DISK » Topics » CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

This excerpt taken from the DISK DEF 14A filed Jul 31, 2006.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

We paid Greenberg Traurig, LLP, a law firm at which Mr. Epstein is Of Counsel, a total of approximately $452,000 during fiscal 2006. The legal fees paid were, in the opinion of management, fair and reasonable, and as favorable to us as those which could have been obtained from unrelated third parties.

In April 2005, M. Trevenen Huxley began consulting for Egami Media, Inc., our subsidiary focused on the acquisition of and licensing digital programming. Mr. Huxley withdrew from his service on our committees as a result, although he is still an “independent director” as defined in NASD Marketplace Rule 4200 (a)(15). We paid him $6,500, and a corporation controlled by him $25,000, in fiscal 2006.

Dale Borshell, the mother of David Borshell, our Chief Operating Officer, is a travel agent at Travel Syndicate. For many years, we have used Travel Syndicate nearly exclusively for our corporate travel needs. We paid Travel Syndicate approximately $294,000 via our Corporate American Express Credit Card for travel services during fiscal 2006, which included airplane ticket fees and costs, and expenses relating to hotel and other travel related services. The fees paid to Travel Syndicate for travel plans made by Travel Syndicate but charged to the American Express card were, in the opinion of management, fair and reasonable, and as favorable to us as those which could have been obtained through or from unrelated third parties.

On September 25, 2002, we sold $2.0 million of Image common stock to Standard Broadcasting Corporation Limited in a private placement. Standard Broadcasting is the largest privately owned multi-media company in Canada. Video One, then a wholly-owned subsidiary of Standard Broadcasting and the parent company of VidCanada (now known as Paradox Entertainment Group) was at that time Canada’s largest distributor of pre-recorded home entertainment programming, including DVD, VHS and video games. VidCanada (now Paradox) was and continues to be our exclusive distributor of our home entertainment programming in Canada. The $2.0 million transaction represented a purchase of 1,801,315 shares of our common stock at $1.11 per share, the closing price of our common stock on September 10, 2002. Of those shares, Standard Broadcasting currently holds 1,272,085 shares of our common stock.

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Additionally, we issued Standard Broadcasting a five-year warrant to purchase up to 270,198 additional shares at $1.22 per share. Contemporaneous with the private placement, we signed a new five-year exclusive distribution agreement with VidCanada (now Paradox) expiring in October 2007. In August 2004, Standard Broadcasting sold the operations and assets of Video One to Canadian-based ROW Entertainment Income Fund. Immediately following the sale, Standard Broadcasting held an approximate 16% interest in ROW Entertainment Income Fund. Robert J. McCloskey, a member of our Board of Directors, served as the President and Chief Executive Officer of Video One until August 2004. In June 2005, ROW Entertainment Income Fund changed its name to Entertainment One Income Fund.  David Coriat, a member of our Board of Directors, currently serves as Executive Vice President, Chief Financial Officer and director of Standard Broadcasting as well as director of Entertainment One Income Fund.

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This excerpt taken from the DISK DEF 14A filed Jul 27, 2005.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

 

The Company paid Greenberg Traurig, LLP, a law firm at which Mr. Epstein is Of Counsel, a total of approximately $188,000 during fiscal 2005.  The legal fees paid were, in the opinion of management, fair and reasonable, and as favorable to the Company as those which could have been obtained from unrelated third parties.

 

Dale Borshell, the mother of David Borshell, the Company’s Chief Operating Officer, is a travel agent at Travel Syndicate.  For many years, the Company has used Travel Syndicate nearly exclusively for its travel needs.  The Company paid Travel Syndicate approximately $12,000 for travel services during fiscal 2005, which included airplane ticket fees and costs, and expenses relating to hotel and other travel related services.  During fiscal 2005, the Company opened an American Express Credit Card exclusively for the Company’s travel services arranged by Travel Syndicate.  The Company paid American Express approximately $211,000 for travel services during fiscal 2005.  The fees paid to Travel Syndicate and for travel plans made by Travel Syndicate but charged to the American Express card were, in the opinion of management, fair and reasonable, and as favorable to the Company as those which could have been obtained through or from unrelated third parties.

 

On September 25, 2002, the Company closed a sale of $2.0 million of Image common stock to Standard Broadcasting Corporation Limited (“Standard Broadcasting”) in a private placement.  Standard Broadcasting is the largest privately owned multi-media company in Canada.  Video One, a wholly-owned subsidiary of Standard Broadcasting and the parent company of VidCanada, is Canada’s largest distributor of pre-recorded home entertainment programming, including DVD, VHS and video games.  VidCanada is Image’s exclusive distributor of its exclusive home entertainment programming in Canada.  Contemporaneous with the private placement, Image and VidCanada extended the term of their exclusive distribution agreement from June 2004 to October 2007.  The $2.0 million transaction represented a purchase of 1,801,315 shares of Image common stock at $1.11 per share, the closing price of Image’s common stock on September 10, 2002.  Additionally, Image issued Standard Broadcasting a five-year warrant to purchase up to 270,198 additional shares at $1.22 per share.  In August 2004, Standard Broadcasting sold the operations and assets of Video One to Canadian-based ROW Entertainment Income Fund.  Immediately following the sale, Standard Broadcasting held an approximate 16% interest in ROW Entertainment Income Fund.  Robert J. McCloskey, a member of our Board of Directors, served as the President and Chief Executive Officer of Video One until August 2004.  The Company’s current distribution relationship with VidCanada or Mr. McCloskey’s position as a member of our Board of Directors was not negatively impacted by the sale.

 

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