatically upon his death or disability. Upon such termination,
in
addition to any benefits mandated by law, we shall pay to Mr. Laikin his full
annual salary in effect at the date of termination and other benefits to which
he is entitled through the date of termination at the rate in effect at the
time
notice of termination is given.
On
signing the Employment Agreement, we also agreed to enter into a separate
indemnity agreement with Mr. Laikin. A new indemnity agreement has not been
entered into as of the date of this Proxy Statement, although we entered into
an
indemnity agreement with Mr. Laikin on May 17, 2002.
Compliance
with Section 16(a) of the Securities Exchange Act
Section
16(a) of the Securities Exchange Act requires our directors, executive officers
and persons who own more than 10% of our common stock to file reports of
ownership and changes in ownership of our common stock with the Securities
and
Exchange Commission. Directors, executive officers and persons who own more
than
10% of our common stock are required by Securities and Exchange Commission
regulations to furnish to us copies of all Section 16(a) forms they
file.
To
our
knowledge, based solely upon review of the copies of such reports received
or
written representations from the reporting persons, we believe that during
the
fiscal year ended July 31, 2006, our directors, executive officers and persons
who own more than 10% of our common stock complied with all Section 16(a) filing
requirements with the exception of the following:
|
Name
of Filer
|
Form
|
Description
|
|
Jeffrey
Gonzalez (former officer)
|
3/4
|
Mr.
Gonzalez was untimely in filing two reports covering two
transactions.
|
|
Lorraine
Evanoff (former officer)
|
3
|
Ms.
Evanoff was untimely in filing one report covering one
transaction.
|
|
Douglas
S. Bennett (former officer)
|
4
|
Mr.
Bennett was untimely in filing one report covering one
transaction.
|
|
Ron
Berger (former director)
|
4
|
Mr.
Berger was untimely in filing one report covering one
transaction.
|
|
Joshua
Finkenberg (former director)
|
4
|
Mr.
Finkenberg was untimely in filing one report covering one
transaction.
|
|
Richard
Irvine (former director)
|
4
|
Mr.
Irvine was untimely in filing one report covering one
transaction.
|
|
James
P. Jimirro, director
|
4
|
Mr.
Jimirro was untimely in filing two reports covering 28
transactions.
|
|
Timothy
Durham, director
|
4
|
Mr.
Durham was untimely in filing three reports covering five
transactions.
|
|
Paul
Skjodt, director
|
4
|
Mr.
Skjodt was untimely in filing three reports covering three
transactions.
|
|
Daniel
S. Laikin
|
4
|
Mr.
Laikin was untimely in filing seven reports covering 16
transactions.
|
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND
MANAGEMENT
The
following table sets forth information as of the Record Date as to each person
or group who is known to us to be the beneficial owner of more than 5% of our
outstanding voting securities and as to the security and percentage ownership
of
each of our executive officers and directors and of all of our officers and
directors as a group.
Beneficial
ownership is determined under the rules of the Securities and Exchange
Commission and generally includes voting or investment power over securities.
The number of shares shown as beneficially owned in the tables below are
calculated pursuant to Rule 13d-3(d)(1) of the Securities Exchange Act of 1934.
Under Rule 13d-3(d)(1), shares not outstanding that are subject to options,
warrants, rights or conversion privileges exercisable within 60 days are deemed
outstanding for the purpose of calculating the number and percentage owned
by
such person, but not deemed outstanding for the purpose of calculating the
percentage owned by each other person listed. Except in cases where community
property laws apply or as indicated in the footnotes to this table, we believe
that each stockholder identified in the table possesses sole voting and
investment power over all of the shares of common stock, Series B Preferred
Stock and Series C Preferred Stock shown as beneficially owned by the
stockholder.
The
following table is based on a total of 15,574,909 shares of common stock
consisting of the following:
| · |
a
total of 8,144,478 shares of common stock outstanding on the Record
Date;
|
| · |
63,607
shares of Series B Convertible Preferred Stock that may be converted
into
3,583,491 shares of common stock;
and
|
| · |
192,347
shares of Series C Convertible Preferred Stock that may be converted
into
3,846,940 shares of common stock.
|
|
Name
and Position
|
Common
Stock
|
Series
B Convertible Preferred Stock,
on
an as-converted basis(11)
|
Series
C Convertible Preferred Stock,
on
an as-converted basis(16)
|
|||
|
Number
of
Shares
|
Percentage
Ownershi
p
of
Class
|
Number
of
Shares
|
Percentage
Ownershi
p
of
Class
|
Number
of Shares
|
Percentage
Ownershi
p
of
Class
|
|
|
Daniel
S. Laikin, CEO
|
4,794,175
(1)
|
51.13%
|
1,787,379
(12)
|
49.88%
|
1,663,060
(17)
|
43.23%
|
|
Bruce
K. Long,
President
|
17,167
(2)
|
0.18%
|
--
|
--
|
--
|
--
|
|
David
M. Kane, Interim Chief Financial Officer
|
--(3)
|
--
|
--
|
--
|
--
|
--
|
|
James
P. Jimirro, Chairman
|
1,681,089
(4)
|
17.93%
|
--
|
--
|
--
|
--
|
|
Timothy
Durham, Director
|
1,888,301
(5)
|
20.14%
|
994,253
(13)
|
27.75%
|
1,206,300
(18)
|
31.36%
|
|
Paul
Skjodt, Director
|
758,297
(6)
|
8.09%
|
366,197
(14)
|
10.22%
|
--
|
--
|
|
Robert
Levy, Director
|
237,300
(7)
|
2.53%
|
--
|
--
|
224,600
(19)
|
5.84%
|
|
Duncan
Murray, Director
|
--(8)
|
--
|
--
|
--
|
--
|
--
|
|
James
Toll, Director
|
--(9)
|
--
|
--
|
--
|
--
|
--
|
|
Officers
and Directors as a Group (9 persons)
|
9,376,329
|
100%
|
3,147,829
|
87.84%
|
3,093,960
|
80.43%
|
|
Douglas
S. Bennett (former executive)
|
869,437(10)
|
5.58%
|
24,000(15)
|
0.67%
|
21,800(20)
|
0.57%
|
|
Remaining
Holders of Series B Convertible Preferred Stock as a Group
|
--
|
--
|
411,662
|
11.49%
|
--
|
--
|
|
Remaining
Holders of Series C Convertible Preferred Stock as a Group
|
--
|
--
|
--
|
--
|
731,180
|
19.01%
|
*Less
than
1%.
(1)
This
number includes 937,903 shares of common stock, options to purchase 1,244,666
shares of common stock, a warrant to purchase 1,780,076 shares of common stock
issued in conjunction with the Series B Convertible Preferred Stock and a
warrant to purchase 831,530 shares of common stock issued in conjunction with
the Series C Convertible Preferred Stock.
(2)
This
number includes 500 shares of common stock and the right to purchase 16,667
shares of common stock from an option to purchase a total of 100,000 shares
of
common stock.
(3)
Mr.
Kane was granted an option to purchase 100,000 shares of our common stock.
No
portion of the right to purchase the common stock had vested as of May 18,
2007.
(4)
This
number includes 139,049 shares of common stock and options to purchase 1,542,040
shares of common stock from a total of 1,567,040 options granted to Mr.
Jimirro.
(5)
This
number includes 599,549 shares of common stock, options to purchase 95,000
shares of common stock of which the right to purchase 70,000 shares has vested,
a warrant to purchase 615,602 shares of common stock issued in conjunction
with
the Series B Convertible Preferred Stock and a warrant to purchase 603,150
shares of common stock issued in conjunction with the Series C Convertible
Preferred Stock.
(6)
This
number includes 329,403 shares of common stock, options to purchase 95,000
shares of common stock of which the right to purchase 70,000 shares has vested,
a warrant to purchase 358,894 shares of common stock issued in conjunction
with
the Series B Convertible Preferred Stock.
(7)
This
number includes options to purchase 150,000 shares of common stock of which
the
right to purchase 125,000 shares has vested and a warrant to purchase 112,300
shares of common stock issued in conjunction with the Series C Convertible
Preferred Stock.
(8)
Mr.
Murray received an option to purchase 25,000 shares of common stock, however,
no
portion of the option was vested as of May 18, 2007.
(9)
Mr.
Toll received an option to purchase 25,000 shares of common stock, however,
no
portion of the option was vested as of May 18, 2007.
(10)
This
number includes 116,737 shares of common stock, options to purchase 717,800
shares of common stock, a warrant to purchase 24,000 shares of common stock
issued in conjunction with the Series B Convertible Preferred Stock and a
warrant to purchase 10,900 shares of common stock issued in conjunction with
the
Series C Convertible Preferred Stock.
(11)
Each
share of Series B Convertible Preferred Stock may be converted into 56.338
shares of common stock.
(12)
Mr.
Laikin owns 31,726 shares of Series B Convertible Preferred Stock that may
be
converted into 1,787,379 shares of common stock.
(13)
Mr.
Durham owns 17,648 shares of Series B Convertible Preferred Stock that may
be
converted into 994,253 shares of common stock.
(14)
Mr.
Skjodt owns 6,500 shares of Series B Convertible Preferred Stock that may be
converted into 366,197 shares of common stock.
(15)
Mr.
Bennett owns 426 shares of Series B Convertible Preferred Stock that may be
converted into 24,000 shares of common stock.
(16)
Each
share of Series C Convertible Preferred Stock may be converted into 20 shares
of
common stock.
(17)
Mr.
Laikin owns 83,153 shares of Series C Convertible Preferred Stock that may
be
converted into 1,663,060 shares of common stock.
(18)
Mr.
Durham owns 60,315 shares of Series C Convertible Preferred Stock that may
be
converted into 1,206,300 shares of common stock.
(19)
Mr.
Levy owns 11,230 shares of Series C Convertible Preferred Stock that may be
converted into 224,600 shares of common stock.
(20)
Mr.
Bennett owns 1,090 shares of Series C Convertible Preferred Stock that may
be
converted into 21,800 shares of common stock.
The
address for each of the officers and directors named above is 8228 Sunset
Boulevard, Third Floor, Los Angeles, California 90046.
IDENTIFICATION
OF EXECUTIVE OFFICERS
Daniel
Laikin, Chief Executive Officer
|
See
discussion of business experience
above.
|
Bruce
Long, President
BRUCE
LONG began providing services to us as our President in July 2006. Prior to
joining us, Mr. Long was Executive Vice President of Strategic Planning and
Business Development for Technicolor Creative Services, a position he held
since
2001. Prior to joining Technicolor Creative Services, beginning in September,
2001, Mr. Long served as Chief Executive Officer of Ionic Worldwide Studios,
an
interactive content start-up company launched with Mike Medavoy and Troy
Bolotnick. In 1997, Mr. Long founded and launched Heroes Title Design and Encore
Visual Effects Company, serving as President of Encore Video. The combined
companies were eventually sold to Liberty Media in 2000. Mr. Long’s experience
also includes working as a comedian, performing in Los Angeles with The
Lunatics, an improvisational troupe, and as a theater director, actor, and
producer. Mr. Long spent the early part of his career in the music industry,
working as Director of College Promotions for Columbia Records and was Chief
Financial Officer of Headfirst Records.
David
Kane, Interim Chief Financial Officer
DAVID
KANE joined us in December 2006 from his financial consulting practice where,
since 2000, he has been a financial consultant for entertainment and media
companies. Prior to his consulting practice, Mr. Kane served as Chief Financial
Officer of the Left Bank Organization, a record label and music management
company. He also served as the Chief Financial Officer for GreatDomains.com,
an
internet start-up company which was eventually sold to VeriSign. Mr. Kane spent
the early part of his career working as Director of Finance for Virgin Records
and Chief Financial Officer of Focus Affiliates, a publicly held electronics
distributor.
Key
Employees
In
addition to our executive officers and directors, we value and rely upon the
services of certain key employees in the support of our business and operations,
and the development and marketing of our brand and products, as
follows:
BARRY
LAYNE is the Executive Vice President responsible for our entertainment
businesses. He joined us in May 2004. Immediately prior to joining National
Lampoon, Mr. Layne spent a number of years as a senior executive consultant
to
companies in the media, entertainment and Internet industries, most recently
as
acting Chief Operating Officer of ASG Entertainment and as a member of the
bankruptcy court approved turnaround team at the former Platinum Entertainment
(subsequently renamed Compendia Media Group). Previous roles included senior
management positions at About, Inc., FasTV, Inc., and Ketchum Communications
Worldwide.
MATTY
SIMMONS rejoined National Lampoon in November 2002 as Director of Classics.
Mr.
Simmons was a co-founder or National Lampoon in the 1970s. Under Mr. Simmons’
leadership, the company introduced
National
Lampoon Magazine
,
one of
the most popular humor magazines in publishing history. In 1978 he produced,
National
Lampoon’s Animal House
,
one of
the most popular comedy movies of all time. He has also produced, among other
films, the
National
Lampoon Vacation
series.
In 1979, he was named
Producer
of the Year
and
in
1980,
Publisher
of the Year
by
industry organizations. Mr. Simmons has written eight books including several
best sellers.
SARA
RUTENBERG has been our Executive Vice President - Business Affairs since
September 2002. Ms. Rutenberg has held various positions in the entertainment
industry for the past twenty years. Prior to joining National Lampoon, she
held
the post of President, Business Development and Strategy for Pearson Television
(now Fremantle Media) where she managed the divisions responsible for digital
asset and intellectual property management and brand management. At Pearson,
Ms.
Rutenberg also served as Senior Vice President, Business and Legal Affairs
and
negotiated a variety of production and distribution agreements for all media.
Ms. Rutenberg came to Pearson from Universal Television, where she held a
variety of posts from 1983-1998, the last being Senior Vice President of
Business and Legal Affairs where she was responsible for all international
and
domestic television distribution and nonscripted television
production.
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Leagre
Chandler & Millard, our former attorneys, assigned to Mr. Timothy Durham, a
director, a promissory note we had signed in favor of Leagre Chandler &
Millard for legal services incurred in relation to the Reorganization
Transaction. The original amount of the promissory note was $165,000. The loan
bore interest at the rate of 6.75% per annum. The promissory note was paid
in
full on December 1, 2006.
From
May
23, 2006 through March 14, 2007, Mr. Durham loaned us $68,667 for publishing.
The loan bears interest at the rate of 6% per annum. A loan payment of $14,206
was made on December 1, 2006. At May 18, 2007 the loan balance was $56,920,
which consisted of $54,461 of principal and $2,459 of accrued interest. There
are no specific repayment terms for this loan.
From
October 3, 2006 through October 30, 2006, Mr. Durham loaned us $312,500. The
loan bore interest at the rate of 6% per annum. The principal amount, along
with
$1,721 in accrued interest, was paid in full by December 1, 2006.
On
October 23, 2006 Mr. Durham loaned us $25,000 for film production. The loan
bears interest at the rate of 6% per annum. There are no specific repayment
terms and no payment has been made to date. At May 18, 2007 the loan balance
was
$25,777, which consisted of $25,000 in principal and $777 in accrued
interest.
On
May
23, 2006, Mr. Daniel S. Laikin, our Chief Executive Officer and a director,
loaned us $37,500 for publishing. The loan bears interest at the rate of 6%
per
annum. There are no specific repayment terms and no payment has been made to
date. At May 18, 2007 the loan balance was $39,608, which consisted of $37,500
of principal and $2,108 of accrued interest.
From
June
29, 2006 through October 30, 2006, Mr. Laikin loaned $520,300 to us. The loan
bears interest at the rate of 6% per annum. There are no specific repayment
terms. A payment of $25,000 was made on February 27, 2007. At May 18, 2007
the
loan balance was $517,443, which consisted of $495,300 of principal and $22,143
of accrued interest.
We,
along
with Messrs. Robert Levy, Tim Durham and Daniel Laikin, are investors in Red
Rock Pictures Holdings, Inc., referred to in this Proxy Statement as “Red Rock”.
In September 2006, we entered into a sublease agreement with Red Rock for office
space. The term of the sublease is two years. The monthly rent is
$2,000.
From
November 7, 2006 through March 2, 2007 Red Rock made various loans to us. The
principal amount of the loans totaled $1,706,758. The funds were used for film
production. The loans bear interest at the rate of 10% per annum. We have repaid
$374 of the amount loaned. At May 18, 2007, the balance of the loans was
$1,743,202 which consisted of $1,706,384 of principal and $36,818 of accrued
interest. There are no specific repayment terms for these loans.
STOCKHOLDER
PROPOSALS FOR 2008 ANNUAL MEETING
To
be
considered for inclusion in next year’s Proxy Statement, stockholder proposals
must be received at our principal executive offices no later than the close
of
business on January 25, 2008.
Notice
of
intention to present a proposal at the 2008 Annual Meeting should be addressed
to Corporate Secretary, National Lampoon, Inc., 8228 Sunset Boulevard, Third
Floor, Los Angeles, California 90046. We reserve the right to reject, rule
out
of order, or take other appropriate action with respect to any proposal that
does not comply with these and other applicable requirements. Any stockholder
proposal for next year’s Annual Meeting submitted after
January
25, 2008
will not
be considered filed on a timely basis. For proposals that are not timely filed,
the Company retains discretion to vote proxies it receives. For proposals that
are timely filed, the Company retains discretion to vote proxies it receives,
provided that (i) the Company includes in its Proxy Statement advice on the
nature of the proposal and how it intends to exercise its voting discretion
and
(ii) the proponent does not issue a Proxy Statement.
TRANSACTION
OF OTHER BUSINESS
Management
does not know of any matters to be brought before the meeting other than those
referred to in this Proxy Statement. If any matters which are not specifically
set forth in the form of proxy and this Proxy Statement properly come before
the
meeting, the persons designated as proxies will vote thereon in accordance
with
their best judgment.
PROXY
NATIONAL
LAMPOON, INC.
This
proxy is solicited on behalf of the Board of Directors for the Annual Meeting
on
June 19, 2007
This
proxy will be voted as specified by the stockholder. If no specification
is
made, all shares will be voted “FOR” the approval of the two proposals set forth
in the proxy statement.
The
stockholder(s) represented herein appoint(s) Daniel S. Laikin and/or James
P.
Jimirro proxy with the power of substitution to vote all shares of common
stock
entitled to be voted by said stockholder(s) at the Annual Meeting of the
Stockholders of National Lampoon, Inc. to be held at the Company’s headquarters
located at 8228 Sunset Boulevard, Third Floor, Los Angeles, California 90046,
on
June 19, 2007 at 11:00 a.m., and in any adjournment or postponement thereof
as
specified in this proxy.
PROPOSAL
#1-ELECTION OF DIRECTORS
|
Daniel
S. Laikin
|
FOR
o
|
AGAINST
o
|
ABSTAIN
o
|
|
Timothy
S. Durham
|
FOR
o
|
AGAINST
o
|
ABSTAIN
o
|
|
Paul
Skjodt
|
FOR
o
|
AGAINST
o
|
ABSTAIN
o
|
|
Robert
Levy
|
FOR
o
|
AGAINST
o
|
ABSTAIN
o
|
|
James
P. Jimirro
|
FOR
o
|
AGAINST
o
|
ABSTAIN
o
|
|
Duncan
Murray
|
FOR
o
|
AGAINST
o
|
ABSTAIN
o
|
|
James
Toll
|
FOR
o
|
AGAINST
o
|
ABSTAIN
o
|
|
PROPOSAL
#2-RATIFICATION OF STONEFIELD JOSEPHSON, INC. AS OUR INDEPENDENT
AUDITORS
FOR 2007
|
|||
|
|
|||
|
FOR
o
|
AGAINST
o
|
ABSTAIN
o
|
|
Please
mark, date and sign your proxy card and mail it in the enclosed envelope
as soon
as possible.
In
their discretion, proxies are entitled to vote upon such other matters as
may
properly come before the meeting, or any adjournment thereof.
Signature_______________________
Date_______
Signature_______________________
Date_______
19