SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement [ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Atlantic International Entertainment Ltd.
- --------------------------------------------------------------------------------
(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:
<PAGE>
ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD.
200 East Palmetto Park Road, Suite 200
Boca Raton, Florida 33432
August 25, 1999
NOTICE OF ANNUAL SHAREHOLDERS' MEETING
NOTICE IS HEREBY GIVEN THAT the annual meeting of shareholders of Atlantic
International Entertainment, Ltd. (the "Corporation"), shall be held on
September 24, 1999, at 10:00 a.m., Eastern time, in the Radisson Bridge Resort
at 999 East Camino Real, in the City of Boca Raton, Florida, 33432.
The shareholders will deliberate and take action on the following matters:
1. TO ELECT DIRECTORS TO SERVE FOR THE ENSUING YEAR OR UNTIL THEIR
RESPECTIVE SUCCESSORS ARE DULY ELECTED AND QUALIFIED. THE NOMINEES
ARE RICHARD A. IAMUNNO, MARTIN V. MCCARTHY, JEFFREY L. HURWITZ,
PETER LAWSON, MARCEL GOLDING and JOHN COPELYN.
2. TO RATIFY THE APPOINTMENT OF MOORE STEPHENS, P.C., AS INDEPENDENT
ACCOUNTANTS OF THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31,
1999.
3. TO AMEND THE ARTICLES OF INCORPORATION TO CHANGE THE NAME OF THE
COMPANY TO ONLINE GAMING SYSTEMS, LTD.
4. TO AMEND THE ARTICLES OF INCORPORATION TO COMPLY WITH THE LISTING
REQUIREMENTS OF THE AUSTRALIAN STOCK EXCHANGE.
5. TO TRANSACT SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING OR ANY ADJOURNMENT THEREOF.
The foregoing items of business are more fully described in the Proxy Statement
that accompanies this Notice.
The board of directors has fixed the close of business on August 18, 1999
as the record date. Only those shareholders, which were shareholders of record
at the close of business on August 18, 1999, will be entitled to vote in person
or by proxy at the meeting or any adjournment thereof.
All stockholders are cordially invited and encouraged to attend the Annual
Meeting. In any event, to ensure your representation at the Annual Meeting,
please carefully read the accompanying Proxy Statement which describes the
matters to be voted on at the meeting and sign, date, and return the enclosed
proxy card in the reply envelope provided. Should you receive more than one
proxy because your shares are registered in different names and addresses, each
proxy should be returned to assure that all of your shares will be voted. If you
attend the Annual Meeting and vote by ballot, your proxy will be revoked
automatically and only your vote at the Annual Meeting will be counted. The
prompt return of your proxy card will assist us in preparing for the Annual
Meeting.
We look forward to seeing you at the Annual Meeting.
BY ORDER OF THE BOARD OF DIRECTORS of
Atlantic International Entertainment, Ltd.
/s/ Richard A. Iamunno
----------------------
Richard A. Iamunno
President, Chief Executive Officer
Dated: August 25, 1999
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING IN
PERSON. IN ANY EVENT, TO ENSURE YOUR REPRESENTATION AT THE ANNUAL MEETING YOU
ARE URGED TO VOTE, SIGN, AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE
IN THE POSTAGE-PREPAID ENVELOPE ENCLOSED FOR THAT PURPOSE.
<PAGE>
ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD.
200 East Palmetto Park Road, Suite 200
Boca Raton, Florida 33432
August 25, 1999
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
(the "Annual Meeting") of Atlantic International Entertainment, Ltd. (the
"Company" or "AIE") which will be held on September 24, 1999 at 10:00 a.m.,
Eastern standard time, in the Radisson Bridge Resort at 999 East Camino Real, in
the City of Boca Raton, Florida, 33432.
At the Annual Meeting, you will be asked to consider and vote upon the
following proposals: (i) to elect six (6) directors of the Company; (ii) to
ratify the appointment of Moore Stephens, P.C., as independent accountants of
the Company for the fiscal year ending December 31, 1999; (iii) to change the
name of the Company to Online Gaming Systems, Ltd.; and (iv) to amend the
articles of incorporation of the Company to comply with the requirements of the
Australian Stock Exchange.
The enclosed Proxy Statement more fully describes the details of the
business to be conducted at the Annual Meeting. After careful consideration, the
Company's Board of Directors has unanimously approved the proposals and
recommends that you vote FOR each such proposal.
After reading the Proxy Statement, please mark, date, sign, and return
the enclosed proxy card in the accompanying reply envelope as promptly as
possible but no later than September 14, 1999. If you decide to attend the
Annual Meeting and would prefer to vote in person, please notify the Secretary
of the Company that you wish to vote in person and your proxy will not be voted.
YOUR SHARES CANNOT BE VOTED UNLESS YOU SIGN, DATE, AND RETURN THE ENCLOSED PROXY
OR ATTEND THE ANNUAL MEETING IN PERSON.
A copy of the Company's 1998 10KSB Financial Report has been mailed
concurrently herewith to all stockholders entitled to notice of and to vote at
the Annual Meeting.
We look forward to seeing you at the Annual Meeting.
Sincerely yours,
/s/ Richard A. Iamunno
----------------------
Richard A. Iamunno
President and Chief Executive Officer
Boca Raton, Florida
August 25, 1999
- --------------------------------------------------------------------------------
IMPORTANT
PLEASE MARK, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT AT YOUR EARLIEST
CONVENIENCE IN THE ENCLOSED POSTAGE-PREPAID RETURN ENVELOPE SO THAT IF YOU ARE
UNABLE TO ATTEND THE ANNUAL MEETING, YOUR SHARES MAY BE VOTED.
- --------------------------------------------------------------------------------
<PAGE>
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS OF
ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD.
TO BE HELD SEPTEMBER 24, 1999
GENERAL
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Atlantic International Entertainment, Ltd., a
Delaware Corporation (the "Company" or "AIE"), of proxies to be voted at the
Annual Meeting of Stockholders (the "Annual Meeting") to be held on September
24, 1999, or at any adjournment or postponement thereof, for the purposes set
forth in the accompanying Notice of Annual Meeting of Stockholders. Stockholders
of record on August 18, 1999 will be entitled to vote at the Annual Meeting. The
Annual Meeting will be held at 10:00 a.m., Eastern standard time, at the
Radisson Bridge Resort at 999 East Camino Real, in the City of Boca Raton,
Florida 33432.
It is anticipated that this Proxy Statement and the enclosed proxy card
will be first mailed to stockholders on or about August 25, 1999.
VOTING RIGHTS
The close of business on August 18, 1999 was the record date for
stockholders entitled to notice of and to vote at the Annual Meeting and any
adjournments thereof. At the record date, the Company had approximately
13,270,964 shares of its Common Stock outstanding and entitled to vote at the
Annual Meeting, held by approximately 787 stockholders. Holders of Common Stock
are entitled to one vote for each share of Common Stock so held. In the election
of Directors, however, cumulative voting is authorized for all stockholders if
any stockholder gives notice at the meeting, prior to voting for the election of
Directors, of his or her intention to cumulate votes. Under cumulative voting, a
stockholder may cumulate votes and give to one nominee a number of votes equal
to the number of Directors to be elected (seven at this meeting) multiplied by
the number of votes to which such stockholder is entitled, or may distribute
such number among any or all of the nominees. The seven candidates receiving the
highest number of votes will be elected. The Board of Directors is soliciting
discretionary authority to vote proxies cumulatively. A majority of the shares
of Common Stock entitled to vote will constitute a quorum for the transaction of
business at the Annual Meeting.
If any stockholder is unable to attend the Annual Meeting, such
stockholder may vote by proxy. The enclosed proxy is solicited by the Company's
Board of Directors, (the "Board of Directors" or the "Board") and, when the
proxy card is returned properly completed, it will be voted as directed by the
stockholder on the proxy card. Stockholders are urged to specify their choices
on the enclosed proxy card. If a proxy card is signed and returned without
choices specified, in the absence of contrary instructions, the shares of Common
Stock represented by such proxy will be voted FOR all of the Proposals and will
be voted in the proxy holders' discretion as to other matters that may properly
come before the Annual Meeting.
An affirmative vote of a plurality of the shares present or represented
at the meeting and entitled to vote is required for the election of directors.
An affirmative vote of a majority of the shares present or represented at the
meeting and entitled to vote is required for the ratification of appointment of
Moore Stephens, P. C. as independent accountants of the Company. An affirmative
vote of a majority of the shares present or represented at the meeting and
entitled to vote is required for the approval of the change of the Company's
name to Online Gaming Systems, Ltd. and to amend the articles of incorporation
to comply with the requirements of the Australian Stock Exchange. An automated
system administered by the Company's transfer agent tabulates stockholder votes.
Abstentions and broker non-votes each are included in determining the presence
or absence of a quorum, and each is tabulated separately. Abstentions are
counted as negative votes, whereas broker non-votes are not counted for purposes
of determining whether the Proposals presented to stockholders have been
approved.
<PAGE>
REVOCABILITY OF PROXIES
Any person giving a proxy has the power to revoke it at any time
beforeits exercise. A proxy may be revoked by filing with the Secretary of the
Company an instrument of revocation or a duly executed proxy bearing a later
date, or by attending the Annual Meeting and voting in person.
SOLICITATION OF PROXIES
The Company will bear the cost of soliciting proxies. Copies of
solicitation material will be furnished to brokerage houses, fiduciaries, and
custodians holding shares in their names that are beneficially owned by others
to forward to such beneficial owners. The Company may reimburse such persons for
their costs of forwarding the solicitation material to such beneficial owners.
The original solicitation of proxies by mail may be supplemented by solicitation
by telephone, telegram, or other means by directors, officers, employees or
agents of the Company. No additional compensation will be paid to these
individuals for any such services. Except as described above, the Company does
not intend to solicit proxies other than by mail.
THE FORM 10KSB FINANCIAL REPORT OF THE COMPANY FOR THE FISCAL YEAR
ENDED DECEMBER 31, 1998, HAS BEEN MAILED CONCURRENTLY WITH THE MAILING OF THE
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT TO ALL STOCKHOLDERS ENTITLED TO
NOTICE OF AND TO VOTE AT THE ANNUAL MEETING. THE ANNUAL REPORT IS NOT
INCORPORATED INTO THIS PROXY STATEMENT AND IS NOT CONSIDERED PROXY SOLICITING
MATERIAL.
<PAGE>
- --------------------------------------------------------------------------------
PROPOSAL NO. 1:
ELECTION OF DIRECTORS
- --------------------------------------------------------------------------------
At the Annual Meeting, six directors (constituting the entire board)
are to be elected to serve until the next Annual Meeting of Stockholders and
until a successor for such director is elected and qualified, or until the
death, resignation, or removal of such director. It is intended that the proxies
will be voted for the six nominees named below for election to the Company's
Board of Directors unless authority to vote for any such nominee is withheld.
There are six nominees, each of whom is currently a director of the Company.
Each person nominated for election has agreed to serve if elected, and the Board
of Directors has no reason to believe that any nominee will be unavailable or
will decline to serve. In the event, however, that any nominee is unable or
declines to serve as a director at the time of the Annual Meeting, the proxies
will be voted for any nominee who is designated by the current Board of
directors to fill the vacancy. Unless otherwise instructed, the proxy holders
will vote the proxies received by them FOR the nominees named below. The six
candidates receiving the highest number of the affirmative votes of the shares
entitled to vote at the Annual Meeting will be elected directors of the Company.
The proxies solicited by this Proxy Statement may not be voted for more than six
nominees.
NOMINEES
Set forth below is information regarding the nominees to the Board of Directors.
NAME/DIRECTOR POSITION WITH
FIRST ELECTED THE COMPANY PAGE
- ------------- ----------- ----
Richard A. Iamunno President, Chief Executive 42
July of 1994 Officer, and Director
Peter Lawson Treasurer, Chief Financial
March of 1999 Officer and Director 51
John Copelyn Chairman of the Board 51
July of 1999
Martin V. McCarthy Director 44
March of 1998
Jeffrey L. Hurwitz Director 43
March of 1998
Marcel Golding Director 38
August of 1998
<PAGE>
BUSINESS EXPERIENCE OF NOMINEES FOR ELECTION AS DIRECTORS
RICHARD A. IAMUNNO has served as a Director, the Chief Executive
Officer and President since its inception on July 16, 1994. Prior to starting
the Company, Mr. Iamunno was President of Ameristar International, an
investment-banking firm that provided European-based companies with merger
assistance into the U.S. public marketplace. Mr. Iamunno's business experience
includes positions as Senior Director of Marketing and Vice President of Western
Union Corporation. Mr. Iamunno is presently a director of Atlantic International
Capital Holdings, Ltd., a Bermuda based investment company and has in the past
served as a Director of Tapistron International, as a Director and officer of
Trinitech Systems, Inc. Mr. Iamunno attended Drake University in Des Moines,
Iowa.
PETER H. LAWSON is currently a Director of an Australian Stockbroking
House. Prior to this appointment, he worked in the Banking and Finance Industry
for over 15 years. The last 10 years was spent with Barclays Bank in Australia
where he held various senior management positions. First as Branch Manager in
Townsville with a staff of 15 and then a state manager in South Australia with a
staff of 25. In 1994 he was elected to be Executive in Resident in the commerce
faculty at the University of Queensland in Australia, where he lectured and held
seminars for pre and post graduate students. His expertise is in the area of
Corporate Advice, mergers, acquisitions, initial public offerings and equity
raisings, especially in the small company sector. He has worked with, and
advised, many small companies from start up situations to more the mature over
the past 13 years. He has extensive experience in the Australian Equity Markets,
with connections within the brokerage community as well as the institutional
market. During that time he was also a director of two publicly listed
Australian companies. He is currently a director of the Australian subsidiary of
Atlantic and has advised us for the past two years. Mr. Lawson holds a degree in
commerce from Queensland University in Australia and is a Certified Practicing
Accountant and holds postgraduate qualified in finance from the Securities
Institute in Australia.
JOHN COPELYN is currently the Chief Executive Officer of the South
African Clothing and Textile Workers Union Investment Group and the Chief
Executive Officer of Hosken Consolidated Investments, Ltd., a company traded on
the Johannesburg Stock Exchange. During 1992-1994, Mr. Copelyn was Chief
Executive Officer of Zenzeleni Clothing. From 1994-1997, Mr. Copelyn served as
an elected member of the democratically elected South African parliament. In
addition, he has held numerous positions with South African trade unions
including serving on the Central Committee of COSATU. Mr. Copelyn is also a
licensed attorney in South Africa. Mr. Copelyn also serves as director for other
gaming and non-gaming companies. He attended both the University of
Witwatersrand and University of South Africa.
MARTIN V. MCCARTHY was appointed a Director of the Company in March of
1998. Mr. McCarthy was the President and CEO of IDD Enterprises, L.P. The
Company was recently sold to Dow Jones and Company. Mr. McCarthy has been a
pioneer in the online world for almost two decades. He has led organization of
scale that have created, commercialized and deployed leading edge technologies
in the areas of communications, information services and transactions. Prior to
joining IDD in 1988, Mr. McCarthy served as Vice President of Office Message and
Information Services at Western Union and was the youngest corporate officer in
the firm's 130 year history. Mr. McCarthy has an MBA from Harvard University.
JEFFREY L. HURWITZ was appointed a Director of the Company in March of
1998. Mr. Hurwitz had been the Managing Director of South African based Clinic
Holdings since 1987. While at Clinic Holdings, the Company grew to 26 Hospitals
with annual turnover of over $370,000,000. In November 1997 Mr. Hurwitz left
Clinic Holdings under the terms of Agreement of Sale of the Company. Prior to
Clinic Holdings Mr. Hurwitz was employed as a Chartered Accountant with Deloitte
& Touche. Mr. Hurwitz graduated from the University of Witwatersrand in South
Africa with degrees in Commerce and Accounting.
MARCEL GOLDING was appointed a Director of the Company in August of
1998. Mr. Golding is Chairman of Hosken Consolidated Investments (HCI) and
Softline Holdings, as well as being a Director of JCI and Global Capital, which
are all listed companies on the Johannesburg Stock Exchange. In addition, he was
the founding chairman of the Mineworkers Investment Company (linked to the
National Union of Mineworkers), one of the two pioneering trade union investment
companies in South Africa. He was elected the first Deputy General Secretary of
the union in 1987 at the age of 26, and was re-elected on three additional
occasions to this post of the Country's largest trade union. From 1994 to 1997
he served as a Member of Parliament, where he chaired the Minerals and Energy
Committee and the Audited Commission, the oversight committee of the office of
the Auditor-General. Mr. Golding holds a post graduate degree from the
University of Cape Town.
BOARD MEETINGS AND COMMITTEES
The Board held four (4) meetings during the year ended December
31,1998. In addition, from time to time during such year, the members of the
Board acted by unanimous written consent. Each member of the Board of Directors,
who served during all of fiscal 1998, attended or participated in more than
seventy-five (75%) or more of the aggregate of (i) the total number of meetings
of the Board of Directors held during the fiscal year and (ii) the total number
of meetings held by all committees on which such director served during the past
fiscal year. There are no family relationships among executive officers or
directors of the Company. The Board of Directors has an Audit Committee and a
Compensation Committee. The entire Board of Directors performs the typical
functions of such committees. There is no nominating committee or any other
board committees.
The Audit Committee of the Board of Directors held one (1) meeting
during fiscal 1998. The Audit Committee, which is comprised of Peter Lawson and
Trevor Klein recommends engagement of the Company's independent accountants,
approves services performed by such accountants and reviews and evaluates the
Company's accounting system and its system of internal controls.
The Compensation Committee of the Board of Directors held one (1)
meeting during fiscal 1998 and approved grants of options by written consent on
a monthly basis. The Compensation Committee, which is currently comprised of
Marcel Golding and Martin McCarthy, has overall responsibility for the Company's
compensation policies and determines the compensation payable to the Company's
executive officers, including their participation in certain of the Company's
employee benefit and stock option plans.
Mr. Norman J. Hoskin resigned from the Board of Directors due to ill
health in July, 1999.
DIRECTOR COMPENSATION
The Company does compensate directors and executive officers of the
Company for service on the Board of Directors. Directors and executive officers
receive $1,500 per meeting and are reimbursed for their expenses incurred in
attending meeting of the Board of Directors. In addition, in 1999, each director
shall receive 50,000 options to purchase the Company stock.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
ELECTION OF ALL OF THE ABOVE NOMINEES.
<PAGE>
- --------------------------------------------------------------------------------
PROPOSAL NO. 2:
RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS
- --------------------------------------------------------------------------------
The Company is asking the stockholders to ratify the selection of Moore
Stephens, P.C. as the Company's independent public accountants for the fiscal
year ending December 31, 1999. The affirmative vote of the holders of a majority
of the shares represented and voting at the Annual Meeting will be required to
ratify the selection of Moore Stephens, P.C.
In the event the stockholders fail to ratify the appointment, the Audit
Committee of the Board of Directors will consider it as a direction to select
other auditors for the subsequent year. Even if the selection is ratified, the
Board of Directors in its discretion may direct the appointment of a different
independent accounting firm at any time during the year if the Board of
Directors determines that such a change would be in the best interest of the
Company and its stockholders.
On January 30, 1997, the Board of Directors of the Company dismissed
Buchbinder Tunick & Company LLP as independent accountants to the Company and on
March 5, 1997 appointed Moore Stephens, P.C. as the new independent accountants
to the Company. Buchbinder Tunick & Company LLP has not reported on any of the
Company's financial statements. Since, December 19, 1996 (the date on which
Buchbinder Tunick & Company LLP was engaged as the Company's independent
accountants), there were no disagreements between the Company and Buchbinder
Tunick & Company LLP on any matters of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure, which
disagreements, if not resolved to the satisfaction of Buchbinder Tunick &
Company LLP would have caused Buchbinder Tunick & Company LLP to make a
reference to the subject matter of the disagreements in connection with its
reports.
Moore Stephens, P.C. has audited the Company's financial statements for
the year ended December 31, 1998. Its representatives are expected to be present
at the Annual Meeting and will have the opportunity to make a statement if they
desire to do so, and will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
PROPOSAL TO RATIFY THE SELECTION OF MOORE STEPHENS, P.C., TO SERVE AS THE
COMPANY'S INDEPENDENT PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR ENDING DECEMBER 31,
1999.
<PAGE>
- --------------------------------------------------------------------------------
PROPOSAL NO. 3:
CHANGE OF COMPANY NAME TO ONLINE GAMING SYSTEMS, LTD.
- --------------------------------------------------------------------------------
The Company is asking the stockholders to approve the change of the
name of the Company to Online Gaming Systems, Ltd. effective immediately and
authorizing the officers of the Company to file amended articles of
incorporation with the State of Delaware. The affirmative vote of the holders of
a majority of the shares represented and voting at the Annual Meeting will be
required to approve the above name change.
- --------------------------------------------------------------------------------
PROPOSAL NO. 4:
AUTHORITY TO AMEND ARTICLES OF INCORPORATION
TO COMPLY WITH REQUIREMENTS OF
AUSTRALIAN STOCK EXCHANGE
- --------------------------------------------------------------------------------
The Company is asking the stockholders to approve of changes to the
Company's articles of incorporation as required by the Australian Stock
Exchange. A copy of the proposed Amended Articles of Incorporation are attached
hereto as Exhibit "A". The affirmative vote of the holders of a majority of the
shares represented and voting at the Annual Meeting will be required to approve
such changes. The Board of Directors shall retain the discretion to actually
implement the changes until such time as the Board of Directors determines to
file its application with the Australian Stock Exchange.
There are several substantive changes to the articles all of which
provide a shift of power from the Board of Directors to the stockholders. The
Board recommends these changes so that the Company may comply with the listing
requirements of the Australian Stock Exchange. The Board of Directors does not
believe that the shift of voting power required by these amendments will
substantially interfere with the Company's operations. These changes are as
follows:
1. Article Fifth shall be changed by omitting the power of the Board
of Directors to fix or alter the rights, preferences, privileges and
restrictions with regard to any series of Preferred Stock. This is generally
known as a "blank check" power to set the terms of a series of Preferred Stock.
After the change to the articles of incorporation is adopted, only the
stockholders will be empowered to make such decisions regarding Preferred Stock.
2. Article Sixth which provided that the power to amend the By-laws
was solely the right of the Board of Directors except that certain amendments to
the By-laws required two-thirds of the Board of Directors shall be deleted from
the articles of incorporation. This means that all future changes to the By-laws
will require the majority vote at a stockholders' meeting. Due to the cost
involved therewith, it is anticipated that the Board of Directors will only
propose changes to the By-laws once a year at the Company's annual meeting. The
Board of Directors recommends this change to comply with the Australian Stock
Exchange listing rules.
3. Article Seventh currently provides that the number of directors
may be set by the Board of Directors either through changing the By-laws of
amending the articles of incorporation. The change recommended by the Board of
Directors removes this power from the Board of Directors and limits this power
to the Stockholders. The Board of Directors recommends this change to comply
with the Australian Stock Exchange listing rules.
4. Article Ninth currently provides that special meetings of the
Stockholders could only be called by a majority of the Board of Directors. This
article is being omitted from the articles of incorporation and replaced by a
By-law which gives stockholders the right to call special meetings. The Board of
Directors recommends this change to comply with the Australian Stock Exchange
listing rules.
5. Article Eleventh currently provides that certain of the articles
of incorporation could only be amended upon the vote of two-thirds of the
stockholders unless two-thirds of the Board of Directors approved the amendment.
The Board of Directors recommends that the power to amend these articles of
incorporation be limited to the Stockholders. The Board of Directors recommends
this change to comply with the Australian Stock Exchange listing rules.
6. Article Twelfth currently provides that the member of the Board
of Directors shall be indemnified against losses incurred in good faith as a
director. This article is being omitted from the articles of incorporation but
is being replaced by separate agreement with each director. The Board of
Directors does not believe that there will be a substantive change in the
Company's obligation to indemnify its directors. The Board of Directors
recommends this change to comply with the Australian Stock Exchange listing
rules.
7. Article Thirteenth currently provides that election need not be
by written ballot. The Company has always used written ballot and the
recommended change to omit Article Thirteenth and replace it with a By-law to
require written ballots is not considered a substantial change. The Board of
Directors recommends this change to comply with the Australian Stock Exchange
listing rules.
The affirmative vote of the holders of a majority of the shares represented and
voting at the Annual Meeting will be required to approve the above changes to
the articles of incorporation.
<PAGE>
SECURITY OWNERSHIP OF CERTAINBENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of June 30, 1999 (except where
indicated by asterisk), information regarding the beneficial ownership of our
common stock by each person we know to own five percent or more of the
outstanding shares, by each of the directors and officers, and by the directors
and officers as a group. As of June 30, 1999, there were outstanding 13,270,964
shares of our common stock.
o Beneficial ownership has been determined in accordance with Rule 13d-3
of the Securities Exchange Act of 1934. Generally, a person is deemed
to be the beneficial owner of a security if he has the right to acquire
voting or investment power within 60 days.
o Unless otherwise indicated, all addresses are at our office at 200 East
Palmetto Park Rd., Suite 200, Boca Raton, Florida 33432.
Name and Address of Beneficial Owner Amount of
Beneficial Percent of
Ownership Class
Richard A. Iamunno 1,153,202 8.69%
Marcel Golding 2,361,935* 17.8%
Martin V. McCarthy 125,000 0.94%
Jeffrey L. Hurwitz N/A
Peter Lawson 10,000 0.74%
John Copelyn 2,361,935* 17.8%*
All Officers and Directors as a Group 3,650,137 27.5%
(5 persons)
*In July, 1999, a subsidiary of HCI acquired the stock of Norman J. Hoskin, the
Company's former Chairman. Both Mr. Golding and Mr. Copelyn are substantial
owners and officers of HCI and consequently, ownership of all of the shares of
HCI or by its subsidiaries have been attributed to both Mr. Golding and Mr.
Copelyn for the purpose of this table.
<PAGE>
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES ACT OF 1934
Section 16(a) of the Securities and Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more than ten
percent (10%) of a registered class of the Company's equity securities, to file
with the Securities and Exchange Commission (the "SEC") initial reports of
ownership and reports of changes in ownership of Common Stock and other equity
securities of the Company. Officers, directors and greater than ten percent
(10%) stockholders are required by SEC regulations to furnish the Company with
copies of all Section 16(a) forms they file.
Based upon (i) the copies of Section 16(a) reports which the Company
received from such persons for their 1998 fiscal year transactions in the Common
Stock and their Common Stock holdings, and (ii) the written representations
received from one or more of such persons that no annual Form 5 reports were
required to be filed by them for the 1998 fiscal year, the Company believes that
all executive officers and Board members complied with all their reporting
requirements under Section 16(a) for such fiscal year.
FORM 10-KSB
THE COMPANY FILED AN ANNUAL REPORT ON FORM 10-KSB WITH THE SECURITIES
AND EXCHANGE COMMISSION ON OR ABOUT MAY 18, 1999. STOCKHOLDERS MAY OBTAIN A COPY
OF THIS REPORT, WITHOUT CHARGE, BY WRITING TO ATLANTIC INTERNATIONAL
ENTERTAINMENT, LTD., ATTN: CHIEF FINANCIAL OFFICER, AT THE COMPANY'S PRINCIPAL
EXECUTIVE OFFICES LOCATED AT 200 EAST PALMETTO PARK ROAD, SUITE 200, BOCA RATON,
FLORIDA 33432.
<PAGE>
EXECUTIVE COMPENSATION AND RELATED INFORMATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION (1)
The following table provides certain summary information concerning the
compensation earned, by the Company's Chief Executive Officer and its Chairman
for services rendered in all capacities to the Company and its subsidiaries for
each of the last three fiscal years. Such individuals will be hereafter referred
to as the Named Executive Officers. No other executive officer who would have
otherwise been includible in such table on the basis of salary and bonus earned
for the 1998 fiscal year has resigned or terminated employment during that
fiscal year.
SUMMARY COMPENSATION TABLE
- --------------------------------------------------------------------------------
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($)
- --------------------------------------------------------------------------------
Richard A. Iamunno 1999 $144,000 --
President and Chief 1998 $144,000 --
Executive Officer 1997 $91,000 $75,700
Karen Welch 1999 $100,000 --
Senior Vice President
Operations and
General Manager
Trevor Klein 1999 $100,000 --
Vice President Finance
(1) The columns for "Other Annual Compensation" and "Long-term Compensation"
have been omitted, as there is no compensation required to be reported in such
columns. The aggregate amount of perquisites and other personal benefits did not
exceed the lesser of $50,000 or 10% of the total of salary and bonus.
<PAGE>
STOCK OPTIONS
On January 1, 1997, the Company adopted an Incentive Stock Option
Plan for Employees, Directors, Consultants, and Advisors (the "Plan"). The Plan
will expire December 31, 2006 unless further extended by appropriate action of
the Board of Directors. Employees, directors, consultants and advisors of the
Company, or any of its subsidiary corporations, are eligible for participation
in the Plan. The Plan provides for stock to issued pursuant to options granted
and shall be limited to 250,000 shares of Common Stock, $.001 par value. The
shares have been reserved for issuance in accordance with the terms of the Plan.
The exercise of these options may be for all or any portion of the option and
any portion not exercised will remain with the holder until the expiration of
the option period. The options granted in 1998 expire on December 23, 2003.
The following table contains information concerning the stock option
grants made to each of the named executive officers and employees for fiscal
1998.
INDIVIDUAL GRANTS
Name #Granted in F/Y % All $/Sh Exp. Date
Richard Iamunno 50,000 1999 28.57% $3.25 12/23/02
100,000 1998 28.57% $4.25 04/03/03
50,000 1997 28.57% $2.80 04/03/03
Karen Welch 50,000 1999 21.00% $2.50 12/31/02
Trevor Klein 20,000 1999 10.00% $2.50 12/31/02
30,000 1999 11.00% $2.25 12/31/02
The Company applies Accounting Principles Board Option No. 25,
Accounting for Stock Issued to Employees, and related interpretations, for stock
options issued to employees in accounting for its stock option plans. The
exercise price of all options issued was the market price at the date of grant.
Accordingly, no compensation expense has been recognized for the Company's
stock-based compensation plans.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors is responsible for
establishing the base salary and incentive cash bonus programs for the Company's
executive officers and other key employees and administering certain other
compensation programs for such individuals, subject in each instance to review
by the full Board. The Compensation Committee also has the exclusive
responsibility for the administration of the Company's 1997 Stock Option Plan
under which grants may be made to executive officers and other key employees.
The Compensation Committee is comprised of three members of the Board of
Directors.
<PAGE>
GENERAL COMPENSATION POLICY
The overall policy of the Compensation Committee is to provide the
Company's executive officers and other key employees with competitive
compensation opportunities based upon their contribution to the financial
success of the Company and their personal performance. It is the Compensation
Committee's objective to have a substantial portion of each officer's
compensation contingent upon the Company's performance as well as upon the
officer's own level of performance. Accordingly, the compensation package for
each executive officer and key employee is comprised of three elements: (i) base
salary which reflects individual performance and is designed primarily to be
competitive with salary levels in effect at companies within and outside the
industry with which the Company competes for executive talent, (ii) annual
variable performance awards payable in cash and tied to the Company's
achievement of financial and individual performance targets, and (iii)
stock-based incentive awards which strengthen the mutuality of interests between
the executive officers and the Company's stockholders.
LONG-TERM INCENTIVE AND PENSION PLANS
The Company does not have any long-term incentive or defined benefit
pension plans.
OTHER
No Director or Executive Officer is involved in any material legal
proceeding in which he is a party adverse to the Company or has a material
interest adverse to the Company.
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT
AND CHANGE-IN-CONTROL AGREEMENTS
The Company currently has an employment agreement with Mr. Iamunno
pursuant to which he will continue to serve as the Company's President and Chief
Executive Officer. It is anticipated that as compensation for his services, the
Company will pay Mr. Iamunno a base salary of $144,000 each per annum, which
shall be subject to annual increases of 10%. The agreement will continue for two
years and will expire in the year 2000. Other than the aforementioned agreement,
the Company has not entered into any other employment agreement with any of its
officers, directors, or any other persons and no such agreements are anticipated
in the immediate future.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(M)
Section 162(m) of the Internal Revenue Code, enacted in 1993, generally
disallows a tax deduction to publicly-held companies for compensation paid to
certain executive officers, to the extent that compensation exceeds $1 million
per officer in any year. The compensation paid to the Company's executive
officers for the 1998 fiscal year did not exceed the $1 million limit per
officer, and it is not expected the compensation to be paid to the Company's
executive officers for the 1999 fiscal year will exceed that limit. Because it
is very unlikely that the cash compensation payable to any of the Company's
executive officers in the foreseeable future will approach the $1 million limit,
the Compensation Committee has decided at this time not to take any other action
to limit or restructure the elements of cash compensation payable to the
Company's executive officers. The Compensation Committee will reconsider this
decision should the individual compensation of any executive officer ever
approach the $1 million level.
<PAGE>
CERTAIN TRANSACTIONS
On March 30, 1999, the Company sold The Eminet Domain, Inc., it wholly
owned Internet Service Provider to Centerline Associates, Inc., a more than 5%
owner of the Company's stock at the time of the sale. Centerline purchased 81%
of the stock of The Eminet Domain, Inc. for $2,500,000.00 payable in cash of
$100,000.00 and a two year promissory note for the balance.
The Company believes that the transaction set forth above was made on
terms no less favorable to the Company than could have been obtained from
unaffiliated third parties. The Company intends that all future transactions,
including loans, between the Company and its officers, directors, principal
stockholders and their affiliates be approved by a majority of the Board of
Directors, including a majority of the independent and disinterested outside
directors on the Board of Directors, and be on terms no less favorable to the
Company than could be obtained from unaffiliated third parties.
OTHER BUSINESS
The Board of Directors knows of no other business that will be
presented for consideration at the Annual Meeting. If other matters are properly
brought before the Annual Meeting, however, it is the intention of the persons
named in the accompanying proxy to vote the shares represented thereby on such
matters in accordance with their best judgment.
The enclosed proxy gives the Proxy Committee discretionary authority to
vote your shares in accordance with its best judgment with respect to all
additional matters which might come before the annual meeting. In addition to
the scheduled items of business, the meeting may consider stockholder proposals
omitted from the Proxy Statement and form of proxy pursuant to the Proxy Rules
of the Securities and Exchange Commission and matters related to the conduct of
the meeting. At the time this Proxy Statement went to press, the Board of
Directors was not aware of any such matter, which would be presented for action
at the meeting.
STOCKHOLDER PROPOSALS
Proposals of stockholders that are intended to be presented at the
Company's Annual Meeting of stockholders to be held in 2000 must be received by
on or before September 14, 1999 in order to be included in the proxy statement
and proxy relating to that meeting.
BY ORDER OF THE BOARD OF DIRECTORS of Atlantic
International Entertainment, Ltd.
/s/ Richard A. Iamunno
-----------------------------------
Richard A. Iamunno
President and Chief Executive Officer
August 25, 1999
IMPORTANT
IF YOU ARE GOING TO VOTE BY MAIL, WE ENCOURAGE YOU TO SPECIFY YOUR
CHOICES BY MARKING THE APPROPRIATE BOXES ON THE ENCLOSED PROXY CARD. HOWEVER,
YOU DO NOT NEED TO MARK ANY BOXES IF YOU WISH TO VOTE ACCORDING TO THE BOARD OF
DIRECTORS' RECOMMENDATIONS; JUST SIGN, DATE AND RETURN THE PROXY IN THE ENCLOSED
ENVELOPE. IF YOU ARE GOING TO VOTE YOUR PROXY BY TELEPHONE OR THE INTERNET,
SIMPLY FOLLOW THE INSTRUCTIONS ON THE ENCLOSED FORM. THANK YOU FOR YOUR
COOPERATION AND YOUR PROMPT RESPONSE.
<PAGE>
APPENDIX A
ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD
ANNUAL MEETING OF SHAREHOLDERS
September 24, 1999
The undersigned shareholder(s) hereby appoints Richard A. Iamunno,
President of the Corporation, or in lieu of the foregoing, Martin V. McCarthy,
Director of the Corporation, and each of them, each with the power of
substitution, authorized to represent and to vote the stock of the undersigned
at the Annual Meeting of its stockholders to be held on September 24, 1999 and
any adjournments thereof.
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
MARK THIS BOX IF AN ADDRESS CHANGE OR COMMENT HAS BEEN NOTED ON THE REVERSE SIDE
OF THIS CARD. [ ]
RECORD DATE SHARES:
THE BOARD OF DIRECTORS RECOMMENDS VOTE FOR THE PROPOSALS.
1. Election of Directors: Richard A. Iamunno, Peter Lawson, Marcel
Golding, Martin V. McCarthy, Jeffrey L. Hurwitz and John Copelyn
FOR [ ] WITHHOLD [ ] FOR EXCEPT [ ]
To withhold authority to vote for any individual nominee while voting for the
remainder, write this nominees name in the space following:
- --------------------------------------------------------------------------------
2. Appointment of Moore Stephens, P.C., as independent accountants.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
- --------------------------------------------------------------------------------
3. Approval of the change of the Company name to Online Gaming Systems, Ltd.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
- --------------------------------------------------------------------------------
4. Approval of all changes to the Company's articles of incorporation and adopt
new Bylaws required by the Australian Stock Exchange as provided in Exhibit "A"
attached to the Proxy Statement.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
- --------------------------------------------------------------------------------
CONTINUED AND TO BE SIGNED ON REVERSE
<PAGE>
5. VOTED on such matters as may properly come before the Meeting of any
adjournment thereof.
THE PROXIES WILL VOTE YOUR SHARES IN ACCORDANCE WITH YOUR DIRECTIONS ON THIS
CARD. IF YOU DO NOT INDICATE YOUR CHOICES ON THIS CARD, THE PROXIES WILL VOTE
YOUR SHARES FOR THE PROPOSALS ON THE REVERSE SIDE.
PLEASE VOTE, DATE, AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
NOTE: Please sign as name appears.
Joint owners should each sign.
Dated: , 1999
--------------------
-----------------------------------
Signature of Shareholder
-----------------------------------
Co-owners sign here
WHEN SIGNING AS ATTORNEY, EXECUTOR,
ADMINISTRATOR, TRUSTEE OR GUARDIAN,
PLEASE GIVE FULL TITLE AS SUCH. IF
SIGNER IS A CORPORATION, PLEASE
SIGN WITH THE FULL CORPORATION NAME
BY DULY AUTHORIZED OFFICER OR
OFFICERS.
<PAGE>
EXHIBIT "A"
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF
ATLANTIC INTERNATIONAL ENTERTAINMENT, LTD.
FIRST: The name of this corporation is Online Gaming Systems, Ltd.
SECOND: The address of the registered office of the corporation in
the State of Delaware is 1013 Centre Road, City of Wilmington, County of New
Castle, Delaware 19805, and the name of its registered agent at that address is
The Prentice-Hall Corporation System, Inc.
THIRD: The purpose of the corporation is to engage in any lawful
act or activity for which corporations may be organised under the General
Corporation Law of Delaware.
FOURTH: The corporation is authorised to issue 110,000,000 shares,
100,000,000 of which are designated "Common stock," $.001 par value, and
10,000,00 of which are designated "Preferred Stock," $.001 par value. The Board
of Directors is authorized to increase or decrease the number of shares of any
series, prior or subsequent to the issue of that series, but not below the
number of shares of such series then outstanding. In case the number of shares
of any series shall be so decreased, the shares constituting such decrease shall
resume the status which they had prior to the adoption of the resolution
originally fixing the number of shares of such series.
FIFTH: The number of directors of the corporation shall be fixed
from time to time by a Bylaw. Any director or the entire Board of Directors may
be removed from office by the stockholders of the corporation.
SIXTH: No stockholder will be permitted to cumulate votes in any
election of directors
SEVENTH: Stockholders of the corporation shall take action by
meetings held pursuant to this certificate of Incorporation and the Bylaws.
Stockholders may not take any action by written consent in lieu of a meeting.
Meetings of Stockholders may be held within or outside of the State of Delaware,
as the Bylaws may provide. The books of the corporation may be kept (subject to
any provision contained in the statute) outside the State of Delaware at such
place or places as may be designated from time to time by the Board of Directors
or in the Bylaws of the corporation.
EIGHTH: The corporation reserves the right to amend, alter, change
or repeal any provision in this Certificate of Incorporation, in the manner now
or hereafter prescribed by Statute, and all rights conferred on stockholders
herein are granted subject to this reservation.
THE UNDERSIGNED, does hereby make this Certificate, under penalties
of perjury, hereby declaring and certifying that this is my act and deed and the
facts herein stated are _________, and accordingly have hereunto set my hand
this __ day of ______, 1999.
-------------------------------
