DEF 14A 1 v181279_def14a.htm Unassociated Document
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 (Amendment No.  )
 
Filed by the Registrant
x
 
Filed by a Party other than the
Registrant
¨
 
Check the appropriate box:
 
 
¨
Preliminary Proxy Statement
 
 
¨
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
 
 
x
Definitive Proxy Statement
 
 
¨
Definitive Additional Materials
 
 
¨
Soliciting Material Pursuant to Rule 14a-12
     
THESTREET.COM, INC.
(Name of Registrant as Specified in Its Charter)
 
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
 
Payment of Filing Fee (Check the appropriate box):
 
 
x
No fee required.
 
 
¨
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:
 
 
(2)
Aggregate number of securities to which transaction applies:
 
 
(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):
 
 
(4)
Proposed maximum aggregate value of transaction:
 
 
(5)
Total fee paid:
 
 
¨
     Fee paid previously with preliminary materials.
 
 
¨
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:
 
 
(2)
Form, Schedule or Registration Statement No.:
 
 
(3)
Filing Party:
 
 
(4)
Date Filed:

 
 

 

April 15, 2010
 
Dear Stockholder:
 
I am pleased to invite you to attend TheStreet.com, Inc.’s Annual Meeting of Stockholders, which will be held on Thursday, May 27, 2010, at 10:00 a.m., at the offices of Hughes Hubbard & Reed LLP, One Battery Park Plaza, New York, New York 10004.  All stockholders of record as of the close of business on March 31, 2010 are entitled to vote at the Annual Meeting.  I urge you to be present in person or represented by proxy at the Annual Meeting.
 
This year, we are using the “Notice and Access” method of providing proxy materials via the Internet.  We believe that this process will allow us to conserve natural resources and reduce the costs of printing and distributing the proxy materials.  On or about April 15, 2010, we are mailing to most of our stockholders a Notice of Internet Availability of Proxy Materials containing instructions on how to access our 2010 Proxy Statement and 2009 Annual Report on Form 10-K and vote electronically via the Internet.  The Notice of Internet Availability of Proxy Materials also contains instructions on how to receive a paper or e-mail copy of the proxy materials.  Stockholders who previously elected to receive a paper or e-mail copy of the proxy materials will not receive a Notice of Internet Availability of Proxy Materials and instead will receive the proxy materials in the form previously elected.
 
The enclosed Notice of Annual Meeting and Proxy Statement fully describe the business to be transacted at the Annual Meeting, which includes (i) the election of two directors of the Company, (ii) a proposal to amend and restate the Company’s 2007 Performance Incentive Plan and (iii) the ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2010.
 
The Company’s Board of Directors believes that a favorable vote on each of the matters to be considered at the Annual Meeting is in the best interests of the Company and its stockholders and unanimously recommends a vote “FOR” each such matter.  Accordingly, I urge you to review the accompanying material carefully and to vote as soon as possible.  You may vote by marking, signing, dating and returning the enclosed proxy card. Alternatively, you may vote over the Internet or by telephone.
 
Directors and officers of the Company will be present to help host the Annual Meeting and to respond to any questions that you may have.  Your vote is important.  Whether or not you plan to attend the Annual Meeting, please vote as soon as possible.  You may vote on the Internet, by telephone, or by completing and mailing a traditional proxy card.  Please review the instructions on the proxy card regarding each of these voting options.
 
Thank you for your ongoing support of TheStreet.com.

Sincerely,

James J. Cramer
Chairman of the Board

 
 

 


NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 27, 2010

NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of TheStreet.com, Inc. (the “Company”) will be held on Thursday, May 27, 2010, at 10:00 a.m., at the offices of Hughes Hubbard & Reed LLP, One Battery Park Plaza, New York, New York 10004.  A proxy card and a Proxy Statement for the Annual Meeting are enclosed.

The Annual Meeting is for the purpose of considering and acting upon:
 
 
(1)
The election of two Class II Directors for three-year terms expiring at the Company’s Annual Meeting of Stockholders in 2013;
     
 
(2)
A proposal to amend and restate the Company’s 2007 Performance Incentive Plan;
     
 
(3) 
The ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2010; and
     
 
(4) 
Such other matters as may properly come before the Annual Meeting or any adjournment or postponement thereof.
 
The close of business on March 31, 2010 has been fixed as the record date for determining stockholders entitled to notice of and to vote at the Annual Meeting or any adjournment or postponement thereof.

Information concerning the matters to be acted upon at the Annual Meeting is set forth in the accompanying Proxy Statement.

YOUR VOTE IS IMPORTANT.  WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE ANNUAL MEETING IN PERSON, YOU ARE URGED TO VOTE.  YOU MAY VOTE ON THE INTERNET, BY TELEPHONE, OR BY COMPLETING, SIGNING AND RETURNING THE ENCLOSED PROXY CARD IN THE ACCOMPANYING ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
 
By Order of the Board of Directors,

Gregory E. Barton
Secretary of the Corporation
New York, New York
April 15, 2010

 
 

 
 
THESTREET.COM, INC.
14 Wall Street, New York, New York 10005
(212) 321-5000 
 
TABLE OF CONTENTS
  
Page
Proxy Statement
1
Purpose of the Annual Meeting
1
Annual Meeting Admission
1
Stockholders Entitled to Vote
1
Proposals You Are Asked to Vote On and the Board’s Voting Recommendations
2
Quorum and Voting Requirements to Elect Directors and Approve Each of the Proposals
2
Access to Proxy Materials
3
Voting Methods
3
Changing Your Vote
4
Householding
4
Lists of Stockholders
4
Costs of Proxy Solicitation
4
Proposal 1 — Election of Directors
4
Nominees for Director
5
Current Directors
5
Designee of the Series B Preferred Stockholders
6
Executive Officers
6
Corporate Governance and Related Matters
6
General
6
Independence of Directors
7
Board of Directors and Committees
7
Board of Directors Leadership Structure and Risk Management Oversight
8
Director Nominations
8
Diversity Policy
8
Stockholder Communications with the Board of Directors
9
Code of Business Conduct and Ethics
9
Related Person Transaction Policy and Procedures
9
Compensation Committee Interlocks and Insider Participation
9
Compensation of Directors
10
Executive Compensation
12
2009 Compensation Discussion and Analysis
12
2009 Report of the Compensation Committee
16
Summary Compensation Table
17
Employment Agreements
19
Grants of Plan-Based Awards in 2009
20
Outstanding Equity Awards at 2009 Fiscal Year-End
21
Option Exercises and Stock Vested in 2009
22
Potential Payments Upon Termination or Change in Control
22
Transactions with Related Persons
25
Employment Agreement with James J. Cramer
25
Kikucall, Inc.
26
Security Ownership of Certain Beneficial Owners and Management
27
Section 16(a) Beneficial Ownership Reporting Compliance
29
Proposal 2 — Approval of the Amendment and Restatement of TheStreet.com, Inc. 2007 Performance Incentive Plan
30
Description of the 2007 Plan
30
Federal Income Tax Consequences
32
Miscellaneous
33
Equity Compensation Plan Information
33

 
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Proposal 3 — Independent Registered Public Accounting Firm
34
Fees of Independent Registered Public Accountants
34
Information Regarding Change of Independent Registered Public Accounting Firm
34
2009 Report of the Audit Committee
35
Stockholder Proposals for 2011 Annual Meeting
36
Other Matters
37
Appendix A – TheStreet.com, Inc. 2007 Performance Incentive Plan (as amended and restated effective May 27, 2010)
A-1

 
ii

 

PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
To Be Held May 27, 2010
 
This Proxy Statement, or Notice of Internet Availability of Proxy Materials, is being first mailed on or about April 15, 2010 to stockholders of TheStreet.com, Inc. (the “Company”) at the direction of the Board of Directors of the Company (the “Board”) to solicit proxies in connection with the Annual Meeting of Stockholders (the “Annual Meeting”).  The Annual Meeting will be held on Thursday, May 27, 2010, commencing at 10:00 a.m., at the offices of Hughes Hubbard & Reed LLP, One Battery Park Plaza, New York, New York 10004, or at such other time and place to which the Annual Meeting may be adjourned or postponed.  This Proxy Statement describes the matters we would like you to vote on and provides information on those matters so you can make an informed decision.

Purpose of the Annual Meeting

The purpose of the Annual Meeting is to elect directors and to conduct the business described in the Notice of Annual Meeting.

Annual Meeting Admission

Only stockholders are invited to attend the Annual Meeting.  Proof of ownership of the Company’s stock, along with personal identification, must be presented in order to be admitted to the Annual Meeting.  If you are a stockholder of record, please bring personal identification (including photo identification) with you so we can check your name against our list of record holders.  If your shares are held in the name of a bank, broker or other holder of record, you must bring a brokerage statement or other proof of ownership with you to the Annual Meeting.  If you do not provide photo identification or comply with the other procedures outlined above, you will not be admitted to the Annual Meeting.

No cameras (including cell phone cameras), recording equipment, electronic devices, large bags, briefcases, or packages will be permitted in the Annual Meeting.

Stockholders Entitled to Vote

The close of business on March 31, 2010 is the record date (the “Record Date”) for determining the stockholders entitled to notice of and to vote at the Annual Meeting.  As of the Record Date, the Company had issued and outstanding 31,548,827 shares of common stock.  The common stock constitutes the only outstanding class of voting securities of the Company.

Most stockholders of the Company hold their shares through a stockbroker, bank, trustee, or other nominee rather than directly in their own name.  As summarized below, there are some distinctions between shares held of record and those owned beneficially:
 
 
  •
Stockholder of Record — If your shares are registered directly in your name with the Company’s transfer agent, American Stock Transfer & Trust Co., you are considered the stockholder of record of those shares and these proxy materials are being sent directly to you by the Company.  As the stockholder of record, you have the right to grant your voting proxy directly to the Company or to vote in person at the Annual Meeting.

 
  •
Beneficial Owner — If your shares are held in a stock brokerage account, by a bank, brokerage firm, trustee, or other nominee, you are considered the beneficial owner of shares held in street name and these proxy materials are being forwarded to you by your bank, brokerage firm, trustee, or nominee which is considered the stockholder of record of those shares.  As the beneficial owner, you have the right to direct your bank, brokerage firm, trustee, or nominee on how to vote and are also invited to attend the Annual Meeting. However, since you are not the stockholder of record, you may not vote these shares in person at the Annual Meeting.  Your bank, brokerage firm, trustee, or nominee is obligated to provide you with a voting instruction form for you to use.  A large number of banks and brokerage firms are participating in online programs that allow eligible stockholders to vote over the Internet or by telephone.  If your bank or brokerage firm is participating in such a program, your voting form will provide instructions.  If your voting form does not contain Internet or telephone voting information, please complete and return the paper form in the self-addressed, postage paid envelope provided by your bank, brokerage firm, trustee or other nominee.

 
1

 

Proposals You Are Asked to Vote On and the Board’s Voting Recommendations
 
Proposals:
  
Board’s Voting 
Recommendation:
1.  
Election of directors.
 
“FOR” each nominee to the Board
       
2.
Approval of the Amendment and Restatement of TheStreet.com, Inc. 2007 Performance Incentive Plan (the “2007 Plan”).
 
“FOR”
       
3.  
Ratification of the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2010.
 
“FOR”

The Board is not aware of any matters, other than the proposals described in this Proxy Statement, to be presented for a vote at the Annual Meeting.  In the election of directors, you may vote “FOR” all of the nominees or you may “WITHHOLD” your vote from one or more of the nominees.  For the other proposals, you may vote “FOR,” “AGAINST,” or “ABSTAIN.”  If you “ABSTAIN,” it has the same effect as a vote “AGAINST.”  Where you have appropriately specified how a proxy is to be voted, it will be voted accordingly.  If you sign a proxy card or voting instruction form with no further instructions, the shares will be voted in accordance with the Board’s voting recommendations as specified above.  Additionally, if you are a stockholder of record and you grant a proxy, any of the persons named as proxy holders will have the discretion to vote your shares on any additional matters properly presented for a vote at the Annual Meeting in accordance with Delaware law and our By-laws.

Quorum and Voting Requirements to Elect Directors and Approve Each of the Proposals

Quorum

The presence (in person or by proxy) of the holders of a majority of the outstanding shares of common stock entitled to vote at the Annual Meeting is necessary to constitute a quorum.  Abstentions and “broker non-votes” are counted as present and entitled to vote for purposes of determining a quorum.  A “broker non-vote” occurs when a bank, brokerage firm, trustee, or nominee that is considered the stockholder of record holding shares for a beneficial owner does not vote on a particular proposal because that holder does not have discretionary voting power for that particular item and has not received specific voting instructions for that proposal from the beneficial owner.

Voting Requirements

Under current rules of the New York Stock Exchange to which its members are subject, certain proposals are considered “discretionary” items upon which brokerage firms holding shares of common stock in street name may vote in their discretion on behalf of their clients if such clients have not furnished voting instructions.  Discretionary items include the ratification of KPMG LLP as our independent registered public accounting firm.  On these matters, your bank, brokerage firm, trustee, or nominee that is considered the stockholder of record may vote your shares held in street name even if you have not given them specific voting instructions.  With respect to the election of directors and approval of the amendment and restatement of the 2007 Plan, a broker does not have discretionary authority to vote in the absence of instructions from the beneficial owner.  If you do not provide specific voting instructions for such proposals, a broker non-vote will occur.  Broker non-votes have no effect and will not be counted towards the vote total for any proposal.

Vote Required
 
 
  • 
Election of Directors — The nominees for election as directors at the Annual Meeting will be elected by a plurality of the votes cast at the meeting.  This means that the director nominee with the most votes for a particular slot is elected for that slot.  Votes withheld from one or more director nominees will have no effect on the election of any director from whom votes are withheld.

 
  •
Approval of the Amendment and Restatement of the 2007 Plan — The affirmative “FOR” vote of a majority of the shares voted on the proposal (in person or by proxy) by persons entitled to vote is required to approve this proposal.  An abstention will have the same effect as a vote against this proposal and a broker non-vote will have no effect on the outcome of the vote.

 
2

 

 
  •
Ratification of the Appointment of KPMG LLP as our Independent Registered Public Accounting Firm — The affirmative “FOR” vote of a majority of the shares present in person or represented by proxy at the Annual Meeting and entitled to vote is required to approve this proposal.  An abstention will have the same effect as a vote against this proposal.

 Stockholder ratification of the selection of KPMG LLP as the Company’s independent registered public accounting firm is not required by the Company’s By-laws or otherwise.  However, the Audit Committee of the Board (the “Audit Committee”) is submitting the selection of KPMG LLP to the stockholders for ratification as a matter of good corporate practice.  If the stockholders fail to ratify the selection, the Audit Committee will reconsider whether or not to retain that firm.  Even if the selection is ratified, the Audit Committee in its discretion may direct the appointment of a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and its stockholders.

Access to Proxy Materials
 
For this Annual Meeting, we are using the “notice and access” process permitted by the Securities and Exchange Commission (the “SEC”) to distribute proxy materials to stockholders.  This process allows us to post proxy materials on a designated web site and notify stockholders of the availability of such proxy materials on that web site.  Thus, for most stockholders, we are furnishing proxy materials, including this Proxy Statement and our 2009 Annual Report on Form 10-K, by providing access to such documents on the Internet instead of mailing paper copies.

The Notice of Internet Availability of Proxy Materials (the “Notice”), which is being mailed to most of our stockholders, describes how to access and review all of the proxy materials on the Internet.  The Notice also describes how to vote electronically via the Internet.  If you would like to receive a paper copy of our proxy materials or receive only e-mail notice of the availability of proxy materials, you should follow the instructions for requesting such materials in the Notice.  Your request to receive proxy materials in paper form by mail or electronically by e-mail will remain in effect until you revoke it.  Choosing to receive your future notices of proxy materials by e-mail will save us the cost of printing and mailing documents to you and will reduce the impact of our Annual Meeting on the environment.  If you choose to receive future notices by e-mail, you will receive an e-mail next year with instructions containing a link to those materials and a link to the proxy voting web site.

This 2010 Proxy Statement and our 2009 Annual Report on Form 10-K are available in digital form for download or review in the Investor Relations section of our web site at http://www.thestreet.com/investor-relations/index.html, under “SEC Filings.”

Voting Methods

If you hold shares directly as the stockholder of record, you may vote by granting a proxy or, if you wish to vote at the meeting, by bringing the enclosed proxy card or using the ballot provided at the meeting.  If you are the beneficial owner of shares held in street name, you must submit voting instructions to your broker or nominee.  In most instances, you will be able to do this over the Internet, by telephone, or by mail.  Please refer to the instructions included on your proxy card or, for shares held in street name, the voting instruction form included by your broker or nominee.  If your shares are held in street name and you wish to vote at the meeting, you will need to contact the broker, trustee or nominee that holds your shares to obtain a “legal proxy” to bring to the meeting.

The Internet and telephone voting procedures are designed to authenticate stockholders by use of a control number and to allow you to confirm that your instructions have been properly recorded.  If you vote by telephone or on the Internet, you do not need to return your proxy card or voting instruction form.  Telephone and Internet voting for both stockholders of record and beneficial owners will be available 24 hours a day, and will close at 11:59 p.m. (Eastern Time) on May 26, 2010, the day before the Annual Meeting.
 
 
  •
Vote by Internet — If you have Internet access, you may vote from any location in the world 24 hours a day, 7 days a week, at the web site that appears on your proxy card or voting instruction form.  Have your proxy card or voting instruction form in hand when you access the web site and follow the instructions.

 
  •
Vote by Telephone — If you live in the United States, you may use any touch-tone telephone to vote toll-free 24 hours a day, 7 days a week.  Have your proxy card or voting instruction form in hand when you call.

 
  •
Vote by Mail — You may vote by mail by signing and mailing your proxy card or, for shares held in street name, the voting instruction form included by your broker or nominee.  If you provide specific voting instructions, your shares will be voted as you instruct.  If you sign, but do not provide instructions, your shares will be voted as the Board recommends. Please return your proxy card or voting instruction form in the postage-paid envelope provided so that it is received by May 25, 2010.
 
All shares that have been properly voted and not revoked will be voted at the Annual Meeting.  A representative of American Stock Transfer & Trust Co., our transfer agent, will tabulate the votes and act as the inspector of election.

 
3

 

Changing Your Vote

You may change your proxy instructions at any time prior to the vote at the Annual Meeting.  For shares held directly in your name, you may accomplish this by granting a new proxy (or revoking your proxy) or by voting in person at the Annual Meeting.  For shares held in street name, you may change your vote by submitting new voting instructions to your broker or nominee.  Attendance at the Annual Meeting will not, by itself, revoke a proxy.
 
Householding

SEC rules now allow the Company to deliver a single copy of our Notice of Internet Availability of Proxy Materials (or, if applicable, our Proxy Statement and Annual Report on Form 10-K) to two or more registered stockholders residing at the same address if we believe the stockholders are members of the same family.  This practice, known as “householding,” is designed to eliminate your receipt of duplicate mailings and to reduce our printing and postage costs. Accordingly, your household may have received a single set of proxy materials this year.  If you prefer to receive your own copy now or in future years, please request a duplicate set by contacting us at the following address: TheStreet.com, Inc., 14 Wall Street, 15th Floor, New York, NY 10005, Attention: Investor Relations, or by telephone at (212) 321-5000.

If your shares are held in street name, meaning through bank or brokerage accounts, you may have received a householding notice from your bank or broker.  Stockholders who did not respond that they do not want to participate in householding are deemed to have consented to it, and only one copy of the proxy materials is being sent to them.  Each stockholder will continue to receive a separate voting instruction form.  Stockholders wishing to change this election with their bank or broker may contact their bank or broker directly, or contact Householding Elections by calling 1-800-542-1061, and be prepared to provide their name, the name of the brokerage firms or banks where their shares are held, and their account numbers.  The revocation of a consent to householding will be effective 30 days following its receipt.

Lists of Stockholders

The names of stockholders of record entitled to vote at the Annual Meeting will be available at the Annual Meeting and for ten days prior to the meeting for any purpose germane to the meeting, between the hours of 9:30 a.m. and 4:30 p.m. (Eastern Time) at our principal executive offices at 14 Wall Street, 15th Floor, New York, NY 10005, by contacting the Secretary of the Company at least 24 hours in advance.

Costs of Proxy Solicitation

All costs incurred in the solicitation of proxies will be borne by the Company.  In addition to the solicitation by mail, officers and employees of the Company may solicit proxies by mail, facsimile, email, telephone, in person or by other means, without additional compensation.  The Company will also reimburse brokerage houses and other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses incurred in connection with forwarding proxy solicitation materials to the beneficial owners of common stock.

PROPOSAL 1

ELECTION OF DIRECTORS

In accordance with our Certificate of Incorporation, our Board has been divided into three classes, denominated Class I, Class II and Class III, which are as equal in number as practicable.  Members of each class hold office for staggered three-year terms. In addition, one director may be elected by the holders of Series B Preferred Stock on an annual basis, at their discretion, pursuant to the Certificate of Designation for the Series B Preferred Stock and the agreements related to the investment by funds affiliated with Technology Crossover Ventures (“TCV”) in the Company.  However, such board member is not a member of a class of directors.  At each annual meeting of our stockholders, the successors to the directors whose terms expire are elected to serve from the time of their election and qualification until the third annual meeting of stockholders following their election or until a successor has been duly elected and qualified.

The names of the nominees and current directors, their ages as of the date of the Annual Meeting, and certain other information about them are set forth below.

4

 
Nominees for Director

Daryl Otte and William R. Gruver each have been nominated for election at the Annual Meeting as Class II directors to serve as a director for a three-year term expiring at our Annual Meeting of Stockholders in 2013, or until their respective successors have been duly elected and qualified.  Each of these nominees has consented to being named in this Proxy Statement as a nominee of the Board and to serve if elected.  It is intended that the persons named in the proxy will vote for the election of each of these nominees. In case any of these nominees should become unavailable for election to the Board prior to the Annual Meeting for any reason not presently known or contemplated, the proxy holders will have discretionary authority in that instance to vote for a substitute nominee.
 
Daryl Otte, age 48.  Mr. Otte has served as a director of the Company since June 2001.  Mr. Otte has served as the Company’s Chief Executive Officer since March 2009, serving as Interim Chief Executive Officer from March 2009 – May 2009 and on a permanent basis thereafter.  Mr. Otte is a founding partner of Montefiore Partners, a venture capital investment fund management firm.  Prior to founding Montefiore Partners in 2000, Mr. Otte was senior vice president and member of the executive committee of Ziff-Davis, Inc., a leading media company.  During his service at Ziff-Davis from 1995 through 2000, Mr. Otte initiated and managed acquisition and development projects and venture investments, including some of the early commercialization efforts of the Internet.  The Company believes that Mr. Otte’s extensive experience as a senior media industry executive, as well as his years of service on our Board and on the boards of a variety of other companies, including digital media companies, make him a suitable member of the Board, able to provide valuable insight and advice.

William R. Gruver, age 65.  Mr. Gruver has served as a director of the Company since October 2003 and previously spent 20 years at Goldman, Sachs & Co., where he was a general partner and served as Chief Administrative Officer of the equities division until his retirement from the firm in 1992.  Still active in finance and business, he sits on the board of several private companies and charities, works as an international strategic consultant for financial firms in the U.S., the U.K., Italy and Switzerland, and is also a national arbitrator of the Financial Industry Regulatory Authority (“FINRA”).  Mr. Gruver currently serves as the Howard I. Scott Clinical Professor of Global Commerce, Strategy and Leadership at Bucknell University.  The Company believes that Mr. Gruver’s extensive experience as a senior financial services executive, as well as his years of service on our Board and on the boards of a variety of other companies, make him a suitable member of the Board, able to provide valuable insight and advice.

The Board of Directors recommends that stockholders vote FOR each named nominee.

 Current Directors

The current Class III director of the Company, who is not standing for re-election at the Annual Meeting and whose term will expire at our Annual Meeting of Stockholders in 2011, is as follows:

Ronni Ballowe, age 53.  Ms. Ballowe has served as a director of the Company since August 2009.  Ms. Ballowe spent nineteen years at Ziff-Davis Inc., a leading media company, serving in several senior executive positions, including Publisher of the flagship PC Magazine, Publisher of Computer Shopper and President of Ziff-Davis.  After leaving Ziff-Davis in 1998, Ms. Ballowe turned her attention to helping non-profit organizations in strategic planning, marketing, fund-raising and organizational dynamics. More recently, Ms. Ballowe has been consulting to media and other companies in a variety of roles, including providing strategic advice to digital media companies.  The Company believes that Ms. Ballowe’s extensive experience as a senior executive and consultant to a variety of media companies makes her a suitable member of the Board, able to provide valuable insight and advice.

The current Class I directors of the Company, who are not standing for re-election at the Annual Meeting and whose terms will expire at our Annual Meeting of Stockholders in 2012, are as follows:

James J. Cramer, age 55.  Mr. Cramer is a co-founder of the Company and has served as a director since May 1998.  He was appointed Chairman of the Board in October 2008.  In addition, Mr. Cramer has served as markets commentator and as advisor to the Company’s Chief Executive Officer since his retirement from Cramer, Berkowitz & Co., a hedge fund, at the end of 2000.  Mr. Cramer served as co-host of the “Kudlow & Cramer” program on the CNBC television network from 2003 through December 2004 and currently hosts the “Mad Money” program and appears frequently on CNBC business news programs.  From June 1996 to December 1998, he served as co-chairman of the Company.  He has been a columnist and contributor to the Company’s publications since its formation in 1996 and has been an employee of the Company since 2001.  The Company believes that Mr. Cramer’s extensive knowledge of financial markets and investing, the Company’s core editorial focus, extensive experience in financial media and journalism, as well as his years of service on our Board, make him a suitable member of the Board, able to provide valuable insight and advice.

Martin Peretz, age 70.  Dr. Peretz is a co-founder of the Company and has served as a director since May 1998.  He served as co-chairman of the Company from June 1996 to December 1998.  Since 1974, Dr. Peretz has served as the editor-in-chief of The New Republic magazine and was its chairman from 1974 through 2001.  He was a member of the faculty of Harvard University from 1966 through 2002.   Dr. Peretz also serves as a director of 11 mutual funds managed by the Dreyfus-Mellon Bank Group.  The Company believes that Dr. Peretz’s extensive experience as a senior media industry executive, as well as his years of service on our Board and on the boards of a variety of other companies, including media and financial services companies, make him a suitable member of the Board, able to provide valuable insight and advice.

5

 
Derek Irwin, age 45.  Mr. Irwin has served as a director of the Company since November 2007 and is the Senior Vice President, Finance for the Global Media Client Services division of The Nielsen Company, a marketing and media information company.  Mr. Irwin assumed this position in 2009.  Prior to his current role, he was the Senior Vice President, Finance for the Business Media division of The Nielsen Company.  Prior to joining Nielsen in 2005, he served in senior level financial positions at Ziff Davis Holdings, Monster Worldwide Inc., and Major League Baseball.  Mr. Irwin started his career at Ernst & Young LLP.  The Company believes that Mr. Irwin’s extensive experience as a senior finance executive at a variety of leading companies, including media companies, as well as his years of service on our Board, make him a suitable member of the Board, able to provide valuable insight and advice.

Designee of the Series B Preferred Stockholders

One of our directors is elected by the holders of our Series B Preferred Stock, being TCV, on an annual basis, at their discretion, pursuant to the agreements related to their investment in the Company.  In August 2009, TCV elected Christopher Marshall to serve as the director designee of our Series B Preferred Stockholders.

Christopher Marshall, age 42.  Mr. Marshall has served as a director of the Company since August 2009.  Mr. Marshall currently serves as a General Partner at Technology Crossover Ventures ("TCV"), a leading private equity and venture capital firm with $7.7 billion under management focused on information technology companies.  Prior to joining TCV in 2008, Mr. Marshall spent twelve years at Trident Capital, a leading venture capital and private equity firm focused on the software, business services and Internet markets.  Earlier in his career, Mr. Marshall worked for Banque Paribas and the Chase Manhattan Bank.  Mr. Marshall also serves on the board of XATA Corporation.  While Mr. Marshall was elected by TCV pursuant to its contractual rights, the Company believes that Mr. Marshall’s extensive experience as an investor in media and technology companies, particularly those with subscription businesses, as well as his years of service on the boards of a variety of companies, including digital media companies, make him a suitable member of the Board, able to provide valuable insight and advice.

Executive Officers

The following sets forth certain information regarding executive officers of the Company, including their ages as of the date of the Annual Meeting.  Information pertaining to Mr. Otte, who is both a director and Chief Executive Officer of the Company, may be found in the section above entitled “Current Directors.”

Gregory E. Barton, age 48, Executive Vice President of Business and Legal Affairs, General Counsel and Secretary.  Mr. Barton joined the Company in June 2009, bringing more than 13 years of experience as general counsel of SEC-reporting media and technology companies, as well as experience managing various business and finance operations.  From 2007 to 2008, Mr. Barton served as General Counsel at Martha Stewart Living Omnimedia, Inc., a media and merchandising company.  From 2002 to 2007, Mr. Barton served at Ziff Davis Media Inc., an integrated media company, holding the positions of Executive Vice President, Licensing and Legal Affairs, General Counsel and Secretary (2004 to 2007) and Executive Vice President, General Counsel and Secretary (2002 to 2004).  In March 2008, Ziff Davis filed for reorganization under chapter 11 of the U.S. Bankruptcy Code and its plan of reorganization was confirmed effective July 2008.  Prior to joining Ziff Davis Media Inc., Mr. Barton held a variety of positions at Index Development Partners, Inc. (formerly known as Individual Investor Group, Inc.), a financial media company, from 1998 to 2002, including President (2001 to 2002), Chief Financial Officer (2000 to 2002) and Executive Vice President of Business and Legal Affairs, General Counsel and Secretary (1998 to 2002).  From 1995 to 1998, Mr. Barton served at Alliance Semiconductor Corporation, as Vice President of Corporate and Legal Affairs (1996 to 1998) and General Counsel (1995 to 1998).  Mr. Barton began his legal career at Gibson, Dunn & Crutcher.

Richard Broitman, age 56, Chief Accounting Officer.  Mr. Broitman has served as our Chief Accounting Officer since June 2009.  Mr. Broitman joined the Company as Controller in July 2000, was appointed Vice President of Finance in October 2007 and was named Acting Chief Accounting Officer in May 2009.  Before joining the Company, Mr. Broitman was Controller of Individual Investor Group, Inc., was Director of International Royalties for Bertelsmann Music Group and worked in an audit capacity for both Deloitte Touche Tohmatsu (formerly Touche Ross & Co.) and CBS Corporation.

There are no family relationships between any director or executive officer of the Company.

CORPORATE GOVERNANCE AND RELATED MATTERS

General
 
The following discussion summarizes corporate governance matters relating to the Company, including director independence, Board and Committee structure, function and composition, and other governance charters, policies and procedures.  For information on the Company’s corporate governance, including the text of the Company’s Certificate of Incorporation and By-laws, the charters approved by the Board for the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee, and the Company’s Code of Business Conduct and Ethics, please visit the Investor Relations section of the Company’s web site at http://www.thestreet.com/investor-relations/index.html, under “Corporate Governance.”

 
6

 

Independence of Directors

The Board has determined that five of its seven members are independent under the independence standards of listing requirements of The Nasdaq Stock Market, Inc. (“Nasdaq”).  Under these standards, a director is not independent if he has certain specified relationships with the Company or any other relationship which in the opinion of the Board would interfere with his exercise of independent judgment as a director.  The independent directors are:  Ms. Ballowe, Mr. Gruver, Mr. Irwin, Mr. Marshall and Dr. Peretz.
 
Board of Directors and Committees
 
The Board is responsible for directing and overseeing the business and affairs of the Company.  The Board represents the Company’s stockholders and its primary purpose is to build long-term shareholder value.  The Board meets on a regularly scheduled basis during the year to review significant developments affecting the Company and to act on matters that in accordance with good corporate governance require Board approval.  It also holds special meetings when an important matter requires Board action between scheduled meetings.
 
The Board met seven times during fiscal 2009.  During fiscal 2009, each member of the Board participated in at least 75% of all Board and applicable committee meetings held during the period for which he or she was a director or member of the applicable committee, except that Dr. Peretz attended 71% (five of seven) meetings of the Board.
 
The Board has established an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee to devote attention to specific subjects and to assist the Board in the discharge of its responsibilities.  The functions of those committees, their current members and the number of meetings held during fiscal 2009 are described below.
 
Audit Committee.  The Audit Committee provides assistance to the Board in fulfilling its legal and fiduciary obligations with respect to matters involving the accounting, auditing, financial reporting and internal control functions of the Company including ensuring the integrity of the Company’s financial statements.  The Audit Committee oversees the Company’s internal accounting and financial reporting procedures and reviews the qualifications, independence and performance of the Company’s independent registered public accounting firm.  The Audit Committee has sole authority to appoint and replace the Company’s independent registered public accounting firm, to approve their fees and to evaluate their performance.  The Company’s Chief Executive Officer does not attend Audit Committee meetings unless requested by the Committee.  The Audit Committee currently consists of Mr. Irwin, who serves as its chairman, Ms. Ballowe and Mr. Gruver.  All of the current members of the Audit Committee satisfy Nasdaq and SEC independence requirements, as well as Nasdaq rules for financial literacy.  In addition, the Board has determined that Mr. Irwin, the Chairman of the Audit Committee, is an “audit committee financial expert” as defined under SEC rules.  The Audit Committee met thirty-four times during fiscal 2009.  The Audit Committee operates under a written charter adopted by the Board available on the Company’s web site at http://www.thestreet.com/investor-relations/index.html under “Corporate Governance.”

Compensation Committee.  The Compensation Committee makes the final determinations concerning the base salary and incentive compensation of the Company’s Chief Executive Officer, certain senior level employees and certain other individuals compensated by the Company, as well as awards granted to all employees, consultants and other individuals under the Company’s incentive compensation plans.  The Compensation Committee currently consists of Mr. Gruver, who serves as its chairman, Mr. Irwin and Mr. Marshall.  All of the current members of the Compensation Committee are independent under Nasdaq corporate governance listing standards.  The Compensation Committee met twenty-five times during fiscal 2009.  The Compensation Committee operates under a written charter adopted by the Board available on the Company’s web site at http://www.thestreet.com/investor-relations/index.html, under “Corporate Governance.”
 
Nominating and Corporate Governance Committee.  The Nominating and Corporate Governance Committee (i) identifies and evaluates potential director candidates, (ii) recommends candidates for appointment or election to the Board, and (iii) advises the Board on matters of corporate governance.  The Nominating and Corporate Governance Committee currently consists of Ms. Ballowe, who serves as its chairwoman, Mr. Gruver and Mr. Irwin.  All of the current members of the Nominating and Corporate Governance Committee are independent under Nasdaq corporate governance listing standards.  The Nominating and Corporate Governance Committee met three times during fiscal 2009.  The Nominating and Corporate Governance Committee operates under a written charter adopted by the Board available on the Company’s web site at http://www.thestreet.com/investor-relations/index.html, under “Corporate Governance.”

7

 
Board of Directors Leadership Structure and Risk Management Oversight

The Board does not have a policy on whether or not the roles of Chairman of the Board and Chief Executive Officer should be separate and, if they are to be separate, whether the Chairman of the Board should be selected from the non-employee directors or be an employee.  The Board believes that it should be free to make a choice from time to time in any manner that it believes to be in the best interests of the Company and its stockholders.  Currently, we separate the roles of Chairman and Chief Executive Officer, with Mr. Cramer serving as Chairman and Mr. Otte serving as Chief Executive Officer.  We believe that at the present time the separation of roles, which enhances the Board’s ability to oversee the performance of the Chief Executive Officer, is appropriate, as it may strengthen investor confidence in our Company and the integrity of the Board.

The Board has an active role, as a whole and also at the committee level, in overseeing management of the Company’s risks.  The Board regularly reviews information regarding the Company’s industry, operations, balance sheet and technology considerations, among other things, as well as the risks associated with each.  The Compensation Committee is responsible for overseeing the management of risks relating to the Company’s executive compensation plans and arrangements.  The Audit Committee oversees management of financial risks.  The Nominating and Governance Committee (as well as the Audit Committee in the context of related party transactions) manages risks associated with the independence of the members of the Board and potential conflicts of interest.  While each committee is responsible for evaluating certain risks and overseeing the management of such risks, the entire Board is regularly informed through committee reports about such risks.

Director Nominations

The Nominating and Corporate Governance Committee will consider candidates for director who are recommended by its members, by other Board members, by stockholders and by management.  From time to time, the Committee may also engage third party search firms to assist it in identifying director candidates.

In evaluating director candidates for purposes of recommending nominees to the Board, the Nominating and Corporate Governance Committee will consider (among other factors the Committee may deem relevant) the candidate’s: (i) personal and professional ethics and integrity; (ii) business and professional experience in fields relevant to the Company’s business (including whether that experience complements the expertise and experience of the other directors); (iii) commitment to representing the interests of all stockholders of the Company; (iv) ability to devote sufficient time to Board activities; and (v) status under applicable independence requirements.

To have a candidate considered by the Nominating and Corporate Governance Committee, a stockholder must submit the recommendation in writing and must include the following information:  (i) name, address and biography of the candidate; (ii) statement from the candidate indicating his or her willingness to serve if elected; (iii) statement from the recommending stockholder indicating the particular skills or expertise the candidate would bring to the Board; (iv) name, address and phone number of the stockholder submitting the recommendation; (v) number of shares of the Company’s stock owned by the stockholder submitting the recommendation and the length of time such shares have been held; (vi) description of all relationships or arrangements between the stockholder and the proposed candidate; and (vii) any additional information that would be required under applicable SEC rules to be included in the Company’s proxy statement in the event the proposed candidate were to be nominated as a director.

Such submissions should be sent to the Company’s Nominating and Corporate Governance Committee, c/o the Secretary, at the Company’s principal executive offices. In order for a candidate to be considered for any annual meeting of stockholders, the submission must be received no later than the December 1st preceding such annual meeting.

The Nominating and Governance Committee will evaluate each potential candidate using publicly available information, biographical and other information obtained from the candidate (or the submitting stockholder), and may seek additional information from the potential candidate, the submitting stockholder, and/or other sources.  The Committee and other members of the Board may hold interviews with selected candidates and contact the candidate’s references and/or other sources of first-hand information about the candidate.  Individuals recommended by stockholders will be considered under the same criteria as candidates recommended by other sources.  However, the Committee may also take into consideration the number of shares held by the recommending stockholder and the length of time that such shares have been held.  In evaluating current director candidates for re-election to the Board, the Committee may also take into consideration the director’s record of attendance at Board and committee meetings.

Diversity Policy

The Board has not adopted a formal policy with respect to Board diversity.  Nevertheless, the Nominating and Corporate Governance Committee and the Board intend to consider, when evaluating potential candidates to join the Board, whether the candidate’s background may add diversity to the Board to potentially enhance the variety of perspectives that may be brought to bear in carrying out the Board’s duties.

8

 
Stockholder Communications with the Board of Directors

The Board has adopted the following policy concerning stockholder communications:  Any stockholder wishing to contact the Board, any committee of the Board, or any individual director regarding bona fide issues or questions about the Company may do so by sending an email to boardcommunications@thestreet.com or a written communication to the Board or the appropriate committee or director c/o the Secretary at the following address: TheStreet.com, Inc., 14 Wall Street, 15th Floor, New York, NY 10005.

The Secretary will review all such correspondence and forward it (or a summary) to the appropriate parties. Where the Secretary deems it appropriate, such forwarding will take place on an expedited basis.  Communications raising concerns relating to the Company’s accounting, internal controls, or audit matters will immediately be brought to the attention of the chairman of the Audit Committee and will be handled in accordance with the procedures established by the Audit Committee for such matters.

The Company believes that it is important for directors to directly hear concerns expressed by stockholders.  Accordingly, Board members are encouraged to attend the Annual Meeting of Stockholders.  Two of the six members of the Board at the time of the Annual Meeting in 2009 attended the meeting.

Code of Business Conduct and Ethics

The Company has adopted a Code of Business Conduct and Ethics that applies to all of its directors, officers and employees. This code is publicly available in the Investor Relations section of the Company’s web site at http://www.thestreet.com/investor-relations/index.html, under “Corporate Governance.”  Any substantive amendments to the code and any grant of a waiver from a provision of the code requiring disclosure under applicable SEC or Nasdaq rules will be disclosed in a report on Form 8-K.

Related Person Transaction Policy and Procedures

Pursuant to the rules of Nasdaq, the Audit Committee reviews and approves or ratifies any transaction or series of transactions involving more than $20,000 in which the Company was, is or will be a participant, and in which any related person had, has or will have, a direct or indirect interest.  For purposes of this policy, the term “related person” has the meaning contained in Item 404 of Regulation S-K.  In the course of its review and approval or ratification of a transaction, the Audit Committee is required to consider the facts and circumstances of the transaction, including, without limitation, the following:
 
 
(1)
the related person’s relationship to the Company and interest in the proposed transaction;

 
(2)
the material facts of the proposed transaction, including the proposed aggregate value of such transaction or, in the case of indebtedness, the amount of principal that would be involved;

 
(3)
the benefits to the Company of the proposed transaction;

 
(4)
the impact on a director’s independence;

 
(5)
the availability of other sources for comparable products or services;

 
(6)
whether the proposed transaction is on terms that are comparable to the terms available to an unrelated third party or to employees generally; and

 
(7)
any other matters the Audit Committee deems appropriate.

In addition, the policy requires Audit Committee review and approval of all proposed contributions by the Company to any charitable or non-profit organization for which a related person serves as a trustee, officer or other principal.  In the event the Company becomes aware of a related person transaction that was not reviewed and approved in advance, then the transaction will be submitted to the Audit Committee for evaluation as above, and (i) if the transaction is pending or ongoing, the Committee will determine the appropriate course of action, including ratification, amendment or termination, and (ii) if the transaction is completed, the Committee will determine if rescission and/or disciplinary action is appropriate, and will request that the General Counsel evaluate the Company’s controls and procedures to ascertain why the transaction was not properly submitted for prior approval and whether changes to the policy and procedures are recommended.  No Audit Committee member may participate in any review, consideration or approval of any transaction with respect to which such member, or any of his or her immediate family members, is a related person.

 Compensation Committee Interlocks and Insider Participation

During fiscal 2009, the Compensation Committee consisted of Mr. Gruver and Mr. Irwin.  Each of them is independent, and none of them are employees or former employees of the Company.  During fiscal 2009, none of the Company’s executive officers served on the compensation committee (or equivalent) or the board of directors of another entity whose executive officers served on the Company’s Compensation Committee or Board.

 
9

 

Compensation of Directors

During fiscal 2009, our directors earned the following total compensation:
 
Name
 
Fees Earned
or Paid in
Cash
($)
 
Stock
Awards(1)
($)
 
Option
Awards(2)
($)
 
Non-Equity
Incentive Plan
Compensation
($)
 
Change in
Pension Value
and Nonqualified
Deferred
Compensation
Earnings
($)
 
All Other
Compensation(3)
($)
 
Total
($)
 
Ronni Ballowe(4)
   
20,156
   
21,205
   
   
   
   
433
 
41,794
 
                                           
James J. Cramer(5)
   
   
447,828
   
   
   
   
13,448
 
461,276
 
                                           
William R. Gruver(6)
   
79,650
   
68,898
   
   
   
   
2,069
 
150,617
 
                                           
Derek Irwin(7)
   
86,200
   
68,898
   
   
   
   
2,069
 
157,167
 
                                           
Christopher Marshall(8)
   
12,515
   
21,205
   
   
   
   
433
 
34,153
 
                                           
Daryl Otte(9)
   
   
   
   
   
   
 
 
                                           
Martin Peretz
   
34,350
   
68,898
   
   
   
   
2,069
 
105,317
 
                                           
Jeffrey Sonnenfeld(10)
   
35,819
   
68,898
   
   
   
   
 
104,717
 
 

(1)
This column represents the aggregate grant date fair value for restricted stock units (“RSUs”) as determined in accordance with Financial Accounting Standards Board Accounting Standards Codification 718.  The grant date fair value for each RSU was $3.33 for the grants to our directors other than Ms. Ballowe and Mr. Marshall, and $2.45 for the grants to Ms. Ballowe and Mr. Marshall, reflecting the closing price of the Company’s common stock on January 2, 2009 and September 10, 2009, respectively.  As noted below, in January 2009 the directors compensation policy provided that the number of shares to be awarded on the first business day of the year to non-executive directors would be calculated based upon the closing price of the Company’s common stock on the business day prior to the date of grant (the closing price of the Company’s common stock on December 31, 2008 was $2.90).  The policy was amended in February 2009 to provide that for subsequent grants, the number of shares to be awarded on the first business day of the year to non-executive directors would be calculated based upon the closing price of the Company’s common stock on the date of grant.  As of December 31, 2008, each of the non-employee directors held 3,769 unvested RSUs, all of which vested on January 2, 2009.  As of December 31, 2009, each of Messrs. Gruver and Irwin and Dr. Peretz held 20,690 unvested RSUs, all of which vested on January 2, 2010 and Ms. Ballowe and Mr. Marshall held 8,655 unvested RSUs, all of which vested on January 2, 2010.  As noted below, Mr. Otte’s compensation as a director during 2009 is not reported on this chart but appears in the Summary Compensation Table, below.  The above table does not reflect compensation paid to Mr. Cramer as an employee, which is described below under the heading “Transactions with Related Persons.”

(2)
No non-employee director held unexercised options as of December 31, 2009.  Mr. Cramer held 357,628 unexercised options as of December 31, 2009 pursuant to awards previously made to him for his services as an employee, rather than as a director.

(3)
Consists of dividend equivalents accrued on RSUs held by such directors in fiscal 2009.

(4)
Ms. Ballowe was elected to the Board in August 2009.  Cash compensation includes a pro rata portion of the $30,000 annual retainer as well as a pro rata portion of an annual fee of $5,000 for duties associated with chairing the Nominating and Corporate Governance Committee.

(5)
Mr. Cramer is the Chairman of the Board and an employee but not an executive officer of the Company.  His compensation for his services as an employee is described below under the heading “Transactions with Related Persons.”  In addition to compensation for his services described under “Transactions with Related Persons,” Mr. Cramer also receives compensation for his services as Chairman of the Board.  On January 2, 2009 Mr. Cramer received a one-time grant of 100,000 RSUs as consideration for his assumption of the Chairmanship duties on October 24, 2008.  This January 2, 2009 award vested immediately upon the grant date but was settled by delivery of shares of common stock on January 2, 2010.  Additionally, Mr. Cramer receives a grant of RSUs having a value of $100,000 annually as compensation for his services as Chairman of the Board and received such grant with respect to fiscal year 2009 on January 2, 2009, which resulted in a grant to Mr. Cramer of 34,483 shares (calculated, as noted above, based upon the closing price of the Company’s common stock on December 31, 2008 in accordance with the Company’s then-current policy).

 
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(6)
Cash compensation includes an annual fee of $15,000 for duties associated with chairing the Compensation Committee.

(7)
Cash compensation includes an annual fee of $20,000 for duties associated with chairing the Audit Committee.

(8)
Mr. Marshall was elected to the Board in August 2009.  Cash compensation includes a pro rata portion of the $30,000 annual retainer.

(9)
Does not include consideration paid for Mr. Otte’s services as a director prior to Mr. Otte’s appointment as Chief Executive Officer in March 2009 (on an interim basis from March 2009 – May 2009, and on a permanent basis thereafter), which is reflected in the Summary Compensation Table, below.  Since his appointment as Chief Executive Officer, Mr. Otte does not receive separate consideration for his service as a director.  Mr. Otte’s compensation for service as the Company’s Chief Executive Officer is described in the section of this Proxy Statement entitled “Executive Compensation.”

(10)
Dr. Sonnenfeld resigned as a director in August 2009.  Cash compensation includes a pro rata portion of the $30,000 annual retainer as well as a pro rata portion of the annual fee of $5,000 for duties associated with chairing the Nominating and Corporate Governance Committee.  The RSU award made to Dr. Sonnenfeld on January 2, 2009 expired unvested upon his resignation from the Board.
 
The compensation set forth in the preceding table was based on the following schedule of fees for 2009 compensation of directors:
 
 
  •
Annual Retainer.  Each non-employee director receives an annual retainer in the amount of $30,000 for service on the Company’s Board.  The retainer is payable in arrears in equal quarterly installments (on March 31st, June 30th, September 30th and December 31st) and prorated as necessary to reflect service commencement or termination during the quarter.

 
  •
Equity Grant.  Each non-executive director receives an annual grant of restricted stock units (“RSUs”) awarded under an equity compensation plan approved by the Company’s shareholders.  The RSUs are awarded on the first business day of each year and valued at $100,000 for a non-executive Chairman and $60,000 for all non-employee other directors.  With respect to the grants in January 2009, the value was calculated based upon the closing price of the Company’s common stock on the Nasdaq Stock Market on December 31st of the previous year.  In February 2009, the Board approved an amendment to the directors compensation policy in which the value of shares on a grant date will be the closing price on the date of grant, as opposed to the closing price on the preceding business day.  The RSUs vest on the first anniversary of the date of grant, subject to continued service.  Vesting of the RSUs will automatically accelerate upon the occurrence of a change of control of the Company.  In September 2009, the Board approved an amendment to the directors compensation policy to clarify that if a non-employee director is elected after the first business day of a year, the $60,000 grant shall be pro rated to reflect the partial year of service and will vest on the first business day of the following calendar year.

 
  •
Meeting Fees.  Each non-employee director is entitled to receive the following fees for participating in meetings of the Company’s Board and committees:

 
   •
$1,500 for attending each Board meeting in person;

 
   •
$450 for attending each committee meeting in person, for committee meetings that take place on the same day as Board meetings;

 
   •
$700 for attending each committee meeting in person (other than committee meetings that take place on the same day as Board meetings);

 
   •
$450 for participating in each Board or committee conference call, or participating by telephone in an otherwise in-person Board or committee meeting.

 
  •
Chairmanship Fees.  In addition to the fees set forth above, the chairman of the each committee receives the following additional annual fees (payable quarterly in arrears), to compensate him or her for the additional responsibilities and duties of the position:

 
   •
Audit – $20,000

 
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   •
Compensation – $15,000

 
   •
Nominating and Corporate Governance – $5,000

Non-employee directors are reimbursed for the expenses they incur in connection with attending Board and committee meetings. See “Transactions with Related Persons” for a discussion of certain agreements between the Company and James J. Cramer, in his capacity as an employee of the Company.  In addition, the Company made payments in 2009 of $3,400 and $9,450, respectively, to former directors Jeffrey Cunningham and Jay Hoag, related to their service as directors of the Company during fiscal 2008, in accordance with the above compensation policy.

Stock Ownership of Directors

Pursuant to the Board’s guidelines for stock ownership by directors adopted in 2007, each director is expected to beneficially own shares of the Company’s common stock (excluding shares underlying unexercised stock options) equal to at least $180,000 in value.  Each director who has served as a director continuously since January 1, 2007 is expected to be in compliance with the guideline by January 1, 2011.  Each director who joined or joins the Company after January 1, 2007 is expected to be in compliance with this guideline by the fourth anniversary of the date of his or her election as a director.  The Board recognizes that exceptions to this guideline may be necessary or appropriate in individual cases, and may approve such exceptions from time to time as it deems appropriate in the interests of the Company’s stockholders.

EXECUTIVE COMPENSATION

2009 Compensation Discussion and Analysis

The Compensation Committee (the “Committee”) sets the base salary and incentive compensation of the Company’s executive officers, and is responsible for the administration of the Company’s 2007 Performance Incentive Plan (the “2007 Plan”).

Compensation Philosophy and Objectives

It is the philosophy of the Compensation Committee to enhance shareholders’ long-term interests by (i) motivating executive officers to achieve the highest levels of performance; (ii) recruiting and retaining talented employees; (iii) competing with rapidly growing, respected companies in businesses similar to ours within clear and rational guidelines; and (iv) creating a compensation environment driven by accountability.

Elements of Compensation and Linkage to Objectives

The Compensation Committee believes that the best way to achieve these objectives is to establish compensation for the Company’s executive officers consisting of (i) a base salary; (ii) short-term incentives provided through an annual cash incentive program; and (iii) long-term incentives provided through grants of equity.  The overall package should be competitive with packages offered by the Company’s peers and other companies in our industry or metropolitan area, as the Company competes with such other companies to attract and retain employees.  In establishing the target and payment methodology for the annual cash incentive awards, the Compensation Committee seeks to create incentives to achieve goals that we believe will enhance long-term shareholder value.  Commencing with fiscal 2009, we sought to increase the focus on creating long-term value by altering the vesting schedule for RSU grants from the schedule that typically had been used by the Company in recent years (which previously provided for vesting as to one-third of the underlying shares on each of the first three anniversaries of the date of grant), such that grants to senior executives made since May 2009 vest over five years, as to 10% of the underlying shares on each of the first four anniversaries of the date of grant and the balance on the fifth anniversary, subject to the executive’s continued employment on the vesting date, and subject to acceleration in the event of a change of control (as well as partial or full acceleration upon termination under certain circumstances).  Moreover, the Compensation Committee revised its equity grant practices with respect to senior executives in 2009, determining that rather than make annual grants of options and RSUs, equity would be granted in the form of RSUs in connection with the hiring of executives and that a grant would be made in 2009 to its current senior executives such that the executives each would have, as of the grant date, 75,000 equity units (calculated, for this purpose, as the sum of the RSUs and one-third of the options, if any, that previously had been granted to such executive).  The Compensation Committee intended that such grants would provide appropriate long-term incentives without need for additional grants in the near term, although as the competition for executive talent may evolve in upcoming years the Compensation Committee will review whether it may be appropriate to make additional equity awards to executives generally, as well as whether additional equity awards may be appropriate for any individual executives based upon their performance, assumption of new responsibilities or for other reasons.

12

 
Determination of Compensation

The determinations of the Compensation Committee regarding the appropriate form and level of executive compensation are ultimately judgments based on the Compensation Committee's assessment of the performance of the Company against its financial and strategic goals, the level of responsibility and individual performance of each executive officer, and executive compensation at comparable companies.  At the request of the Compensation Committee, the Company’s Chief Executive Officer makes compensation recommendations for the Company’s senior managers (including the named executive officers) other than himself.  He also provides to the Compensation Committee his evaluations of each manager’s performance.  The Compensation Committee discusses the recommendations with the Chief Executive Officer and amongst its members.  Additionally, the Compensation Committee conducts a review of the Chief Executive Officer’s performance with the Company’s Board.  The Compensation Committee makes the final decisions on the compensation of all named executive officers.

In 2009, the compensation structures for Daryl Otte and Gregory Barton were shaped by negotiations with such individuals in connection with the hiring of Mr. Otte as our Chief Executive Officer and Mr. Barton as our Executive Vice President, Business and Legal Affairs, General Counsel and Secretary.  (The structure for Mr. Barton’s compensation arrangement was modeled after Mr. Otte’s, although Mr. Otte’s arrangement reflects a higher compensation level, and contains certain additional features, in light of the unique importance of the role of Chief Executive Officer.)  Mr. Broitman’s compensation in 2009 reflected a raise in his base salary, and participation in our annual cash incentive plan, in connection with his promotion to become Chief Accounting Officer.  The compensation of the other named executive officers, who ceased to be employees of the Company during the first half of 2009, primarily reflected their arrangements from the prior year, together with a grant of RSUs in January 2009 (which RSUs, other than with respect to Thomas J. Clarke, Jr., were forfeited upon the executive’s departure).  In connection with determining the compensation structure for the Company’s named executive officers in 2009, the Compensation Committee retained a compensation consultant, Exequity LLP (the “Consultant”), to perform an assessment of our executive compensation programs as compared to an updated peer group of companies.  However, this peer survey held less importance in 2009 than in prior years in light of the factors described above.  The Consultant did not perform any services for the Company other than the executive compensation peer assessment and consulting services described herein.  All decisions regarding the engagement of the Consultant were made by the Compensation Committee.  The peer group consisted of companies deemed by the Consultant and the Compensation Committee to be representative of companies that compete for the same types of executive talent as does the Company:  Bankrate, Inc.; Dolan Media Company; eDiets.com, Inc.; The Knot, Inc.; Local.com Corporation; Martha Stewart Living Omnimedia, Inc.; Media General, Inc.; Morningstar, Inc.; The New York Times Company; PlanetOut Inc.; Primedia Inc.; Shutterfly, Inc.; Travelzoo Inc.; The Washington Post Company; and WebMD Health Corp. (now known as HLTH Corporation).

In addition to the compensation discussion below, the Compensation Committee approved the following terms to retain Daryl Otte as a consultant to serve as our Interim Chief Executive Officer in March 2009, which arrangement was in place through the Company’s hiring of Mr. Otte in May 2009 to become Chief Executive Officer:  Mr. Otte was paid a base salary of $59,792 per month and received a grant of 25,000 RSUs, which were to vest on January 2, 2010.  These amounts were determined through negotiation with Mr. Otte.
 
Base Salary

Base salary is the basic element of direct cash compensation, designed to attract and retain highly qualified executives. Accordingly, in setting base salary, the Compensation Committee intends to be competitive with other publicly-traded companies in our industry of providing Internet-related content services (with the understanding that such comparisons are imperfect).  The Committee also considers the level of responsibility of the position and the level of experience of the executive.  Additionally, in some circumstances, it is necessary to set compensation at levels that differ from median market levels, due to recruitment or retention considerations, to recognize roles that vary in responsibility from standard market positions, or to reward individual performance.

The base salaries of Messrs. Otte and Barton ($425,000 and $275,000, respectively) were determined in connection with negotiations to hire such individuals, and represent levels that the Compensation Committee believed were reasonable in connection with their role and experience, as well as in relation to the compensation levels paid to the Company’s other named executive officers (including those who left the Company during the first half of 2009).  The base salary of Mr. Broitman, who has served as the Company’s Vice President of Finance since October 2007, was increased by $20,000, to $200,000 per annum, in connection with his appointment as the Company’s Chief Accounting Officer in June 2009.

Bonus

The annual bonus is the short-term incentive component of our executive compensation program and is designed to provide a direct method of motivating executives to the achievement of near-term corporate performance goals.  This component provides for the payment of cash bonuses based upon achievement of annual financial performance measures that are deemed by our Board and Compensation Committee to be critical to our long-term success.  Generally, the short-term, annual incentive element of our executive compensation has tended to be a larger portion of total compensation than among our peer companies, while the long-term, equity incentive portion has tended to be smaller.  This is due to the following factors: (i) short-term, direct compensation has been viewed by the Board and the Compensation Committee as the most effective spur to our reaching profitability on a sustainable basis, (ii) the Internet industry is notable for its high volatility and rapid pace of change, which make annual incentives more appropriate and (iii) the Compensation Committee’s desire to reduce the potential dilution to shareholders resulting from excessive reliance on long-term equity compensation.  The Company issues short-term cash incentive awards pursuant to the terms of the 2007 Plan.

 
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Under our short-term cash incentive program, we set a target bonus amount for each applicable executive, generally expressed as a percentage of the executive’s base salary (pro rated in the event employment commences during a fiscal year).  In 2009, this target was $320,000 for Mr. Otte; 75% of salary for Mr. Barton; and 40% of salary for Mr. Broitman.  The annual targets of Messrs. Otte and Barton were determined in connection with negotiations to hire such individuals; the targets for Messrs. Otte, Barton and Broitman represent levels that the Compensation Committee believed were reasonable in connection with their role and experience, as well as in relation to the compensation levels paid to the Company’s other named executive officers (including those who left the Company during the first half of 2009).

In 2009, the short-term cash incentive was based 70% on achievement of an Adjusted EBITDA target and 30% on achievement of a Free Cash Flow target.  The level of the targets — $4.5 million for Adjusted EBITDA and $8.0 million for Free Cash Flow – were determined in connection with a forecast prepared by the Company after Mr. Otte was hired as Chief Executive Officer.  Potential payout with respect to the Adjusted EBITDA measure ranged from 80% of the bonus opportunity for that measure for achievement of 67% of target performance to 120% of the bonus opportunity for achievement of 133% or more of target performance, on a straight-line sliding scale.  Potential payout with respect to the Free Cash Flow measure ranged from 80% of the bonus opportunity for that measure for achievement of 75% of target performance to 120% of the bonus opportunity for achievement of 125% or more of target performance, on a straight-line sliding scale.  However, the Compensation Committee has discretion to pay less than these amounts if in its judgment the bonus should be reduced.  (The Compensation Committee also has the ability to award wholly discretionary bonuses.)  The short-term incentive is paid as soon as practicable after the end of the fiscal year.

The Compensation Committee viewed Adjusted EBITDA and Free Cash Flow as the most important metrics on which to focus during 2009, which was a time of severe dislocation in the financial and advertising markets.  In that difficult environment, the Compensation Committee believed it would assist in creating long-term value if the Company could demonstrate its ability to generate profits (as defined by Adjusted EBITDA) and Free Cash Flow in such challenging conditions, and that the Adjusted EBITDA measure should be weighted significantly more than the Free Cash Flow measure.  The Compensation Committee each year considers which financial metrics to use in establishing targets for the short-term cash incentive program, and what respective weight to give to any such metric.

Following conclusion of fiscal year 2009, the Compensation Committee determined that the Company had exceeded 133% of the Adjusted EBTIDA performance target and 125% of the Free Cash Flow performance target, and determined to pay the maximum 120% of target bonus opportunity for each such measure.  In addition, the Company also determined to pay discretionary bonuses to Mr. Otte and certain employees who are not named executive officers, including a bonus of $25,000 payable to James Cramer, in light of the exceptional contributions made by such employees to the Company during fiscal 2009.

As used in 2009 for purposes of the short-term cash incentive program, “Adjusted EBITDA” and “Free Cash Flow” were defined as the Adjusted EBITDA and cash flow, of the Company for 2009, in each case excluding the positive or negative impact of (i) asset write-downs, (ii) litigation or claim judgments or settlements, (iii) the effect of changes in tax laws, accounting principles, or other laws or provisions affecting reported results, (iv) any reorganization and restructuring programs, (v) extraordinary nonrecurring items as described in Accounting Principles Board Opinion No. 30 and/or in management’s discussion and analysis of financial condition and results of operations appearing in the Company’s annual report to stockholders for the applicable year, (vi) the impact of adjustments to the Company’s deferred tax asset valuation allowance, (vii) acquisitions or divestitures, (viii) foreign exchange gains and losses, (ix) results of the Promotions.com subsidiary and (x) legal, accounting and other costs related to the examination of the recognition of revenue in the Promotions.com subsidiary, the restatement or revision to any prior period financial statements, or any actions, proceedings, investigations, inquiries or other matters related thereto.

In certain prior years, the Company also made awards under a long-term cash incentive plan, in which, if the ratio of the Company’s Enterprise Value to its EBITDA achieved a high-enough percentile ranking as compared to a peer group, a certain amount of “phantom equity” was awarded that would vest over a three-year period and be settled in cash on each of the first three anniversaries (subject to continued employment and other conditions).  The Compensation Committee determined to discontinue making awards of this type, finding that such awards were not as effective as desired in creating incentives, in light of the complexity of their design.  No such awards were made in fiscal 2009.  (Mr. Cramer received phantom equity pursuant to such an award in fiscal 2007 and received cash payments in 2008 and 2009 with respect to the first two of the three installments under that award).

Long-Term Equity Incentives

Long-term incentives are provided by equity awards under the 2007 Plan.  The 2007 Plan authorizes the Compensation Committee to grant a variety of types of equity awards, including stock options, stock appreciation rights (“SARs”), restricted stock and RSUs.  Long-term equity awards enable our executive officers to maintain an equity interest in the Company, which aligns their financial interests with those of our shareholders.

 
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Generally, to encourage executives to remain employed by the Company, stock options have vested and become exercisable in equal portions over the first three anniversaries of the grant date and expired on the fifth anniversary of the grant date.  Previously, the Company’s practice with respect to vesting of RSUs was that RSUs would vest and be settled in the form of common stock in equal portions over the first three anniversaries of the grant date; as noted above, commencing with fiscal 2009, the Compensation Committee determined to change the vesting schedule such that grants to senior executives made since May 2009 vest over five years, as to 10% of the underlying shares on each of the first four anniversaries of grant and the balance on the fifth anniversary.  In both the prior and current practice, vesting was subject to the executive’s continued employment on the vesting date, and subject to acceleration in the event of a change of control, as defined in the 2007 Plan (as well as partial or full acceleration upon termination under certain circumstances). Whereas the Company previously had a practice of making annual equity incentive grants, the Compensation Committee in 2009 determined that it would issue special awards to senior executives in 2009 (and in connection with the hiring of Messrs. Otte and Barton), without an expectation for additional annual awards, subject to review at a later date by the Compensation Committee.  The Compensation Committee determined to grant Mr. Otte 650,000 RSUs in connection with hiring him as permanent Chief Executive Officer in May 2009 and determined to grant Mr. Barton 175,000 RSUs in connection with hiring him as Executive Vice President of Business and Legal Affairs, General Counsel and Secretary in June 2009.  The grants to Messrs. Otte and Barton were determined in connection with negotiations to hire such individuals, and represent levels that the Compensation Committee believed were reasonable in connection with their role and experience. The Compensation Committee also determined in July 2009 to issue awards to certain other current and prospective senior executives, including Mr. Broitman, such that, as of the grant date, the executive would have 75,000 equity units (calculated, for this purpose, as the sum of the RSUs and one-third of the options, if any, that previously had been granted to such executive).  These grants were intended to enhance the long-term incentive of, and the internal parity of such incentive within, the Company’s executive team.

Other Compensation

Currently, our executives are eligible to participate in Company-wide plans and programs such as the 401(k) plan (including Company match), group medical and dental, vision, long- and short-term disability plans, and health care, dependent care and mass transit spending accounts, in accordance with the terms of the programs.

Impact of Tax Treatment on Compensation

Section 162(m) of the Internal Revenue Code (the “Code”) limits deductibility of certain compensation paid to certain executive officers to $1 million per officer in any one year.  However, performance-based compensation can be excluded from this limitation so long as it meets certain requirements.  Cash and equity awards granted under the 2007 Plan may, but need not be, structured so as to qualify as performance-based compensation under Section 162(m).  In general, the Company’s short-term cash incentives are intended to qualify as performance-based.  Stock options are generally intended to qualify, but RSUs are not.

The severance, change of control and RSU award agreements of Messrs. Otte, Barton and Broitman (as well as the Employment Agreement and RSU award agreements of Mr. Cramer, who is a director and employee but is not an executive officer of the Company) contain provisions that require certain payments to be delayed in order to avoid the imposition of additional taxes pursuant to Section 409A of the Code.

Severance and Change in Control Arrangements

The Company has entered into severance agreements with its senior executives, which in general we believe are significantly less generous than arrangements that are typical at peer companies.  Other than with respect to Messrs. Otte and Barton, our current named executive officers do not have a contractual right to receive payments upon a change of control of the Company or enhanced severance payments for terminations following a change of control.  (Messrs. Clarke, Ashman, Morrow and Elkes, who are deemed named executive officers for fiscal 2009 but who were not employees of ours at December 31, 2009, did have agreements during 2009 that provided for certain such rights; and Mr. Cramer’s employment agreement provides for certain such rights.)  In prior years, the Company typically had agreements with its executives that provided for significantly greater severance and for change of control payments.  The Compensation Committee believed that, in general, during 2009, such arrangements were not required in order for the Company to be able to attract and retain talented executives.  The Compensation Committee did, however, feel that it was necessary and desirable, in order to hire Messrs. Otte and Barton, to provide these individuals with severance and change of control arrangements that the Compensation Committee believed were similar to terms available to comparable senior executive officers of peer companies, with the arrangement for Mr. Otte, as Chief Executive Officer, being significantly more generous than the arrangement for Mr. Barton, due to the unique role and importance of the chief executive officer.  Change in control arrangements, in particular, are intended to help ensure the objectivity of executives who would likely be involved in decisions regarding a potential change in control and who are at risk for job loss in such event.  We believed that a “single trigger” arrangement was appropriate for our Chief Executive Officer given the high likelihood that such officer would face the prospect of job loss in the event of a change of control.  Moreover, with respect to our Chief Executive Officer, we believed it was appropriate to provide for potential additional payments in the event that certain payments to him caused him to be subject to change in control excise taxes.  See “Executive Compensation — Potential Payments Upon Termination or Change in Control” for a summary of the severance and change in control provisions for our named executive officers.

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In addition to the severance and change of control agreements described above, the Company’s RSU agreements generally provide for full acceleration of vesting upon the occurrence of a change of control, and for partial acceleration of vesting upon the termination of the grantee’s employment due to death or disability.  In addition, the RSU agreements for Messrs. Cramer, Otte and Barton provide for full or partial acceleration upon the termination of the grantee’s employment by the Company without Cause or by the grantee for Good Reason, each as defined in the respective agreements.  The Compensation Committee believed such provisions were necessary and appropriate to offer in connection with hiring Messrs. Cramer, Otte and Barton.

While in past years the Company typically had entered into formal written employment agreements with all of its senior executives, in 2009 the Compensation Committee recommended the discontinuation of this practice and currently there are no formal written employment agreements with any executive officers of the Company.  As noted above, however, the Compensation Committee did approve in 2009 the execution of written severance agreements with the Company’s senior executives, as well as the issuance of RSU agreements described above.

Equity Granting Practices

Historically, it had been the policy of the Compensation Committee to make annual grants of stock options and other equity-based awards to our executives, members of our senior management team and other employees who make significant contributions to our success.  In recent years, these grants have been made shortly following the end of the fiscal year, in order for the Compensation Committee to take into account the Company’s actual financial performance for the year.  Pursuant to the 2007 Plan, options have an exercise price equal to the closing market price of our common stock on the grant date.  Grants also were made in connection with the hiring of certain prospective employees and occasionally at mid-year, in each case to those employees or prospective employees whom the Compensation Committee believed would have the ability to have an impact on the long-term performance of our stock and should therefore have the opportunity to participate in its appreciation.  For current employees, the grant date is the date the Compensation Committee approved the award or a prospective date set by the Compensation Committee, and for prospective employees, the grant date is the date they commence employment.  There is no relationship between the timing of an equity-based award and the Company’s release of material, non-public information.  It is the policy of the Company that options may not be repriced without shareholder approval, and this policy has been made a specific feature of the 2007 Plan.  As noted above, in 2009 the Compensation Committee determined, in light of then-prevailing conditions, to change its equity grant practices with respect to senior executives, determining that rather than make annual grants of options and RSUs, equity would be granted in the form of RSUs in connection with the hiring of new executives and that a grant would be made in 2009 to its current senior executives such that the executives each would have, as of the grant date, 75,000 equity units (calculated, for this purpose, as the sum of the RSUs and one-third of the options, if any, that previously had been granted to such executive). Moreover, as noted above, the Compensation Committee determined that the RSUs granted to senior executives since May 2009 should vest over five years, as to 10% of the underlying shares on each of the first four anniversaries of the date of grant and the balance on the fifth anniversary, subject to the executive’s continued employment on the vesting date, and subject to acceleration in the event of a change of control (as well as partial or full acceleration upon termination under certain circumstances).  The Compensation Committee believes its current equity grant policy should be sufficient to attract and retain executives, although, as noted above, as the competition for executive talent may evolve in upcoming years the Compensation Committee will review whether it may be appropriate to make additional equity awards to executives generally, as well as whether additional equity awards may be appropriate for any individual executives based upon their performance, assumption of new responsibilities or for other reasons.
 
 2009 Report of the Compensation Committee

In accordance with the SEC’s disclosure requirements for executive compensation, the Compensation Committee has reviewed and discussed with the Company’s management the preceding Compensation Discussion and Analysis.  Based on this review and these discussions with the Company’s management, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement.

Submitted by the Compensation Committee of the Company’s Board of Directors
William R. Gruver, Chairman
Derek Irwin
Christopher Marshall

 
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Summary Compensation Table

The following table shows the compensation earned during 2009, 2008 and 2007 by each of the Company’s named executive officers (as determined pursuant to the SEC’s disclosure requirements for executive compensation in Item 402 of Regulation S-K).

Name
 
Year
 
Salary
($)
 
Bonus(1)
($)
 
Stock
Awards(2)(3)
($)
 
Option
Awards(4)
($)
 
Non-Equity
Incentive
Plan
Compen-
sation(1)
($)
   
Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
($)
   
All Other
Compensation(5)
($)
   
Total
($)
 
Daryl Otte(6)
 
2009
    265,625     58,027     1,430,398         241,973             180,951       2,176,974  
Chief Executive Officer
 
2008
                                       
   
2007
                                       
                                                             
Gregory E. Barton(7)
 
2009
    157,388         351,750         141,649             11,931       662,718  
Executive Vice President, Business
 
2008
                                       
and Legal Affairs, General Counsel and Secretary
 
2007
                                       
                                                             
Richard Broitman(8)
 
2009
    190,682         115,073         91,527             7,529       404,811  
Chief Accounting Officer
 
2008
                                       
   
2007
                                       
                                                             
Thomas J. Clarke, Jr.(9)
 
2009
    93,271         344,485                     333,173       770,929  
Former Chief Executive Officer
 
2008
    410,000         237,076     371,438                 12,905       1,031,419  
   
2007
    410,000         390,600         222,307             9,141       1,032,048  
                                                             
Eric Ashman(10)
 
2009
    98,345         156,510                     106,096       360,951  
Former Chief Financial Officer
 
2008
    276,000         137,246     207,901                 6,678       627,825  
   
2007
    265,000         104,160         124,526             1,200       494,886  
                                                             
David Morrow(11)
 
2009
    122,500         66,600                     87,137       276,237  
Former Editor-in-Chief
 
2008
    245,000         108,913     141,960                 6,626       502,499  
   
2007
    235,000         130,200         84,949             1,883       452,032  
                                                             
Steven Elkes(12)
 
2009
    80,118         133,200                     3,229       216,547  
Former Chief Revenue Officer and
 
2008
    312,000         197,225     180,059                 6,410       695,694  
Executive Vice President of Mergers and Acquisitions
 
2007
    230,682             462,459                       693,141  
 

(1)
For 2009, amounts shown in the “Non-Equity Incentive Plan” column reflect the short-term cash incentive earned in 2009, which was paid in 2010.  For 2009, 2008 and 2007, all short-term and long-term cash incentive opportunities were granted as performance awards under the 2007 Plan.  In each of 2008 and 2007, although certain of the performance goals for the short-term incentive were met, the Compensation Committee exercised its discretion to reduce the payouts of the short-term incentive to zero.  Amounts shown in the in the “Non-Equity Incentive Plan” column for 2007 reflect long-term cash incentives which were earned and would be paid over a three-year period subject to continued employment as follows:  Messrs. Clarke, Ashman and Morrow earned 13,964, 7,822 and 5,336 phantom shares, respectively, based upon the closing price of the Company’s common stock on December 31, 2007.  The phantom shares would vest as to one-third of the shares on each of the first three anniversaries of December 31, 2007, subject to continued employment, and upon vesting the grantee would receive the cash value of the shares as of the vesting date, together with any dividends that had accrued on such shares.  Amounts shown in the “Bonus” column reflect discretionary payments awarded by the Compensation Committee.

 
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(2)
The amounts in the “Stock Awards” column reflect the aggregate grant date fair value computed in accordance with Financial Accounting Standards Board Accounting Standards Codification 718.  Assumptions made in the calculation of these amounts are included in Note 1 to the Company’s audited consolidated financial statements for the fiscal year ended December 31, 2009, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 30, 2010.

(3)
Each RSU award includes the grant of dividend equivalents with respect to such RSU.  The Company maintains a bookkeeping account to which it credits, whenever cash dividends are paid on the common stock, an amount equal to the amount of the dividend paid on a share of common stock for each then-outstanding RSU granted.  The accumulated dividend equivalents vest on the applicable vesting date for the RSU with respect to which such dividend equivalents were credited, and will be paid in cash to the holder.  The following amounts were earned as dividend equivalents for the named executive officers during 2009, 2008 and 2007, respectively, with respect to unvested RSUs:  Mr. Otte, $53,319, $0 and $0; Mr. Barton, $8,750, $0 and $0; Mr. Broitman, $3,639, $0 and $0 (excludes dividends accrued during 2008 and 2007 prior to Mr. Broitman becoming an executive officer); Mr. Clarke, $3,312, $6,604 and $7,500; Mr. Ashman, $1,478, $2,018 and $1,200; Mr. Morrow, $1,572, $1,966 and $1,500; and Mr. Elkes, $1,292, $1,750 and $0.  These amounts are not reflected in the “Stock Awards” column but rather are reflected in the “All Other Compensation” column.

(4)
The amounts in the “Option Awards” column reflect the aggregate grant date fair value computed in accordance with Financial Accounting Standards Board Accounting Standards Codification 718.  Assumptions made in the calculation of these amounts are as follows:  2008 grants:  expected life of 3.5 years, expected volatility of 47.07%, risk-free interest rate of 2.37% and expected dividends of 0.75%; 2007 grant: expected life of 3.5 years, expected volatility of 49.73%, risk-free interest rate of 4.52% and expected dividends of 1.04%.

(5)
Amounts in the “All Other Compensation” column include the following:  (i) the Company’s matching contribution of contributions made by the employee to the Company’s 401(k) Plan in 2009, 2008 and 2007, respectively, in the following amounts:  Mr. Otte, $4,900, $0 and $0; Mr. Barton, $3,148, $0 and $0; Mr. Broitman, $3,834, $0 and $0 (excludes matching contributions made in 2008 and 2007 prior to Mr. Broitman becoming an executive officer); Mr. Clarke, $4,900, $4,600 and $0; Mr. Ashman, $4,595, $4,600 and $0; Mr. Morrow, $3,049, $4,600 and $383; Mr. Elkes, $1,914, $4,600 and $0; (ii) amounts paid by the Company with respect to group life insurance in 2009, 2008 and 2007, respectively, in the following amounts:  Mr. Otte, $33, $0 and $0; Mr. Barton, $33, $0 and $0; Mr. Broitman, $56, $0 and $0 (excludes payments made in 2008 and 2007 prior to Mr. Broitman becoming an executive officer); Mr. Clarke, $56, $60 and $0; Mr. Ashman, $23, $60 and $0; Mr. Morrow, $28, $60 and $0; Mr. Elkes, $23, $60 and $0; and (iii) amounts earned as dividend equivalents during 2009, 2008 and 2007, respectively, with respect to unvested RSUs:  Mr. Otte, $53,319, $0 and $0; Mr. Barton, $8,750, $0 and $0; Mr. Broitman, $3,639, $0 and $0 (excludes dividends accrued during 2008 and 2007 prior to Mr. Broitman becoming an executive officer); Mr. Clarke, $3,312, $6,604 and $7,500; Mr. Ashman, $1,478, $2,018 and $1,200; Mr. Morrow, $1,572, $1,966 and $1,500; and Mr. Elkes, $1,292, $1,750 and $0.  Amounts in the “All Other Compensation” column also include the following amounts:  (a) for Mr. Otte, $110,905 earned for his services as interim Chief Executive Officer and $11,794 cash fees earned for his services as a director prior to being hired as Chief Executive Officer; (b) for Mr. Clarke, $1,641 paid for term life insurance in each of 2009, 2008 and 2007; and $316,729 and $6,535 paid in 2009 for severance and for accrued and unused vacation, respectively; (c) for Mr. Ashman, $100,000 in severance paid in 2009; and (d) for Mr. Morrow, $82,488 received for consulting services after he resigned from the Company.

(6)
In March 2009, Mr. Otte was appointed interim Chief Executive Officer as an outside consultant.  In May 2009, Mr. Otte was hired as Chief Executive Officer.  Amounts shown in the “Salary” column reflect salary earned by Mr. Otte since being hired as Chief Executive Officer, and exclude (i) $110, 905 earned by Mr. Otte for his services as interim Chief Executive Officer and (ii) $11,794 cash fees earned for his services as a director prior to being hired as Chief Executive Officer, which amounts are reported in the “All Other Compensation” column.  Amounts shown in the “Stock Awards” column for 2009 include (i) $68,898 reflecting RSUs awarded to him in January 2009 in connection with his service as a director, (ii) $48,500 reflecting RSUs awarded to him in March 2009 in connection with his appointment as Interim Chief Executive Officer and (iii) $1,313,000 reflecting RSUs awarded to him in connection with his appointment as permanent Chief Executive Officer.

(7)
In June 2009, Mr. Barton was hired as Executive Vice President, Business and Legal Affairs, General Counsel and Secretary.
   
(8)
In June 2009, Mr. Broitman was appointed Chief Accounting Officer, becoming an executive officer of the Company.  Amounts shown in the Summary Compensation Table include amounts earned in 2009 as an employee prior to becoming an executive officer.

(9)
Mr. Clarke was appointed Chief Executive Officer in November 1999.  Mr. Clarke ceased being a director or employee of the Company in March 2009.

 
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(10)
Mr. Ashman was appointed Chief Financial Officer in July 2006.  Mr. Ashman resigned from the Company effective May 2009.

(11)
Mr. Morrow was appointed an executive officer of the Company in January 2007.  Mr. Morrow resigned from the Company in June 2009.

(12)
Mr. Elkes was appointed Chief Revenue Officer and Executive Vice President, Mergers and Acquisitions in March 2007.  Mr. Elkes ceased to be an employee of the Company in March 2009.

Employment Agreements

The Company has from time to time entered into employment and severance arrangements with certain of its named executive officers.  A summary of some of the material terms of these arrangements is set forth in the following paragraphs.  Provisions of the agreements dealing with termination of employment or change in control are described under the heading “Potential Payments Upon Termination or Change in Control.”

Daryl Otte – Chief Executive Officer

The Company does not have in place any formal employment agreement with Mr. Otte.  Nevertheless, the Company and Mr. Otte executed a “CEO Term Sheet” dated as of May 15, 2009 (the “Otte Term Sheet”).  The Otte Term Sheet provides that Mr. Otte will receive a base salary of $425,000 per year (with potential annual increases at the discretion of the Compensation Committee) and a target annual bonus of $320,000 (with potential annual increases at the discretion of the Compensation Committee), contingent upon achieving performance goals established by the Compensation Committee with input from Mr. Otte.  The Otte Term Sheet also provided that Mr. Otte would receive a one-time grant of 650,000 RSUs, to vest as to 10% of the shares underlying the RSUs on each of the first four anniversaries of the date of grant, and as to the balance on the fifth anniversary of the date of grant, subject to continued employment and subject to accelerated vesting in certain events as described under the heading “Potential Payments Upon Termination or Change in Control.”  The RSU agreement with respect to this grant provides that the Company reserves the right to claw back any shares of common stock delivered under the RSU agreement in the event that, within two years of the cessation of Mr. Otte’s employment with the Company, Mr. Otte engages in any Competitive Activity (as defined in the RSU agreement) or violates any restrictive covenants related to non-solicitation of employees, clients and vendors; non-disparagement; and confidentiality; all as described in the RSU agreement.

Gregory E. Barton – Executive Vice President, Business and Legal Affairs, General Counsel and Secretary

The Company does not have in place any formal employment agreement with Mr. Barton.  Nevertheless, the Company and Mr. Barton executed a “Term Sheet” dated as of June 2, 2009 (the “Barton Term Sheet”).  The Barton Term Sheet provides that Mr. Barton will be Executive Vice President, Business and Legal Affairs, General Counsel and Secretary, reporting to the Chief Executive Officer; receive a base salary of $275,000 per year (with potential annual increases at the discretion of the Compensation Committee); and have a target annual bonus of 75% of his annualized base pay at the beginning of each calendar year (with potential annual increases at the discretion of the Compensation Committee and Chief Executive Officer), contingent upon achieving performance goals established by the Compensation Committee and Chief Executive Officer with input from Mr. Barton.  The Barton Term Sheet also provided that Mr. Barton would receive a one-time grant of 175,000 RSUs, to vest as to 10% of the shares underlying the RSUs on each of the first four anniversaries of the date of grant, and as to the balance on the fifth anniversary of the date of grant, subject to continued employment and subject to accelerated vesting in certain events as described under the heading “Potential Payments Upon Termination or Change in Control.”  The RSU agreement with respect to this grant provides that the Company reserves the right to claw back any shares of common stock delivered under the RSU agreement in the event that, within two years of the cessation of Mr. Barton’s employment with the Company, Mr. Barton engages in any Competitive Activity (as defined in the RSU agreement) or violates any restrictive covenants related to non-solicitation of employees, clients and vendors; non-disparagement; and confidentiality; all as described in the RSU agreement.

Richard Broitman – Chief Accounting Officer

The Company does not have in place any formal employment agreement with Mr. Broitman.  The RSU Agreement dated July 1, 2009, with respect to RSUs granted to Mr. Broitman following his appointment as an executive officer, provides that the Company reserves the right to claw back any shares of common stock delivered under the RSU agreement in the event that, within two years of the cessation of Mr. Broitman’s employment with the Company, Mr. Broitman engages in any Competitive Activity (as defined in the RSU agreement) or violates any restrictive covenants related to non-solicitation of employees, clients and vendors; non-disparagement; and confidentiality; all as described in the RSU agreement.

 
19

 

Thomas J. Clarke, Jr. – Former Chief Executive Officer

In March 2009, Mr. Clarke and the Company entered into a separation agreement and mutual release (the “Clarke Separation Agreement”).  The material terms of this agreement are described under the heading “Potential Payments Upon Termination or Change in Control.”  Prior to his separation, Mr. Clarke was employed pursuant to the terms of an Employment Agreement dated as of September 13, 2007, as amended October 24, 2008 (the “Clarke Employment Agreement”).  The Clarke Employment Agreement provided, among other things, that Mr. Clarke was to receive a base salary of $410,000 per year, an annual cash target bonus of 75% of his base salary, an annual grant of a long-term equity incentive having a value of not less than $300,000, and Company-paid term life insurance with a death benefit equal to two times his base salary.  The Clarke Employment Agreement also contained customary provisions related to non-competition, non-solicitation, non-disparagement, confidentiality and intellectual property, as well as provisions described under the heading “Potential Payments Upon Termination or Change in Control.”

Eric Ashman – Former Chief Financial Officer

In May 2009, Mr. Ashman resigned from his position as the Company’s Chief Financial Officer and he and Company executed a letter agreement (the “Ashman Separation Agreement”), the material terms of which are described under the heading “Potential Payments Upon Termination or Change in Control.”  Prior to his resignation, Mr. Ashman was employed pursuant to the terms of an Employment Agreement dated as of June 30, 2008 (the “Ashman Employment Agreement”).  The Ashman Employment Agreement provided, among other things, that Mr. Ashman was to receive a base salary of $276,000 per year and, for 2008, a cash bonus under the 2007 Plan consisting of a short-term incentive and long-term incentive bonus, the target of such short- and long-term incentive bonuses being 65% of annual salary, respectively (no cash bonus was paid to Mr. Ashman for his service in 2008).  The Ashman Employment Agreement also contained customary provisions related to non-competition, non-solicitation, confidentiality and intellectual property, as well as provisions described under the heading “Potential Payments Upon Termination or Change in Control.”

 David J. Morrow – Former Editor-in-Chief

In June 2009, Mr. Morrow resigned from his position as the Company’s Editor-in-Chief.  Prior to his resignation, Mr. Morrow was employed pursuant to the terms of an Employment Agreement dated as of August, 2007 (the “Morrow Employment Agreement”).  The Morrow Employment Agreement provided, among other things, that Mr. Morrow was to receive a base salary of $235,000 per year (the Company paid him $245,000 in base salary 2008) and, for 2007, a cash bonus under the 2007 Plan (no cash bonus was paid to Mr. Morrow for his service in 2008).  The Morrow Employment Agreement also contained customary provisions related to non-competition, non-solicitation, confidentiality and intellectual property, as well as provisions described under the heading “Potential Payments Upon Termination or Change in Control.”

Steven Elkes – Former Chief Revenue Officer and Executive Vice President, Mergers and Acquisitions

In March 2009, the Employment Agreement dated as of March 26, 2007 with Mr. Elkes (the “Elkes Employment Agreement”) expired and Mr. Elkes ceased to be employed by the Company.  Prior to his separation, Mr. Elkes was employed pursuant to the terms of the Elkes Employment Agreement which provided, among other things, that Mr. Elkes was to receive a base salary of $300,000 and an annual cash target bonus of 65% of his base salary.  The Elkes Employment Agreement also contained customary provisions related to non-competition, non-solicitation, confidentiality and intellectual property, as well as provisions described under the heading “Potential Payments Upon Termination or Change in Control.”  Pursuant to the Elkes Employment Agreement, Mr. Elkes was also granted options to purchase up to 100,000 shares of the Company’s common stock, which options vested ratably over the first three anniversaries of the grant date.

Grants of Plan-Based Awards in 2009

       
Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards(1)
 
Estimated Future Payouts
Under Equity Incentive
Plan Awards
 
All Other
Stock
Awards:
Number
of Shares 
 
All Other
Option
Awards:
Number
of
 
Exercise
or Base
 
Grant
Date Fair
Value of
 
Name
 
Grant
Date
 
Threshold
($)
 
Target
($)
 
Maximum
($)
 
Threshold
($)
 
Target
($)
 
Maximum
($)
 
of Stock
or Units
(#)(2)
 
Securities
Underlying
Options
(#)
 
Price of
Option
Awards
($/Sh)
 
Stock and
Option
Awards
($)
 
Daryl Otte
 
1/2/09
                            20,690             68,898  
   
3/13/09
                            25,000             48,500  
   
6/9/09
                            650,000             1,313,000  
   
7/14/09
    161,315     201,644     241,973                              
                                                                   
Gregory Barton
 
7/14/09
                            175,000             351,750  
   
7/14/09
    94,433     118,041     141,649                              
                                                                   
Richard Broitman
 
1/2/09
                            5,000             16,650  
   
7/1/09
                            47,778             98,423  
   
7/14/09
    61,018     76,273     91,527                              
                                                                   
Thomas J. Clarke, Jr.
 
1/2/09
                            103,449             344,485  
                                                                   
Eric Ashman
 
1/2/09
                            47,000             156,510  
                                                                   
David Morrow
 
1/2/09
                            20,000             66,600  
                                                                   
Steven Elkes
 
1/2/09
                            40,000             133,200  

 
20

 
 

(1)
This represents the potential payouts to the named executive officers under the 2007 Plan as short-term performance awards for 2009 as determined at the time of grant. The applicable targets are described in the Compensation Discussion and Analysis and the actual amount paid to each named executive officer pursuant to such award is set forth in the Summary Compensation Table.

(2)
This column reflects grants of RSUs made under the 2007 Plan.  The grant made to Mr. Otte on 1/2/09 was made in connection with his services as a director and vested on 1/2/10, as did the grant made to Mr. Otte on 3/13/09 in connection with his services as interim Chief Executive Officer.  The grant made to Mr. Broitman on 1/2/09 vests as to one-third of the shares underlying the grant on each of the first three anniversaries of the grant date.  The grants made to Mr. Otte on 6/9/09, to Mr. Barton on 7/14/09 and to Mr. Broitman on 7/1/09 each vest as to 10% of the shares underlying the grant on each of the first four anniversaries of the date of grant and as to the balance on the fifth anniversary of the date of grant, subject to whole or partial acceleration under certain circumstances as described under the heading “Potential Payments Upon Termination or Change in Control.”  The grants made to Messrs. Clarke, Ashman, Morrow and Elkes on 1/2/09 were to vest as to one-third of the shares underlying the grant on each of the first three anniversaries of the grant date.  The RSU agreements for Messrs. Clarke, Ashman, Morrow and Elkes provided that 100% (in the case of Messrs. Clarke and Elkes) or 50% (in the case of Messrs. Ashman and Morrow) of the then unvested portion would immediately vest in the event of a Change of Control (as such term is defined in the 2007 Plan).  In addition, Mr. Clarke’s RSUs would vest upon the occurrence of certain events described under the heading “Potential Payments Upon Termination or Change in Control.”  The above RSUs of Mr. Clarke vested upon his separation from employment in 2009; the above RSUs for Messrs. Ashman, Morrow and Elkes were forfeited upon such individual’s respective separation from employment in 2009.  Each RSU award includes the grant of dividend equivalents with respect to such RSU.  The Company maintains a bookkeeping account to which it credits, whenever cash dividends are paid on the common stock, an amount equal to the amount of the dividend paid on a share of common stock for each then-outstanding RSU granted.  The accumulated dividend equivalents vest on the applicable vesting date for the RSU with respect to which such dividend equivalents were credited, and will be paid in cash at the time a stock certificate evidencing the shares represented by such vested RSU is delivered.
 
Outstanding Equity Awards at 2009 Fiscal Year-End

         
Option Awards
   
Stock Awards
 
Name
 
Grant Date
   
Number of
Securities
Underlying
Unexercised
Options (#)
Exercisable
   
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercis-
able
   
Equity Incentive Plan
Awards: Number of
Securities Underlying
Unexercised
Unearned Options (#)
   
Option
Exercise
Price ($)
   
Option
Expira-
tion
Date
   
Number of
Shares or Units
of Stock That
Have Not
Vested (#)(1)
   
Market Value
of Shares or
Units of Stock
That Have
Not Vested
($)(1)
 
Daryl Otte
 
1/2/09
                                    20,690       49,656  
   
3/13/09
                                    25,000       60,000  
   
6/9/09
                                    650,000       1,560,000  
                                                               
Gregory Barton
 
7/14/09
                                    175,000       420,000  
                                                               
Richard Broitman
 
1/3/05
      6,667                   4.08    
1/2/10
             
   
1/19/07
                                    2,500       6,000  
   
2/14/08
                                    5,000       12,000  
   
1/2/09
                                    5,000       12,000  
   
7/1/09
                                    47,778       114,667  
                                                               
Thomas J. Clarke, Jr.
                                               
                                                                 
Eric Ashman
                                               
                                                                 
David Morrow
                                               
                                                                 
Steven Elkes
                                               
 

(1)
These columns represent RSUs that were unvested at 2009 fiscal year-end.  Dollar values reflect the closing price of the Company’s common stock on December 31, 2009, which was $2.40 per share.  The vesting schedule of these awards is as follows.  Mr. Otte’s 20,690 share RSU grant, awarded to him in connection with his service as a director of the Company prior to being named the Company’s Chief Executive Officer, vested on 1/2/10.  Mr. Otte’s 25,000 share RSU grant, awarded to him in connection with his appointment as Interim Chief Executive Officer, vested on 1/2/10.  Mr. Otte’s 650,000 share RSU grant, awarded to him in connection with the Company hiring him in May 2009 as Chief Executive Officer, Mr. Barton’s RSU grant and Mr. Broitman’s 47,778 share RSU grant each vest as to 10% of the underlying shares on each of the first four anniversaries of the date of grant and as to the balance on the fifth anniversary of the date of grant, subject to continued employment and subject to accelerated vesting in certain events as described under the heading “Potential Payments Upon Termination or Change in Control.”  Mr. Broitman’s other RSU grants vest in equal installments over the first three anniversaries of the date of grant.

 
21

 
 
Option Exercises and Stock Vested in 2009
 
  
 
Option Awards
   
Stock Awards
 
Name
 
Number of Shares 
Acquired on Exercise
(#)
   
Value Realized on 
Exercise
($)
   
Number of Shares 
Acquired on Vesting
(#)
   
Value Realized on 
Vesting
($)
 
Daryl Otte