TIX CORPORATION Ventura Blvd., Suite 340 Studio City, California 91604

Transcription

1 TIX CORPORATION Ventura Blvd., Suite 340 Studio City, California August 8, 2014 Dear Stockholder: You are cordially invited to attend the Annual Meeting of Stockholders of Tix Corporation to be held at 10:00 A.M., local time, on September 5, 2014 at Sportsmen s Lodge Events Center, Ventura Boulevard, Studio City, California As more fully described in the attached Notice of Annual Meeting and the accompanying proxy statement, at the Annual Meeting, our stockholders will consider and vote to (i) elect the five director nominees recommended by the Board of Directors to our Board of Directors and named in the proxy statement, (ii) ratify the appointment of Weinberg & Company, P.A. as our independent registered public accountant for the fiscal year ending December 31, 2014, and (iii) transact any other business as may properly come before the meeting or at any adjournments or postponements thereof. Whether or not you plan to attend the Annual Meeting, please submit your proxy to ensure your representation and the presence of a quorum at the Annual Meeting. You may submit your proxy by telephone or over the Internet or by marking, signing, dating and mailing the proxy card enclosed with the proxy statement. The Board of Directors recommends that you vote FOR the two proposals presented in this proxy statement. Your vote is important. We encourage you to vote your shares as soon as possible. If you have any questions or need assistance in voting your shares, please call our transfer agent, Computershare, at On behalf of the Board of Directors and management at Tix Corporation, we would like to thank you for your continued support and confidence. Sincerely, /s/ Mitch Francis Mitch Francis Chairman of the Board of Directors

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3 TIX CORPORATION Ventura Blvd., Suite 340 Studio City, California NOTICE OF ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON SEPTEMBER 5, 2014 Notice is hereby given that the 2014 Annual Meeting of Stockholders of Tix Corporation (the Annual Meeting ), will be held at 10:00 A.M., local time, on September 5, 2014 at Sportsmen s Lodge Events Center, Ventura Boulevard, Studio City, California 91604, for the following purposes: to elect the five director nominees recommended by the Board of Directors to our Board of Directors and named in the proxy statement; to ratify the appointment of Weinberg & Company, P.A. as our independent registered public accountant for the fiscal year ending December 31, 2014; and to transact any other business as may properly come before the meeting or at any adjournments or postponements thereof. We have fixed the close of business on July 18, 2014 as the record date for the determination of stockholders entitled to notice of and to vote at the Annual Meeting. Only our stockholders of record at the close of business on that date will be entitled to notice of and to vote at the Annual Meeting or any adjournments or postponements thereof. You are invited to attend the Annual Meeting. Whether or not you plan to attend the Annual Meeting in person, please vote by mail by signing, dating, and returning the proxy card enclosed with this proxy statement or by telephone or via the Internet, in accordance with the instructions provided in the enclosed proxy card or voting instruction form, in order to be certain your shares are represented at the Annual Meeting. By Order of the Board of Directors, August 8, 2014 /s/ Mitch Francis Mitch Francis Chairman of the Board of Directors

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5 IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE STOCKHOLDER MEETING TO BE HELD ON SEPTEMBER 5, 2014 The proxy statement and annual report to stockholders are available online at Your Vote is Important Please vote as promptly as possible by using the telephone or via the Internet or by signing, dating, and returning the proxy card enclosed with this proxy statement. Instructions to vote by telephone or online are printed directly on the proxy card or voting instruction form. If you have any questions or need assistance in voting your shares, please call our transfer agent, Computershare, at All stockholders are invited to attend the Annual Meeting in person. Stockholders who vote their proxy by telephone or online or by executing a proxy card may nevertheless attend the meeting, revoke their proxy, and vote their shares in person.

6 TABLE OF CONTENTS Page THE ANNUAL MEETING...1 QUESTIONS AND ANSWERS ABOUT THIS PROXY STATEMENT AND THE ANNUAL MEETING...4 PROPOSAL I ELECTION OF DIRECTORS...7 PROPOSAL II RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM...8 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT...9 DIRECTOR NOMINEES AND EXECUTIVE OFFICERS...12 DIRECTOR AND EXECUTIVE OFFICER COMPENSATION...20 CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS...29 STOCKHOLDER PROPOSALS FOR 2015 ANNUAL MEETING...32 OTHER MATTERS...33 WHERE YOU CAN FIND MORE INFORMATION...33 i

7 THE ANNUAL MEETING TIX CORPORATION Ventura Blvd., Suite 340 Studio City, California Annual Meeting of Stockholders to Be Held on September 5, 2014 This proxy statement is being furnished to the stockholders of Tix Corporation, a Delaware corporation (the Company ), in connection with the solicitation of proxies by the Company s Board of Directors (the Board ) for use at the Annual Meeting to be held at 10:00 A.M., local time, on September 5, 2014, at Sportsmen s Lodge Events Center, Ventura Boulevard, Studio City, California 91604, and at any adjournments or postponements thereof. The purpose of the Annual Meeting is to consider and vote upon the following matters: to elect the five director nominees recommended by the Board to our Board and named in this proxy statement; to ratify the appointment of Weinberg & Company, P.A. ( Weinberg ) as our independent registered public accountant for the fiscal year ending December 31, 2014; and to transact any other business as may properly come before the meeting or at any adjournments or postponements thereof. Stockholders of the Company as of the close of business on July 18, 2014 (the Record Date ) may vote in one of the following three ways: (1) by completing, signing and dating the proxy card, (2) by completing your proxy either by telephone or on the Internet at the website listed on the proxy card, or (3) in person at the Annual Meeting. It is important that you vote your shares whether or not you attend the meeting in person. If you attend the Annual Meeting, you may vote in person even if you have previously returned your proxy card or completed your proxy by telephone or on the Internet. Shares represented by proxy will be voted in accordance with the instructions you provide to the individuals named on the proxy. With regard to the election of directors, votes may be cast in favor of all director nominees, cast in favor of particular director nominees or withheld. Votes that are left blank will be voted FOR the election of all of the director nominees named on the proxy card; votes that are withheld are not considered votes cast and thus have no effect on the election of directors. With regard to ratification of the appointment of Weinberg as our independent registered public accounting firm, votes may be cast in favor, cast against, cast as an abstention or left blank. Abstentions will not be included among the shares that are considered to be present and voting on the ratification and, therefore, they will have no effect on the voting for this proposal. Votes that are left blank will be voted FOR the ratification of Weinberg as our independent registered public accounting firm. With regard to other matters that may properly come before the Annual Meeting, votes will be cast at the discretion of the persons named as proxy holders. 1

8 Abstentions may be specified on all proposals, other than the election of directors, and will be counted as present for purposes of determining a quorum. Submitted proxies which are left blank or for which a vote is withheld and broker non-votes will also be counted as present for purposes of determining a quorum. Broker non-votes are shares held by a broker or nominee that are represented at the Annual Meeting, but with respect to which the broker or nominee is not empowered to vote on a particular proposal. The proxy statement for the Annual Meeting and the annual report for the fiscal year ended December 31, 2013 are available at NO MATTER WHAT METHOD YOU ULTIMATELY DECIDE TO USE TO VOTE YOUR SHARES, WE URGE YOU TO VOTE PROMPTLY. Record Date; Shares Entitled to Vote; Vote Required to Approve Each Proposal The Board has fixed the close of business on July 18, 2014 as the Record Date, the date for the determination of stockholders entitled to notice of and to vote at the Annual Meeting. On the Record Date, 18,179,744 shares of Common Stock, par value $0.08 per share ( Common Stock ), were issued and outstanding out of 100,000,000 shares authorized, and pursuant to our Second Amended and Restated By-laws ( By-laws ), each outstanding share of Common Stock is entitled to one vote on each matter submitted to vote at a meeting of our stockholders. Stockholders do not have cumulative voting rights. A majority of the issued and outstanding shares of Common Stock entitled to vote, present in person or represented by proxy, is necessary to constitute a quorum for the transaction of business at the Annual Meeting. In the absence of a quorum, the Annual Meeting may be postponed from time to time until stockholders holding the requisite number of shares of Common Stock are present in person or represented by proxy. Solicitation, Voting and Revocation of Proxies This solicitation of proxies is being made by our Board, and our Company will pay the entire cost of preparing, assembling, printing, and distributing these proxy materials. The solicitation of proxies or votes may be made in person, by telephone or by electronic communications by directors, officers and employees of our Company, who will not receive any additional compensation for such solicitation activities. We also will reimburse brokerage houses and other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses for forwarding proxy and solicitation materials to our stockholders. Shares of Common Stock represented by a proxy properly signed and received at or prior to the Annual Meeting, unless properly revoked, will be voted in accordance with the instructions on the proxy. A stockholder may revoke any proxy given pursuant to this solicitation by: (i) delivering to our corporate secretary, prior to or at the Annual Meeting, a written notice revoking the proxy; (ii) delivering to our corporate secretary, at or prior to the Annual Meeting, a duly executed proxy relating to the same shares and bearing a later date; or (iii) voting in person at the Annual Meeting. Attendance at the Annual Meeting will not, in and of itself, constitute a revocation of a proxy. All written notices of revocation and other communications with respect to the revocation of a proxy should be addressed to: 2

9 Telephone and Internet Voting Tix Corporation Ventura Blvd., Suite 340 Studio City, CA Attn: Norman Feirstein, Corporate Secretary In addition to marking, signing, dating and mailing the proxy card if you received a copy of the proxy statement, you may vote by telephone or via the Internet. Voting by telephone or via the Internet is fast and convenient, and your vote is immediately confirmed and tabulated. If you choose to vote by telephone or via the Internet, instructions to do so are set forth on the proxy card or voting instruction form. If you own your shares in your own name, you can vote by telephone or via the Internet in accordance with the instructions provided on the proxy card. If your shares are held in street name by a bank, broker or other nominee, you can also vote by telephone or via the Internet by following the voting instructions on your voting instruction form. You may need to contact your bank or broker to vote. If you vote by telephone or via the Internet, you do not have to mail in your proxy card, but your vote must be received by 4:00 a.m., Eastern Daylight Time, on September 5,

10 QUESTIONS AND ANSWERS ABOUT THIS PROXY STATEMENT AND THE ANNUAL MEETING Q: WHAT IS THIS PROXY STATEMENT AND WHY AM I RECEIVING IT? A: You are receiving this proxy statement in connection with an annual meeting of stockholders called by our Board in connection with soliciting stockholder votes for the purpose of (i) electing the five director nominees recommended by the Board and named in this proxy statement to our Board to serve for a term ending on the date of the next annual meeting of stockholders, or until their successors are duly elected and qualified; and (ii) ratifying the appointment of Weinberg as our independent registered public accountant for the fiscal year ending December 31, 2014, in each case, as more fully described in this proxy statement. You are being provided this proxy statement and the proxy card because our Board is soliciting your proxy to vote at the Annual Meeting called for the purpose of voting on the foregoing matters. Q: WHAT INFORMATION IS CONTAINED IN THIS PROXY STATEMENT? A: The information included in this proxy statement relates to the proposals to be voted on at the Annual Meeting, the voting process, certain information regarding our directors and executive officers, and certain other information. Q: WHO IS ENTITLED TO VOTE AT THE ANNUAL MEETING, AND WHAT VOTE IS REQUIRED TO APPROVE THE PROPOSALS? A: Only holders of shares of Common Stock as of the Record Date are entitled to vote at the Annual Meeting. As of the close of business on July 18, 2014, the Record Date, there were 18,179,744 shares of Common Stock issued and outstanding, and entitled to notice of and to vote at the Annual Meeting. For all matters, each outstanding share of Common Stock will be entitled to one vote on each matter. Stockholders do not have cumulative voting rights. Under Delaware law, and pursuant to our By-laws, a majority of the issued and outstanding shares of Common Stock entitled to vote, present in person or represented by proxy, is necessary to constitute a quorum for the transaction of business at the Annual Meeting. Once a quorum is established, stockholder approval with respect to a particular proposal is generally obtained by the affirmative vote of a majority of our issued and outstanding shares of Common Stock present in person or represented by proxy and entitled to vote at the Annual Meeting, except for the election of directors, which is determined by a simple plurality of the votes cast on the election at the Annual Meeting. Q: DOES OUR BOARD OF DIRECTORS RECOMMEND VOTING FOR THE PROPOSALS? A: Yes. Our Board recommends that our stockholders vote FOR each of the proposals described in this proxy statement. Q: HOW MAY I VOTE ON THE PROPOSALS IF I OWN SHARES IN MY OWN NAME? A: If you own your shares in your own name, you may vote on the proposals presented in this proxy statement in one of the following three ways: (1) by completing, signing and dating the proxy card and returning it to the Company, (2) by completing your proxy by telephone or on the 4

11 Internet at the telephone number or website address listed on the enclosed proxy card or voting instruction form, or (3) in person at the Annual Meeting. It is important that you vote your shares whether or not you attend the meeting in person. Q: HOW MAY I VOTE ON THE PROPOSALS IF MY SHARES ARE HELD IN STREET NAME BY MY BROKER, BANK OR OTHER NOMINEE? A: If your shares are held in street name through a broker, bank or other nominee, you can also vote by telephone or via the Internet by following the voting instructions provided on your voting instruction form. You may need to contact your bank or broker to vote. If your shares are held in street name through a broker, bank or other nominee, the nominee may vote your shares with respect to discretionary items, such as the ratification of the independent registered public accountant, if they do not receive your voting instructions. Brokers holding shares of record for customers generally are not entitled to vote on non-routine matters unless they receive voting instructions from their customers. Uninstructed shares means shares held by a broker who has not received instructions from its customers on such non-routine matters, and the broker has so notified the Company on a proxy form or has otherwise advised us that the broker lacks voting authority. Broker non-votes means the votes that could have been cast on the matter in question by brokers with respect to uninstructed shares if the brokers had received their customers instructions. Brokers, banks and other nominees are no longer permitted to vote stockholders shares for the election of directors without instruction from the stockholders. Therefore, we urge all stockholders to give voting instructions to their brokers, banks and other nominees on all voting items. Q: CAN I CHANGE MY MIND AND REVOKE MY PROXY? A: Yes. If you are a stockholder of record, you may change your vote at any time before the polls close at the Annual Meeting. You may do this by (i) delivering to our corporate secretary, prior to or at the Annual Meeting, a written notice revoking the proxy; (ii) delivering to our corporate secretary, at or prior to the Annual Meeting, a duly executed proxy relating to the same shares and bearing a later date; or (iii) voting in person at the Annual Meeting. Attendance at the Annual Meeting, in and of itself, will not constitute a revocation of a proxy. If you hold your shares in street name, you may submit new voting instructions by contacting your broker, bank or other nominee. If you voted by telephone or via the Internet, you may change your vote at any time up until 4:00 a.m., Eastern Daylight Time, on September 5, 2014 by resubmitting a new telephone or Internet vote. Your last telephone or Internet vote will be the one that is used for voting purposes. Q: CAN I VOTE MY SHARES IN PERSON? A: Yes. The Annual Meeting is open to all holders of Common Stock as of the Record Date. To vote in person, you will need to attend the Annual Meeting and bring with you evidence of your stock ownership. If your shares are registered in your name, you will need to bring valid picture identification. If your shares are held in the name of your broker, bank or another nominee, you will need to bring evidence of your stock ownership, such as your most recent brokerage account statement and valid picture identification. In addition, because you are not the stockholder of 5

12 record, you may not vote your shares in person at the Annual Meeting unless you request and obtain a legal proxy from your broker or a power of attorney or other proxy authority from your bank, broker or another nominee, and bring it to the Annual Meeting. Q: DO I HAVE DISSENTERS OR APPRAISAL RIGHTS IN CONNECTION WITH THE PROPOSALS? A: No. Under Delaware law, dissenters or appraisal rights are not available in connection with any of the proposals. Q. WHAT SHOULD I DO IF I RECEIVE MORE THAN ONE SET OF VOTING MATERIALS? A: You may receive more than one set of voting materials, including multiple copies of this proxy statement and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you may receive a separate notice for each brokerage account in which you hold shares. If you are a stockholder of record and your shares are registered in more than one name, you will receive more than one proxy card. Please complete, sign, date and return each Company proxy card and voting instruction card that you receive. Q. WHAT HAPPENS IF ADDITIONAL MATTERS ARE PRESENTED AT THE ANNUAL MEETING? A: Other than the proposals described in this proxy statement, we are not aware of any other business to be acted upon at the Annual Meeting. If you grant a proxy, 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 meeting. If for any reason any of our nominees are not available as a candidate for director, the persons named as proxy holders will vote your proxy for such other candidate or candidates as may be nominated by the Board. Q. IS MY VOTE CONFIDENTIAL? A: Proxy instructions, ballots and voting tabulations that identify individual stockholders are handled in a manner that protects your voting privacy. Your vote will not be disclosed either within the Company or to third parties, except: (1) as required by law, (2) to allow for the tabulation of votes and certification of the vote, and (3) to facilitate a successful proxy solicitation. Occasionally, stockholders provide on their proxy card written comments, which are then forwarded to Company management. Your identity will be kept confidential unless you ask that your name be disclosed. 6

13 PROPOSAL I ELECTION OF DIRECTORS Our Board currently has five directors. The Board proposes that the following five nominees, each of whom currently serve on the Board, be elected as directors to serve for a term ending on the date of the next annual meeting of stockholders and until their successors are duly elected and qualified. In connection with the election of directors at the Annual Meeting, the Board, after considering the relevant facts and circumstances, has approved for election as directors at the Annual Meeting the nominees described in this proxy statement. Each of the nominees has consented to serve if elected. If any of them becomes unavailable to serve as a director, the Board may designate a substitute nominee. In that case, the persons named as proxies will vote for the substitute nominee designated by the Board. The affirmative vote of a plurality of the shares of Common Stock represented at the Annual Meeting is required to elect each director. Name Age Position Mitch Francis 59 Chairman of the Board of Directors, President, Chief Executive Officer Aaron S. Bregman 52 Director Norman Feirstein 66 Director, Corporate Secretary Andrew Pells 58 Director Steven L. Zelinger 55 Director The biographies and work experience of each of our nominees for directors is set forth under Director Nominees and Executive Officers beginning on page 12 of this proxy statement. Vote Required and Recommendation of Board of Directors Our By-laws provide that directors are elected by a plurality of the votes cast by shares entitled to vote at such election of directors. In addition, stockholders have two voting choices for the election of directors: FOR or WITHHOLD. You may choose to vote FOR or WITHHOLD with respect to all of the nominees or any specific nominee(s). Stockholders entitled to vote at the Annual Meeting have the right to cast, in person or by proxy, all of the votes to which the stockholder s shares are entitled for each of the nominees. Under the plurality standard, the only votes that count when director votes are being tabulated are FOR votes. WITHHOLD votes have no effect. Thus, a director-nominee could be elected by a single FOR vote. Unless otherwise instructed on your proxy, your shares will be voted FOR the election of all nominees. If your broker does not vote your shares of Common Stock held in street name or if you withhold authority for one or all nominees, your vote will not count either FOR or AGAINST the nominee, although it will be counted for purposes of determining whether there is a quorum present at the meeting. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH DIRECTOR NOMINEE NAMED ABOVE. 7

14 Audit and Audit Related Fees PROPOSAL II RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Weinberg & Company, P.A. ( Weinberg ) was the Company s independent registered public accounting firm for the years ended December 31, 2013 and Services provided to the Company by Weinberg with respect to the years ended December 31, 2013 and 2012 consisted of audits of the Company s consolidated financial statements and audit services with respect to our 401(k) plan and our Employee Stock Ownership Plan (ESOP). Charges by Weinberg with respect to these matters aggregated $112,000 and $122,000, respectively, for the years ended December 31, 2013 and Tax Fees Weinberg did not provide any services to the Company with respect to the preparation of corporate income tax returns or tax planning matters. All Other Fees Weinberg did not provide any services with respect to any matters other than those related to audit and audit-related matters. Vote Required and Recommendation of Board of Directors Under Delaware law, and pursuant to our By-laws, the proposal to ratify Weinberg as our independent registered public accounting firm for the fiscal year ending December 31, 2014, will be approved by the affirmative vote of a majority of our issued and outstanding shares of Common Stock present in person or represented by proxy and entitled to vote at the Annual Meeting. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF WEINBERG AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM. 8

15 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT As used in this section, the term beneficial ownership with respect to a security is defined as consisting of sole or shared voting power (including the power to vote or direct the vote) and/or sole or shared investment power (including the power to dispose of or direct the disposition of) with respect to the security through any contract, arrangement, understanding, relationship or otherwise, subject to community property laws where applicable. As of July 31, 2014, the Company had a total of 18,179,744 shares of Common Stock issued and outstanding, which is the only issued and outstanding voting equity security of the Company. The following table sets forth, as of July 31, 2014: (a) the names and addresses of each beneficial owner of more than five percent (5%) of the Company s Common Stock as disclosed to the Company by such beneficial owner in writing, the number of shares of Common Stock beneficially owned by each such person, and the percent of the Company s Common Stock so owned; and (b) the names and addresses of each director and executive officer, the number of shares of Common Stock beneficially owned, and the percentage of the Company s Common Stock so owned, by each such person and by all directors and executive officers of the Company as a group. Because beneficial owners are not required to disclose their ownership interests publicly or to the Company, we may only rely on public sources and written reports made directly to us when determining beneficial ownership, and, as a result, there may be, and the Company believes there are, other beneficial owner(s) of more than five percent (5%) of the Company s Common Stock that are not included in the following table. Name and Address of Beneficial Owner Amount and Nature of Beneficial Ownership (1) Percent of Shares of Common Stock Outstanding (2) Mitch Francis (3) Chairman of the Board, Chief Executive Officer and President 4,009,605(4) 21.0% Steve Handy (3) Chief Financial Officer 492,182(5) 2.7% Kimberly Simon (3) Chief Operating Officer 2,150,430(6) 11.2% Aaron S. Bregman (3) Director 2,000(10) * Norman Feirstein (3) Director 510,586(7) 2.8% Andrew Pells (3) Director 120,293(8) * Steven L. Zelinger (3) Director 125(9) * All directors and officers as a group (7 persons) 7,285,221(11) 35.5% * Less than one percent. (1) We determine beneficial ownership in accordance with the rules of the Securities and Exchange Commission (the SEC ) (although the Company recognizes that it is no longer subject to the rules of the SEC). We deem shares subject to stock options and warrants that are exercisable as of or within 60 days after July 31, 2014 as outstanding for purposes of computing the share 9

16 amount and the percentage ownership of the person holding such awards, but we do not deem them outstanding for purposes of computing the percentage ownership of any other person. (2) We determine applicable percentage ownership based on 18,179,744 shares of Common Stock outstanding on July 31, 2014, plus, with respect to each named person, the number of shares of Common Stock which the stockholder has the right to acquire upon exercise of stock options and warrants exercisable as of or within 60 days of July 31, (3) The address of each such person is c/o the Company, Ventura Blvd., Suite 340, Studio City, California (4) Includes 3,137,056 shares of Common Stock owned by Mr. Francis and 872,549 shares of Common Stock that may be acquired as of or within 60 days after July 31, 2014 through the exercise of stock options or warrants granted to Mr. Francis. Mr. Francis also has 24,510 shares of Common Stock underlying stock options or warrants that may not be acquired as of or within 60 days after July 31, Mr. Francis disclaims beneficial ownership of both 225,988 shares of Common Stock owned by Sandra Francis, the wife of Mr. Francis, and 108,562 shares of Common Stock owned by a trust for which Mr. Francis is one of three trustees. (5) Includes (i) 211,332 shares of Common Stock over which Mr. Handy has the power to vote pursuant to that certain proxy delivered in connection with an agreement among Mr. Handy, an existing stockholder of the Company and the Company whereby Mr. Handy has agreed to purchase 211,332 shares of Common Stock from the existing stockholder for $2.00 per share (see Certain Relationships and Related Party Transactions below) and (ii) 280,850 shares of Common Stock that may be acquired as of or within 60 days after July 31, 2014 through the exercise of stock options or warrants granted to Mr. Handy. Mr. Handy also has 8,170 shares of Common Stock underlying stock options or warrants that may not be acquired as of or within 60 days after July 31, (6) Includes (i) 568,109 shares of Common Stock owned by Ms. Simon, (ii) 631,258 shares of Common Stock over which Ms. Simon has the power to vote pursuant to that certain proxy delivered in connection with an agreement among Ms. Simon, an existing stockholder of the Company and the Company whereby Ms. Simon has agreed to purchase 631,258 shares of Common Stock from the existing holder for $2.00 per share (see Certain Relationships and Related Party Transactions below) and (iii) 951,063 shares of Common Stock that may be acquired as of or within 60 days after July 31, 2014 through the exercise of stock options or warrants granted to Ms. Simon. Ms. Simon also has 10,213 shares of Common Stock underlying stock options or warrants that may not be acquired as of or within 60 days after July 31, (7) Includes 390,586 shares of Common Stock owned by Mr. Feirstein and 120,000 shares of Common Stock that may be acquired as of or within 60 days after July 31, 2014 through the exercise of stock options or warrants granted to Mr. Feirstein. (8) Includes 293 shares of Common Stock owed by Mr. Pells and 120,000 shares of Common Stock that may be acquired as of or within 60 days after July 31, 2014 through the exercise of stock options or warrants granted to Mr. Pells. (9) Includes 125 shares of Common Stock owned by Mr. Zelinger. 10

17 (10) Includes 2,000 shares of Common Stock owned by Mr. Bregman. (11) Excludes 288,333 shares of Common Stock which used to be beneficially owned by Benjamin Frankel, a former director. As a result of Mr. Frankel s passing, such shares are beneficially owned by his estate. 11

18 DIRECTOR NOMINEES AND EXECUTIVE OFFICERS The following set forth the names and ages of the nominees proposed by the Board to be elected as directors and the executive officers of the Company as of July 31, All the director nominees currently serve as members of the Board. The Board is comprised of only one class. All of the directors elected at the Annual Meeting will serve until the next annual meeting of stockholders and until their successors are elected and qualified, or until their earlier death, retirement, resignation or removal. There are no arrangements or understandings between any two or more of the Company s directors or executive officers. Also provided herein is a brief description of the business experience of each director nominee and each executive officer and an indication of directorships held by each such nominee in other companies subject to the reporting requirements under the federal securities laws. Name Age Position(s) as of July 31, 2014 Mitch Francis 59 Chairman of the Board of Directors, Chief Executive Officer and President Steve Handy 46 Chief Financial Officer Kimberly Simon 46 Chief Operating Officer Aaron S. Bregman 52 Director Norman Feirstein 66 Director, Corporate Secretary Andrew Pells 58 Director Steven L. Zelinger 55 Director Biographies of Director Nominees and Executive Officers Directors and Chief Executive Officer Mitch Francis founded the Company in 1993 and has been the Chairman of the Board of Directors and Chief Executive Officer since its inception. Mr. Francis is an innovative leader whose inventions have yielded four United States patents with one invention patent pending. All of these inventions have contributed to the unique businesses and success of the Company. Mr. Francis was one of the first real estate majors in the United States at the University of Colorado and developed numerous shopping centers, office buildings and condominium projects. The Company believes that Mr. Francis qualifications to serve on the Board include his long tenure as our Chief Executive Officer and Chairman during which time he gained a unique and extensive understanding of the Company and its long-term strategy. Additionally, his real estate expertise has been a valuable asset to the Company in identifying and negotiating its retail facilities which have been a significant component of the Company s success. Aaron S. Bregman has been a director of the Company since October Mr. Bregman has been a practicing attorney from 1989 to the present. Since 1995, Mr. Bregman has been practicing law as a sole practitioner at the Aaron S. Bregman Law Offices. Mr. Bregman has extensive litigation and negotiating experience. In addition to his professional endeavors, Mr. Bregman is a founding director of the Grossman Burn Foundation and has been on their board of directors since its inception. The 12

19 Company believes that Mr. Bregmans qualifications to serve on the Board include his extensive experience as a lawyer and a board member. Norman Feirstein has been a director of the Company since March 1995, and serves as the Corporate Secretary of the Company. Mr. Feirstein has been practicing law as a sole practitioner from 1978 to the present. Mr. Feirstein currently practices law at The Feirstein Law Firm. The Company believes that Mr. Feirstein s qualifications to serve on the Board include his extensive experience as a lawyer and in the field of public company oversight. Andrew Pells has been a director of the Company since July From 1990 to December 2003, Mr. Pells served as an executive of Hotels.com and its predecessors in various management capacities. From January 2004 to the present, Mr. Pells has been an independent consultant to the Internet/Travel Industry. The Company believes that Mr. Pells qualifications to serve on the Board include his extensive experience in the hospitality field. Steven. L. Zelinger has been a director of the Company since August Mr. Zelinger started his career at the law firm of Baker and McKenzie, serving as an associate attorney from 1985 until From 1987 until 1992, Mr. Zelinger served as Senior Trial Attorney for the U.S. Department of Justice in Washington, D.C. From 1992 until 1998, Mr. Zelinger was a partner at the law firm of Manatt, Phelps & Phillips. From 1998 until 2002, Mr. Zelinger served as Senior Vice President, Senior Counsel and Global Chief of Litigation, Regulatory, Risk, Brand & Product Affairs of Visa International. From 2003 until March 2008, Mr. Zelinger served as Executive Vice President, General Counsel and Corporate Secretary at Solidus Networks, Inc. d/b/a Pay By Touch, a biometric authentication and payments company. From March 2008 until April 2012, Mr. Zelinger served as General Counsel and a member of senior management of the healthcare company, Balance Health Corporation, and an advisor to its affiliates. From April through November 2012, and again from April 2013 to present, Mr. Zelinger served and is serving as interim General Counsel, board secretary and advisor to Starfish Holding, Inc. d/b/a YourOffers.com, a company providing coupon, loyalty and rewards platforms. In addition, since April 2012, Mr. Zelinger has worked as an attorney with Axiom Global, Inc., providing legal services to Axiom s Fortune 100 clients. Since February 2009, Mr. Zelinger has served as an advisor to Carbon Tracing Inc., an early-stage company developing an online platform to monetize global carbon assets. Since March 2008, Mr. Zelinger has served as an advisor to Bling Nation, Inc., a company providing mobile payments and loyalty services and Lemon, Inc., an innovative mobile and online receipts and loyalty company. From September 2008, Mr. Zelinger has served as advisor to Shift Systems, LLC, an early-stage cybersecurity company. Since August 2013, Mr. Zelinger has served as a legal advisor to MyLo Solutions, Inc., which offers a training and education software platform. Mr. Zelinger is the cofounder and since May 2008 has served as an advisor and board member of Sweetspot, Inc., a company providing a wi-fi based mobile platform for delivery of brands and retailers rich content (including coupons, discounts, loyalty and payments) to consumers smartphones at the purchase point of decision in retail and public spaces. Mr. Zelinger is an active member of his community and currently serves on the boards of SweetSpot, Inc., TRS Holding, Inc., and Octet Ensemble, Inc. The Company believes that Mr. Zelinger s qualifications to serve on the Board include his extensive experience as a lawyer, general counsel and advisor in the fields of payments, financial services, loyalty, healthcare, technology, cybersecurity, and media and entertainment. Other Executive Officers 13

20 Steve Handy has been employed by the Company since March Prior to his employment at the Company, Mr. Handy was a consultant to several public companies involved in the entertainment industry in the areas of business development and SEC reporting and compliance. From 2002 to 2007, Mr. Handy held positions of increasing responsibility, including Senior Vice President, Chief Financial Officer and Corporate Secretary of SM&A, a former publicly traded professional services firm. Previous to his employment with SM&A, Mr. Handy held various management roles in high technology manufacturing and service companies, including working abroad for a U.S. high technology manufacturer. Mr. Handy also served as Senior Auditor, Business Advisory and Audit Services, for Deloitte & Touche LLP. Kimberly Simon has been employed by the Company for over seventeen years. Ms. Simon started her career with the Company in September 1997 as the general manager of the Company s Las Vegas ride simulator facility. Effective March 1, 2007, Ms. Simon was promoted to Chief Operating Officer and is responsible for all day-to-day operations. Prior to joining the Company, Ms. Simon gained managerial experience with several national companies. Board Leadership Structure Our By-laws provide our Board with flexibility to combine or separate the positions of Chairman of the Board and Chief Executive Officer. Currently, Mr. Francis serves as both Chairman of the Board and Chief Executive Officer. Our Board does not currently have a lead independent director. Our Board has determined that this structure is the most effective leadership structure for our company at this time. The Board believes that Mr. Francis is the director best situated to identify strategic opportunities for our company and focus the activities of the Board due to his full-time commitment to the business and long tenure with our company. The Board also believes that Mr. Francis service as both Chairman of the Board and Chief Executive Officer promotes effective execution of our business strategy and facilitates information flow between management and the Board. Our Board has determined that maintaining the independence of a majority of our directors helps maintain the Board s independent oversight of management. In addition, our Audit, Compensation and Nomination and Governance Committees, which oversee critical matters such as our accounting principles, financial reporting practices and system of disclosure controls and internal controls over financial reporting, our executive compensation program and the selection and evaluation of our directors and director nominees, each consist entirely of independent directors. Risk Oversight The Board is actively involved in the oversight of risks, including credit risk, liquidity risk and operational risk, that could affect our business. The Board does not have a standing risk management committee, but administers this oversight function directly through the Board as a whole, as well as through committees of the Board. For example, the Audit Committee assists the Board in its risk oversight function by reviewing and discussing with management our accounting principles, financial reporting practices and system of disclosure controls and internal controls over financial reporting. The Nomination and Governance Committee assists the Board in its risk oversight function by considering risks related to our director nominee evaluation process. The Compensation Committee assists the Board in its risk oversight function by considering risks relating to the design of our executive compensation programs and arrangements. The full Board considers strategic risks and opportunities and receives reports from the committees regarding risk oversight in their areas of responsibility as necessary. We 14

21 believe our Board leadership structure facilitates the division of risk management oversight responsibilities among the Board committees and enhances the Board s efficiency in fulfilling its oversight function with respect to different areas of our business risks and our risk mitigation practices. Legal Proceedings with Affiliates The Company is currently not a party to any litigation with any director, officer or affiliate of the Company. Code of Business Conduct and Ethics The Company has adopted a written Code of Business Conduct and Ethics that applies to its directors, officers and employees. A copy of the Company s Code of Business Conduct and Ethics is available to any stockholder by addressing a request to the attention of the Secretary of the Company and mailing such request to the Company s corporate offices. Selection and Evaluation of Director Candidates The Nomination and Governance Committee is responsible for identifying candidates for membership on the Board and makes determinations as to whether to recommend such candidates nomination to the Board based on such nominee s character, judgment, and business and financial experience, as well as their ability to add to the Board s existing strengths. This assessment typically includes issues of expertise in industries important to us, functional expertise in areas such as marketing, human resources, operations, finance, and information technology and an assessment of an individual s abilities to work constructively with the existing Board and management, all in the context of an assessment of the perceived needs of the Board at that point in time. The Committee does not have any written specific minimum qualifications or skills that a candidate must meet in order to serve on the Board. The Committee identifies nominees by first evaluating the current members of the Board qualified and willing to continue in service. Current members of the Board with skills and experience that are relevant to our business and who are willing to continue in service are considered for re-nomination, balancing the value of continuity of service by existing members of the Board with that of obtaining a new perspective. If any member of the Board does not wish to continue in service or if the majority of the Board decides not to re-nominate a member for re-election, the Board identifies the desired skills and experience of a new nominee in light of the following criteria. When identifying and evaluating new directors, the Board considers the diversity and mix of the existing Board, including, but not limited to, such factors as: employment experience, public interest considerations and the implementation of our strategic plan. Among other things, when examining a specific candidate s qualifications, the Board considers: the ability to represent our best interests, existing relationships with us, interest in the affairs and our purpose, the ability to fulfill director responsibilities, leadership skill, integrity, business and financial judgment, ability to develop business for us and the ability to work as a member of a team. The Nomination and Governance Committee did not recommend any new candidates to the Board in connection with the Annual Meeting, but recommended the currently serving members of the Board for re-election. Meetings and Committees of the Board of Directors During the year ended December 31, 2013, the Board met on seven occasions. Additional Board actions were taken by unanimous written consent. 15

22 The Nomination and Governance Committee of the Board presently consists of three directors of the Company, Andrew Pells, Norman Feirstein and Steven L. Zelinger. The purpose of the Nomination and Governance Committee of the Board is to assist the Board in discharging its duties relating to corporate governance and the composition and evaluation of the Board. The members of the Nomination and Governance Committee during 2013 were Messrs. Feirstein, Georges, Pells and Traub. None of the current members of the Committee, and none of the members that served in 2013, is or was an employee of the Company. Mr. Pells currently serves as the Chairman of the Committee. Our Nomination and Governance Committee held no meeting in 2013, took some actions by unanimous written consent and did not recommend any new candidates to the Board in connection with the Annual Meeting. Our Nomination and Governance Committee recommended for re-election all of our currently serving members of the Board. The Compensation Committee of the Board presently consists of three directors of the Company, Steven L. Zelinger, Aaron S. Bregman and Norman Feirstein. The members of the Compensation Committee during 2013 were Messrs. Feirstein, Georges, Pells and Perelman. None of the current members of the Compensation Committee, and none of the members that served in 2013, is or was an employee of the Company. Mr. Zelinger currently serves as the Chairman of the Committee. The Compensation Committee reviews the performance of the executive officers of the Company and reviews the compensation programs and agreements for key employees, including salary and bonus levels. Our Compensation Committee held four meetings in The Audit Committee of the Board presently consists of three directors of the Company, Norman Feirstein, Aaron S. Bregman and Andrew Pells. The members of the Audit Committee during 2013 were Messrs. Feirstein, Georges, Pells and Stolper. None of the current members of the Audit Committee, and none of the members that served in 2013, is or was an employee of the Company. Mr. Feirstein currently serves as the Chairman of the Committee. The Audit Committee reviews, acts on, and reports to the Board with respect to various auditing and accounting matters, including the selection of the Company s independent public accountants, the scope of the annual audits, the nature of non-audit services, the fees to be paid to the independent public accountants, the performance of the independent public accountants, and the accounting practices of the Company. Our Audit Committee held six meetings in The Dividend Committee of the Board consisted of three directors of the Company during The members of the Dividend Committee during 2013 were Messrs. Perelman, Traub and Frankel. The Dividend Committee was required to be maintained under the terms of the BSC Agreement through February 2015 to make an annual recommendation to the Board whether to declare and pay a cash dividend to the stockholders of the Company and, if so, the amount of any such cash dividend, provided that the amount of any such cash dividend was not to exceed 25% of the Consolidated Free Cash Flow (as defined in the BSC Agreement) of the Company for the fiscal year immediately preceding the date of such recommendation. If the Dividend Committee recommended the payment of a cash dividend, the Board was required under the terms of the BSC Agreement to adopt such recommendation and pay the dividend, unless such payment would be prohibited by applicable law. The Dividend Committee executed one unanimous written consent in 2013 in lieu of a meeting, in which it resolved that, because the Company did not have positive Consolidated Free Cash Flow (as defined in the BSC Agreement) for the fiscal year ended December 31, 2012, and as a consequence thereof, the BSC Agreement did not permit the Dividend Committee to recommend any cash dividend in respect of such period, it would make no recommendation that the Board declare or pay any cash dividend in respect of such period. In 16